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, 1996
Commission File Number 1-8893
ROYAL PALM BEACH COLONY,
LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
DELAWARE 59-2501059
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
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 None
Securities registered pursuant to Section 12(g) of the Act: NONE
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 the last reported sale price of the
Units over-the-counter on December 31, 1996 was approximately $1,592,649.
<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 a review of, among other matters, the Partnership's
inability to meet the Exchange's listing standards. The Partnership's units did
not resume trading on the Exchange and, following such review, were delisted on
March 28, 1996. See Item 5. The Units are currently trading over-the-counter
under the symbol "YYGHA."
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 $65,298,575. As of December
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."
As of September 30, 1996, the Partnership's remaining assets consisted
principally of; (1) 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 $4,476,742 (this tract is hereinafter referred to as the "Crestwood"
tract), (3) unsold land in Palm Beach County, Florida which is included in the
<PAGE>
balance sheet at its book value of $485,596, (4) a tract of land in the Village
reacquired by foreclosure in 1993 and included in the balance sheet at $287,650,
(5) contingent receivables relating to a prior sale of utility assets with a
maximum future undiscounted value of $5,603,000 (which amount, other than
$129,000 earned as of September 30, 1996 but not payable to the Partnership
until January, 1997, 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 $41,451. Through December 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.
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 originally of 170 lots zoned for
single family housing (increased in a revised site-plan to 198 lots), 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
<PAGE>
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.
After several potential affiliations were identified, a memorandum of
understanding was executed with Regency Homes, Inc., a prominent,
privately-owned South Florida home builder, envisioning a business combination
of the two entities. However, protracted negotiations with Regency were
suspended in early December 1995 and terminated in late December, 1995.
While management might consider a business combination with an
appropriate operating business, it is not actively seeking such transactions and
no discussions concerning any such transaction have taken place. The Partnership
is proceeding with the liquidation of the its remaining assets. In connection
therewith, the Partnership is continuing to develop the residential lots in the
Crestwood tract, and may develop other properties if such development would
enhance liquidation values. The status of real estate dispositions and
development is discussed in Item 2 below.
(2) Cash Available for Distribution
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 a substantial reduction in sales revenues
in 1993 and 1994, and 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 has
<PAGE>
been available for distribution since December 1992. Although at currently
targeted sales prices the Partnership could realize cash proceeds from the sale
of the Crestwood lots in a range exceeding $5,000,000, there can be no assurance
that currently targeted prices will be realized, and initial sales proceeds will
be applied to repayment of debt, including bank financing incurred for
development work expected to total approximately $2,625,000 It is therefore
considered doubtful that cash will be available for distribution in 1997. See
Item 2 - Properties - Development and Sale of Residential Lots; and Item 7 --
Management Discussion and Analysis of Financial Condition -- Liquidity and
Capital Resources.
The timing of the resumption of liquidating distributions will depend
largely upon the timing of future sales of the Partnership's remaining land
(developed or undeveloped) and future collections of contingent receivables
relating to a prior sale of a utility plant. See Item 2 -- Properties, for a
discussion of other sources of and anticipated timing of the receipt of revenue
which will affect future distributions.
(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."
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.
<PAGE>
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 served as interim Vice President and Chief Operating Officer
of the Partnership's managing general partner between September 1995 and
February 1996. Mr. Rieger currently provides services as an independent
consultant to the Partnership for management services in addition to ongoing
brokerage services. 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, 1997, Stein Management Company, Inc. ("Steinco") the
Managing General Partner, employed 2 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.
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 Villaqe 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.
<PAGE>
The Crestwood Tract
Although the Partnership had previously sold nearly 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 is otherwise
undeveloped with the exception of the existence of portions of a drainage
system.
Commercial Land within the Crestwood Tract
In order to enhance the market value of the Crestwood Tract, the
Partnership obtained the rezoning of a 28 acre portion of the Crestwood Tract
previously zoned for multi-family housing to permit the Partnership to develop a
14 acre portion for use as a shopping center site. The Partnership received
site-plan approval in mid-1996. The Partnership has executed an agreement to
sell the entire 28 acre 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). The closing on
this phase was subject to soil testing, availability of sufficient utility
connections, environmental matters, site-plan approval and approval of the
premises by a major supermarket chain as a site for a new supermarket. All of
such conditions have now been satisfied, the parties are awaiting the issuance
of a building permit and the satisfaction of other conditions which are
considered likely to occur during January, 1997. The closing is therefore
expected to take place by the end of February, 1997. Were the Purchaser to
refuse to close, which is considered highly unlikely, its only liability would
be its loss of deposits presently aggregating $71,000.
The second and third phases consist of two additional parcels in the 14
acre portion rezoned as described 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 pending closing on the first phase, to accord
an option to the 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 itself obtains an
unsolicited offer to lease or purchase the parcels 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 by the third party during the first five
years of the proposed lease, and (ii) in the event of a sale, 50% of the net
proceeds to be paid by the third party.
<PAGE>
The final phase relates to a contiguous 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). However, after two years from the
first closing, the Partnership for multi-family residential purposes only, 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.
Residential Lots within the Crestwood Tract
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 has included a redesign of the Single Family Tract, and the
Partnership has now received final plat approval to increase to 198 the number
of residential lots which may be developed for single family use (hereinafter
the "Residential 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.
In 1995, the Partnership completed the off-site utility infrastructure
for the entire Crestwood Tract. The cost of such construction, approximating
$975,000, 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,
originally $2,175,000, has been increased to $2,625,000 (which includes the
$975,000 advanced for infrastructure for the entire Crestwood Tract and $350,000
advanced for on-site improvement of Phase I of the Residential Tract (see
below.) The Union Bank Loan, which is secured by a first mortgage on the 198
undeveloped homesites, is due in full on January 31, 1998. The Partnership is
required to apply $20,000 of the proceeds of each lot sale to payment of the
Union Bank Loan.
The Partnership is developing the residential lots in three phases, of
which Phase I, comprising 32 lots, has been developed with on-site improvements,
financed by $350,000 in borrowings under the Union Bank Loan. Five of the
residential lots in Phase I were purchased for the aggregate sum of $170,000 by
Regency Homes, Inc. under an option which covered all 32 lots. The option as to
the balance of the lots has terminated because of Regency's failure to purchase
a specified minimum number of lots per month, although the Partnership continues
to negotiate with Regency and others for the sale of individual lots.
<PAGE>
In addition, on August 12, 1996, the Partnership executed an agreement
with Lennar Homes, Inc. ("Lennar"), a prominent South Florida developer, for the
purchase of 86 lots in Phase II of the Residential Tract for an aggregate of
$2,451,000. The Partnership holds deposits under letters of credit aggregating
$490,200. The agreement contemplates that all lots will be taken and paid for
over an 18-month period after completion by the Partnership of development work.
It is anticipated that closing on at least 22 of the lots will occur during the
summer of 1997, resulting in gross proceeds to the Partnership of approximately
$612,000.
The Partnership intends to finance on-site development of the 166 lots
in Phases II and III of the Residential Tract, anticipated to cost in the range
of $1.9 million, with the balance of the borrowing available under the Union
Bank Loan and the net proceeds of a public bond financing effected in November,
1996 by the Indian Trail Water Control District (the "District"), which produced
net available funds for the project of approximately $1,074,000. The bonds are a
direct obligation of the District and not of the Partnership, and interest and
principal on the bonds will payable from taxes levied on the lots in the
Residential Tract. Such bond issue resulted in an increase in an aggregate real
estate tax of approximately $117,000 per annum on the entire Residential Tract,
of which amount $600 is allocable to each lot individually.
Other Acreage within the Village
In March, 1993 the Partnership reacquired a separate tract of 4.54
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. An agreement to sell this
acreage for $325,000 was terminated by the purchaser in November 1996 and the
property is currently being remarketed
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,
$5,365,000 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.
<PAGE>
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
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<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
1996*
Total $5,535,000 $262,000
========== ========
</TABLE>
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* The Partnership anticipates receipt of $129,000 in late January, 1997.
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 $5,365,000 in contingent payments under the
Utility Contract. There can be no assurance, particularly in view of the decline
in payments from 1995 to 1996, 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.
<PAGE>
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 three tracts in the vicinity of
the Village.
The first tract originally consisted of 206 one-acre lots located
approximately eight miles northwest of the Village. These lots have been
improved with graded unpaved access roads and drainage facilities. One lot from
this tract was sold during 1996 for $12,000.
In October, 1996, the County of Palm Beach Nature Conservancy
purchased, for approximately $100,000, 18 lots within this parcel for use as a
conservation easement. The County has also agreed to purchase an additional 16
such lots for $84,000, with a closing anticipated in late February, 1997.
Assuming that this sale is closed, the Partnership will retain 171 lots in this
tract.
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 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.
The second tract, consisting of 470 acres, 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, in 1996 the Partnership rejected an offer of $1,100,000 for
this tract and alternatives to such sale are being examined with a view to
obtaining a higher price. Accordingly, management is of the opinion that its
realizable value is in excess of its current book value of $213,421.
The timing of future sales of the land discussed above, the manner in
which they may be developed and the ultimate realizable prices for this land are
dependent upon a complex and interrelated number of factors arising out of
governmental regulations concerning permissible land use.
The third tract 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,
<PAGE>
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 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 $1,986,000 (less
selling commissions) of which the Partnership's share would be approximately
$993,000. 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.
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
$168.962.
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
On January 16, 1996 the American Stock Exchange halted trading in the
Partnership's Units pending a review of, among other matters, the Partnership's
inability to meet the Exchange's listing standards. The Partnership's units did
not resume trading on the Exchange and, following such review, were delisted on
March 28, 1996. 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 through January
15, 1996; information for periods thereafter relates to over-the-counter
trading.
The Partnership's Units were held by approximately 649 holders of
record as of December 31, 1996. Based on its tax records, including beneficial
owners, the Partnership believes that there are a total of approximately 1,000
unit holders.
<TABLE>
<CAPTION>
Fiscal Year Ended:
September 30, 1996
Quarter High Low
------- ---- ---
<S> <C> <C>
First 1 1/2 3/4
Second 13/16 7/8
Third 9/16 17/20
Fourth 9/16 3/4
September 30, 1995
<CAPTION>
<S> <C> <C>
First 15/16 3/4
Second 1 13/16
Third 2 13/16
Fourth 1-11/16 1 3/8
</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
<PAGE>
management's judgment that Partnership cash should be conserved and applied to
the development activities discussed in Item 2, and, during 1994 and 1995, in
light of the possibility that the Partnership might resume 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."
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 $1.85 as of September 30, 1996. 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.
<PAGE>
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>
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,
----------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Selected Income
Statement Data
Revenues $ 397 $ 497 $ 832 $ 1,717 $ 1,510
Net income (loss) (690) (787) (554) 773 398
Income (loss) per unit (.15) (.18) (.12) .17 .09
Selected Balance
Sheet Data
Total assets 5,486 5,425 4,650 5,090 5,361
Mortgage notes payable 2,065 1,511 -- -- --
Partners' equity 2,370 3,060 3,847 4,401 4,750
Cash distributions
per unit -0- -0- .25 .25 --
</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 continued to incur substantial
expenses in the planning and development of its properties in addition to normal
ongoing administrative costs. The Partnership had withheld its properties from
sale during the fiscal year ended September 30, 1995, and during most of the
quarter ended December 31, 1995, in anticipation of a business combination which
was being negotiated throughout most of that year, but which negotiations were
terminated in December, 1995. The only revenues for the year ended September 30,
1996, were the proceeds of $182,000 received upon the sale of five residential
lots and one undeveloped lot, offset in part by approximately $71,000 of
terminated merger expense. In addition, the Partnership received $433,000 in
payment of an installment on a contingent note held in respect of a prior sale
of the utility system.
See Item 1.
During the quarter ended December 31, 1995 the Partnership also
received $168,962 in satisfaction of a mortgage note receivable.
The Partnership is obligated to repay a working capital loan in the
amount of $527,000 due to Hasam Realty Limited Partnership, a general partner of
the Partnership, on February 28, 1997. See Item 13 -- "Certain Relationships and
Related Transactions."
In June 13, 1996 the Partnership obtained an additional working capital
loan in the amount of $300,000 from an affiliate of Jack Friedland and $25,000
from Mr. Friedland directly. Mr. Friedland is affiliated with Hasam Realty
Limited Partnership, a general partner of the Partnership. The loan was
originally for a term ending October 31, 1996, at an interest rate of 2% over
the prime rate of Union Bank, and is secured by a first mortgage lien on a 4.54
acre tract of undeveloped land in Palm Beach County and a tract of approximately
14 acres of commercially zoned land in the Crestwood tract described in Item 2.
As a result of the deferral of closing on several transactions which had been
anticipated to produce substantial cash proceeds, the maturity date of the note
was extended through February 28, 1997.
As a result of the foregoing, the Partnership's cash balances declined
from $84,000 at September 30, 1995 to $41,000 at September 30, 1996.
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", and land sales and contingent utility receipts described under Item 2 --
Properties -- "Utility Contingent Receipts." In the event of a deferral of land
sales beyond currently anticipated dates, management believes that additional
financing arrangements will be available from, or guaranteed by, Hasam Realty
Limited Partnership, a general partner of the Partnership, or an institutional
lender.
<PAGE>
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 $343,000. As indicated
under Item 2 -- " Acreage in the Vicinity of the Village," the Partnership
recently rejected an offer of $1.1 million for a 483 acre portion of this land.
While the Partnership believes that all or a major portion of the acreage in the
vicinity of the Village will 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."
As indicated in Item 2, the Partnership is committed to the continuing
development of phases II and III of the Crestwood Residential Tract, as the most
efficacious manner in which to enhance liquidation values. 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, and the
Partnership's obligation to repay indebtedness incurred to finance such
development and for working capital, that distributions to partners will be made
during fiscal 1997.
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>
Fiscal Years Ended September 30
--------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Revenues
Sales of land, net $182,000 -0- $520,000
Recognized profit on
installment and cost
recovery sales (a) 1,000 31,000 18,000
Interest income (b) 5,000 32,000 67,000
Sale of utility system (c) 129,000 432,000 86,000
Other (d) 80,000 2,000 141,000
-------- -------- --------
Total revenues $397,000 $497,000 $832,000
======== ======== ========
</TABLE>
a) Recognized profit on installment and cost recovery sales has changed from
year to year as collections of the Partnership's mortgage notes receivable
related to sales reported on the installment and cost recovery basis decreased.
b) Interest income decreased from 1994 to 1996 as the Partnership's mortgage
notes receivable decreased.
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 1996 includes $74,000 received as a foreclosure settlement,
net of related expenses. 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. However, in 1996 and 1995 the Company
incurred $70,720 and $405,261, respectively, in costs related to a proposed
merger, as to which negotiations have been terminated.
Provision for doubtful accounts
In 1994 a provision for doubtful accounts and an allowance for doubtful
accounts of $48,500 was recorded. In 1995 it was determined that this allowance
of $48,500 was no longer required.
<PAGE>
Depreciation and property taxes
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 64 Chairman and President of Steinco (1)(*)
Private Investor
Randy Rieger (**) 47 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 58 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
Dr. Ernest Sayfie 66 Director of Steinco; Physician in
private practice
Herbert Tobin 56 Director, and Secretary and Treasurer(*)
of Steinco; President, The Ben Tobin
Companies, LTD, a real estate development company.
Jack Friedland 71 Member, Friedco, L.C.(l); Private Investor
Leonard Friedland 74 Member, Friedco, L.C.(l); Private Investor
Harold Friedland 66 Member, Friedco, L.C.(l); Private Investor
Marjorie Cowan 56 Member, Friedco, L.C.(l); Private Investor
</TABLE>
(1) The general partners are Stein Management Company, Inc. ("Steinco") and
Hasam Realty L.P. The general partner of Hasam L.P. is Friedco, L.C.,
("Friedco") a Florida limited liability company. Friedco is managed by its four
members, Jack, Harold and Leonard Friedland and Marjorie Cowan, who are brothers
and sister. Irving Cowan is the husband of Marjorie Cowan.
<PAGE>
(*) Elected to this position on February 14, 1996.
(**) Mr. Rieger, 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 above table.
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 1996.
Based solely on the foregoing the Partnership believes that during fiscal 1996,
no purchases or sales of units were made requiring compliance with applicable
Section 16(a) filing requirements.
Item 11. Executive Compensation
During fiscal 1996 no executive officer of the Managing General Partner
received compensation exceeding $60,000 except Randy Rieger, who received
$60,000 through February, 1996 (the date of Mr. Rieger's resignation as Vice
President) and $42,000 through end of the fiscal year in management and
consulting and brokerage fees.
All officers and Directors, as a group (5 persons) earned $127,400 in
cash compensation (including the compensation paid to Mr. Rieger described
above) and $4,300 in other benefits.
The Partnership Agreement provides that the Partnership will provide
and pay for all payroll and other costs of Steinco (to the extent such costs are
not paid directly by the Partnership) 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, 1996.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth as of December 15, 1996 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 712,417 (1) 15.8%
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 (5) 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. In the case of Harold Friedland does not
include 316,144 Units owned by an adult child and 65,000 Units owned by trusts
for other adult children of which Jack Friedland is one of three trustees. In
the case of Leonard Friedland, includes Units held for benefit of Mr. Friedland
and adult children of Mr. Friedland.
(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.
(5) Does not include 20,000 Units owned by Stein Management Company, of which
Mr. Simpson's wife owns 50% of the common stock.
Item 13. Certain Relationships and Related Transactions
Borrowing from Related Parties
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 February, 1996, Hasam
agreed to add to principal $27,249 of interest accrued through January 31, 1996
and unpaid. The loan (including said amount added to principal) was payable in
full on June 29, 1996 but was extended through February 28, 1997. The loan 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.
On June 13, 1996, the Partnership borrowed $300,000 from an affiliate
of Jack Friedland and $25,000 directly from Mr. Friedland, who is an affiliate
of Hasam Realty Limited Partnership, a general partner of the Partnership. These
loans, originally due on October 1, 1996, have been extended through February
28, 1997. See Item 7.
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."
<PAGE>
Herbert Tobin, a Director of Steinco, is Chairman of the Board and
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 in 1995, Mr. Rieger had been 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 were
being paid to RTL Realty Corp. (50% owned by Mr. Rieger) which had been engaged
as the Partnership's exclusive broker in respect of a substantial portion of its
real estate assets. Under such prior arrangement, RTL Realty Corp. 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 Villaqe of Royal Palm Beach." Mr.
Rieger resigned following the election of new officers on February 14, 1996;
however, Mr. Rieger has continued to serve the Partnership as a consultant under
a consulting and brokerage agreement with Mr. Rieger and RTL Realty Corp, dated
May 23, 1996, which was originally scheduled to expire on December 31, 1996 (the
"RTL Agreement"). Under the RTL Agreement, RTL received $6,000 per month in
consideration of Mr. Rieger's services to the Partnership, in addition to
brokerage on sales of the Partnership's properties at a varying schedule of
rates and reimbursement of approved expenses. In November, 1996, the Partnership
approved an extention of the RTL Agreement until December 31, 1997, and also
agreed to reimburse RTL for certain expenses at the rate of $2,500 per month for
office expenses. In the fiscal year ended September 30, 1996, Mr. Rieger was
paid $113,060 under the original and revised agreements, of which $60,000 was
paid to him as officer's compensation. 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, 1996 and 1995.
Statements of operations for the years ended September 30,
1996, 1995 and 1994.
Statements of partners' equity for the years ended September
30, 1996, 1995 and 1994.
Statements of cash flows for the years ended September 30,
1996, 1995 and 1994.
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.
(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.
<PAGE>
3(c) Amended Certificate and Agreement of Limited Partnership of 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.
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 of the Registrant on Form 10-K for
the fiscal year ended September 30, 1995 and incorporated herein by reference.
4(c) Correction to description of Exhibit 4(c) filed with Report of Registrant
on Form 10-K for fiscal year ended September 30, 1995. Said Exhibit relates to
is a promissory note for $27,247.83 of accrued interest on Prommissory Note in
the amount of $500,000 filed as Exhibit 4(d) to said report on Form 10-K.
4(d) Correction to description of Exhibit 4(d) filed with Report of Registrant
on Form 10-K for fiscal year ended September 30, 1995. Said Exhibit is a
Prommissory note from Registrant to Hasam Realty Limited Partnership in the
amount of $500,000.
4(e) Agreement between Registrant and Gerald M. Higier dated December 1, 1995
relating to purchase of 10.8 acre commercial tract. Filed as Exhibit 4(e) to the
Report of the Registrant on Form 10-K for the fiscal year ended September 30,
1995 and incorporated herein by reference.
4(f) Agreement between Registrant and Gerald M. Higier dated in 1995 relating to
purchase of 24 acres. Filed as Exhibit 4(f) to the Report of the Registrant on
Form 10-K for the fiscal year ended September 30, 1995 and incorporated herein
by reference.
4(g) Agreement executed August 12, 1996 between the Registrant and Lennar Homes,
Inc. relating to sale of 86 single family lots in Crrestwood Unit 3 - Plat
Three.
<PAGE>
4(h) First Amendment to Loan Agreement and First Mortgage Modification Amendment
dated June 26, 1995 to Loan Agreement referred to in Exhibit 4(b).
4(i) Second Mortgage Modification Amendment dated October 21, 1996 to Loan
Agreement referred to in Exhibit 4(b).
4 (j) Mortgage dated June 13, 1996 between Crossroads Associates, Ltd. and the
Registrant pertaining to secured loan of $300,000 to the Registrant.
4 (k) Promissory Note dated June 13, 1996 in the amount of $300,000 from
Registrant to Crossroads Associates, Ltd. relating to Mortgage referred to in
Exhibit 4(j).
4(l) Letter Agreement dated May 23, 1996 between Randy Rieger and the Registrant
relating to brokerage and consulting services.
<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: January 31, 1997 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 Cohen Chairman, President and Director, January 31, 1997
- --------------- Stein Management Company, Inc.
Irving Cowan
/s/David B. Simpson Vice President and Director, January 31, 1997
- ------------------- Stein Management Company, Inc.
David B. Simpson
/s/Ernest Sayfie Director, January 31, 1997
- ---------------- Stein Management Company, Inc.
Ernest Sayfie
/s/Herbert Tobin
- ---------------- Director, January 31, 1997
Herbert Tobin Stein Management Company, Inc.
</TABLE>
<PAGE>
ROYAL PALM BEACH COLONY,
LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1996, 1995, 1994
<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, 1996 and 1995, and the related
statements of operations, partners' equity and cash flows for each of the three
years in the period ended September 30, 1996. 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, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
September 30, 1996 in conformity with generally accepted accounting principles.
The accompanying financial statements 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 year 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 matters raise substantial doubt about the Partnership's ability to
continue as a going concern. The financial statements and schedules do not
include any adjustments that might result from the outcome of this uncertainty.
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.
/s/ LEFCOURT, BILLIG, SARBEY, TIKTIN & YESNER, P.A.
Coral Gables, Florida
December 11, 1996
<PAGE>
<TABLE>
<CAPTION>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
BALANCE SHEETS
SEPTEMBER 30, 1996 AND 1995
ASSETS
1996 1995
---------- ----------
<S> <C> <C>
Cash $ 41,451 $ 83,902
Mortgage notes and other receivables (Note 2):
Mortgage notes receivable 236,153
Other 133,318 435,883
Property held for sale (Note 3) 5,249,988 4,607,661
Other assets (Note 4) 61,376 61,891
---------- ----------
$5,486,133 $5,425,490
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Mortgage notes payable, bank (Note 5) $1,212,412 $1,010,513
Mortgage notes payable, general partner (Note 5) 527,249 500,000
Mortgage and note payable, related parties (Note 5) 325,000
Accounts payable and other liabilities (Note 6) 1,037,439 840,402
Estimated costs of development of land sold 14,142 14,441
Subsequent events (Notes 5 and 6)
Partners' equity:
4,485,504 units authorized and outstanding 2,369,891 3,060,134
---------- ----------
$5,486,133 $5,425,490
========== ==========
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
Years ended September 30,
---------------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Revenues (Notes 13 and 14) $ 396,924 $ 497,651 $ 831,773
----------- ----------- -----------
Costs and expenses:
Cost of sales 135,533 439,195
Selling, general and
administrative expenses 752,935 807,505 804,930
Terminated merger costs (Note 7) 70,720 405,261
Provision for doubtful
accounts (48,500) 48,500
Depreciation and
property taxes 127,979 120,734 92,941
----------- ----------- -----------
1,087,167 1,285,000 1,385,566
----------- ----------- -----------
Net loss ($ 690,243) ($ 787,349) ($ 553,793)
=========== =========== ===========
Net loss per unit ($ 0.15) ($ 0.18) ($ 0.12)
=========== =========== ===========
Weighted average number of
units outstanding 4,485,504 4,485,504 4,485,504
=========== =========== ===========
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' EQUITY
Partnership General Limited Total
Units Partner Partners Equity
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
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
Net loss (14,633) (675,610) (690,243)
----------- ----------- ----------- -----------
Balance, September 30, 1996 4,485,504 $ 118,351 $ 2,251,540 $ 2,369,891
=========== =========== =========== ===========
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
Years ended September 30,
----------------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Cash received:
Collections on land sales
and receivables $ 434,830 $ 161,428 $ 469,393
Interest income 7,622 77,207 56,051
Sale of utility system 432,800 85,800 215,050
Other cash received 6,398 14,985 106,021
----------- ----------- -----------
881,650 339,420 846,515
----------- ----------- -----------
Cash expended:
Selling, general and
administrative, property
taxes and other expenses 528,353 845,097 991,682
Interest paid
(net of amounts capitalized) 72,696 4,750
Acquisition of property held for sale 18,766 123,552
Improvements to property held for sale 848,616 1,439,903 597,404
----------- ----------- -----------
1,449,665 2,308,516 1,712,638
----------- ----------- -----------
Net cash used in
operating activities (568,015) (1,969,096) (866,123)
----------- ----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (1,335) (758) (11,387)
----------- ----------- -----------
Net cash used in investing activities (1,335) (758) (11,387)
----------- ----------- -----------
(continued)
<PAGE>
<CAPTION>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS (CONTINUED)
Years ended September 30,
----------------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from mortgage notes payable:
Bank 301,899 1,010,513
General partner 500,000
Others 325,000
Payments on mortgage payable:
Bank (100,000)
----------- ----------- -----------
Net cash provided by
financing activities 526,899 1,510,513
----------- ----------- -----------
Net decrease in cash (42,451) (459,341) (877,510)
Cash at beginning of year 83,902 543,243 1,420,753
----------- ----------- -----------
Cash at end of year $ 41,451 $ 83,902 $ 543,243
=========== =========== ===========
(continued)
<PAGE>
<CAPTION>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS (CONTINUED)
Years ended September 30,
----------------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Reconciliation of net loss to
net cash used in
operating activities:
Net loss ($ 690,243) ($ 787,349) ($ 553,793)
----------- ----------- -----------
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 3,428 4,334 3,599
Provision for doubtful accounts (48,500) 48,500
Sundry 4,227
Change in assets and liabilities:
Increase in:
Mortgage notes and
other receivables (158,232)
Property held for sale (642,327) (1,097,773) (485,947)
Other assets (1,578) (28,696)
Accounts payable and
accrued liabilities 197,037 297,436 191,670
Estimated costs of development
of land sold
Decrease in:
Mortgage notes and
other receivables 538,718 36,356
Other assets 61,740
Estimated cost of development
of land sold (299) (244,979) (77,812)
----------- ----------- -----------
Total adjustments 94,979 (1,181,747) (312,330)
----------- ----------- -----------
Net cash flow used in
operating activities ($ 595,264) ($1,969,096) ($ 866,123)
=========== =========== ===========
</TABLE>
Supplemental information concerning investing and financing activities:
As discussed in Note 5, in fiscal 1996 the Partnership issued a note payable to
the general partner for unpaid interest in the amount of $27,249. 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, 1996, 1995 AND 1994
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
related 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 received
from the buyer. Under the cost recovery method no profit is recognized
until cash payments received from 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 the
original purchase price, cost of land development, and development
period real estate taxes and interest.
(continued)
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
1. Organization and summary of significant accounting policies (continued):
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 (loss) per unit:
Net (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.
2. Mortgage notes and other receivables:
Mortgage notes receivable consist of the following as of September 30,
1995:
<TABLE>
<CAPTION>
<S> <C>
Mortgage notes receivable $ 285,801
Less:
Deferred profit (49,648)
---------
$ 236,153
=========
</TABLE>
In December 1995, the Partnership received $168,962 as full settlement of
a mortgage note which had a carrying value at the date of settlement of
$173,513 (mortgage note receivable $222,471 less deferred profit of
$48,958). The loss on this transaction, $4,551, has been included in 1996
selling, general and administrative expenses.
(continued)
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
2. Mortgage notes and other receivables (continued):
Other receivables consist of the following:
<TABLE>
<CAPTION>
September 30,
------------------------
1996 1995
--------- ---------
<S> <C> <C>
Utility receivable (Note 11) $129,000 $432,800
Accrued interest receivable 2,833
Other 4,318 250
-------- --------
$133,318 $435,883
======== ========
</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 Partnership filed an
action to foreclose on the mortgage. 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. In
September 1996, the Partnership received $155,000 from the purchaser of
the property as part of a joint stipulation settlement to settle and
compromise the litigation. Proceeds received in excess of the net
carrying value of the in substance foreclosure and related settlement
expenses amount to $74,047 and have been included in revenues (See Note
13).
4. Other assets:
Other assets consist of the following:
<TABLE>
<CAPTION>
September 30,
-----------------------------
1996 1995
--------- ---------
<S> <C> <C>
Furniture and equipment, net of
accumulated depreciation $ 6,090 $ 8,184
Prepaid expenses 55,286 53,707
--------- ---------
$ 61,376 $ 61,891
========= =========
</TABLE>
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
5. Mortgages and note payable:
Mortgages and note payable consist of the following:
<TABLE>
<CAPTION>
September 30,
---------------------------
1996 1995
----------- ----------
<S> <C> <C>
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 (10.25% at September 30, 1996).
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 $2,978,000 is collateral for this loan and the
additional borrowings described below. The mortgage requires certain
release principal payments as land is sold. $ 875,000 $ 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 based on the minimum
proceeds of a $1,000,000 municipal bond issuance of the Indian Trail
Water Control District during November, 1996. 337,412 35,513
----------- ----------
On October 21, 1996 the Partnership combined these obligations under a
Consolidation Promissory Note, whereby the Partnership may borrow up to
$2,625,000 at 2% over the prime rate, maturing on January 31, 1998. $ 1,212,412 $1,010,513
=========== ==========
Mortgage notes 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 (10.25% at September 30,
1996) with the outstanding principal balance due at maturity on June 29,
1996. Property held for sale with a cost of approximately $787,000 is
collateral for this loan. On February 9, 1996 the Partnership issued a
note payable to the general partner for unpaid interest in the amount of
$27,249 and on September 30, 1996 the general partner extended the due
date of both notes to February 28, 1997. $ 527,249 $ 500,000
=========== ==========
(continued)
</TABLE>
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
5. Mortgage notes payable (continued):
<TABLE>
<CAPTION>
September 30,
---------------------------
1996 1995
----------- ----------
<S> <C> <C>
Mortgage note payable, related party:
On June 13, 1996, the Partnership borrowed $300,000 from a related
company for working capital. The terms of the mortgage call for monthly
interest payments at a rate of 2% over prime (10.25% at September 30,
1996) with the outstanding principal balance at maturity on October 31,
1996. Property held for sale with a cost of approximately $287,000 is
collateral for this loan. No payments of interest have been made and on
September 30, 1996 the lender waived the default for nonpayment of
interest and extended the due date of the mortgage to February 28, 1997. $ 300,000
Note payable, related party:
On September 4, 1996, the Partnership borrowed $25,000 from a unit holder
for working capital. The terms of the note call for monthly interest
payments at a rate of 2% over prime (10.25% at September 30, 1996) with
the outstanding balance due upon maturity which has been extended to
February 28, 1997. 25,000
-----------
$ 325,000
===========
</TABLE>
Interest is capitalized for property being developed. All other interest is
charged to operations as incurred as follows for the years ended September
30:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Capitalized $ 119,870 $ 89,605
Charged to operations 72,696 16,630
--------- ----------
Total interest incurred $ 192,566 $ 106,235
========= ==========
</TABLE>
There was no interest incurred during 1994.
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
6. Accounts payable and other liabilities:
Accounts payable and other liabilities consist of the following:
<TABLE>
<CAPTION>
September 30,
---------------------------
1996 1995
---------- ---------
<S> <C> <C>
Accounts payable $ 750,934 $ 555,547
Accrued liabilities:
Property taxes 130,772 107,352
Other 80,733 83,703
Due to landowner 75,000 93,800
---------- ---------
$1,037,439 $ 840,402
========== =========
</TABLE>
Property taxes related to calendar year 1994, which were due March 31,
1995, and property taxes related to calendar year 1995, which were due
March 31, 1996, in the approximate amounts of $144,431 and $147,735,
respectively, are delinquent and are included in accounts payable at
September 30, 1996.
Due to landowner represents reimbursement due for development costs in
connection with common areas. Payment of $75,000 was due on June 30,
1996, with interest at 8% per annum. Due date was extended to December
31, 1996 and payment was made November 6, 1996.
7. Terminated merger costs:
During fiscal year 1995, a potential affiliation with a privately-owned
South Florida home builder was identified and a memorandum of
understanding was executed for the purpose of merger. However, after
protracted negotiations, the attempt to merge was terminated in December
1995. Costs incurred during the years ended September 30, 1996 and 1995
in connection with the terminated merger amounted to approximately
$71,000 and $405,000, respectively, and have been expensed in the
statement of operations. Such costs include fees for financial, capital
and real estate consultants, and attorneys' fees.
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.
(continued)
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
8. Income taxes (continued):
The following analysis summarizes the major differences between the
financial reporting and income tax basis of the partners' equity account
at September 30, 1996.
<TABLE>
<CAPTION>
<S> <C> <C>
Partners' equity, financial reporting basis $ 2,369,891
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 11,139,231
------------
5,860,769
Add items not deducted for tax purposes 40,270
------------
5,901,039
-----------
Partners' equity, income tax basis $ 8,270,930
===========
</TABLE>
The Partnership, pursuant to the transitional grandfather rules of the
Internal Revenue Code dealing with publicly traded partnerships, reports
its income as a partnership. Under current provisions, the application of
the grandfather rules is scheduled to terminate for the taxable year
commencing after December 31, 1997. At that point in time the Partnership
will be required to determine its income tax status pursuant to the
operative Internal Revenue Code provisions, regulations and rules
thereunder governing publicly traded partnerships. The ultimate
determination, which is dependent upon future results of operations and
other factors, will result in the Partnership either retaining its status
as a partnership or, alternatively, being taxed as a corporation. These
provisions will become operative for the taxable year beginning January
1, 1998.
9. Related party transactions:
The Partnership reimbursed Steinco approximately $45,000 for payroll and
related expenses for fiscal year 1994.
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.
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
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, over a period which is expected to
be extended from August, 2001 through 2003. 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 $5,365,000 had not
yet been received as of September 30, 1996. In addition, the Partnership
had the right to receive up to $500,000, of which $262,000 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
$129,000, $432,800 and $85,800 were recognized for fiscal years 1996,
1995 and 1994, respectively.
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
12. Comparative quarterly financial information (unaudited):
<TABLE>
<CAPTION>
First Second Third Fourth
quarter quarter quarter quarter Full year
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1996:
Revenues $ 144,044 $ 7,197 $ 12,476 $ 260,207 $ 396,924
Costs and expenses 375,444 283,059 185,668 242,996 1,087,167
----------- ----------- ----------- ----------- -----------
Net income (loss) ($ 231,400) ($ 275,862) ($ 173,192) $ 17,211 ($ 690,243)
=========== =========== =========== =========== ===========
Net income (loss) per unit ($ 0.05) ($ 0.06) ($ 0.04) $ 0.00 ($ 0.15)
=========== =========== =========== =========== ===========
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)
=========== =========== =========== =========== ===========
</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 net loss by
approximately $61,000.
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
13. Revenues:
Revenues consist of the following:
<TABLE>
<CAPTION>
Years ended September 30,
--------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Land revenues:
Gross sales of land $182,000 $581,575
Less profit deferred
until principal
collections are
received 61,395
-------- --------
Net sales of land 182,000 520,180
Recognized profit on
installment and cost
recovery sales 690 $ 30,929 18,316
Interest income 4,789 31,916 66,814
Sale of utility system
(Note 11) 129,000 432,800 85,800
Foreclosure
settlement, net (Note 3) 74,047
Other 6,398 2,006 140,663
-------- -------- --------
$396,924 $497,651 $831,773
======== ======== ========
</TABLE>
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.
(continued)
<PAGE>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
14. Liquidity: (continued):
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>
<TABLE>
<CAPTION>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
SCHEDULE IX - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
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> <C>
Deferred profit:
1994 $110,049 $ (A) $ 61,395 $
(B) (18,316)
(E) (1) 153,127
1995 153,127 (B) (30,929)
(C) (72,550) 49,648
1996 49,648 (B) (690) 0
(F) (48,958)
Allowance for
doubtful accounts:
1994 0 48,500 48,500
1995 48,500 (D) (48,500) 0
1996 $ 0 $ 0
(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
(F) Part of settlement transaction (See Note 3 to Financial Statements)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
SCHEDULE X - SUPPLEMENTAL INCOME STATEMENT INFORMATION
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
September 30,
----------------------------------
1996 1995 1994
-------- -------- -------
<S> <C> <C> <C>
1. Maintenance and repairs $ 0 $ 0 $ 580
======== ======== ========
2. Taxes, other than payroll
and income taxes $128,589 $119,201 $ 92,267
======== ======== ========
3. Advertising $ 0 $ 600 $ 2,500
======== ======== ========
</TABLE>
EXHIBIT (g)
CONTRACT FOR SALE AND PURCHASE
LENNAR HOMES, INC. ("Buyer") and ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
("Seller"), hereby agree that Seller shall sell and Buyer shall buy the
following real property ("Property") upon the terms and conditions of this
Contract for Sale and Purchase ("Contract").
1. DESCRIPTION OF PROPERTY: See Paragraph 37 for the description of the
Property.
2. PURCHASE PRICE AND METHOD OF PAYMENT:
A. Purchase Price....................................$2,451,000.00
B. Initial Deposit and Additional Deposit
in accordance with Paragraph 48.......$ 490,200.00
C. Balance to close in U.S. Dollars, in cashier's check issued by
local financial institution, subject to adjustments and prorations.
3. intentionally omitted.
4. EFFECTIVE DATE: The "Effective Date" of this Contract will be the date when
the last one of the Buyer and Seller has signed this offer.
5. PLACE OF CLOSING: This transaction shall close in Palm Beach County or at
another location acceptable to the parties.
6. intentionally omitted.
7. intentionally omitted.
8. EVIDENCE OF TITLE: (A) Seller shall provide a standard title insurance
commitment ("Commitment") issued by a Florida licensed title insuror agreeing to
issue to Buyer, upon recording of the deed to Buyer, an owner's policy of title
insurance ("Policy") in the amount of the Purchase Price, subject only to those
title exceptions set forth in this Contract or which shall be discharged by
Seller at or before Closing. Seller shall pay the premium for the Policy.
(B) The Commitment shall be brought current to a date subsequent to the
Effective Date. The commitment shall show a marketable title of record in
Seller, in accordance with current title standard adopted by the Florida Bar,
subject to only those title exceptions permitted by this Contract or which shall
be discharged by Seller at or before Closing. At Closing, Seller shall convey to
Buyer a marketable title of record as described in this paragraph.
(C) Seller, at Seller's expense, shall deliver the Commitment to Buyer
within 20 days after the Effective Date. Buyer shall examine the Commitment
within 15 days after receipt thereof, and Buyer shall, within the same 15 day
period, notify Seller in writing of any title defects. If any title defects
render title unmarketable, Seller shall use diligent effort to cure such defects
(including the bringing of unnecessary lawsuits) within 90 days from receipt of
such notice. If Seller shall fail to cure such defects within the 90 day period,
Buyer shall have the option of: (1) accepting title as is; or (2) demanding a
return of the Deposit, in which case, the Deposit shall forthwith be returned to
Buyer, and Buyer and Seller shall be relieved, as to each other, of all
obligations under this Contract.
<PAGE>
9. RESTRICTIONS AND EASEMENTS; BUILDING AND ZONING: (A) Buyer shall take title
subject to: (1) zoning restrictions imposed by governmental authority; (2)
restrictions and matters appearing on the plat, or otherwise common to the
subdivision which do not render title unmarketable or adversely affect Buyer's
intended use of the Property; (3) taxes for the year of closing; (4)
restrictions, utility easements and other matters which do not render title
unmarketable or adversely affect Buyer's use of the Property. (B) Seller
warrants that, at the time of Closing, the Property shall not be in violation of
building or zoning codes and that all approvals are consistent with the Buyer's
intended use of the Property which is the construction and sale of single family
homes. If the Property is in violation of such codes, Seller shall pay the
expenses required to bring the Property into compliance with such codes at the
time of Closing. This warranty shall not survive Closing.
10. SURVEY: Buyer, within the time allowed for delivery of the Commitment and
examination thereof, may have the Property surveyed at Buyer's expense. If the
survey shows any encroachment on the Property or that any improvements on the
Property in fact encroach on setback lines, easements, or lands of others, or
violate any restriction, Contract covenant, or applicable governmental
regulation, the same shall be treated as a title defect which renders title
unmarketable.
11. INGRESS AND EGRESS: Seller covenants and warrants that there is ingress and
egress to the Property over public roads.
12. intentionally omitted.
13. intentionally omitted.
14. POSSESSION: Seller warrants and represents that there are not parties in
possession or with a right to possession of the Property other than Seller, and
that Seller shall deliver possession of the Property to Buyer upon Closing.
15. intentionally omitted.
16. intentionally omitted.
17. intentionally omitted.
18. intentionally omitted.
19. CLOSING DOCUMENTS: Seller shall deliver to Buyer at Closing (a) statutory
warranty deed subject to matters contained in Paragraph 9.(A); (b) affidavit
attesting to the absence of liens or potential lienors known to Seller, gap
affidavit, and affidavit of possession; (c) FIRPTA affidavit or exemption
certificate as may be required to exempt Seller or any agent from the income tax
withholding requirements or Seller shall authorize Buyer to withhold the
necessary amount.
20. TITLE INSURANCE AGAINST ADVERSE MATTERS: Buyer shall receive title insurance
against adverse matters pursuant to Section 627.7841 F.S.
21. EXPENSES: State documentary stamps and surtax on deed and the cost of
recording any corrective instruments shall be paid by Seller. The cost of
recording the deed shall be paid by Buyer.
<PAGE>
22. PRORATIONS: All prorations shall be made as of midnight of the day preceding
the Closing. Taxes shall be prorated based on the current year's tax with due
allowance being made for the maximum allowable discount. If Closing occurs on a
date when the current year's assessment is not available, then taxes shall be
prorated on the prior year's tax. However, any tax proration based on an
estimate may at the request of either party be subsequently readjusted upon
receipt of the tax bill, and a statement to that effect will be set forth on the
closing statement.
23. SPECIAL ASSESSMENT LIENS: Certified, confirmed and ratified special
assessment liens as of Closing are to be paid by Seller. Pending liens as of
Closing shall be assumed by Buyer, provided, however, that where the improvement
has been substantially completed as of the Effective Date, such pending lien
shall be considered as certified or ratified and Seller shall, at Closing, be
charged an amount equal to the last estimate by the public body of the
assessment for the improvements.
24. intentionally omitted.
25. PERSONS BOUND; GENDER; FLORIDA LAW: The benefits and obligations of this
Contract shall enure to and bind the respective heirs, personal representatives,
successors and assigns of the parties hereto. Whenever used, the singular shall
include the plural, the plural the singular, and the use of any gender shall
include all genders. This Contract shall be governed by the laws of the State of
Florida.
26. DEFAULT: If Buyer fails to perform this Contract within the time specified
(including the payment of the Deposit), the Deposit made, or agreed to be made
by Buyer, may be retained or recovered by or for the account of Seller as agreed
upon liquidated damages as consideration for the execution of this Contract and
in full settlement of Seller's claims, whereupon Buyer and Seller shall be
relieved, as to each other, of all obligations under this Contract; this shall
be Seller's sole remedy. If, for any reason other than failure of Seller to make
Seller's title marketable after diligent effort, Seller fails, neglects or
refuses to perform this Contract, Buyer may seek specific performance or elect
to receive the return of Buyer's Deposit without thereby waiving any action for
damages resulting from Seller's breach.
27. ATTORNEY'S FEES AND COSTS: In connection with any litigation (including all
appeals and interpleaders) involving Seller, Buyer, or broker arising out of
this Contract, the prevailing party shall be entitled to recover all costs
incurred, including reasonable attorney's fees at trial and appellate levels.
28. ASSIGNABILITY: Buyer may not assign this Contract without the written
consent of Seller except assignments to a wholly owned subsidiary of Buyer or to
Lennar Corporation.
29. TIME: Time is of the essence for all provisions of this Contract.
30. ENTIRE AGREEMENT; TYPEWRITTEN OR HANDWRITTEN PROVISIONS; NOT RECORDABLE:
This Contract, including any exhibits and riders attached, set forth the entire
agreement between Buyer and Seller and contains all the covenants, promises,
agreements, representations, conditions and understandings. Typewritten or
handwritten provisions inserted in this Contract or attached hereto as exhibits
or riders shall control all printed provisions in conflict therewith. Neither
this Contract nor any notice of it, shall be recorded in any public records.
<PAGE>
31. RADON GAS: Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been found in buildings in Florida. Additional information
regarding radon and radon testing may be obtained from your local public health
unit.
32. WARRANTY: Seller warrants and represents that there are no facts known to
Seller which materially affect the value or desirability of the Property which
are not readily observable by Buyer or which have not been disclosed to Buyer.
33. intentionally omitted.
34. intentionally omitted.
35. intentionally omitted.
36. intentionally omitted.
37. DESCRIPTION OF PROPERTY: The Property being sold and purchased pursuant to
this Contract is eighty-six (86) single family home lots (the "Lots") located in
the Village of Royal Palm Beach, Florida, described as Lots 1 through 86,
inclusive, in "Crestwood Unit 3 - Plat Three" according to the plat thereof
recorded or to be recorded in the Public Records of Palm Beach County, Florida.
38. INVESTIGATION PERIOD: Buyer shall have 45 days from the Effective Date to
investigate the suitability of the Property for Buyer's purposes and to procure
an environmental audit. If for any reason Buyer is dissatisfied with its
investigation, Buyer shall have the right at any time during said 45-day period
to cancel this Contract, in which event the Deposit will be refunded to Buyer
and the parties released of all rights and obligations hereunder. Buyer shall be
deemed to have waived its right of cancellation if not exercised by Buyer giving
Seller written notice thereof during such 45-day period. Seller will provide
Buyer with any documents requested by Buyer relating to the Property which are
in Seller's possession. If Buyer does not exercise its right of cancellation,
Buyer shall be deemed have agreed to purchase the Property subject only to
Seller's obligations set forth in this Contract.
39. SITE PLAN AND PLAT APPROVALS: Seller represents that Seller has received
from the Village of Royal Palm Beach site plan approval for the subdivision
described in paragraph 37. Seller agrees to obtain final plat approval within
sixty (60) days after the Effective Date and to record the plat within 30 days
after such approval. Copies of the site plan and plat are attached hereto as
Exhibit "A".
40. SUBDIVISION IMPROVEMENTS/INDIAN TRAIL WATER CONTROL DISTRICT ASSESSMENTS:
Seller shall construct and pay for (i) all the subdivision improvements for the
Property shown on the plans attached hereto as Exhibits B, C, and D, (ii) any
other subdivision improvements (except house pads) and bonds required by the
Village of Royal Palm Beach as a condition of plat approval, and (iii) all
landscaping and entranceway improvements shown on the plans attached hereto as
Exhibit D. Seller agrees that all utilities, including sewer, water, electric
and telephone, will be installed to the locations on the Property as shown on
the above-described plans. Buyer understands and agrees that lots will not be
filled to grade or fully cleared, but Seller will provide sufficient clean sand
fill stockpiled on or within 2,000 feet of the Property on paved roads to fill
the lots to 8" below fixed floor. At Seller's option, payment for the
improvements described above may be provided in whole or in part from the
proceeds of bonds issued for such purpose by the Indian Trail Water Control
<PAGE>
District ("District"), which bonds would be paid from assessments on the Lots
within the Subdivision. With respect to such assessments, Buyer agrees to
include in all lot sales contract it enters into with prospective purchasers,
immediately prior to the space reserved in the contract for the signature of the
purchaser, the following disclosure statement in boldfaced and conspicuous type
which is larger than the type in the remaining text of the contract: INDIAN
TRAIL WATER CONTROL DISTRICT IMPOSES TAXES OR ASSESSMENTS, OR BOTH TAXES AND
ASSESSMENTS, ON THIS PROPERTY THROUGH A SPECIAL TAXING DISTRICT. THESE TAXES AND
ASSESSMENTS PAY THE CONSTRUCTION, OPERATION AND MAINTENANCE COSTS OF CERTAIN
PUBLIC FACILITIES OF THE DISTRICT AND ARE SET ANNUALLY BY THE GOVERNING BOARD OF
THE DISTRICT. THESE TAXES AND ASSESSMENTS ARE IN ADDITION TO ALL OTHER TAXES AND
ASSESSMENTS PROVIDED BY LAW. Buyer consents to the District's recording in the
Public Records of Palm Beach County an assessment disclosure statement. Title to
the lots will be conveyed by Seller to Buyer subject to such assessment rights
of the District. Seller represents to Buyer that assessments for construction
debt, which will be determined at the time the bonds are issued by the District,
will not exceed $600.00 per year per lot. In the event assessments will exceed
$600.00 per year per lot, Seller will promptly notify Buyer and Buyer may either
cancel this Contract or elect to deduct from the purchase price of each lot at
time of closing an amount equal to the excess above $600.00 per year for the
remainder of the assessment term. Seller will pay the costs of any of the
improvements described above which are not paid from the District bond proceeds.
41. COMMENCEMENT AND COMPLETION OF SUBDIVISION IMPROVEMENTS: (A) Seller must use
all reasonable efforts to commence construction of the subdivision improvements,
but if for any reason Seller fails to commence construction within ninety (90)
days from the Effective Date, then Seller shall notify Buyer within seven (7)
days of such failure, and either party may then cancel this Contract by giving
written notice to the other party within thirty (30) days after such notice,
whereupon the Deposit shall be returned to Buyer and the parties shal1 be
released of all obligations and liabilities hereunder. Provided, however, Buyer
at Buyer's sole option may extend said date for commencement of construction by
up to two (2) three (3) month extentions by giving written notice to Seller,
which notice must be given within seven (7) days after the above-described
notice by Seller of failure to commence construction. If construction is not
commenced by said extended date, either party may then cancel this Contract.
(B) Seller must use all reasonable efforts to complete construction of the
subdivision improvements, but in the event that completion and acceptance by the
Village is not achieved within two hundred forty (240) days from the Effective
Date, Seller shall notify Buyer within seven (7) days of such failure, and Buyer
as its sole remedy may cancel this Contract, whereupon the Deposit shall be
returned to Buyer and the parties shall be released of all obligations and
liabilities hereunder. Provided, however, Buyer at Buyer's sole option may
extend said date for completion and acceptance of construction by up to two (2)
three (3) month extentions by giving written notice to Seller, which notice must
be given within seven (7) days after the above-described notice by Seller of
failure to complete construction. Provided further, however, if completion and
acceptance is delayed for reasons beyond delays, Seller shall have the right to
extend the applicable achievement date for a period of time equal to the
delay(s). In any event, if completion and acceptance is not achieved by August
15, 1997, this Contract shall be deemed canceled, whereupon the Deposit shall be
returned to Buyer and the parties shall be released of all obligations and
liabilities hereunder.
<PAGE>
(C) If Buyer exercises the option herein to purchase the two model lots prior to
completion of the subdivision improvements and acceptance by the Village, and if
this Contract is thereafter canceled pursuant to paragraph (A) or (B) above,
then Seller shall purchase each model from Buyer (including the lot) for
$100,000.00 each if undecorated and $150,000.00 each if decorated.
(D) Notwithstanding the provisions of Paragraph 43 conditioning the sale of
certain lots on completion and acceptance of the subdivision improvements, Buyer
may at its option purchase and close on lots prior to the subdivision
improvements being completed and accepted by the Village of Royal Palm Beach. In
such event, the net proceeds realized by Seller from such sale (i.e., the sale
price minus the mortgage release price, normal closing expenses, and brokers'
commission) shall be held in escrow by Seller's attorney or another mutually
acceptable escrow agent, and disbursed to Seller upon the subdivision
improvements being completed and accepted by the Village.
The subdivision improvements are being financed by the District and Union Bank
of Florida. Buyer will be given a copy of the financing agreement within twenty
(20) after the Effective Date.
42. ACCESS TO THE PROPERTY: Buyer shall have the right to enter upon the
Property to perform surveys, engineering studies, inspections, and test borings.
Buyer agrees to indemnify and hold Seller harmless from and against any loss,
damage, claim, demand or liability with respect to any injury to person or
property caused by entry upon the Property by Buyer or its representatives,
agents or employees. The provisions of this paragraph shall survive this
Contract.
43. SCHEDULE OF LOT PURCHASES: The purchase price of $2,451,000.00 for the 86
lots is based upon a price of $28,500.00 for each lot. Buyer shall close on the
purchase of the lots at the aforementioned price per lot in accordance with the
following schedule:
(a) Buyer shall have the option of purchasing two (2) contiguous model
lots, namely, Lots 65 and 66 after Seller has commenced construction of the
subdivision improvements.
(b) Lots 67 through 72 and 27 through 41, within 20 days after written
evidence from Seller to Buyer that the subdivision improvements have been
completed and accepted by the Village of Royal Palm Beach.
(c) Lots 73 through 75, 42 through 52, and 15 through 21, during the
first six (6) month period following the closing on the initial 21 lots
described in (b) above.
(d) Lots 1 through 14 and 53 through 59, during the second (6) month
period following the closing on the initial 21 lots described in (b) above.
(e) Lots 60 through 64, 76 through 86, and 22 through 26, during the
third six (6) month period following the closing on the initial 21 lots
described in (b) above.
(f) The lots to be closed during each such period shall close at the
same time. If Buyer closes on more than 21 lots during any period, the excess
shall be credited against the minimum for the next succeeding period.
Buyer agrees that it shall not sell lots to another builder until
Seller has sold and conveyed all the lots in the adjoining subdivision known as
"Crestwood Unit 3 - Plat Two."
<PAGE>
If between the Effective Date and the date that Buyer closes on the
purchase of the last of the 86 lots (or the sooner termination of this Contract
in accordance with the provisions hereof), Seller receives a written offer(s) to
purchase lots in "Crestwood Unit 3 - Plat Two" at a price below $28,500.00 per
lot, which offer Seller desires to accept, Buyer shall have a first right of
refusal to purchase such lots at the same price and upon the same terms and
conditions as contained in the offer. Seller will deliver to Buyer a copy of
such acceptable offer, and Buyer must notify Seller of its election to purchase
within five (5) days after delivery, otherwise Buyer shall be deemed to have
waived its first right of refusal with respect to said offer.
44. HOMEOWNERS ASSOCIATION: Buyer will receive the homeowners' association
documents and budget applicable to the Property, which Buyer shall review during
the investigation period. If Buyer does not exercise its right of cancellation
during the investigation period, Buyer will be deemed to have approved such
documents. Seller shall execute and record the aforesaid homeowners' association
documents in the Public Records of Palm Beach County prior to closing on the
first lots. Title to the lots will be conveyed by Seller to Buyer subject to
said recorded documents.
45. ARCHITECTURAL APPROVAL: No home may be constructed on any lot until the
plans and specifications for the home, the landscape plan, and the location of
the home on the lot have been approved in writing by Seller. Any approvals shall
be made promptly and not unreasonably withheld. Buyer will submit architectural
elevations and plans to Seller during the Investigation Period to receive an
approval for the 86 lots. Buyer's failure to comply the architectural control
restriction set forth above will entitle Seller to exercise any and all remedies
allowed in law or equity.
46. REAL ESTATE BROKER: Seller and Buyer represent and warrant to each other
that neither of them has dealt or consulted with any real estate brokers,
salesmen or finders in connection with this transaction, except RTL Realty,
whose commission shall be Seller's obligation. Seller and Buyer hereby mutually
agree to indemnify, save and hold each other harmless from and against any and
all losses, damages, claims, costs and expenses (including attorney's fees and
expenses) in any way resulting from or connected with any claims or suits for a
broker's or salesman's commission, finder's fee or other like compensation, made
or brought by any person or entity resulting from its own acts, except as
aforesaid. This provision shall survive closing.
47. NOTICES: Any notices required to be given by the terms of this Contract or
under any applicable law by either party shall be in writing and shall be either
hand-delivered or sent by certified or registered mail, postage prepaid, return
receipt requested, or sent via Federal Express or other similar courier service,
and such notice shall be deemed to have been given when postmarked, when
hand-delivered or when sent via courier service in accordance with the terms of
this paragraph. Such written notice shall be addressed as follows:
To Buyer: Lennar Homes, Inc.
12230 Forrest Hills Boulevard
West Palm Beach, Florida 33414
Attention: Tom Herman
<PAGE>
with copies to
Morris Watsky
700 N.W. 107 Avenue
Miami, Florida 33172
Mark Shevory
8190 W. State Road 84
Davie, Florida 33324
To Seller: Royal Palm Beach Colony, Limited
Partnership
c/o Randy Rieger
1541 Sunset Drive #301
Coral Gables, Florida 33143
with copy to
Martin Shapiro
767 Arthur Godfrey Road
Miami Beach, Florida 33140
48. DEPOSIT: Upon execution of this Contract by both parties, Buyer shall
deliver to Seller an unconditional letter of credit, effective for a period of
twenty four (24) months, in the amount of $100,000.00 representing Seller's
initial Deposit. A copy of the letter of credit is attached hereto as Exhibit
"E". Seller acknowledges receipt of the original letter of credit. Within three
business days after the end of the investigation period, if Buyer has not
elected to cancel this Contract, Buyer shall increase the letter of credit to
$490,200.00. The letter of credit will be from Universal American Mortgage
Company naming Seller as beneficiary.
In the event that Seller determines that Buyer is in default, Seller may convert
the Deposit into cash by drawing the funds under the letter credit. Within five
business days after receiving the funds, Seller shall give Buyer written notice
that the Deposit has been converted to cash and describing the nature of the
default. Seller agrees to keep the funds in a separate escrow account for a
period of 30 days after giving such written notice. If Buyer files and serves a
lawsuit on Seller contesting the default within said 30-day period, Seller shall
continue to hold the funds in the escrow account pending court order. If the
letter of credit will expire at any time prior to the closing on the last lots,
Buyer agrees to obtain an extension of the term of the letter of credit and
deliver proof thereof to Seller no later than 30 days before its expiration. The
parties agree that the letter of credit shall be reduced by 20 percent of the
purchase price of the lots being purchased at each takedown, and the amount of
the Deposit shall be reduced accordingly.
49. HAZARDOUS MATERIALS: Seller represents to the best of its knowledge that
there are no hazardous materials or residual contamination in, on, under or
about, the Property. Hazardous materials shall include any substances regulated
under any and all Federal, State and local statutes and laws, including case
law.
<PAGE>
50. MORATORIUM: As condition precedent to closing, there shall be no moratorium
of any kind relating to the Property. This will include any moratoriums on water
or sewer connections, building permits, certificates of occupancy, or building
inspections. In such event the closing will be postponed for up to thirty (30)
for the moratoriums(s) to be removed, failing which this Contract shall
terminate and the parties released of all liability and obligations hereunder.
Provided, however, Buyer may elect two (2) ninety (90) day further extentions of
the closing.
51. REPRESENTATIONS AND WARRANTIES: Seller hereby warrants, covenants and
represents the following to Buyer with full knowledge that Buyer is relying upon
same in executing this Contract and performing hereunder.
A. Seller has full power and authority to make, deliver, enter into and
perform pursuant to the terms and conditions of this Contract and has taken all
necessary action to authorize the execution, delivery and performance of the
terms and conditions of this Contract and all documents to be executed and
delivered by Seller pursuant hereto. There are no actions, suits or proceedings
pending or threatened against by or affecting Seller in any court or before any
governmental agency relating to the Property, the ownership of the Property, or
Seller's ability to convey the Property.
B. This Contract and the documents to be executed and delivered by
Buyer and Seller in connection with this Contract will not breach the terms and
conditions of or cause a default in any mortgage, restrictive covenant or
easement, or any other agreement or document encumbering or affecting the
Property.
C. Seller has received no notice of any change contemplated in any
applicable laws, ordinances, or restrictions, or of a judicial or administrative
action (except those of a general application) or of any action by adjacent
landowners, which would prevent, limit or impede Buyer's use of the Property for
single family residential use.
D. Seller has received no notice of any violation or any applicable
laws, ordinances, regulations, statutes, rules and restrictions pertaining to
and affecting the Property.
E. No approval(s) or consent(s) by third parties or governmental
authorities are required in order for Seller to convey the Property as
contemplated hereby.
F. There is sewer and water available in sufficient capacity to service
the entire Property. The sewer and water lines will be of sufficient size to
service the Property.
Each of the foregoing warranties, covenants and representations shall
be true and correct at closing and shall survive the closing. In the event that
any of the warranties and representations are not correct or as represented by
Seller, and Seller fails to remedy same within thirty (30) days after written
notice from Buyer, then Buyer may, at its option, elect to cancel and terminate
this Contract, whereupon the Escrow Agent shall return the Deposit delivered to
it by Buyer and the rights and obligations of the parties each to the other with
respect to this transaction shall cease and terminate. Seller agrees to
cooperate fully with Buyer, at no cost to Seller, in its examination and
verification of Seller's warranties and representations.
<PAGE>
52. CONDITIONS PRECEDENT TO CLOSING: Buyer's obligation to close pursuant to
this Contract is conditioned on the following:
A. No material adverse change in the condition of the Property shall
have occurred since the date of this Contract.
B. As of closing, there shall be no governmental prohibition (including
zoning restrictions or conditions) that prevents Buyer from receiving building
permits for construction of the intended improvements.
C. As of the closing, there shall be no (i) leases or other occupancy
agreements, or (ii) contracts for labor or service that affect the Property.
D. All of Seller's covenants and obligations contained in this Contract
shall have been performed by Seller, and all of Seller's warranties and
representations are true and correct and shall be true and correct at closing.
E. No condemnation proceedings or any other matters which might have a
material adverse effect on the value of the Property shall be pending or
threatened against the Property at the closing.
F. Any and all permits, licenses, or qualifications from any Federal,
State or other local governmental agencies having jurisdiction over the
Property, required for the development of the Property and construction of
Buyer's model homes shall be obtained or obtainable.
G. Seller gives to Buyer evidence that its development loan financing
is in a position to be funded and that the District Bonds have been sold and the
proceeds thereof are available to pay for the subdivision improvements required
to be constructed in accordance with paragraph 40 hereof.
H. Water and sewer shall be available to the Property pursuant to an
agreement with the governmental agencies having jurisdiction and all other
utilities shall be available to the Property.
If any of the conditions precedent to Buyer's obligation have not been
satisfied, Buyer may cancel this Agreement by notifying Seller (unless Seller
shall satisfy the condition precedent within thirty (30) days after such
notice), in which event Seller shall return the Deposit to Buyer. Buyer may
waive, at Buyer's option and in Buyer's sole discretion, any of the conditions
precedent to Buyer's obligation to close.
ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
Date signed: By: s/sRandy Rieger
August 12, 1996 ---------------
Randy Rieger, as Authorized Agent of
Stein Management Company, Inc.,
Managing General Partner
LENNAR HOMES, INC.
Date signed: By: /s/Tom Herman
August 9, 1996 -------------
Tom Herman
Vice President
<PAGE>
EXHIBIT (h)
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT, dated as of the 26th day of
June, 1995 (the "Amendment"), is made by and between Royal Palm Beach Colony,
Limited partnership, a Delaware Limited Partnership (hereinafter referred to as
"BORROWER"), and Union Bank of Florida ("Bank" or "Lender").
RECITALS
A. Borrower has applied to Bank for a future advance of $1,200,000.00
("Future Advance") to the Note secured by the Mortgage in the original principal
amount of $975,000.00 to be advanced by Bank pursuant to the terms hereof and
evidenced by notes described in the First Mortgage Modification Agreement
executed this date by the Bank and Borrower.
B. Bank is willing to make the Loan modification described above based on
the terms and conditions set forth in this Amendment.
NOW, THEREFORE for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Borrower and Bank hereby agree as
follows:
2. The term "Loan" shall be in the amount of $2,175,000.00.
3. The term "Improvements" shall include the on-site infrastructure lot
improvements to be constructed with the proceeds of the Future Advance.
4. The term "Use of Proceeds" shall mean the permitted use of the Loan
proceeds under the Note as set forth in the Loan Agreement. Exhibit "C" of the
Loan Agreement shall be hereby deleted.
5. The term "Note" shall include the Future Advance Promissory Note (For
Non-Revolving Line of Credit) of even date herewith in the amount of
$1,200,000.00) and the Consolidation Promissory Note (For Non-Revolving Line of
Credit) of even date herewith in the amount of $2,175,000.00.
4. The release price as set forth in paragraph 5.26 shall be amended from
$10,000.00 to $20,000.00 per developed lot.
6. A commitment fee in the amount of $19,500.00 (two percent (2%) computed
on $975,000.00) is due from Borrower and earned upon closing of the Future
Advance whether or not any disbursements are made thereunder.
If Borrower draws Loan proceeds under the Future Advance beyond
$975,000.00 ("Excess Funding"), additional commitment fees of two percent (2%)
based on the amount of such Excess Funding shall be due and owing at the time
draws representing such Excess Funding disbursed by Lender.
7. The parties agree that the mortgagee title insurance for the Future
Advance shall be in the amount of $975,000.00 but such insurance shall be
increased and paid for by the Borrower in the event of any Excess Funding to the
Borrower up to the future advance amount of $1,200,000.00.
8. The maturity date of the Loan shall be July 1, 1997.
9. Borrower agrees to give Lender immediate written notice upon the
recording of the Plats for Phases I, II and III.
<PAGE>
10. Borrower shall be in default under the Loan if Borrower fails to
record the Plats for Phases I, II and III prior to the date upon which such
Plats (the preliminary approved plats for such phases having been submitted to
Bank by the date of this Amendment) expire with Palm Beach County, Florida.
11.The parties hereto agree that no funding of Future Advance proceeds for
Phase I (except for the closing costs associated with the closing of the Future
Advance set forth on the Closing Statement made this date) shall be made by Bank
until Borrower has submitted to Bank all permits and necessary governmental
authorizations (including Plat recordation and site plan approval) for the
construction of the on-site infrastructure lot improvements; provided Bank with
proof that the off-site improvements constructed with the original proceeds of
the Loan have been accepted by the appropriate governmental authorities; and
provided proof that the 1994 real estate taxes have been paid for the Property.
Likewise, no funding of Future Advance proceeds for Phases II and III shall be
made by Bank until such Plats have been recorded, site plans have obtained final
approval by the governmental authorities and all of the permits and governmental
authorizations as described above have been obtained by Borrower and provided to
Bank.
12. All other terms and conditions of the Loan Agreement shall be amended
consistent with the matters set forth above.
<PAGE>
IN WITNESS WHEREOF, Borrower and bank have executed this Amendment as of the
above written date by their respective officers all duly authorized thereunto.
Signed, sealed and delivered
in the presence of: "BORROWER"
ROYAL PALM BEACH COLONY, LIMITED
PARTNERSHIP, a Delaware Limited
Partnership
BY: STEIN MANAGEMENT COMPANY, INC., a Florida
corporation, Managing General Partner
By: /s/Martin J. Katz
-----------------
Martin J.Katz, President
(seal)
/s/Jane Rankin
- -------------------
Jane Rankin
/s/Martin Shapiro
- -------------------
Martin Shapiro
Address: 2501 South Ocean Drive
Hollywood, FL 33019
"LENDER"
Union Bank of Florida
/s/Jane Rankin
- ------------------- BY: /s/Jack Brewer, Sr.
Jane Rankin -------------------
Jack Brewer, Sr. Vice President
/s/Martin Shapiro
- -------------------
Martin Shapiro
Address: 1801 North Pine Island Road
Plantation, FL 33322
<PAGE>
Prepared by:
Jane C. Rankin, Esq.
Kubicki Draper/BM
Suite 1600
One East Broward Blvd.
Ft. Lauderdale, FL 33309
305-768-0011
FIRST MORTGAGE MODIFICATION AGREEMENT
THIS AGREEMENT is made this 26th day of June, 1995 by and between Royal
Palm Beach Colony, Limited Partnership, a Delaware Limited Partnership, whose
address is 2501 South Ocean Drive, Hollywood, FL 33019 (hereinafter referred to
as "Borrower") and Union Bank of Florida, with its offices at 1901 North Pine
Island Road, Plantation, FL 33322 (hereinafter referred to as "Lender").
W I T N E S S E T H:
WHEREAS, Borrower executed a Promissory Note ("Note") in favor of Lender
dated October 6, 1994 in the original principal amount of $975.000.00 which Note
was secured by a Real Estate Mortgage, Assignment and Security Agreement of even
date therewith ("Mortgage") given by Borrower in favor of Lender recorded in
Official Records Book 9464, at Page 1619, of the Public Records of Palm Beach
County, Florida, encumbering the property described therein ("Property"):
WHEREAS, the Loan is additionally secured by certain other documents
including but not limited to UCC-1 Financing Statement(s), filed in the Public
Records of Palm Beach County, Florida and with the Secretary of State of Florida
(jointly and severally referred to as the "Loan Documents or "Security
Documents"); and
WHEREAS, the Note, Mortgage and Security Documents are further subject to
an unrecorded Loan Agreement ("Loan Agreement") dated October 6, 1994; and
WHEREAS, the principal balance that is outstanding under the Loan as of
the date hereof is $975,000.00 plus accrued interest thereon; and
WHEREAS, Borrower represents to Lender that it is the fee simple owner of
the Property described in the Mortgage; and that there are no inferior mortgages
or other liens or encumbrances now outstanding against the Property except as
permitted by the terms of the Loan Agreement, and that the lien of said Mortgage
held by Lender is a valid first subsisting lien on the Property.
<PAGE>
WHEREAS, the parties hereto desire to increase the amount of the Note and
Mortgage by $1,200,000.00 such that the total secured under such Loan would be
$2,175,000.00 and to modify certain terms and conditions of the Loan Agreement;
and
NOW, THEREFORE, in consideration of these premises, TEN AND NO/100 DOLLARS
($10.00) and the mutual covenants contained herein, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. The foregoing recitals are true and correct and are incorporated herein
by reference.
2. The outstanding principal balance of the Loan as of the date of this
Agreement is $975,000.00.
3. The Borrower this date has executed a Future Advance Promissory Note
(For Non-Revolving Line of Credit) in the amount of S1,200,000.00, and a
Consolidation Promissory Note (For Revolving Line of Credit) in the amount of
$2,175,000.00, evidencing the total indebtedness under the Loan which shall be
secured by the Mortgage and Security Documents. [The foregoing notes hereinafter
included in the term "Note".]
4. Borrower and Lender have this date executed a First Amendment to Loan
Agreement which shall be incorporated by reference into the Loan Agreement and
the Security Documents.
5. The maturity date of the Loan shall be extended to July 1, 1997.
6. The Maximum Possible Principal Debt, including future advances, which
may be secured by the Mortgage shall be increased from $1,950,000.00 to two (2)
times the amount of the indebtedness secured thereby.
7. All of the Property shall remain in all respects subject to the lien,
charge and encumbrance of said Mortgage in favor of Lender, and nothing herein
contained, and nothing done pursuant hereto, shall affect or be construed to
affect the lien, charge or encumbrance of, or warranties title in, or conveyance
affected by said Mortgage, or the priority thereof over other liens, charges or
encumbrances or conveyances, or to release or affect the liability of any party
or parties who may now or hereafter be liable under or on account of said
Mortgage, or the Note secured thereby; nor shall anything herein contained or
done in pursuance hereof affect or be construed to affect any other security or
instrument, if any, held by Lender as security for or evidence of the aforesaid
indebtedness.
8. The Borrower hereby ratifies and re-affirms all of the terms and
conditions of the Note, Mortgage, Security Documents and Loan Agreement as
modified herein, and Borrower does hereby acknowledge, certify, affirm and
represent with full knowledge that Lender is acting in reliance thereon in the
execution of this Agreement; that there are no claims, offsets, breaches of any
agreement, document or writing relating directly or indirectly to the loan
evidenced by the Note; no matter, item or thing that would diminish or reduce
the amount owed under the Note; or any action or causes or action by the
Borrower or any person dealing with the Borrower against Lender directly or
indirectly relating to the loan evidenced by the Note and the Borrower affirms
there is no offset or defense as to the indebtedness owed as of this date and
that Borrower is not in default of the Note, Mortgage, Security Documents or
Loan Agreement as of this date. Borrower further acknowledges that all
representations and warranties made by the Borrower in the loan documents remain
true and correct as of this date.
<PAGE>
9. Borrower agrees to pay all fees and costs related to the recording of
this Agreement and as set forth by Lender.
10. Except as modified herein, the Mortgage, Security Documents and Loan
Agreement shall remain in full force and effect according to their terms and if
there is any conflict in the terms of this Agreement and the aforedescribed
documents, the terms of this Agreement shall apply.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first set forth above.
Signed, sealed and delivered
in the presence of: "BORROWER"
ROYAL PALM BEACH COLONY, LIMITED
PARTNERSHIP, a Delaware Limited
Partnership
BY: STEIN MANAGEMENT COMPANY, INC., a Florida
corporation, Managing General Partner
By: /s/Martin J. Katz
-----------------
Martin J.Katz, President
(seal)
- -------------------
Printed Name:
- -------------------
Printed Name:
Address: 2501 South Ocean Drive
Hollywood, FL 33019
"LENDER"
Union Bank of Florida
- ------------------- BY: /s/Jack Brewer, Sr.
Printed Name: -------------------
Jack Brewer, Sr. Vice President
- -------------------
Printed Name:
Address: 1801 North Pine Island Road
Plantation, FL 33322
(seal)
STATE OF FLORIDA
COUNTY OF :ss
The foregoing instrument was acknowledged before me this _ day of , 1995 by
Martin J. Katz as President of STEIN MANAGEMENT COMPANY, INC. a Florida
corporation, as Managing General Partner of ROYAL PALM BEACH COLONY, LIMITED
PARTNERSHIP, a Delaware Limited Partnership, on behalf of the Limited
Partnership. He is known to me or has produced a _____________as identification.
<PAGE>
----------------------
Notary Public
(Seal)
STATE OF FLORIDA
COUNTY OF
The foregoing instrument was acknowledged before me this ______ day of
___________, 1995 by Jack Brewer, Sr. Vice President of Union Bank of Florida on
behalf of the Bank. He is known to me or has produced a Florida driver's license
as identification.
Notary Public (Seal)
<PAGE>
Borrower's Taxpayer
Identification No. 59-2501059
CONSOLIDATED PROMISSORY NOTE
(For Non-Revolving Line of Credit)
$2,175,000.00 May _ , 1994
Fort Lauderdale, Florida
FOR VALUE RECEIVED, ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP, a
Delaware Limited Partnership, (sometimes hereinafter referred to as the
"undersigned" or the "Borrower"), promises to pay to the order of Union Bank of
Florida, or any subsequent holder of this note ("Bank") at its principal offices
located at Plantation, Florida (or at such other place or places as Bank may
designate) the principal sum of Two Million one Hundred Seventy Five Thousand
and No/100 Dollars ($2,175,000.00) or so much thereof as may be from time to
time outstanding, plus interest thereon at the Rate hereinafter defined, all in
accordance with the terms and conditions of this Promissory Note (the "Note")
and in accordance with the Loan Agreement dated October 6, 1994, as amended, by
and between Borrower and Bank (the "Loan Agreement"). This Note is secured by a
Real Estate Mortgage, Assignment, and Security Agreement dated October 6, 1994
filed for record in the public records of Palm Beach County, Florida, as amended
(the "Mortgage"), UCC Financing Statements filed for record in the public
records of Palm Beach County, Florida, and in the Office of the Secretary of
State of the State of Florida (the "Financing Statements"), and other written
agreements by and between Borrower and Bank. The Mortgage and such other
agreements are hereinafter referred to collectively as the "Security Documents".
Terms used herein but not otherwise defined hereunder are defined as set forth
in the Security Documents or the Loan Agreement. All of the terms, definitions,
conditions and covenants of the Loan Agreement and the Security Documents are
expressly made a part of this Note by reference in the same manner and with the
same effect as if set forth herein at length, and any holder of this Note is
entitled to the benefits of and remedies provided in the Loan Agreement and the
Security Documents. Subject to the terms and conditions of this Note and the
Security Documents, Bank shall advance funds to Borrower pursuant to the terms
of the Loan Agreement.
l. Prime Rate. For purposes hereof, "Prime Rate" means the highest
fluctuating rate of interest per annum as published by the "Wall Street
Journal."
2. Interest. 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.
3. Payment of Interest. 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, as defined in Paragraph 6 below.
All payments of principal and interest shall be made in lawful currency of
the United States of America which shall be legal tender in payment of all
debts, public and private, at the time of payment.
<PAGE>
4. Prepayment. This Note may be prepaid in whole or in part at any time
without fee, premium or penalty. Any partial prepayment shall be applied in
accordance with paragraph 10 below and shall not postpone the due date of any
subsequent periodic installments or the Maturity Date, or change the amount of
such installments due, unless Bank shall otherwise agree in writing.
5. Late Charges. Should Borrower fail to pay the installments of
interest or principal (if applicable) on any due date provided for herein, then
Borrower further promises to pay a late payment charge equal to five percent
(5%) of the amount of the unpaid installment as liquidated compensation to Bank
for the extra expense to Bank to process and administer the late payment,
Borrower agreeing, by execution hereof, that any other measure of compensation
for a late payment is speculative and impossible to compute. This provision for
late charges shall not be deemed to extend the time for payment or be a "grace
period" or "cure period" that gives Borrower a right to cure a Default or
Default Condition. Imposition of late charges is not contingent upon the giving
of any notice or lapse of any cure period provided for in the Mortgage and shall
not be deemed a waiver of any right or remedy of Bank, including without
limitation, acceleration of this Note.
6. Maturity Date. The then outstanding principal balance plus all accrued
but unpaid interest shall be due and payable on July 1, 1997 (the "Maturity
Date").
7. Default. Any failure of Borrower to comply with any term, covenant, or
condition of this Note, including without limitation, Borrower's failure to pay
principal, interest, or expenses when same shall become due, or the existence of
any Default Condition or Default under the Security Documents or Loan Agreement
shall be deemed, at the option of Bank, a Default under this Note.
a. Acceleration. Upon the occurrence of a Default hereunder or under the
terms of any one or more of the Security Documents or the Loan Agreement, Bank
may declare the then outstanding principal and all accrued but unpaid interest
immediately due and payable and upon acceleration and thereafter this Note shall
bear interest at the Default Rate, hereinafter defined, until all indebtedness
evidenced hereby and secured by the Security Documents has been paid in full.
Further, in the event of such acceleration, the Loan, and all other indebtedness
of Borrower to Bank arising out of or in connection with the Loan shall become
immediately due and payable, without presentation, demand, protest or notice of
any kind, all of which are hereby waived by Borrower.
9. Default Rate. After default or maturity or upon acceleration, and
thereafter, the unpaid indebtedness then evidenced by this Note and due under
and secured by the Security Documents shall bear interest at a fixed rate equal
to the maximum rate then permitted under applicable law.
10. Application of Payments. A11 sums received by Bank for application to
the Loan may be applied by Bank to late charges, expenses, costs, interest,
principal, and other amounts owing to Bank in connection with the Loan in the
order selected by Bank in its sole discretion.
11. Expenses. In the event this Note is not paid when due on any stated or
accelerated maturity date, or should it be necessary for Bank to enforce any
other of its rights under the Loan Documents, Borrower will pay to Bank, in
addition to principal, interest and other charges due hereunder or under the
other Loan Documents, all costs of collection or enforcement, including
<PAGE>
reasonable attorneys' fees, paralegals' fees, legal assistants' fees, costs and
expenses, whether incurred with respect to collection, litigation, bankruptcy
proceedings, interpretation, dispute, negotiation, trial, appeal, defense of
actions instituted by a third party against Bank arising out of or related to
the Loan, enforcement of any judgment based on this Note, or otherwise, whether
or not a suit to collect such amounts or to enforce such rights is brought or,
if brought, is prosecuted to judgment.
12. Waiver. A11 persons now or at any time liable for payment of this
Note, whether directly or indirectly, including without limitation any
Guarantor, hereby waive presentment, protest, notice of protest and dishonor.
The undersigned expressly consents to any extensions and renewals, in whole or
in part, to the release of any or all Guarantors or co-makers and any collateral
security or portions thereof, given to secure this Note, and all delays in time
of payment or other performance which Bank may grant, in its sole discretion, at
any time and from time to time without limitation all without any notice or
further consent of Borrower, and any such grant by Bank shall not be deemed a
waiver of any subsequent delay or any of Bank's rights hereunder or under any of
the other Loan Documents.
13. Usury. In no event shall this or any other provision herein or in the
Loan Agreement or Security Documents, 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, Borrower 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 Borrower, and Borrower
agrees to accept such refund, or, at Borrower's option, such refund shall be
applied as a principal payment hereunder.
14. Modification. This Note may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
changes, modifications, or discharges is sought.
15. Applicable Law. This Note shall be governed by and construed in
accordance with the laws of the State of Florida.
16. Notices. All notices or other communications required or permitted to
be given pursuant to the provisions of this Note shall be given in accordance
with the notice provisions of the Loan Agreement.
17. Successors and Assigns. As used herein, the terms "Borrower" and
"Bank" shall be deemed to include their respective heirs, personal
representatives, successors and assigns.
18. Severability. In the event any one or more of the provisions of this
Note shall for any reason be held to be invalid, illegal, or unenforceable, in
whole or in part or in any respect, or in the event that any one or more of the
provisions of this Note operates or would prospectively operate to invalidate
this Note, then and in any of those events, only such provision or provisions
shall be deemed null and void and shall not affect any other provision of this
Note. The remaining provisions of this Note shall remain operative and in full
force and effect and shall in no way be affected, prejudiced, or disturbed
thereby. In the event any provisions of this Note are inconsistent with the
provisions of the Loan Agreement, the Security Documents, or any other
agreements or documents executed in connection with this Note, this Note shall
control.
<PAGE>
19. Captions: Pronouns. Captions are for reference only and in no way
limit the terms of this Note. The pronouns used in this instrument shall be
construed as masculine, feminine, or neuter as the occasion may require. Use of
the singular includes the plural, and vice versa.
20. Business Day. Any reference herein or in the Loan Agreement or
Security Documents to a day or business day shall be deemed to refer to a
banking day which shall be a day on which Bank is open for the transaction of
business, excluding any national holidays, and any performance which would
otherwise be required on a day other than a banking day shall be timely
performed in such instance, if performed on the next succeeding banking day.
Notwithstanding such timely performance, interest shall continue to accrue
hereunder until such payment or performance has been made.
21. WAIVER OF TRIAL BY JURY: THE PARTIES (INCLUDING ANY GENERAL PARTNER(S)
OF THE BORROWER) HEREBY MUTUALLY AGREE THAT NEITHER PARTY, NOR ANY PARTNER,
ASSIGNEE, SUCCESSOR, HEIR, OR LEGAL REPRESENTATIVE OF THE PARTIES (ALL OF WHOM
ARE HEREINAFTER REFERRED TO AS THE "PARTIES") SHALL SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDINGS, COUNTERCLAIM, OR ANY OTHER LITIGATION PROCEDURE BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY INSTRUMENT EVIDENCING, SECURING, OR
RELATING TO THE INDEBTEDNESS AND OTHER OBLIGATIONS EVIDENCED HEREBY, ANY RELATED
AGREE- MENT OR INSTRUMENT, ANY OTHER COLLATERAL FOR THE INDEBTEDNESS EVIDENCED
HEREBY OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG THE PARTIES, OR ANY
OF THEM. NONE OF THE PARTIES WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH
A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL HAS
NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY
THE PARTIES WITH BANK, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
BANK HAS IN NO WAY AGREED WITH OR REPRESENTED TO ANY OF THE PARTIES THAT THE
PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES. THE
WAIVER CONTAINED HEREIN IS IRREVOCABLE AND CONSTITUTES A KNOWING AND VOLUNTARY
WAIVER.
22. This Note is a consolidation of that certain Promissory Note (For
Non-Revolving Line of Credit) dated October 6, 1994 in the original principal
amount of Nine Hundred Seventy Five Thousand and No/100 Dollars ($975,000.00)
upon which full documentary stamps were paid and affixed to the Real Estate
Mortgage, Assignment and Security Agreement securing same and that certain
Future Advance Promissory Note (For Non-Revolving Line of Credit) of even date
herewith in the original principal amount of One Million Two Hundred Thousand
and No/100 Dollars ($1,200,000.00) upon which full documentary stamps were paid
and affixed to the First Mortgage Modification Agreement securing same.
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as
of the day and year first above written.
ROYAL PALM BEACH COLONY, LIMITED
PARTNERSHIP, a Delaware Limited
Partnership
BY: STEIN MANAGEMENT COMPANY, INC.,
a Florida corporation, Managing
General Partner
By:/s/Marvin J. Katz
-----------------
Martin J.Katz, President
(seal)
<PAGE>
Borrower's Taxpayer
Identification No. 59-2501059
FUTURE ADVANCE PROMISSORY NOTE
(For Non-Revolving Line of Credit)
$1,200,000.00 __________, 1994
Fort Lauderdale Florida
FOR VALUE RECEIVED, ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP, a
Delaware Limited Partnership, (sometimes hereinafter referred to as the
"undersigned" or the "Borrower"), promises to pay to the order of Union Bank of
Florida, or any subsequent holder of this note ("Bank") at its principal offices
located at Plantation, Florida (or at such other place or places as Bank may
designate) the principal sum of One Million Two Hundred Thousand and No/100
Dollars ($1,200,000.00) or so much thereof as may be from time to time
outstanding, plus interest thereon at the Rate hereinafter defined, all in
accordance with the terms and conditions of this Promissory Note (the "Note")
and in accordance with the Loan Agreement dated October 6, 1994, as amended, by
and between Borrower and Bank (the "Loan Agreement"). This Note is secured by a
Real Estate Mortgage, Assignment, and Security Agreement dated October 6, 1994,
filed for record in the public records of Palm Beach County, Florida, as amended
(the "Mortgage"), UCC Financing Statements filed for record in the public
records of Palm Beach County, Florida, and in the Office of the Secretary of
State of the State of Florida (the "Financing Statements"), and other written
agreements by and between Borrower and Bank. The Mortgage and such other
agreements are hereinafter referred to collectively as the "Security Documents~.
Terms used herein but not otherwise defined hereunder are defined as set forth
in the Security Documents or the Loan Agreement. All of the terms, definitions,
conditions and covenants of the Loan Agreement and the Security Documents are
expressly made a part of this Note by reference in the same manner and with the
same effect as if set forth herein at length, and any holder of this Note is
entitled to the benefits of and remedies provided in the Loan Agreement and the
Security Documents. Subject to the terms and conditions of this Note and the
Security Documents, Bank shall advance funds to Borrower pursuant to the terms
of the Loan Agreement.
1. Prime Rate. For purposes hereof, "Prime Rate" means the highest
fluctuating rate of interest per annum as published by the "Wall Street
Journal".
2. Interest. 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.
3. Payment of Interest. 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, as defined in Paragraph 6 below.
All payments of principal and interest shall be made in lawful currency of
the United States of America which shall be legal tender in payment of all
debts, public and private, at the time of payment.
<PAGE>
4. Prepayment. This Note may be prepaid in whole or in part at any time
without fee, premium or penalty. Any partial prepayment shall be applied in
accordance with paragraph 10 below and shall not postpone the due date of any
subsequent periodic installments or the Maturity Date, or change the amount of
such installments due, unless Bank shall otherwise agree in writing.
5. Late Charges. Should Borrower fail to pay the installments of interest
or principal (if applicable) on any due date provided for herein, then Borrower
further promises to pay a late payment charge equal to five percent (5%) of the
amount of the unpaid installment as liquidated compensation to Bank for the
extra expense to Bank to process and administer the late payment, Borrower
agreeing, by execution hereof, that any other measure of compensation for a late
payment is speculative and impossible to compute. This provision for late
charges shall not be deemed to extend the time for payment or be a "grace
period" or "cure period" that gives Borrower a right to cure a Default or
Default Condition. Imposition of late charges is not contingent upon the giving
of any notice or lapse of any cure period provided for in the Mortgage and shall
not be deemed a waiver of any right or remedy of Bank, including without
limitation, acceleration of this Note.
6. Maturity Date. The then outstanding principal balance plus all accrued
but unpaid interest shall be due and payable on July 1, 1997 (the "Maturity
Date").
7. Default. Any failure of Borrower to comply with any term, covenant, or
condition of this Note, including without limitation, Borrower's failure to pay
principal, interest, or expenses when same shall become due, or the existence of
any Default Condition or Default under the Security Documents or Loan Agreement
shall be deemed, at the option of Bank, a Default under this Note.
8. Acceleration. Upon the occurrence of a Default hereunder or under the
terms of any one or more of the Security Documents or the Loan Agreement, Bank
may declare the then outstanding principal and all accrued but unpaid interest
immediately due and payable and upon acceleration and thereafter this Note shall
bear interest at the Default Rate, hereinafter defined, until all indebtedness
evidenced hereby and secured by the Security Documents has been paid in full.
Further, in the event of such acceleration, the Loan, and all other indebtedness
of Borrower to Bank arising out of or in connection with the Loan shall become
immediately due and payable, without presentation, demand, protest or notice of
any kind, all of which are hereby waived by Borrower.
9. Default Rate. After default or maturity or upon acceleration, and
thereafter, the unpaid indebtedness then evidenced by this Note and due under
and secured by the Security Documents shall bear interest at a fixed rate equal
to the maximum rate then permitted under applicable law.
<PAGE>
10. Application of Payments. All sums received by Bank for application to
the Loan may be applied by Bank to late charges, expenses, costs, interest,
principal, and other amounts owing to Bank in connection with the Loan in the
order selected by Bank in its sole discretion.
11. Expenses. In the event this Note is not paid when due on any stated or
accelerated maturity date, or should it be necessary for Bank to enforce any
other of its rights under the Loan Documents, Borrower will pay to Bank, in
addition to principal, interest and other charges due hereunder or under the
other Loan Documents, all costs of collection or enforcement, including
reasonable attorneys' fees, paralegals' fees, legal assistants' fees, costs and
expenses, whether incurred with respect to collection, litigation, bankruptcy
proceedings, interpretation, dispute, negotiation, trial, appeal, defense of
actions instituted by a third party against Bank arising out of or related to
the Loan, enforcement of any judgment based on this Note, or otherwise, whether
or not a suit to collect such amounts or to enforce such rights is brought or,
if brought, is prosecuted to judgment.
12. Waiver. A11 persons now or at any time liable for payment of this
Note, whether directly or indirectly, including without limitation any
Guarantor, hereby waive presentment, protest, notice of protest and dishonor.
The undersigned expressly consents to any extensions and renewals, in whole or
in part, to the release of any or all Guarantors or co-makers and any collateral
security or portions thereof, given to secure this Note, and all delays in time
of payment or other performance which Bank may grant, in its sole discretion, at
any time and from time to time without limitation all without any notice or
further consent of Borrower, and any such grant by Bank shall not be deemed a
waiver of any subsequent delay or any of Bank's rights hereunder or under any of
the other Loan Documents.
13. Usury. In no event shall this or any other provision herein or in the
Loan Agreement or Security Documents, 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, Borrower 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 Borrower, and Borrower
agrees to accept such refund, or, at Borrower's option, such refund shall be
applied as a principal payment hereunder.
14. Modification. This Note may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
changes, modifications, or discharges is sought.
15. Applicable Law. This Note shall be governed by and construed in
accordance with the laws of the State of Florida.
16. Notices. All notices or other communications required or permitted to
be given pursuant to the provisions of this Note shall be given in accordance
with the notice provisions of the Loan Agreement.
17. Successors and Assigns. As used herein, the terms "Borrower" and
"Bank" shall be deemed to include their respective heirs, personal
representatives, successors and assigns.
<PAGE>
18. Severability. In the event any one or more of the provisions of this
Note shall for any reason be held to be invalid, illegal, or unenforceable, in
whole or in part or in any respect, or in the event that any one or more of the
provisions of this Note operates or would prospectively operate to invalidate
this Note, then and in any of those events, only such provision or provisions
shall be deemed null and void and shall not affect any other provision of this
Note. The remaining provisions of this Note shall remain operative and in full
force and effect and shall in no way be affected, prejudiced, or disturbed
thereby. In the event any provisions of this Note are inconsistent with the
provisions of the Loan Agreement, the Security Documents, or any other
agreements or documents executed in connection with this Note, this Note shall
control.
19. Captions: Pronouns. Captions are for reference only and in no way
limit the terms of this Note. The pronouns used in this instrument shall be
construed as masculine, feminine, or neuter as the occasion may require. Use of
the singular includes the plural, and vice versa.
20. Business Day. Any reference herein or in the Loan Agreement or
Security Documents to a day or business day shall be deemed to refer to a
banking day which shall be a day on which Bank is open for the transaction of
business, excluding any national holidays, and any performance which would
otherwise be required on a day other than a banking day shall be timely
performed in such instance, if performed on the next succeeding banking day.
Notwithstanding such timely performance, interest shall continue to accrue
hereunder until such payment or performance has been made.
21. WAIVER OF TRIAL BY JURY: THE PARTIES (INCLUDING ANY GENERAL PARTNER(S)
OF THE BORROWER) HEREBY MUTUALLY AGREE THAT NEITHER PARTY, NOR ANY PARTNER,
ASSIGNEE, SUCCESSOR, HEIR, OR LEGAL REPRESENTATIVE OF THE PARTIES (ALL OF WHOM
ARE HEREINAFTER REFERRED TO AS THE "PARTIES") SHALL SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDINGS, COUNTERCLAIM, OR ANY OTHER LITIGATION PROCEDURE BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY INSTRUMENT EVIDENCING, SECURING, OR
RELATING TO THE INDEBTEDNESS AND OTHER 0BLIGATIONS EVIDENCED HEREBY, ANY RELATED
AGREE- MENT OR INSTRUMENT, ANY OTHER COLLATERAL FOR THE INDEBTEDNESS EVIDENCED
HEREBY OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG THE PARTIES, OR ANY
OF THEM. NONE OF THE PARTIES WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH
A JURY TRIAL HAS SEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL HAS
NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY
THE PARTIES WITH BANK, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
BANK HAS IN NO WAY AGREED WITH OR REPRESENTED TO ANY OF THE PARTIES THAT THE
PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES. THE
WAIVER CONTAINED HEREIN IS IRREVOCABLE AND CONSTITUTES A KNOWING AND VOLUNTARY
WAIVER.
22. This Note represents a future advance to that certain Promissory Note
(For Non-Revolving Line of Credit) dated October 6, 1994 in the original
principal amount of Nine Hundred Seventy Five Thousand and No/100 Dollars
($975,000.00) upon which full documentary stamps were paid and affixed to the
Real Estate Mortgage, Assignment and Security Agreement securing same.
<PAGE>
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as
of the day and year first above written.
ROYAL PALM BEACH COLONY, LIMITED
PARTNERSHIP, a Delaware Limited
Partnership
BY: STEIN MANAGEMENT COMPANY, INC.,
a Florida corporation, Managing
General Partner
By:/s/Martin J. Katz
-----------------
Martin J. Katz, President
(seal)
Documentary Stamps in the amount of
$4,200.00 have been paid and
affixed to the First Mortgage
Modification Agreement securing this
Note.
<PAGE>
EXHIBIT 4(i)
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT, dated as of the day of October,
1996 (the "Amendment"), is made by and between Royal Palm Beach Colony, Limited
partnership, a Delaware Limited Partnership (hereinafter referred to as
"BORROWER"), and Union Bank of Florida
("Bank" or "Lender").
RECITALS
A. Borrower has applied to Bank for a future advance of $550,000.00
("Future Advance") to the Loan secured by the Mortgage and Loan Documents in the
current principal amount of $2,175,000.00 to be advanced by Bank pursuant to the
terms hereof and evidenced by note and "L/C" described herein and in the Second
Mortgage Modification Agreement executed this date by the Bank and Borrower.
B. Bank is willing to make the Loan modification described above based
on the terms and conditions set forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Borrower and Bank hereby agree as
follows:
1. The term "Loan" shall be in the amount of $2,625,000.00 which
represents the sum of the renewal of the outstanding principal balance of
1,212,412.55 and the current availability under the Loan ($862,587.45) plus the
Future Advance described herein.
2. The "Use of Proceeds" for the Future Advance set forth herein shall
be attached as Exhibit "A" hereto and incorporated by reference herein.
3. The term "Note" shall be collectively the Renewal Promissory Note
(For Non-Revolving Line of Credit)in the amount of $1,212,412.55, the Future
Advance Promissory Note (For Non-Revolving Line of Credit) in the amount of
$1,412,587.45 and the Consolidation Promissory Note in the amount of
$2,625,000.00, all of even date herewith which Note shall be secured by the
Mortgage and Loan Documents.
4. A commitment fee in the amount of (i) $10,375.00 [one half of one
percent (.05%) computed on the Loan amount as of the First Amendment to Loan
Agreement - $2,075,000.00] is due from Borrower for the renewal of the existing
Loan until January 31, 1998; and (ii) $11,000.00 [two percent (2%)] computed on
$550,000.00] is due from Borrower and earned upon closing of the Future Advance
whether or not any disbursements are made thereunder.
5. The amount advanced to date under the Note is $1,212,412.55 leaving
a balance of $862,587.45 available for disbursement under this non-revolving
Loan facility. This balance, plus the Future Advance, results in a total of
$1,412,587.45 available for disbursement effective upon this date. Of this total
amount $950,000.00 will be allocated for the issuance of an Irrevocable
(Documentary) Letter of Credit ("L/C") for the benefit of Indian Trail Water
Control District to fund the remaining costs of Borrower's infrastructure
development of Phases II and III of Crestwood Unit #3 (the "Project") after
Borrower's use of bond proceeds derived from the sale of special assessment
revenue bonds issued by ITWCD for the Project ("Bond Offering") with the
remaining available Loan balance to be disbursed to the Borrower per the Use of
Proceeds as and when requested by Borrower for so long as Borrower is not in
default under the Loan.
<PAGE>
A. The L/C shall be (i) for a term of no more than one (1)
year; (ii) shall be in a form and have attached as exhibits a requisition form
and draw schedule approved by Bank;(iii) shall be secured by the Mortgage and
the existing collateral for the Loan; and (iv) shall be delivered by Bank to
ITWCD upon the successful closing of the Bond Offering. To the extent that any
amounts outstanding under the Loan during the term of the Note or the L/C exceed
sixty percent (60%) of the value of the Bank's collateral ("Value"), as
determined by Bank's appraisal, Bank at its sole discretion shall require
sufficient additional collateral to regain the sixty percent (60%) Loan-to-Value
such as the following:
i) Cash security in a form acceptable to Bank; and/or
ii) Additional real estate collateral of same loan-to-
Value acceptable to Bank in Bank's sole discretion.
B. In the event the current appraised value of the collateral
(as determined by an appraiser acceptable to Bank) for the Loan becomes
decreased such that the Loan-to Value is less than sixty percent (60%), the
Borrower shall be required to provided Bank with additional collateral as set
forth in items (i) and (ii) above in this section.
C. Bank shall have received opinions of counsel for the
issuing entity and such other parties as Bank may require, a copy of the Bond
Offering documentation and such other documentation and agreements as Bank may
reasonably require upon review of the foregoing.
D. Any uncured Default by Borrower under the Bond Offering
documents shall be a Default under the Loan.
E. Bank shall have approved of the final form and content of
the Agreement between ITWCD and Borrower for the development of the Project.
6. The parties agree that the mortgagee title insurance issued in favor
of Bank shall at all times during the Loan be in an amount of at least the
outstanding indebtedness under the Loan.
7. The maturity date of the Loan shall be January 31, 1998.
8. Bank agrees to waive any and all pre-sale requirements for lots in
Phase I which were a condition to funding Loan Proceeds for Phase II and III.
9. All other terms and conditions of the Loan Agreement shall be
amended consistent with the matters set forth above.
<PAGE>
IN WITNESS WHEREOF, Borrower and Bank have executed this Amendment as
of the above written date by their respective officers all duly authorized
thereunto.
Signed, sealed and delivered
in the presence of: "BORROWER"
ROYAL PALM BEACH COLONY, LIMITED
PARTNERSHIP, a Delaware Limited
Partnership
BY: STEIN MANAGEMENT COMPANY, INC.,
a Florida corporation, Managing
General Partner
-------------------------------
By: Randy Rieger, Authorized Agent
(seal)
- --------------------------- Address: 2501 South Ocean Drive
Printed Name: Hollywood, FL 33019
- ---------------------------
Printed Name:
"LENDER"
Union Bank of Florida
___________________________ BY: ---------------------------(Seal)
Printed Name: John S. Chaperon, President
- --------------------------- Address: 1801 North Pine Island Road
Printed Name: Plantation, FL 33322
<PAGE>
EXHIBIT 4(j)
MORTGAGE
THIS MORTGAGE, executed this _____ day of ___________________, 1996,
between ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP, a Florida limited
partnership, whose address is 2501 South Ocean Drive, Hollywood, FL 33019,
hereinafter referred to as the "MORTGAGOR" and CROSSROADS ASSOCIATES, LTD., a
Florida limited partnership, whose address is 5858 Central Avenue, St.
Petersburg, FL 33743, its successors and assigns, hereinafter referred to as the
"MORTGAGEE."
(The term "MORTGAGOR" as used in every instance shall include the Mortgagor's
heirs, executors, administrators, successors, legal representatives and assigns,
either voluntary or by an act of the parties, or involuntary by operation of
law, and shall denote the single and/or plural, the masculine and/or feminine,
and natural and/or artificial persons whenever and wherever the context so
requires or admits.)
W I T N E S S E T H:
THAT for good and valuable consideration, and to secure the payment of
the promissory note (the "Note") as hereinafter described, together with
interest thereon, the MORTGAGOR grants, bargains, sells, and conveys to the
MORTGAGEE in fee simple, the following described real property (the "Property")
of which the MORTGAGOR is now seized and possessed, and in actual possession,
situate in the County of Palm Beach, State of Florida, to wit:
SEE EXHIBIT "A" ATTACHED HERETO
TOGETHER with all buildings and improvements now or hereafter situated
on the Property.
AND TOGETHER with the tenements, hereditaments, easements and
appurtenances thereunto belonging, and the rents, issues, and profits hereof.
TO HAVE AND TO HOLD the same unto the said MORTGAGEE, in fee simple.
The MORTGAGOR hereby covenants with the MORTGAGEE that the MORTGAGOR is
indefeasibly seized with the absolute and fee simple title to said property, and
has full power and lawful authority to sell, convey, transfer and mortgage the
same; that it shall be lawful at any time hereafter for the MORTGAGEE to
peaceably and quietly enter upon, have, hold and enjoy said Property, and every
part thereof; that the Property is free and discharged from all liens,
encumbrances and claims of any kind, including taxes and assessments, except
taxes for the current year that are not yet due and payable; that the MORTGAGOR
will make, at MORTGAGOR'S expense, to MORTGAGEE such other and further
assurances to perfect the fee simple title to said Property in the MORTGAGEE as
may hereafter be required; and, that
MORTGAGOR hereby fully warrants unto the MORTGAGEE the title to said
Property and will defend the same against the lawful claims and demands of all
persons whomsoever.
<PAGE>
NOW, THEREFORE, the conditions of this Mortgage are such that if the
MORTGAGOR shall pay unto the MORTGAGEE the indebtedness evidenced by the Note of
even date herewith, made by the MORTGAGOR and payable to the MORTGAGEE in the
original principal sum of $300,000.00, together with interest as therein stated,
and shall perform, comply with and abide by each and every stipulation,
agreement, condition and covenant contained in this Mortgage and in the Note
secured hereby, then this Mortgage and the estate hereby created shall cease and
be null and void.
AND, the MORTGAGOR does hereby further covenant and agree as follows:
1. To perform and comply with every covenant contained in the Note and
this Mortgage.
2. To pay all and singular the principal and interest and other sums of
money payable by virtue of said Note and this Mortgage, or either, promptly on
the days respectively the same become severally due.
3. To pay, before becoming delinquent, all obligations, encumbrances,
taxes, assessments, paving, sidewalk, sanitary and other assessments, levies or
liens, now or hereafter levied or imposed upon or against the mortgaged
property, and to exhibit to the MORTGAGEE, before such taxes, assessments,
liens, and encumbrances become delinquent, the official receipts for payment
thereof. If the same, or any part hereof, are not paid before becoming
delinquent, the MORTGAGEE may at any time pay the same with accrued interest and
charges, if any, without waiving or affecting MORTGAGEE'S option to foreclose
this Mortgage, or any right hereunder. Every payment so made shall bear interest
from the date thereof at the highest rate authorized by law, but if there is at
the time of default no maximum lawful rate, then at the rate of 18% per annum,
and all such payments with interest shall be secured by the lien hereof.
4. If all or any part of the Property or an interest therein is sold,
transferred or conveyed, all the sums secured by this Mortgage shall be
immediately due and payable.
5. In the event any judgment or mechanic's lien is filed against the
mortgaged Property and is not discharged or removed within thirty (30) days, or
in the event that any legal proceeding is initiated against the mortgaged
Property and is not dismissed or otherwise terminated within thirty (30) days
from the date of filing of such legal proceedings, the MORTGAGEE at its option
may accelerate the entire indebtedness secured by this Mortgage and demand
payment in full.
6. To pay all costs, fees, charges and expenses of every kind,
including the cost of an abstract of title to said Property or a title insurance
policy, found to be convenient or expedient in connection with any suit for the
foreclosure of this Mortgage, and also including reasonable attorneys' fees
incurred or expended at any time by the MORTGAGEE because of the failure of the
MORTGAGOR to perform, comply with and abide by any of the covenants, conditions
and stipulations of the Note, or this Mortgage, or in the foreclosure of this
Mortgage and in collecting the amount secured hereby with or without legal
proceedings, and to reimburse the MORTGAGEE for every payment made or incurred
for any such purpose with interest from date of every such payment at the
highest rate permitted by law, but if there is at the time of default no maximum
lawful rate, then at the rate of 18% per annum, and such payments and
obligations, with interest therein as aforesaid, shall be secured by the lien of
this Mortgage.
<PAGE>
7. To permit, commit or suffer no waste and at all times keep the
Property in a state of good repair and condition.
8. MORTGAGOR shall not further encumber the Property without the prior
written consent of the MORTGAGEE.
9. No waiver of any covenant herein or in the obligation secured hereby
shall at any time hereafter be held to be a waiver of any of the other terms
hereof or of the Note secured hereby, or future waiver of the same covenant.
10. In order to accelerate the maturity of the indebtedness hereby
secured because of the failure of the MORTGAGOR to pay any tax assessment,
liability, obligation or encumbrances upon said property as herein provided, it
shall not be necessary nor requisite that the MORTGAGEE shall first pay the
same.
11. If the MORTGAGOR shall fail for a period of fifteen (15) days to
fully and promptly to pay the amounts required to be paid by the Note hereby
secured or the interest therein specified or any of the sums of money herein
referred to or hereby and promptly to perform, each and every of the terms and
covenants contained herein, then, without notice or demand, the aggregate sum
mentioned in said Note, less previous payments, if any, and any and all sums
mentioned herein or secured hereby shall become due and payable forthwith at the
option of the MORTGAGEE and the MORTGAGEE shall be entitled thereupon without
notice or demand to institute suit to enforce the rights of the MORTGAGEE
hereunder or under the Note. In the event of any default or breach on the part
of the MORTGAGOR hereunder or under the Note, the MORTGAGEE shall have the
option to enforce payment of all sums secured hereby either by suit upon the
Note or by foreclosure of this Mortgage, and one action shall not be a bar to or
waiver of the MORTGAGEE'S right to institute or maintain the other, provided
said MORTGAGEE shall have only one payment of the indebtedness.
12. In the event that the MORTGAGOR shall (a) consent to the
appointment of a receiver, trustee, or liquidator of all or a substantial part
of the MORTGAGOR'S assets, or (b) be adjudicated a bankrupt, or insolvent, or
file a voluntary petition in bankruptcy, or admit in writing its inability to
pay its debts as they mature, or (c) make a general assignment for the benefit
of creditors, or (d) file a petition or answer seeking reorganization or
arrangement with creditors, or to take advantage of any insolvency law, or (e)
file an answer admitting the material allegations of a petition filed against
the MORTGAGOR in any bankruptcy, reorganization or insolvency proceeding, or (f)
action shall be taken by the MORTGAGOR for the purpose of affecting any of the
foregoing, or (g) any order, judgment or decree shall be entered upon an
application of a creditor of MORTGAGOR by a court of competent jurisdiction
approving a petition seeking appointment of a receiver or trustee of all or a
substantial part of the MORTGAGOR'S assets and such order, judgment or decree
shall continue unstayed and in effect for any period of thirty (30) consecutive
days, the MORTGAGEE may declare the Note hereby secured forthwith due and
payable, whereas the principal of and the interest accrued on the Note and all
other sums hereby secured shall become forthwith due and payable as if all of
the said sums of money were originally stipulated to be paid on such day; and
thereupon the MORTGAGEE without notice or demand may prosecute a suit at law
and/or in equity as if all monies secured hereby had matured prior to its
institution.
<PAGE>
13. The MORTGAGEE, or any person authorized by the MORTGAGEE, shall
have the right to enter upon and inspect the Property at all reasonable times.
14. It is agreed that nothing in the Note or this Mortgage shall
operate to require the MORTGAGOR to pay interest at a rate greater than the
maximum lawful rate of interest allowable from time to time under the laws of
the State of Florida or the United States of America, whichever is higher, or
unlimited, or to make any payment or to do any act contrary to law. If any
clauses or provisions herein would operate to invalidate this Mortgage or the
Note in whole or in part, such clauses or provisions only shall be considered
invalid, and the remainder of this Mortgage shall remain operative and in full
force and effect.
15. If all or any part of the Property shall be damaged or taken
through condemnation (which terms when used in this Mortgage shall include any
damage or taking by any governmental authority, and any transfer by private sale
in lieu thereof), either temporarily or permanently, the entire indebtedness
secured hereby shall at the option of the MORTGAGEE, become immediately due and
payable. The MORTGAGEE shall be entitled to all compensation awards, and other
payments or relief therefor and is hereby authorized, at its option, to
commence, appear in and prosecute, in its own or the MORTGAGOR'S name, any
action or proceeding relating to any condemnation, and to settle or compromise
any claim in connection therewith. All such compensation is hereby assigned by
the MORTGAGOR to the MORTGAGEE, who, after deducting therefrom all its expenses,
including attorneys' fees, may release any monies so received by it without
affecting the lien of this Mortgage or may apply the same in such manner as the
MORTGAGEE shall determine, to the reduction of the sums secured hereby, and any
balance of such monies then remaining shall be paid to the MORTGAGOR. MORTGAGOR
agrees to execute such further assignments of any compensation, awards, damages,
claims, rights of action and proceeds as the Mortgage may require.
16. MORTGAGOR will procure and maintain for the benefit of the
MORTGAGEE during the life of this Mortgage a standard ALTA Mortgagee Policy,
which shall be issued by a title insurance company approved by MORTGAGEE or its
counsel. Such policy shall provide coverage for the full principal amount of the
loan evidenced by the Note secured hereby, together with such affirmative
coverage and such reinsurance or coinsurance as MORTGAGEE or its counsel shall
reasonably require, and shall not contain any title exceptions not approved by
MORTGAGEE or its counsel. Such mortgagee title policy shall insure all of the
Property described on Exhibit "A".
17. MORTGAGOR agrees (to the full extent permitted by law) that in case
of an event of default, neither MORTGAGOR nor anyone claiming by, through or
under it, shall or will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension or redemption laws now or hereafter in
force, to prevent or hinder the enforcement or foreclosure of this Mortgage or
the final and absolute sale of the mortgaged Property or the final and absolute
possession of the mortgaged Property by the purchasers in foreclosure, and the
MORTGAGOR, for itself and for all who may at any time claim through or under it,
hereby waives (to the full extent that it may lawfully do so) the benefit of all
such laws and any and all right to have the assets comprising the mortgaged
Property marshalled upon any foreclosure and the MORTGAGOR agrees that the
mortgaged Property may be sold in its entirety.
18. (a) MORTGAGOR hereby represents that neither the MORTGAGOR nor any
other person has ever used the mortgaged Property as a storage facility for any
"Hazardous Substances" used in the ordinary course of the MORTGAGOR's business.
<PAGE>
(b) MORTGAGOR hereby agrees to indemnify the MORTGAGEE and hold
MORTGAGEE harmless from and against any and all losses, liabilities, including
strict liability, damages, injuries, expenses, including reasonable attorneys'
fees, cost of any settlement or judgement or claims of any and every kind
whatsoever paid incurred or suffered by, or asserted against, the MORTGAGEE by
any person or entity or governmental agency for, with respect to, or as a direct
or indirect result of, the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or release from the
mortgaged Property of any Hazardous Substance (including, without limitation,
any losses, liabilities, including strict liability, damages, injuries,
expenses, including reasonable attorneys' fees, cost of any settlement or
judgement or claims asserted or arising under the Comprehensive Environmental
Response, Compensation and Liability Act, any so called federal, state or local
"Superfund"or "Superlien" laws, statutes, law, ordinance, code, rule,
regulation, order or decree regulating, with respect to or imposing liability,
including strict liability, substances or standards of conduct concerning any
Hazardous Substances) and, regardless of whether within the control of the
MORTGAGEE.
(c) For purposes of this Mortgage, "Hazardous Substances" shall
mean and include asbestos, asbestos-containing materials and those elements or
compounds which are contained in the list of hazardous substances adopted by the
U.S. Environmental Protection Agency (EPA) and the list of toxic pollutants
designated by Congress or the EPA or defined by any other Federal, state or
local statute, law or ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material as now
or at any time hereunder in effect.
(d) If the MORTGAGOR receives any notice of (i) the happening of
any material event involving the spill, release, leak, seepage, discharge or
cleanup of any Hazardous Substance on the Property or in connection with the
MORTGAGOR'S operations thereon or (ii) any complaint, order, citation or
material notice with regard to air emissions, water discharges, or any other
environmental, health or safety matter affecting the MORTGAGOR (an
"Environmental Complaint") from any person or entity (including without
limitation the EPA) then the MORTGAGOR shall immediately notify the MORTGAGEE
orally and in writing of said notice.
(e) MORTGAGEE shall have the right but not the obligation, and
without limitation of the MORTGAGEE's rights under this Mortgage to enter onto
the Property or to take such other actions as it deems necessary or advisable to
cleanup, remove, resolve or minimize the impact of, or otherwise deal with, any
such Hazardous Substance or Environmental Complaint following receipt of any
notice from any person or entity (including without limitation the EPA)
asserting the existence of any Hazardous Substance or an Environmental Complaint
pertaining to the Property or any part thereof which, if true, could result in
an order, suit or other action against MORTGAGOR and/or which, in the sole
opinion of MORTGAGEE, could jeopardize its security under this Mortgage. All
reasonable costs and expenses incurred by MORTGAGEE in the exercise of any such
rights shall be secured by this Mortgage and shall be payable by MORTGAGOR upon
demand.
<PAGE>
(f) MORTGAGEE shall have the right, in its sole discretion, to
require MORTGAGOR to periodically (but not more frequently than annually unless
an Environmental Complaint is then outstanding) perform (at MORTGAGOR'S expense)
an environmental audit and, if deemed necessary by MORTGAGEE, an environmental
risk assessment, each of which must be satisfactory to MORTGAGEE, of the
Property, hazardous waste management practices and/or hazardous waste disposal
sites used by MORTGAGOR. Said audit and/or risk assessment must be by an
environmental consultant satisfactory to MORTGAGEE. Should MORTGAGOR fail to
perform said environmental audit or risk assessment within 30 days of
MORTGAGEE'S written request, MORTGAGEE shall have the right but not the
obligation to retain an environmental consultant to perform said environmental
audit or risk assessment. All costs and expenses incurred by MORTGAGEE in the
exercise of such rights shall be secured by this Mortgage and shall be payable
by MORTGAGOR upon demand or charged to MORTGAGOR'S loan balance at the
discretion of MORTGAGEE.
(g) Any breach of any warranty, representation or agreement
contained in this Section shall be an event of default hereunder and shall
entitle MORTGAGEE to exercise any and all remedies provided in this Mortgage, or
otherwise permitted by law.
19. MORTGAGOR 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 MORTGAGE AND ANY
DOCUMENT EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF MORTGAGOR. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE MORTGAGEE'S MAKING THE LOAN SECURED
HEREBY.
20. MORTGAGOR agrees that time is of the essence hereof in connection
with all obligations of MORTGAGOR in this Mortgage or in the Note.
21. Whenever in this Mortgage one of the parties is named or referred
to, the successors and/or assigns of such party shall be included and the
covenants and agreements contained herein shall bind and inure to their
respective successors and assigns.
IN WITNESS WHEREOF, the MORTGAGOR has executed this Mortgage as of the
date and year first set forth above.
Signed in the presence of: ROYAL PALM BEACH COLONY,
LIMITED PARTNERSHIP
- -------------------------------------
(Signature of Witness) By: STEIN MANAGEMENT COMPANY, INC.,
a Florida corporation, as Managing
_____________________________________ General Partner
(Print Name of Witness)
_____________________________________ By: /s/Irving Cowan
---------------
(Signature of Witness) Irving Cowan, President
- -------------------------------------
(Print Name of Witness)
[NOTARIAL ACKNOWLEDGMENT ON FOLLOWING PAGE]
<PAGE>
STATE OF FLORIDA )
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this 13th day of
June, 1996, by Irving Cowan, as President of Stein Management Company, Inc., a
Florida corporation, on behalf of said corporation, and who did/did not take an
oath and who is personally known to me or who has produced driver's license as
identification.
-------------------------------
Notary Public, State of Florida
This Instrument Prepared by:
IRWIN M. FROST, P.A.
IRWIN M. FROST, ESQ.
1101 Brickell Avenue, Suite 1400
Miami, FL 33131
Phone No. (305) 374-3001)
<PAGE>
EXHIBIT 4(k)
PROMISSORY NOTE
$300,000.00 ___________________, 1996
St. Petersburg, Florida
FOR VALUE RECEIVED, ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP, a
Delaware limited partnership, promises to pay to the order of CROSSROADS
ASSOCIATES, LTD. a Florida limited partnership, at its principal office located
in St. Petersburg, Florida (or such other place as the holder may designate) the
principal sum of Three Hundred Thousand Dollars and 00/100 ($300,000.00), 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 "Rate"). The Rate 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 compounded daily, for the
actual number of days the principal is outstanding during such applicable
interest period.
The then outstanding principal balance of this Promissory Note, plus
all accrued but unpaid interest, shall be due and payable on October 31, 1996,
or earlier upon the sale, transfer or other conveyance of all or any part of the
property securing this Promissory 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 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 Promissory Note shall bear interest
at a fixed rate equal to the maximum rate then permitted by applicable law, or
if there shall be no maximum rate then at the rate of eighteen percent (18%) per
annum.
In no event shall this Promissory 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 Promissory 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 Promissory 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 Promissory
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.
<PAGE>
This Promissory 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.
IN WITNESS WHEREOF, Maker has caused this Promissory 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/Irving Cowan
---------------
Irving Cowan, President
[Corporate Seal]
Attest: _____________________________
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 41,451
<SECURITIES> 0
<RECEIVABLES> 133,318
<ALLOWANCES> 0
<INVENTORY> 5,249,988
<CURRENT-ASSETS> 0
<PP&E> 6,090
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,486,133
<CURRENT-LIABILITIES> 1,037,439
<BONDS> 3,102,100
0
0
<COMMON> 0
<OTHER-SE> 2,369,891
<TOTAL-LIABILITY-AND-EQUITY> 5,486,133
<SALES> 182,000
<TOTAL-REVENUES> 396,924
<CGS> 135,533
<TOTAL-COSTS> 135,533
<OTHER-EXPENSES> 878,938
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 72,696
<INCOME-PRETAX> (690,243)
<INCOME-TAX> 0
<INCOME-CONTINUING> (690,243)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (690,243)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> 0
</TABLE>
