UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended September 30, 1995
Commission File Number 1-8893
ROYAL PALM BEACH COLONY,
LIMITED PARTNERSHIP
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 59-2501059
- --------------------------------- ---------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
2501 S. Ocean Drive
Hollywood, Florida 33019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (305) 927-3080
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on which Registered
------------------- ---------------------
Limited Partnership Units American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
<PAGE>
Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [ X ] NO [ ]
Indicate by checkmark if disclosure of delinquent filers pursuant to item 405 of
Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statement incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K. [XX]
The aggregate market value of the limited partnership units held by
non-affiliates of Registrant computed by reference to the closing price of the
Units on the American Stock Exchange at December 31, 1995 was approximately
$1,722,770. The Exchange halted trading in Partnership Units on January 16, 1995
pending review of this Report. See Item I.
<PAGE>
PART I
Item 1. Business
(a) GENERAL DEVELOPMENT OF BUSINESS
Royal Palm Beach Colony, Limited Partnership (the "Partnership" or the
"Registrant") was organized under the Delaware Revised Uniform Limited
Partnership Act. The Partnership is a successor to Royal Palm Beach Colony,
Inc., (the "Predecessor Company") a Florida corporation organized in 1963.
Pursuant to a Plan of Complete Liquidation (the "Plan"), the Predecessor Company
transferred all of its assets, subject to all of its liabilities, to the
Partnership in exchange for a number of partnership units ("Units") exactly
equal to the number of shares of common stock of the Predecessor Company
outstanding on July 11, 1985 (the "Effective Date"). On the Effective Date, the
Units were distributed to the former holders of common stock of the Predecessor
Company on the basis of one (1) Unit for each share of common stock of the
Predecessor Company. The Partnership, as a successor to the Predecessor Company,
has registered its Units under Section 12 (b) of the Securities Exchange Act of
1934. Under the Amended Agreement of Limited Partnership of the Registrant, the
term of the Partnership expires December 31, 2005, unless extended by vote of a
majority of the partnership units.
AMERICAN STOCK EXCHANGE LISTING On January 16, 1996 the American Stock Exchange
halted trading in the Partnership's Units pending filing of this Form 10K and
review thereof by the Exchange. The Exchange also advised the Partnership that
it did not currently meet the Exchange's listing standards and that no assurance
could be given that trading in the units would resume. Management believes that
a market for the Partnership's Units may develop over-the-counter if the Units
are not permitted to trade on the Exchange, but there can be no assurance that
such market will develop.
Results of Liquidation Activities
The Partnership's principal business has been to operate, manage and dispose of
the assets which were transferred to it on the Effective Date by the Predecessor
Company.
Since the Effective Date of the Predecessor Company's liquidation, the
Partnership has engaged in a program of asset disposition resulting in the sale
of assets for an aggregate gross consideration of $65,116,575. As of January 31,
1996, the Partnership had distributed an aggregate of $29,156,000, or $6.50 per
Unit, to the general and limited partners. See Item 5 -- Market for the
Registrant's Common Equity and Related Stockholder Matters -- "Prior
Distributions."
<PAGE>
As of September 30, 1995, the Partnership's remaining assets consisted
principally of; (1) mortgages having aggregate principal balances of $285,801
and which are included in the balance sheet in the item "Mortgage Notes
Receivable" (net of deferred profit of $49,648 -- see Note 2 to the financial
statements); (2) a 165 acre tract of land in the Village of Royal Palm Beach
(the "Village"), (a portion of which is now under development: see Item 2 --
Properties -- "Village of Royal Palm Beach"), which land was reacquired in
January, 1992 by foreclosure of a mortgage and which is included in the balance
sheet at $3,767,818 (this tract is hereinafter referred to as the "Crestwood"
tract), (3) unsold land in Palm Beach County, Florida which is included in the
balance sheet at its book value of $487,582, (4) a tract of land in the Village
reacquired by foreclosure in 1993 and included in the balance sheet at $287,197,
(5) contingent receivables relating to a prior sale of utility assets with a
maximum future undiscounted value of $5,945,000 (which amount, other than
$432,800 earned as of September 30, 1995 but not paid to the Partnership until
January, 1996, has not been included in the balance sheet due to its contingent
nature -- see Note 11 to the Financial Statements), and (6) cash in the amount
of $83,902. Through January 31, 1996, there had been no material changes in the
Partnership's real estate assets.
Factors Affecting Future Operations and Distributions
The availability of cash for distribution in the future will depend upon a
variety of factors not currently determinable.
(1) Recent Efforts to Resume Active Business Activities
In early 1992, a large portion of the Partnership's remaining land consisted of
the undeveloped 165 acre "Crestwood" Tract described above, which had been sold
during the process of the Partnership's liquidation but reacquired by the
Partnership in 1992 when the purchaser was unable to service the interest and
amortization payments to the Partnership on a $5,039,952 purchase money
mortgage. Management's attempts to remarket the Crestwood Tract on a bulk basis
were unsuccessful. Management perceived that due to changes in the market for
real estate in southern Florida, the Crestwood Tract would continue to be
difficult to market at acceptable prices. Among other factors depressing the
local market was the "overhang" of large undeveloped tracts which were on the
market as the result of bank insolvencies.
Management also concluded that the market for developed land -- defined for
purposes of this discussion as buildable lots which have been properly zoned and
developed with grading, roads and utility lines brought to the property
boundaries -- was tightening, with local and national builders competing for a
shrinking supply of such developed land. With the liquidation of the Partnership
having progressed to the point at which the major portion of the Partnership's
assets had been liquidated, management began to consider the most effective
means to maximize unitholder value with respect to the balance of the
Partnership's assets.
After study, management concluded that the Partnership's continuing liquidation
should proceed along two tracks.
<PAGE>
First, it was determined that unitholder values could most effectively be
increased if some or all of the Crestwood Tract were temporarily withheld from
sale and selectively developed. In the judgment of management, the prospective
incremental increase in selling prices of developed land over amounts which
might reasonably be anticipated from the sale of the land in its raw state would
substantially exceed the cost of developing such land, and warranted investment
of a portion of the Partnership's cash assets in development activities.
Management therefore commenced the development of one portion of the Crestwood
Tract, consisting of 178 lots zoned for single family housing, in order to
enhance its sale value. Management's decision to commence development was
influenced, in part, by an appraisal obtained in 1992 of the Crestwood Tract
which indicated that such tract had a then current fair market value in the
approximate amount of $4,500,000 and could have a significantly higher value if
rezoning and re-permitting work were accomplished. Management was further of the
opinion that the Crestwood Tract would have an indefinite but substantially
higher value if developed with roads and a utility infrastructure. See Item 2 --
Properties -"Village of Royal Palm Beach."
Second, management concluded that generally strengthening conditions in the
south Florida real estate market might present an opportunity to the Partnership
to capitalize on its status as a publicly traded entity. In early 1994 the
Partnership retained a private consultant to determine whether unitholder values
could further be enhanced by utilizing the Partnership's cash and remaining land
as a vehicle for the resumption of active business operations, either in the
land development business or by expanding its activities into home building and
other real estate-related fields. Management also wished to obtain an
independent review of its assumption that the market value of the Partnership's
units might be enhanced over time were the Partnership to convert from a
liquidating to an active business mode.
Management also concluded that its decision to develop portions of its remaining
Palm Beach County real estate would be consistent either with a decision to
proceed with the Partnership's complete liquidation, to resume business
operations, or to complete its liquidation by acquiring and distributing to
unitholders the securities of another entity in connection with a business
combination. It therefore proceeded with the development plans described above,
and at the same time explored the business and tax implications of the
resumption of business activities and/or business combination with another
entity. The progress of such land development, and financing recently obtained
therefor, is discussed under Item 2 -- Properties -- "Village of Royal Palm
Beach."
Management ultimately concluded that the most logical course for the Partnership
to follow would involve the addition of home building operations. In furtherance
of this objective, the Partnership, during the summer of 1994, retained a
locally recognized consultant to the home building industry to assist it in
identifying possible affiliations in south Florida. After several potential
affiliations were identified, a memorandum of understanding was executed with
Regency Homes, Inc., a prominent, privately-owned South Florida home builder.
The memorandum envisioned a business combination in which the Regency
shareholders, and the Partnership would have acquired 62.5% and 37.5%,
respectively (later modified to 60% and 40%, respectively) of a new entity,
followed by distribution of the Partnership's shares to its unitholders and
liquidation of the Partnership. However, after protracted negotiations over the
terms of the agreement and several downward modifications of Regency's original
earnings projections, negotiations with Regency were suspended in early December
1995 and terminated in late December, 1995.
<PAGE>
While management continues to explore the possibility of a business combination
with an operating business, the Partnership is proceeding with the liquidation
of the its remaining assets, and, in connection therewith, continuing to develop
the residential lots in the Crestwood tract. The status of such dispositions and
development is discussed in Item 2 below.
(2) Cash Available for Distribution
Whether or not the Partnership resumes active business activities, management
intends to continue to invest in the development of portions of the
Partnership's remaining land in Palm Beach County as a means of achieving a
higher return upon sale. Because of the cash requirements for such land
development activities in 1995, together with cash expenditures in connection
with the proposed transaction with Regency Homes, Inc. and normal operating
expenses, no cash was available for distribution in 1995 and it is considered
doubtful that cash will be available for distribution in 1996. See Item 7 --
Management Discussion and Analysis of Financial Condition -- Liquidity and
Capital Resources. If the Partnership ultimately determines to carry its
liquidation to conclusion, the timing of the resumption of liquidating
distributions will depend largely upon its ability to dispose of its remaining
land, developed or undeveloped, and future collections of contingent receivables
relating to a prior sale of a utility plant. See Item 2 -- Properties --
"Utility Contingent Receivable" for a discussion of other factors affecting
future distributions. If management determines that the Partnership should
continue in business, the form in which the Partnership does business, and the
form in which present unitholders hold an equity position, could also change.
Management is unable to predict the distribution policy of the Partnership if it
resumes active business activities or the distribution policy of any business
entity which might result from the combination of the Partnership with another
entity. However, management considers it more likely than not that the
Partnership will complete its liquidation without engaging in a business
combination with another entity.
(b) Financial Information About Industry Segments
Not applicable.
(c) Narrative Description Of The Business
Regulation
Development and sales operations of the Partnership or by potential purchasers
of real estate from the Partnership have been subject to regulation by a number
of local, state and federal agencies concerning the nature and extent of
improvements, and compliance with zoning regulations, building codes, health
requirements and environmental protection. The Partnership believes that it has
been in substantial compliance with all such laws and regulations which affect
its properties and that it has developed the properties to the extent required
by contract or law. If such laws or regulations are amended, in particular those
concerning environmental protection, the cost of compliance could be increased.
Reference is made to the discussion concerning the impact of land use regulatory
issues affecting salability of certain properties remaining in Palm Beach County
in Item 2 -- Properties -- "Acreage in the Vicinity of the Village."
<PAGE>
Competition
The real estate business conducted by the Partnership is highly competitive. The
Partnership's sales of its remaining land will compete with surrounding
developments, and with owners of tracts of land in the area of all its
properties. There are substantial tracts of vacant land and land under
development in the general area of most of the Partnership's remaining real
estate. These competitive considerations could affect the decisions of potential
purchasers of the Partnership's remaining properties.
The Partnership has historically marketed its properties through direct mail
advertising to major brokers and developers, advertisements in major regional
newspapers and direct contacts between officers of the Managing General Partner
and real estate developers and brokers. The Partnership is currently marketing
its remaining properties through local real estate brokers, including Randy
Rieger, who also served as interim Vice President and Chief Operating Officer of
the Partnership's managing general partner between September 1995 and February
1996. See Item 13 -- "Certain Relationships and Related Transactions."
Impact of General Economic Conditions
The development and sale of real estate occurs within a historically cyclical
market, and is significantly influenced by general economic conditions. Sales of
housing units and sales of tracts to builders are particularly affected by the
costs and availability of mortgage financing and the rise and fall of interest
rates in general. Interest rates have moved in a narrow range during the past
year, and declined slightly in December 1995. If significant increases occur in
the future, the real estate market could suffer as a result.
Personnel
As of January 31, 1996, Stein Management Company, Inc. ("Steinco") the Managing
General Partner, employed 3 persons.
Office Facilities
The Partnership's executive headquarters are located at 2501 S. Ocean Drive,
Hollywood, Florida 33019. The premises are owned by an affiliate of Hasam Realty
Limited Partnership ("Hasam L.P."), a general partner of the Partnership, and
are being made available to the Partnership as an accommodation without charge.
<PAGE>
Item 2. Properties
Palm Beach County, Florida
The Company originally owned approximately 28,000 acres in Palm Beach County, in
southeastern Florida, approximately 4,200 of which were located within the
Village.
The Village of Royal Palm Beach
The village, an incorporated municipality, is approximately eight miles from the
Palm Beach International Airport and eleven miles west of Palm Beach. Two major
area highways, Southern Boulevard and Okeechobee Road, lead directly from Palm
Beach through West Palm Beach to the Village. The Village has a population of
approximately 16,000 and is primarily residential. The Village has been
developed in accordance with a master plan and includes schools, shopping
facilities, community recreation areas, and its own police and fire departments.
Although the Partnership had previously sold all of its land in the Village, it
reacquired in 1992, through foreclosure of a defaulted purchase money mortgage,
the 165 acre Crestwood Tract of undeveloped land in the Village. When
reacquired, the Crestwood Tract was zoned and preliminary approval had been
obtained for the development of 172 single-family homesites (the "Single Family
Tract") and 625 multi-family units. The Crestwood Tract is bisected by a
principal Village road and has access to all utilities, but was otherwise
undeveloped with the exception of the existence of portions of a drainage
system.
Commercial Tract within the Crestwood Tract
In order to enhance the value and salability of the Crestwood Tract, the
Partnership has obtained the rezoning of a 28 acre portion of the multi-family
zoned property in the Crestwood Tract to permit the Partnership to offer such
portion for sale as a shopping center site. The Partnership expects to receive
site-plan approval in mid-1996. The Partnership has executed an agreement to
sell this portion to an unaffiliated shopping center developer ("Purchaser") in
four phases. The first phase relates to an 11.8 acre tract to be sold for $3.00
per square foot (approximately $1,542,024 subject to final survey), with a
closing subject to soil testing, availability of sufficient utility connections,
environmental matters, final site-plan approval by June, 1996 and approval of
the premises by a major supermarket chain as a site for a new supermarket. In
addition, the Purchaser has an inspection period ending in May, 1996 during
which Purchaser can terminate the agreement if it determines that the property
is not suitable for Purchaser's purposes. All conditions to closing must be
satisfied and the closing must occur ("First Closing") on or before December 31,
1996. The Purchaser's only liability for failure to close will be its loss of an
initial deposit of $15,000, plus additional deposits aggregating $55,500
required if the inspection period expires, the supermarket chain approves the
site, and the Purchaser does not terminate the agreement.
<PAGE>
The second and third phases consist of two parcels which are covered by the
rezoning process referred to above and adjoin the shopping center site, but as
to which building permits are not expected to be available for approximately
four years. As to such parcels, the Partnership has agreed, during a five-year
period following the First Closing, to accord an option to Purchaser to acquire
the parcels, with the price to be paid dependent on the terms upon which the
Purchaser leases or sells such parcels to an unaffiliated third party. In such
event the Purchaser will pay to the partnership, (i) in the event of a lease, a
sum equal to the five times the average annual rental under the lease, and (ii)
in the event of a sale, 50% of the net proceeds of the sale; provided that the
partnership is not required to accept less than $3.50 per square foot. If the
Partnership obtains an unsolicited offer to lease or purchase the parcels
("Third Party Offer") which the Partnership desires to accept, the Purchaser may
exercise a right of first refusal in which case the Partnership must accept (i)
in the event of a lease, a sum equal to five times the average annual rental to
be paid during the first five years of the proposed lease, and (ii) in the event
of a sale, 50% of the net proceeds the Partnership would have received under the
Third Party Offer.
The fourth phase relates to a 14-acre parcel as to which rezoning from the
current multi-family to commercial use is not considered feasible for several
years. The Purchaser has been granted an option ending four years after the
First Closing to acquire this parcel at $3.50 per square foot (approximately
$2,129,000 subject to survey). The Partnership is entitled to make an earlier
sale of this parcel, commencing two years after the First Closing, for
multi-family residential purposes only, and for a price which is less than the
option price, subject to the Purchaser's right of first refusal at the same
price.
Randy Rieger, who became vice-president of the Partnership's managing general
partner in September, 1995 for an interim period following the death of its
President, is entitled to a commission of 10% of the net proceeds to the
Partnership on all of the above-described transactions. See Item 13.
In addition, as a result of management's decision to develop portions of the
Crestwood Tract, the Partnership has replanned the configuration of the entire
tract. This project included a redesign of the Single Family Tract, and the
Partnership has now received final plat approval to increase to 198 the number
of lots which may be developed in the Single Family Tract. "Development," as
such term is applied to single-family lots, entails the completion of all
necessary zoning, land use, environmental and other required regulatory
procedures, the installation of roads and utility connections to each lot and
the provision of drainage facilities.
The Partnership has recently completed the off-site utility infrastructure for
the entire Crestwood Tract. The cost of such construction approximated $975,000.
This construction was financed with the proceeds of a $975,000 construction loan
from Union Bank of Florida, ("Union Bank Loan " -- See Item 13 -"Certain
Relationships and Related Transactions"). See Item 7 -Management Discussion and
Analysis -- "Liquidity." Under the terms of the Union Bank Loan, the Partnership
is paying interest at a rate equal to 2% above the bank's prime lending rate.
The Union Bank's aggregate commitment in respect of the Residential Tract is
$2,175,000. The Union Bank Loan, which is secured by a first mortgage on the
1978 undeveloped homesites, is due in full on July 1, 1997. Individual lots may
be released from the mortgage upon sale upon a prepayment of $20,000 per lot.
<PAGE>
The Partnership is developing the residential lots in three phases, of which the
first phase, comprising 32 lots, is currently being developed with on-site
improvements. financed by $350,000 in additional borrowings under the Union Bank
Loan. Four of the residential lots in the first phase have already been
purchased by Regency Homes, Inc. for the sum of $35,000 per lot, and the balance
of 28 lots are subject to an option in favor of Regency at $36,000 per lot for
the 14 remaining waterfront lots and $30,000 for the 14 remaining "dry" lots (an
additional $924,000 if all options are exercised). In order to preserve the
option, Regency must purchase a minimum of three lots per month commencing in
May, 1996. The agreement with Regency Homes, Inc. was unrelated to and not
contingent upon the merger described in Item 1 -- Recent Efforts to resume
Active Business Operations.
The Partnership proposes to finance on-site development of the balance of the
Single Family Tract, anticipated to cost in the range of $1.9 million, with the
balance of the borrowing available under the Union Bank Loan and public bond
financing through the Indian Trail Water Control District (the "District"),
which the Partnership anticipates will produce net available funds of
approximately $1,000,000. Union Bank is not obliged to fund the balance of its
commitment unless bond issue proceeds of a minimum of $1,000,000 are realized.
The District has adopted the Partnership's proposed development plan, a
court-appointed commission has reported favorably upon such plan and the
District has authorized the initiation of procedures with a view to issuance of
the bonds. The Partnership intends to seek issuance of the bonds during
mid-spring of 1996. The District's ability to sell such bonds will be subject to
financial market and other variable factors which cannot be predicted at this
time. The Partnership's ability to proceed with on-site development of these
sites would be adversely affected if such bank and/or bond financing proves to
be unavailable. The additional financing anticipated from Union Bank could be
deferred or said bank's obligation to make further advances could expire without
further funding if the Partnership does not sell at least 20 single-family lots
in first 32-lot phase on or before May, 1996. In turn, the Partnership's ability
to meet this schedule depends upon the rate at which Regency Homes, Inc., which
holds options on these lots, is able to sell and construct homes thereon.
Regency has the right to defer additional purchases until May 1996 without
losing its options. Management believes that the market for homes on such lots
is currently strong.
In March, 1993 the Partnership reacquired a separate tract of five acres in the
Village by accepting a deed in lieu of foreclosure on a mortgage with a
principal balance of $300,000 (See Item 7 --"Foreclosure Transactions"). This
parcel is bordered by a golf course and a principal Village road, is zoned for
approximately 100 multi-family residential units and is being offered for sale
in its present state without further development.
Included in Property Held For Sale at September 30, 1995 is the net carrying
value of a mortgage note receivable having a net carrying value of $137,614 on
which foreclosure action has been commenced. Management is of the opinion that
the realizable value of the underlying property is in excess of the current book
value of the mortgage.
<PAGE>
Utility Contingent Receivable
In 1983 the Partnership's Predecessor Company sold to the Village of Royal Palm
Beach a water and sewage treatment system servicing the Village. Pursuant to the
agreement of sale ("Utility Contract"), the Predecessor company received
$2,510,000 on closing, and was entitled to future payments to a maximum of
$10,900,000 as future connections, measured by consumption increases, were made
to the system over a period ending August, 2001. As of September 30, 1995,
$5,708,000 had not been received or earned. The Utility Contract also provided
for contingent extension periods aggregating not more than three additional
years to compensate for possible future governmental building moratoriums or
water use restrictions. The Partnership's consultants have advised it that the
term has been extended through 2003 as a result of water usage restrictions
imposed by the South Florida Water Management District in 1990 and 1991 and
moratorium actions taken by the Village of Royal Palm Beach in 1985 and 1986.
The Utility Contract also calls for payments to the Partnership equal to 25% of
any "Guaranteed Revenues" (payment by developers to secure guaranteed
allocations of plant capacity) collected by the Village to a maximum payment of
$500,000, of which $262,657 has already been received. It is not possible to
predict the amount or timing of future revenues to the Partnership under this
program.
To date, the Partnership has received the following Utility Contract payments:
<TABLE>
<CAPTION>
Amount Received Based On
---------------------------------
Fiscal Year Ended Consumption Guaranteed
September 30, Increases Revenues
- ----------------- ----------- ----------
<S> <C> <C>
1984 $919,000
1985 830,000
1986 637,000
1987 859,000
1988 240,000 $ 30,000
1989 761,000 45,000
1990 -0- 35,000
1991 293,000 21,000
1992 357,000 37,000
1993 168,000 47,000
1994 58,000 27,000
1995* 413,000 20,000
---------- --------
Total $5,535,000 $262,000
+========= ========
</TABLE>
- ----------------------------------
*Paid in January, 1996.
<PAGE>
The Utility Contract with extensions management believes have already
accumulated will expire in 2003, subject to extensions of up to one additional
year. The ability of the Partnership to realize the maximum price is dependent
upon the rate at which the population in the Village grows, and levels of water
consumption which in turn depends upon economic, social and climatic factors
which cannot be predicted. Historically, water consumption tends to increase
based upon increases in population. During most of fiscal 1990, however, due to
drought conditions existing in most Southern Florida, the South Florida Water
Management District imposed mandatory water usage restrictions. The imposition
of these restrictions resulted in a decrease in aggregate water consumption in
the area from which the Partnership's receipts are projected while population
was increasing.
Management believes that there remain sufficient potential new home water
hookups in the area served by the utility to enable the Partnership to realize
the maximum remaining $5,708,000 in contingent payments under the Utility
Contract. There can be no assurance that the rate of new construction or water
consumption in such area will be sufficient to enable the Partnership to receive
the full amount or even a substantial portion of such payments prior to the
expiration of the contingent payment term.
Acreage in the Vicinity of the Village
Substantially all of the property previously owned by the Predecessor Company in
Palm Beach County outside of the Village limits, originally aggregating
approximately 23,800 acres, was sold under the Predecessor Company's retail
installment sales program, which terminated prior to the inception of the
Partnership. The Partnership currently retains a tract of approximately 483
acres, and additionally holds approximately 206 one-acre lots, located
approximately eight miles northwest of the Village.
The 206 lots have been improved with graded unpaved access roads and drainage
facilities. The Partnership has not sold any of these lots. The timing of future
sales of these lots, the manner in which they may be developed and the ultimate
realizable prices for these lots are dependent upon a complex and interrelated
number of factors arising out of governmental regulations concerning permissible
land use.
Palm Beach County has adopted land development regulations under which new
development will not be permitted unless adequate public facilities (such as
roads) will be in place concurrently with the impacts of such development. The
Indian Trail Water Control District ("District") is currently preparing a
revised drainage plan which would result in an exemption for such 206 lots from
further compliance with such concurrency requirements and would allow the
issuance of building permits for single-family residences on such lots. Such
plan has been opposed by other governmental agencies, however, and it is
uncertain whether the plan will be adopted. If the plan is not approved these
lots may not be usable for residential purposes. Further, even assuming a
favorable result, the administrative process leading to the availability of
building permits cannot be expected to be completed before mid-1998. However,
management is of the opinion that the realizable value of these lots, in the
aggregate, is in excess of its current book value of $132,754.
<PAGE>
The 483-acre tract had been reserved for use by the District, in part, as a
water retention area for such revised drainage plan. The Partnership is
presently evaluating possible alternative uses of this tract, which contains a
significant amount of wetlands. Since the use of this land is also dependent on
the extension of roads, and development activity on this tract may meet with
opposition from governmental agencies concerned with wildlife and wetlands
preservation, it is not possible to estimate the realizable value of this land.
However, management is of the opinion that its realizable value is in excess of
its current book value of $213,421.
Elsewhere in the vicinity of the Village the Partnership previously held a
disputed claim to approximately 24 acres of undeveloped land. This claim had not
originally been accorded value on the Partnership's balance sheet and was
considered to have little or no value. During 1994, in connection with the
resolution of this claim with adjoining land owners, and in order to give value
to such claim, the Partnership relinquished a portion of its claim, acquired 5
adjoining acres for $141,879, and executed a joint development agreement with
one of such adjoining landowners relating to the Partnership's acreage and such
landowner's acreage (comprising approximately 22 acres in the aggregate of which
the Partnership now owns approximately 12 acres). The Partnership and the joint
developer have recently entered into an agreement to sell the entire combined
parcel for a price of $1.90 per square foot, subject to survey, which would
result in a gross selling price of approximately $1,820,808 of which the
Partnership's share would be approximately $927,500. The sale is subject to the
purchaser's ability to have the premises rezoned for use as a shopping center,
approval of the premises as a site for a supermarket by a major supermarket
chain, and the issuance of all necessary building and other permits, with a
closing date (subject to all of the foregoing) no later than June 30, 1997. The
agreement is also subject the ability of the Partnership to cause the owner of
an adjoining residence, which is not owned by the Partnership or its joint
developer, to sell such residence to the purchaser. There is no assurance that
such permits will be obtained, nor can the Partnership predict whether the
rezoning process, which involves proceedings before several governmental bodies,
or the sale of the aforesaid residence, could be completed or obtained within
the required time frame.
Hernando County, Florida
The Predecessor Company originally owned approximately 17,600 acres in Hernando
County, Florida, located 56 miles from Tampa, with 13 miles of road frontage
along U.S. Highway 19, a major area highway. In 1994 the Partnership sold a 14
acre tract in this area for $125,000. The Partnership presently retains
approximately 20 acres in this area with negligible value.
<PAGE>
Lake County, Florida
The Predecessor Company originally owned approximately 12,300 acres in Lake
County, Florida, located in Central Florida on the outskirts of the Ocala
National Forest approximately 39 miles from Ocala and 6 miles from Deland. Lake
County is predominantly rural with a population of approximately 14,000. At
September 30, 1992, the Partnership owned no property in Lake County; however,
in March of 1993 the Partnership accepted a deed in lieu of foreclosure on a
mortgage on a 1400 acre portion of this property with a principal balance of
$706,000. See Item 7 -- "Foreclosure Transactions." Approximately 1,000 acres of
this property which are remote, undeveloped and may be unsuited for any
development, were sold by the Partnership for a cash price of $350,000 in June,
1993. The balance of the tract was sold in 1994 in two transactions for prices
aggregating $360,000, of which $248,000 was represented by a purchase money
mortgage payable over a five year term. In November 1995 this mortgage having a
principal balance of $222,471 and deferred profit of $48,958, was sold for
$170,000.
Item 3. Pending Legal Proceedings.
There are no pending legal proceedings, other than routine and immaterial
litigation incidental to its business, to which the Partnership is a party or to
which its property is subject.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters
The Partnership's Units are listed on the American Stock Exchange. The following
table sets forth, for the fiscal periods of the Partnership indicated, the
reported high and low closing prices for the Partnership's Units as reported on
the American Stock Exchange. See Item 1 -- Business - American Stock Exchange
Listing.
The Partnership's Units were held by approximately 700 holders of record as of
December 31, 1995. Based on its tax records, including beneficial owners, the
Partnership believes that there are a total of approximately 1,500 unit holders.
<TABLE>
<CAPTION>
Fiscal Year Ended September 30, 1995
Quarter High Low
------- ---- ---
<S> <C> <C>
First 15/16 3/4
Second 1 13/16
Third 2 13/16
Fourth 1-11/16 1-3/8
<CAPTION>
Fiscal Year Ended September 30, 1994
Quarter High Low
------- ---- ---
<S> <C> <C>
First 1-1/16 3/4
Second 1-3/16 7/8
Third 1-1/16 7/8
Fourth 7/8 13/16
</TABLE>
Prior Distributions
The Partnership Agreement requires the Managing General Partner to consider
quarterly whether the Partnership has Cash Available for Distribution in respect
of the Partnership Units, and to make distributions unless the costs of the
distribution would be disproportionately high in relation to the Cash Available
for Distribution. "Cash Available for Distribution" in general means the excess
cash held by the Partnership over anticipated expenditures and reserves for
anticipated or contingent liabilities. The Partnership is not a party to any
agreements which would restrict its ability to make future distributions. No
distributions were made since December of 1992, in light of management's
judgment that Partnership cash should be conserved and applied to the
development activities discussed in Item 2, and, more recently, in light of the
negotiations held in 1995 with a view to the resumption of active business
operations as discussed in Item 1. It is unlikely that distributions will be
made during fiscal 1996, although management, in reviewing the Partnership's use
of cash, will consider the tax effect on partners in the event that the
Partnership generates taxable income from its development and sale activities.
See Item 1 -- "Factors Affecting Future Operations and Distributions."
<PAGE>
At the inception of the Partnership, its assets were assigned a tax basis in the
hands of the Partnership based upon the net fair market value of the assets
transferred from the Predecessor Company as determined by reference to the
aggregate market value of the Units at the time of original issuance. Each
Unit's pro rata share of such net fair market value resulted in a capital
account of $6.31 per Unit, which also became the original tax basis of each Unit
in the hands of the original Unitholders. As a result of taxable income and loss
and distributions since inception, the capital account and tax basis
attributable to each Unit which has remained in the hands of an original
Unitholder has been reduced to $2.04 as of September 30, 1995. Each person
acquiring a Unit after inception has a tax basis in such Unit equal to the net
price paid therefor. Such basis is thereafter increased by such Unit's allocable
share of the Partnership's income and decreased by the allocable share of
taxable loss and by any cash distributions made. A distribution itself is not a
taxable event except to the extent that the distribution reduces the
Unitholder's basis below zero.
Section 17-607(a) of the Delaware Revised Uniform Limited Partnership Act
provides generally that a limited partnership shall not make a distribution to a
partner if, after giving effect to the distribution, all liabilities of the
partnership exceed the fair value of its assets. A limited partner who receives
such a distribution is liable to the limited partnership for the amount thereof,
but only if such limited partner knew at the time of the distribution that
distribution violated said Section 17-607(a). No claim based on any such
wrongful distribution may be made more than three years after such distribution.
In the normal course of events, however, the Managing General Partner does not
anticipate that the liabilities of the Partnership immediately following any
future distribution will ever exceed the fair value of its net assets. See also
"Factors Affecting Future Operations and Distributions" under Item 1.
The Partnership has declared and paid the following liquidating distributions:
<TABLE>
<CAPTION>
Payment Date Amount Per Unit
------------ ---------------
<S> <C>
April 15, 1986 $ .25
August 15, 1986 .35
December 15, 1986 .40
January 15, 1988 .50
July 15, 1988 .50
January 15, 1989 .50
July 17, 1989 1.00
September 29, 1989 .75
March 30, 1990 .75
July 31, 1990 .50
August 30, 1991 .50
December 15, 1991 .25
December 16, 1992 .25
----
6.50
</TABLE>
<PAGE>
Item 6. Selected Financial Data
The following is a summary of selected financial data (in thousands of dollars
except as to per unit amounts) as of and for the periods ended on the dates
indicated:
<TABLE>
<CAPTION>
Fiscal Years Ended September 30,
---------------------------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Selected Income
Statement Data
Revenues ................ $ 497 $ 832 $ 1,717 $ 1,510 $ 3,649
Net income (loss) ....... (787) (554) 773 398 1,395
Income (loss) per unit .. (.18) (.12) .17 .09 .31
Selected Balance
Sheet Data
Total assets ............ 5,425 4,650 5,090 5,361 6,409
Mortgage notes payable .. 1,511 -- -- -- --
Partners' equity ........ 3,060 3,847 4,401 4,750 5,473
Cash distributions
per unit ............. -0- -0- .25 .25 .50
</TABLE>
Since the Partnership's sole business has been the disposition of its assets and
the distribution of proceeds to its Unitholders, results in any period are not
comparable with any other period and are not indicative of the results which may
be anticipated in any future period. See Item 5 Prior Distributions (relating to
prior returns of capital)
<PAGE>
Item 7. MANAGEMENT`S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
During the fiscal year, the Partnership incurred substantial expenses in the
planning and development of its properties in additional to normal ongoing
administrative costs, but had no sales. The time lag between development and
ultimate sale resulted in a substantial net cash outflow during the year. In
addition, receipts from mortgage payments declined as purchase money mortgages
completed interest and amortization schedules. During the year, however, the
Partnership made net borrowings of $1,510,513. As a result, the Partnership's
cash balances declined from $543,000 at September 30, 1994 to $84,000 at
September 30, 1995.
During the current fiscal year, and based upon management's judgment
that ordinary operating expenses will not increase, the Partnership anticipates
that cash flow and liquidity requirements will be satisfied by current cash, the
bank financing described in Item 2 -- Properties -- "Village of Royal Palm
Beach", land sales and contingent utility receipts described under Item 2 --
Properties -- "Utility Contingent Receipts," and, in the event of a deferral of
land sales beyond currently anticipated dates, additional financing arrangements
which management believes will be available from, or guaranteed by, Hasam Realty
Limited Partnership, a general partner of the Partnership, or an institutional
lender.
Affect of Land Sales on Future Cash Flow
Assuming that the Partnership continues to liquidate, total net cash flow which
might become available for distribution remains unpredictable due to uncertain
conditions in the South Florida real estate market in which the Partnership's
remaining real estate is located, and the competitive factors described in Item
1 -- Business -- "Competition." These conditions will continue to affect the
realizable value of the Partnership's remaining land, including decisions by
parties holding options on the Partnership's land to exercise such options in
whole or in part. See Item 2.
Certain of the Partnership's land in Palm Beach County located outside of the
Village of Royal Palm Beach (see Item 2 -- Properties -- "Acreage in the
Vicinity of the Village") has been the subject of substantial regulatory
concerns relating to land use issues, and the salability of such land has been
adversely affected by doubts concerning the future availability of building
permits. At the inception of the Partnership, such land, in the aggregate, was
assigned appraised or estimated values aggregating approximately $1.7 million
and is carried on the Partnership's balance sheet at $346,000. The Partnership
has obtained a recent appraisal of this property indicating a fair market value
of $1,020,000; however, there can be no assurance that the property could in
fact be sold for such amount, or as to the length of time which might be
required to effect its sale. While the Partnership believes that all or a major
portion of such land could ultimately be sold, aggregate realizable values
cannot be estimated. It also remains possible, on the other hand, that
continuing development and possible future road building activity in the
vicinity of this land could have a favorable impact on the value of the land,
although such impact is entirely speculative. For a discussion of the land use
issues which could affect future development of this acreage see Item 2 --
Properties -- "Acreage in the Vicinity of the Village."
<PAGE>
As indicated in Item 2, the Partnership has determined to develop portions of
its remaining properties in order to enhance their ultimate selling price. Such
development will continue whether or not the Partnership continues to liquidate,
contingent upon the availability of financing, as discussed in Item 2 --
Properties -- "Village of Royal Palm Beach." Management believes that such
financing would be available on commercially acceptable terms. As indicated
under Item 1 -- "Factors Affecting Future Operations and Distributions," it is
unlikely, in view of management's decision to continue development activities as
an aid to the enhancement of ultimate liquidation proceeds, that distributions
to partners will be made during fiscal 1996.
Foreclosure Transactions
Included in property held for sale at September 30, 1991 was the net carrying
value of one mortgage note receivable in default which was considered to be an
in substance foreclosure. The in substance foreclosure had been recorded by
reclassifying the net carrying value of the receivable, $1,612,785, consisting
of a mortgage note receivable of $5,039,952 less related deferred profit of
$3,427,167 to property held for sale. During 1992 the underlying property on
this mortgage note receivable, referred to previously in this report as
"Crestwood," was reacquired by acceptance of a deed in lieu of foreclosure.
Reacquisition costs amounted to approximately $132,000 and are included in
property held for sale. The Crestwood Tract is described in detail under Item 2
- -Properties -- "Village of Royal Palm Beach."
Included in property held for sale at September 30, 1992 is the net carrying
value of two mortgage notes receivable in default which were considered to be in
substance foreclosures, as follows:
(a) A mortgage having a principal balance of $137,614, secured by land in Palm
Beach County, Florida. This property is described under Item 2 -- Properties --
"Palm Beach County." The Partnership recorded this transaction as an in
substance foreclosure at September 30, 1995 by reclassifying the net carrying
value of the receivable ($65,064), consisting of a mortgage note receivable of
$137,614 less related deferred profit of $72,550, to property held for sale.
Management believes that the fair market value of this property is excess of its
carrying.
(b) The property securing the other mortgage in default, comprising
approximately 5 acres in the Village (described in item 2 -- Properties
- -"Village of Royal Palm Beach") was reacquired by the Partnership by acceptance
of a deed in lieu of foreclosure in March 1993. The Partnership recorded this
transaction as an in substance foreclosure at September 30, 1992 by
reclassifying the net carrying value of the receivable, $300,000 less costs, to
property held for sale. The Partnership has obtained a recent appraisal of this
property indicating a fair market value of $400,000; however, there can be no
assurance that the property could in fact be sold for such amount, or as to the
length of time which might be required to effect its sale.
Environmental Matters
There are no environmental contingencies in respect of the Partnership or its
properties. Use of all of the Partnership's properties is subject to compliance
with state and county land use regulations relating to environmental matters,
which the Partnership takes into account in considering the values of its
properties. See Item 1 -- Business -"Factors Affecting Future Operations and
Distributions" and "Regulation" and Item 2 -- Properties -- "Acreage in the
Vicinity of the Village."
<PAGE>
Results of Operations
<TABLE>
<CAPTION>
Revenues
Fiscal Years Ended September 30,
----------------------------------------------
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Sales of land, net ........... -0- $ 520,000 $ 350,000
Recognized profit on
installment and cost
recovery sales (a) ......... 31,000 18,000 958,000
Interest income (b) ......... 32,000 67,000 184,000
Sale of utility system (c) ... 432,000 86,000 215,000
Other (d) .................... 2,000 141,000 10,000
---------- ---------- ----------
Total revenues ............... $ 497,000 $ 832,000 $1,717,000
========== ========== ==========
</TABLE>
a) Recognized profit on installment and cost recovery sales decreased in 1995
and 1994 as collections of the Partnership's mortgage notes receivable related
to sales reported on the installment and cost recovery basis were decreased.
b) Interest income decreased from 1993 to 1994 as the Partnership's mortgage
notes receivable decreased, and again in 1995 for the same reason.
c) As discussed in Note 11 to the financial statements, income recognized on the
sale of the utility system varies with water consumption and other factors.
d) Other income in 1994 includes $119,000 recovered as a litigation settlement
for breach of contract against a third party.
Cost of sales
Cost of sales relates to the sales of land as discussed above. This item varies
as a result of dissimilar profit margins and income recognition methods on the
various sales of land and buildings as discussed above.
Selling, administrative and other expenses
Selling, general and administrative expenses, have not varied significantly
during the last three years. In addition, in 1995 the Company incurred $405,261
in costs related to a proposed merger, as to which negotiations have been
terminated.
Provision for doubtful accounts
In 1993 it was determined that an allowance for doubtful collections of $131,250
was no longer required. In 1994 a provision for doubtful accounts and an
allowance for doubtful accounts of $48,500 was recorded. In 1995 it was
determined that an allowance for doubtful collections of $48,500 was no longer
required.
<PAGE>
Depreciation and property taxes
The reduction in this item from 1993 to 1994 relates to the sales of property
resulting in lower levels of property owned. The increase in this item from 1994
to 1995 relates to assessments of penalties and interest on delinquent 1994
taxes not yet paid.
Item 8. Financial Statements and Supplementary Data
The financial statements and the supplementary data are listed under Item 14
herein.
Item 9. Disagreements with Accountants on Accounting and Financial Disclosure
None
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The following information is provided with respect to the directors and officers
of each general partner of the Registrant.(l)
<TABLE>
<CAPTION>
Present Position
With the Registrant
Name Age and other positions
- ---- --- ---------------------
<S> <C> <C>
Irving Cowan __ Chairman and President of Steinco (1)(*)
Randy Rieger (**) __ Vice President and Chief
Operating Officer of Steinco,
September 1995 through February 1996;
President of RTL Realty, Inc.
and Royal T Land, Inc.,
privately held real estate
consultants and brokers
for over five years
David B. Simpson 57 Director and Vice President(*) of Steinco;
attorney currently in private practice and counsel
to the Partnership; partner,
Holtzmann, Wise & Shepard,
Counsel to Partnership,
September 1991 to August 1993;
Partner, Dow, Lohnes and Albertson,
Counsel to Partnership July, 1988 to
June, 1991
Dr. Ernest Sayfie 65 Director of Steinco; Physician in
private practice
Herbert Tobin 55 Director, and Secretary and Treasurer(*)
of Steinco
Jack Friedland 70 Member, Friedco,
L.C.(l); Private Investor
Leonard Friedland 73 Member, Friedco,
L.C.(l); Private Investor
Harold Friedland 65 Member, Friedco,
L.C.(l); Private Investor
Marjorie Cowan 55 Member, Friedco,
L.C.(l); Private Investor
</TABLE>
<PAGE>
(1) The general partners are Stein Management Company, Inc. and Hasam Realty
L.P. The general partner of Hasam L.P. is Friedco, L.C., a Florida limited
liability company. Friedco, L.C. is managed by its four members, Jack,
Harold and Leonard Friedland and Marjorie Cowan, who are are brothers and
sister. Irving Cowan is the husband of Marjorie Cowan.
(*) Elected to this position on February 14, 1996.
(**) Mr. Reiger, who was elected on an interim basis following the death in
September, 1995, of Martin Katz, President of the managing general partner,
resigned following the election of the officers referred to in the
preceding note. See Item 13.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the officers and
directors of the general partners of the Partnership, and persons who own more
than ten percent of the Partnership's Units, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and the
American Stock Exchange. Such officers, directors and greater than ten-percent
Unitholders are required by SEC regulations to furnish the Partnership with
copies of all Section 16(a) forms they file.
No such forms were furnished to the Partnership during fiscal 1995. Based solely
on the foregoing the Partnership believes that during fiscal 1995, no purchases
or sales of units were made requiring compliance with applicable Section 16(a)
filing requirements.
Item 11. Executive Compensation
During fiscal 1995 the only executive officer of the Managing General Partner
whose annualized compensation exceeded $60,000 was Martin J. Katz, who served as
Steinco's President and Chief Executive and Operating Officer and earned
$101,923 in cash compensation and $14,275 in insurance benefits, or
reimbursements and other personal benefits. Mr. Katz died in September 1995.
Death benefits of $35,779 payable to Mr. Katz's estate have been accrued as of
September 30, 1995.
All officers and Directors, as a group (4 persons) earned $114,423 in cash
compensation and $14,275 in other benefits.
The Partnership Agreement provides that the Partnership will provide and pay for
all payroll and other costs of Steinco in connection with the employment of
personnel, and the costs of office space, outside clerical and professional
assistance, equipment, and other facilities which are ordinary and necessary to
the conduct and management of the Partnership's affairs. The Partnership
reimbursed Steinco approximately $45,000 in the fiscal year ended September 30,
1994 for such expenses. Steinco's sole function is to serve as the Managing
General Partner and it does not conduct any other operations.
Other than the foregoing, the Managing General Partner is not entitled to any
compensation in respect of the discharge of its obligations under the
Partnership Agreement. Hasam L.P., the other General Partner, is not entitled to
compensation of any nature under the Partnership Agreement but is entitled to
reimbursement for such expenses as it may reasonably incur in the discharge of
its ordinary and necessary obligations as a General Partner. No such expenses
were reimbursed in the fiscal year ended September 30, 1995.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth as of December 15, 1995 information concerning
(i) all persons who are known to the Registrant to be the beneficial owner of
more than 5% of the Units and (ii) the beneficial ownership of Units of
directors and officers of each General Partner of the Registrant.
<TABLE>
<CAPTION>
Amount Beneficially Percent of
Name and Address Owned (a) Class
- ------------------ ------------------- ----------
<S> <C> <C>
Harold Friedland 1,093,561 (1) 24.4%
636 Old York Road #210
Jenkintown, PA 19046
Jack Friedland 1,155,834 (1) (2) 25.8%
111 Regatta Drive
Jupiter, FL 33477
Leonard Friedland 1,170,196 (1) (3) 26.1%
6530 Allison Road
Miami Beach, FL 33131
Marjorie Cowan 1,057,929 (1) (4) 23.6%
3725 S. Ocean Dr.
Hollywood, FL 33019
Samuel Friedland
Family Foundation 637,417 14.2%
2501 S. Ocean Dr.
Hollywood, FL 33019
Hasam Realty Limited
Partnership 75,000 1.7%
2501 S. Ocean Dr.
Hollywood, FL 33019
Stein Management Company 20,093 Less than 1%
2501 S. Ocean Drive
Hollywood, FL 33019
David B. Simpson 1,460 Less than 1%
2 University Plaza #109
Hackensack, N. J. 07601
Dr. Ernest Sayfie 150 Less than 1%
3001 S. Ocean Dr.
Hollywood, FL 33019
All officers and directors 2,361,972 52.7%
as a group (See footnotes)
</TABLE>
<PAGE>
(a) Includes all units as to which owner holds sole or shared voting or
investment power.
(1) Includes 637,417 units owned by the Samuel Friedland Family Foundation and
75,000 units owned by Hasam Realty Limited Partnership, of which this
individual may be deemed a controlling person.
(2) Does not include 2,500 units owned Jack Friedland's wife.
(3) Does not include 2,500 units owned by Leonard Friedland's ex-wife.
(4) Does not include 96,900 units owned by Mrs. Cowan's husband, Irving Cowan.
Includes 16,993 units owned by a trust for a minor child of which Mr. and
Mrs. Cowan are trustees; Includes 21,708 Units owned jointly with Mr.
Cowan.
Item 13. Certain Relationships and Related Transactions
Borrowing From General Partner
In June, 1995, the Company borrowed $500,000 from Hasam Realty, L.P. for general
working capital purposes, secured by a first mortgage on the Crestwood
commercial property referred to in Item 2. In January, 1996, Hasam agreed to add
to principal $22,249 of interest accrued through January 31, 1996 and unpaid.
The loan (including said amount added to principal) is payable in full on August
31, 1996 and bears interest at a rate equal to two percent over the Prime Rate,
defined as the highest fluctuating rate of interest per annum as published by
the Wall Street Journal. Management believes that the terms of this borrowing
are fair and reasonable, and at least as favorable as the terms which could have
been obtained from an unaffiliated institutional lender.
Indian Trail Water Control District
The Indian Trail Water Control District, a public entity whose seven supervisors
included Martin J. Katz until his death in September, 1995 and to which Jack
Friedland has recently been elected, has prepared a drainage and reclamation
plan covering a portion of the Company's acreage in the vicinity of the Village
of Royal Palm Beach. In addition, the Partnership is negotiating with the
District for the issuance of bonds to finance a portion of the Partnership's
acreage in the Village. Reference is made to Item 2 - Properties -- Palm Beach
County -"The Village of Royal Palm Beach" and "Acreage in the Vicinity of the
Village."
Herbert Tobin, a Director of Steinco, is a director of Union Bank of Florida,,
which made a land development loan to the Partnership in 1994. See Item 2.
Randy Rieger was elected on an interim basis as a Vice President and Chief
Operating Officer of Stein Management Company, Inc., the Partnership's managing
general partner, in September 1995, shortly following Mr. Katz's death. Mr.
Rieger had been active as a real estate broker, directly and through affiliated
companies, in the south Florida real estate market for many years. Prior to his
election Mr. Rieger was serving as a consultant to the Partnership under an
arrangement pursuant to which he was paid consulting fees and additional amounts
applicable to future brokerage commissions. In the fiscal year ended September
30, 1995, Mr. Rieger was paid $75,100 under such arrangement, of which $ 57,600
was paid as consulting fees and $17,500 was applicable to future brokerage
commissions which may be earned in connection with sales of the Partnership's
real estate assets. Mr. Rieger, through affiliated companies, had also been
engaged as the Partnership's exclusive broker in respect of a substantial
portion of its real estate assets, and will be entitled to substantial brokerage
commissions in the event that certain real estate sales currently under contract
relating to a shopping center site are consummated. See Item 2 -- Properties --
"The Village of Royal Palm Beach." The Company has compensated Mr. Rieger at the
rate of $12,300 per month, and is negotiating with Mr. Rieger concerning revised
brokerage arrangements. Mr. Rieger resigned following the election of new
officers on February 14, 1996; however, it is intended that Mr. Rieger will
continue to serve the Partnership as a consultant, on terms presently being
negotiated. See Item 10.
General Partners
The general partners do not receive any compensation for serving as such. See
Item 11 -- "Executive Compensation."
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as a part of this report:
1. Financial Statements:
Independent Auditor's Report
Royal Palm Beach Colony, Limited Partnership Financial
Statements:
Balance sheets as of September 30, 1995 and 1994.
Statements of income for the years ended September 30, 1995,
1994 and 1993.
Statements of partners' equity for the years ended September
30, 1995, 1994 and 1993.
Statements of cash flows for the years ended September 30,
1995, 1994 and 1993.
2. Financial Statement Schedules:
Schedule IX Valuation and qualifying accounts
Schedule X Supplementary Income Statement Information
Schedules other than those listed above have been omitted because they are not
applicable or the required information is shown in the financial statements or
notes thereto.
(b) Reports on Form 8-K
None.
<PAGE>
(c) Exhibits
NOTE: All references in this table of exhibits to "Registration Statement"
relate to the Registration Statement of the Registrant on Form S-14 (file Number
2-96374) as originally filed with the Securities and Exchange commission on
March 12, 1985, as supplemented by Amendment No. 1 filed May 23, 1985 and as
effective on June 10, 1985.
3(a) Certificate and Agreement of Limited Partnership of Royal Palm Beach
Colony, L.P. filed as Exhibit 3(d) to the Registration Statement and
incorporated herein by reference.
3(b) Restated certificate and Agreement of Limited Partnership of Royal Palm
Beach Colony, L.P. included as Appendix B to the Registration Statement and
incorporated herein by reference.
3(c) Amended Certificate and Agreement of Limited Partnership off Royal Palm
Beach Colony, L.P. (filed May 21, 1985 with the Secretary of State of Delaware)
changing name to Royal Palm Beach Colony, Limited Partnership. Filed as Exhibit
3(g) to Amendment Number One to the Registration Statement and incorporated
herein by reference.
3(d) Restated Certificate and Agreement of Limited Partnership (revised)
included as Appendix B to Amendment No. 1 to the Registration Statement and
filed July 11, 1985 with the Secretary of State of Delaware and incorporated
herein by reference.
3(e) Restated Certificate of Limited Partnership dated December 16, 1986. Filed
as Exhibit 3(e) to Report on Form 10-K for the fiscal year ended September 30,
1986 and incorporated herein by reference.
3(f) Amended and Restated Agreement of Limited Partnership dated December 16,
1986. Filed as Exhibit 3(f) to Report on Form 10-K for the fiscal year ended
September 30, 1986 and incorporated herein by reference.
3(g) Amendment No. 1 to Amended and Restated Agreement of Limited Partnership
dated December 30, 1986. Filed as Exhibit 3(g) to Report on Form 10-K for the
fiscal year ended September 30, 1986 and incorporated herein by reference.
3(h) Second Amended and Restated Certificate of Limited Partnership dated
December 30, 1986. Filed as Exhibit 3 (h) to Report on Form 10-K for the fiscal
year ended September 30, 1986 and incorporated herein by reference.
<PAGE>
(c) Exhibits -- continued
4(a) Form of Unit Certificate issued to Limited Partners and Assignees of the
Partnership. Filed as Exhibit 4 (a) to the Registration Statement and
incorporated herein by reference.
4(b) Loan Agreement between Royal Palm Beach Colony, Limited Partnership and
Union Bank of Florida dated October 6, 1994, pertaining to loan in the amount of
$975,000. Filed as Exhibit 4(b) to the report on Form 10-K of the fiscal year
ended September 30, 1994 and incorporated herein by reference.
4(c) Promissory Note: $27,247.83, Registrant to Hasam Realty Limited Partnership
dated June 29, 1995.
4(d) Promissory Note: $27,247.83, Registrant to Hasam Realty Limited Partnership
relating to accrued interest on note described in Exhibit 4 (c).
4(e) Agreement between Registrant and Gerald M. Higier dated December 1, 1995
relating to purchase of 10.8 acre commercial tract.
4(f) Agreement between Registrant and Gerald M. Higier dated in 1995 relating to
sale of 24 acres.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ROYAL PALM BEACH COLONY,
LIMITED PARTNERSHIP
By: Stein Management Company, Inc.
Managing General Partner
Date: February 14, 1996 By: /s/David B. Simpson
------------------------------------
David B. Simpson, Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
/s/Irving Cowan
- ------------------------ Chairman, President and Director, February 14, 1996
Irving Cowan Stein Managment Company, Inc.
/s/David B. Simpson
- ------------------------ Vice President and Director, Stein February 14, 1996
David B. Simpson Management Company, Inc.
/s/Ernest Sayfie
- ------------------------ Director, Stein Management February 14, 1996
Ernest Sayfie Company, Inc.
/s/Herbert Tobin
- ------------------------ Director, Stein Management February 14, 1996
Herbert Tobin Company, Inc.
</TABLE>
<PAGE>
ROYAL PALM BEACH COLONY,
LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1995, 1994, 1993
<PAGE>
INDEPENDENT AUDITORS' REPORT
Partners
Royal Palm Beach Colony, Limited Partnership
Hollywood, Florida
We have audited the accompanying balance sheets of Royal Palm Beach Colony,
Limited Partnership as of September 30, 1995 and 1994, and the related
statements of operations, partners' equity and cash flows for each of the three
years in the period ended September 30, 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Royal Palm Beach Colony,
Limited Partnership as of September 30, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
September 30, 1995, in conformity with generally accepted accounting principles.
The accompanying financial statements for 1995 have been prepared assuming that
the Partnership will continue as a going concern. As discussed in Note 14 to the
financial statements, in anticipation of a proposed merger which was ultimately
terminated, the Partnership suspended land sales during fiscal 1995 which
resulted in insufficient cash resources to meet its obligations as they become
due. Management's plans in regard to these matters are also described in Note
14. These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
<PAGE>
Partners
Royal Palm Beach Colony, Limited Partnership
As described in Note 1, the primary business purpose of the Partnership is the
operation, management and orderly disposition of its assets and the distribution
of the proceeds therefrom to unitholders.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in item 14(a) 2 are
presented for purposes of complying with the Securities and Exchange
Commission's rules and are not part of the basic financial statements. These
schedules have been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly state in all material
respects the financial data required to be set forth therein in relation to the
basic financial statements taken as a whole.
LEFCOURT, BILLIG, SARBEY, TIKTIN & YESNER, P.A.
Coral Gables, Florida
January 8, 1996, except for the third paragraph of Note 5, as to which the date
is January 31, 1996
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
BALANCE SHEETS
SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
ASSETS
Cash .............................................. $ 83,902 $ 543,243
Mortgage notes and other receivables (Note 2):
Mortgage notes receivable ..................... 236,153 383,215
Other ......................................... 435,883 147,153
Property held for sale (Note 3) ................... 4,607,661 3,444,824
Other assets (Note 4) ............................. 61,891 131,434
---------- ----------
$5,425,490 $4,649,869
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Mortgage notes payable, bank (Note 5) ......... $1,010,513 --
Mortgage note payable, general partner (Note 5) 500,000 --
Accounts payable and other liabilities (Note 6) 840,402 $ 542,966
Estimated costs of development of land sold ... 14,441 259,420
Commitment and subsequent events (Notes 2, 3 and 5)
Partners' equity:
4,485,504 units authorized and outstanding ... 3,060,134 3,847,483
---------- ----------
$5,425,490 $4,649,869
========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years ended September 30,
---------------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Revenues (Notes 13 and 14) ........... $ 497,651 $ 831,773 $ 1,717,276
----------- ----------- -----------
Costs and expenses:
Cost of sales ..................... -- 439,195 188,674
Selling, general and
administrative expenses (Note 10) 807,505 804,930 770,777
Terminated merger costs (Note 7) .. 405,261 -- --
Provision for doubtful
accounts ........................ (48,500) 48,500 (131,250)
Depreciation and
property taxes .................. 120,734 92,941 116,210
----------- ----------- -----------
1,285,000 1,385,566 944,411
----------- ----------- -----------
Net income (loss) .................... ($ 787,349) ($ 553,793) $ 772,865
=========== =========== ===========
Net income (loss) per unit ........... ($ 0.18) ($ 0.12) $ 0.17
=========== =========== ===========
Weighted average number of
units outstanding ................. 4,485,504 4,485,504 4,485,504
=========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' EQUITY
<TABLE>
<CAPTION>
Partnership General Limited Total
Units Partner Partners Equity
--------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, September 30, 1992 ............. 4,485,504 $ 168,804 $ 4,580,983 $ 4,749,787
Partnership distributions ($.25 per unit) -- (23,773) (1,097,603) (1,121,376)
Net income .............................. -- 16,384 756,481 772,865
--------- ----------- ----------- -----------
Balance, September 30, 1993 ............. 4,485,504 161,415 4,239,861 4,401,276
Net loss ................................ -- (11,740) (542,053) (553,793)
--------- ----------- ----------- -----------
Balance, September 30, 1994 ............. 4,485,504 149,675 3,697,808 3,847,483
Net loss ................................ -- (16,691) (770,658) (787,349)
--------- ----------- ----------- -----------
Balance, September 30, 1995 ............. 4,485,504 $ 132,984 $ 2,927,150 $ 3,060,134
========= =========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended September 30,
---------------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Cash received:
Collections on land sales
and receivables ................. $ 161,428 $ 469,393 $ 2,031,927
Interest income .................... 77,207 56,051 181,095
Sale of utility system ............. 85,800 215,050 389,000
Other cash received ................ 14,985 106,021 7,250
----------- ----------- -----------
339,420 846,515 2,609,272
----------- ----------- -----------
Cash expended:
Selling, general and
administrative, property
taxes and other expenses ........... 845,097 991,682 835,284
Interest paid
(net of amounts capitalized) ....... 4,750
Acquisition of property held for sale 18,766 123,552 --
Improvements to property held for sale 1,439,903 597,404 305,471
----------- ----------- -----------
2,308,516 1,712,638 1,140,755
----------- ----------- -----------
Net cash provided by (used in)
operating activities ................. (1,969,096) (866,123) 1,468,517
----------- ----------- -----------
Cash flows from investing activities:
Purchase of property and equipment ... (758) (11,387) (4,940)
----------- ----------- -----------
Net cash used in investing activities ... (758) (11,387) (4,940)
----------- ----------- -----------
Cash flows from financing activities:
Proceeds from mortgage notes payable:
Bank ............................... 1,010,513 -- --
General partner .................... 500,000
Distributions to unitholders ......... -- -- (1,121,376)
----------- ----------- -----------
Net cash provided by (used in)
financing activities ............... 1,510,513 -- (1,121,376)
----------- ----------- -----------
Net increase (decrease) in cash ......... (459,341) (877,510) 342,201
Cash at beginning of year ............... 543,243 1,420,753 1,078,552
----------- ----------- -----------
Cash at end of year ..................... $ 83,902 $ 543,243 $ 1,420,753
=========== =========== ===========
(continued)
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS (CONTINUED)
<CAPTION>
Reconciliation of net income (loss) to net cash provided by (used in) operating activities:
Years ended September 30,
---------------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Net income (loss) ....................... ($ 787,349) ($ 553,793) $ 772,865
----------- ----------- -----------
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization ........ 4,334 3,599 2,394
Provision for doubtful accounts ...... (48,500) 48,500 (131,250)
Sundry ............................... 4,227 -- --
Change in assets and liabilities:
Increase in:
Mortgage notes and
other receivables ............... (158,232) -- --
Property held for sale ............. (1,097,773) (485,947) (131,739)
Other assets ....................... -- (28,696) (30,158)
Accounts payable and
accrued liabilities ............. 297,436 191,670 72,180
Estimated costs of development
of land sold .................... -- -- 4,942
Decrease in:
Mortgage notes and
other receivables ............... -- 36,356 909,283
Other assets ....................... 61,740 -- --
Estimated cost of development
of land sold .................... (244,979) (77,812) --
----------- ----------- -----------
Total adjustments ....................... (1,181,747) (312,330) 695,652
----------- ----------- -----------
Net cash flow provided by
(used in) operating activities ....... ($1,969,096) ($ 866,123) $ 1,468,517
=========== =========== ===========
</TABLE>
Supplemental information concerning investing and financing activities:
In connection with the 1995 recording of an in substance foreclosure of the
property described in Note 3, the Partnership recorded the property and
concurrently reduced its mortgage notes receivable by the carrying value of the
receivable, $65,064, in fiscal year 1995.
See notes to financial statements.
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
1. Organization and summary of significant accounting policies:
The primary business purpose of the Partnership is the operation,
management and orderly disposition of its assets and the distribution of
the proceeds therefrom to unitholders. The general partners of the
Partnership are Hasam Realty Limited Partnership and Stein Management
Company, Inc. ("Steinco"). Steinco is the Managing General Partner which
employs the management and clerical employees necessary to carry out the
operation of the Partnership. Steinco is reimbursed by the Partnership for
related expenses.
A summary of the Partnership's accounting principles is as follows:
Land sales:
Land sales are accounted for under the accrual method when the
purchaser has made an adequate down payment, generally 20% to 25% of
the purchase price, the Partnership has no substantial remaining
obligations with respect to the property, and collectibility of the
receivable is reasonably predictable. Otherwise, either the installment
or the cost recovery method is used. Under the installment method,
portions of profit are recognized as cash payments are made by the
buyer. Under the cost recovery method no profit is recognized until
cash payments by the buyer, including interest and principal, exceed
the seller's cost of the property sold.
Sale of Utility System:
The Partnership recognizes profit on the 1983 sale of a Utility System
in the years in which increases in consumption generate amounts due to
the Partnership. (See note 11).
Cash:
The partnership considers all highly liquid debt investments with
maturities of three months or less to be cash equivalents.
Mortgage notes receivable:
Mortgage notes receivable represent amounts due from the sale of
properties and in certain cases have been reduced by the deferred
profit which is being recognized under the installment method of
accounting. The Partnership evaluates the carrying amount of delinquent
mortgage notes receivable to determine that such amount is not in
excess of the estimated fair market value of the underlying land.
Property held for sale:
Property held for sale is stated at the lower of cost or estimated net
realizable value. The cost of property held for sale includes original
purchase price, cost of land development and development period real
estate taxes and interest.
<PAGE>
Property and equipment:
Property and equipment are stated at cost. Depreciation is computed
over the estimated useful lives of the assets on the straight-line
method for financial reporting purposes and accelerated methods for tax
reporting purposes.
Net income (loss) per unit:
Net income (loss) per unit is calculated based on the weighted average
number of units outstanding during the year.
Concentrations of credit risk:
Assets which subject the Partnership to concentrations of credit risk
consist primarily of cash and property held for sale. The Partnership
places its temporary cash investments with high credit quality
institutions. At times, such investments may exceed the FDIC insurance
limit. The Partnership's property held for sale is located in Florida.
The Partnership's ability to sell its property is substantially
dependent upon the Florida real estate economic sector.
Use of estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures.
Actual results could differ from those estimates.
<PAGE>
2. Mortgage notes and other receivables:
Mortgage notes receivable consist of the following:
<TABLE>
<CAPTION>
September 30,
--------------------------
1995 1994
--------- ---------
<S> <C> <C>
Mortgage notes receivable .................... $ 285,801 $ 584,842
Less:
Deferred profit ........................... (49,648) (153,127)
Allowance for doubtful collection ......... -- (48,500)
--------- ---------
$ 236,153 $ 383,215
========= =========
</TABLE>
Mortgage notes receivable at September 30, 1995 consisted of two notes in
the amounts of $60,194 and $225,607, respectively. On October 27, 1995 the
first note was collected in full. On November 24, 1995 the second note was
sold for $170,000, such amount approximating the carrying value of the note
at the date of sale.
Other receivables consist of the following:
<TABLE>
<CAPTION>
September 30,
-------------------------
1995 1994
-------- --------
<S> <C> <C>
Utility receivable (Note 11) ................. $432,800 $ 85,800
Accrued interest receivable .................. 2,833 48,124
Other ........................................ 250 13,229
-------- --------
$435,883 $147,153
======== ========
</TABLE>
3. Property held for sale:
Included in property held for sale at September 30, 1995 is the net
carrying value of a mortgage note receivable in default which was
considered to be an in substance foreclosure. The underlying property is in
the process of being reacquired through foreclosure. The in substance
foreclosure was recorded by reclassifying the net carrying value of the
receivable of $65,064, consisting of a mortgage note receivable of $137,614
less related deferred profit of $72,550, to property held for sale.
The Partnership has contracted to develop certain property held for sale.
The amount of the contract is approximately $306,000, of which $21,000 has
been incurred and is included in accounts payable at September 30, 1995.
<PAGE>
4. Other assets:
Other assets consist of the following:
<TABLE>
<CAPTION>
September 30,
-------------------------
1995 1994
-------- --------
<S> <C> <C>
Furniture and equipment, net of
accumulated depreciation .................. $ 8,184 $ 15,987
Prepaid expenses ............................. 53,707 115,447
-------- --------
$ 61,891 $131,434
======== ========
</TABLE>
5. Mortgage notes payable:
Mortgage notes payable - bank
On October 6, 1994 the Partnership entered into a
construction/development loan agreement whereby the
Partnership borrowed $975,000 at 2% over the prime
rate (10.75% at September 30, 1995). Interest only
is payable monthly and, as modified on June 26,
1995 (see below), the loan matures on July 1, 1997.
Property held for sale with a cost of approximately
$2,530,000 is collateral for this loan and the
additional borrowings described below. $ 975,000
On June 26, 1995, the Partnership entered into a
modification of the above loan agreement whereby
the Partnership may borrow, under the same terms as
above, up to an additional $1,200,000 provided that
the Partnership receives at least $1,000,000 from a
proposed municipal bond offering of the Indian
Trail Water Control District, the proceeds of which
are to be used to develop water and sewer
facilities. Should the proposed municipal bond 35,513
offering not provide these additional proceeds, ----------
additional borrowings are limited to $350,000. $1,010,513
==========
<PAGE>
Mortgage note payable - general partner:
On June 29, 1995 the Partnership borrowed $500,000
from its general partner for working capital. The
terms of the mortgage call for monthly interest
payments at a rate of 2% over prime (10.75% at
September 30, 1995) with the outstanding principal
balance due upon maturity at June 29, 1996.
Property held for sale with a cost of approximately
$640,000 is collateral for this loan. No payments
of interest have been made since August 1995 and on
January 31, 1996 the general partner waived the
default for nonpayment of interest and extended the
due date of the mortgage to August 31, 1996. $ 500,000
==========
Interest is capitalized for property being developed. All other interest is
charged to operations as incurred. During the year ended September 30, 1995
interest of $106,235 was incurred of which $89,605 was capitalized and
$16,630 was charged to operations.
6. Accounts payable and other liabilities:
Accounts payable and other liabilities consist of the following:
<TABLE>
<CAPTION>
September 30,
---------------------------
1995 1994
-------- --------
<S> <C> <C>
Accounts payable ......................... $555,547 $388,162
Accrued liabilities:
Property taxes ......................... 107,352 106,764
Other .................................. 83,703 48,040
Due to landowner ......................... 93,800
-------- --------
$840,402 $542,966
======== ========
</TABLE>
Property taxes related to calendar 1994, and which were due March 31, 1995
in the approximate amount of $145,000, are delinquent and are included in
accounts payable at September 30, 1995.
Due to landowner represents reimbursement due for development costs in
connection with common areas. Payments of $18,800 and $75,000 are due on
February 15, 1996 and June 30, 1996, respectively, with interest at 8% per
annum.
<PAGE>
7. Terminated merger costs:
During fiscal year 1994 management determined that the Partnership should
add home building operations to its business. After a potential affiliation
was identified at the beginning of fiscal 1995, a memorandum of
understanding was executed for the purpose of merging with a
privately-owned South Florida home builder. However, after protracted
negotiations, the attempt to merge was terminated in December 1995. Costs
incurred during the year ended September 30, 1995, in connection with
terminated merger, amounted to approximately $405,000 and have been
expensed in the 1995 statement of operations. Such costs include fees for
financial, capital and real estate consultants and attorneys' fees.
Subsequent to September 30, 1995 approximately $66,000 of additional costs
were incurred.
8. Income taxes:
The Partnership is not subject to income taxes. Instead, the partners are
required to include in their income tax returns their share of the
Partnership's income or loss, as adjusted to reflect the effects of certain
transactions which are accorded different accounting treatment for federal
income tax purposes. Pursuant to the Tax Reform Act of 1986, the Company
changed its fiscal year end, September 30, to a calendar year end for
income tax purposes.
Since the Partnership has not completed accounting for its operations for
the period October 1, 1995 through December 31, 1995, it has estimated its
taxable loss for the calendar year based upon annualization of its
operations for the nine months ended September 30, 1995, after adjusting
for non-recurring items. Exclusive of taxable income or loss generated by a
December 1995 sale of land in the amount of $140,000 (pending cost of sale
allocations), it is presently estimated that the Partnership's tax loss for
calendar year 1995 will approximate $300,000.
The following analysis summarizes the major differences between the
financial reporting and income tax basis of the partners' equity account at
September 30, 1995.
<PAGE>
<TABLE>
<S> <C> <C>
Partners' equity, financial reporting basis ........ $ 3,060,134
Add items recorded for tax purposes only:
Step-up in basis of property ..................... $17,000,000
Less: Cost of sales - step-up as adjusted
for unamortized additional capitalized
inventory costs ................................ 11,495,211
-----------
5,504,789
-----------
Add items not deducted for tax purposes:
Deferred profit - financial reporting basis .... 49,648
Accrued liabilities ............................ 95,772
Terminated merger costs ........................ 375,630
Commissions .................................... 74,226
-----------
595,276 6,100,065
----------- -----------
Partners' equity, income tax basis ................. $ 9,160,199
===========
</TABLE>
9. Related party transactions:
The Partnership reimbursed Steinco approximately $45,000 and $154,000, for
payroll and related expenses for fiscal years 1994 and 1993, respectively.
10. Lease information:
The Partnership occupies its office facility in a building owned by an
entity related by common ownership. The Partnership does not pay any rent
at this office facility. Other long-term operating leases on real and
personal properties are not considered material.
11. Other transactions:
A subsidiary of the Company, Royal Palm Beach Utilities Company
("Utilities"), previously sold to the Village of Royal Palm Beach
("Village") all of its assets, consisting of a water treatment and
distribution system and a sanitary sewer collection, treatment and disposal
system located in the Village. The sale requires payments to be received by
Utilities as future connections (as measured by increases in consumption)
are added to the system. Should consumption not increase sufficiently, the
Partnership would not receive the full sale amount. The maximum proceeds to
Utilities, was approximately $13,410,000, of which, under the terms of the
sale, approximately $5,708,000 had not yet been received as of September
30, 1995. In addition, the Partnership had the right to receive up to
$500,000, of which $262,657 has already been received, as the Village
collects guaranteed revenues from developers. Since future increases in
consumption and payment of guaranteed revenues cannot be assured and,
therefore, the extent of future payments to the Partnership is uncertain,
the Partnership accounts for this transaction utilizing the cost recovery
method of accounting. The Partnership has previously fully recovered its
cost and recognizes profit on the sale as increases in consumption generate
amounts due to the Partnership. Revenues related to the sale of utility
system of $432,800, $85,800, $215,000 were recognized for fiscal years
1995, 1994 and 1993, respectively.
<PAGE>
12. Comparative quarterly financial information (unaudited):
<TABLE>
<CAPTION>
First Second Third Fourth
quarter quarter quarter quarter Full year
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
1995:
Revenues $ 19,758 $ 36,840 $ 10,666 $430,387 $ 497,651
Costs and expenses 215,640 282,400 338,582 448,378 1,285,000
-------- -------- -------- -------- ----------
Net loss ($195,882) ($245,560) ($327,916) ($ 17,991) ($ 787,349)
======== ======== ======== ======== ==========
Net loss per unit ($.04) ($.06) ($.07) ($.01) ($.18)
==== ==== ==== ==== ====
1994:
Revenues $145,468 $ 70,504 $390,362 $225,439 $ 831,773
Costs and expenses 202,220 329,583 499,026 354,737 1,385,566
-------- -------- -------- -------- ----------
Net loss ($ 56,752) ($259,079) ($108,664) ($129,298) ($ 553,793)
======== ======== ======== ======== ==========
Net loss
per unit ($.01) ($.06) ($.02) ($.03) ($.12)
==== ==== ==== ==== ====
1993:
Revenues $800,297 $308,233 $376,203 $232,543 $1,717,276
Costs and expenses 170,767 119,964 375,538 278,142 944,411
-------- -------- -------- -------- ----------
Net income (loss) $629,530 $188,269 $ 665 ($ 45,599) $ 772,865
======== ======== ======== ======== ==========
Net income (loss) per unit $.14 $.04 $.00 ($.01) $.17
==== ==== ==== ==== ====
</TABLE>
Year end adjustments at September 30, 1995 principally include the
write-off of terminated merger costs of approximately $220,000, which had
previously been capitalized.
Year end adjustments at September 30, 1994 principally include the
reporting of a third quarter land sale on the installment basis whereas the
accrual method had previously been used. At year end, management determined
that the installment method of accounting was more appropriate. The effect
of this adjustment was to increase the 1994 loss by approximately $61,000.
<PAGE>
13. Revenues:
Revenues consist of the following:
<TABLE>
<CAPTION>
Years ended September 30,
----------------------------------------
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Land revenues:
Gross sales of land ............ -- $ 581,575 $ 350,000
Less profit deferred
until principal
collections are
received ................ -- 61,395 --
---------- ----------
Net sales of land .............. -- 520,180 350,000
Recognized profit on
installment and cost
recovery sales ............ $ 30,929 18,316 958,135
Interest income ................... 31,916 66,814 184,284
Sale of utility system
(Note 11) ...................... 432,800 85,800 215,000
Other ............................. 2,006 140,663 9,857
---------- ---------- ----------
$ 497,651 $ 831,773 $1,717,276
========== ========== ==========
</TABLE>
Sales to a different single purchaser each year represented 60%, and 100%
of total sales for fiscal years 1994, and 1993, respectively.
In fiscal year 1994, other revenue principally consists of $119,000
received as a litigation settlement against an unrelated third party for
breach of contract. The third party failed to reimburse the Partnership for
the costs incurred in building a road. The Partnership received the full
amount due of $119,000 prior to final judicial determination.
14. Liquidity:
During the year ended September 30, 1995, the Partnership incurred
substantial expenses in the development of its properties in addition to
normal ongoing administrative costs and costs incurred in connection with
the terminated merger described in Note 7. In anticipation of adding home
building operations through the proposed merger, management made a decision
to suspend land sales activity pending the outcome of the merger. This
suspension of land sales resulted in insufficient cash resources available
for the Partnership to meet its obligations as they become due.
Since the termination of the merger in December 1995, the Partnership has
resumed land sales efforts and has entered into sales contracts for which
closings are pending. However, there is no assurance that such closings
will occur, or that their timing will coincide with the Partnership's cash
requirements. Management believes that shortfalls in cash flow are
temporary and that the Partnership will be able to arrange short term
financing sufficient to fund ongoing operations. The success of the sales
efforts or obtaining additional borrowings is necessary to enable the
Partnership to meet its current obligations and continue as a going
concern.
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
SCHEDULE IX - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Column C-
-------------------------
(1) (2)
Column B- Charged Charged Column E-
Balance at to to Balance at
Column A beginning costs and other Column D- end of
Description of period expenses accounts deductions period
- --------------------------- ----------- ---------- ---------- -------------- ------------
<S> <C> <C> <C> <C>
Deferred profit:
1993 1,068,184 (B) ($ 958,135) $ 110,049
1994 110,049 (A) 61,395
(B) ( 18,316)
(E) ( 1) 153,127
1995 153,127 (B) ( 30,929)
(C) ( 72,550) 49,648
Allowance for
doubtful accounts:
1993 131,250 (D) ( 131,250) 0
1994 0 48,500 48,500
1995 48,500 (D) ( 48,500) 0
</TABLE>
(A) Deferred profit on current year sales
(B) Recognized profit on installment and cost recovery sales
(C) Deferred profit on receivable - the underlying property was recorded as an
in substance foreclosure (See Note 3 to Financial Statements)
(D) Recovery of reserved receivable
(E) Rounding
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
SCHEDULE X - SUPPLEMENTAL INCOME STATEMENT INFORMATION
YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
September 30,
------------------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
1. Maintenance and repairs ........... $ 0 $ 580 $ 822
======== ======== ========
2. Taxes, other than payroll
and income taxes .................. $119,201 $ 92,267 $118,614
======== ======== ========
3. Advertising ....................... $ 600 $ 2,500 $ 4,363
======== ======== ========
</TABLE>
EXHIBIT 4(c)
PROMISSORY NOTE
$27,247.83 ___________________, 1996
Hollywood, Florida
FOR VALUE RECEIVED, ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP, a
Delaware limited partnership, promises to pay to the order of HASAM REALTY
LIMITED PARTNERSHIP, a Florida limited partnership, at its principal office
located in Hollywood, Florida (or such other place as the holder may designate)
the principal sum of Twenty-Seven Thousand Two Hundred Forty-Seven Dollars and
83/100 ($27,247.83), plus interest thereon from date at the Rate hereinafter
defined.
For purposes hereof, "Prime Rate" means the highest fluctuating rate of
interest per annum as published by the Wall Street Journal. The outstanding loan
principal balance shall bear interest at a variable rate per annum equal to the
Prime Rate plus two percent (2.0%). The interest rate hereunder shall be
adjusted daily in accordance with fluctuations in the Prime Rate. Interest shall
be computed on the basis of a daily amount of interest accruing on the daily
outstanding principal balance during a 360 day year multiplied by the actual
number of days the principal is outstanding during such applicable interest
period.
The then outstanding principal balance of this Note, plus all accrued
but unpaid interest, shall be due and payable on August 31, 1996, or earlier
upon the sale, transfer or other conveyance of all or any part of the property
securing this Note (the "Maturity Date").
After default or maturity or upon acceleration, and thereafter, the
unpaid indebtedness then evidenced by this Note shall bear interest at a fixed
rate equal to the maximum rate then permitted by applicable law.
In no event shall this Note permit the collection of any interest which
would be usurious under the law governing this transaction. If any such interest
in excess of the maximum rate allowable under applicable law has been collected,
Maker agrees that the amount of interest collected above the maximum rate
permitted by applicable law, together with interest thereon at the rate required
by applicable law, shall be refunded to Maker, and Maker agrees to accept such
refund.
This Note may be prepaid in whole or in part at any time without
penalty.
Anyone now or at any time liable for payment of this Note, whether
directly or indirectly, hereby waives presentment, protest, notice of protest
and dishonor.
Maker further agrees to pay all costs of collection, including without
limitation a reasonable attorney's fee, in case the principal of this Note or
any installment of interest thereon is not paid when due, or in case it becomes
necessary to protect the security hereof, whether suit be brought or not.
This Note is secured by a first mortgage dated June 29, 1995, and
recorded in the official records of Palm Beach, Florida at Official Records Book
8834, at Page 126, encumbering certain property in the State of Florida, and
represents deferred and unpaid interest on a promissory note dated June 29, 1995
in the original principal amount of $500,000 (the "Promissory Note") and shall
be of equal dignity and priority with said Promissory Note, and as given in
consideration of Payee's forbearance and waiver of Maker's past default in
payment of installments of interest due under said Promissory Note and first
mortgage, and is to be construed and enforced according to the laws of the State
of Florida; upon default in the payment of principal and/or interest when due,
the whole sum of principal and interest remaining unpaid shall, at the option of
the holder, become immediately due and payable.
MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND ANY DOCUMENT EXECUTED
IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF MAKER, GUARANTORS OR HOLDER. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE HOLDER'S MAKING THE LOAN EVIDENCED
HEREBY.
IN WITNESS WHEREOF, Maker has caused this Note to be duly executed as
of the day and year first above written.
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
By: STEIN MANAGEMENT COMPANY, INC., a
Florida corporation, Managing General Partner
By: ________________________________________________
, President
[Corporate Seal]
Attest: ________________________________________________
, Secretary
<PAGE>
EXHIBIT 4(d)
PROMISSORY NOTE
S500,000.00 June 29, 1995
Hollywood, Florida
FOR VALUE RECEIVED, ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP, a Delaware
limited partnership, promises to pay to the order of HASAM REALTY LIMITED
PARTNERSHIP, a Florida limited partnership, at its principal office located in
Hollywood, Florida (or such other place as the holder may designate) the
principal sum of Five Hundred Thousand Dollars ($500,000.00), plus interest
thereon from date at the Rate hereinafter defined.
For purposed hereof, "Prime Rate" means the highest fluctuating rate of interest
per annum as published by the Wall Street Journal. The outstanding loan
principal balance shall bear interest at a variable rate per annum equal to the
Prime Rate plus two percent (2.0%). The interest rate hereunder shall be
adjusted daily in accordance with fluctuations in the Prime Rate. Interest shall
be computed on the basis of a daily amount of interest accruing on the daily
outstanding principal balance during a 360-day year multiplied by the actual
number of days the principal is outstanding during such applicable interest
period.
Interest accrued in accordance with this Note shall be due and payable monthly,
in arrears, on the first day of each month immediately following the calendar
month for which said interest has accrued. All accrued but unpaid interest shall
be due and payable in full on the Maturity Date hereinafter defined.
The then outstanding principal balance of this Note, plus all accrued but unpaid
interest, shall be due and payable one (l) year from the date of this Note, or
earlier upon the sale, transfer or other conveyance of all or any part of the
property securing this Note (the "Maturity Date").
Should Maker fail to pay the installments of interest on any due date provided
for herein, then Maker further promises to to pay a late payment charge equal to
four percent (4%) of the amount of the unpaid installment.
After default or maturity or upon acceleration, and thereafter, the unpaid
indebtedness then evidenced by this Note shall bear interest at a fixed rate
equal to the maximum rate then permitted by applicable law.
In no event shall this Note permit the collection of any interest which would be
usurious under the law governing this transaction. If any such interest in
excess of the maximum rate allowable under applicable law has been collected,
Maker agrees that the amount of interest collected above the maximum rate
permitted by applicable law, together with interest thereon at the rate required
by applicable law, shall be refunded to Maker, and Maker agrees to accept such
refund.
This Note may be prepaid in whole or in part at any time without penalty.
Anyone now or at any time liable for payment of this Note, whether directly or
indirectly, hereby waives presentment, protest, notice of protest and dishonor.
<PAGE>
Maker further agrees to pay all costs of collection, including without
limitation a reasonable attorney's fee, in case the principle of this Note or
any installment of interest thereon is not paid when due, or in case it becomes
necessary to protect the security hereof, whether suit be brought or not.
This Note is secured by a first mortgage of even date herewith encumbering
certain property in the State of Florida, and is to be construed and enforced
according to the laws of the State of Florida; upon default in the payment of
principal and/or interest when due, the whole sum of principal and interest
remaining unpaid shall, at the option of the holder, become immediately due and
payable.
MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND ANY DOCUMENT EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF MAKER, GUARANTORS OR HOLDER. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE HOLDER'S MAKING THE LOAN EVIDENCED
HEREBY.
IT WITNESS WHEREOF, Maker has caused this Note to be duly executed as of the day
and year first above written.
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
By: STEIN MANAGEMENT COMPANY, INC., a
Florida corporation, Managing General
Partner
By: /s/Martin Katz, President
-------------------------
Martin Katz, President
[seal]
Attest: /s/Linda Baer
------------------------
Linda Baer, Secretary
<PAGE>
LIMITED PARTNERSHIP RESOLUTION/INCUMBENCY CERTIFICATE
The undersigned Managing General Partner of ROYAL PALM BEACH COLONY,
LIMITED PARTNERSHIP, a Delaware limited partnership, ("Borrower" or "Limited
Partnership") hereby certifies that the following is a true and correct copy of
a Resolution adopted at a duly called special meeting of the general partners of
the Limited Partnership, which was held at the officer of the Limited
Partnership on May 26, 1995, at which meeting a quorum of the partners was
present:
WHEREAS, the Borrower desires to borrow $500,000.00 from HASAM REALTY
LIMITED PARTNERSHIP, a Florida limited partnership ("Lender") for various
purposes which are in furtherance of the business objectives of the Borrower;
and
WHEREAS, the Borrower desires to authorize STEIN MANAGEMENT COMPANY,
INC., a Florida corporation, the Managing General Partner of the Limited
Partnership ("Agent") to borrow such funds from the Lender on behalf of this
Limited Partnership.
NOW THEREFORE, it is hereby:
RESOLVED, that the Agent is hereby authorized and empowered in the name
and on behalf of the Limited Partnership to:
(i) borrow $500,000.00 from the Lender;
(ii) make, execute and deliver in form satisfactory to the Lender and
its counsel a promissory note of this Limited Partnership evidencing the Limited
Partnership's obligations for the repayment of such sums;
(iii) make, execute and deliver a mortgage to the Lender to secure said
promissory note on certain real property owned by this Limited Partnership as
more particularly described on Exhibit "A" attached hereto; and
FURTHER RESOLVED, that the approval and agreement of the Agent and this
Limited Partnership of and to the terms and conditions in the documents executed
by such Agent in connection with the transaction contemplated in these
resolutions shall be conclusively established by its execution thereto; and
FURTHER RESOLVED, that STEIN MANAGEMENT COMPANY, INC., a Florida
corporation, is the Managing General Partner of the Limited Partnership, and is
authorized and directed to execute in the name of this Limited Partnership, the
necessary documents on behalf of the Limited Partnership as may be necessary in
connections with transactions contemplated in these resolutions.
So certified this 29th day of June, 1995.
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
By: STEIN MANAGEMENT COMPANY, INC., a
Florida corporation, Managing General
Partner
By: /s/Martin Katz, President
-------------------------
Martin Katz, President
<PAGE>
BOARD RESOLUTIONS//INCUMBENCY CERTIFICATE
I hereby certify that I am the duly elected, qualified and serving
Secretary of STEIN MANAGEMENT COMPANY, INC., a Florida corporation,
("Corporation"); that Corporation is organized and existing under the laws of
the State of Florida; that the following is a true and correct copy of
resolutions duly adopted at a meeting of the Board of Directors of Corporation,
held on May 26, 1995, at which a quorum was present and acting throughout; that
said meeting was duly authorized by the By-Laws of Corporation; that the actions
taken at such meeting and reflected in said resolutions are now in full force
and effect and have not been modified or amended; that on the date hereof the
officers are as set forth below and that following are the genuine signatures of
said officers:
President /s/ Martin Katz
Secretary /s/ Linda Baer
"RESOLVED that on behalf of ROYAL PALM BEACH COLONY, LIMITED
PARTNERSHIP (the "Limited Partnership"), of which this Corporation is the sole
Managing General Partner, this Corporation enter into a certain loan made to the
Limited Partnership, as borrower, from HASAM REALTY LIMITED PARTNERSHIP, a
Florida limited partnership, a lender, in the principal amount of $500,000.00
secured by a mortgage on certain real property owned by the Limited Partnership
and described on Exhibit "A" attached hereto.
RESOLVED FURTHER, that the President of this Corporation be and is
hereby authorized to execute and deliver the required loan documents and any
other agreements which said lender may require, and to consent and agree to any
and all terms to each and every one thereof;
RESOLVED FURTHER, that the execution and delivery of any writings or
the taking of any other actions in connection with the foregoing by the
President or any other officer of this Corporation be and the same is hereby
ratified as the act and deed of this Corporation;
RESOLVED FURTHER, that the Secretary of this Corporation be and is
hereby authorized to affix the seal of said Corporation to any writings executed
by the President in connection with the foregoing, and to attest the same, but
such attestation is not required to evidence the same as the act and deed of
this Corporation."
So certified this 29th day of June, 1995.
[Corporate Seal]
/s/Linda Baer
Secretary
<PAGE>
EXHIBIT 4(e)
AGREEMENT
THIS AGREEMENT, is made and entered into this 1st day of September,
1995 by and between ROYAL PALM BEACH COLONY LIMITED PARTNERSHIP, hereinafter
called "Seller," and GERALD M. HIGIER, Trustee, hereinafter called "Purchaser,"
their heirs, executors, administrators, personal representatives, successors and
permitted assigns, wherever the context so requires or admits:
W I T N E S S E T H:
WHEREAS, the Seller is the fee simple owner of approximately ten and
eight-tenths (10.8) acres of land, net of all road rights of way for Folsom Road
and Crestwood Boulevard as presently located, all of which acreage is located
westerly of the northwest corner of the intersection of Crestwood Boulevard and
Southern Boulevard, in the Village of Royal Palm Beach, Palm Beach County,
Florida, which property has a frontage on Southern Boulevard and a sketch of
which property is attached as Exhibit "A" hereto (the "Property"); and
WHEREAS, the Property includes the access driveway (the "access
driveway") depicted on Exhibit "A" as part of the Property; and
WHEREAS, Purchaser wishes to purchase and Seller wishes to sell the
Property on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises, as well as the mutual
covenants herein contained, it is agreed as follows:
1. Purchase Price. Seller agrees to sell, and Purchaser agrees to
purchase the Property for the sum of One Million Four Hundred Eleven Thousand
Three Hundred Forty-Four and 00/XX Dollars ($1,411,344.00) which price is
computed based on a rate of Three and 00/XX Dollars ($3.00) per square foot. The
exact price will be determined based upon the acreage shown on the survey, and
the parties acknowledge that the price may increase or decrease based on such
acreage.
2. Payment of Purchase Price. The Purchase Price will be paid as
follows:
(a) Upon execution of this Agreement by Seller Fifteen
Thousand and 00/XX Dollars ($15,000.00) will be paid to STEIN, SIMPSON AND
ROSEN, P.A., as Escrow Agent, by delivery of Purchaser's check or wire transfer
in the said sum to the said Escrow Agent, and the proceeds thereof shall be held
by the Escrow Agent, to be returned to Purchaser as closing or otherwise
disbursed in accordance with any other applicable term of this Agreement. The
Escrow Agent shall deposit the Fifteen Thousand and 00/XX Dollars ($15,000.00)
in an interest-bearing account, and all interest earned on the deposit shall be
delivered to the party entitled to the deposit, simultaneously with delivery of
the deposit.
(b) On or before five (5) days after termination of the
Inspection Period as provided in paragraph 5 below, provided Purchaser has not
terminated this Agreement, Purchaser shall deposit an additional Fifteen
Thousand and 00/XX Dollars ($15,000.00) with Escrow Agent, which additional sum
shall be added to and commingled with the initial deposit.
(c) On or before five (5) days after the later of the Publix
Approval Date (as defined in Paragraph 7(c) below) or the termination of the
Inspection Period as provided in Paragraph 6 below, provided Purchaser has not
terminated this Agreement, Purchaser shall deposit an additional $40,500.00 with
Escrow Agent, which additional sum shall be added to and commingled with the
initial deposit.
(d) At closing, the balance of the purchase price shall be
paid by cashier's check or wire transfer of funds in accordance with Seller's
instructions.
3. Title, Legal and Survey Examination.
(a) Within thirty (30) days after the date hereof, at Seller's
sole cost and expense, Seller will cause to be delivered to THERREL BAISDEN &
MEYER WEISS, 1111 Lincoln Road, Suite 500, Miami Beach, Florida 33139,
Purchaser's attorneys, a title insurance commitment naming the Purchaser as
proposed insured and in the amount of the purchase price. Copies of all
exceptions to title shall accompany the commitment. An examination of said
commitment shall show that Seller owns good and marketable fee simple title to
the Property subject only to such matters as are acceptable to Purchaser.
Purchaser shall have thirty (30) days from receipt of the commitment and copies
of all exceptions contained therein within which to examine same. If title is
found defective, Purchaser shall, no later than five (5) days after the
expiration of the thirty (30) day period, notify Seller in writing specifying
the defects. Seller will have no obligation to remove, and Purchaser shall be
deemed to have accepted, any exceptions to Seller's title to which Purchaser
fails to object in writing within such five (5) day period. If the defects
render title unmarketable or contain restrictions, easements or other conditions
which are unacceptable to Purchaser in its sole and absolute discretion, then
Seller will have sixty (60) days from receipt of the notice within which to
remove said defects, provided, however, that Seller shall not be required to
commence any litigation or to expend more than $25,000.00 in correcting title
defects. Notwithstanding the foregoing, Seller shall have no obligation
whatsoever to correct or remove restrictions, easements, reservations or rights
of way, but Purchaser shall have the right, if objection is given timely as
provided above, to terminate this Agreement by reason thereof, and to receive
back all deposits made hereunder. Notwithstanding the foregoing, Seller shall
remove or satisfy all mortgages and other liens it has created. If Seller is
unsuccessful in removing the defects within said time, Purchaser shall have the
option of either accepting title as it then is or demanding a refund of all
monies paid hereunder which monies shall be returned to Purchaser, and thereupon
Purchaser and Seller shall be released, as to one another, of all further
obligations under this Agreement. Seller agrees that if title is found to be
unacceptable as hereinabove stated, it will use reasonable effort to correct the
defects within the time provided, but with no obligation to commence any
litigation.
(b) Purchaser shall have a period of sixty (60) days from the
date hereof to have a survey of the Property made at Purchaser's expense in
order to determine if there are any matters show on the survey which are
unacceptable to Purchaser. In the event there are any such matters, same shall
be treated as a title defect in accordance with paragraph (a) above, provided
that Purchaser shall give notice of any such defect within twenty (20) days
following the later of receipt of such survey or expiration of the time provided
for obtaining such survey.
4. Conveyance of Premises. The Property will be conveyed by Special
Warranty Deed at closing, free and clear of all encumbrances (except for
exceptions to title accepted or deemed accepted by Purchaser), and possession
thereof will be delivered to Purchaser at closing.
5. Prorations. Taxes and other expenses in connection with the Property
will be prorated as of the date of closing. If the tax bills for the year of
closing are not available, taxes will be prorated based upon the previous year's
bill with maximum discount allowed and will be re-prorated upon receipt of the
actual tax bills for the year of the closing. Certified liens as of the date of
closing will be paid by the Seller. Pending liens, if any, will be assumed by
the Purchaser, except that if there are any pending liens for governmental
improvements, the installation of which has been completed but for which the
lien is not certified as of the last day of The Inspection Period (defined in
Paragraph 6 below), such pending liens will be paid by the Seller.
6. Inspection Period. Purchaser shall have a period of one hundred and
fifty (150) days (the "Inspection Period") commencing with the day following the
date this Agreement is executed by both parties within which to determine if the
Property is acceptable to Purchaser for Purchaser's proposed use. Purchaser
shall have unrestricted access to the Property during the Inspection Period in
order to inspect and test the Property to determine its acceptability.
Purchaser's inspections may include verification through
environmental investigations that the site is free from evidence of hazardous
substances or contamination of any kind. Should the Purchaser's investigations
disclose evidence of contamination of any kind, the Purchaser shall notify the
Seller who shall then obtain a PHASE II ENVIRONMENTAL AUDIT (performed by an
engineer or testing laboratory approved by the Purchaser) at Seller's sole cost
and expense. If closing is held under this Agreement, at closing Purchaser shall
reimburse Seller for the cost of such Phase II ENVIRONMENTAL AUDIT. The PHASE II
ENVIRONMENTAL AUDIT shall be commenced no later than five days after the
termination of the Inspection Period, provided Purchaser has not previously
cancelled this contract in accordance with the terms hereof. The PHASE II
ENVIRONMENTAL AUDIT shall show evidence satisfactory to the Purchaser that there
is no contamination of any kind on the site, or Purchaser may cancel this
Agreement and receive back all deposits paid together with all interest earned
thereon.
Prior to entering upon the Property for any purpose, Purchaser
shall provide to Seller proof, satisfactory to Seller, that Purchaser maintains
general liability insurance with minimum limits of $1,000,000.00 for any single
accident or occurrence with an insurance company reasonably satisfactory to
Seller naming Seller and its General Partners, and their respective officers,
directors shareholders and partners as additional insureds, protecting Seller
and such persons against claims arising out of or relating to the entry by
Purchaser or its employees, agents or contractors, onto the property.
Purchaser's inspections may also include verification of
availability of utilities with sufficient plant capacity for the Purchaser's
intended use of the Property, all without any moratorium in place. Criteria for
utilities shall be in accordance with, but not limited to, the following
conditions:
(a) That there will be available at the Property line at
locations and elevations compatible with the Purchaser's intended design, one or
more sewer connections of sufficient size and capacity to allow for a gravity
connection of the Purchaser's on-site waste water collection system without the
need for any pumping or other mechanical transmission of the waste water.
(b) That there will be available at the Property line at
locations compatible with the Purchaser's intended design, one or more water
connections with sufficient capacity, pressure, and flow to satisfy the
Purchaser's potable water, irrigation water, and fire protection requirements
without the need for any additional pumping equipment provided by the Purchaser.
(c) That there will be available at the Property line at
locations compatible with the Purchaser's intended design, electrical service of
sufficient capacity to satisfy Purchaser's intended use.
(d) That there will be available at the Property line, at
locations compatible with the Purchaser's intended design, telephone service of
sufficient capacity to satisfy Purchaser's intended use.
(e) If necessary, that there will be available at the Property
line at locations compatible with the Purchaser's intended design, natural gas
service of sufficient capacity to satisfy Purchaser's intended use.
(f) That the sub-grade elevation at the Property is sufficient
to meet all local, state and federal flood elevation standards without the need
for additional import fill which would raise the elevations on the site and
shall meet the Purchaser's engineer's specifications, in their sole and absolute
discretion.
(g) That there will be available at the Property line at
locations and elevations compatible with Purchaser's intended design, a storm
water out fall with sufficient capacity, allowable by all governing authorities,
so that there will be positive drainage off-site without the need of any on-site
surface water retention or storage of any type.
If Purchaser notifies Seller no later than ten (10) days after
the expiration of the Inspection Period that, in the Purchaser's sole
determination, the Property is unacceptable for any reason, Purchaser may
terminate this Agreement and all deposit monies paid hereunder together with
interest earned thereon shall be returned to Purchaser in which event both
parties shall be relieved of all further obligations hereunder.
Notwithstanding anything herein to the contrary, in the event
on or before the expiration of the Inspection Period, Publix Super Markets, Inc.
("Publix") has not approved in writing the Property as a site for a Publix
supermarket and provided Purchaser ia diligently pursuing said approval, then
upon notice to Seller delivered before the expiration of the Inspection Period,
Purchaser shall be entitled to a 90 day extension of the Inspection Period (such
extension is herein called the "Extended Inspection Period") for the sole
purpose of obtaining Publix's approval of the Property. In the event Purchaser
has not received Publix's written approval of the Property on or before the
expiration of the Extended Inspection Period, then upon notice to Seller
delivered no later than 5 days after the end of the extended Inspection Period,
Purchaser shall be entitled to terminate this Agreement and receive back all
deposits made hereunder in which event all parties shall be relieved of all
further liability hereunder; Purchaser's failure to deliver said Notice timely
shall be deemed to be a waiver of the Publix approval as a condition of closing.
Purchaser agrees to indemnify and hold Seller harmless from
any damage to person or property caused by Purchaser's inspections. Seller
acknowledges that Purchaser is a Trustee and that Gerald M. Higier is not liable
personally for any such damage.
7. Conditions Precedent to Purchaser's Obligations. Purchaser shall not
be obligated to close this transaction and shall be entitled to a return of its
deposit and all interest earned thereon if:
(a) As of the date of closing, (i) there are any pending
building or utility moratoria preventing construction on the Property and
Outparcel #3 and Outparcel #4 described on Exhibit B hereto of an 85,000 square
foot one story neighborhood shopping center (as more particularly described in
paragraph 8 below) or (ii) the impact fees, the categories of which are listed
on Exhibit "B" hereto, together with any similar additional fees which are
imposed between the date of this Agreement and the date of closing, which will
be imposed on Purchaser's development are more than 133% of the amount of said
costs as of the date hereof, determined based on the intended uses of the
Property as of the date of closing;
(b) On or before ninety (90) days after the Application Date
(as hereinafter defined), the Purchaser has not obtained an unconditional
building permit together with such other confirmation from the Village of Royal
Palm Beach and Palm Beach County as is needed to determine that the Purchaser's
development of the Property will be exempted from all applicable concurrency
requirements or that same has satisfied all applicable concurrency requirements;
provided, however, that if Purchaser is diligently pursuing the obtaining of
said permit and confirmation but has not received same within said ninety (90)
day period, then upon notice to Seller, delivered no later than the expiration
of said ninety (90) day period, Purchaser may extend the said ninety (90) day
period for an additional sixty (60) days. Purchaser agrees to apply for said
permit and confirmation and to diligently pursue same within the initial
aforementioned ninety (90) day period and then to diligently pursue same during
any sixty (60) day extension.
For purposes of this paragraph (b);
i) the "Publix Approval Date" shall be the date of
receipt of Publix's approval as referred to in
paragraph 6. above;
ii) the "Satisfaction of Special Conditions Date" shall be the
date of satisfaction of all Special Conditions imposed by the
Village of Royal Palm Beach for the issuance of a building
permit for the Property;
iii) "Special Conditions" shall be those conditions which do not
relate directly to the Property and which will be performed by
parties other than the Purchaser which special conditions
include, but are not limited to, the commencement of
construction of Folsom Road;
iv) The "Rezoning Date" shall be the date as of which the rezoning
of the Property described in Paragraph 8 below is final and
not subject to further appeal.
v) The "Application Date" is five (5) business days
after the last to occur of the Publix Approval
Date, the Satisfaction of Special Conditions Date,
and the Rezoning Date.
(c) If any of Seller's warranties or representations made
herein prove to be false in any material respect.
(d) If an update of title to be obtained by Purchaser within
thirty (30) days of the closing date reveals any matters which were not
disclosed on the title commitment delivered in accordance with Paragraph 3
above. In such event, the provisions of Paragraph 3(a) shall be applicable
thereto, except that the sixty (60) day period within which Seller may remove
objections shall be deemed to run from the date closing was to have occurred, as
contemplated in Section 10 below.
8. Rezoning. The parties acknowledge that the Property is presently in
the process of being designated commercial on the existing land use plan
governing the Property. Seller has received approval from the Department of
Community Affairs ("DCA") of the State of Florida to change said designation to
"Commercial," which will allow for the construction of a supermarket, drug
store, retail stores (including professional offices) and outparcel uses such as
banks, gas stations and restaurants, including fast food restaurants, and the
only remaining condition to said change is implementation of the rezoning by the
Village of Royal Palm Beach, site plan approval and approval of a Special
Exception which will allow development on the Property of a gas station and
drive-through restaurant. The Purchaser shall also be required to obtain any
other special exceptions required by the Village of Royal Palm Beach and which
are required for any proposed uses of the Property. In the event the land use
designation described above does not become final or the appropriate rezoning
consistent with the change in designation to Commercial has not occurred on or
before one hundred and eighty (180) days after the date hereof (the termination
of the "Rezoning Period"), then either party may cancel this Agreement by notice
to the other party delivered no later than fifteen (15) days after the
termination of the Rezoning Period, in which event Purchaser shall receive back
its deposit and all interest earned thereon, and all parties shall then be
relieved of all obligations hereunder. Seller agrees to diligently pursue all
remaining requirements of the completion of the Rezoning.
The Purchaser and Seller acknowledge that the 85,000 square
feet referred to in paragraph 7(a) above describes the Purchaser's proposed
Shopping Center and consists of the following:
i) A first phase which will consist of a supermarket containing
up to 50,000 square feet and two outparcels on the Property to
be developed with improvements containing up to 5,000 square
feet each. It is contemplated that the improvements described
in this first phase will not be permitted to open prior to
September, 1997.
ii) A second phase consisting of 15,000 square feet of retail
(including professional) uses on the Property and improvements
containing up to 5,000 square feet each on the two Outparcels
described as Outparcel #3 and Outparcel #4 on Exhibit "A"
hereto. It is expected that the improvements described in this
paragraph will not be permitted to open prior to January 1,
2000.
9. Platting. In the event a platting, re-platting or waiver of Plat is
necessary in order for the Seller to sell the Property to the Purchaser, Seller
shall cause same to be completed at Purchaser's sole cost and expense. In the
event Seller has not commenced any such required platting, re-platting or waiver
of plat on or before 30 days after the expiration of the Inspection Period or in
the event Seller does not complete same on or before the end of the Rezoning
Period, then Purchaser may cancel this Agreement by notice to Seller and Escrow
Agent in which event Purchaser shall receive back all deposits made hereunder,
together with any interest earned, and all parties shall then be relieved of all
further obligations hereunder. Seller shall pursue diligently, in consultation
with Purchaser, all applications and work in connection with any matter
described herein.
10. Closing. Unless this Agreement is terminated or extended as herein
provided, then this transaction will close fifteen (15) days after the
satisfaction of all items identified in this Agreement as contingencies for
closing. The closing will take place at 10:00 A.M. on the closing date at the
offices of the Seller's attorney. At the closing, Purchaser shall:
(a) Execute the closing statement.
(b) Execute and deliver such other documents and do such other
things as may be required hereunder.
(c) Pay for recording the deed.
At the closing, the Seller shall:
(a) Deliver its special warranty deed, in recordable form, and
pay for documentary stamps and any surtax on the deed.
(b) Deliver a mechanic's lien affidavit in statutory form.
(c) Deliver an affidavit attesting to the fact that Seller is
not a foreign person. Said affidavit shall be issued in accordance with Section
1445 of the Internal Revenue Code.
(d) Execute a "gap" affidavit attesting to the fact that
Seller has not executed any documents which might adversely affect title to the
Property between the date of the last title update and the date of closing.
(e) Execute the closing statement.
(f) Pay for Purchaser's title insurance policy.
11. Termination of Contract. Notwithstanding anything herein to the
contrary, in the event the Application Date, as defined in paragraph 7(b)v, has
not occurred on or before December 31, 1996, then either party may terminate
this Agreement by notice to the other party delivered on or before January 31,
1997 in which event all deposits shall be returned to Purchaser, together with
any interest earned thereon, and all parties shall then be relieved of all
further obligations hereunder. In the event neither party exercises its right to
terminate as provided in this Paragraph 11, the Purchaser shall have been deemed
to have waived all of the conditions to closing except those set forth in
paragraphs 7(a), (c) and (d) above.
12. Representations of Seller. The Seller hereby warrants and
represents to Purchaser that:
(a) Seller has not received any notice from any applicable
governing authority advising Seller of any proposed or threatened condemnation
of all or any part of Property.
(b) Seller is not aware of any proposed or threatened
litigation against the Property or against Seller which could have an adverse
impact on the Property other than the possibility that an unrelated third party
satisfying the applicable standing requirements may file an administrative
appeal against the approval by the Village of the amendment to its Comprehensive
Plan designating the Property as Commercial.
(c) Neither Seller nor, to the best of Seller's knowledge, any
prior owner of the Property has used the Property for the storage, disposal or
handling of any hazardous materials, toxic waste or other environmental
contaminants as same are defined or described in applicable governmental laws or
regulations, nor is Seller aware of and Seller has not received any notice of
the presence of any such materials, waste or contaminants in, on, or about the
Property.
(d) To Seller's knowledge, the Property is not part of a
Development of Regional Impact.
13. Dispute. In the event of any litigation between the parties for any
matter arising out of this Agreement, the parties agree that the prevailing
party shall be entitled to recovery of all costs of said litigation including
attorney's fees.
14. Notice. Notice shall be deemed properly given hereunder when
hand-delivered, delivered by Federal Express or other recognized overnight
carrier, made in writing and deposited in the United States certified or
registered mails, with sufficient postage prepaid thereon to carry it to its
addressed destination; and the said notices shall be addressed as follows:
For the Seller: Royal Palm Beach Colony Limited
Partnership
2501 South Ocean Drive
Hollywood, Florida 33019
Attn: Randy Rieger
With a copy to: David Simpson, Esq.
Stein, Simpson & Rosen
2 University Plaza
Hackensack, NJ 07670
For the Purchaser: Gerald M. Higier, Trustee
1541 Sunset Drive, Suite 300
Coral Gables, FL 33143
With a copy to: Ellen Rose, Esquire
Therrel Baisden & Meyer Weiss
1111 Lincoln Road, Suite 500
Miami Beach, FL 33139-0558
Nothing herein contained shall be construed as prohibiting the parties
respectively from changing the place at which notice is henceforth to be given,
but no such change shall be effective unless and until it shall have been
accomplished by written notice given in the manner set forth in this paragraph
13.
15. Assignment. This Agreement is assignable by Purchaser to any entity
controlled by Gerald M. Higier or The Prudential Insurance Company of America,
and Seller agrees to close with Purchaser's assignee.
16. Broker. Seller and Purchaser represent and warrant to each other
that they have not authorized any broker, agent, or finder to act on their
behalf other than the R.T.L. Realty, Inc., whose commission Seller shall pay,
nor do they have any knowledge of any other broker, agent or finder purporting
to act on their behalf in respect to this transaction. Seller and Purchaser
hereby agree to indemnify and hold harmless each other from and against any
cost, expense, claim, liability or damage resulting from a breach of the
representation and warranty contained herein and from any claim by any broker in
connection with this transaction.
17. Default. If Purchaser breaches this Agreement all monies paid or
required to be paid pursuant to this Agreement by Purchaser, together with all
interest earned thereon, shall be retained by or for the account of Seller as
consideration for the execution of this Agreement and as agreed and liquidated
damages, in full settlement of any claim for damages, and such remedies shall be
the sole and exclusive remedy of Seller. If for any reason other than failure of
Seller to make title conform to the requirements of this Agreement, Seller
fails, neglects or refuses to convey title to Purchaser under this Agreement or
otherwise fails to perform its obligations hereunder, all deposits made by
Purchaser, together with all interest earned thereon, shall be returned upon
demand, or Purchaser, at its option, shall have the right of specific
performance against Seller. If Seller's default is its wrongful failure to close
on account of its fraudulent transfer of the Property to another party, then
Purchaser shall also have the right to seek damages against the Seller.
18. Condemnation. If prior to the closing under this Agreement either
party hereto receives or obtains any notice of any type that any governmental
authority having jurisdiction intends to commence proceedings for the taking of
all or a portion of the Property by the exercise of any power of condemnation or
eminent domain or notice thereof is recorded in the Public Records of Palm Beach
County, Florida, the applicable party shall promptly notify the other and
thereupon the Purchaser shall have the option to either (i) terminate this
Agreement and receive back all deposit monies paid hereunder, whereupon the
parties shall be released and relieved of any further liabilities or obligations
under this Agreement or (ii) close this transaction as if no such notice had
been received, obtained or recorded, or proceedings commenced, in which case all
proceeds of such condemnation otherwise belonging to Seller shall belong to the
Purchaser and there shall be no reduction of the Purchase Price or any sums
required to be paid to the Seller by the Purchaser hereunder.
19. Escrow Agent. Any Escrow Agent receiving funds hereunder agrees to
deposit same promptly and to hold same in accordance with the terms and
conditions of this Agreement. In the event of doubt as to its duties or
liabilities hereunder, Escrow Agent may, in its discretion, continue to hold the
funds until the parties agree to disbursement thereof or until a court of
competent jurisdiction shall determine the rights of the parties thereto, or
Escrow Agent may deposit same with the Clerk of the Circuit Court having
jurisdiction of the dispute and upon notifying all parties of such action, the
liability of the Escrow Agent hereunder shall terminate, except for accounting
of all sums disbursed hereunder out of escrow. In the event of any suit between
Seller and Purchaser wherein the Escrow Agent is made a party by virtue of
acting as Escrow Agent hereunder, or in the event of any suit wherein Escrow
Agent interpleads the subject matter of the escrow, the Escrow Agent shall be
entitled to recover reasonable attorneys' fees and costs incurred, said fees and
costs to be charged and assessed as court costs in favor of the prevailing
party. All parties agree that the Escrow Agent shall not be liable to any party
or person whomsoever for misdelivery to Purchaser or Seller of the items subject
to this escrow, unless said misdelivery shall be due to willful breach of this
Agreement or gross negligence of the Escrow Agent.
Seller acknowledges that Escrow Agent is Purchaser's attorney. In the
event of a dispute which requires that Escrow Agent interpleads the escrow
amount or in the event of any other litigation between the parties on account of
the terms hereof. Seller agrees that Escrow Agent may continue to act in its
capacity as Purchaser's attorney in settling or litigating said dispute.
20. Options.
(a) Outparcels. Provided closing on the Property occurs
pursuant to the terms hereof, as same may be amended from time to time by the
parties, Purchaser shall have the option to purchase the two (2) parcels
identified as Outparcel #3 and Outparcel #4 (together, the "Parcels" and
individually, a "Parcel") on Exhibit "F" hereto under the following terms and
conditions:
(i) The options may only be exercised if the lease or
sale contemplated by Purchaser as hereinafter described, is a bone fide
transaction entered into at arms length on commercially reasonable terms. As a
condition to exercise, Purchaser shall provide to Seller, simultaneously with
any purported exercise of an option, an affidavit, sworn to by Gerald Higier,
certifying that Purchaser intends to lease or sell the Parcel for a specified
use or purpose which is set forth in reasonable detail with appropriate
supporting documentation. If the Parcel is proposed to be leased, the terms and
conditions of the proposed leasing of the Parcel shall be set forth as shall the
identity of the proposed tenant. If the Parcel is proposed to be sold, the
proposed sales price and other conditions of the transactions and the identity
of the proposed purchaser shall be set forth. Purchaser shall further certify
that the proposed transaction is a bone fide transaction being entered into at
arms length with an unrelated party capable of performing its obligations and
that neither Purchaser nor any of its partners, principals, shareholders or
other equity owners nor any of the immediate relatives of any such persons has
any interest or expectancy, direct or indirect, in the transaction or in the
proposed tenant or purchaser. In the event the purchaser of the Property is an
entity in which The Prudential Insurance Company of America, or other similar
institutional investor, holds an interest, then a third party purchaser or
tenant shall not be deemed to be related to such institutional investor unless
said purchaser or tenant is a wholly owned subsidiary of the institutional
investor. Information as to rental shall include the calculation of the "Average
Annual Rental" which shall be the average annual rent over the first five (5)
years of the proposed lease, including any option periods, if necessary,
calculated as though all amounts of free rent, rent concessions, fixed rent,
escalations and tenant allowances or other considerations to be provided to
tenant by purchaser were amortized over the entire term of the lease including
renewal periods, if applicable renewal options are reasonably expected to be
exercised during such first five (5) year term, if applicable. The purchase
price payable upon the exercise of either or both of the said options by
Purchaser shall, if (x) Purchaser intends to lease a Parcel to an unrelated
third-party, be equal to five (5) times the amount of the Average Annual Rental
as described above; (y) Purchaser intends to sell the Parcel to an unrelated
third-party, be equal to fifty percent (50%) of the net proceeds received by
Purchaser at Closing. Seller agrees to deliver a special warranty deed directly
to the third party, if Purchaser so requests. In all events, the purchase price
shall be reduced by all out of pocket expenses related to the sale or lease of
the Parcels and incurred by the Purchaser, including but not limited to,
documentary stamp taxes, broker fees, attorney's fees, title examination costs,
items usually prorated on a sale or lease, as the case may be, and all other
similar expenses. Nothwithstanding anything herein contained to the contrary, in
no event shall the purchase price to be paid by Purchaser to Seller hereunder be
less than $3.50 per square foot of the land included in the Parcel being
purchased.
(ii) Purchaser may elect to purchase both Parcels
simultaneously, each individually, or one and not the other.
(iii) The option is exercisable by notice to the
Seller delivered no later than five (5) years after the date of closing of the
Property (the "Parcels Option Expiration Date"). The Parcels Option Expiration
Date for each Parcel shall be accelerated by one (1) day for each day prior to
January 1, 2000 on which a Certificate of Occupancy would become obtainable for
improvements on such Parcel. The parties acknowledge that as of the date hereof
it is contemplated that the rezoning will not allow for a Certificate of
Occupancy on either Parcel prior to January 1, 2000.
(iv) Closing shall occur on or before six (6) months
after the Parcels Option Expiration Date.
(v) In the event Purchaser delivers a notice of
exercise of option, then paragraphs 3, 4, 5, 6(f), 6(g), 7(a)(i), 9 and 10
hereof shall apply. It is a condition of closing that prior to closing an
unconditional building permit be obtained for improvements on the Outparcels and
that same not be revoked. Purchaser agrees to diligently pursue the building
permit application. In the event Purchaser exercises its option hereunder and
then does not close for any reason other than Seller's default, then Purchaser
shall reimburse Seller for all reasonable expenses incurred by Seller on account
of Purchaser's exercise of its option.
(vi) Prior to the Parcels Option Expiration Date, the
Parcels shall not be improved or otherwise developed.
(vii) If the Purchaser exercises its option to
purchase one, but not both Outparcels, then the Purchaser shall determine the
exact dimensions of the Outparcel to be purchased, provided, however:
(1) The remaining Outparcel shall be a
rectangular (or square) shaped
parcel of land whose measurements
shall not be less than two hundred
(200) feet by two hundred (200)feet.
(2) Depending upon the location of any
curb cut or cuts which are located
on Southern Boulevard on the
southern boundary of the Outparcels,
Purchaser and Seller shall enter
into appropriate perpetual easement
agreements so that such curb cut
will provide full, unrestricted and
open vehicular access to both
Outparcels.
Notwithstanding the foregoing, in the event prior to the Purchaser's
exercise of its option with respect to a Parcel, the Seller receives an
unsolicited bona fide offer from a third party to purchase or lease either of
the Parcels which offer the Seller desires to accept, then Seller shall first
present said offer to the Purchaser who shall have a period of fifteen (15) days
within which to elect to purchase the respective Parcel for five (5) times the
amount of the Average Annual Rental (as defined above) for any lease or one-half
of the net proceeds which would have been received by the Seller at a closing
with the third party. In the event Purchaser exercises its option, then Seller
shall pay for the documentary stamp taxes on the deed and Purchaser shall pay
the cost of title examination and the title insurance policy. In the event
Purchaser exercises its option, then closing shall take place sixty (60) days
after the date of exercise of the option provided however that if Purchaser
obtains a title commitment showing any exceptions which are unacceptable to
Purchaser, then same shall be treated in the same manner as objections are
treated in paragraph 3(a) above, and provided further that if Purchaser obtains
a survey of the subject Property and has any objections to the matters shown on
same, same shall be treated in accordance with paragraph 3(b) above.
Notwithstanding the foregoing right of Seller to accept a contract from
a third party, Seller agrees that it will not actively market the Parcels for
sale to third parties. In that regard Seller agrees that it will not advertise
same for sale, place a "for sale" sign on said Property, retain a real estate
broker to market same, or take any other action which is similar to the
foregoing.
(b) Adjoining Land. Provided closing on the Property occurs
pursuant to the terms hereof, as same may be amended from time to time by the
parties, Purchaser shall have the option to purchase the property identified as
Parcel A on Exhibit "G" hereto under the following terms and conditions:
(i) The purchase price shall be Three and 50/XX
Dollars ($3.50) per square foot, net of all rights of way for the Folsom Road
and Southern Boulevard, with the exact square footage to be determined by
survey.
(ii) The option is exercisable by notice to the
Seller delivered no later than four (4) years after the date of closing of the
property (the "Parcel A Option Expiration Date"). The Parcel A Option Expiration
Date shall be accelerated by one (1) day for each day prior to January 1, 2000
on which a Certificate of Occupancy would become obtainable for Parcel A for
commercial use.
(iii) Closing shall occur on or before six (6) months
after the Parcel A Option Expiration Date.
(iv) In the event Purchaser delivers a notice of
exercise of option, then paragraphs 3, 4, 5, 6(f), 6(g), 7(a)(i), 9 and 10
hereof shall apply. It is a condition of closing that prior to closing an
unconditional building permit be obtained for improvements on the Parcel and
that same not be revoked. Purchaser agrees to diligently pursue the building
permit application. In the event Purchaser exercises its option hereunder and
then does not close for any reason other than Seller's default, then Purchaser
shall reimburse Seller for all reasonable expenses incurred by Seller on account
of Purchaser's exercise of its option.
(v) Prior to the Parcel A Option Expiration Date,
Parcel A shall not be improved or otherwise developed.
Notwithstanding the foregoing, in the event after the date
which is two (2) years from the date of closing under paragraph 10 hereof, but
prior to the Parcel A Option Expiration Date Seller receives a bona fide offer
from a third party purchaser to purchase Parcel A for a price which is less than
the price set forth in paragraph (b)(i) above and which offer the Seller desires
to accept, then Seller shall first present said offer to Purchaser who shall
have a period of fifteen (15) days within which to elect to purchase Parcel A in
accordance with the terms of the third party offer. In the event Purchaser does
not elect to purchase Parcel A, then Seller may sell same in accordance with the
offer from the third party provided the third party offer is not contingent on a
zoning change. Notwithstanding the foregoing right of Seller to accept a
contract from a third party, Seller agrees that its only marketing efforts for
Parcel A shall be to multi-family residential users. Any signs, advertising,
listing agreements or other methods of marketing said Parcel A shall put all
third parties on notice that same is being marketed for multi-family use only.
Except as herein provided, Seller may not sell Parcel A prior to the Parcel A
Option Expiration Date.
(c) Simultaneously with the closing of the purchase and sale
of the Property, a Notice of Option and Other Matters in the form attached
hereto as Exhibit "B" shall be recorded by Seller in the Public Records of Palm
Beach County, Florida. Said notice shall restrict the Parcels in the manner set
forth in said notice. At closing, two (2) separate Terminations of Notice of
Option shall be delivered to the Seller's attorney to be held in escrow.
Provided The Parcels Option Expiration Date has occurred and the Purchaser has
not exercised its option to purchase either Out Parcel #3 or Out Parcel #4, then
the Seller's attorney may record the Termination of Notice of Option which is in
the form attached hereto as Exhibit D, and provided the Parcel A Expiration Date
has occurred and the Purchaser has not exercised its option to purchase Parcel A
prior to said date, then the Seller's attorney may record the Notice of
Termination in the form attached hereto as Exhibit E. An Escrow Agreement
reflecting these terms shall be executed at closing.
21. Seller Acceptance. Seller will have until 5:00 P.M. December 1,
1995 to accept and return a fully executed contract to Purchaser.
22. Survival. The provisions of this Agreement shall not survive the
closing of this transaction.
IN WITNESS WHEREOF, the parties hereto have hereunto placed their hands
and seals, this 1st of December, 1995. Signed, sealed and delivered in the
presence of:
SELLER
Rebecca Spinaldi
C.A. ????? ROYAL PALM BEACH COLONY LIMITED
Ellen ??????? PARTNERSHIP, a Florida limited
John ???????? partnership
By: STEIN MANAGEMENT COMPANY, INC.,
Managing General Partner
/s/Randy Rieger
Vice President
PURCHASER
/s/Gerald M. Higier
GERALD M. HIGIER, Trustee
<PAGE>
EXHIBIT 4(f)
AGREEMENT-24 ACRES
THIS AGREEMENT, is made and entered into this _____ day of
____________, 1995 by and between Royal Palm Beach Colony, Limited Partnership
and John Morris, hereinafter together called "Sellers," and GERALD M. HIGIER,
Trustee, hereinafter called "Purchaser," their heirs, executors, administrators,
personal representatives, successors and permitted assigns, wherever the context
so requires or admits:
W I T N E S S E T H:
WHEREAS, the Sellers own the fee simple interest in approximately
twenty-four (24) acres of land, net of all road rights of way, located at the
Northeast corner of the intersection of Seminole Pratt Whitney Blvd, and Orange
Drive in Palm Beach County, Florida, which property is more particularly
described on Exhibit "A" hereto (the "Property"); and
WHEREAS, the parts of the Property owned by each Seller are also more
specifically shown on Exhibit "A" hereto, and
WHEREAS, the only portion of the Property not now owned by Sellers is
referred to more specifically in Section 9 below; and
WHEREAS, Purchaser wishes to purchase and Sellers wish to sell the
Property on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises, as well as the mutual
covenants herein contained, it is agreed as follows:
1. Purchase Price. Sellers agree to sell, and Purchaser agrees to
purchase the Property for the sum of One Dollar and Ninety Cents ($1.90) per
square foot of the Property net of all road rights of way which are dedicated to
the public or to the Indian Trail Water Control District (i.e., Purchaser
acknowledges that Purchaser shall pay the specified purchase price for the
square footage of the Property that is used for on-site access drives and
roadways, with the exact square footage of the Property to be determined by
survey as hereinafter provided).
2. Payment of Purchase Price. The Purchase Price will be paid as
follows:
(a) Upon execution of this Agreement by Sellers Ten Thousand
and 00/xx ($10,000.00) Dollars will be paid to THERREL BAISDEN & MEYER WEISS, as
Escrow Agent, by delivery of Purchaser's check or wire transfer in the said sum
to the said Escrow Agent, and the proceeds thereof shall be held by the Escrow
Agent, to be returned to Purchaser at closing or otherwise disbursed in
accordance with any other applicable term of this Agreement. The Escrow Agent
shall deposit the Ten Thousand Dollars ($10,000.00) in an interest-bearing
account, and all interest earned on the deposit shall be delivered to the party
entitled to the deposit, simultaneously with delivery of the deposit.
(b) At closing, the balance of the purchase price shall be
paid by cashier's check or wire transfer of funds in accordance with Seller's
instructions.
3. Title, Legal and Survey Examination.
(a) Within thirty (30) days after the date hereof, at Sellers'
sole cost and expense, Sellers will cause to be delivered to THERREL BAISDEN &
MEYER WEISS, 1111 Lincoln Road, Suite 500, Miami Beach, Florida 33139,
Purchaser's attorneys, a title insurance commitment for the Property naming the
Purchaser as proposed insured and in the amount of the purchase price. Copies of
all exceptions to title shall accompany the commitment. An examination of said
commitment shall show that Sellers own good and marketable fee simple title to
the Property (except for the portion described in Section 9 below) subject only
to such matters as are acceptable to Purchaser. Purchaser shall have thirty (30)
days from receipt of the commitment and copies of all exceptions contained
therein within which to examine same. If title is found defective, Purchaser
shall, no later than five (5) days after the expiration of the thirty (30) day
period, notify Sellers in writing specifying the defects. If the defects render
title unmarketable or contain restrictions, easements or other conditions which
are unacceptable to Purchaser in its sole and absolute discretion, then Sellers
will have sixty (60) days from receipt of the notice within which to remove said
defects. If Sellers are unsuccessful in removing the defects within said time,
Purchaser shall have the option of either accepting title as it then is or
demanding a refund of all monies paid hereunder which monies shall be returned
to Purchaser, and thereupon Purchaser and Sellers shall be released, as to one
another, of all further obligations under this Agreement. Sellers agree that if
title is found to be unacceptable as hereinabove stated, it will use diligent
effort to correct the defects within the time provided therefor, but Sellers
shall not be obligated to institute any necessary lawsuits. Seller will be
obliged to satisfy any liens or mortgages placed on the Property through the
action or inaction of Seller; as to all other objections to title, Seller will
not be required to spend more than a total of Ten Thousand and 00/xx
($10,000.00) Dollars to correct same.
Attached hereto as Exhibit "B" is a list of title exceptions which
Seller has advised Purchaser encumber the Property. Purchaser agrees that all
such items are acceptable to Purchaser.
(b) Sellers have delivered to Purchaser the most current
survey (or surveys) of the Property in Sellers' possession. The survey was
prepared by Mixon Land Surveying, Inc. under Job No. 95- 010 and is dated
February 20, 1995. Purchaser shall have a period of thirty (30) days from the
date hereof to have the survey updated at Purchaser's expense in order to
determine if there are any matters show on the survey which are unacceptable to
Purchaser. In the event there are any such matters, same shall be treated as an
objection to title in accordance with paragraph (a) above.
4. Conveyance of Premises. The Property will be conveyed by general
Warranty Deed at closing, free and clear of all encumbrances (except for
exceptions to title accepted by Purchaser), and possession thereof will be
delivered to Purchaser at closing.
5. Prorations. Taxes and other expenses in connection with the Property
will be prorated as of the date of closing. If the tax bills for the year of
closing are not available, taxes will be prorated based upon the previous year's
bill with maximum discount allowed and will be reprorated upon receipt of the
actual tax bills for the year of the closing. Certified liens as of the date of
closing will be paid by the Sellers. Pending liens, if any, will be assumed by
the Purchaser, except that if there are any pending liens for governmental
improvements, the installation of which has been completed but for which the
lien has not yet been certified, such pending liens will be paid by the Sellers.
6. Conditions Precedent to Purchaser's Obligations.
Purchaser shall not be obligated to close this transaction and
shall be entitled to a return of its deposit and all interest
earned thereon if:
(a) As of the date of closing, there are any pending or
threatened building moratoria preventing construction on the Property of the
shopping center more particularly described in paragraph 7(i) below;
(b) As of the date of closing, Purchaser has not received a
building permit as described in paragraph 7(i) below, including approval of a
package sewer treatment plant, all of which Purchaser is required to apply for
in accordance with paragraph 7 below, or, if Purchaser has received same, said
permit and approval have been revoked;
(c) If an update of title shows any matters which were not
present as of the date of the title commitment which Purchaser obtained in
accordance with paragraph 3 above; or
(d) If the Seller of Lot 505, as more particularly described
in paragraph 9 below, is not ready, willing and able to close simultaneously
with the closing of the balance of the Property hereunder.
7. Approval Period. Purchaser shall have a period of 18 months (the
"Approval Period") beginning with the Date Hereof (as hereinafter defined)
within which: (i) to obtain all necessary zoning approvals to allow for
construction of a 125,000 square foot shopping center containing a supermarket,
drug store, retail stores, restaurants and other uses typically found in
neighborhood shopping centers; (ii) apply for a building permit, including
approval of a package sewer treatment plant suitable for Purchaser's proposed
development, which application shall be made after Purchaser has received
approval from Publix Super Markets, Inc. confirming that the Property is
approved for a Publix supermarket site. Purchaser agrees to apply for such
approval from Publix Super Markets, Inc. no later than thirty (30) days after
the date hereof and to diligently pursue said approval. The aforementioned
governmental approvals shall also include approval of free standing buildings
containing up to 7500 square feet each, which buildings will be useable as a
bank or savings and loan association or fast food restaurant. As part of the
Zoning approval process, Purchaser agrees to use diligent effort to apply timely
in order to meet the December 1, 1995 land use plan amendment filing deadline of
Palm Beach County. Purchaser shall diligently pursue all applications. In the
event prior to the termination of the Approval Period Purchaser has not:
(i) obtained all necessary zoning approvals,
including a building permit for the construction of the shopping center which
shall be subject to only those conditions which are acceptable to Purchaser;
(ii) obtained an approval from Publix Super Markets
for the use of the Property as a Publix supermarket site;
(iii) obtained approval for the construction of a
package treatment plant in such size, with such capacity and to be situated in a
location acceptable to Purchaser;
(iv) obtained all other approvals for Purchaser's
development of the aforedescribed shopping center, then Purchaser may cancel
this Agreement by delivery of a notice of cancellation to Sellers no later than
10 days after the expiration of the Approval Period in which event all deposits
herein made together with all interest thereon shall be returned to Purchaser
and all parties shall then be relieved of all further obligation thereunder.
8. Platting. In the event a platting, replatting or waiver of Plat is
necessary in order for the Sellers to sell the Property to the Purchaser,
Purchaser shall cause same to be completed at its sole cost and expense. Sellers
shall cooperate with Purchaser in the platting process and shall promptly sign
any and all applications, plats or other matters requested by Purchaser with
respect to same.
9. Residential Lot. Part of the Property is designated as Lot 505 on
Exhibit "A" and currently is improved with a residence. Lot 505 is not owned by
the Sellers. Purchaser hereby agrees to use its best effort to enter into a
contract with the owners of Lot 505 to purchase Lot 505 pursuant to an Option
Agreement suitable to Purchaser. The purchase price to be paid pursuant to the
option shall be $2.00 per square foot of said option property or such other
price as is accepted in writing by the Purchaser, and closing thereunder shall
occur simultaneously with the closing hereunder and be conditioned upon said
closing. In the event Purchaser has not entered into said Option Agreement with
the owners of Lot 505 on or before February 1, 1996 then Purchaser may cancel
this contract by notice to Sellers and Escrow Agent in which event Purchaser
shall receive back all deposits made hereunder together with any interest earned
and all parties shall then be relived of all further obligations hereunder.
10. Closing. Unless this Agreement is terminated or extended as herein
provided, then this transaction will close thirty (30) days after the
satisfaction of all items identified in this Agreement as contingencies for
closing, but in no event later than nineteen (19) months from the Date Hereof
(as hereinafter defined). The closing will take place at 10:00 A.M. on the
closing date at the offices of the Sellers attorney. At the closing, Purchaser
shall:
(a) Execute the closing statement.
(b) Execute and deliver such other documents and do such other
things as may be required hereunder.
(c) Pay for recording the deed.
At the closing, the Sellers shall:
(a) Deliver its general warranty deed, in recordable form, and
pay for documentary stamps and surtax on the deed.
(b) Deliver a mechanic's lien affidavit in statutory form.
(c) Deliver an affidavit attesting to the fact that Sellers is
not a foreign person. Said affidavit shall be issued in accordance with Section
1445 of the Internal Revenue Code.
(d) Execute a "gap" affidavit attesting to the fact that s has
not executed any documents which might adversely affect title to the Property
between the date of the last title update and the date of closing.
(e) Execute the closing statement.
(f) Pay for Purchaser's title insurance policy.
11. Representation of Sellers. The Sellers hereby warrant and represent
to Purchaser that:
(a) Sellers have not received any notice from any applicable
governing authority advising Sellers of any proposed or
threatened condemnation of the Property.
(b) Sellers is not aware of any proposed or threatened
litigation against the Property or against Sellers which could
have an adverse impact on the Property.
(c) Neither Sellers nor any prior owner of the Property has
used the Property for the storage, disposal or handling of any
hazardous materials, or toxic waste or other environmental
contaminants, nor are Sellers aware of and Sellers have not
received any notice of the presence of any such materials,
waste or contaminants in, on or about the Property.
(d) The Property is not part of a Development of Regional
Impact.
12. Dispute. In the event of any litigation between the parties on
account of any matter arising out of this Agreement, the parties agree that the
prevailing party shall be entitled to recovery of all costs of said litigation
including attorney's fees.
13. Notice. Notice shall be deemed properly given hereunder when
hand-delivered, delivered by Federal Express or other recognized overnight
carrier, made in writing and deposited in the United States certified or
registered mails, with sufficient postage prepaid thereon to carry it to its
addressed destination; and the said notices shall be addressed as follows:
For the Sellers: Royal Palm Beach Colony Limited
Partnership
2501 South Ocean Drive
Hollywood, Florida 33019
ATTN: Randy Rieger
John Morris
721 US Highway 1, Suite 205
North Palm Beach, Florida 33408
With a copy to: David Greenberg, Esquire
1371 SW 12th Avenue
Pompano Beach, Florida 33069
For the Purchaser: Gerald M. Higier, Trustee
1541 Sunset Drive, Suite 300
Coral Gables, Florida 33143
With a copy to: Ellen Rose, Esquire
Therrel Baisden & Meyer Weiss
Suite 500
1111 Lincoln Road Mall
Miami Beach, Florida 33139-0558
Nothing herein contained shall be construed as prohibiting the parties
respectively from changing the place at which notice is henceforth to be given,
but no such change shall be effective unless and until it shall have been
accomplished by written notice given in the manner set forth in this paragraph
14.
14. Assignment. This Agreement is assignable by Purchaser subject to
the Sellers' prior written approval which shall not be unreasonably withheld or
delayed.
15. Broker. Sellers and Purchaser represent and warrant to each other
that they have not authorized any broker, agent, or finder to act on their
behalf other than the RTL Realty, whose commission Sellers shall pay pursuant to
separate listing agreements, nor do they have any knowledge of any other broker,
agent or finder purporting to act on their behalf in respect to this
transaction. Sellers and Purchaser hereby agree to indemnify and hold harmless
each other from and against any cost, expense, claim, liability or damage
resulting from a breach of the representation and warranty contained herein and
from any claim by any broker in connection with this transaction.
16. Default. If Purchaser breaches this Agreement all monies paid or
required to be paid pursuant to this Agreement by Purchaser, together with all
interest earned thereon, shall be retained by or for the account of Sellers as
consideration for the execution of this Agreement and as agreed and liquidated
damages, in full settlement of any claim for damages, and such remedies shall be
the sole and exclusive remedy of Sellers. If for any reason other than failure
of Sellers to make title good and marketable as required by this Agreement,
Sellers fail, neglect or refuse to convey title to Purchaser under this
Agreement or otherwise fails to perform their obligations hereunder, all
deposits made by Purchaser, together with all interest earned thereon, shall be
returned upon demand, or Purchaser, at its option, shall have the right of
specific performance against Sellers. If Sellers default is their wrongful
failure to close on account of its fraudulent transfer of all or any part of the
Property to another party, then Purchaser shall also have the right to seek
damages against the Sellers.
17. Condemnation. If prior to the closing under this Agreement either
party hereto receives or obtains any notice of any type that any governmental
authority having jurisdiction intends to commence proceedings for the taking of
all or a portion of the Property by the exercise of any power of condemnation or
eminent domain or notice thereof is recorded in the Public Records of Palm
Beach, County, Florida, the applicable party shall promptly notify the other and
thereupon the Purchaser shall have the option to either (i) terminate this
Agreement and receive back all deposit monies paid hereunder, whereupon the
parties shall be released and relieved of any further liabilities or obligations
under this Agreement or (ii) close this transaction as if no such notice had
been received, obtained or recorded, or proceedings commenced, in which case all
proceeds of such condemnation otherwise belonging to Sellers shall belong to the
Purchaser and there shall be no reduction of the Purchase Price or any sums
required to be paid to the Sellers by the Purchaser hereunder.
18. Escrow Agent. Any Escrow Agent receiving funds hereunder agrees to
deposit same promptly and to hold same in accordance with the terms and
conditions of this Agreement. In the event of doubt as to its duties or
liabilities hereunder, Escrow Agent may, in its discretion, continue to hold the
funds until the parties agree to disbursement thereof or until a court of
competent jurisdiction shall determine the rights of the parties thereto, or
Escrow Agent may deposit same with the Clerk of the Circuit Court having
jurisdiction of the dispute and upon notifying all parties of such action, the
liability of the Escrow Agent hereunder shall terminate, except for accounting
of all sums disbursed hereunder out of escrow. In the event of any suit between
Sellers and Purchaser wherein the Escrow Agent is made a party by virtue of
acting as Escrow Agent hereunder, or in the event of any suit wherein Escrow
Agent interpleads the subject matter of the escrow, the Escrow Agent shall be
entitled to recover reasonable attorneys' fees and costs incurred, said fees and
costs to be charged and assessed as court costs in favor of the prevailing
party. All parties agree that the Escrow Agent shall not be liable to any party
or person whomsoever for misdelivery to Purchaser or Sellers of the items
subject to this escrow, unless said misdelivery shall be due to willful breach
of this Agreement or gross negligence of the Escrow Agent.
Sellers acknowledge that Escrow Agent is Purchaser's attorney. In the
event of a dispute which requires that Escrow Agent interpleads the escrow
amount or in the event of any other litigation between the parties on account of
the terms hereof. Sellers agree that Escrow Agent may continue to act in its
capacity as Purchaser's attorney in settling or litigating said dispute.
19. Purchaser's Due Diligence. In the event this transaction shall fail
to close for any reason, then Purchaser shall deliver to Seller copies of any
studies, surveys, etc. which Purchaser obtained in its inspection of the
Property, and in the event Purchaser does not have any duplicate copies of same,
Purchaser shall make same available for Seller to copy.
20. Allocations. The Property is owned in the following percentages:
Royal Palm Beach Colony, 50.94%; John Morris, 49.06%. The purchase price shall
be divided between the Sellers in accordance with those percentages, and Sellers
agree to divide the expense of this transaction between them in the foregoing
percentages.
21. Purchaser's Efforts. Purchaser agrees to use good faith and to
diligently pursue all approvals, including the replat of the Property, which are
required to be pursued by Purchaser herein.
22. Sellers' Acceptance. Sellers will have until 5:00 P.M.
_____________________, 1995 to accept and return a fully executed Agreement to
Purchaser.
23. Date Hereof. For purposes hereof, the "Date Hereof" shall be the
date both parties are in receipt of a fully executed copy of this Agreement.
24. Survival. The provisions of this Agreement shall not survive the
closing of this transaction, unless specifically provided otherwise.
IN WITNESS WHEREOF, the parties hereto have hereunto placed their hands
and seals, this _____ of_________________, 1995.
Signed, sealed and delivered SELLER
in the presence of:
ROYAL PALM BEACH COLONY LIMITED
PARTNERSHIP
By: Stein Management Co.,
Inc., a Florida
Corporation, Managing
General Partner
By: _____________________________
RANDY REIGER
Vice President
_____________________________________
JOHN MORRIS
PURCHASER
/s/Ellen ?????????????????????? /s/Gerald M. Higier
/s/???????????????????????????? GERALD M. HIGIER, Trustee
<PAGE>
EXHIBIT "B"
1. Taxes or special assessments for the year of closing.
2. Any claim that any portion of the lands are sovereign lands of the State of
Florida including submerged, filled or artificially exposed lands and lands
accreted to such lands.
3. Reservations of 1/2 of all of the rents and royalties paid or payable for
any oil, gas or other mineral, whether metallic or non-metallic and mineral
rights on, in or under the land herein conveyed. The exploration, mining
and developing of same can only be done with the permission of the then
surface owner, all as set forth in Deed from Elizabeth L. Randolph, et. al.
to Royal Palm Beach Colony, Inc., as recorded April 9, 1969 in OR Book 1714
at Page 1410 of the Public Records of Palm Beach County, Florida; as
affected by conveyances recorded in OR Book 1802 at Page 266; OR Book 3710
at Pages 1109 and 1111; OR Book 5302 at Pages 1896, 1897 and 1898; OR Book
5926 at Page 1774; So far as same shall affect lands in Section 30,
Township 42 South Range, 41 East, Palm Beach County, Florida.
4. Declaration of Easements as granted by Royal Palm Beach Colony, Inc., in
favor of the Indian Trail Water Control District for road, flood and water
control purposes dated April 22, 1970 and recorded May 18, 1970 in OR Book
1810 at Page 491 of the Public Records of Palm Beach County, Florida, so
far as same shall affect lands in Section 30, Township 42, South Range 41
East, Palm Beach County, Florida. Purchaser accepts same subject to
location of the Easements on a survey.
5. Tri-party Easement Agreement recorded December 27, 1976 in OR Book 2621 at
Page 420 of the Public Records of Palm Beach County, Florida. Purchaser
accepts same subject to location of the Easements on a survey.
6. Order Extending Boundaries of the Indian Trail Water Control District to
include all of Section 30, Township 42, South Range 41 East and other lands
as recorded October 14, 1970 in OR Book 1845 at Page 68 of the Public
Records of Palm Beach County, Florida.
7. Resolution Number R-86-434 filed by the Board of County Commissioners of
Palm Beach County in regard to the use of septic tanks when approved by the
Palm Beach County Health Department as recorded April 14, 1986 in OR Book
4846 at Page 1542 of the Public Records of Palm Beach County, Florida.
8. Notice of Interest recorded in OR Book 2492 at page 1359 of the Public
Records of Palm Beach County, Florida.
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