<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1996
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-6471
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PGI INCORPORATED
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(Exact name of Registrant as specified in its charter)
Florida 59-0867335
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Ident. No.)
212 S. Central, Suite 100; St. Louis, Missouri 63105
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (314) 512-8650
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Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange
Title of Each Class on which Registered
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None None
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.10 per share
6% Convertible Subordinated Debentures due 1992
Indicate by check mark 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.
X Yes No
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Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-B is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendments to this Form 10-KSB. [ ]
The aggregate market value of voting stock held by non-affiliates of
the registrant can not be determined. See page 11 of Form 10-KSB/A.
Indicate the number of shares outstanding of each of the
Registrant's classes of common stock as of March 25, 1997.
Common Stock $.10 par value, 3,317,555 shares outstanding.
The Index to Exhibits is located on pages 42 to 45 of this report.
<PAGE> 2
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
FORM 10-KSB/A - 1996
Contents and Cross Reference Index
<CAPTION>
Part Item Form 10-KSB/A
No. No. Description Page No.
- ---- ---- ----------- -------------
<S> <C> <C> <C>
I 1 Business
General 3-4
Recent Developments 4-10
2 Properties 10
3 Legal Proceedings 10
4 Submission of Matters to a Vote of Security Holders 11
II 5 Market for Registrant's Common Equity and
Related Stockholder Matters 11
6 Management's Discussion and Analysis or Plan
of Operation 11-17
7 Report of Independent Certified Public Accountants 18
Financial Statements and Supplementary Data 19-34
8 Disagreements on Accounting and
Financial Disclosure 34
III 9 Directors and Executive Officers of The Registrant 34-35
10 Executive Compensation 35
11 Security Ownership of Certain Beneficial Owners
and Management 35-36
12 Certain Relationships and Related Transactions 36-39
IV 13 Exhibits, Financial Statement Schedules and
Reports on Form 8-K 40
Signatures 41
Exhibit Index 42-45
</TABLE>
<PAGE> 3
PART I
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Item 1. Business
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GENERAL
As used in this Annual Report on Form 10-KSB, the "Company" refers,
unless the context otherwise requires, to PGI Incorporated and its
subsidiaries. The Company's offices are at 8120 South Suncoast Boulevard,
Homosassa, Florida 34446 and its executive offices are located at 212 S.
Central, Suite 100; St. Louis, Missouri 63105, and its telephone number is
(314) 512-8650.
The Company was founded in 1958 to engage in the business of building
and selling homes, developing and selling homesites and selling undeveloped
or partially developed tracts of land. Substantially all of the real estate
available for sale by the Company is situated within Sugarmill Woods in west
central Florida.
In 1994 the Company closed a series of agreements executed in April
1994 wherein the Company sold to its primary bank lender the remainder of its
Southern Woods developed homesites inventory (approximately 72 homesites),
the remainder of the undeveloped acreage of Southern Woods (approximately 200
acres) and 162 prepaid water and sewer connections in exchange for a
reduction in the principal due to its primary bank lender, a reduction in
accrued interest due to that lender and the satisfaction of other liabilities
and additional closing costs (the "1994 Secured Lender Transaction").
With the closing of the 1994 Secured Lender Transaction, the Company's
homesite sales efforts came to an end. After the sale of the Southern Woods
development, the Company was left with only a few undeveloped homesites.
Accordingly, the Company believes that a discussion of its traditional core
business is no longer applicable for the reason set forth above and in the
next paragraph. A discussion of the Company's traditional core business will
be included in future filings on Form 10-KSB if and at such time as the
Company resumes normal operations.
During the fiscal year ended December 31, 1996, the Company's business
focus and emphasis changed substantially as it concentrated its sales and
marketing efforts almost exclusively on the disposition in bulk of its
undeveloped, platted, residential real estate. This change was prompted by
its continuing financial difficulties due to the principal and interest owed
on its debt and managements' conclusion that a bulk sale was the best way to
reduce the Company's debt service obligations. If the Company is successful
in its sale of this undeveloped land, its remaining inventory will consist of
undeveloped commercial property. There can be no assurance that the Company
will be successful in its efforts to effect a bulk sale. Assuming a bulk
sale occurs, the Company intends to decide at that point whether it will
pursue the development and sale of the commercial property in accordance with
its traditional core business plans or whether it will attempt to sell such
property in bulk. That decision will depend, in part, on whether the Company
believes it can generate more revenue by developing and selling individual
commercial properties or by selling in bulk.
<PAGE> 4
As of January 1, 1997 the Company employed a total of 6 persons of
which 4 are on a full-time basis.
RECENT DEVELOPMENTS
Option Agreement for Sale and Purchase
On January 31, 1997, Sugarmill Woods, Inc., a Florida corporation and a
wholly-owned subsidiary of the Company, and Love-PGI Partners, L.P.
("L-PGI")(collectively as "Seller"), entered into an Option Agreement For
Sale and Purchase ("Sale Agreement") with The Nature Conservancy, Inc., an
unrelated nonprofit District of Columbia corporation ("Purchaser"), for the
sale of and purchase of approximately 5,240 acres of certain undeveloped real
estate located in Citrus County and Hernando County, Florida ("Property").
Approximately 4,890 acres of the Property is owned by the Company, and 350
acres is owned by L-PGI. The Property, known as Sugarmill Woods, is located
five miles south of Homosassa Springs and 60 miles north of Tampa on U.S. 19.
U.S. 98 runs diagonally through its southern portion. The Sugarmill Woods
area consists of rolling hills covered by cypress, oak and pine trees.
Sugarmill Woods lies within the "Nature Coast" area which offers both fresh
and salt water fishing and hunting in a state forest. There are public
beaches, picnic areas and fishing and camping facilities in the immediate
vicinity. Several rivers in the area provide access to the Gulf of Mexico.
Negotiations regarding the Sale Agreement began in January of 1996
after Purchaser first contacted the Company in March of 1994 about its desire
to acquire the land. The Nature Conservancy is a 501(c)(3) corporation that is
sponsoring a conservation project for Florida's Conservation and Recreation
Land program, and often acts as an intermediary for states. The Nature
Conservancy and the State of Florida are interested in obtaining the
Property, which is mostly an upland sand dune area, in order to preserve the
land and to protect the endangered wildlife on the land. In addition, the
Florida Department of Forestry is contemplating incorporating the Property
into the adjacent Withlacoochee State Forest.
The Sale Agreement is contingent upon shareholder approval. Moreover,
the Purchaser may choose not to exercise its option under the Sale Agreement.
Purchaser paid an option payment of $100 and upon exercising the option, the
purchase price for the Property is expected to be approximately $14,759,335
payable in cash by Purchaser subject to the adjustments below. Purchaser may
assign the Sale Agreement to the State of Florida and if assigned then such
purchase price may be paid by state warrant. Of the total purchase price,
approximately $1,220,000 is expected to be
<PAGE> 5
allocated to the approximately 350 acres of the Property being sold by L-PGI,
with the remaining $13,539,335 being allocated to the approximate 4,890 acres
being sold by the Company. Based upon the above purchase price, the net
proceeds to the Company would be approximately $13,089,335, after payment of
approximately $450,000 of expenses related to the sale.
The amount of the purchase price was based on a price of $2,816.43 per
acre. The purchase price is subject to adjustments for the following: the
maximum value per acre permitted to be paid under Florida statutes, the
actual number of acres calculated after a survey, defects in title or
marketability of the Property, and any charges for cleaning up hazardous
materials. However, if any such adjustment exceeds $100,000, Seller shall
have the right to terminate the Sale Agreement. Notwithstanding the final
valuation of the Property by the State of Florida, the purchase price shall
not exceed $14,759,335.
The Company shall pay for and furnish a current boundary survey of the
Property and a marketable title insurance commitment and related insurance
policy to Purchaser.
The Company shall also pay for and furnish to Purchaser a Phase 1
environmental assessment of the Property and if such assessment recommends a
Phase 2 environmental assessment, then the Company shall pay for and furnish
such a Phase 2 environmental assessment. If such assessments confirm the
presence of hazardous waste on the Property, then the Company may be liable
for cleanup and monitoring the hazardous waste pursuant to the terms of the
Sale Agreement.
All real estate taxes and assessments shall be prorated between the
Seller and Purchaser to the date of closing unless the Sale Agreement is
assigned to the State of Florida and then such taxes and assessments shall be
paid by Seller at closing.
The option shall expire May 28, 1997, if the Sale Agreement is not
assigned to the State of Florida or not approved by the State of Florida
before such date unless such date is extended. If the purchase is approved
by the State of Florida, the option shall expire 120 days after the State of
Florida's approval of the Sale Agreement unless extended.
Closing shall take place 15 days after the Purchaser exercises the
option unless defects in the marketability of title exist or other necessary
actions have not been taken by Seller.
Under Florida law and the regulations of the Department of Business and
Professional Regulation, Division of Land Sales, Condominiums and Mobile
Homes ("Division"), the Company is required to report the proposed sale to
the Division for its review and approval. The Company provided the Division
with information and supporting documentation in April 1997, but there can be
no assurance that the approval of the Division will be obtained or obtained
in a timely manner.
The Company believes the purchase price is equitable because the
Property has been marketed locally and nationally for several years without
bona fide offers. The Company believes the
<PAGE> 6
appraisals, as discussed below, indicate this is a fair price. There are two
new appraisals which are only available to The Nature Conservancy and the State
of Florida at this time. The Company has been assured, however, that the
purchase price represents no less than 90% of appraised value. The Company
believes this is the best price it will be offered for the Property, because
there are thousands of individual lots and many developments of bulk sale lots
in the same general vicinity that are available at reasonable prices. They are
included in both golf and non-golf communities. The cost to acquire, and
upgrade the Property would probably be much greater than purchasing existing
improved property. The past programs of the Company and other similar companies
of selling lots off premises has virtually ceased. Therefore, owners of large
tracts must find other uses. The sale to The Nature Conservancy is such a use.
Any interested buyer of this Property will most likely encounter the same
problems that the Company did with regard to development, platting, and
reselling the Property, including such things as environmental and
conservation laws, and the highly competitive nature of real estate sales in
Florida. Additionally, it would be difficult to find someone to purchase the
Property in bulk and the acquirer may have a difficult time obtaining
financing given the problems past creditors of the Company had with respect
to the financing of the Property.
In addition to the State of Florida appraisals, in September 1995, PGIP
L.L.C. ("PGIP"), the holder of the Company's "First Mortgage Indebtedness"
(as that terms is hereafter defined) contracted for an appraisal to update a
prior appraisal conducted seven years ago on the bulk acreage owned by the
Company and of which the Property is a part. Such updated appraisal
reflected a value of approximately $4,855 per acre. In 1992, a predecessor
of First Union National Bank of Florida ("First Union"), the Company's former
primary bank lender, obtained an appraisal reflecting a value of
approximately $2,930 per acre, and PGIP obtained another appraisal in
September 1995, which reflected a value of approximately $2,500 per acre.
Although the Company has in prior years received other appraisals which in
some instances reflected a higher value than the value used to determine the
purchase price, the Company believes that the more recent appraisals
particularly those obtained by the State of Florida reflect a more accurate
valuation of the Property. See "Item 12. Certain Relationships and Related
Transactions."
The net proceeds of the sale under the Sale Agreement will be first
applied to retire all or most of the First Mortgage Indebtedness held by PGIP
on the Property owned by the Company. See "Purchase of the Company's First
Mortgage Indebtedness by PGIP" and "Item 12. Certain Relationships and
Related Transactions" for a discussion of PGIP's relationship with the
Company and the Company's officers and directors.
As of March 31, 1997, the principal balance of such indebtedness was
$7,323,000 and the accrued interest with respect thereto was $2,705,000.
Approximately $685,000 will be used to pay real estate taxes (including
interest and penalties) on the Property. Approximately $2,080,000 of the
remaining net proceeds will be used to reduce the indebtedness under the
Company's 1989 Convertible Secured Debentures and to obtain a release of the
<PAGE> 7
mortgage on a portion of the Property securing those debentures.
Approximately $700,000 will be used to establish an escrow to substitute for
a mortgage in favor of the Division of Florida Land Sales which encumbers
part of the Property in order to assure completion of certain roads on
property developed by the Company. The establishment of the escrow will be
required in order to procure release of the aforementioned mortgage in order,
in turn, to convey good title to the Property to the Purchaser. See "Item
12. Certain Relationships and Related Transactions." Any remaining proceeds
will be for general corporate purposes, which may include retirement of
additional indebtedness, working capital needs, and operating obligations of
the Company.
The payment in full of accrued interest on the principal balance of the
First Mortgage Indebtedness held by PGIP would result in an inability of the
Company to make all of the other payments described above in the amount of
approximately $825,000. As a result, the Company has requested that PGIP
consider leaving in place part of the First Mortgage Indebtedness secured by
a first mortgage lien on the approximately 600 acres of real estate which
will continue to be owned by the Company. This would enable the Company to
make all of the payments described above in full and, depending on the amount
of the First Mortgage Indebtedness PGIP agrees to leave in place, to provide
additional funds with which the Company can meet operating expenses and other
obligations of the Company.
PGIP has indicated to the Company that it will entertain such request
and that when, as and if approved by the members, it will leave the debt in
place, and thereby make additional funds available to the Company, in such
amounts as may be approved by its members and subject to such other terms and
conditions as shall be determined by PGIP. See "Summary of Purchase of the
Company's First Mortgage Indebtedness" for a discussion of the management
structure of PGIP. That section also indicates that Love Savings Holding
Company (a savings and loan holding company ("LSHC") of which Messrs. Andrew
S. Love, Jr. and Laurence A. Schiffer are two of the directors and LSHC's
controlling shareholders) owns the majority of the limited liability company
interests in PGIP. Accordingly, Messrs. Love and Schiffer, through PGIP,
will decide if and whether PGIP will leave in place part of the First
Mortgage Indebtedness. Messrs. Schiffer and Love are also the Company's only
directors and executive officers. Any remaining proceeds shall be for
general corporate purposes, which may include retirement of additional
indebtedness, working capital needs, and operating obligations of the
Company.
The Company believes that the sale price is fair and represents the
best prospects for the Company to realize proceeds in a prompt bulk sale at a
fair level of value. The Company has tried for many years to sell property in
bulk or in large tracts to commercial and residential developers without
success. In addition, its program of retail lot sales had become
increasingly non-viable up until the time it was terminated. Even if the
Company determines that retail lot sales have again become economically
viable, and it is not the view of the Company that such is the case, the
Company lacks the capital and financial resources to resume a program of
retail lot sales. A condition of the continued forbearance by PGIP as the
holder of the first
<PAGE> 8
mortgage indebtedness, which is in default, is that the Company proceed with a
satisfactory program of land sales. The Company believes that, not only does it
not have any other reasonable prospects to satisfy that requirement, but, the
existing Sale Agreement does not represent a distress sale in price and terms
but, rather, represents a fair result for the Company. In addition, the Company
believes that the sale pursuant to the Sale Agreement represents the Company's
best prospect to meet its financial obligations, in addition to the first
mortgage indebtedness, and to realize a fair market value from the remaining
acreage retained by the Company. The Company believes that, because of its
proximity to the proposed Suncoast Expressway from Tampa and the proposed
interchange between the Suncoast Highway and Highway 98, the value of the
retained acreage will be enhanced as the highway improvements near completion.
If the proposed sale of the Property occurs, the Company's remaining
assets will consist primarily of approximately 600 acres of undeveloped
property. The Company intends to decide after the sale whether it will
pursue the development and sale of the property in accordance with its
traditional core business plans or whether it will attempt to sell such
property in bulk. That decision will depend, in part, on whether the Company
believes it can generate more revenue by developing and selling individual
properties or by selling in bulk.
Summary of Purchase of the Company's First Mortgage Indebtedness by PGIP
For the past several years, First Union, the Company's former primary
bank lender, had been threatening to foreclose on substantially all of the
Company's real estate. This would have forced a liquidation of the Company.
To prevent foreclosure, Messrs. Love and Schiffer, who control a large
portion of the voting stock through their affiliation with L-PGI and who are
the Company's only directors and executive officers, formed PGIP in August
1995 to purchase the Company's First Mortgage Indebtedness and to accept the
assignment from First Union of the first mortgage securing repayment of the
First Mortgage Indebtedness.
On March 28, 1996, First Union assigned to PGIP all of its right, title
and interest in and to the loan documents (i) evidencing First Union's credit
agreements with the Company, and the Company's subsidiaries, Sugarmill Woods,
Inc., Burnt Store Marina, Inc., and Gulf Coast Credit Corporation, and (ii)
securing such indebtedness with substantially all of the Company's real estate
(the "Loan Documents"). At the time of the assignment, the Company and its
subsidiaries owed First Union approximately $9,007,000 in principal and accrued
interest (the "First Mortgage Indebtedness").
PGIP purchased the First Mortgage Indebtedness for a total purchase
price of approximately $5,548,000 (the "Purchase Price"), including amounts
paid by PGIP to First Union prior to the closing of the purchase, or
approximately 61.1% of the First Mortgage Indebtedness. The assignment of
the Loan Documents to PGIP was pursuant to the terms and conditions of that
certain Note and Loan
<PAGE> 9
Documents Purchase Agreement dated as of October 12, 1995, by and between First
Union, PGIP and the Borrowers, as amended by letter agreements dated November
10, 1995, December 15, 1995, January 17, 1996 and February 16, 1996 and as
further amended by that certain Modification of Note and Loan Documents Purchase
Agreement dated as of March 28, 1996.
PGIP borrowed $3,249,521 of the Purchase Price from First Union (the
"PGIP Notes"). The PGIP Notes bear interest at the prime rate as published
in the Wall Street Journal plus 1% and mature on June 1, 1997. Interest on
the PGIP Notes is payable monthly. As security for payment of its
obligations under the PGIP Notes, PGIP assigned back to First Union all of
its right, title and interest in and to the Loan Documents.
While PGIP was negotiating with First Union regarding the purchase of
the First Mortgage Indebtedness, First Union and the Company entered into a
series of forbearance agreements, so that First Union would not foreclose on
the Company's real estate. As a condition to First Union's execution of the
forbearance agreement, Purchaser paid First Union multiple nonrefundable
forbearance fees totaling $168,000 on December 31, 1995 ($273,000 as of March
28, 1996), which were applied to the purchase price of the Loan Documents.
In addition, upon execution of the Note Purchase Agreement, PGIP paid First
Union a nonrefundable initial loan purchase installment of $241,617 (the
"Initial Purchase Payment") which was applied against the Purchase Price
which was paid at closing on March 28, 1996. The Initial Loan Purchase
Payment paid to First Union was used by First Union to pay the Company's 1993
property tax owed to Citrus and Hernando Counties, Florida.
Although First Union would have been willing to accept repayment of a
discounted amount from the Company in exchange for cancellation of the First
Mortgage Indebtedness, the Company was unable to take advantage of this
corporate opportunity because it did not have the liquidity, borrowing power
or ability to sell equity to raise the money necessary to take advantage of
it. That is the reason Messrs. Love and Schiffer formed PGIP to purchase the
First Mortgage Indebtedness.
The largest investor in PGIP is Love Savings Holding Company ("LSHC")
which holds a 72% interest and is a manager of PGIP. Andrew S. Love, Jr. and
Laurence A. Schiffer own approximately 52% of all the issued and outstanding
voting stock of LSHC and serve as the directors and officers of LSHC.
Messrs. Love, Schiffer and LSHC are the managers of PGIP.
As the purchaser of the Loan Documents, PGIP has a first mortgage on
the part of the property owned by the Company and proposed to be sold to The
Nature Conservancy. PGIP accepted assignment of the Loan Documents, which
were in default and with respect to which the maturity of the First Mortgage
Indebtedness had been accelerated. The Company has been advised by PGIP that
it will be the policy of PGIP not to proceed with collection of the principal
and interest evidenced and secured by the Loan Documents so long as the
Company pursues satisfactory efforts to market and sell the property. PGIP's
policy, but not its contractual obligation, will be to facilitate sales of
the property by agreeing to the release of property to be sold from
<PAGE> 10
the lien of the Loan Documents against payments of the net sale proceeds
therefrom, after all expenses, closing costs and the like incurred by the
Company in connection with any such sale, in a manner to be agreed upon by PGIP
and the Company. The bulk sale of the Property to The Nature Conservancy is an
integral part of the plan by which the Company intends to repay PGIP.
Pursuant to PGIP's operating agreement, all proceeds received from
repayment of the First Mortgage Indebtedness are to be distributed to its
members prorata with the percent of PGIP interests each owns. Because LSHC
owns 72% of PGIP, it will be entitled to 72% of any distributions PGIP makes
to its members from proceeds of the sale to The Nature Conservancy received
from the Company. Because Messrs. Love and Schiffer own 52% of LSHC, they
would be deemed to have "profited" by 52% of the amount that the distribution
to LSHC exceeds the amount LSHC paid for its PGIP interests.
Item 2. Properties
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The Company's primary investments in properties relates to its
Sugarmill Woods project. The Company generally has fee simple title to these
properties, but substantially all of the Company's properties are encumbered
by mortgages under either its primary lender agreement or other financing
arrangements (see Item 6 and Note 10 to the consolidated financial statements
under Item 7).
Item 3. Legal Proceedings
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The Company is a party to a number of lawsuits incidental to the normal
operation of its business. Based upon information presently available, the
Company does not believe that the resolution of any of the suits
individually, or collectively, will have a material adverse effect on its
financial position (see Note 16 of Item 7).
Item 4. Submission of Matters to a Vote of Security Holders
- ------- ---------------------------------------------------
A shareholders meeting was not held during the year 1996. Although the
Florida Business Corporation Act and the Company's Bylaws as amended provide
for an annual meeting of stockholders, no stockholder filed an action to
compel the holding of a meeting during the year ended December 31, 1996.
PART II
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Item 5. Market for Registrant's Common Equity and Related Stockholder
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Matters
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The Company's Common Stock was traded on the American Stock Exchange,
Inc. ("AMEX") (trading symbol--PGA) until January 4, 1991 at which time the
Company consented to the removal of its Common Stock and 6% Convertible
Subordinated Debentures from the AMEX. The Company's Common Stock and
Debentures were delisted because the Company's financial condition no longer
satisfied the AMEX's listing requirements. Subsequent to the AMEX de-listing
the Company attempted to establish relations with a brokerage firm who would
serve as a market maker for the Common Stock. Based on information received
from The National Quotation Bureau, Inc., there have been no reported
transactions in the Company's Common
<PAGE> 11
Stock since January 29, 1991. During the period January 1, 1991 through January
29, 1991 the high and low bid price for the Common Stock was $.03 and the high
and low offer price was $.10. No dividends have ever been paid on the Common
Stock, and payment of dividends is restricted under the terms of the two
indentures pursuant to which the Company's outstanding debentures are issued.
As of December 31, 1996 there were 676 holders of record of the Company's Common
Stock and 453 debenture holders.
Item 6. Management's Discussion and Analysis or Plan of Operation
- ------- ---------------------------------------------------------
PRELIMINARY NOTE
During the fiscal year ended December 31, 1996, the Company's business
focus and emphasis concentrated on sales and marketing efforts almost
exclusively on the disposition in bulk of its undeveloped, platted,
residential real estate. This change was prompted by its continuing
financial difficulties due to the principal and interest owed on its debt and
managements' conclusion that a bulk sale was the best way to reduce the
Company's debt service obligations. If the Company is successful in its sale
of this undeveloped land, its remaining inventory will consist of undeveloped
commercial property. There can be no assurance that the Company will be
successful in its efforts to effect a bulk sale. Assuming a bulk sale
occurs, the Company intends to decide at that point whether it will pursue
the development and sale of the remaining property in accordance with its
traditional core business plans or whether it will attempt to sell such
property in bulk. That decision will depend, in part, on whether the Company
believes it can generate more revenue by developing and selling individual
commercial properties or by selling in bulk.
RESULTS OF OPERATIONS
Revenues for the year ended December 31, 1996 decreased by $478,000 to
$483,000 compared to revenues of $961,000 for the year ended December 31,
1995. A net loss of $2.9 million ($1.07 per share) was incurred for 1996
compared to a net loss of $2.4 million ($.93 per share) for 1995. Included
in the 1996 and 1995 earnings per share computation is $640,000 ($.19 per
share of Common Stock) of annual cumulative preferred stock dividends in
arrears.
Real Estate Activities
- ----------------------
Sales revenues by major components for real estate operations
(excluding improvement revenues related to prior sales) for the years 1996 and
1995 were:
<TABLE>
<CAPTION>
1996 1995
---- ----
($ in thousands)
<S> <C> <C>
Homesite sales-gross $ - $ 44
Acreage sales - 80
----- -----
$ - $ 124
===== =====
</TABLE>
Cost by major component for real estate operations (excluding
improve costs related to prior sales) for the years 1996 and 1995 were:
<PAGE> 12
<TABLE>
<CAPTION>
1996 1995
---- ----
($ in thousands)
<S> <C> <C>
Homesite sales-gross $ - $ 56
Acreage sales - 6
---- ----
$ - $ 62
==== ====
</TABLE>
Gross profit margins by major components for real estate operations
for the years 1996 and 1995 were:
<TABLE>
<CAPTION>
1996 % 1995 %
---- - ---- -
($ in thousands)
<S> <C> <C> <C> <C>
Homesite sales-gross $ - - % $(12) (27.3)%
Acreage sales - - % 74 92.5 %
--- --- ---- -------
$ - - % $ 62 50.0 %
</TABLE>
Home Sales
- ----------
There were no home sales in 1996 and 1995.
The Company believed economic conditions and increased competition
negatively impacted housing sales and that the Company would not experience a
substantial improvement in either home sales volume or gross profit margins.
In response to this outlook, the Board of Directors in 1994 temporarily
suspended the new home construction operation in Sugarmill Woods.
Acreage Sales
- -------------
No significant bulk sales were generated in 1996 and 1995.
The Company intends to continue its efforts to sell a portion or all of
its remaining 4,900 acres of undeveloped platted property and 600 acres of
undeveloped commercial property.
Other Activities
- ----------------
The Company's cash accounts are substantially smaller given the
decrease in operations. Interest income in 1996 decreased by $80,000 compared
to a 1995 decrease of $104,000 from 1994.
Changes in other income for the years 1996 and 1995 were:
<TABLE>
<CAPTION>
1996 1995
---- ----
($ in thousands)
<S> <C> <C>
Commission income $325 $277
Timber income - 138
Other income 71 255
---- ----
$396 $670
</TABLE>
Commission income increased by $48,000 in 1996 to $325,000 from
$277,000 in 1995. There was no timber income in 1996 as compared to $138,000 in
1995. Other income decreased by $184,000 in 1996 to $71,000 from $255,000 in
1995. The decrease is a result of a $151,000 gain on installment sale in 1995.
There were no installment sales in 1996.
<PAGE> 13
Costs and Expenses
- ------------------
The relationship of selling expenses and real estate sales was as
follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
($ in thousands)
<S> <C> <C>
Selling expenses $11 $39
Selling expenses as a
percentage of gross
sales revenues for real
estate operations -% 31.5%
</TABLE>
Selling expenses decreased by $28,000 (71.79%) during 1996 compared to
1995 and in 1995 they decreased by $139,000 (78.18%) compared to 1994. The
decreases are a result of the reduction in selling activity.
The relationship of general and administrative expenses and real estate
sales was as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
($ in thousands)
<S> <C> <C>
General and administrative
expenses $843 $541
General and administrative
expenses as a percentage
of gross sales revenues for
real estate operations -% 436.3%
</TABLE>
General and administrative expenses increased by $302,000 in 1996
compared to 1995 as a result of an increase in real estate taxes due to an
adverse decision from the State of Florida on an agricultural exemption
status on Citrus County unimproved land.
In an effort to conserve cash and reduce overhead, the Company
consolidated its administrative office functions in St. Louis, Missouri in
June, 1994. The Company has contracted out the services to Love Real Estate
Company ("LREC"), an affiliate of Love-PGI Partners, the Company's Preferred
Shareholder (see note 18), to handle the day-to-day accounting for a fee. As
a result general and administrative expenses decreased by $539,000 (50.6%) in
1995 compared to 1994. The decrease reflects lower costs associated with
fewer personnel required to operate the downsized Company.
Interest expense for the two years ended December 31, 1996 was:
<TABLE>
<CAPTION>
1996 1995
---- ----
($ in thousands)
<S> <C> <C>
Interest expense $2,512 $2,380
</TABLE>
Interest expense in 1996 increased by $132,000 (5.55%) compared to 1995
and increased by $261,000 (12.3%) in 1995 compared to 1994 due to the Secured
Lender Transaction.
Other expenses decreased by $369,000 (46.85%) in 1996 compared to 1995
due to changes in valuation allowances as discussed in Note 3 and decreased
by $160,000 (29.6%) in 1995 compared to 1994 due to real estate valuation
adjustments as discussed in Note 16.
<PAGE> 14
FINANCIAL CONDITION
Assets totaled $11.3 million at December 31, 1996 compared to $11.7
million at December 31, 1995 reflecting the following changes:
<TABLE>
<CAPTION>
1996 1995 Inc. (Dec.)
---- ---- -----------
($ in thousands)
<S> <C> <C> <C>
Cash and cash equavalents $ 12 $ 63 $ (51)
Restricted cash 1,140 1,102 38
Receivables 344 693 (349)
Land and improvement
inventories 9,016 9,031 (15)
Net property and equipment 46 81 (35)
Other assets 759 766 ( 7)
------- ------- -----
$11,317 $11,736 $(419)
======= ======= =====
</TABLE>
Declining levels of business activities are reflected in declining cash
balances, which at year end 1996 and 1995 were $12,000 and $63,000,
respectively.
Cash decreased by $51,000 to $12,000 at December 31, 1996 compared to
$63,000 at December 31, 1995. Net cash flow provided by operations increased
by $34,000 to $64,000 for the year ended December 31, 1996 from cash provided
by operations of $30,000 for the 1995 year.
Cash received from operations during 1996 was $959,000, a $496,000
decrease from cash received during 1995. The majority of the decrease is
attributable to reduced principal and interest collections from real estate
sales and receivables.
Cash expended for operations decreased by $530,000 to $895,000 during
1996 from $1.4 million in 1995, reflecting decreases in the following
classifications; payments for real estate operations ($101,000), general -
administrative ($320,000), interest payments($57,000) and other of ($52,000).
Cash expended for operations decreased by $1.6 million to $1.4 million
during 1995 from $3.0 million in 1994, reflecting decreases in the following
classifications; payments for real estate operations ($1.7 million), land
improvements ($5,000), interest expense ($69,000) and other of ($42,000).
The increase in general and administrative ($121,000) is due to payment of
delinquent real estate taxes.
The $399,000 and $508,000 utilized during 1996 and 1995 by financing
activities represents payments to Finova from collections on the receivables
on real estate sold to Finova in 1988.
The $344,000 in receivables on real estate sales at December 31, 1996
included a 1988 receivable sale with recourse to Finova Financial Services
("Finova") treated as a financing transaction for accounting purposes. The
Company does not have receivables available for replacement and is therefore
unable to meet its recourse obligations. However, the Company has requested
that Finova permit the Company to satisfy its replacement obligation by
canceling or foreclosing the delinquent accounts and reselling the property
for the lender. Finova has not yet responded to this request, and the
Company has no assurance that it will receive a favorable response. The
$349,000 decrease in receivables reflects the continuing paydown of the
Finova portfolio.
<PAGE> 15
A comparison of the contracts receivable delinquency status at December
31, 1996 and 1995 follows:
<TABLE>
<CAPTION>
December 31, December 31,
1996 % 1995 %
---- - ---- -
($ in thousands)
<S> <C> <C> <C> <C>
Current $ 272 25.3% $ 741 46.3%
------ ----- ------ -----
31 days to 60 days delinquent 42 3.9 91 5.7
61 days to 90 days delinquent 18 1.6 38 2.4
Over 90 days 744 69.2 729 45.6
------ ----- ------ -----
Total delinquency 804 74.7 858 53.7
------ ----- ------ -----
Total contracts $1,076 100.0% $1,599 100.0%
====== ===== ====== =====
</TABLE>
The Company has experienced a deterioration in the quality of the
contracts receivable portfolio over the past several years. The Company
believes the deterioration is the result of the adverse publicity regarding
community developers as a result of the GDC bankruptcy, as well as the
difficulty of implementing foreign contract collection activities.
Other assets at December 31, 1996 decreased by $7,000 compared to year
end 1995 primarily as a result of the normal amortization of prepaid
financing costs and lower prepaid expenses related to receivable exchanges.
Liabilities were $33.8 million at December 31, 1996 compared to $31.4
million at December 31, 1995, reflecting the following changes:
<TABLE>
<CAPTION>
Increase
1996 1995 (Decrease)
---- ---- ----------
($ in thousands)
<S> <C> <C> <C>
Accounts payable $ 78 $ 91 $ (13)
Other liabilities 1,428 1,143 285
Accrued interest 10,790 8,471 2,319
Credit agreements - primary lender 7,307 7,287 20
Notes and mortgages payable 3,667 3,802 (135)
Convertible subordinated debentures payable 9,059 9,059 -
Convertible debentures payable 1,500 1,500 -
------- ------- ------
$33,829 $31,353 $2,476
======= ======= ======
</TABLE>
The $2.3 million increase in accrued interest at December 31, 1996
compared to year end 1995 reflects changes in the following:
<TABLE>
<CAPTION>
Increase
1996 1995 (Decrease)
---- ---- ----------
($ in thousands)
<S> <C> <C> <C>
Primary lender $ 2,461 $1,541 $ 920
Debentures 6,880 5,628 1,252
Other 1,449 1,302 147
------- ------ ------
$10,790 $8,471 $2,319
======= ====== ======
</TABLE>
The increase is primarily due to the nonpayment of interest on the
company's debentures (see Note 11 to the consolidated financial statements
under Item 7).
The $135,000 reduction in notes and mortgages payable primarily
represents normal principal reductions required to amortize the Finova
<PAGE> 16
mortgage.
The Company's capital deficiency increased to $22.5 million at December
31, 1996 from a $19.6 million capital deficiency at December 31, 1995,
reflecting the 1996 operating loss.
To maintain its existence during the two years ended December 31, 1996,
the Company relied upon a combination of borrowings, sales of land and
improvement inventories and contracts receivables.
As of the date of this filing, the Company is in default of the entire
principal plus interest on its subordinated debentures payable in amounts
indicated in the following table:
<TABLE>
<CAPTION>
12/31/96
Principal Unpaid
Amount Due Interest
---------- --------
($ in thousands)
<S> <C> <C>
Subordinated debentures due June 1, 1991 $ 1,034 $ 468
Subordinated debentures due May 1, 1992 8,025 3,808
------- -------
$ 9,059 $ 4,276
======= =======
</TABLE>
The Company does not have funds available to make any payments of either
principal or interest on the above debentures. If a debenture holder or
Trustee institutes action to collect on the debentures, such action could
prohibit the Company from continuing to operate in the normal course of
business (see Notes 10 and 11 to the consolidated financial statements under
Item 7).
The Company has investigated the consequences of a bankruptcy filing and
believes that such an event is not in the best interest of either the
debenture or equity holders because a bankruptcy filing would negatively
impact the Company's business, as well as cause an acceleration of the First
Mortgage Indebtedness, Finova and secured debenture debt. Management believes
that a bankruptcy filing would prompt all secured lenders to initiate
foreclosure proceedings. Since Company assets are encumbered by mortgages,
the secured lenders have a perfected security interest and priority over the
unsecured debenture holders.
In January 1997, Sugarmill Woods, Inc, the Company's wholly-owned
subsidiary, and Love-PGI Partners, L.P. ("L-PGI") entered into a Sale
Agreement with The Nature Conservancy, Inc. for the sale of approximately
5,240 acres of undeveloped real estate to The Nature Conservancy. L-PGI, a
Missouri limited partnership, is managed by the general partner, Love
Investment Company. Andrew S. Love, Jr. is the Chairman and principal
stockholder of Love Investment Company. Sugarmill Woods, Inc. owns 4,890
acres of the land under the Sale Agreement and L-PGI owns the remaining 350
acres. See "Item 1. Business - Recent Developments."
<PAGE> 17
Item 7. Financial Statements and Supplementary Data
- ------- -------------------------------------------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Stockholders and Board of Directors
PGI, Incorporated
St. Louis, Missouri
We have audited the accompanying consolidated statement of financial position
of PGI Incorporated and subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of operations, stockholders' deficiency and
cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedule 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 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of PGI
Incorporated and subsidiaries at December 31, 1996 and 1995, and the results
of their operations and cash flows for the years then ended in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 11 to the financial
statements, the Company is currently in default of certain sinking fund and
interest payments on its convertible subordinated debentures. As discussed in
Note 2, the Company is also currently in default of interest payment on its
primary debt, as well as property taxes owed on properties serving as
collateral for this obligation. In addition, the Company has an accumulated
deficit. These matters raise substantial doubt about the company's ability to
continue as a going concern. Management's plans in this regard are described
in Notes 10 and 11. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
St. Louis, Missouri /s/BDO Seidman
March 4, 1997
<PAGE> 18
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
DECEMBER 31, 1996 AND 1995
<CAPTION>
ASSETS LIABILITIES
====== ===========
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 12,000 $ 63,000 Accounts payable $ 78,000 $ 91,000
Restricted Cash (Note 4) 1,140,000 1,102,000
Receivables on real estate Other liabilities
sales - net (Note 5) 318,000 682,000 (Note 9) 1,428,000 1,143,000
Other receivables 26,000 11,000 Accrued interest:
Land and improvement Primary lender 1,541,000
inventories (Note 6) 9,016,000 9,031,000 2,461,000
Property and equipment - Debentures 6,880,000 5,628,000
net (Note 7) 46,000 81,000
Other assets (Note 8) 759,000 766,000 Other 1,449,000 1,302,000
Credit agreements -
(Note 10)
Primary lender 7,307,000 7,287,000
Notes and mortgages
payable 3,667,000 3,802,000
Convertible debentures
payable (Note 11) 9,059,000 9,059,000
Convertible debentures
payable (Note 12) 1,500,000 1,500,000
------------ ------------
33,829,000 31,353,000
------------ ------------
Commitments and
contingencies (Note
17)
STOCKHOLDERS' DEFICIENCY
========================
Preferred stock, par value
$1.00 per share; authorized
5,000,000 shares; 2,000,000
Class A cumulative convertible
shares issued and outstanding; 2,000,000 2,000,000
(liquidation preference of
$4.00 per share or $8,000,000)
(Note 14)
Common stock, par value
$.10 per share; authorized
25,000,000 shares; 3,317,555
shares issued and outstanding
(Note 14) 332,000 332,000
Paid-in capital 13,698,000 13,698,000
Accumulated deficit (38,542,000) (35,647,000)
------------ ------------
(22,512,000) (19,617,000)
------------ ------------
$11,317,000 $11,736,000 $ 11,317,000 $ 11,736,000
=========== =========== ============ ============
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 19
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996 AND 1995
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Revenues (Note 3):
Real estate sales $ - $ 124,000
Interest income 87,000 167,000
Other income 396,000 670,000
----------- -----------
483,000 961,000
----------- -----------
Costs and expenses:
Cost of real estate sales - 62,000
Selling expenses 11,000 39,000
General and administrative expenses (Note 17) 843,000 541,000
Interest (Notes 10, 11 and 12) 2,512,000 2,380,000
Other expenses (Note 3) 12,000 381,000
----------- -----------
3,378,000 3,403,000
----------- -----------
Net loss ($2,895,000) ($2,442,000)
=========== ===========
Loss per share of common stock and common stock
equivalents after considering preferred dividends
of $640,000 for 1996 and 1995:
Primary net loss per share ($1.07) ($ .93)
====== =======
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 20
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996 AND 1995
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Cash received from operations:
Collections from real estate sales and receivables on such sales $ 545,000 $ 852,000
Interest on homesite and acreage contracts 30,000 94,000
Collections from amenity and other operations 339,000 277,000
Other interest received 34,000 42,000
Other receipts 11,000 190,000
--------- ----------
959,000 1,455,000
--------- ----------
Cash expended for operations:
Payments to subcontractors and vendors for real estate
operations and sale and marketing activities 9,000 110,000
Payments for amenity and other operations 315,000 327,000
General and administrative costs 352,000 672,000
Interest paid 193,000 250,000
Other disbursements 26,000 66,000
--------- ----------
895,000 1,425,000
--------- ----------
Net cash flow provided by operating activities 64,000 30,000
--------- ----------
Cash flows from investing activities:
Proceeds from fixed asset sales - 1,000
Proceeds from expiration of cash restrictions
Net cash flow provided by investing activities - 169,000
--------- ----------
- 170,000
--------- ----------
Cash flows from financing activities:
Proceeds from borrowings 284,000 345,000
Principal payments on debt (399,000) (508,000)
--------- ----------
Net cash flow used in financing activities (115,000) (163,000)
--------- ----------
Net increase (decrease) in cash and cash equivalents (51,000) 37,000
Cash and cash equivalents at beginning of year 63,000 26,000
--------- ----------
Cash and cash equivalents at end of year $ 12,000 $ 63,000
========= ==========
Non-cash investing activities:
Earnings capitalized into restricted cash $ 38,000 $ 36,000
========= ==========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 21
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996 AND 1995
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Reconciliation of net loss to net cash provided by
operating activities:
Net loss $(2,895,000) $(2,442,000)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 31,000 36,000
Net allowance and valuations related to real estate sales (374,000) (86,000)
Loss on sale or disposition of property, plant & equipment 4,000 1,000
Earnings capitalized into restricted cash (38,000) (36,000)
(Increase) decrease in:
Contracts and mortgages receivable 550,000 561,000
Other receivables (12,000) 29,000
Land and improvement inventories - net 15,000 123,000
Loan costs and other prepaid expenses 7,000 22,000
Increase (decrease) in:
Accounts payable (13,000) 12,000
Accrued interest 2,319,000 2,130,000
Other accrued expenses 471,000 (248,000)
Deposits and advances ( 1,000) (72,000)
----------- -----------
2,959,000 2,472,000
----------- -----------
Net cash flow provided by operating activities $ 64,000 $ 30,000
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 22
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
YEARS ENDED DECEMBER 31, 1996 AND 1995
<CAPTION>
Preferred Stock Common Stock Retained
--------------- ------------ Paid-In Earnings
Shares Par Value Shares Par value Capital (Deficit)
------ --------- ------ --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balances at
January 1, 1995 2,000,000 $2,000,000 3,317,555 $332,000 $13,698,000 ($33,205,000)
Net loss - - - - - (2,442,000)
--------- ---------- --------- -------- ----------- ------------
Balances at
December 31, 1995 2,000,000 $2,000,000 3,317,555 $332,000 $13,698,000 ($35,647,000)
Net loss - - - - - (2,895,000)
--------- ---------- --------- -------- ----------- ------------
Balances at
December 31, 1996 2,000,000 $2,000,000 3,317,555 $332,000 $13,698,000 ($38,542,000)
========= ========== ========= ======== =========== ============
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies:
--------------------------------
Principles of Consolidation
- ---------------------------
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries after eliminating all significant
intercompany transactions.
Accounting 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 of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Revenue and Profit Recognition
- ------------------------------
Homesites
---------
Prior to July 1992, homesites were generally sold under contracts for
deed or deed, note and mortgage which provide for a down payment and monthly
installments, including interest, for periods up to ten years. Prior to 1990
income from sales of homesites was recorded when minimum down payment
(including interest) and other requirements were met. However, because of
collectibility problems with certain off-site broker/foreign sales programs,
effective January 1, 1990, the Company adopted the installment method of
profit recognition in accordance with Statement of Financial Accounting
Standard No. 66 "Accounting for Sales of Real Estate".
Homes Units
-----------
Home sales are recorded at closing.
Acreage
-------
Sales of undeveloped and developed acreage tracts are recognized, net of
any deferred revenue and valuation discount, when minimum down payment and
other requirements are met.
Provision for Cancellations
- ---------------------------
For sales prior to January 1, 1990, the Company provided for estimated
future cancellations of receivables on real estate sales by charges to
operations based on historical collection experience and analysis of
delinquencies. Balances related to canceled receivables are charged to the
allowance for cancellations.
Land and Improvement Inventories
- --------------------------------
Land held for sale to customers and land held for bulk sale are stated
at cost, which is not in excess of estimated net realizable value. Homesite
costs are allocated to projects based on area methods, which consider square
footage, future improvement costs and frontage.
Property and Equipment
- ----------------------
Property and equipment are stated at cost. Depreciation is provided
principally by the straight-line method over the estimated useful lives of the
related assets. Gains or losses resulting from the disposition of property
and equipment are respectively included in other income or other expense.
Per Share Data
- --------------
Primary loss per share is computed by dividing net loss, after including
dividends on the Company's preferred stock, by the average number of common
shares. For this purpose, the Company's convertible
<PAGE> 24
debentures are not deemed to be common stock equivalents, which are only
considered when their effect is dilutive. The average number of common shares
outstanding was 3,317,555 for 1996 and 1995.
Cash and Cash Equivalents
- -------------------------
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
2. Secured Lender Transactions:
----------------------------
As of December 31, 1996 the Company was in default of it primary credit
agreements with PGIP, LLC. As of December 31, 1996, the Company was
unsuccessful in consummating a large land sale to meet its obligations and to
make any payments of either principal or interest. On January 31, 1997, the
Company sold an option for the purchase of approximately 4,900 acres of
its Sugarmill Woods property. The proceeds of this sale are expected to
aggregate $13,770,000 if the option is exercised. See Note 19 to the
consolidated financial statements.
On March 28, 1996, the Company's primary lender, First Union National
Bank of Florida, a national banking association ("First Union") assigned to
PGIP, LLC., a Missouri limited liability company ("PGIP") all of First Union's
right, title and interest in and to the documents (the "Loan Documents")
evidencing and securing its primary credit agreements with the Company and the
Company's subsidiaries, Sugarmill Woods, Inc., Burnt Store Marina, Inc. and
Gulf Coast Credit Corporation (collectively, the "Borrowers"), which credit
agreements are in default and the maturity of the indebtedness secured thereby
has been accelerated.
The Company has been advised by PGIP that it will be the policy of PGIP
not to proceed with collection of the principal and interest evidenced and
secured by the Loan Documents so long as PGI pursues satisfactory efforts to
market and sell the Property. PGIP's policy, but not its contractual
obligation, will be to facilitate sales of the Property by agreeing to the
release of Property to be sold from the lien of the Loan Documents against
payments of the net sale proceeds therefrom, after all expenses, closing costs
and the like incurred by PGI in connection with any such sale, in a manner to
be agreed upon by PGIP and PGI.
PGIP is owned and managed by Love Savings Holding Company ("LSHC"),
Andrew S. Love, Jr. and Laurence A. Schiffer. Messrs. Love and Schiffer are
directors and executive officers of LSHC and own slightly more than half of
all the issued and outstanding voting stock of LSHC. Messrs. Love and
Schiffer serve as executive officers and directors of the Company and the
other Borrowers and the Guarantors.
Company management has determined that the Company's primary activity
must concentrate on one goal - the sale of sufficient additional acreage as
soon as possible to again substantially reduce the primary lender debt.
PGIP purchased the Loan Documents for a total purchase price of
approximately $5,548,000 (the "Purchase Price"), including amounts paid by
PGIP to First Union prior to the Closing Date, or approximately 61.1% of the
approximately $9,007,000 owed First Union by the Company under the Loan
Documents. PGIP borrowed $3,249,521 of the Purchase Price from First Union
(the "Notes"). The Notes bear interest at the prime rate as published in the
Wall Street Journal plus 1% and mature on June 1, 1997. Interest on the Notes
is payable monthly. As security for payment of its obligations under the
Notes, PGIP assigned to First Union all of PGIP's right, title and interest in
and to the Loan Documents.
The assignment of the Loan Documents to PGIP was pursuant to the terms
and conditions of that certain Note and Loan Documents Purchase Agreement
dated as of October 12, 1995, by and between First Union, PGIP and the
Borrowers, as amended by letter agreements dated November
<PAGE> 25
10, 1995, December 15, 1995, January 17, 1996 and February 16, 1996 and as
further amended by that certain Modification of Note and Loan Documents Purchase
Agreement dated as of the Closing Date.
3. Real Estate Sales, Other Income and Other Expense:
--------------------------------------------------
Real estate sales and cost of sales consisted of:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S>
Revenues: <C> <C>
Homesite sales $ - $ 44,000
Acreage sales - 80,000
--------- --------
$ - $124,000
========= ========
Cost of Sales:
Homesites $ - $ 56,000
Acreage - 6,000
--------- --------
$ - $ 62,000
========= ========
Other income consisted of:
Commission income 325,000 277,000
Timber income - 138,000
Other income 71,000 255,000
--------- --------
Other expense consisted of:
Reduction in allowance for cancellations of contracts 396,000 670,000
receivable (See Quarterly Results under Note 15) (170,000) -
Reduction in estimated recourse liability for
receivables sold (See quarterly results under Note 15) (185,000) -
Other expenses 367,000 381,000
--------- --------
$ 12,000 $381,000
========= ========
</TABLE>
4. Restricted Cash:
----------------
Restricted cash included cash and certificates of deposit pledged to
agencies in various states and local Florida governmental units related to
land development and environmental matters, escrowed receipts related to
pledged receivables on real estate sales and the servicing of sold receivables
and, as a result of sales agreements and Company policies, customer payments
and deposits related to home site and housing contracts.
5. Receivables on Real Estate Sales:
---------------------------------
Net receivables on real estate sales consisted of:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C>
Contracts receivable on homesite sales $1,076,000 $1,599,000
Other 98,000 128,000
---------- ----------
1,174,000 1,727,000
Less: Allowance for cancellations (806,000) (976,000)
Unamortized valuation discount (50,000) (69,000)
---------- ----------
$ 318,000 $ 682,000
========== ==========
</TABLE>
<PAGE> 26
Stated interest rates for contracts receivable on homesite sales, as
well as contracts and mortgages receivable on acreage sales, ranged up to 10%
with payment terms varying from seven to ten years. The weighted average
interest rate for such receivables outstanding at December 31, 1996 and 1995
was 9.32% and 9.35%, respectively.
The Company generally considers receivables on real estate sales
delinquent if the scheduled installment payment is over 30 days past due. At
December 31, 1996 and 1995 delinquent receivables approximated $804,000 and
$858,000, respectively.
Contracts receivable on homesite sales and contracts and mortgages
receivable on acreage sales have been discounted to yield an effective
interest rate of 14%. Contracts receivable on homesite sales recorded under
the installment method have not been discounted.
The estimated scheduled principal collections for receivables on real
estate sales at December 31, 1996 are:
<TABLE>
<S> <C>
1997 (Including past- $ 921,000
due balances)
1998 143,000
1999 40,000
2000 23,000
2001 25,000
Thereafter 22,000
----------
$1,174,000
==========
</TABLE>
In March 1988 the Company sold contracts receivable on homesite sales
totaling approximately $9,246,000, before consideration of a related
unamortized valuation discount of approximately $1,197,000 at the time of the
sale. For financial reporting purposes this transaction has been treated as a
financing transaction (see Note 10), since the Company may be required to
repurchase the contracts receivable on homesite sales under conditions other
than the recourse provision of the sales agreement. At December 31, 1996, and
1995, contracts receivable on homesite sales of approximately
$1,076,000 and $1,599,000, respectively, and related unamortized valuation
discount of approximately $50,000 and $69,000, respectively, related to this
transaction have been included in the Company's reported receivables on real
estate sales.
At December 31, 1996, 56% of the Company's gross receivables from real
estate sales were generated by a broker in two geographic regions, certain
districts in New York City and Taiwan. These sales were under contract for
deed with terms similar to sales to other customers. This concentration of
credit risk has been considered by management in determining the allowance for
cancellations.
6. Land and Improvements:
----------------------
Land and improvement inventories consisted of:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Unimproved land $8,724,000 $8,724,000
Fully improved land 292,000 307,000
---------- ----------
$9,016,000 $9,031,000
========== ==========
</TABLE>
<PAGE> 27
7. Property and Equipment:
-----------------------
Property and equipment consisted of:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Furniture, fixtures and other equipment $ 363,000 $ 405,000
Less accumulated depreciation (317,000) (324,000)
--------- ---------
$ 46,000 $ 81,000
========= =========
</TABLE>
Depreciation was:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Charged to expense $31,000 $36,000
</TABLE>
8.
Other assets consisted of:
<TABLE>
<CAPTION>
Other Assets:
-------------
1996 1995
---- ----
<S> <C> <C>
Guaranteed future connections, net $621,000 $621,000
Prepaid loan and debenture costs - 13,000
Deposit with Trustee of 6-1/2% debentures 125,000 120,000
Other 13,000 12,000
-------- --------
$759,000 $766,000
======== ========
</TABLE>
The guaranteed future connections are reflected net of discount of
$274,000 and deferred gain of $101,000 in 1996 and 1995. They represent the
amount paid for utility hookups, connections, rights and related equipment to
bring utilities into the development. These costs are being amortized as
units are sold.
9.
Other liabilities consisted of:
<TABLE>
<CAPTION>
Other Liabilities:
------------------
1996 1995
---- ----
<S> <C> <C>
Accrued property taxes
- current $ 208,000 $ 37,000
- delinquent 476,000 249,000
Other accrued expenses 316,000 243,000
Deposits, advances and escrows 346,000 346,000
Estimated recourse liability for receivables sold 66,000 252,000
Other 16,000 16,000
---------- ----------
$1,428,000 $1,143,000
========== ==========
</TABLE>
10. Credit Agreements - Primary Lender and Notes and Mortgages Payable:
-------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Credit agreements - primary lender
(maturing July 8, 1997, bearing interest at prime plus 5.0%): $7,307,000 $ 7,287,000
Notes and mortgages payable -
$1,385,000 bearing interest at 12-1/4%,
$1,176,000 bearing interest at prime
plus 2%, the remainder bearing interest
at varying rates to 23%; maturing
through 1999 3,667,000 3,802,000
----------- -----------
$10,974,000 $11,089,000
=========== ===========
</TABLE>
<PAGE> 28
The prime rate at December 31, 1996 was 8.25%.
At December 31, 1996 assets collateralizing the Company's credit
agreements with its primary lender and notes and mortgages payable were
carried at $10,162,000, of which $1,174,000 represented gross
receivables on real estate sales, $26,000 represented other receivables,
$8,916,000 represented land and improvement inventories, and $46,000
represented property and equipment.
The overall weighted average interest rate for the Company's credit
agreements with its primary lender and all remaining notes and mortgages was
approximately 12.3% as of December 31, 1996 and 11.1% as of December 31, 1995.
As discussed in Note 5, the Company's March 1988 sale of receivables on
real estate sales has been treated as a financing transaction for financial
reporting purposes since the Company may be required to repurchase these
receivables under conditions other than the recourse provision of the sales
agreement. Principal and interest payments are recorded by the Company based
on the collections from receivables applicable to the sale and the application
of the 12 1/4% interest rate used to calculate this sale's discounted present
value. At December 31, 1996 and 1995, the outstanding principal balance for
this financing transaction was approximately $1,385,000 and $1,783,000,
respectively, and based on estimated collections of the associated receivables
on real estate sales, full repayment should be made by 1999.
Although substantially all of the Company's real and personal property
including all of the stock of the Company's wholly-owned subsidiaries remains
pledged as collateral, the Company negotiated agreements with it's mortgage
holders to allow the Company to sell part of it's land holdings without
requiring full payment of the secured debt.
Scheduled payments applicable to the reduction of principal amounts of
all primary lender debt based on the terms of the Company's primary lender
credit agreements, and all other notes and mortgages payable (without giving
effect to various cross-default provisions which could, upon formal notice,
accelerate payment of substantially all of the Company's debt) will be
required approximately as follows:
<TABLE>
<S> <C>
1997 9,162,000
1998 1,112,000
1999 700,000
-----------
$10,974,000
===========
</TABLE>
In March 1996, the debt with First Union, the previous primary lender,
was purchased by PGIP, LLC. See Note 2 for the details of the transaction.
During the fiscal year ended December 31, 1996, the Company's business
focus and emphasis changed substantially as it concentrated its sales and
marketing efforts almost exclusively on the disposition in bulk of its
undeveloped, platted, residential real estate. This change was prompted by its
continuing financial difficulties due to the principal and interest owed on
its debt and managements' realization that a bulk sale was the best way to
reduce the Company's debt service obligations. If the Company is successful
in its sale of this undeveloped land, its remaining inventory will consist of
undeveloped commercial property. There can be no assurance that the Company
will be successful in its efforts to effect a bulk sale. Assuming a bulk sale
occurs, the Company intends to decide at that point whether it will pursue the
development and sale of the commercial property in accordance with its
traditional core business plans or whether it will attempt to sell such
property in bulk. That decision will depend, in part, on whether the Company
believes it can generate more revenue by developing and selling individual
commercial properties or by selling in bulk. (See Note 19 for a bulk sale
option sold in 1997.)
<PAGE> 29
11. Subordinated Debentures Payable:
--------------------------------
Subordinated debentures payable consisted of:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
6-1/2%, due June 1991 $1,034,000 $1,034,000
6%, due May 1992 8,025,000 8,025,000
---------- ----------
$9,059,000 $9,059,000
========== ==========
</TABLE>
Since issuance, $650,000 and $152,000 of the 6-1/2% and 6% debentures,
respectively, have been converted into common stock; however, this conversion
feature is no longer in effect.
The Company is currently in default of certain sinking fund and interest
payments on both subordinated debentures, $9,059,000 in principal plus accrued
and unpaid interest totaling $4,276,000 at December 31, 1996.
The debentures are not collateralized and are not subordinated to each
other, but are subordinated to senior indebtedness ($12,474,000 at December
31, 1996). Payment of dividends on the Company's common stock is restricted
under the terms of the two indentures pursuant to which the outstanding
debentures are issued.
In order to satisfy the obligation to debenture holders, the Company has
been and intends to continue to:
- - actively seek buyers for all or a portion of the undeveloped acreage;
- - search for additional sources of equity; and
- - determine if potential merger or joint venture candidates exist.
No assurances can be made that the Company can achieve any of the three
above alternatives.
12. Convertible Debentures Payable:
-------------------------------
In July and September 1989, the Company sold $1,282,000 and $1,000,000,
respectively, of convertible debentures to a partnership affiliated with the
Company's preferred shareholder. In connection with the July 1992 Secured
Lender Transaction in partial consideration for the conveyance of 350 acres of
property, the principal amount due to convertible debenture holders was
reduced by $782,000 and accrued interest thereon was reduced by $389,000
leaving a balance of $1,500,000. The debentures, with a maturity of July 8,
1997 accrue interest at 14% compounded quarterly. The Company's primary
lender credit agreements, however, prohibit the payment of interest until such
time as the primary lender loans are repaid. Each month, to the extent
interest on the Convertible Debentures is not paid in cash, the number of
shares into which the Convertible Debentures are convertible will increase.
If no interest is paid prior to maturity, at maturity the Convertible
Debentures purchased on July 24, 1989, will be convertible into 868,788 shares
and those purchased on September 29, 1989, will be convertible into 1,726,568
shares, or a total of 2,595,356 shares of common stock. The debentures are
convertible into common stock at an initial conversion price of $1.72 per
share. The conversion price may be adjusted upon the occurrence of certain
events.
Accrued interest was $2,604,000 and $2,076,000 at December 31, 1996 and
1995, respectively. The debentures are collateralized by a second mortgage on
an approximately 650-acre tract of land in Citrus County, Florida.
13. Income Taxes:
-------------
Reconciliation of the statutory federal income tax rates, 34% for the
years ended December 31, 1996 and 1995, to the Company's effective income tax
rates follows:
<PAGE> 30
<TABLE>
<CAPTION>
1996 1995
($ in thousands) ($ in thousands)
Percent of Percent of
Amount of Tax Pre-tax Loss Amount of Tax Pre-tax Loss
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Expected tax (credit) $ (984) (34.0%) $(830) (34.0%)
State income taxes, net of federal tax benefits (105) (3.6) (89) (3.6)
Current year unused book operating loss 1,089 37.6 919 37.6
------ ----- ----- -----
$ - -% $ - -%
====== ===== ===== =====
</TABLE>
At December 31, 1996, the Company had an operating loss carryforward of
approximately $34,000,000 which will expire at various dates through 2011. In
addition, the Company had unused investment tax credits of approximately
$215,000 which will expire at varying dates through 2004.
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Deferred tax asset:
Net operating loss carryover $ 12,531,000 $11,529,000
Adjustments to reduce land to net realizable value 12,000 12,000
Expenses capitalized under IRC 263(a) 56,000 50,000
ITC carryforward 215,000 250,000
Other 2,000 3,000
Valuation allowance (10,347,000) (9,364,000)
------------ -----------
2,469,000 2,480,000
Deferred tax liability:
Basis difference of land and improvement inventories 2,453,000 2,453,000
Excess tax over book depreciation 16,000 27,000
------------ -----------
2,469,000 2,480,000
Net deferred tax asset $ 0 $ 0
============ ===========
</TABLE>
14. Capital Stock:
--------------
In March 1987 the Company sold in a private placement 1,875,000 shares
of its Class A cumulative convertible preferred stock to a limited partnership
("Partnership") for a purchase price of $7,500,000 cash ($4.00 per share).
The Company also converted $500,000 of indebtedness owed to a corporation
owned by the Company's former Chairman of the Board of Directors and members
of his family into 125,000 shares of the cumulative convertible preferred
stock.
The holders of the preferred stock are entitled to one vote per share
and, except as provided by law, will vote as one class with the holders of the
common stock. Class A preferred stockholders are also entitled to receive
cumulative dividends at the annual rate of $.32 per share, an effective yield
of 8%. Dividends accrued for an initial two year period and, at the
expiration of this period, preferred stockholders had the option of receiving
accumulated dividends, when and if declared by the Board of Directors, in cash
(unless prohibited by law or contract) or common stock. At December 31, 1996
cumulative preferred dividends in arrears totaled
<PAGE> 31
$5,336,000 ($640,000 of which related to the year ended December 31, 1996).
As of December 31, 1996, the preferred stock is callable or redeemable
at the option of the Company at $4.00 per share plus accrued and unpaid
dividends. In addition, the preferred stock will be entitled to preference of
$4.00 per share plus accrued and unpaid dividends in the event of liquidation of
the Company.
At December 31, 1996 the Company had reserved 6,684,341 common shares
for the conversion of debentures.
15. Quarterly Results:
------------------
Based on the prior evidence of losses ultimately being realized from
contract cancellations and accounts receivable sold with recourse, the Company
revised the process to estimate losses. Consequently, during the fourth
quarter of 1996, the provision for cancellation of contracts receivable was
reduced by $170,000 to allow for receivable balances which are past due only.
In addition, the estimated recourse liability for receivables sold was reduced
by $85,000. Another, similar reduction was made in a prior quarter.
16. Commitments and Contingencies:
------------------------------
The Company is a party to various legal proceedings incidental to the
normal operation of its business.
One instance of litigation involves Sugarmill Woods, Inc. and Citrus
County Tax Collector. In 1994, the Citrus County Tax Appraiser denied
agricultural exemption status for the undeveloped Sugarmill Woods property and
the Company was forced to sue the County to reclaim the tax benefit. In 1995,
the Citrus County Tax Appraiser again denied agricultural exemption status for
the undeveloped Sugarmill Woods property, but was overruled by the Value
Adjustment Board. As a result, the Tax Appraiser sued Sugarmill Woods, and
was again successful in denying the agricultural exemption for the property.
The Company has filed an appeal to reinstate the exemption. At this time the
outcome of the appeal cannot be determined.
The aggregate outstanding balances of receivables sold or exchanged with
recourse by the Company, not including those receivables associated with the
March 1988 financing transaction previously discussed in Notes 5 and 9,
totaled approximately $246,000 and $384,000 at December 31, 1996 and 1995,
respectively. Based on its collection experience with such receivables, the
Company maintained an allowance at December 31, 1996 and 1995 classified in
other liabilities, of approximately $66,000 and $252,000 respectively for the
recourse provisions related to all receivables sold.
Under the terms of the receivables sale agreements the Company must
repurchase contracts greater than 90 days past due or exchange current
contracts owned by the Company. The repurchase price is equal to the
outstanding principal balance of the delinquent contract plus accrued
interest. At December 31, 1996, sold contracts receivable greater than 90
days past due totaled approximately $66,000. The related accrued interest is
considered immaterial.
17. Related Party Transactions:
---------------------------
On March 28, 1996, the Company's primary lender, First Union National Bank
of Florida, a national banking association ("First Union") assigned to PGIP,
LLC., a Missouri limited liability company ("PGIP") all of First Union's
right, title and interest in and to the documents (the "Loan Documents")
evidencing and securing its primary credit agreements with the Company and the
Company's subsidiaries. See Note 2 for further details of this transaction.
During 1995, a certified public accounting firm in which the former
President of the Company is a partner was paid for rendered services totaling
$25,000. To conserve operating cash, the Company negotiated an agreement
whereby property was transferred at the same prices as would be paid by third
party purchasers for comparable
<PAGE> 32
property. Additional property to cover the cost of delinquent and current year
taxes, as well as transfer costs was also conveyed at the same value paid by
third party purchasers for comparable property.
In 1994, the Company moved its administration and accounting offices to
the offices of Love Real Estate Company ("LREC"). LREC, which is an affiliate
of Love-PGI, the Company's preferred shareholder is paid a fee of $8,350 per
month for the following:
1. Maintain books of original entry;
2. Prepare quarterly and annual SEC filings;
3. Coordinate the annual audit;
4. Assemble information for tax filing, review reports as prepared by
tax accountants and file same;
5. Track shareholder records through transfer agent;
6. Maintain policies of insurance against property and liability
exposure;
7. Handle payroll and benefits for Sugarmill location; and
8. Handle day-to-day accounting requirements.
In addition, the Company receives office space, telephone service and
computer service from LREC.
In 1996 and 1995, an affiliate of Love-PGI, the Company's Preferred
Shareholder, Love Investment Company made uncollateralized loans to the
Company, which at December 31, 1996 and 1995 had a total outstanding balance,
excluding accrued interest, of $325,000 and $60,000, respectively. Interest
charged on these loans was $17,700 and $300 for 1996 and 1995 respectively.
In September, 1995, the Company sold Promissory Notes and Mortgages with
principal balances of $180,000, to Love Real Estate Company Profit Sharing Plan
(1994), an affiliate company of Love-PGI Partners, the Company's Preferred
Shareholder.
Pursuant to the terms of the 1987 preferred stock private placement
agreement, the Company accrued $46,000 and $49,000 in management consulting
fees during 1996 and 1995, respectively, to a company affiliated with the
Partnership's managing general partner. Only $10,000 of these fees were paid
in 1995. See Secured Lender Transaction under Note 2.
In 1985 a corporation owned by the former Chairman of the Board and his
family made an uncollateralized loan to the Company which at December 31, 1996
had an outstanding balance, including accrued interest, of $357,000. Interest
accrued on this loan was $18,000 and $19,000 for 1996 and 1995 respectively.
In April 1985 the Company sold its former administration building,
located in Punta Gorda, Florida, to a corporation owned and operated by the
husband of the Company's former President, Secretary-Treasurer and
subsequently entered into a leaseback of a portion of the building on terms
similar to those negotiated by other tenants. During 1995, the Company paid
$7,000 in rent, common area cost and utilities related to this leased office
space.
18. Fair Value of Financial Instruments
-----------------------------------
The following methods and assumptions were used to estimate the fair
value of each class of financial instrument for which it is practicable to
estimate that value:
Cash and Short-Term Investments:
The carrying amount approximates fair value because of the short
maturity of those instruments.
Real Estate Receivables:
The fair value of real estate receivables is estimated by discounting
the future cash flows using current rates at which similar receivables would
be made to borrowers with similar credit ratings and for the same remaining
maturities.
<PAGE> 33
Long-Term Debt:
The fair value of the Corporation's long-term debt with its primary
lender is estimated based on the 1996 purchase price by PGIP as discussed in
Note 2. It was not practicable to estimate the fair value of the remaining
notes payable because the other notes are in default and no basis for
estimating value by reference to quoted market prices or on current rates
offered to the Corporation for debt of the same remaining maturities.
Accounts Payable:
The carrying amount approximates fair value because of the short-term
maturity of those debts. The estimated fair values of the Corporations'
financial instruments are as follows:
<TABLE>
<CAPTION>
Carrying Fair
1996 Amount Value
---- ------ -----
<S> <C> <C>
Cash and short-term investments $ 1,152,000 $1,152,000
Principal plus accrued interest
receivable on real estate $ 318,000 318,000
Accounts payable $ 78,000 $ 78,000
Long-term debt
Primary Lender $ 9,768,000 $5,548,000
Other $22,555,000 -
</TABLE>
19. Subsequent Events
-----------------
On January 31, 1997, the Company and an unrelated, nonprofit corporation
entered into an agreement in which the corporation purchased an option to
acquire certain real estate owned by the Company. The exclusive option is to
purchase an estimated 4,900 acres of real property located in Florida for
$2,816.43 per acre. The aggregate purchase price based on the option price
and the estimated acres is $13,770,000. The Corporation, at its discretion,
can exercise the option prior to May 28, 1997.
Item 8. Disagreements on Accounting and Financial Disclosure
- ------- ----------------------------------------------------
Not Applicable.
PART III
--------
Item 9. Directors and Executive Officers of the Registrant;
- ------- --------------------------------------------------
Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------
The following information, regarding executive officers and directors of
the Company, is as of March 25, 1997.
Position with Company and Business
----------------------------------
Name and Age Experience During Last Five Years
- ------------ ---------------------------------
Laurence A. Schiffer Director of the Company since April 1987;
(age 57) President and Chief Executive Officer of the
Company since February 1994; Vice Chairman of
the Board since May 1987; President and Chief
Executive Officer of Love Real Estate Company
and Love Investment Company since 1973; Chairman
of Heartland Bank and President of LSHC, the
parent company of Heartland Bank since December,
1985; Manager of PGIP since 1995; member of the
Real Estate Board of Metropolitan St. Louis and
the National Association of Real Estate Boards.
<PAGE> 34
Andrew S. Love, Jr. Chairman of the Company's Board of Directors
(age 53) since May 1987; Secretary since February 1994;
Chairman of the Board of Love Real Estate
Company and Secretary of Love Investment Company
since 1973; Partner in St. Louis based law firm
of Bryan, Cave, McPheeters & McRoberts until
1991; Director of Heartland Bank and Chairman of
LSHC, the parent company of Heartland Bank since
December 1985; Manager of PGIP since 1995.
Executive officers of the Company are appointed annually by the Board of
Directors to hold office until their successors are appointed and qualify.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- -------------------------------------------------------
As of March 25, 1995, the rights of the holders to convert the Preferred
Stock into Common Stock expired pursuant to the terms of the Certificate of
Designation. The Preferred Shareholders failed to file Forms 4 to reflect the
change in beneficial ownership as a result of the expiration of such
conversion rights.
Item 10. Executive Compensation
- -------- ----------------------
The Company's Chief Executive Officer is Mr. Laurence A. Schiffer.
Because of the Company's impaired financial condition, it does not compensate
Mr. Schiffer or Mr. Love, the Company's only other executive officer, for the
services they perform for the Company in that capacity. Management services
are provided to the Company by Love Real Estate Company ("LREC") pursuant to
that certain Management Consulting Agreement by and between the Company and
LREC dated March 25, 1987 (the "Management Agreement"). Mr. Schiffer is an
employee of, and receives an annual salary from LREC. Mr. Love receives only
a nominal salary from LREC. Neither the Company nor LREC maintains records
which would allow either of them to attribute any portion of the remuneration
Mr. Schiffer receives from LREC to the management services he performs for the
Company. See Item 12. "Certain Relationships and Related Party
Transactions" for additional information about the Management Agreement.
Neither Mr. Schiffer nor Mr. Love received fees from any source directly
attributable to their services as directors of the Company during 1996.
Item 11. Security Ownership of Certain Beneficial Owners and Management
- -------- --------------------------------------------------------------
The table below provides certain information as of March 25, 1997
regarding the beneficial ownership of the Common Stock and the Preferred
Stock by each person known by the Company to be the beneficial owner of more
than five percent of either the Common Stock or the Preferred Stock, each
director of the Company (which persons are also the Company's only executive
officers), and by virtue of the foregoing, the directors and executive officers
of the Company as a group.
<TABLE>
<CAPTION>
PERCENT OF
TOTAL PERCENT
----- OF TOTAL
COMMON PREFERRED COMMON PREFERRED VOTING
NAME STOCK STOCK STOCK<F1> STOCK POWER<F1>
---- ----- ----- --------- ----- ---------
<S> <C> <C> <C> <C> <C>
Estate of Harold Vernon 998,777<F2><F3> -- 30.1% -- 18.8%
Alfred M. Johns 312,401<F4> 125,000<F4> 9.4% 6.3% 8.2%
Love-PGI Partners, L.P. 385,516<F5> 1,875,000<F5> 11.6% 93.8% 42.5%
Andrew S. Love, Jr. 385,516<F6> 1,875,000<F6> 11.6% 93.8% 42.5%
Laurence A. Schiffer 385,516<F7> 1,875,000<F7> 11.6% 93.8% 42.5%
All executive officers
and directors as
a group (2 persons) 385,516<F8> 1,875,000<F8> 11.6% 93.8% 42.5%
<PAGE> 35
<FN>
<F1> The above table does not include 2,595,356 shares that may be received
upon conversion of the Company's Convertible Secured Debentures or
2,004,382 shares related to unpaid dividends on the issued and
outstanding shares of the Company's Preferred Stock. The Board of
Directors has indicated it may authorize the issuance of the additional
Common Stock, representing the dividends on the Class A Preferred Stock
unpaid as of April 25, 1995. If such shares are issued, L-PGI would
receive 1,861,069 of the shares and would control approximately 56.3% of
the Company vote and L-PGI together with Mr. Johns would control
approximately 64.2% of the Company vote. See Item 12. "Certain
Relationships and Related Transactions".
<F2> The shares of Common Stock owned by Mr. Vernon are currently in the
possession of the Federal Deposit Insurance Corporation ("FDIC") which
is the receiver for First American Bank and Trust, Lake Worth, Florida
("First American"). First American previously made a loan to Mr. Vernon
which was secured by these shares. The loan is in default and the
Company understands that the FDIC has the right, pursuant to a pledge
agreement, to vote the shares at any annual or special meeting of
shareholders.
<F3> Information obtained from filings made with the Securities and Exchange
Commission.
<F4> Sole voting and investment power over 302,401 shares of Common Stock;
shared voting and investment power over 10,100 shares of Common Stock
included in the table which are owned by Mr. Johns' wife; sole voting
and investment power over the 125,000 shares of Preferred Stock.
<F5> The controlling general partner of L-PGI is Love Investment Company, a
Missouri corporation owned by Mr. Love, Love family members and trusts,
the Estate of Martha Love Symington and Mr. Schiffer. Messrs. Love and
Schiffer serve as the executive officers and directors of Love
Investment Company. These shares are pledged to the FDIC, as successor
in interest to Germania Federal Savings and Loan ("Germania"), as
security for a loan made by Germania to L-PGI. L-PGI has the right to
vote these shares.
<F6> These shares are the same shares owned by L-PGI. Mr. Love is an
indirect owner of L-PGI. See Footnote 5 above and Item 12. "Certain
Relationships and Related Transactions" for more information.
<F7> These shares are the same shares owned by L-PGI. Mr. Schiffer is an
indirect owner of L-PGI. See Footnote 5 above and Item 12. "Certain
Relationships and Related Transactions" for more information.
<F8> These shares are the same shares reflected in Footnotes 5, 6 and 7.
See Footnote 5 above and Item 12. "Certain Relationships and Related
Transactions" for more information.
</TABLE>
Item 12. Certain Relationships and Related Transactions
- -------- ----------------------------------------------
The Company, in order to conserve cash and permit management to
concentrate on achieving a sale of all or a portion of the acreage, moved its
administration and accounting offices to the offices of LREC in St. Louis,
Missouri, in 1994. LREC, which is an affiliate of L-PGI, one of the Company's
preferred shareholders, is located at 212 South Central Avenue, Suite 100, St.
Louis, Missouri 63105. A fee of $8,350 per month is paid to LREC for the
following services:
1. Maintain books of original entry;
2. Prepare quarterly and annual SEC filings;
3. Coordinate the annual audit;
4. Assemble information for tax filing, review reports as prepared by
tax accountants and file same;
5. Track shareholder records through transfer agent;
6. Maintain policies of insurance against property and liability
exposure;
7. Handle payroll and benefits for Sugarmill location;
8. Handle day-to-day accounting requirements; and
9. Provide telephone and computer services.
<PAGE> 36
Although an amount is paid to LREC as reimbursement of expenses and as a
fee for providing management services to the Company, neither the Company nor
LREC maintain records which would allow them to attribute any portion of the
aforementioned $8,350 per month to reimbursement of particular expenses or to
payment for the management services performed for the Company by individual
employees of LREC, including Messrs. Love and Schiffer.
Effective as of March 25, 1987, the Company also entered into a
Management Consulting Agreement with LREC ("Management Agreement"). As a
consultant to the Company and in addition to the above services, LREC provides
services, including, but not limited to strategic planning, marketing and
financing as requested by the Company. In consideration for these consulting
services, the Company pays LREC a quarterly consulting fee of one-tenth of one
percent of the book value of the Company's assets, plus reasonable
out-of-pocket expenses. As of December 31, 1996 the book value of the
Company's assets was approximately $11.0 million. Consulting fees totaling
$46,000 and $49,000 were accrued during 1996 and 1995 respectively, of which
$10,000 was paid in 1995. In July 1992 accrued management fees were reduced
by $1,042,000 as partial consideration for the conveyance by the Company of
350 acres of property to L-PGI. Such property is part of the Property to be
sold pursuant to the Sale Agreement. The Management Agreement will continue
in effect until terminated upon 90 days prior written notice by a majority
vote of the Company's directors who have no financial interest in LREC or in
any LREC affiliated entity. Mr. Schiffer receives an annual salary from LREC
but none of such salary is directly allocated to management services to the
Company under the Management Agreement.
In 1989, the Company sold an aggregate $2,282,451 of its Convertible
Secured Debentures due April 30, 1991 (the "1989 Debentures"), in a private
placement to Love-1989 Florida Partners, L.P., a limited partnership. The
general partner of Love-1989 Florida Partners, L.P. is Love Investment
Company, which is owned by Mr. Love, Mr. Love's family members and trusts, the
Estate of Martha Love Symington and Mr. Schiffer. The purchase by Love-1989
Florida Partners, L.P. of the 1989 Debentures was funded in part with a loan
from L-PGI. Love-1989 Florida Partners, L.P. has since repaid the debt to
L-PGI in full, in part by transferring a portion of the 1989 Debentures held
by Love-1989 Florida Partners, L.P. to L-PGI. In July 1992, as partial
consideration for the conveyance of 350 acres of property, the Company was
able to retire the 1989 Debentures held by L-PGI in the principal amount of
$782,000 together with $389,000 in accrued interest. The maturity date on all
of the remaining 1989 Debentures was extended to July 8, 1997. The 1989
Debentures are in part collateralized by a second mortgage in favor of
Love-1989 Florida Partners, L.P. on approximately 650 acres of property owned
by the Company. The 350 acres and the 650 acres referred to above are included
in the Property under option for sale.
As of December 31, 1996, Love-1989 Florida Partners, L.P. held $796,950
principal amount of the 1989 Debentures with respect to which there was at
that date accrued and unpaid interest in the amount of $1,399,397. Pursuant to
a transfer in 1990, $703,050 principal amount of the 1989 Debentures were
transferred by Love-1989 Florida Partners, L.P. to one of its (now former)
limited partners. That former limited partner continues to hold such
debentures and as of December 31, 1996
<PAGE> 37
there was accrued and unpaid interest with respect thereto in the amount of
$1,204,777. The Company's primary lender credit agreements held by PGIP,
however, prohibit the payment of interest on the 1989 Debentures until such
time as the primary lender loans are repaid. Each month, to the extent
interest on the 1989 Debentures are not paid in cash, the number of shares
into which they are convertible will increase. If no interest were paid prior
to maturity, at maturity the 1989 Debentures would be convertible into
2,595,356 shares of Common Stock. If the conversion rights of the 1989
Debentures were exercised in full, Love-1989 Florida Partners, L.P., and the
former limited partner would together directly control 61.6% of the Company's
voting stock, assuming no other conversions of convertible securities.
In 1985, a corporation owned by Alfred M. Johns, the former chairman,
and his family made an uncollateralized loan to the Company which at December
31, 1996 had an outstanding balance, excluding accrued interest, of $176,000.
For the past several years, First Union, the Company's former primary
bank lender, had been threatening to foreclose on substantially all of the
Company's real estate. This would have forced a liquidation of the Company.
To prevent foreclosure, Messrs. Love and Schiffer, who control a large portion
of the voting stock through their affiliation with L-PGI and who are the
Company's only directors and executive officers, formed PGIP in August 1995 to
purchase the Company's First Mortgage Indebtedness and to accept the
assignment from First Union of the first mortgage securing repayment of the
First Mortgage Indebtedness.
On March 28, 1996, First Union assigned to PGIP all of its right, title
and interest in and to the Loan Documents. At the time of the assignment, the
Company and its subsidiaries owed First Union approximately $9,007,000 in
principal and accrued interest.
PGIP purchased the First Mortgage Indebtedness for a total purchase
price of approximately $5,548,000 (previously defined as the "Purchase
Price"), including amounts paid by PGIP to First Union prior to the closing of
the purchase, or approximately 61.1% of the First Mortgage Indebtedness. The
assignment of the Loan Documents to PGIP was pursuant to the terms and
conditions of that certain Note and Loan Documents Purchase Agreement dated as
of October 12, 1995, by and between First Union, PGIP, the Company and certain
of its subsidiaries, as amended by letter agreements dated November 10, 1995,
December 15, 1995, January 17, 1996 and February 16, 1996 and as further
amended by that certain Modification of Note and Loan Documents Purchase
Agreement dated as of March 28, 1996.
PGIP borrowed $3,249,521 of the Purchase Price from First Union
(previously defined as the "PGIP Notes"). The PGIP Notes bear interest at the
prime rate as published in the Wall Street Journal plus 1% and matured on June
1, 1997. Interest on the PGIP Notes is payable monthly. As security for
payment of its obligations under the PGIP Notes, PGIP assigned back to First
Union all of its right, title and interest in and to the Loan Documents.
While PGIP was negotiating with First Union regarding the purchase of
the First Mortgage Indebtedness, First Union and the Company entered into a
series of forbearance agreements, so that First Union would not foreclose on
the Company's real estate. As a condition to First Union's execution of the
forbearance agreement, Purchaser paid First Union multiple nonrefundable
forbearance fees totaling $168,000 on December 31, 1995 ($273,000 as of March
28, 1996), which were applied to the purchase price of the Loan Documents. In
addition, upon execution of the Note Purchase Agreement, PGIP paid First Union
a nonrefundable initial loan purchase installment of $241,617 (previously
defined as the "Initial Purchase Payment") which was applied against the
Purchase Price which was paid at closing on March 28, 1996. The Initial Loan
Purchase Payment paid to First Union was used by First Union to pay the
Company's 1993 property tax owed to Citrus and Hernando Counties, Florida.
<PAGE> 38
Although First Union would have been willing to accept repayment of a
discounted amount from the Company in exchange for cancellation of the First
Mortgage Indebtedness, the Company was unable to take advantage of this
corporate opportunity because it did not have the liquidity, borrowing power
or ability to sell equity to raise the money necessary to take advantage of
it. That is the reason Messrs. Love and Schiffer formed PGIP to purchase the
First Mortgage Indebtedness.
The largest investor in PGIP is LSHC which holds a 72% interest and is a
manager of PGIP. Messrs. Andrew S. Love, Jr. and Laurence A. Schiffer own
approximately 52% of all the issued and outstanding voting stock of LSHC and
serve as the directors and officers of LSHC. Messrs. Love, Schiffer and LSHC
are the managers of PGIP.
As the purchaser of the Loan Documents, PGIP has a first mortgage on
the part of the Property owned by the Company and proposed to be sold to The
Nature Conservancy. PGIP accepted assignment of the Loan Documents, which
were in default and with respect to which the maturity of the First Mortgage
Indebtedness had been accelerated. The Company has been advised by PGIP that
it will be the policy of PGIP not to proceed with collection of the principal
and interest evidenced and secured by the Loan Documents so long as the
Company pursues satisfactory efforts to market and sell the property. PGIP's
policy, but not its contractual obligation, will be to facilitate sales of the
property by agreeing to the release of property to be sold from the lien of
the Loan Documents against payments of the net sale proceeds therefrom, after
all expenses, closing costs and the like incurred by the Company in connection
with any such sale, in a manner to be agreed upon by PGIP and the Company.
The bulk sale of the Property to The Nature Conservancy is an integral part of
the plan by which the Company intends to repay PGIP.
Pursuant to PGIP's operating agreement, all proceeds received from
repayment of the First Mortgage Indebtedness are to be distributed to its
members prorata with the percent of PGIP interests each owns. Because LSHC
owns 72% of PGIP, it will be entitled to 72% of any distributions PGIP makes
to its members from proceeds of the sale to The Nature Conservancy received
from the Company. Because Messrs. Love and Schiffer own 52% of LSHC, they
would be deemed to have "profited" by 52% of the amount that the distribution
to LSHC exceeds the amount LSHC paid for its PGIP interests.
In January 1997, Sugarmill Woods, Inc, the Company's wholly-owned
subsidiary, and L-PGI entered into a Sale Agreement with The Nature
Conservancy for the sale of approximately 5,240 acres of undeveloped real
estate to The Nature Conservancy. L-PGI, a Missouri limited partnership, is
managed by the general partner, Love Investment Company. Andrew S. Love, Jr.
is the Chairman and principal stockholder of Love Investment Company.
Sugarmill Woods, Inc. owns approximately 4,890 acres of the land under the
Sale Agreement and L-PGI owns the remaining 350 acres. See "Item 1. Business -
Recent Developments."
Messrs. Love and Schiffer have varying degrees of personal financial
stakes in the Company, Love-PGI Partners, L.P., Love-1989 Florida Partners,
L.P., Love Investment Company, Love Real Estate Company, Love Savings Holding
Company, and PGIP.
The Company believes that the foregoing transactions were on terms
comparable to those which would have been obtained from unaffiliated persons.
<PAGE> 39
Item 13. Exhibits, Financial Statement Schedules & Reports on Form 8-K
- -------- -------------------------------------------------------------
Form 10-KSB/A
-------------
(a) 1. Financial Statements Page No.
Report of Independent Accountants 18
Consolidated Statements of Financial Position
December 31, 1996 and 1995 19
Consolidated Statements of Operations
Years Ended December 31, 1996 and 1995 20
Consolidated Statements of Cash Flows Years
Ended December 31, 1996 and 1995 21-22
Consolidated Statements of Stockholders'
Deficiency years Ended December 31, 1996 and 1995 23
Notes to Consolidated Financial Statements 24-34
(a) 2. Exhibits
Reference is made to the Exhibit Index contained on pages 42 to 45
herein for a list of exhibits filed under this Item.
(b) Reports on Form 8-K.
None were filed in the fourth quarter of 1996.
(c) See the Exhibit Index contained on pages 42 to 45 herein for a list of
each management contract, compensatory plan or arrangement
required to be filed pursuant to Item 14(c) of this report:
Exhibits 10.1, 10.2, and 10.5.
(d) None
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of PGI Incorporated and subsidiaries on Form S-8 (File 2-77149) of
our report dated March 4, 1997 relating to the consolidated financial
statements and financial statement schedule of PGI Incorporated and
subsidiaries which report is included in this Annual Report on Form 10-KSB/A.
Our report contains an explanatory paragraph regarding uncertainty as to the
ability of the Company to continue as a going concern.
St. Louis, Missouri
March 31, 1997 /s/BDO Seidman
<PAGE> 40
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment to Form
10-KSB to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Louis, State of Missouri, on this 22nd day of
August, 1997.
PGI INCORPORATED
(Registrant)
By:/s/Laurence A. Schiffer
----------------------------
Laurence A. Schiffer, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Amendment to Form 10-KSB has been signed below by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/Andrew S. Love, Jr. Chairman of the Board August 22, 1997
- ------------------------- Secretary
Andrew S. Love, Jr.
/s/Laurence A. Schiffer Vice Chairman of the August 22, 1997
- ------------------------- Board, President,
Laurence A. Schiffer Principal Executive Officer,
Principal Financial Officer
and Principal Accounting Officer
</TABLE>
<PAGE> 41
<TABLE>
EXHIBIT INDEX
<C> <S>
3.1 Articles of Incorporation (filed as Exhibit 3.1 to Registrant's Form
10-K Annual Report for the year ended December 31, 1980 and
incorporated herein by reference).
3.2 Certificate of the Designation, Powers, Preferences and Relative
Rights, and the Qualifications, Limitations or Restrictions Thereof,
which have not been set forth in the Articles of Incorporation, of
the Class A Cumulative Convertible Preferred Stock, effective as of
March 24, 1987 (filed as Exhibit 3.2 to Registrant's Form 10-K Annual
Report for the year ended December 31, 1986 ("1986 Form 10-K") and
incorporated herein by reference).
3.3 Bylaws of Registrant, as amended September 1987 (filed as Exhibit 3.3
to Registrant's original Form 10-K Annual Report for the year ended
December 31, 1987 ("Original 1987 Form 10-K") dated as of March 29,
1987 and incorporated herein by reference).
3.4 Amendments to the Articles of Incorporation effective March 13, 1990
and July 27, 1990, dated as of November 13, 1990 (filed as Exhibit 19
to the September 30, 1990 Form 10-Q and incorporated herein by
reference).
3.5 Amendments to the Bylaws of Registrant by the Board of Directors of
PGI Incorporated by Unanimous Written Consent, dated as of March 17,
1995 (filed as Exhibit 3.5 to the December 31, 1995 Form 10KSB and
incorporated herein by reference).
4.1 Extension and Forbearance Agreement among PGI Incorporated, Punta
Gorda Developers, Inc., Burnt Store Marina, Inc., and Gulf Coast
Credit Corporation and BancFlorida (formerly Naples Federal Savings
and Loan Association), dated as of March 25, 1987 (filed as Exhibit
4.4 to the 1986 Form 10-K and incorporated herein by reference).
4.2 Seventh Mortgage and Loan Modification Agreement among PGI
Incorporated, Punta Gorda Developers, Inc., Burnt Store Marina, Inc.,
and Gulf Coast Credit Corporation and BancFlorida, dated as of March
25, 1987 (filed as Exhibit 4.5 to the 1986 Form 10-K and incorporated
herein by reference).
4.3 Eighth Mortgage and Loan Modification Agreement among PGI
Incorporated, Punta Gorda Developers, Inc., Burnt Store Marina, Inc.,
and Gulf Coast Credit Corporation and BancFlorida, dated as of March
25, 1987 (filed as Exhibit 4.6 to the 1986 Form 10-K and incorporated
herein by reference).
4.4 Restated Loan and Security Agreement among PGI Incorporated, Punta
Gorda Developers, Inc., Burnt Store Marina, Inc., and Gulf Coast
Credit Corporation and BancFlorida, as well as Restated Consolidating
Substituted Renewal Note and Future Advance Mortgage Note related
thereto, dated as of March 25, 1987 (filed as Exhibit 4.7 to the 1986
Form 10-K and incorporated herein by reference).
4.5 Forbearance Agreement among PGI Incorporated, Punta Gorda Developers,
Inc., Burnt Store Marina, Inc., and Gulf Coast Credit Corporation and
BancFlorida (Restated Loan Agreement No. 1), dated as of October 19,
1985 (filed as Exhibit 4.1 to the Registrant's Form 10-Q Quarterly
Report for the quarter ended September 30, 1985 and incorporated
herein by reference).
4.6 Amendment to Restated Loan Agreement No. 1(Receivables Loan), as well
as Restated Consolidating Substituted Renewal Note relating thereto,
dated as of March 25, 1987 (filed as Exhibit 4.9 to the 1986 Form
10-K and incorporated herein by reference).
<PAGE> 42
4.7 Extension, Forbearance and Modification Agreement between PGI
Incorporated, Punta Gorda Developers, Inc., Burnt Store Marina, Inc.
and Gulf Coast Credit Corporation, and BancFlorida, dated as of May
20, 1988 (filed as Exhibit 4.1 to Registrant's Form 10-Q Quarterly
Report for the quarter ended June 30, 1988 and incorporated herein by
reference).
4.8 Ninth Mortgage and Loan Modification Agreement between PGI
Incorporated, Punta Gorda Developers, Inc., Burnt Store Marina, Inc.
and Gulf Coast Credit Corporation, and BancFlorida, dated as of May
20, 1988 (filed as Exhibit 4.2 to Registrant's Form 10-Q Quarterly
Report for the quarter ended June 30, 1988 and incorporated herein by
reference).
4.9 Purchase Agreement among Finova Financial Services, PGI Incorporated
and Punta Gorda Developers, Inc., as well as certain Exhibits and the
Mortgage related thereto, dated March 15, 1988 (filed as Exhibit 1 to
Registrant's Form 8-K dated as of March 28, 1988 and incorporated
herein by reference).
4.10 Tenth Mortgage and Loan Modification Agreement between PGI
Incorporated, Punta Gorda Developers, Inc., as well as certain
Exhibits and the Mortgage related thereto, dated May 30, 1989 (filed
as Exhibit 1 to Registrant's Form 8-K dated as of June 8, 1989 and
incorporated herein by reference).
4.11 Eleventh Mortgage and Loan Modification among PGI Incorporated
(formerly Punta Gorda Isles, Inc.), Sugarmill Woods, Inc. (formerly
Punta Gorda Developers, Inc.), Burnt Store Marina, Inc. and Gulf
Coast Credit Corporation and BancFlorida (formerly Naples Federal
Savings and Loan Association), dated as of June 1, 1990 (filed as
Exhibit 4.2 to Registrant's Form 10-Q Quarterly Report for the
quarter ended June 30, 1990 and incorporated herein by reference).
4.12 Loan Forbearance Agreement among PGI Incorporated (formerly Punta
Gorda Isles, Inc.), Sugarmill Woods, Inc. (formerly Punta Gorda
Developers, Inc.), Burnt Store Marina, Inc. and Gulf Coast Credit
Corporation and BancFlorida (formerly Naples Federal Savings and
Loan Association), dated as of October 17, 1991 (filed as Exhibit
4.12 to Registrants Form 10-K dated March 30, 1994 and incorporated
herein by reference).
4.13 Twelfth mortgage and loan modification among PGI Incorporated,
Sugarmill Woods, Inc., Burnt Store Marina, Inc. and Gulf Coast Credit
Corporation and BancFlorida, dated as of July 8, 1992 (filed as
Exhibit 4.1 to Registrant's Form 8-K dated as of July 24, 1992, and
incorporated herein by reference).
4.14 Thirteenth mortgage and loan modification agreement among PGI
Incorporated, Sugarmill Woods, Inc., Burnt Store Marina, Inc., Gulf
Coast Credit Corporation and First Union, dated as of May 13, 1994
(filed as Exhibit 4.1 to Registrant's Form 8-K dated May 27, 1994 and
incorporated herein by reference).
<PAGE> 43
4.15 Forbearance Agreement dated as of October 12, 1995 by First Union
National Bank of Florida, PGI Incorporated, Sugarmill Woods, Inc.,
Burnt Store Marina, Inc., Gulf Coast Credit Corporation, Southern
Woods, Incorporated, Punta Gorda Isles, Inc., Deep Creek Utilities,
Inc., Burnt Store Utilities, Inc. and Sugarmill Woods Sales, Inc.
(filed as Exhibit 4(i) to Registrant's Form 8-K on November 1, 1995
and incorporated herein by reference).
4.16 Note and Loan Document Purchase Agreement dated as of October 12,
1995 by First Union National Bank of Florida, PGIP L.L.C., PGI
Incorporated, Sugarmill Woods, Inc., Burnt Store Marina, Inc., and
Gulf Coast Credit Corporation (filed as Exhibit 4(ii) to
Registrant's Form 8-K on November 1, 1995 and incorporated herein by
reference).
4.17 Note Purchase and Loan Transaction dated as of March 28, 1996, by
First Union National Bank of Florida, PGIP, LLC, PGI Incorporated,
Sugarmill Woods, Inc., Burnt Store Marina, Inc. and Gulf Coast Credit
Corporation.
9. Inapplicable.
10.1 PGI Incorporated Restated 1981 Incentive Stock Option
Plan, as amended (filed as Exhibit 10.1 to the Original
1987 Form 10-K and incorporated herein by reference).
10.2 PGI Incorporated 1987 Non-Qualified Stock Option and Stock
Appreciation Rights Plan (filed as Exhibit 10.2 to the Original 1987
Form 10-K and incorporated herein by reference).
10.3 Preferred Stock Purchase Agreement by and between PGI Incorporated
and Love Development and Investment Company, dated as of February 16,
1987 (filed as Exhibit (i) to the Registrant's Form 8-K Current
Report dated February 25, 1987 and incorporated herein by reference).
10.4 Form of Convertible Debenture Agreement due April 30, 1992 between
PGI Incorporated and Love-1989 Florida Partners, L.P. and Mortgage
and Security Agreement dated July 28, 1989 between Sugarmill Woods,
Inc. and Love-1989 Florida Partners, L.P. (filed as Exhibit 10.9 to
the Registrant's Form 10-K Annual Report for the year ended December
31, 1989 and incorporated herein by reference).
10.5 Consulting Agreement between PGI Incorporated and Love Real Estate
Company, dated as of March 25, 1987 (filed as Exhibit 10.7 to the
1986 Form 10-K and incorporated herein by reference).
10.6 Option Agreement For Sale and Purchase dated January 31, 1997,
between Sugarmill Woods, Inc., Love-PGI Partners, L.P., and The
Nature Conservancy.
11. Statements re: Computation of Per Share Earnings, filed herein on
page 46 of this Annual Report on Form 10-KSB/A.
12. Inapplicable.
13. Inapplicable.
<PAGE> 44
16. Coopers and Lybrand's letter to the SEC dated February 9, 1995 (filed
as Exhibit 16 to the Registrant's From 8-K dated February 9, 1995 and
incorporated herein by reference).
18. Inapplicable.
19. Inapplicable.
22. Inapplicable.
21. Subsidiaries of the Registrant, filed herein on page 47 of this
Annual Report on Form 10-KSB/A.
23. Inapplicable.
27. Financial Data Schedule.
</TABLE>
<PAGE> 1
MODIFICATION OF NOTE AND LOAN DOCUMENT PURCHASE AGREEMENT
---------------------------------------------------------
This MODIFICATION OF NOTE AND LOAN DOCUMENT PURCHASE AGREEMENT
("Modification"), dated and effective as of March 28, 1996, by and
between FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association
("Seller"), PGIP L.L.C., a Missouri limited liability company ("Buyer"),
and PGI INCORPORATED, SUGARMILL WOODS, INC., BURNT STORE MARINA, INC.
and GULF COAST CREDIT CORPORATION, all Florida corporations (collectively,
the "Borrowers").
RECITALS
--------
A. On or about October 12, 1995, Seller, Buyer and the Borrowers
entered into that certain Note and Loan Document Purchase Agreement
("Original Purchase Agreement") whereby Buyer agreed to purchase and Seller
agreed to sell, all of Seller's right, title and interest in and to that
certain Consolidated Renewal Promissory Note dated as May 13, 1994,
executed by Borrowers in favor of Seller, and that certain Future Advance
Note dated as of October 12, 1995, executed by Borrowers in favor of Seller
(together, the "Notes"), and those other documents listed on Schedule 1
----------
attached thereto (collectively and together with the Notes, "Loan Documents"),
all in accordance the terms and conditions set forth therein.
B. By those certain letter agreements ("Letter Agreements") dated
November 10, 1995, December 15, 1995, January 17, 1996, and February 16,
1996, respectively, the parties agreed to modify the Original Purchase
Agreement to provide that the closing of the transactions contemplated
thereby would occur on or before March 20, 1996. All terms used herein and
not defined herein shall have the meanings as set forth in the Original
Purchase Agreement, as modified by the Letter Agreements (the Original
Purchase Agreement as modified by the Letter Agreements, "Purchase
Agreement").
C. The Buyer has requested, and the Seller has agreed, that the
Purchase Agreement be modified in accordance with the terms and conditions
of this Modification Agreement.
AGREEMENT
---------
Now, Therefore, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Modification of Purchase Agreement. The Purchase Agreement is
----------------------------------
hereby modified as follows:
a. On the 9th line of Paragraph 1, the words "in immediately
available funds" shall be deleted and the words "in accordance with
Paragraph 3 below" substituted in their place.
<PAGE> 2
b. On the fifth line of Paragraph 3, the words "in immediately
available funds" shall be deleted and the following substituted in its place:
"by paying at least $1,760,000 in immediately available funds and
executing a promissory note in the amount of $2,988,001.65 and a
promissory note in the amount of $261,518.90 for the balance for
the purchase price, which promissory notes (together, "Purchase
Notes") shall be in substantially the form of Exhibit B attached
---------
hereto and hereby made a part hereof. The Purchase Notes shall be
secured by a collateral assignment of Notes, Mortgages and Loan
Documents executed by Buyer in favor of Seller, which collateral
assignment shall be in substantially the form attached hereto as
Exhibit C attached hereto and hereby made a part hereof. Buyer and
---------
Seller agree to execute such other documents and instruments as
Seller may reasonably deem to be necessary or desirable to carry
out the intent of this Purchase Agreement, including without
limitation the execution of UCC-3 assignments in connection with
the conveyance of the Loan Documents contemplated hereby and UCC-1
Financing Statements executed in connection with the collateral
assignment described above."
c. The following shall be added as Paragraph 28:
"Covenant of the Borrowers. Notwithstanding anything herein
--------------------------
to the contrary, until the Purchase Notes have been repaid in full,
the Borrowers agree that any and all payments made under the Notes,
the Mortgages and the Loan Documents on or after the date hereof,
shall be made directly to Seller. This obligation shall survive
the closing of the transactions contemplated by this Purchase
Agreement."
2. Miscellaneous.
-------------
a. The closing of the transactions contemplated by the Purchase
Agreement, as modified hereby, shall occur on or before March 28, 1996.
b. Except as modified herein, the Purchase Agreement shall remain
in full force and effect without modification thereto, and is hereby ratified
and affirmed.
c. This Modification will not constitute a novation of the effect
of discharging any liability or obligation evidenced by the Purchase Agreement.
d. This Modification shall be governed by and construed in
accordance with the laws of the state of Florida.
e. This Modification shall be binding upon and shall inure to the
benefit of Seller, Buyer and the Borrower, and their respective successors and
assigns.
-2-
<PAGE> 3
f. This Modification may be executed simultaneously in any
number of counterparts. Each counterpart shall be deemed to be an original,
and all such counterparts shall be constitute one and the same instrument.
This Modification together with the Purchase Agreement constitutes the entire
agreement between the parties relating to the subject matter hereof and
supersedes any prior agreement or communication between the parties.
g. The parties have the appropriate authority and have obtained
any authorizations necessary for them to enter into this Modification and
to perform all acts contemplated by this Modification, and to authorize the
person who executes the Modification on its behalf to do so to bind such party.
BUYER: SELLER:
PGIP L.L.C., a Missouri FIRST UNION NATIONAL BANK OF FLORIDA,
limited liability company a national banking association
By: /s/ Andrew S. Love Jr. By: /s/ Nelson T. Ritch III
------------------------------ -------------------------------
Name: Andrew S. Love Jr. Name: Nelson T. Ritch III
------------------------- --------------------------
Title: Manager Title: Asst. Vice Pres.
------------------------ -------------------------
BORROWERS:
PGI INCORPORATED, a Florida corporation
By: /s/ Laurence A. Schiffer
-------------------------------
Name: Laurence A. Schiffer
--------------------------
Title: President
-------------------------
SUGARMILL WOODS, INC.,
a Florida corporation
By: /s/ Laurence A. Schiffer
-------------------------------
Name: Laurence A. Schiffer
--------------------------
Title: President
-------------------------
BURNT STORE MARINA, INC.,
a Florida corporation
By: /s/ Laurence A. Schiffer
-------------------------------
Name: Laurence A. Schiffer
--------------------------
Title: President
-------------------------
-3-
<PAGE> 4
GULF COAST CREDIT CORPORATION,
a Florida corporation
By: /s/ Laurence A. Schiffer
-------------------------------
Name: Laurence A. Schiffer
--------------------------
Title: President
-------------------------
-4-
<PAGE> 5
EXHIBIT B
PURCHASE NOTE
<PAGE> 6
ALL DOCUMENTARY STAMP TAXES DUE IN CONNECTION WITH THIS PROMISSORY NOTE HAVE
BEEN PAID AND THE PROPER DOCUMENTARY STAMPS ARE AFFIXED TO THE COLLATERAL
ASSIGNMENT OF NOTES, MORTGAGES AND OTHER LOAN DOCUMENTS WHICH SECURES THIS
PROMISSORY NOTE, AND WHICH IS RECORDED OR SHALL BE RECORDED IN THE PUBLIC
RECORDS OF CITRUS COUNTY, FLORIDA, AND CANCELLED.
PROMISSORY NOTE
---------------
$2,988,001.65 St. Louis, Missouri
March 28, 1996
FOR VALUE RECEIVED, the undersigned, and if more than one, each of them
jointly and severally (hereinafter called "Maker") promises to pay to the
order of FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association
(together with any subsequent holder of this Note, hereinafter called
"Holder") at its office in Orlando, Florida, or at such other place as Holder
may from time to time designate, the principal sum of TWO MILLION NINE HUNDRED
EIGHTY EIGHT THOUSAND ONE AND 65/100 DOLLARS ($2,988,001.65), with interest
thereon from the date hereof at an adjustable interest rate of Prime (as
defined below) plus one percent (1.0%) per annum. For purposes of this Note,
"Prime" shall mean that rate of interest published in the Wall Street Journal
from time to time as the "prime rate", it being agreed that Prime is not
necessarily the lowest or best rate at any time charged by Holder. The foregoing
interest and principal will be payable in full on June 1, 1997.
The amounts due or to become due under this Note shall be paid as follows:
a. Commencing on May 1, 1996, and continuing on the first day of
each and every month thereafter, Maker shall pay all accrued and unpaid
interest.
b. A principal payment in the amount of $240,000.00 shall be
due and payable on June 30, 1996.
c. The entire outstanding unpaid principal balance together with
all accrued and unpaid interest and all other sums due hereunder shall be due
and payable on June 1, 1997 ("Maturity Date").
If any payment is more than 10 days late, Maker shall pay Holder, without
notice or demand, a late charge equal to 5% of the payment. The foregoing late
charge is provided to compensate Holder for its expense in collecting and
administering delinquent payments and is not to be construed as interest.
<PAGE> 7
After the maturity or due date of this Note, through acceleration or
otherwise, at the election of Holder, interest will accrue on the principal
balance remaining unpaid at the lesser of (i) Prime plus three percent (3.0%)
per annum, or (ii) the highest lawful rate.
All payments hereunder will first be credited to interest and lawful
charges then accrued and the remainder to principal.
All interest on this Note will be computed on the basis of the actual
number of days elapsed in a 360-day year.
The indebtedness evidenced by this Note, and all other indebtedness of
Maker to Holder, however and whenever incurred or evidenced, whether primary,
secondary, direct, indirect, absolute, contingent, sole, joint, or several,
due to become due, or which may be hereafter contracted or acquired, whether
arising in the ordinary course of business or otherwise (hereinafter with this
Note, collectively called "Liabilities") is secured inter alia by the property
----------
encumbered by security instruments listed in Schedule 1 attached hereto and
----------
hereby made a part hereof, including all proceeds thereof and rights in
connection therewith (which property, together with additions and
substitutions, is called the "Collateral"). Holder will have such rights
with respect to the Collateral as is authorized by law. The parties
expressly agree that all of the covenants, conditions, and agreements
contained in any mortgage securing this Note are hereby made a part of this
Note. If Maker has other loans with Holder, or if Maker takes out other loans
with Holder in the future, collateral securing those loans will also secure
this Note.
Maker, endorser, surety, guarantor, or other parties to this Note (all of
whom are hereinafter called "Obligor") jointly and severally agree as follows:
Additions to, releases, reductions, or exchanges of or substitutions for
the Collateral, payments on account of this loan or increases of the same, or
other loans made partially or wholly upon the Collateral, may from time to
time be made without affecting the provisions of this Note or the Liabilities
of any party hereto. If any of the Collateral is personal property, Holder
shall exercise reasonable care in the custody and preservation of the
Collateral in its possession, and will be deemed to have exercised
reasonable care if it takes such action for that purpose as Maker reasonably
requests in writing, but no omission to comply with any request of Maker will
of itself be deemed a failure to exercise reasonable care. Holder shall not be
bound to take any steps necessary to preserve any rights in the Collateral
against prior parties, and Maker shall take all necessary steps for such
purposes. Holder or its nominee need not collect interest on or principal of
any Collateral or give any notice with respect thereto.
Upon default, Maker shall, at the option of Holder and in addition to all
other remedies available to Holder, within one (1) day after demand, deposit
with Holder as part of the Collateral additional property which is satisfactory
to Holder.
Obligor will be in default under this Note upon: (a) nonpayment when due
of any interest or principal under this Note or under any other note executed
by Maker in favor of Lender, including without limitation, that certain
Promissory Note, dated even date herewith
-2-
<PAGE> 8
in the original principal amount of $261,518.90 (any and all other notes
executed by Maker in favor of Holder as herein collectively referred to as the
"Other Notes"); (b) failure of any Obligor to perform any agreement under this
Note or the Other Notes or otherwise a part of this loan transaction or to pay
in full, when due, any liability whatsoever to Holder or any installment
thereof or interest thereon, or failure to pay when due any premium upon any
life insurance policy held as collateral hereunder; (c) the death, dissolution,
termination of existence, insolvency, or business failure of any Obligor,
appointment of a receiver of any part of the property of any such party,
assignment for the benefit of creditors by or the commencement of any
proceedings in bankruptcy or insolvency by or against any Obligor; (d) the
entry of a judgment against any Obligor which is not satisfied or stayed with
appropriate bond within thirty (30) days; (e) the issuing of any attachment or
garnishment, or the filing of any lien, against any property of any obligor;
(f) the taking of possession of any substantial part of the property of any
Obligor at the instance of any governmental authority; (g) the merger,
consolidation, or reorganization of any Obligor; (h) falsity in any material
respect of, or any material omission in, any representation or statement made
to Holder by or on behalf of any Obligor in connection with this Note; (i) the
pledge, assignment, transfer, or granting of a security interest by any Obligor
of any equity in any of the Collateral without the written consent of Holder;
or (j) the failure to promptly deliver to Holder any and all payments made
under any and all loan documents held as collateral for this Note, including
without limitation, payments made under (i) that certain Consolidated Renewal
Promissory Note, dated as of May 13, 1994, executed by PGI Incorporated,
Sugarmill Woods, Inc., Burnt Store Marina, Inc. and Gulf Coast Credit
Corporation (collectively, "PGI Borrowers") and (ii) that certain Future
Advance Note, dated October 12, 1995 executed by the PGI Borrower in favor
of Holder.
Holder will have all of the rights and remedies of a creditor, mortgagee,
and secured party under all applicable law. Without limiting the generality of
the foregoing, upon the occurrence of any default under this Note, Holder may
at its option and without notice or demand: (1) declare the entire unpaid
principal and accrued interest accelerated and due and payable at once,
together with any and all other liabilities of any Obligor or any of such
liabilities selected by Holder; (2) set off against this Note all money owed
by Holder in any capacity to each or any Obligor whether or not due and also
set off against all other liabilities of each Obligor to Holder all money owed
by Holder in any capacity to any Obligor, and Holder will be deemed to have
exercised such right of setoff and to have made a charge against any such
money immediately upon the occurrence of such default although made or entered
on the books subsequent thereto; (3) demand, sue for, collect, or make any
compromise or settlement it deems desirable with reference to the Collateral;
and (4) take possession or control of any proceeds of the Collateral. To the
extent that any of the Collateral is personal property and the Holder elects
to proceed with respect to it in accordance with the Uniform Commercial Code,
then unless that Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Holder shall
give Maker reasonable notice of the time and place of any public or private
sale thereof. The requirement of reasonable notice will be met if such notice
is mailed, postage prepaid, to any Obligor at the address given below or at
any other address shown on the
-3-
<PAGE> 9
records of Holder at least twenty days before the time of sale. Upon
disposition of any Collateral after the occurrence of any default hereunder,
Maker will be and will remain liable for any deficiency; and Holder shall
account to Maker for any surplus, but Holder shall have the right to apply
all or part of such surplus (or to hold the same as a reserve) against any
and all other Liabilities of each or any Obligor to Holder.
Holder may, at any time whether or not this Note is due: (i) pledge or
transfer this Note and its interest in the Collateral, whereupon Holder may be
relieved of all duties and responsibilities hereunder and relieved from any and
all liability with respect to any Collateral so pledged or transferred, and
pledgee or transferee will for all purposes stand in the place of Holder
hereunder and have all the rights of Holder hereunder; (ii) transfer the whole
or any part of the Collateral into the name of itself or its nominee; (iii)
notify the Obligor on any Collateral to make payment to Holder of any amounts
due or to become due thereon; and (iv) exercise all other rights necessary or
required, in Holder's discretion, in order to protect its interests under this
Note.
In no event will Holder be entitled to unearned or unaccrued interest or
other charges or rebates, except as may be authorized by law; nor will any
such party be entitled or receive at any time any such charges not allowed or
permitted by law, or any interest in excess of the highest lawful rate. Any
payments of interest in excess of the highest lawful rate will be credited by
Holder on interest accrued or principal or both; except that Maker will have
an option to demand refund as to any such interest or charges in excess of the
highest lawful rate.
No delay or omission on the part of Holder in exercising any right
hereunder will operate as a waiver of such right or of any other rights under
this Note. Presentment, demand, protest, notice of dishonor, and all other
notices are hereby waived by each and every Obligor. Obligor, jointly and
severally, promises and agrees to pay all costs of collection and reasonable
attorney's fees, including reasonable attorney's fees of any suit, out of
court, in trial, on appeal, in bankruptcy proceedings or otherwise, incurred
or paid by Holder in enforcing this Note or preserving any right or interest
of Holder hereunder. All notices given in connection with this Note must be
sent by certified mail, return receipt requested, and will be deemed given
three days after mailing or upon actual receipt, whichever is sooner. Any
notice to Maker shall be addressed to Maker, Suite 1400, 515 Olive Street,
St. Louis, Missouri 63101, Attention: Laurence A. Schiffer or to any other
address shown on Holder's records.
Each Obligor hereby expressly consents to any and all extensions,
modifications, and renewals, in whole or in part, including but not limited to
changes in payment schedules and interest rates, and all delays in time of
payment or other performance which Holder may grant or permit at any time and
from time to time without limitation and without any notice to or further
consent of any Obligor. Each Obligor will also be bound by each of the
foregoing terms, without the requirement that Holder first go against any
security interest otherwise held by Holder.
-4-
<PAGE> 10
Each Obligor hereby expressly agrees to indemnify and hold Holder harmless
against any and all Florida documentary stamp taxes and/or intangible personal
property taxes which may be deemed to be due and payable in respect of this
Note, the indebtedness evidenced thereby and any instrument securing any
indebtedness evidenced thereby. In order to secure the performance and
discharge of Obligor's obligations under the immediately preceding sentence,
but not in lieu of such obligations, Obligor, upon execution of this Note,
will pay over to Holder sufficient funds to satisfy the Florida recurring
intangible personal property tax which shall become due and payable as of
January 1, 1997, with respect to the outstanding indebtedness evidenced by
this Note. Such deposit shall not be, nor be deemed to be, trust funds but
may be commingled with the general funds of Holder, and no interest shall be
payable in respect thereof. In the event of a default under any of the terms,
covenants and conditions of this Note, Holder may apply to the reduction of
the sum secured hereby, in such manner as Holder shall determine, any amount
under this Paragraph any amount remaining to Obligor's credit.
WAIVER OF JURY TRIAL. OBLIGOR AND HOLDER (BY ITS ACCEPTANCE OF THIS
--------------------
NOTE) HEREBY AGREE AS FOLLOWS: (A) EACH OF THEM KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION (AN "ACTION")
BASED UPON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE OR ANY
RELATED DOCUMENTS, INSTRUMENTS, OR AGREEMENTS (WHETHER ORAL OR WRITTEN AND
WHETHER EXPRESS OR IMPLIED AS A RESULT OF A COURSE OF DEALING, A COURSE OF
CONDUCT, A STATEMENT, OR OTHER ACTION OF EITHER PARTY); (B) NEITHER OF THEM
MAY SEEK A TRIAL BY JURY IN ANY SUCH ACTION; (C) NEITHER OF THEM WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION (IN WHICH A JURY TRIAL HAS BEEN WAIVED) WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED; AND (D)
NEITHER OF THEM HAS IN ANY WAY AGREED WITH OR REPRESENTED TO THE OTHER OF THEM
THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
MAKERS:
PGIP L.L.C., a Missouri limited liability
company
By:-------------------------------------
Name:--------------------------------
Title:-------------------------------
-5-
<PAGE> 11
SCHEDULE 1
----------
1. Collateral Assignment of Notes, Mortgages and Other Loan Documents dated
even date herewith, made by Maker in favor of Holder.
-6-
<PAGE> 12
ALL DOCUMENTARY STAMP TAXES DUE IN CONNECTION WITH THIS PROMISSORY NOTE HAVE
BEEN PAID AND THE PROPER DOCUMENTARY STAMPS ARE AFFIXED TO THE COLLATERAL
ASSIGNMENT OF NOTES, MORTGAGES AND OTHER LOAN DOCUMENTS WHICH SECURES THIS
PROMISSORY NOTE, AND WHICH IS RECORDED OR SHALL BE RECORDED IN THE PUBLIC
RECORDS OF CITRUS COUNTY, FLORIDA, AND CANCELLED.
PROMISSORY NOTE
---------------
$261,518.90 St. Louis, Missouri
March 28, 1996
FOR VALUE RECEIVED, the undersigned, and if more than one, each of them
jointly and severally (hereinafter called "Maker") promises to pay to the
order of FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association
(together with any subsequent holder of this Note, hereinafter called
"Holder") at its office in Orlando, Florida, or at such other place as Holder
may from time to time designate, the principal sum of TWO HUNDRED SIXTY
ONE THOUSAND FIVE HUNDRED EIGHTEEN AND 90/100 DOLLARS ($261,518.90), with
interest thereon from the date hereof at an adjustable interest rate of Prime
(as defined below) plus one percent (1.0%) per annum. For purposes of this
Note, "Prime" shall mean that rate of interest published in the Wall Street
Journal from time to time as the "prime rate", it being agreed that Prime is
not necessarily the lowest or best rate at any time charged by Holder. The
foregoing interest and principal will be payable in full on June 1, 1997.
The amounts due or to become due under this Note shall be paid as follows:
a. Commencing on May 1, 1996, and continuing on the first day of
each and every month thereafter, Maker shall pay all accrued and unpaid
interest.
b. The entire outstanding unpaid principal balance together with
all accrued and unpaid interest and all other sums due hereunder shall be due
and payable on June 1, 1997 ("Maturity Date").
If any payment is more than 10 days late, Maker shall pay Holder, without
notice or demand, a late charge equal to 5% of the payment. The foregoing late
charge is provided to compensate Holder for its expense in collecting and
administering delinquent payments and is not to be construed as interest.
After the maturity or due date of this Note, through acceleration or
otherwise, at the election of Holder, interest will accrue on the principal
balance remaining unpaid at the lesser of (i) Prime plus three percent (3.0%)
per annum, or (ii) the highest lawful rate.
<PAGE> 13
All payments hereunder will first be credited to interest and lawful
charges then accrued and the remainder to principal.
All interest on this Note will be computed on the basis of the actual
number of days elapsed in a 360-day year.
The indebtedness evidenced by this Note, and all other indebtedness of
Maker to Holder, however and whenever incurred or evidenced, whether primary,
secondary, direct, indirect, absolute, contingent, sole, joint, or several,
due to become due, or which may be hereafter contracted or acquired, whether
arising in the ordinary course of business or otherwise (hereinafter with this
Note, collectively called "Liabilities") is secured inter alia by the property
----------
encumbered by security instruments listed in Schedule 1 attached hereto and
----------
hereby made a part hereof, including all proceeds thereof and rights in
connection therewith (which property, together with additions and
substitutions, is called the "Collateral"). Holder will have such rights with
respect to the Collateral as is authorized by law. The parties expressly agree
that all of the covenants, conditions, and agreements contained in any
mortgage securing this Note are hereby made a part of this Note. If Maker has
other loans with Holder, or if Maker takes out other loans with Holder in the
future, collateral securing those loans will also secure this Note.
Maker, endorser, surety, guarantor, or other parties to this Note (all of
whom are hereinafter called "Obligor") jointly and severally agree as follows:
Additions to, releases, reductions, or exchanges of or substitutions for
the Collateral, payments on account of this loan or increases of the same, or
other loans made partially or wholly upon the Collateral, may from time to time
be made without affecting the provisions of this Note or the Liabilities of any
party hereto. If any of the Collateral is personal property, Holder shall
exercise reasonable care in the custody and preservation of the Collateral in
its possession, and will be deemed to have exercised reasonable care if it
takes such action for that purpose as Maker reasonably requests in writing,
but no omission to comply with any request of Maker will of itself be deemed
a failure to exercise reasonable care. Holder shall not be bound to take any
steps necessary to preserve any rights in the Collateral against prior parties,
and Maker shall take all necessary steps for such purposes. Holder or its
nominee need not collect interest on or principal of any Collateral or give any
notice with respect thereto.
Upon default, Maker shall, at the option of Holder and in addition to all
other remedies available to Holder, within one (1) day after demand, deposit
with Holder as part of the Collateral additional property which is satisfactory
to Holder.
Obligor will be in default under this Note upon: (a) nonpayment when due
of any interest or principal under this Note or under any other note executed
by Maker in favor of Lender, including without limitation, that certain
Promissory Note, dated even date herewith in the original principal amount of
$2,748,001.65 (any and all other notes executed by Maker in favor of Holder as
herein collectively referred to as the "Other Notes"); (b) failure of any
Obligor to perform any agreement under this Note or the Other Notes or
otherwise a part of this loan transaction or to pay in full, when due, any
liability whatsoever to Holder or any
-2-
<PAGE> 14
installment thereof or interest thereon, or failure to pay when due any
premium upon any life insurance policy held as collateral hereunder; (c) the
death, dissolution, termination of existence, insolvency, or business failure
of any Obligor, appointment of a receiver of any part of the property of any
such party, assignment for the benefit of creditors by or the commencement of
any proceedings in bankruptcy or insolvency by or against any Obligor; (d) the
entry of a judgment against any Obligor which is not satisfied or stayed with
appropriate bond within thirty (30) days; (e) the issuing of any attachment or
garnishment, or the filing of any lien, against any property of any obligor;
(f) the taking of possession of any substantial part of the property of any
Obligor at the instance of any governmental authority; (g) the merger,
consolidation, or reorganization of any Obligor; (h) falsity in any material
respect of, or any material omission in, any representation or statement made
to Holder by or on behalf of any Obligor in connection with this Note; (i) the
pledge, assignment, transfer, or granting of a security interest by any Obligor
of any equity in any of the Collateral without the written consent of Holder;
or (j) the failure to promptly deliver to Holder any and all payments made
under any and all loan documents held as collateral for this Note, including
without limitation, payments made under (i) that certain Consolidated Renewal
Promissory Note, dated as of May 13, 1994, executed by PGI Incorporated,
Sugarmill Woods, Inc., Burnt Store Marina, Inc. and Gulf Coast Credit
Corporation (collectively, "PGI Borrowers") and (ii) that certain Future
Advance Note, dated October 12, 1995 executed by the PGI Borrower in favor
of Holder.
Holder will have all of the rights and remedies of a creditor, mortgagee,
and secured party under all applicable law. Without limiting the generality of
the foregoing, upon the occurrence of any default under this Note, Holder may
at its option and without notice or demand: (1) declare the entire unpaid
principal and accrued interest accelerated and due and payable at once,
together with any and all other liabilities of any Obligor or any of such
liabilities selected by Holder; (2) set off against this Note all money owed
by Holder in any capacity to each or any Obligor whether or not due and also
set off against all other liabilities of each Obligor to Holder all money owed
by Holder in any capacity to any Obligor, and Holder will be deemed to have
exercised such right of setoff and to have made a charge against any such
money immediately upon the occurrence of such default although made or entered
on the books subsequent thereto; (3) demand, sue for, collect, or make any
compromise or settlement it deems desirable with reference to the Collateral;
and (4) take possession or control of any proceeds of the Collateral. To the
extent that any of the Collateral is personal property and the Holder elects
to proceed with respect to it in accordance with the Uniform Commercial Code,
then unless that Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Holder shall
give Maker reasonable notice of the time and place of any public or private
sale thereof. The requirement of reasonable notice will be met if such notice
is mailed, postage prepaid, to any Obligor at the address given below or at
any other address shown on the records of Holder at least twenty days before
the time of sale. Upon disposition of any Collateral after the occurrence of
any default hereunder, Maker will be and will remain liable for any
deficiency; and Holder shall account to Maker for any surplus, but Holder
shall have
-3-
<PAGE> 15
the right to apply all or part of such surplus (or to hold the same as a
reserve) against any and all other Liabilities of each or any Obligor to
Holder.
Holder may, at any time whether or not this Note is due: (i) pledge or
transfer this Note and its interest in the Collateral, whereupon Holder may be
relieved of all duties and responsibilities hereunder and relieved from any and
all liability with respect to any Collateral so pledged or transferred, and
pledgee or transferee will for all purposes stand in the place of Holder
hereunder and have all the rights of Holder hereunder; (ii) transfer the whole
or any part of the Collateral into the name of itself or its nominee; (iii)
notify the Obligor on any Collateral to make payment to Holder of any amounts
due or to become due thereon; and (iv) exercise all other rights necessary or
required, in Holder's discretion, in order to protect its interests under this
Note.
In no event will Holder be entitled to unearned or unaccrued interest or
other charges or rebates, except as may be authorized by law; nor will any
such party be entitled or receive at any time any such charges not allowed or
permitted by law, or any interest in excess of the highest lawful rate. Any
payments of interest in excess of the highest lawful rate will be credited by
Holder on interest accrued or principal or both; except that Maker will have
an option to demand refund as to any such interest or charges in excess of the
highest lawful rate.
No delay or omission on the part of Holder in exercising any right
hereunder will operate as a waiver of such right or of any other rights under
this Note. Presentment, demand, protest, notice of dishonor, and all other
notices are hereby waived by each and every Obligor. Obligor, jointly and
severally, promises and agrees to pay all costs of collection and reasonable
attorney's fees, including reasonable attorney's fees of any suit, out of
court, in trial, on appeal, in bankruptcy proceedings or otherwise, incurred
or paid by Holder in enforcing this Note or preserving any right or interest
of Holder hereunder. All notices given in connection with this Note must be
sent by certified mail, return receipt requested, and will be deemed given
three days after mailing or upon actual receipt, whichever is sooner. Any
notice to Maker shall be addressed to Maker, Suite 1400, 515 Olive Street,
St. Louis, Missouri 63101, Attention: Laurence A. Schiffer or to any other
address shown on Holder's records.
Each Obligor hereby expressly consents to any and all extensions,
modifications, and renewals, in whole or in part, including but not limited to
changes in payment schedules and interest rates, and all delays in time of
payment or other performance which Holder may grant or permit at any time and
from time to time without limitation and without any notice to or further
consent of any Obligor. Each Obligor will also be bound by each of the
foregoing terms, without the requirement that Holder first go against any
security interest otherwise held by Holder.
Each Obligor hereby expressly agrees to indemnify and hold Holder harmless
against any and all Florida documentary stamp taxes and/or intangible personal
property taxes which
-4-
<PAGE> 16
may be deemed to be due and payable in respect of this Note, the indebtedness
evidenced thereby and any instrument securing any indebtedness evidenced
thereby. In order to secure the performance and discharge of Obligor's
obligations under the immediately preceding sentence, but not in lieu of such
obligations, Obligor, upon execution of this Note will pay over to Holder
sufficient funds to satisfy the Florida recurring intangible personal property
tax which shall become due and payable as of January 1, 1997 with respect to
the outstanding indebtedness evidenced by this Note. Such deposit shall not
be, nor be deemed to be, trust funds but may be commingled with the general
funds of Holder, and no interest shall be payable in respect thereof. In the
event of a default under any of the terms, covenants and conditions of this
Note, Holder may apply to the reduction of the sum secured hereby, in such
manner as Holder shall determine, any amount under this Paragraph any amount
remaining to Obligor's credit.
WAIVER OF JURY TRIAL. OBLIGOR AND HOLDER (BY ITS ACCEPTANCE OF THIS
--------------------
NOTE) HEREBY AGREE AS FOLLOWS: (A) EACH OF THEM KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION (AN "ACTION")
BASED UPON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE OR ANY
RELATED DOCUMENTS, INSTRUMENTS, OR AGREEMENTS (WHETHER ORAL OR WRITTEN AND
WHETHER EXPRESS OR IMPLIED AS A RESULT OF A COURSE OF DEALING, A COURSE OF
CONDUCT, A STATEMENT, OR OTHER ACTION OF EITHER PARTY); (B) NEITHER OF THEM
MAY SEEK A TRIAL BY JURY IN ANY SUCH ACTION; (C) NEITHER OF THEM WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION (IN WHICH A JURY TRIAL HAS BEEN WAIVED) WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED; AND (D)
NEITHER OF THEM HAS IN ANY WAY AGREED WITH OR REPRESENTED TO THE OTHER OF THEM
THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
MAKERS:
PGIP L.L.C., a Missouri limited liability
company
By:-------------------------------------
Name:--------------------------------
Title:-------------------------------
-5-
<PAGE> 17
SCHEDULE 1
----------
1. Collateral Assignment of Notes, Mortgages and Other Loan Documents dated
even date herewith, made by Maker in favor of Holder.
-6-
<PAGE> 18
EXHIBIT C
COLLATERAL ASSIGNMENT OF NOTES,
MORTGAGES AND LOAN DOCUMENTS
<PAGE> 19
THIS INSTRUMENT PREPARED BY AND RETURN TO:
MICHAEL J. VIRGADAMO, ESQUIRE
CARLTON, FIELDS, WARD, EMMANUEL,
SMITH & CUTLER, P.A.
POST OFFICE BOX 3239
TAMPA, FLORIDA 33601
COUNTERPART ORIGINALS OF THIS COLLATERAL ASSIGNMENT OF NOTES, MORTGAGES AND
OTHER LOAN DOCUMENTS ARE BEING RECORDED IN CITRUS COUNTY AND HERNANDO COUNTY,
FLORIDA. FLORIDA DOCUMENTARY STAMP TAXES IN THE AMOUNT OF $11,373.00 ARE
BEING PAID UPON THE RECORDATION OF THIS INSTRUMENT IN CITRUS COUNTY, FLORIDA.
COLLATERAL ASSIGNMENT OF NOTES,
MORTGAGES AND OTHER LOAN DOCUMENTS
THIS COLLATERAL ASSIGNMENT OF NOTES, MORTGAGES AND OTHER LOAN DOCUMENTS
("Assignment") is made as of March 28, 1996 by PGIP L.L.C., a Missouri limited
----------
liability company ("Assignor"), having a mailing address of 515 Olive Street,
--------
Suite 1400, St. Louis, Missouri 63101, to and for the benefit of FIRST UNION
NATIONAL BANK OF FLORIDA, a national banking association ("Assignee"), having
--------
a mailing address of Special Assets Department (FL 2202), 800 North Magnolia,
Orlando, Florida 32802.
BACKGROUND
In connection with that certain Note and Loan Department Purchase
Agreement executed by and between Assignee, Assignor, and PGI Incorporated,
Sugarmill Woods, Inc., Burnt Store Marina, Inc., and Gulf Coast Credit
Corporation (collectively, "Borrowers") dated effective October 12, 1995, as
---------
amended by those certain letter agreements, dated November 10, 1995, December
15, 1995, January 17, 1996, and February 16, 1996, and as further amended
by that certain Modification of Note and Loan Document Purchase Agreement dated
and effective as of even date herewith (as amended, "Purchase Agreement"),
------------------
Assignor executed that certain Promissory Note in the original principal
amount of $2,988,001.65 in favor of Assignee ("Note A") and that certain
------
Promissory Note in the original principal amount of $261,518.90 in favor of
Assignee ("Note B"; Note B
------
<PAGE> 20
together with Note A, the "Notes"). As security for repayment of the Notes,
-----
Assignor has agreed to assign to Assignee all of Assignor's right, title and
interest in and to: (1) that certain Consolidated Renewal Promissory Note,
dated as of May 13, 1994, executed by Borrowers in favor of Assignee, in the
original principal amount of $7,001,615.29 ("Consolidated Note"), which
-----------------
Consolidated Note was assigned to Assignor pursuant to that certain Assignment
of Notes, Mortgages and Loan Documents executed by Assignee in favor
of Assignor dated effective of even date herewith ("Assignment of Notes");
-------------------
(2) that certain Future Advance Note, dated October 12, 1995, executed by
Borrowers in favor of Assignee, in the original principal amount of
$241,617.65 ("Future Advance Note"), which Future Advance Note was assigned
-------------------
to Assignor pursuant to the provisions of the Assignment of Notes; and (3) any
and all other documents evidencing or securing any portion of the indebtedness
evidenced by the Consolidated Note or the Future Advance Note, including
without limitation, the documents listed in Exhibit A attached hereto and
---------
made a part hereof (collectively, the "Other Loan Documents"), which Other
--------------------
Loan Documents were assigned to Assignor pursuant to the provisions of the
Assignment of Notes. Hereinafter, the Consolidated Note, the Future Advance
Note and the Other Loan Documents shall be referred to herein, collectively,
as the "Collateral Loan Documents."
-------------------------
OPERATIVE TERMS
The parties agree as follows:
1. As security for payment and satisfaction of all Assignor's
liabilities and obligations to Assignee, including without limitation,
Assignor's liability to Assignee under the Notes, Assignor hereby assigns to
Assignee and its successors and assigns all of Assignor's present and
hereafter acquired right, title, and interest in and to the Collateral Loan
Documents and in all money and payments that are due or to become due
(including interest and penalties) under the Collateral Loan Documents.
Concurrently with its execution of this Assignment, Assignor shall endorse
the Consolidated Note and the Future Advance Note payable to Assignee and
deliver the Collateral Loan Documents to Assignee; and, hereafter, at the
request of Assignee, Assignor shall execute and deliver to Assignee any other
documents and instruments as Assignee, in its sole discretion, determines are
necessary to perfect or maintain Assignee's security interest in the Collateral
Loan Documents. Assignor hereby irrevocably appoints Assignee as Assignor's
attorney-in-fact to execute and file on Assignor's behalf any financing
statements, and any refilings and continuations thereof, as Assignee deems
necessary or appropriate to perfect Assignee's security interests granted in
this Assignment.
2. The parties intend that this instrument create a present assignment
of the Collateral Loan Documents. Until all amounts due under the Notes have
been repaid in full, Assignor shall not collect any payments under the
Collateral Loan Documents. If Assignor receives any such payment from the
Borrowers before all amounts due under the Notes have been repaid in full,
Assignor shall be deemed to be holding the same in trust for Assignee
2
<PAGE> 21
and shall immediately deliver the same to Assignee. Upon repayment of all sums
due pursuant to the Notes in full, Assignee shall endorse the Consolidated
Note and Future Advance Note payable to Assignor and assign the Collateral
Loan Documents to Assignor and release this Assignment and any and all other
assignments, pledges or UCC's held by Assignee in connection with this
Assignment. THE BORROWERS ARE HEREBY IRREVOCABLY AUTHORIZED AND DIRECTED BY
ASSIGNOR TO MAKE ALL PAYMENTS UNDER THE COLLATERAL LOAN DOCUMENTS DIRECTLY
TO ASSIGNEE UNTIL THE NOTES HAVE BEEN PAID IN FULL AND TO RELY UPON ANY AND
ALL INSTRUCTIONS FROM ASSIGNEE, WITHOUT HAVING ANY RIGHT OR DUTY TO INQUIRE
AS TO WHETHER AN EVENT OF DEFAULT HAS OCCURRED UNDER THIS ASSIGNMENT OR THE
NOTES.
3. Assignor represents and warrants to Assignee that (a) Assignor has
received consideration sufficient to induce Assignor to execute and deliver
this Assignment and to perform all its obligations under this Assignment;
(b) Assignor has full authority to execute, deliver and perform its obligations
under this Assignment; (c) upon the delivery to Assignee of this Assignment
and the Collateral Loan Documents, Assignee will have a first perfected
security interest in the Collateral Loan Documents, and no person or entity,
other than Assignor, Assignee and the Borrowers will have any interest in the
respective Collateral Loan Documents; and (d) each of the Collateral Loan
Documents is enforceable in accordance with its respective terms, and, the
Borrowers have no defenses, counterclaims, or offsets to its obligations under
the Collateral Loan Documents.
4. Assignor covenants not to sell, assign, hypothecate, encumber,
amend, subordinate, modify, renew, replace or accept any prepayment (by
acceleration or otherwise) of the Collateral Loan Documents without the prior
written consent of Assignee. If any of the foregoing events occurs (with or
without the consent of Assignee), Assignor immediately shall notify Assignee
of the occurrence of the event, and Assignee, in its sole discretion and
without limiting any other of its rights under this Assignment, may require
Assignor to prepay the Note by the full amount of the consideration, proceeds,
or payments received by Assignor in connection with the event.
5. Assignor shall timely perform all its obligations under the
Collateral Loan Documents and immediately shall notify Assignee of any default
or breach by Assignor or the Borrowers under the Collateral Loan Documents.
Assignor shall not, without the prior written consent of Assignee, (i) waive
any breach or default by the Borrowers under the terms of the Collateral Loan
Documents, (ii) permit any modification or termination of the Collateral Loan
Documents or (iii) release any of the collateral encumbered by the Mortgages
on the Other Loan Documents.
6. If the Borrowers default under the Collateral Loan Documents (i) by
permitting or committing any waste, impairment or deterioration of the
property encumbered by the Collateral Loan Documents or taking any action
which would increase the risk of damage to such property, (ii) by failing to pay
promptly when due any and all taxes, assessments, dues, charges, fees, levies,
fines, impositions, liabilities and encumbrances of every kind, now or
hereafter imposed, levied or assessed upon or against the property encumbered
by the Collateral Loan Documents, or (iii) by selling, conveying, transferring,
3
<PAGE> 22
leasing, or further encumbering the property encumbered by the Collateral Loan
Documents without making the appropriate principal reduction payment
thereunder, then, Assignee, at its sole option, may, at Assignor's sole
expense, on Assignee's own behalf or otherwise, enforce the Collateral Loan
Documents and exercise any or all other remedies available to Assignor under
the Collateral Loan Documents with or without joining Assignor as a party. The
foregoing rights of Assignee are cumulative, and Assignee may exercise any one
or more of them without waiving its rights to exercise the others.
7. If Assignor becomes obligated under this Assignment to pay any
amounts to Assignee, such amounts will be secured by this Assignment and
Assignor promptly shall pay such amounts to Assignee, together with interest
thereon, from the date when due, at the maximum rate allowable under applicable
law. At its option, Assignee may collect any or all such amounts, together
with accrued interest, if any, from payments by the Borrowers under the
Consolidated Note and Future Advance Note.
8. This Assignment does not create any obligation or liability on the
part of Assignee, and Assignor shall indemnify Assignee from any claim, costs,
expense or liability incurred by Assignee as a result of this Assignment,
including, without limitation, attorneys' and paralegals' fees and costs
incurred in the enforcement of this Assignment (including, without
limitation, attorneys' and paralegals' fees and costs incurred in any
litigation, mediation, arbitration, bankruptcy and administrative proceedings,
and any appeals therefrom).
9. Upon payment in full of the indebtedness evidenced by the Note and
the satisfaction in full of all other obligations of Assignor under this
Assignment, Assignee shall reassign the Collateral Loan Documents to
Assignor, and this Assignment will be null and void and have no further force
or effect.
10. This Assignment binds and inures to the benefit of the respective
successors and assigns of Assignor and Assignee.
SIGNED, SEALED AND DELIVERED ASSIGNOR:
IN THE PRESENCE OF:
PGIP L.L.C., a Missouri limited
liability company
- ----------------------------------
(Signature)
- ---------------------------------- By:------------------------------------
(Printed Name) Name:-----------------------------
Title:----------------------------
- ----------------------------------
(Signature)
- ----------------------------------
(Printed Name)
4
<PAGE> 23
ASSIGNEE:
FIRST UNION NATIONAL
BANK OF FLORIDA, a national
banking association
- ---------------------------------- [CORPORATE SEAL]
(Signature)
- ---------------------------------- By:------------------------------------
(Printed Name) Name:-----------------------------
Title:----------------------------
- ----------------------------------
(Signature)
- ----------------------------------
(Printed Name)
STATE OF---------------
COUNTY OF--------------
The foregoing instrument was acknowledged before me this ------ day
of ------, 1996, by -------------------------------- as ----------------------
of PGIP L.L.C., a Missouri limited liability company, on behalf of the company.
He/She is personally known to me or has produced ----------- (state) driver's
license no.--------------------------------------- as identification.
My Commission Expires: ---------------------------------------
Notary Public (Signature)
(AFFIX NOTARY SEAL) ---------------------------------------
(Printed Name)
---------------------------------------
(Title or Rank)
---------------------------------------
(Serial Number, if any)
5
<PAGE> 24
STATE OF---------------
COUNTY OF--------------
The foregoing instrument was acknowledged before me this ------ day
of ------, 1996, by -------------------------------- as ----------------------
of FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association, on
behalf of the company. He/She is personally known to me or has produced
- ----------- (state) driver's license no.--------------------- as identification.
My Commission Expires: ---------------------------------------
Notary Public (Signature)
(AFFIX NOTARY SEAL) ---------------------------------------
(Printed Name)
---------------------------------------
(Title or Rank)
---------------------------------------
(Serial Number, if any)
6
<PAGE> 25
EXHIBIT A
---------
LOAN DOCUMENTS
--------------
1. Substitute Renewal Mortgage No. 1, dated as of October 19, 1985,
executed by Borrowers in favor of Naples, and recorded in the Public
Records of Citrus County, Florida at O.R. Book 682, Page 2140, and in
the Public Records of Hernando County, Florida, at O.R. Book ---,
Page ----, as each of the same may have been amended from time to time.
2. Substitute Renewal Mortgage No. 2, dated as of October 19, 1985,
executed by Punta Gorda Isles, Inc., Punta Gorda Developers, Inc. and
Burnt Store Marina, Inc. in favor of The First National Bank of Chicago,
as Agent ("FNBC"), and recorded at O.R. Book 837, Page 959 of the
----
Public Records of Charlotte County, Florida, and recorded at O.R.
Book 682, Page 1952 of the Public Records of Citrus County, Florida,
which Substitute Renewal Mortgage No. 2 was assigned by FNBC to Naples
pursuant to: (i) that certain Assignment of Mortgage recorded at
O.R. Book 683, Page 187 of the Public Records of Citrus County, Florida,
(ii) that certain Assignment of Mortgages recorded at O.R. Book 683,
Page 190 of the Public Records of Citrus County, Florida and O.R.
Book 683, Page 195 of the Public Records of Citrus County, Florida,
as the same may have been amended from time to time.
3. Restated Loan Agreement No. 1, dated October 19, 1985, executed between
Naples and Borrowers as the same may have been amended from time to time.
4. Divided Security Agreement and Pledge of Collateral No. 1, dated
October 19, 1985, executed by Borrowers in favor of Naples, as the same
may have been amended from time to time.
5. Divided Assignment of Notes, Mortgages, Contracts and Agreements for Deed
No. 1 dated as of October 19, 1985, executed by Borrowers in favor of
Naples, as the same may have been amended from time to time.
6. Platinum Point Loan Documents, as described in that Thirteenth Mortgage
& Loan Modification Agreement, dated as of May 13, 1994, executed by and
between Borrowers and BancFlorida, a Federal Savings Bank, predecessor
in interest by merger to Lender.
7. Tugboat Loan Documents, as described in that Thirteenth Mortgage & Loan
Modification Agreement, dated as of May 13, 1994, executed by and
between Borrowers and BancFlorida, a Federal Savings Bank, predecessor
in interest by merger to Lender.
<PAGE> 26
8. Loan and Security Agreement, dated October 1, 1984, executed by PGI, PGD,
Marina, FNBC, CREI or FNB, as agent ("Land Loan Agreement"), a portion of
-------------------
which Agreement was assigned by FNBC and CREI to Naples pursuant to a
Note Purchase Agreement, dated October 19, 1985, as the same may have
been amended from time to time.
9. Loan and Security Agreement, dated as of October 1, 1984, executed among
PGI, PGD, Marina, FNBC, CREI and FNBC, as Agent, as the same may have
been modified from time to time ("FNBC Receivables Loan Agreement"),
-------------------------------
a portion of which Agreement was assigned by FNBC and CREI to Naples
pursuant to a Note Purchase Agreement, dated October 19, 1985, as the
same may have been amended from time to time.
10. Restated Loan and Security Agreement, dated as of March 25, 1987,
executed by and among Borrowers and Naples, as the same may have been
amended from time to time ["to be read in conjunction with Restated Loan
Agreement No. 1" - item 3 above]
11. Pledge Agreement, dated as of March 25, 1987, executed among Punta Gorda
Isles, Inc., Punta Gorda Developers, Inc. and Naples regarding stock
collateral, as the same may have been amended from time to time.
12. Security Agreement, dated March 25, 1987, executed among Borrowers and
Naples regarding blanket lien on all of Borrower's assets, as the same
may have been amended from time to time.
13. Together with Assignor's right, title and interest, if any, in any
additional security instruments securing the indebtedness under the
Consolidated Note and the Future Advance Note.
A-2
<PAGE> 27
Prepared By and Return to:
John P. McNearney, Esquire
Peper, Martin, Jensen, Maichel and Hetlage
720 Olive Street, 24th Floor
St. Louis, Missouri 63101-2398
ASSIGNMENT OF NOTES, MORTGAGES AND LOAN DOCUMENTS
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association,
("Assignor"), hereby assigns to PGIP L.L.C., a Missouri limited liability
--------
company ("Assignee"), without recourse, warranty or representation of any
--------
kind, except as expressly stated in paragraph 9 "Representations and Warranties
of Seller," of that certain Note and Loan Document Purchase Agreement, dated
as of October 12, 1995, by and between Assignor and Assignee (the "Agreement"),
---------
all of its right, title and interest in and to that certain Consolidated
Renewal Promissory Note, dated as of May 13, 1994, executed by PGI,
Incorporated, Sugarmill Woods, Inc., Burnt Store Marina, Inc. and Gulf Coast
Credit Corporation (collectively, "Borrowers") in favor of Assignor, in the
---------
original principal amount of $7,001,615.29 ("Consolidated Note"), that certain
-----------------
Future Advance Note, dated October 12, 1995, executed by Borrowers in favor of
Assignor, in the original principal amount of $241,617.25 ("Future Advance
--------------
Note"), and any other documents evidencing or securing any portion of the
- ----
indebtedness evidenced by the Consolidated Note or the Future Advance Note,
including, without limitation, the documents listed in Exhibit A attached
---------
hereto and made a part hereof to have and to hold forever.
WITNESSES: FIRST UNION NATIONAL BANK OF
FLORIDA, a national banking association
/s/ Margaret A. Reiman By: /s/ Nelson T. Ritch III
- ---------------------------------- ------------------------------------
Name: Margaret A. Reiman Name: Nelson T. Ritch III
----------------------------- -----------------------------
Title: Asst. Vice Pres.
----------------------------
/s/ John P. McNearney
- ----------------------------------
Name: John P. McNearney [CORPORATE SEAL]
-----------------------------
Date: 3/28/96
----------------------------------
Post Office Address:
Special Assets Department (FL 2202)
800 North Magnolia
Orlando, Florida 32802
<PAGE> 28
STATE OF FLORIDA
COUNTY OF ORANGE
The foregoing instrument was acknowledged before me this 28th day of
March, 1996, by Nelson T. Ritch III as Asst. Vice Pres. of First Union
National Bank of Florida, a national banking association, on behalf of the
Bank. He/she is personally known to me or has produced -------------- (state)
--
drivers license no. ------------ as identification.
My Commission Expires:
- ---------------------------------- /s/Margaret A. Reiman
---------------------------------------
[AFFIX MARGARET A. REIMAN (Signature)
NOTARY MY COMMISSION #CC 374628
SEAL] Expires: June 25, 1998 Margaret A. Reiman
Bonded Thru Notary Public Underwriters ---------------------------------------
(Printed Name)
---------------------------------------
(Title or Rank)
---------------------------------------
(Serial Number, if any)
-2-
<PAGE> 29
EXHIBIT A TO ASSIGNMENT
-----------------------
LOAN DOCUMENTS
--------------
1. Substitute Renewal Mortgage No. 1, dated as of October 19, 1985,
executed by Borrowers in favor of Naples, and recorded in the Public
Records of Citrus County, Florida at O.R. Book 682, Page 2140, and in
the Public Records of Hernando County, Florida, at O.R. Book ---,
Page ----, as each of the same may have been amended from time to time.
2. Substitute Renewal Mortgage No. 2, dated as of October 19, 1985,
executed by Punta Gorda Isles, Inc., Punta Gorda Developers, Inc. and
Burnt Store Marina, Inc. in favor of The First National Bank of Chicago,
as Agent ("FNBC"), and recorded at O.R. Book 837, Page 959 of the
----
Public Records of Charlotte County, Florida, and recorded at O.R.
Book 682, Page 1952 of the Public Records of Citrus County, Florida,
which Substitute Renewal Mortgage No. 2 was assigned by FNBC to Naples
pursuant to: (i) that certain Assignment of Mortgage recorded at
O.R. Book 683, Page 187 of the Public Records of Citrus County, Florida,
(ii) that certain Assignment of Mortgages recorded at O.R. Book 683,
Page 190 of the Public Records of Citrus County, Florida and O.R.
Book 683, Page 195 of the Public Records of Citrus County, Florida,
as the same may have been amended from time to time.
3. Restated Loan Agreement No. 1, dated October 19, 1985, executed between
Naples and Borrowers as the same may have been amended from time to time.
4. Divided Security Agreement and Pledge of Collateral No. 1, dated
October 19, 1985, executed by Borrowers in favor of Naples, as the same
may have been amended from time to time.
5. Divided Assignment of Notes, Mortgages, Contracts and Agreements for Deed
No. 1 dated as of October 19, 1985, executed by Borrowers in favor of
Naples, as the same may have been amended from time to time.
6. Platinum Point Loan Documents, as described in that Thirteenth Mortgage
& Loan Modification Agreement, dated as of May 13, 1994, executed by and
between Borrowers and BancFlorida, a Federal Savings Bank, predecessor
in interest by merger to Lender.
7. Tugboat Loan Documents, as described in that Thirteenth Mortgage & Loan
Modification Agreement, dated as of May 13, 1994, executed by and
between Borrowers and BancFlorida, a Federal Savings Bank, predecessor
in interest by merger to Lender.
8. Loan and Security Agreement, dated October 1, 1984, executed by PGI, PGD,
Marina, FNBC, CREI or FNB, as agent ("Land Loan Agreement"), a portion of
-------------------
which Agreement was assigned by FNBC and CREI to Naples pursuant to a
Note Purchase
<PAGE> 30
Agreement, dated October 19, 1985, as the same may have been amended from
time to time.
9. Loan and Security Agreement, dated as of October 1, 1984, executed among
PGI, PGD, Marina, FNBC, CREI and FNBC, as Agent, as the same may have
been modified from time to time ("FNBC Receivables Loan Agreement"),
-------------------------------
a portion of which Agreement was assigned by FNBC and CREI to Naples
pursuant to a Note Purchase Agreement, dated October 19, 1985, as the
same may have been amended from time to time.
10. Restated Loan and Security Agreement, dated as of March 25, 1987,
executed by and among Borrowers and Naples, as the same may have been
amended from time to time ["to be read in conjunction with Restated Loan
Agreement No. 1" - item 3 above]
11. Pledge Agreement, dated as of March 25, 1987, executed among Punta Gorda
Isles, Inc., Punta Gorda Developers, Inc. and Naples regarding stock
collateral, as the same may have been amended from time to time.
12. Security Agreement, dated March 25, 1987, executed among Borrowers and
Naples regarding blanket lien on all of Borrower's assets, as the same
may have been amended from time to time.
13. Together with Assignor's right, title and interest, if any, in any
additional security instruments securing the indebtedness under the
Consolidated Note and the Future Advance Note.
A-2
<PAGE> 31
THIS CONSOLIDATED RENEWAL PROMISSORY NOTE CONSOLIDATES, RENEWS AND RESTATES ALL
PRIOR NOTES MADE BY, AND ALL EXISTING INDEBTEDNESS OF, MAKER IN FAVOR OF
HOLDER, INCLUDING THOSE CERTAIN PROMISSORY NOTES LISTED IN THE ATTACHED
SCHEDULE 1 ("PRIOR NOTES"). THIS CONSOLIDATED RENEWAL PROMISSORY NOTE DOES NOT
CONSTITUTE A NEW OBLIGATION TO PAY MONEY AND THE PRINCIPAL AMOUNT OF THIS
CONSOLIDATED RENEWAL PROMISSORY NOTE IS EQUAL TO THE OUTSTANDING PRINCIPAL
BALANCE UNDER THE PRIOR NOTES. FLORIDA INTANGIBLE PERSONAL PROPERTY TAXES AND
FLORIDA DOCUMENTARY STAMP TAXES DUE IN CONNECTION WITH THE PRIOR NOTES AND
THE INDEBTEDNESS EVIDENCED HEREBY WERE PAID UPON RECORDATION OF THE
INSTRUMENTS DESCRIBED IN THE ATTACHED SCHEDULE 2, AND THE AMENDMENTS THERETO.
ALL THE ORIGINALS OF PRIOR NOTES WHICH REMAIN IN HOLDER'S POSSESSION ARE
ATTACHED HERETO AND MARKED "PAID BY RENEWAL".
CONSOLIDATED RENEWAL PROMISSORY NOTE
------------------------------------
$7,001,615.29 St. Louis, Missouri
May 13, 1994
FOR VALUE RECEIVED, the undersigned, and if more than one, each of them
jointly and severally (hereinafter called "Maker") promises to pay to the order
of FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association
(together with any subsequent holder of this Note, hereinafter called
"Holder") at its office in Orlando, Florida, or at such other place as Holder
may from time to time designate, the principal sum of SEVEN MILLION ONE
THOUSAND SIX HUNDRED FIFTEEN AND 29/100 DOLLARS ($7,001,615.29), with interest
thereon from the date hereof at an adjustable interest rate of Prime (as
defined below) plus one and one-half percent (1.5%) per annum. For purposes of
this Note, "Prime" shall mean that rate of interest published in the Wall
Street Journal from time to time as the "prime rate", it being agreed that
Prime is not necessarily the lowest or best rate at any time charged by Holder.
The foregoing interest and principal will be payable in full on June 1, 1997.
The amounts due or to become due under this Note shall be paid as follows:
(a) On November 16, 1995, Maker shall pay all accrued and
unpaid interest.
(b) Commencing on December 1, 1995 and continuing on the first day
of each and every month thereafter, Maker shall pay all accrued and unpaid
interest.
<PAGE> 32
(c) The entire outstanding unpaid principal balance together with
all accrued and unpaid interest and all other sums due hereunder shall be due
and payable on June 1, 1997 ("Maturity Date").
If any payment is more than 10 days late, Maker shall pay Holder, without
notice or demand, a late charge equal to 5% of the payment. The foregoing
late charge is provided to compensate Holder for its expense in collecting and
administering delinquent payments and is not to be construed as interest.
After the maturity or due date of this Note, through acceleration or
otherwise, interest will accrue on the principal balance remaining unpaid at
the highest lawful rate until paid.
All payments hereunder will first be credited to interest and lawful
charges then accrued and the remainder to principal.
All interest on this Note will be computed on the basis of the actual
number of days elapsed in a 360-day year.
The indebtedness evidenced by this Note, and all other indebtedness of
Maker to Holder, however and whenever incurred or evidenced, whether primary,
secondary, direct, indirect, absolute, contingent, sole, joint, or several,
due to become due, or which may be hereafter contracted or acquired, whether
arising in the ordinary course of business or otherwise (hereinafter with this
Note, collectively called "Liabilities") is secured inter alia by the property
----------
encumbered by security instruments listed in Schedule 3 attached hereto and
hereby made a part hereof, including all proceeds thereof and rights in
connection therewith (which property, together with additions and
substitutions, is called the "Collateral"). Holder will have such rights
with respect to the Collateral as is authorized by law. The parties
expressly agree that all of the covenants, conditions, and agreements
contained in any mortgage securing this Note are hereby made a part of this
Note. If Maker has other loans with Holder, or if Maker takes out other loans
with Holder in the future, collateral securing those loans will also secure
this Note.
Maker, endorser, surety, guarantor, or other parties to this Note (all of
whom are hereinafter called "Obligor") jointly and severally agree as follows:
Additions to, releases, reductions, or exchanges of or substitutions for
the Collateral, payments on account of this loan or increases of the same, or
other loans made partially or wholly upon the Collateral, may from time to
time be made without affecting the provisions of this Note or the Liabilities
of any party hereto. If any of the Collateral is personal property, Holder
shall exercise reasonable care in the custody and preservation of the
Collateral in its possession, and will be deemed to have exercised
reasonable care if it takes such action for that purpose as Maker reasonably
requests in writing, but no omission to comply with any request of Maker will
of itself be deemed a failure to exercise reasonable care. Holder shall not be
bound to take any steps necessary to preserve any rights in the
<PAGE> 33
Collateral against prior parties, and Maker shall take all necessary steps for
such purposes. Holder or its nominee need not collect interest on or principal
of any Collateral or give any notice with respect thereto.
If the Collateral at any time becomes unsatisfactory to Holder, or if
Holder at any time deems itself insecure, or upon default, Maker shall, at the
option of Holder and in addition to all other remedies available to Holder,
within one (1) day after demand, deposit with Holder as part of the Collateral
additional property which is satisfactory to Holder.
Obligor will be in default under this Note upon: (a) nonpayment of any
interest or principal under this Note when due; (b) failure of any Obligor to
perform any agreement under this Note or otherwise a part of this loan
transaction or to pay in full, when due, any liability whatsoever to Holder or
any installment thereof or interest thereon, or failure to pay when due any
premium upon any life insurance policy held as collateral hereunder; (c) the
death, dissolution, termination of existence, insolvency, or business failure
of any Obligor, appointment of a receiver of any part of the property of any
such party, assignment for the benefit of creditors by or the commencement of
any proceedings in bankruptcy or insolvency by or against any Obligor; (d) the
entry of a judgment against any Obligor; (e) the issuing of any attachment or
garnishment, or the filing of any lien, against any property of any obligor;
(f) the taking of possession of any substantial part of the property of any
Obligor at the instance of any governmental authority; (g) the merger,
consolidation, or reorganization of any Obligor; (h) the determination by Holder
that a material adverse change has occurred in the financial condition of any
Obligor from the condition set forth in the most recent financial statement of
such Obligor heretofore furnished to Holder or from the condition of such
Obligor as heretofore most recently disclosed to Holder in any manner;
(i) falsity in any material respect of, or any material omission in, any
representation or statement made to Holder by or on behalf of any Obligor in
connection with this Note; (j) the pledge, assignment, transfer, or granting
of a security interest by any Obligor of any equity in any of the Collateral
without the written consent of Holder.
Holder will have all of the rights and remedies of a creditor, mortgagee,
and secured party under all applicable law. Without limiting the generality of
the foregoing, if Holder deems itself insecure or upon the occurrence of any
default under this Note, Holder may at its option and without notice or demand:
(1) declare the entire unpaid principal and accrued interest accelerated and
due and payable at once, together with any and all other liabilities of any
Obligor or any of such liabilities selected by Holder; and (2) set off against
this Note all money owed by Holder in any capacity to each or any Obligor
whether or not due and also set off against all other liabilities of each
Obligor to Holder all money owed by Holder in any capacity to any Obligor, and
Holder will be deemed to have exercised such right of setoff and to have made
a charge against any such money immediately upon the occurrence of such
default although made or entered on the books subsequent thereto. To the
extent that any of the Collateral is personal property and the Holder elects
to proceed with respect to it in accordance with the Uniform Commercial Code,
then unless that Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized
-3-
<PAGE> 34
market, Holder shall give Maker reasonable notice of the time and place of any
public or private sale thereof. The requirement of reasonable notice will be
met if such notice is mailed, postage prepaid, to any Obligor at the address
given below or at any other address shown on the records of Holder at least
five days before the time of sale. Upon disposition of any Collateral after
the occurrence of any default hereunder, Maker will be and will remain liable
for any deficiency; and Holder shall account to Maker for any surplus, but
Holder shall have the right to apply all or part of such surplus (or to hold
the same as a reserve) against any and all other Liabilities of each or any
Obligor to Holder.
Holder may, at any time whether or not this Note is due: (i) pledge or
transfer this Note and its interest in the Collateral, whereupon Holder will be
relieved of all duties and responsibilities hereunder and relieved from any and
all liability with respect to any Collateral so pledged or transferred, and
pledgee or transferee will for all purposes stand in the place of Holder
hereunder and have all the rights of Holder hereunder; (ii) transfer the whole
or any part of the Collateral into the name of itself or its nominee; (iii)
vote the Collateral; (iv) notify the Obligor on any Collateral to make payment
to Holder of any amounts due or to become due thereon; (v) demand, sue
for, collect, or make any compromise or settlement it deems desirable with
reference to the Collateral; (vi) take possession or control of any proceeds
of the Collateral; and (vii) exercise all other rights necessary or
required, in Holder's discretion, in order to protect its interests under this
Note.
In no event will Holder be entitled to unearned or unaccrued interest or
other charges or rebates, except as may be authorized by law; nor will any
such party be entitled or receive at any time any such charges not allowed or
permitted by law, or any interest in excess of the highest lawful rate. Any
payments of interest in excess of the highest lawful rate will be credited by
Holder on interest accrued or principal or both; except that Maker will have
an option to demand refund as to any such interest or charges in excess of the
highest lawful rate.
No delay or omission on the part of Holder in exercising any right
hereunder will operate as a waiver of such right or of any other rights under
this Note. Presentment, demand, protest, notice of dishonor, and all other
notices are hereby waived by each and every Obligor. Obligor, jointly and
severally, promises and agrees to pay all costs of collection and reasonable
attorney's fees, including reasonable attorney's fees of any suit, out of
court, in trial, on appeal, in bankruptcy proceedings or otherwise, incurred
or paid by Holder in enforcing this Note or preserving any right or interest
of Holder hereunder. All notices given in connection with this Note must be
sent by certified mail, return receipt requested, and will be deemed given
three days after mailing or upon actual receipt, whichever is sooner. Any
notice to Maker shall be addressed c/o PGI Incorporated, Suite 1400,
515 Olive Street, St. Louis, Missouri, Attention Laurence A. Schiffer or to
any other address shown on Holder's records.
Each Obligor hereby expressly consents to any and all extensions,
modifications, and renewals, in whole or in part, including but not limited to
changes in payment schedules and
-4-
<PAGE> 35
interest rates, and all delays in time of payment or other performance which
Holder may grant or permit at any time and from time to time without
limitation and without any notice to or further consent of any Obligor. Each
Obligor will also be bound by each of the foregoing terms, without the
requirement that Holder first go against any security interest otherwise held
by Holder.
Each Obligor hereby expressly agrees to indemnify and hold Holder harmless
against any and all Florida documentary stamp taxes and/or intangible personal
property taxes which may be deemed to be due and payable in respect of this
Note, the indebtedness evidenced thereby and any instrument securing any
indebtedness evidenced thereby.
WAIVER OF JURY TRIAL. OBLIGOR AND HOLDER (BY ITS ACCEPTANCE OF THIS
--------------------
NOTE) HEREBY AGREE AS FOLLOWS: (A) EACH OF THEM KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION (AN "ACTION")
BASED UPON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE OR ANY
RELATED DOCUMENTS, INSTRUMENTS, OR AGREEMENTS (WHETHER ORAL OR WRITTEN AND
WHETHER EXPRESS OR IMPLIED AS A RESULT OF A COURSE OF DEALING, A COURSE OF
CONDUCT, A STATEMENT, OR OTHER ACTION OF EITHER PARTY); (B) NEITHER OF THEM
MAY SEEK A TRIAL BY JURY IN ANY SUCH ACTION; (C) NEITHER OF THEM WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION (IN WHICH A JURY TRIAL HAS BEEN WAIVED) WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED; AND (D)
NEITHER OF THEM HAS IN ANY WAY AGREED WITH OR REPRESENTED TO THE OTHER OF THEM
THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
MAKERS:
PGI INCORPORATED, formerly known
as PUNTA GORDA ISLES, INC., a
Florida corporation
/s/ Andrew S. Love Jr.
-------------------------------------
Chairman
-5-
<PAGE> 36
SUGARMILL WOODS, INC., a Florida
corporation
/s/ Andrew S. Love Jr.
-------------------------------------
Chairman
BURNT STORE MARINA, INC., a
Florida corporation
/s/ Andrew S. Love Jr.
-------------------------------------
Chairman
GULF COAST CREDIT
CORPORATION, a Florida corporation
/s/ Andrew S. Love Jr.
-------------------------------------
Chairman
The Address for all of the Makers is:
c/o PGI, Incorporated
515 Olive Street, Suite 1400
St. Louis, Missouri 63101
-6-
<PAGE> 37
SCHEDULE 1
----------
EXISTING NOTES
1. That certain Consolidating Substitute Renewal Note dated as of March 25,
1987, executed by the Borrowers in favor of Naples Federal Savings and
Loan Association, predecessor in interest to BancFlorida, a Federal
Savings Bank, predecessor in interest by merger to Lender ("Naples"),
in the original principal amount of $3,837,967.15, as the same may have
been amended from time to time ("Receivables Consolidated Note");
2. That certain restated Consolidating Substitute Renewal Note dated as of
March 25, 1987, executed by the Borrowers in favor of Naples, in the
original principal amount of $19,383,437.26, as the same may have been
amended from time to time ("Land Loan Note No. 1");
3. That certain Future Advance Note, dated as of March 25, 1987, executed
by the Borrowers in favor of Naples, in the original principal amount of
$6,223,518.81, as the same may have been amended from time to time
("Land Loan Note No. 2");
4. That certain Future Advance Mortgage Note dated as of May 20, 1988,
executed by the Borrowers in favor of Naples, in the original principal
amount of $1,300,000.00, as the same may have been amended from time to
time ("Land Loan Note No. 3");
5. That certain Future Advance Mortgage Note dated as of May 20, 1988,
executed by the Borrowers in favor of Naples, in the original principal
amount of $541,653.03, as the same may have been amended from time to
time ("Land Loan Note No. 4");
6. That certain Future Advance Mortgage Note dated as of May 30, 1989,
executed by the Borrowers in favor of Naples, in the original principal
amount of $453,551.34, as the same may have been amended from time to
time ("Land Loan Note No. 5");
7. That certain Future Advance Mortgage Note dated as of June 1, 1990,
executed by the Borrowers in favor of Naples, in the original principal
amount of $426,025.04, as the same may have been amended from time to
time ("Land Loan Note No. 6"); and
8. That certain Future Advance Mortgage Note dated as of July 8, 1992,
executed by the Borrowers in favor of Naples, in the original principal
amount of $415,000.00, as the same may have been amended from time to
time ("Land Loan Note No. 7");
<PAGE> 38
SCHEDULE 2
----------
INSTRUMENTS UPON WHICH DOCUMENTARY STAMP AND
NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAXES WERE PAID
1. Mortgage, Assignment of Rents and Security Agreement, dated December 31,
1984, executed by Borrowers in favor of Naples, and recorded at O.R. Book
800, Page 1056 of the Public Records of Charlotte County, Florida, and
recorded at O.R. Book 659, Page 146 of the Public Records of Citrus
County, Florida, and recorded at O.R. Book 208, Page 840 of the Public
Records of DeSoto County, Florida, and recorded at O.R. Book 1761,
Page 3257 of the Public Records of Lee County, Florida.
2. First Modification of Mortgage, dated May 31, 1985, executed by
Borrowers in favor of Naples, and recorded at O.R. Book 818, Page 1995
of the Public Records of Charlotte County, Florida, and recorded at
O.R. Book 670, Page 2143 of the Public Records of Citrus County, Florida,
and recorded at O.R. Book 213, Page 165 of the Public Records of DeSoto
County, Florida, and recorded at O.R. Book 580, Page 1255 of the Public
Records of Hernando County, Florida and recorded at O.R. Book 1786,
Page 4571 of the Public Records of Lee County, Florida.
3. Second Modification of Mortgage, dated August 26, 1985, executed by
Borrowers, in favor of Naples, and recorded at O.R. Book 830, Page 97 of
the Public Records of Charlotte County, Florida, and recorded at
O.R. Book 678, Page 751 of the Public Records of Citrus County, Florida,
and recorded at O.R. Book 215, Page 756 of the Public Records of DeSoto
County, Florida, and recorded at O.R. Book 590, Page 24 in the Public
Records of Hernando County, Florida, and recorded at O.R. Book 851,
Page 381 of the Public Records of Highlands County, Florida, and recorded
at O.R. Book 1801, Page 945 of the Public Records of Lee County, Florida.
4. Third Modification of Mortgage, dated September 9, 1985, executed by
Borrowers, in favor of Naples, and recorded at O.R. Book 832, Page 500 of
the Public Records of Charlotte County, Florida, and recorded at O.R.
Book 680, Page 30 of the Public Records of Citrus County, Florida, and
recorded at O.R. Book 216, Page 221 of the Public Records of DeSoto
County, Florida, and recorded at O.R. Book 590, Page 55 of the Public
Records of Hernando County, Florida, and recorded at O.R. Book 1804,
Page 3588 of the Public Records of Lee County, Florida.
5. Fourth Modification of Mortgage, dated September 26, 1985, executed by
Borrowers, in favor of Naples, and recorded at O.R. Book 834, Page 734
of the Public Records of Charlotte County, Florida, and recorded at
O.R. Book ---, Page --- of the Public Records of Citrus County, Florida,
and recorded at O.R. Book 216, Page 810 of the Public Records of DeSoto
County, Florida, and recorded at O.R. Book 590,
<PAGE> 39
Page 1885 of the Public Records of Hernando County, Florida, and
recorded at O.R. Book 1808, Page 1616 of the Public Records of
Lee County, Florida.
6. Notice of Future Advance and Receipt dated March 25, 1987 and recorded
in O.R. Book 734, Page 1152, Public Records of Citrus County, Florida,
and O.R. Book 645, Page 130, Public Records of Hernando County, Florida.
7. Notice of Future Advance and Receipt dated May 20, 1988 and recorded in
O.R. Book 782, Page 781, Public Records of Citrus County, Florida.
8. Notice of Future Advance and Receipt dated May 20, 1988 and recorded in
O.R. Book 782, Page 785, Public Records of Citrus County, Florida.
9. Notice of Future Advance and Receipt dated May 30, 1989 and recorded in
O.R. Book 822, Page 1620, Public Records of Citrus County, Florida, and
O.R. Book 741, Page 1384, Public Records of Hernando County, Florida.
10. Notice of Future Advance dated June 1, 1990 and recorded in O.R. Book 864,
Page 2107, Public Records of Citrus County, Florida, and O.R. Book 788,
Page 708, Public Records of Hernando County, Florida.
11. Twelfth Mortgage and Loan Modification Agreement and Notice of Future
Advance and Receipt, dated July 8, 1992, executed by BancFlorida, a
Federal Savings Bank, predecessor in interest by merger to Lender, and
the Borrowers, and recorded at O.R. Book 944, Page 1564 of the Public
Records of Citrus County, Florida, and recorded at O.R. Book 872, Page
517 of the Public Records of Hernando County, Florida.
12. Any other instruments upon which additional advances were made and/or
additional taxes were paid.
<PAGE> 40
SCHEDULE 3
----------
SCHEDULE OF SECURITY INSTRUMENTS
1. Substitute Renewal Mortgage No. 1, dated as of October 19, 1985,
executed by Borrowers in favor of Naples, and recorded in the Public
Records of Charlotte, Citrus, DeSoto, Hernando and Lee Counties, Florida,
as the same may have been amended from time to time.
2. Substitute Renewal Mortgage No. 2, dated as of October 19, 1985,
executed by Punta Gorda Isles, Inc., Punta Gorda Developers, Inc. and
Burnt Store Marina, Inc. in favor of The First National Bank of Chicago,
as Agent ("FNBC"), and recorded at O.R. Book 837, Page 959 of the
Public Records of Charlotte County, Florida, and recorded at O.R.
Book 682, Page 1952 of the Public Records of Citrus County, Florida,
which Substitute Renewal Mortgage No. 2 was assigned by FNBC to Naples
pursuant to: (i) that certain Assignment of Mortgage recorded at
O.R. Book 683, Page 187 of the Public Records of Citrus County, Florida,
(ii) that certain Assignment of Mortgages recorded at O.R. Book 683,
Page 190 of the Public Records of Citrus County, Florida and O.R.
Book 683, Page 195 of the Public Records of Citrus County, Florida,
as the same may have been amended from time to time.
3. Restated Loan Agreement No. 1, dated October 19, 1985, executed between
Naples and Borrowers as the same may have been amended from time to time.
4. Divided Security Agreement and Pledge of Collateral No. 1, dated
October 19, 1985, executed by Borrowers in favor of Naples, as the same
may have been amended from time to time.
5. Divided Assignment of Notes, Mortgages, Contracts and Agreements for Deed
No. 1 dated as of October 19, 1985, executed by Borrowers in favor of
Naples, as the same may have been amended from time to time.
6. Platinum Point Loan Documents, as described in that Thirteenth Mortgage
& Loan Modification Agreement, dated as of May 13, 1994, executed by and
between Borrowers and BancFlorida, a Federal Savings Bank, predecessor
in interest by merger to Lender.
7. Tugboat Loan Documents, as described in that Thirteenth Mortgage & Loan
Modification Agreement, dated as of May 13, 1994, executed by and
between Borrowers and BancFlorida, a Federal Savings Bank, predecessor
in interest by merger to Lender.
8. Loan and Security Agreement, dated October 1, 1984, executed by PGI, PGD,
Marina, FNBC, CREI or FNB, as agent ("Land Loan Agreement"), a portion of
<PAGE> 41
which Agreement was assigned by FNBC and CREI to Naples pursuant to a
Note Purchase Agreement, dated October 19, 1985, as the same may have
been amended from time to time.
9. Loan and Security Agreement, dated as of October 1, 1984, executed among
PGI, PGD, Marina, FNBC, CREI and FNBC, as Agent, as the same may have
been modified from time to time ("FNBC Receivables Loan Agreement"),
a portion of which Agreement was assigned by FNBC and CREI to Naples
pursuant to a Note Purchase Agreement, dated October 19, 1985, as the
same may have been amended from time to time.
10. Restated Loan and Security Agreement, dated as of March 25, 1987,
executed by and among Borrowers and Naples, as the same may have been
amended from time to time ["to be read in conjunction with Restated Loan
Agreement No. 1" - item 3 above]
11. Pledge Agreement, dated as of March 25, 1987, executed among Punta Gorda
Isles, Inc., Punta Gorda Developers, Inc. and Naples regarding stock
collateral, as the same may have been amended from time to time.
12. Security Agreement, dated March 25, 1987, executed among Borrowers and
Naples regarding blanket lien on all of Borrower's assets, as the same
may have been amended from time to time.
13. Together with Assignor's right, title and interest, if any, in any
additional security instruments securing the indebtedness under this
Consolidated Note and the Future Advance Note.
<PAGE> 42
ENDORSEMENT OF THAT CERTAIN CONSOLIDATED
RENEWAL PROMISSORY NOTE DATED MAY 13, 1994
IN THE ORIGINAL PRINCIPAL AMOUNT OF $7,001,615.29
Pay to the order of PGIP L.L.C., a Missouri limited liability company
("PGIP") pursuant to that certain Note and Loan Document Purchase Agreement
dated as of October 12, 1995, by and between First Union National Bank of
Florida, a national banking association, PGIP, PGI Incorporated, a Florida
corporation, Sugarmill Woods, Inc., a Florida corporation, Burnt Store Marina,
Inc., a Florida corporation, and Gulf Coast Credit Corporation, a Florida
corporation, as amended by that certain Modification of Note and Loan
Document Purchase Agreement dated even date herewith (as amended, "Note and
Loan Document Purchase Agreement"), without recourse, representation, warranty
or obligation except as set forth in paragraph 9 "Representations and
Warranties of Seller" of the Note and Loan Document Purchase Agreement.
FIRST UNION NATIONAL BANK OF FLORIDA,
a national banking association
By: /s/ Nelson T. Ritch III
------------------------------------
Name: Nelson T. Ritch III
-------------------------------
Title: Asst. Vice Pres.
------------------------------
Dated: March 28, 1996
<PAGE> 43
ENDORSEMENT OF THAT CERTAIN CONSOLIDATED
RENEWAL PROMISSORY NOTE DATED MAY 13, 1994
IN THE ORIGINAL PRINCIPAL AMOUNT OF $7,001,615.29
Pay to the order of First Union National Bank of Florida, a national banking
association ("First Union") pursuant to that certain Collateral Assignment of
Notes, Mortgages and Other Loan Documents dated even date herewith executed by
PGIP L.L.C., a Missouri limited liability company ("PGIP") in favor of
First Union ("Collateral Assignment"), without recourse, representation,
warranty or obligation except as set forth in the Collateral Assignment.
PGIP L.L.C., a Missouri limited liability company
By: /s/ Andrew S. Love Jr.
------------------------------------
Name: Andrew S. Love Jr.
-------------------------------
Title: Manager
------------------------------
Date: March 28, 1996
<PAGE> 44
FLORIDA DOCUMENTARY STAMP TAXES HAVE BEEN PAID AND THE PROPER
DOCUMENTARY STAMPS ARE AFFIXED TO THE COUNTERPART NOTICE OF FUTURE
ADVANCE RECORDED IN CITRUS COUNTY, FLORIDA, ON OR ABOUT THE DATE HEREOF.
FUTURE ADVANCE NOTE
-------------------
$241,617.65 St. Louis, Missouri
October 12, 1995
FOR VALUE RECEIVED, the undersigned, and if more than one, each of them
jointly and severally (hereinafter called "Maker") promises to pay to the
order of FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association
(together with any subsequent holder of this Note, hereinafter called
"Holder") at its office in Orlando, Florida, or at such other place as Holder
may from time to time designate, the principal sum of Two Hundred and
Forty-One Thousand Six Hundred Seventeen and 65/100 ($241,617.65) with
interest thereon from the date hereof at an adjustable interest rate of Prime
(as defined below) plus one and one-half percent (1.5%) per annum. For
purposes of this Note, "Prime" shall mean that rate of interest published in
the Wall Street Journal from time to time as the "prime rate", it being agreed
that Prime is not necessarily the lowest or best rate at any time charged by
Holder. The foregoing interest and principal will be payable in full on
November 16, 1995.
If any payment is more than 10 days late, Maker shall pay Holder, without
notice of demand, a late charge equal to 5% of the payment. The foregoing late
charge is provided to compensate Holder for its expense in collecting and
administering delinquent payments and is not to be construed as interest.
After the maturity or due date of this Note, through acceleration or
otherwise, interest will accrue on the principal balance remaining unpaid at
the highest lawful rate until paid.
All payments hereunder will first be credited to interest and lawful
charges then accrued and the remainder to principal.
All interest on this Note will be computed on the basis of the actual
number of days elapsed in a 360-day year.
The indebtedness evidenced by this Note, and all other indebtedness of
Maker to Holder, however and whenever incurred or evidenced, whether primary,
secondary, direct,
<PAGE> 45
indirect, absolute, contingent, sole, joint, or several, due to become due, or
which may be hereafter contracted or acquired, whether arising in the ordinary
course of business or otherwise (hereinafter with this Note, collectively
called "Liabilities") is secured inter alia by the property encumbered by
----------
security instruments listed in Schedule 1 attached hereto and hereby made a
part hereof, including all proceeds thereof and rights in connection therewith
(which property, together with additions and substitutions, is called the
"Collateral"). Holder will have such rights with respect to the Collateral as
is authorized by law. The parties expressly agree that all of the covenants,
conditions, and agreements contained in any mortgage securing this Note are
hereby made a part of this Note. If Maker has other loans with Holder, or if
Maker takes out other loans with Holder in the future, collateral securing
those loans will also secure this Note.
Maker, endorser, surety, guarantor, or other parties to this Note (all of
whom are hereinafter called "Obligor") jointly and severally agree as follows:
Additions to, releases, reductions, or exchanges of or substitutions for
the Collateral, payments on account of this loan or increases of the same, or
other loans made partially or wholly upon the Collateral, may from time to
time be made without affecting the provisions of this Note or the Liabilities
of any party hereto. If any of the Collateral is personal property, Holder
shall exercise reasonable care in the custody and preservation of the
Collateral in its possession, and will be deemed to have exercised
reasonable care if it takes such action for that purpose as Maker reasonably
requests in writing, but no omission to comply with any request of Maker will
of itself be deemed a failure to exercise reasonable care. Holder shall not be
bound to take any steps necessary to preserve any rights in the Collateral
against prior parties, and Maker shall take all necessary steps for such
purposes. Holder or its nominee need not collect interest on or principal of
any Collateral or give any notice with respect thereto.
If the Collateral at any time becomes unsatisfactory to Holder, or if
Holder at any time deems itself insecure, or upon default, Maker shall, at the
option of Holder and in addition to all other remedies available to Holder,
within one (1) day after demand, deposit with Holder as part of the Collateral
additional property which is satisfactory to Holder.
Obligor will be in default under this Note upon: (a) nonpayment of any
interest or principal under this Note when due; (b) failure of any Obligor to
perform any agreement under this Note or otherwise a part of this loan
transaction or to pay in full, when due, any liability whatsoever to Holder or
any installment thereof or interest thereon, or failure to pay when due any
premium upon any life insurance policy held as collateral hereunder; (c) the
death, dissolution, termination of existence, insolvency, or business failure
of any Obligor, appointment of a receiver of any part of the property of any
such party, assignment for the benefit of creditors by or the commencement of
any proceedings in bankruptcy or insolvency by or against any Obligor; (d) the
entry of a judgment against any Obligor; (e) the issuing of any attachment or
garnishment, or the filing of any lien, against any property of any obligor;
(f) the taking of possession of any substantial part of the property of any
Obligor at the
-2-
<PAGE> 46
instance of any governmental authority; (g) the merger, consolidation, or
reorganization of any Obligor; (h) the determination by Holder that a material
adverse change has occurred in the financial condition of any Obligor from the
condition set forth in the most recent financial statement of such Obligor
heretofore furnished to Holder or from the condition of such Obligor as
heretofore most recently disclosed to Holder in any manner; (i) falsity in any
material respect of, or any material omission in, any representation or
statement made to Holder by or on behalf of any Obligor in connection with
this Note; (j) the pledge, assignment, transfer, or granting of a security
interest by any Obligor of any equity in any of the Collateral without the
written consent of Holder.
Holder will have all of the rights and remedies of a creditor, mortgagee,
and secured party under all applicable law. Without limiting the generality of
the foregoing, if Holder deems itself insecure or upon the occurrence of any
default under this Note, Holder may at its option and without notice or demand:
(1) declare the entire unpaid principal and accrued interest accelerated and
due and payable at once, together with any and all other liabilities of any
Obligor or any of such liabilities selected by Holder; and (2) set off against
this Note all money owed by Holder in any capacity to each or any Obligor
whether or not due and also set off against all other liabilities of each
Obligor to Holder all money owed by Holder in any capacity to any Obligor, and
Holder will be deemed to have exercised such right of setoff and to have made
a charge against any such money immediately upon the occurrence of such
default although made or entered on the books subsequent thereto. To the
extent that any of the Collateral is personal property and the Holder elects
to proceed with respect to it in accordance with the Uniform Commercial Code,
then unless that Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Holder shall
give Maker reasonable notice of the time and place of any public or private
sale thereof. The requirement of reasonable notice will be met if such notice
is mailed, postage prepaid, to any Obligor at the address given below or at
any other address shown on the records of Holder at least five days before the
time of sale. Upon disposition of any Collateral after the occurrence of any
default hereunder, Maker will be and will remain liable for any deficiency;
and Holder shall account to Maker for any surplus, but Holder shall have the
right to apply all or part of such surplus (or to hold the same as a reserve)
against any and all other Liabilities of each or any Obligor to Holder.
Holder may, at any time whether or not this Note is due: (i) pledge or
transfer this Note and its interest in the Collateral, whereupon Holder will be
relieved of all duties and responsibilities hereunder and relieved from any and
all liability with respect to any Collateral so pledged or transferred, and
pledgee or transferee will for all purposes stand in the place of Holder
hereunder and have all the rights of Holder hereunder; (ii) transfer the whole
or any part of the Collateral into the name of itself or its nominee; (iii)
vote the Collateral; (iv) notify the Obligor on any Collateral to make payment
to Holder of any amounts due or to become due thereon; (v) demand, sue
for, collect, or make any compromise or settlement it deems desirable with
reference to the Collateral; (vi) take possession or control of any proceeds
of the Collateral; and (vii) exercise all other rights necessary or required,
in Holder's discretion, in order to protect its interests under this Note.
-3-
<PAGE> 47
In no event will Holder be entitled to unearned or unaccrued interest or
other charges or rebates, except as may be authorized by law; nor will any
such party be entitled or receive at any time any such charges not allowed or
permitted by law, or any interest in excess of the highest lawful rate. Any
payments of interest in excess of the highest lawful rate will be credited by
Holder on interest accrued or principal or both; except that Maker will have
an option to demand refund as to any such interest or charges in excess of the
highest lawful rate.
No delay or omission on the part of Holder in exercising any right
hereunder will operate as a waiver of such right or of any other rights under
this Note. Presentment, demand, protest, notice of dishonor, and all other
notices are hereby waived by each and every Obligor. Obligor, jointly and
severally, promises and agrees to pay all costs of collection and reasonable
attorney's fees, including reasonable attorney's fees of any suit, out of
court, in trial, on appeal, in bankruptcy proceedings or otherwise, incurred
or paid by Holder in enforcing this Note or preserving any right or interest
of Holder hereunder. All notices given in connection with this Note must be
sent by certified mail, return receipt requested, and will be deemed given
three days after mailing or upon actual receipt, whichever is sooner. Any
notice to Maker shall be addressed c/o PGI Incorporated, Suite 1400,
515 Olive Street, St. Louis, Missouri, Attention Laurence A. Schiffer or to
any other address shown on Holder's records.
Each Obligor hereby expressly consents to any and all extensions,
modifications, and renewals, in whole or in part, including but not limited to
changes in payment schedules and interest rates, and all delays in time of
payment or other performance which Holder may grant or permit at any time and
from time to time without limitation and without any notice to or further
consent of any Obligor. Each Obligor will also be bound by each of the
foregoing terms, without the requirement that Holder first go against any
security interest otherwise held by Holder.
Each Obligor hereby expressly agrees to indemnify and hold Holder harmless
against any and all Florida documentary stamp taxes and/or intangible personal
property taxes which may be deemed to be due and payable in respect of this
Note, the indebtedness evidenced thereby and any instrument securing any
indebtedness evidenced thereby.
WAIVER OF JURY TRIAL. OBLIGOR AND HOLDER (BY ITS ACCEPTANCE OF THIS
--------------------
NOTE) HEREBY AGREE AS FOLLOWS: (A) EACH OF THEM KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION (AN "ACTION")
BASED UPON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE OR ANY
RELATED DOCUMENTS, INSTRUMENTS, OR AGREEMENTS (WHETHER ORAL OR WRITTEN AND
WHETHER EXPRESS OR IMPLIED AS A RESULT OF A COURSE OF DEALING, A COURSE OF
CONDUCT, A STATEMENT, OR OTHER ACTION OF EITHER PARTY); (B) NEITHER OF THEM
MAY SEEK A TRIAL BY JURY IN ANY
-4-
<PAGE> 48
SUCH ACTION; (C) NEITHER OF THEM WILL SEEK TO CONSOLIDATE ANY SUCH ACTION (IN
WHICH A JURY TRIAL HAS BEEN WAIVED) WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL CANNOT BE OR HAS NOT BEEN WAIVED; AND (D) NEITHER OF THEM HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO THE OTHER OF THEM THAT THE PROVISIONS OF THIS
SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
BORROWERS:
PGI INCORPORATED, formerly known
as PUNTA GORDA ISLES, INC., a
Florida corporation
/s/ Andrew S. Love Jr.
-------------------------------------
Chairman
SUGARMILL WOODS, INC., a Florida
corporation
/s/ Andrew S. Love Jr.
-------------------------------------
Chairman
BURNT STORE MARINA, INC., a
Florida corporation
/s/ Andrew S. Love Jr.
-------------------------------------
Chairman
GULF COAST CREDIT
CORPORATION, a Florida corporation
/s/ Andrew S. Love Jr.
-------------------------------------
Chairman
The Address for all of the Borrowers is:
-5-
<PAGE> 49
c/o PGI, Incorporated
515 Olive Street, Suite 1400
St. Louis, Missouri 63101
-6-
<PAGE> 50
SCHEDULE 1
----------
SCHEDULE OF SECURITY INSTRUMENTS
1. Substitute Renewal Mortgage No. 1, dated as of October 19, 1985,
executed by Borrowers in favor of Naples Federal Savings and Loan
Association predecessors in interest to BancFlorida, a Federal Savings
Bank predecessors by merger and Lender ("Naples"), and recorded in the
Public Records of Charlotte, Citrus, DeSoto, Hernando and Lee Counties,
Florida, as the same may have been amended from time to time.
2. Substitute Renewal Mortgage No. 2, dated as of October 19, 1985,
executed by Punta Gorda Isles, Inc., Punta Gorda Developers, Inc. and
Burnt Store Marina, Inc. in favor of The First National Bank of Chicago,
as Agent ("FNBC"), and recorded at O.R. Book 837, Page 959 of the
Public Records of Charlotte County, Florida, and recorded at O.R.
Book 682, Page 1952 of the Public Records of Citrus County, Florida,
which Substitute Renewal Mortgage No. 2 was assigned by FNBC to Naples
pursuant to: (i) that certain Assignment of Mortgage recorded at
O.R. Book 683, Page 187 of the Public Records of Citrus County, Florida,
(ii) that certain Assignment of Mortgages recorded at O.R. Book 683,
Page 190 of the Public Records of Citrus County, Florida and O.R.
Book 683, Page 195 of the Public Records of Citrus County, Florida,
as the same may have been amended from time to time.
3. Restated Loan Agreement No. 1, dated October 19, 1985, executed between
Naples and Borrowers as the same may have been amended from time to time.
4. Divided Security Agreement and Pledge of Collateral No. 1, dated
October 19, 1985, executed by Borrowers in favor of Naples, as the same
may have been amended from time to time.
5. Divided Assignment of Notes, Mortgages, Contracts and Agreements for Deed
No. 1 dated as of October 19, 1985, executed by Borrowers in favor of
Naples, as the same may have been amended from time to time.
6. Platinum Point Loan Documents, as described in that Thirteenth Mortgage
& Loan Modification Agreement, dated as of May 13, 1994, executed by and
between Borrowers and BancFlorida, a Federal Savings Bank, predecessor
in interest by merger to Lender.
7. Tugboat Loan Documents, as described in that Thirteenth Mortgage & Loan
Modification Agreement, dated as of May 13, 1994, executed by and
between Borrowers and BancFlorida, a Federal Savings Bank, predecessor
in interest by merger to Lender.
-7-
<PAGE> 51
8. Loan and Security Agreement, dated October 1, 1984, executed by PGI, PGD,
Marina, FNBC, CREI or FNB, as agent ("Land Loan Agreement"), a portion of
which Agreement was assigned by FNBC and CREI to Naples pursuant to a
Note Purchase Agreement, dated October 19, 1985, as the same may have
been amended from time to time.
9. Loan and Security Agreement, dated as of October 1, 1984, executed among
PGI, PGD, Marina, FNBC, CREI and FNBC, as Agent, as the same may have
been modified from time to time ("FNBC Receivables Loan Agreement"),
a portion of which Agreement was assigned by FNBC and CREI to Naples
pursuant to a Note Purchase Agreement, dated October 19, 1985, as the
same may have been amended from time to time.
10. Restated Loan and Security Agreement, dated as of March 25, 1987,
executed by and among Borrowers and Naples, as the same may have been
amended from time to time ["to be read in conjunction with Restated Loan
Agreement No. 1" - item 3 above]
11. Pledge Agreement, dated as of March 25, 1987, executed among Punta Gorda
Isles, Inc., Punta Gorda Developers, Inc. and Naples regarding stock
collateral, as the same may have been amended from time to time.
12. Security Agreement, dated March 25, 1987, executed among Borrowers and
Naples regarding blanket lien on all of Borrower's assets, as the same
may have been amended from time to time.
13. Together with Assignor's right, title and interest, if any, in any
additional security instruments securing the indebtedness under this
Consolidated Renewal Promissory Note.
-8-
<PAGE> 52
ENDORSEMENT OF THAT CERTAIN
FUTURE ADVANCE NOTE DATED MAY 13, 1994
IN THE ORIGINAL PRINCIPAL AMOUNT OF $241,617.65
Pay to the order of PGIP L.L.C., a Missouri limited liability company
("PGIP") pursuant to that certain Note and Loan Document Purchase Agreement
dated as of October 12, 1995, by and between First Union National Bank of
Florida, a national banking association, PGIP, PGI Incorporated, a Florida
corporation, Sugarmill Woods, Inc., a Florida corporation, Burnt Store Marina,
Inc., a Florida corporation, and Gulf Coast Credit Corporation, as amended by
that certain Modification of Note and Loan Document Purchase Agreement dated
even date herewith (as amended, "Note and Loan Document Purchase Agreement"),
without recourse, representation, warranty or obligation except as set forth
in paragraph 9 "Representations and Warranties of Seller" of the Note and Loan
Document Purchase Agreement.
FIRST UNION NATIONAL BANK OF FLORIDA
By: /s/ Nelson T. Ritch III
------------------------------------
Name: Nelson T. Ritch III
-------------------------------
Title: Asst. Vice Pres.
------------------------------
Date: March 28, 1996
<PAGE> 53
ENDORSEMENT OF THAT CERTAIN
FUTURE ADVANCE NOTE DATED MAY 13, 1994
IN THE ORIGINAL PRINCIPAL AMOUNT OF $241,617.65
Pay to the order of First Union National Bank of Florida, a national banking
association ("First Union") pursuant to that certain Collateral Assignment of
Notes, Mortgages and Other Loan Documents dated even date herewith executed by
PGIP L.L.C., a Missouri limited liability company ("PGIP") in favor of
First Union ("Collateral Assignment"), without recourse, representation,
warranty or obligation except as set forth in the Collateral Assignment.
PGIP L.L.C., a Missouri limited liability company
By: /s/ Andrew S. Love Jr.
------------------------------------
Name: Andrew S. Love Jr.
-------------------------------
Title: Manager
------------------------------
Date: March 28, 1996
<PAGE> 54
ALL DOCUMENTARY STAMP TAXES DUE IN CONNECTION WITH THIS PROMISSORY NOTE HAVE
BEEN PAID AND THE PROPER DOCUMENTARY STAMPS ARE AFFIXED TO THE COLLATERAL
ASSIGNMENT OF NOTES, MORTGAGES AND OTHER LOAN DOCUMENTS WHICH SECURES THIS
PROMISSORY NOTE, AND WHICH IS RECORDED OR SHALL BE RECORDED IN THE PUBLIC
RECORDS OF CITRUS COUNTY, FLORIDA, AND CANCELLED.
PROMISSORY NOTE
---------------
$2,988,001.65 St. Louis, Missouri
March 28, 1996
FOR VALUE RECEIVED, the undersigned, and if more than one, each of them
jointly and severally (hereinafter called "Maker") promises to pay to the
order of FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association
(together with any subsequent holder of this Note, hereinafter called
"Holder") at its office in Orlando, Florida, or at such other place as Holder
may from time to time designate, the principal sum of TWO MILLION NINE
HUNDRED EIGHTY EIGHT THOUSAND ONE AND 65/100 DOLLARS ($2,988,001.65), with
interest thereon from the date hereof at an adjustable interest rate of Prime
(as defined below) plus one percent (1.0%) per annum. For purposes of this
Note, "Prime" shall mean that rate of interest published in the Wall Street
Journal from time to time as the "prime rate", it being agreed that Prime is
not necessarily the lowest or best rate at any time charged by Holder. The
foregoing interest and principal will be payable in full on June 1, 1997.
The amounts due or to become due under this Note shall be paid as
follows:
a. Commencing on May 1, 1996, and continuing on the first day of
each and every month thereafter, Maker shall pay all accrued and unpaid
interest, it being agreed that interest shall not begin accruing until
April 1, 1996.
b. A principal payment in the amount of $240,000.00 shall be due
and payable on June 30, 1996.
c. The entire outstanding unpaid principal balance together with
all accrued and unpaid interest and all other sums due hereunder shall be due
and payable on June 1, 1997 ("Maturity Date").
If any payment is more than 10 days late, Maker shall pay Holder,
without notice or demand, a late charge equal to 5% of the payment. The
foregoing late charge is provided to compensate Holder for its expense in
collecting and administering delinquent payments and is not to be construed
as interest.
<PAGE> 55
After the maturity or due date of this Note, through acceleration or
otherwise, at the election of Holder, interest will accrue on the principal
balance remaining unpaid at the lesser of (i) Prime plus three percent
(3.0%) per annum, or (ii) the highest lawful rate.
All payments hereunder will first be credited to interest and lawful
charges then accrued and the remainder to principal.
All interest on this Note will be computed on the basis of the actual
number of days elapsed in a 360-day year.
The indebtedness evidenced by this Note, and all other indebtedness of
Maker to Holder, however and whenever incurred or evidenced, whether primary,
secondary, direct, indirect, absolute, contingent, sole, joint, or several,
due to become due, or which may be hereafter contracted or acquired, whether
arising in the ordinary course of business or otherwise (hereinafter with this
Note, collectively called "Liabilities") is secured inter alia by the property
----------
encumbered by security instruments listed in Schedule 1 attached hereto and
----------
hereby made a part hereof, including all proceeds thereof and rights in
connection therewith (which property, together with additions and
substitutions, is called the "Collateral"). Holder will have such rights with
respect to the Collateral as is authorized by law. The parties expressly agree
that all of the covenants, conditions, and agreements contained in any
mortgage securing this Note are hereby made a part of this Note. If Maker
has other loans with Holder, or if Maker takes out other loans with Holder
in the future, collateral securing those loans will also secure this Note.
Maker, endorser, surety, guarantor, or other parties to this Note (all
of whom are hereinafter called "Obligor") jointly and severally agree as
follows:
Additions to, releases, reductions, or exchanges of or substitutions for
the Collateral, payments on account of this loan or increases of the same,
or other loans made partially or wholly upon the Collateral, may from time
to time be made without affecting the provisions of this Note or the
Liabilities of any party hereto. If any of the Collateral is personal
property, Holder shall exercise reasonable care in custody and preservation
of the Collateral in its possession, and will be deemed to have exercised
reasonable care if it takes such action for that purpose as Maker reasonably
requests in writing, but no omission to comply with any request of Maker will
of itself be deemed a failure to exercise reasonable care. Holder shall not be
bound to take any steps necessary to preserve any rights in the Collateral
against prior parties, and Maker shall take all necessary steps for such
purposes. Holder or its nominee need not collect interest on or principal of
any Collateral or give any notice with respect thereto.
Upon default, Maker shall, at the option of Holder and in addition to
all other remedies available to Holder, within one (1) day after demand,
deposit with Holder as part of the Collateral additional property which is
satisfactory to Holder.
Obligor will be in default under this Note upon: (a) nonpayment when due
of any interest or principal under this Note or under any other note executed
by Maker in favor of Lender, including without limitation, that certain
Promissory Note, dated even date herewith
-2-
<PAGE> 56
in the original principal amount of $261,518.90 (any and all other notes
executed by Maker in favor of Holder as herein collectively referred to as the
"Other Notes"); (b) failure of any Obligor to perform any agreement under this
Note or the Other Notes or otherwise a part of this loan transaction or to pay
in full, when due, any liability whatsoever to Holder or any installment
thereof or interest thereon, or failure to pay when due any premium upon any
life insurance policy held as collateral hereunder; (c) the death, dissolution,
termination of existence, insolvency, or business failure of any Obligor,
appointment of a receiver of any part of the property of any such party,
assignment for the benefit of creditors by or the commencement of any
proceedings in bankruptcy or insolvency by or against any Obligor; (d) the
entry of a judgment against any Obligor which is not satisfied or stayed with
appropriate bond within thirty (30) days; (e) the issuing of any attachment or
garnishment, or the filing of any lien, against any property of any obligor;
(f) the taking of possession of any substantial part of the property of any
Obligor at the instance of any governmental authority; (g) the merger,
consolidation, or reorganization of any Obligor; (h) falsity in any
material respect of, or any material omission in, any representation or
statement made to Holder by or on behalf of any Obligor in connection with
this Note; (i) the pledge, assignment, transfer, or granting of a security
interest by any Obligor of any equity in any of the Collateral without the
written consent of Holder; or (j) the failure to promptly deliver to Holder
any and all payments made under any and all loan documents held as collateral
for this Note, including without limitation, payments made under (i) that
certain Consolidated Renewal Promissory Note, dated as of May 13, 1994,
executed by PGI Incorporated, Sugarmill Woods, Inc., Burnt Store Marina,
Inc. and Gulf Coast Credit Corporation(collectively, "PGI Borrowers") and
(ii) that certain Future Advance Note, dated October 12, 1995 executed by
the PGI Borrower in favor of Holder.
Holder will have all of the rights and remedies of a creditor, mortgagee,
and secured party under all applicable law. Without limiting the generality
of the foregoing, upon the occurrence of any default under this Note, Holder
may at its option and without notice or demand: (1) declare the entire
unpaid principal and accrued interest accelerated and due and payable at once,
together with any and all other liabilities of any Obligor or any of such
liabilities selected by Holder; (2) set off against this Note all money owed
by Holder in any capacity to any Obligor whether or not due and also set off
against all other liabilities of each Obligor to Holder all money owed by
Holder in any capacity to any Obligor, and Holder will be deemed to have
exercised such right of setoff and to have made a charge against any such
money immediately upon the occurrence of such default although made or entered
on the books subsequent thereto; (3) demand, sue for, collect, or make any
compromise or settlement it deems desirable with reference to the Collateral;
and (4) take possession or control of any proceeds of the Collateral. To the
extent that any of the Collateral is personal property and the Holder elects
to proceed with respect to it in accordance with the Uniform Commercial
Code, then unless that Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Holder shall give Maker reasonable notice of the time and place of any public
or private sale thereof. The requirement of reasonable notice will be met if
such notice is mailed, postage prepaid, to any Obligor at the address given
below or at any other address shown on the
-3-
<PAGE> 57
records of Holder at least twenty days before the time of sale. Upon
disposition of any Collateral after the occurrence of any default hereunder,
Maker will be and will remain liable for any deficiency; and Holder shall
account to Maker for any surplus, but Holder shall have the right to apply
all or part of such surplus (or to hold the same as a reserve) against any and
all other Liabilities of each or any Obligor to Holder.
Holder may, at any time whether or not this Note is due: (i) pledge or
transfer this Note and its interest in the Collateral, whereupon Holder will
be relieved of all duties and responsibilities hereunder and relieved from
any and all liability with respect to any Collateral so pledged or
transferred, and pledgee or transferee will for all purposes stand in the place
of Holder hereunder and have all the rights of Holder hereunder; (ii)
transfer the whole or any part of the Collateral into the name of itself or
its nominee; (iii) notify the Obligor on any Collateral to make payment to
Holder of any amounts due or to become due thereon; and (iv) exercise all
other rights necessary or required, in Holder's discretion, in order to
protect its interests under this Note.
In no event will Holder be entitled to unearned or unaccrued interest or
other charges or rebates, except as may be authorized by law; nor will any
such party be entitled or receive at any time any such charges not allowed
or permitted by law, or any interest in excess of the highest lawful rate.
Any payments of interest in excess of the highest lawful rate will be
credited by Holder on interest accrued or principal or both; except that
Maker will have an option to demand refund as to any such interest or charges
in excess of the highest lawful rate.
No delay or omission on the part of Holder in exercising any right
hereunder will operate as a waiver of such right or of any other rights under
this Note. Presentment, demand, protest, notice of dishonor, and all other
notices are hereby waived by each and every Obligor. Obligor, jointly and
severally, promises and agrees to pay all costs of collection and reasonable
attorney's fees, including reasonable attorney's fees of any suit,
out of court, in trial, on appeal, in bankruptcy proceedings or otherwise,
incurred or paid by Holder in enforcing this Note or preserving any right
or interest of Holder hereunder. All notices given in connection with this Note
must be sent by certified mail, return receipt requested, and will be deemed
given three days after mailing or upon actual receipt, whichever is sooner.
Any notice to Maker shall be addressed to Maker, Suite 1400, 515 Olive
Street, St. Louis, Missouri 63101, Attention: Laurence A. Schiffer or to any
other address shown on Holder's records.
Each Obligor hereby expressly consents to any and all extensions,
modifications, and renewals, in whole or in part, including but not limited
to changes in payment schedules and interest rates, and all delays in time
of payment or other performance which Holder may grant or permit at any time
and from time to time without limitation and without any notice to or further
consent of any Obligor. Each Obligor will also be bound by each of the
foregoing terms, without the requirement that Holder first go against any
security interest otherwise held by Holder.
-4-
<PAGE> 58
Each Obligor hereby expressly agrees to indemnify and hold Holder
harmless against any and all Florida documentary stamp taxes and/or
intangible personal property taxes which may be deemed to be due and
payable in respect of this Note, the indebtedness evidenced thereby and any
instrument securing any indebtedness evidenced thereby. In order to secure
the performance and discharge of Obligor's obligations under the immediately
preceding sentence, but not in lieu of such obligations, Obligor, upon
execution of this Note, will pay over to Holder sufficient funds to satisfy
the Florida recurring intangible personal property tax which shall become
due and payable as of January 1, 1997, with respect to the outstanding
indebtedness evidenced by this Note. Such deposit shall not be, nor be
deemed to be, trust funds but may be commingled with the general funds of
Holder, and no interest shall be payable in respect thereof. In the event
of a default under any of the terms, covenants and conditions of this Note,
Holder may apply to the reduction of the sum secured hereby, in such manner
as Holder shall determine, any amount under this Paragraph any amount
remaining to Obligor's credit.
WAIVER OF JURY TRIAL. OBLIGOR AND HOLDER (BY ITS ACCEPTANCE OF THIS NOTE)
--------------------
HEREBY AGREE AS FOLLOWS: (A) EACH OF THEM KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION (AN
"ACTION") BASED UPON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
NOTE OR ANY RELATED DOCUMENTS, INSTRUMENTS, OR AGREEMENTS (WHETHER ORAL OR
WRITTEN AND WHETHER EXPRESS OR IMPLIED AS A RESULT OF A COURSE OF DEALING,
A COURSE OF CONDUCT, A STATEMENT, OR OTHER ACTION OF EITHER PARTY); (B) NEITHER
OF THEM MAY SEEK A TRIAL BY JURY IN ANY SUCH ACTION; (C) NEITHER OF THEM WILL
SEEK TO CONSOLIDATE ANY SUCH ACTION (IN WHICH A JURY TRIAL HAS BEEN WAIVED)
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED;
AND (D) NEITHER OF THEM HAS IN ANY WAY AGREED WITH OR REPRESENTED TO THE OTHER
OF THEM THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
MAKERS:
PGIP L.L.C., a Missouri limited
liability company
By: /s/ Andrew S. Love Jr.
---------------------------------
Name: Andrew S. Love Jr.
----------------------------
Title: Manager
---------------------------
-5-
<PAGE> 59
SCHEDULE 1
----------
1. Collateral Assignment of Notes, Mortgages and Other Loan Documents dated
even date herewith, made by Maker in favor of Holder.
-6-
<PAGE> 60
ALL DOCUMENTARY STAMP TAXES DUE IN CONNECTION WITH THIS PROMISSORY NOTE HAVE
BEEN PAID AND THE PROPER DOCUMENTARY STAMPS ARE AFFIXED TO THE COLLATERAL
ASSIGNMENT OF NOTES, MORTGAGES AND OTHER LOAN DOCUMENTS WHICH SECURES THIS
PROMISSORY NOTE, AND WHICH IS RECORDED OR SHALL BE RECORDED IN THE PUBLIC
RECORDS OF CITRUS COUNTY, FLORIDA, AND CANCELLED.
PROMISSORY NOTE
---------------
$261,518.90 St. Louis, Missouri
March 28, 1996
FOR VALUE RECEIVED, the undersigned, and if more than one, each of them
jointly and severally (hereinafter called "Maker") promises to pay to the order
of FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association
(together with any subsequent holder of this Note, hereinafter called "Holder")
at its office in Orlando, Florida, or at such other place as Holder may from
time to time designate, the principal sum of TWO HUNDRED SIXTY ONE THOUSAND
FIVE HUNDRED EIGHTEEN AND 90/100 DOLLARS ($261,518.90), with interest thereon
from the date hereof at an adjustable interest rate of Prime (as defined below)
plus one percent (1.0%) per annum. For purposes of this Note, "Prime" shall
mean that rate of interest published in the Wall Street Journal from time to
time as the "prime rate", it being agreed that Prime is not necessarily the
lowest or best rate at any time charged by Holder. The foregoing interest
and principal will be payable in full on June 1, 1997.
The amounts due or to become due under this Note shall be paid as follows:
a. Commencing on May 1, 1996, and continuing on the first day of
each and every month thereafter, Maker shall pay all accrued and unpaid
interest, it being agreed that interest shall not begin accruing until
April 1, 1996.
b. The entire outstanding unpaid principal balance together with
all accrued and unpaid interest and all other sums due hereunder shall be due
and payable on June 1, 1997 ("Maturity Date").
If any payment is more than 10 days late, Maker shall pay Holder,
without notice or demand, a late charge equal to 5% of the payment. The
foregoing late charge is provided to compensate Holder for its expense in
collecting and administering delinquent payments and is not to be construed
as interest.
After the maturity or due date of this Note, through acceleration or
otherwise, at the election of Holder, interest will accrue on the principal
balance remaining unpaid at the lesser of (i) Prime plus three percent (3.0%)
per annum, or (ii) the highest lawful rate.
<PAGE> 61
All payments hereunder will first be credited to interest and lawful
charges then accrued and the remainder to principal.
All interest on this Note will be computed on the basis of the actual
number of days elapsed in a 360-day year.
The indebtedness evidenced by this Note, and other indebtedness of
Maker to Holder, however and whenever incurred or evidenced, whether primary,
secondary, direct, indirect, absolute, contingent, sole, joint, or several,
due to become due, or which may be hereafter contracted or acquired, whether
arising in the ordinary course of business or otherwise (hereinafter with
this Note, collectively called "Liabilities") is secured inter alia by the
----------
property encumbered by security instruments listed in Schedule 1 attached
----------
hereto and hereby made a part hereof, including all proceeds thereof and rights
in connection therewith (which property, together with additions and
substitutions, is called the "Collateral"). Holder will have such rights with
respect to the Collateral as is authorized by law. The parties expressly agree
that all of the covenants, conditions, and agreements contained in any
mortgage securing this Note are hereby made a part of this Note. If Maker has
other loans with Holder, or if Maker takes out other loans with Holder in the
future, collateral securing those loans will also secure this Note.
Maker, endorser, surety, guarantor, or other parties to this Note (all
of whom are hereinafter called "Obligor") jointly and severally agree as
follows:
Additions to, releases, reductions, or exchanges of or substitutions
for the Collateral, payments on account of this loan or increases of the
same, or other loans made partially or wholly upon the Collateral, may from
time to time be made without affecting the provisions of this Note or the
Liabilities of any party hereto. If any of the Collateral is personal property,
Holder shall exercise reasonable care in the custody and preservation of the
Collateral in its possession, and will be deemed to have exercised reasonable
care if it takes such action for that purpose as Maker reasonably requests
in writing, but no omission to comply with any request of Maker will of itself
be deemed a failure to exercise reasonable care. Holder shall not be bound
to take any steps necessary to preserve any rights in the Collateral against
prior parties, and Maker shall take all necessary steps for such purposes.
Holder or its nominee need not collect interest on or principal of any
Collateral or give any notice with respect thereto.
Upon default, Maker shall, at the option of Holder and in addition to
all other remedies available to Holder, within one (1) day after demand,
deposit with Holder as part of the Collateral additional property which is
satisfactory to Holder.
Obligor will be in default under this Note upon: (a) nonpayment when due
of any interest or principal under this Note or under any other note executed
by Maker in favor of Lender, including without limitation, that certain
Promissory Note, dated even date herewith in the original principal amount of
$2,748,001.65 (any and all other notes executed by Maker in favor of Holder
as herein collectively referred to as the "Other Notes"); (b) failure of
any Obligor to perform any agreement under this Note or the Other Notes or
otherwise a part of this loan transaction or to pay in full, when due, any
liability whatsoever to Holder or any
-2-
<PAGE> 62
installment thereof or interest thereon, or failure to pay when due any
premium upon any life insurance policy held as collateral hereunder; (c) the
death, dissolution, termination of existence, insolvency, or business failure
of any Obligor, appointment of a receiver of any part of the property of any
such party, assignment for the benefit of creditors by or the commencement
of any proceedings in bankruptcy or insolvency by or against any Obligor;
(d) the entry of a judgment against any Obligor which is not satisfied or
stayed with appropriate bond within thirty (30) days; (e) the issuing of any
attachment or garnishment, or the filing of any lien, against any property
of any obligor; (f) the taking of possession of any substantial part of the
property of any Obligor at the instance of any governmental authority; (g) the
merger, consolidation, or reorganization of any Obligor; (h) falsity in any
material respect of, or any material omission in, any representation or
statement made to Holder by or on behalf of any Obligor in connection with
this Note; (i) the pledge, assignment, transfer, or granting of a security
interest by any Obligor of any equity in any of the Collateral without the
written consent of Holder; or (j) the failure to promptly deliver to Holder
any and all payments made under any and all loan documents held as collateral
for this Note, including without limitation, payments made under (i) that
certain Consolidated Renewal Promissory Note, dated as of May 13, 1994,
executed by PGI Incorporated, Sugarmill Woods, Inc., Burnt Store Marina, Inc.
and Gulf Coast Credit Corporation (collectively, "PGI Borrowers") and (ii)
that certain Future Advance Note, dated October 12, 1995 executed by the PGI
Borrower in favor of Holder.
Holder will have all of the rights and remedies of a creditor, mortgagee,
and secured party under all applicable law. Without limiting the generality
of the foregoing, upon the occurrence of any default under this Note, Holder
may at its option and without notice or demand: (1) declare the entire unpaid
principal and accrued interest accelerated and due and payable at once,
together with any and all other responsibilities of any Obligor or any of
such liabilities selected by Holder; (2) set off against this Note all money
owed by Holder in any capacity to each or any Obligor whether or not due and
also set off against all other liabilities of each Obligor to Holder all money
owed by Holder in any capacity to any Obligor, and Holder will be deemed to
have exercised such right of setoff and to have made a charge against any
such money immediately upon the occurrence of such default although made or
entered on the books subsequent thereto; (3) demand, sue for, collect, or
make any compromise or settlement it deems desirable with reference to the
Collateral; and (4) take possession or control of any proceeds of the
Collateral. To the extent that any of the Collateral is personal property
and the Holder elects to proceed with respect to it in accordance with the
Uniform Commercial Code, then unless that Collateral is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, Holder shall give Maker reasonable notice of the time and place of any
public or private sale thereof. The requirement of reasonable notice will be
met if such notice is mailed, postage prepaid, to any Obligor at the address
given below or at any other address shown on the records of Holder at least
twenty days before the time of sale. Upon disposition of any Collateral after
the occurrence of any default hereunder, Maker will be and will remain liable
for any deficiency; and Holder shall account to Maker for any surplus, but
Holder shall have
-3-
<PAGE> 63
the right to apply all or part of such surplus (or to hold the same as a
reserve) against any and all other Liabilities of each or any Obligor to
Holder.
Holder may, at any time whether or not this Note is due: (i) pledge or
transfer this Note and its interest in the Collateral, whereupon Holder will
be relieved of all duties and responsibilities hereunder and relieved from
any and all liability with respect to any Collateral so pledged or transferred,
and pledgee or transferee will for all purposes stand in the place of Holder
hereunder and have all the rights of Holder hereunder; (ii) transfer the whole
or any part of the Collateral into the name of itself or its nominee; (iii)
notify the Obligor on any Collateral to make payment to Holder of any amounts
due or to become due thereon; and (iv) exercise all other rights necessary
or required, in Holder's discretion, in order to protect its interests under
this Note.
In no event will Holder be entitled to unearned or unaccrued interest or
other charges or rebates, except as may be authorized by law; nor will any
such party be entitled or receive at any time any such charges not allowed
or permitted by law, or any interest in excess of the highest lawful rate.
Any payments of interest in excess of the highest lawful rate will be credited
by Holder on interest accrued or principal or both; except that Maker will
have an option to demand refund as to any such interest or charges in excess
of the highest lawful rate.
No delay or omission on the part of Holder in exercising any right
hereunder will operate as a waiver of such right or of any other rights under
this Note. Presentment, demand, protest, notice of dishonor, and all other
notices are hereby waived by each and every Obligor. Obligor, jointly and
severally, promises and agrees to pay all costs of collection and reasonable
attorney's fees, including reasonable attorney's fees of any suit, out of
court, in trial, on appeal, in bankruptcy proceedings or otherwise, incurred
or paid by Holder in enforcing this Note or preserving any right or interest
of Holder hereunder. All notices given in connection with this Note must be
sent by certified mail, return receipt requested, and will be deemed given
three days after mailing or upon actual receipt, whichever is sooner. Any
notice to Maker shall be addressed to Maker, Suite 1400, 515 Olive Street,
St. Louis, Missouri 63101, Attention: Laurence A. Schiffer or to any other
address shown on Holder's records.
Each Obligor hereby expressly consents to any and all extensions,
modifications, and renewals, in whole or in part, including but not limited
to changes in payment schedules and interest rates, and all delays in time
of payment or other performance which Holder may grant or permit at any time
and from time to time without limitation and without any notice to or further
consent of any Obligor. Each Obligor will also be bound by each of the
foregoing terms, without the requirement that Holder first go against any
security interest otherwise held by Holder.
Each Obligor hereby expressly agrees to indemnify and hold Holder
harmless against any and all Florida documentary stamp taxes and/or
intangible personal property taxes which
-4-
<PAGE> 64
may be deemed to be due and payable in respect of this Note, the
indebtedness evidenced thereby and any instrument securing any indebtedness
evidenced thereby. In order to secure the performance and discharge of
Obligor's obligations under the immediately preceding sentence, but not in
lieu of such obligations, Obligor, upon execution of the Note will pay
over to Holder sufficient funds to satisfy the Florida recurring intangible
personal property tax which shall become due and payable as of January 1,
1997 with respect to the indebtedness evidenced by this Note. Such deposit
shall not be, nor be deemed to be, trust funds but may be commingled with
the general funds of Holder, and no interest shall be payable in respect
thereof. In the event of a default under any of the terms, covenants and
conditions of this Note, Holder may apply to the reduction of the sum secured
hereby, in such manner as Holder shall determine, any amount under this
Paragraph any amount remaining to Obligor's credit.
WAIVER OF JURY TRIAL. OBLIGOR AND HOLDER (BY ITS ACCEPTANCE OF THIS NOTE)
--------------------
HEREBY AGREE AS FOLLOWS: (A) EACH OF THEM KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION (AN
"ACTION") BASED UPON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
NOTE OR ANY RELATED DOCUMENTS, INSTRUMENTS, OR AGREEMENTS (WHETHER ORAL OR
WRITTEN AND WHETHER EXPRESS OR IMPLIED AS A RESULT OF A COURSE OF DEALING,
A COURSE OF CONDUCT, A STATEMENT, OR OTHER ACTION OF EITHER PARTY); (B)
NEITHER OF THEM MAY SEEK A TRIAL BY JURY IN ANY SUCH ACTION; (C) NEITHER OF
THEM WILL SEEK TO CONSOLIDATE ANY SUCH ACTION (IN WHICH A JURY TRIAL HAS BEEN
WAIVED) WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED; AND (D) NEITHER OF THEM HAS IN ANY WAY AGREED WITH OR PRESENTED TO THE
OTHER OF THEM THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED
IN ALL INSTANCES.
MAKERS:
PGIP L.L.C., a Missouri limited
liability company
By: /s/ Andrew S. Love Jr.
----------------------------------
Name: Andrew S. Love Jr.
----------------------------
Title: Manager
---------------------------
-5-
<PAGE> 65
SCHEDULE 1
----------
1. Collateral Assignment and Notes, Mortgages and Other Loan Documents dated
even date herewith, made by Maker in favor of Holder.
-6-
<PAGE> 66
THIS INSTRUMENT PREPARED BY AND RETURN TO:
MICHAEL J. VIRGADAMO, ESQUIRE
CARLTON, FIELDS, WARD, EMMANUEL,
SMITH & CUTLER, P.A.
POST OFFICE BOX 3239
TAMPA, FLORIDA 33601
COUNTERPART ORIGINALS OF THIS COLLATERAL ASSIGNMENT OF NOTES, MORTGAGES AND
OTHER LOAN DOCUMENTS ARE BEING RECORDED IN CITRUS COUNTY AND HERNANDO COUNTY,
FLORIDA. FLORIDA DOCUMENTARY STAMP TAXES IN THE AMOUNT OF $11,373.00 ARE BEING
PAID UPON THE RECORDATION OF THIS INSTRUMENT IN CITRUS COUNTY, FLORIDA.
COLLATERAL ASSIGNMENT OF NOTES,
MORTGAGES AND OTHER LOAN DOCUMENTS
THIS COLLATERAL ASSIGNMENT OF NOTES, MORTGAGES AND OTHER LOAN DOCUMENTS
("Assignment") is made as of March 28, 1996 by PGIP L.L.C., a Missouri limited
----------
liability company ("Assignor"), having a mailing address of 515 Olive Street,
--------
Suite 1400, St. Louis, Missouri 63101, to and for the benefit of FIRST UNION
NATIONAL BANK OF FLORIDA, a national banking association ("Assignee"), having a
--------
mailing address of Special Assets Department (FL 2202), 800 North Magnolia,
Orlando, Florida 32802.
BACKGROUND
In connection with that certain Note and Loan Document Purchase
Agreement executed by and between Assignee, Assignor, and PGI Incorporated,
Sugarmill Woods, Inc., Burnt Store Marina, Inc., and Gulf Coast Credit
Corporation (collectively, "Borrowers") dated effective October 12, 1995, as
---------
amended by those certain letter agreements, dated November 10, 1995, December
15, 1995, January 17, 1996, and February 16, 1996, and as further amended
by that certain Modification of Note and Loan Document Purchase Agreement
dated and effective as of even date herewith (as amended, "Purchase Agreement"),
------------------
Assignor executed that certain Promissory Note in the original principal
amount of $2,988,001.65 in favor of Assignee ("Note A") and that certain
------
Promissory Note in the original principal amount of $261,518.90 in favor of
Assignee ("Note B"; Note B
------
<PAGE> 67
together with Note A, the "Notes"). As security for repayment of the Notes,
-----
Assignor has agreed to assign to Assignee all of Assignor's right, title and
interest in and to: (1) that certain Consolidated Renewal Promissory Note,
dated as of May 13, 1994, executed by Borrowers in favor of Assignee, in the
original principal amount of $7,001,615.29 ("Consolidated Note"), which
-----------------
Consolidated Note was assigned to Assignor pursuant to that certain Assignment
of Notes, Mortgages and Loan Documents executed by Assignee in favor of
Assignor dated effective of even date herewith ("Assignment of Notes");
(2) that certain Future Advance Note, dated October 12, 1995, executed by
Borrowers in favor of Assignee, in the original principal amount of
$241,617.65 ("Future Advance Note"), which Future Advance Note was assigned to
-------------------
Assignor pursuant to the provisions of the Assignment of Notes; and (3) any
and all other documents evidencing or securing any portion of the indebtedness
evidenced by the Consolidated Note or the Future Advance Note, including
without limitation, the documents listed in Exhibit A attached hereto and made
---------
a part hereof (collectively, the "Other Loan Documents"), which Other Loan
--------------------
Documents were assigned to Assignor pursuant to the provisions of the
Assignment of Notes. Hereinafter, the Consolidated Note, the Future Advance
Note and the Other Loan Documents shall be referred to herein, collectively,
as the "Collateral Loan Documents."
-------------------------
OPERATIVE TERMS
The parties agree as follows:
1. As security for payment and satisfaction of all Assignor's liabilities
and obligations to Assignee, including without limitation, Assignor's liability
to Assignee under the Notes, Assignor hereby assigns to Assignee and its
successors and assigns all of Assignor's present and hereafter acquired right,
title, and interest in and to the Collateral Loan Documents and in all money
and payments that are due or to become due (including interest and penalties)
under the Collateral Loan Documents. Concurrently with its execution of this
Assignment, Assignor shall endorse the Consolidated Note and the Future
Advance Note payable to Assignee and deliver the Collateral Loan Documents to
Assignee; and, hereafter, at the request of Assignee, Assignor shall execute
and deliver to Assignee any other documents and instruments as Assignee, in
its sole discretion, determines are necessary to perfect or maintain
Assignee's security interest in the Collateral Loan Documents. Assignor hereby
irrevocably appoints Assignee as Assignor's attorney-in-fact to execute and
file on Assignor's behalf any financing statements, and any refilings and
continuations thereof, as Assignee deems necessary or appropriate to perfect
Assignee's security interests granted in this Assignment.
2. The parties intend that this instrument create a present assignment
of the Collateral Loan Documents. Until all amounts due under the Notes have
been repaid in full, Assignor shall not collect any payments under the
Collateral Loan Documents. If Assignor receives any such payment from the
Borrowers before all amounts due under the Notes have been repaid in full,
Assignor shall be deemed to be holding the same in trust for Assignee
2
<PAGE> 68
and shall immediately deliver the same to Assignee. Upon repayment of all
sums due pursuant to the Notes in full, Assignee shall endorse the
Consolidated Note and Future Advance Note payable to Assignor and assign the
Collateral Loan Documents to Assignor and release this Assignment and any and
all other assignments, pledges or UCC's held by Assignee in connection with
this Assignment. THE BORROWERS ARE HEREBY IRREVOCABLY AUTHORIZED AND DIRECTED
BY ASSIGNOR TO MAKE ALL PAYMENTS UNDER THE COLLATERAL LOAN DOCUMENTS DIRECTLY
TO ASSIGNEE UNTIL THE NOTES HAVE BEEN PAID IN FULL AND TO RELY UPON ANY AND
ALL INSTRUCTIONS FROM ASSIGNEE, WITHOUT HAVING ANY RIGHT OR DUTY TO INQUIRE
AS TO WHETHER AN EVENT OF DEFAULT HAS OCCURRED UNDER THIS ASSIGNMENT OR THE
NOTES.
3. Assignor represents and warrants to Assignee that (a) Assignor has
received consideration sufficient to induce Assignor to execute and deliver
this Assignment and to perform all its obligations under this Assignment;
(b) Assignor has full authority to execute, deliver and perform its obligations
under this Agreement; (c) upon the delivery to Assignee of this Assignment
and the Collateral Loan Documents, Assignee will have a first perfected
security interest in the Collateral Loan Documents, and no person or entity,
other than Assignor, Assignee and the Borrowers will have any interest in
the respective Collateral Loan Documents; and (d) each of the Collateral
Loan Documents is enforceable in accordance with its respective terms, and,
the Borrowers have no defenses, counterclaims, or offsets to its obligations
under the Collateral Loan Documents.
4. Assignor covenants not to sell, assign, hypothecate, encumber, amend,
subordinate, modify, renew, replace or accept any prepayment (by acceleration
or otherwise) of the Collateral Loan Documents without the prior written
consent of Assignee. If any of the foregoing events occurs (with or without
the consent of Assignee), Assignor immediately shall notify Assignee of the
occurrence of the event, and Assignee, in it sole discretion and without
limiting any other of its rights under this Assignment, may require Assignor
to prepay the Note by the full amount of the consideration, proceeds, or
payments received by Assignor in connection with the event.
5. Assignor shall timely perform all its obligations under the Collateral
Loan Documents and immediately shall notify Assignee of any default or breach
of Assignor or the Borrowers under the Collateral Loan Documents. Assignor
shall not, without the prior written consent of Assignee, (i) waive any breach
or default by the Borrowers under the terms of the Collateral Loan Documents,
(ii) permit any modification or termination of the Collateral Loan Documents
or (iii) release any of the collateral encumbered by the Mortgages on the
Other Loan Documents.
6. If the Borrowers default under the Collateral Loan Documents (i) by
permitting or committing any waste, impairment or deterioration of the
property encumbered by the Collateral Loan Documents or taking any action which
would increase the risk of damage to such property, (ii) by failing to pay
promptly when due any and all taxes, assessments, dues, charges, fees,
levies, fines, impositions, liabilities and encumbrances of every kind, now
or hereafter imposed, levied or assessed upon or against the property
encumbered by the Collateral Loan Documents, or (iii) by selling, conveying,
transferring,
3
<PAGE> 69
leasing, or further encumbering the property encumbered by the Collateral
Loan Documents without making the appropriate principal reduction payment
thereunder, then, Assignee, at its sole option, may, at Assignor's sole
expense, on Assignee's own behalf or otherwise, enforce the Collateral Loan
Documents and exercise any or all other remedies available to Assignor under
the Collateral Loan Documents with or without joining Assignor as a party.
The foregoing rights of Assignee are cumulative, and Assignee may exercise
any one or more of them without waiving its rights to exercise the others.
7. If Assignor becomes obligated under this Agreement to pay any
amounts to Assignee, such amounts will be secured by this Assignment and
Assignor promptly shall pay such amounts to Assignee, together with interest
thereon, from the date when due, at the maximum rate allowable under
applicable law. At its option, Assignee may collect any or all such amounts,
together with accrued interest, if any, from payments by the Borrowers under
the Consolidated Note and Future Advance Note.
8. This Assignment does not create any obligation or liability on the
part of Assignee, and Assignor shall indemnify Assignee from any claim, costs,
expense or liability incurred by Assignee as a result of this Assignment,
including, without limitation, attorneys' and paralegals' fees and costs
incurred in the enforcement of this Assignment (including, without
limitation, attorneys' and paralegals' fees and costs incurred in any
litigation, mediation, arbitration, bankruptcy and administrative proceedings,
and any appeals therefrom.)
9. Upon payment in full of the indebtedness evidenced by the Note and
the satisfaction in full of all other obligations of Assignor under this
Assignment Assignee shall reassign the Collateral Loan Documents to Assignor,
and this Assignment will be null and void and have no further force or effect.
10. This Assignment binds and inures to the benefit of the respective
successors and assigns of Assignor and Assignee.
SIGNED, SEALED AND DELIVERED ASSIGNOR:
IN THE PRESENCE OF:
PGIP L.L.C., a Missouri limited
/s/ John P. McNearney liability company
- -----------------------------
(Signature)
John P. McNearney
- ----------------------------- By: /s/ Andrew S. Love Jr.
(Printed Name) ------------------------------
Name: Andrew S. Love Jr.
-------------------------
Title: Manager
/s/ Michael J. Virgadamo -------------------------
- -----------------------------
(Signature)
Michael J. Virgadamo
- -----------------------------
(Printed Name)
4
<PAGE> 70
ASSIGNEE:
FIRST UNION NATIONAL
/s/ John P. McNearney BANK OF FLORIDA, a
- ----------------------------- national banking association
(Signature)
(CORPORATE SEAL)
John P. McNearney
- -----------------------------
(Printed Name) By: /s/ Nelson T. Ritch III
------------------------------
Name: Nelson T. Ritch III
------------------------
Title: Asst. Vice Pres.
------------------------
/s/ Michael J. Virgadamo
- -----------------------------
(Signature)
Michael J. Virgadamo
- -----------------------------
(Printed Name)
STATE OF FLORIDA
COUNTY OF ORANGE
The foregoing instrument was acknowledged before me this 28th day of
March, 1996, by Andrew S. Love as Manager of PGIP L.L.C., a Missouri limited
liability company, on behalf of the company. He/She is personally known to
--
me or has produced MO (state) driver's license no. ###-##-#### as
identification.
My Commission Expires: /s/ Margaret A. Reiman
----------------------------------
(AFFIX NOTARY SEAL) Notary Public (Signature)
MARGARET A. REIMAN Margaret A. Reiman
MY COMMISSION # CC 374628 ----------------------------------
EXPIRES: June 25, 1998 (Printed Name)
Bonded Thru Notary Public Underwriters
----------------------------------
(Title or Rank)
----------------------------------
(Serial Number, if any)
5
<PAGE> 71
STATE OF FLORIDA
COUNTY OF ORANGE
The forgoing instrument was acknowledged before me this 28th day of
March, 1996, by Nelson T. Ritch III as Assoc. Vice Pres. of FIRST UNION
NATIONAL BANK OF FLORIDA, a national banking association, on behalf of the
association. He/She is personally known to me or has produced ------ (state)
--
driver's license no. --------------------------------- as identification.
My Commission Expires: /s/ Margaret A. Reiman
----------------------------------
Notary Public (Signature)
(AFFIX NOTARY SEAL)
MARGARET A. REIMAN Margaret A. Reiman
MY COMMISSION # CC 374628 ----------------------------------
EXPIRES: June 25, 1998 (Printed Name)
Bonded Thru Notary Public Underwriters
----------------------------------
(Title or Rank)
----------------------------------
(Serial Number, if any)
6
<PAGE> 72
EXHIBIT A
---------
LOAN DOCUMENTS
--------------
1. Substitute Renewal Mortgage No. 1, dated as of October 19, 1985, executed
by Borrowers in favor of Naples, and recorded in the Public Records of
Citrus County, Florida at O.R. Box 682, Page 2140, and in the Public
Records of Hernando County, Florida, at O.R. Book ----, Page ----, as each
of the same may have been amended from time to time.
2. Substitute Renewal Mortgage No. 2, dated as of October 19, 1985, executed
by Punta Gorda Isles, Inc., Punta Gorda Developers, Inc. and Burnt Store
Marina, Inc. in favor of The First National Bank of Chicago, as Agent
("FNBC"), and recorded at O.R. Book 837, Page 959 of the Public Records of
----
Charlotte County, Florida, and recorded at O.R. Book 682, Page 1952 of the
Public Records of Citrus County, Florida, which Substitute Renewal
Mortgage No. 2 was assigned by FNBC to Naples pursuant to: (i) that certain
Assignment of Mortgage recorded at O.R. Book 683, Page 187 of the Public
Records of Citrus County, Florida, (ii) that certain Assignment of
Mortgages recorded at O.R. Book 683, Page 190 of the Public Records of
Citrus County, Florida and O.R. Book 683, Page 195 of the Public Records
of Citrus County, Florida, as the same may have been amended from time
to time.
3. Restated Loan Agreement No. 1, dated October 19, 1985, executed between
Naples and Borrowers as the same may have been amended from time to time.
4. Divided Security Agreement and Pledge of Collateral No. 1, dated October 19,
1985, executed by Borrowers in favor of Naples, as the same may have been
amended from time to time.
5. Divided Assignment of Notes, Mortgages, Contracts and Agreements for
Deed No. 1 dated as of October 19, 1985, executed by Borrowers in favor of
Naples, as the same may have been amended from time to time.
6. Platinum Point Loan Documents, as described in that Thirteenth Mortgage &
Loan Modification Agreement, dated as of May 13, 1994, executed by and
between Borrowers and BancFlorida, a Federal Savings Bank, predecessor in
interest by merger to Lender.
7. Tugboat Loan Documents, as described in that Thirteenth Mortgage & Loan
Modification Agreement, dated as of May 13, 1994, executed by and between
Borrowers and BancFlorida, a Federal Savings Bank, predecessor in interest
by merger to Lender.
<PAGE> 73
8. Loan and Security Agreement, dated October 1, 1984, executed by PGI, PGD,
Marina, FNBC, CREI or FNB, as agent ("Land Loan Agreement"), a portion of
-------------------
which Agreement was assigned by FNBC and CREI to Naples pursuant to a Note
Purchase Agreement, dated October 19, 1985, as the same may have been
amended from time to time.
9. Loan and Security Agreement, dated as of October 1, 1984, executed among
PGI, PGD, Marina, FNBC, CREI and FNBC, as Agent, as the same may have
been modified from time to time ("FNBC Receivables Loan Agreement"), a
-------------------------------
portion of which Agreement was assigned by FNBC and CREI to Naples
pursuant to a Note Purchase Agreement, dated October 19, 1985, as the
same may have been amended from time to time.
10. Restated Loan and Security Agreement, dated as of March 25, 1987,
executed by and among Borrowers and Naples, as the same may have been
amended from time to time ["to be read in conjunction with Restated Loan
Agreement No. 1" - item 3 above]
11. Pledge Agreement, dated as of March 25, 1987, executed among Punta Gorda
Isles, Inc., Punta Gorda Developers, Inc. and Naples regarding stock
collateral, as the same may have been amended from time to time.
12. Security Agreement, dated March 25, 1987, executed among Borrowers and
Naples regarding blanket lien on all of Borrower's assets, as the same
may have been amended from time to time.
13. Together with Assignor's right, title and interest, if any, in any
additional security instruments securing the indebtedness under the
Consolidated Note and the Future Advance Note.
A-2
<PAGE> 1
MULTIASG.GH
Project : Annutteliqa Hammock/Sugarmill Woods (Form Revised 07/23/96)
----------------------------------- DNR 61-38(16)
Parcel #:
OPTION AGREEMENT FOR SALE AND PURCHASE
THIS AGREEMENT is made this 31st day of January, 1997, between Sugarmill
Woods, Inc., a Florida corporation, and LOVE-PGI Partners, L.P., a Missouri
limited partnership whose address is 212 South Central, Suite 100, St. Louis,
MO 63105-3506, collectively referred to as "Seller" and The Nature
Conservancy, a non-profit District of Columbia corporation, qualified as
a public charity pursuant to Section 501(c)(3) of the Internal Revenue Code
of 1986, as amended (the "Code"), and authorized to transact business in
the State of Florida as The Nature Conservancy, Inc., whose address is
222 S. Westmonte Drive, Suite 300, Altamonte Springs, FL 32714, and its
successors and assigns as "Purchaser."
1. GRANT OF OPTION. Seller hereby grants to Purchaser and its
---------------
successors and assigns the exclusive option to purchase the real property
located in Citrus and Hernando counties, Florida, described in Exhibit "A",
together with all improvements, easements and appurtenances and riparian and
littoral rights, if any (the "Property"), in accordance with the provisions
of this Agreement. The legal description of the Property described in
Exhibit "A" may be modified prior to closing to match the final DSL-approved
legal description of the Property. This Agreement becomes legally binding on
Seller upon Seller's execution of the Agreement, but exercise of the option
is subject to approval by the Board of Governors of the Purchaser and/or by
the Board of Trustees of the Internal Improvement Trust Fund of the State of
Florida (the "Trustees"), whose address is Florida Department of Environmental
Protection, Division of State Lands, 3900 Commonwealth Blvd., Mail Station 115,
Tallahassee, Florida 32399, if this option is assigned to the Trustees, and
is effective only if Purchaser gives written notice of exercise to Seller.
If this option is assigned to the Trustees, the Trustees' agent in all matters
shall be the Division of State Lands of the Florida Department of
Environmental Protection ("DSL").
2. OPTION TERMS. The option payment is $100.00 ("Option Payment"), the
------------
receipt and sufficiency of which is hereby acknowledged by Seller. The option
may be exercised during the period beginning with Purchaser's approval of this
Agreement and ending 120 days after Trustees' approval of this Agreement
("Option Expiration Date"), unless extended by other provisions of this
Agreement, if this Agreement is assigned to the Trustees. If this Agreement
is not approved by the Trustees on or before May 28, 1997, or if the
Agreement is not assigned to the Trustees, then the Option Expiration Date
shall be May 28, 1997, unless extended by other provisions of this Agreement.
In the event Purchaser's funds in the amount of the Purchase Price (as
hereinafter defined in paragraph 3.A.) are not available by the Option
Expiration Date the period of exercise of the option may be extended until
such funds become available, not to exceed 60 days after the Option Expiration
Date, by written notice to Seller.
3.A. PURCHASE PRICE. The purchase price ("Purchase Price") for the
--------------
Property is Fourteen Million Seven Hundred Fifty-Nine Thousand Three Hundred
Thirty-Five Dollars ($14,759,335.00) which, after reduction by the amount of
the Option Payment, will be paid in cash (or, if this option is assigned to
the Trustees in accordance with paragraph 20., by state warrant) at closing to
Seller or Seller's designated agent who meets the requirements of Section
259.041(17), Florida Statutes. The Purchase Price is subject to adjustment
in accordance with paragraph 3.B. This Agreement is contingent upon approval
of the Purchase Price by Purchaser and upon confirmation that the final
Purchase Price is not in excess of the maximum value of the Property as
determined in accordance with Section 259.041(7), Florida Statutes ("DSL
Approved Value"). The determination of the final DSL Approved Value and the
final Purchase Price can only be made after the completion and DSL's approval
of the survey required in paragraph 5.
3.B. ADJUSTMENT OF PURCHASE PRICE. The Purchase Price set out in paragraph
----------------------------
3.A. above is based on $2,816.43 per acre ("Acre Price") for an estimated
5,240.45 unsurveyed acres ("Acres"). For purposes of this Agreement, Acres
shall mean those lands located within the boundary of the final DSL approved
survey required
Page 1
<PAGE> 2
by paragraph 5. hereof. The Purchase Price shall be adjusted and the final
Purchase Price shall be obtained by multiplying the lower of the Acre Price or
the final DSL approved maximum value per Acre permitted to be paid under
Section 259.041(7), Florida Statutes ("Final DSL Approved Acre Value"), by
the surveyed Acreage shown on the final DSL approved survey required by
paragraph 5. hereof. The Acre Price as set forth above in this paragraph 3.B.
will not decrease unless the Acre Price is in excess of the Final DSL
Approved Acre Value. If it is determined by DSL that the Acre Price is in
excess of the Final DSL Approved Acre Value, the Acre Price will be reduced
to the Final DSL Approved Acre Value. If the Final Adjusted Purchase Price is
decreased by more than $100,000.00 because of a reduction in the Acre Price,
Seller shall, in its sole discretion, have the right to terminate this
Agreement and neither party shall have any further obligations under this
Agreement. If Seller elects to terminate this Agreement, Seller shall
provide written notice to Purchaser of his election to terminate this
Agreement within 10 days after Seller's receipt of written notice from
Purchaser of the final adjusted Purchase Price. In the event Seller fails to
give Purchaser a written notice of termination within the aforesaid time
period from receipt of Purchaser's written notice, then Seller shall be
deemed to have waived any right to terminate this Agreement based upon a
reduction in the Purchase Price originally stated in paragraph 3.A. The Seller
acknowledges that the Acre Price and the estimated number of Acres may vary
substantially from the Final DSL Approved Acre Value and the surveyed Acres
as shown on the final DSL approved survey required by paragraph 5. hereof.
Notwithstanding any provision herein to the contrary, the final adjusted
Purchase Price shall not exceed $14,759,335.00; even though this amount may
be less than the final DSL Approved Value of the Property.
4.A. ENVIRONMENTAL SITE ASSESSMENT. Seller shall, at his sole cost and
-----------------------------
expense and at least 15 days prior to the Option Expiration Date, furnish to
Purchaser a Phase I environmental site assessment of the Property, and, if
recommended in the Phase I environmental site assessment, a Phase II
environmental site assessment both of which meet the standards and
requirements of Purchaser. However, should the cost of the Phase II
environmental site assessment exceed $20,000, Seller may elect to terminate
this Agreement and neither party shall have any further obligations under this
Agreement. It is Seller's responsibility to ensure that the environmental
consultant contacts Purchaser regarding these standards and requirements.
Seller shall use the services of a competent, professional consultant with
expertise in the environmental site assessment process to determine the
existence and extent, if any, of Hazardous Materials on the Property. For
purposes of this Agreement "Hazardous Materials" shall mean any hazardous
or toxic substance, material or waste of any kind or any other substance
which is regulated by any Environmental Law (as hereinafter defined in
paragraph 4.B.). The environmental site assessment shall be certified to
Purchaser and the date of certification shall be within 45 days before the
date of closing, unless this 45 day time period is waived by DSL.
4.B. HAZARDOUS MATERIALS. In the event that the environmental site
-------------------
assessment provided for in paragraph 4.A. confirms the presence of Hazardous
Materials on the Property, Purchaser, at its sole option, may elect to
terminate this Agreement and neither party shall have any further obligations
under this Agreement. Should Purchaser elect not to terminate this Agreement,
Seller shall, at his sole cost and expense and prior to the exercise of the
option and closing, promptly commence and diligently pursue any assessment,
clean up and monitoring of the Property necessary to bring the Property into
full compliance with any and all applicable federal, state or local laws,
statutes, ordinances, rules, regulations or other governmental restrictions
regulating, relating to, or imposing liability or standards of conduct
concerning Hazardous Materials ("Environmental Law"). However, should the
estimated cost of clean up of Hazardous Materials exceed $100,000, Seller
may elect to terminate this Agreement and neither party shall have any further
obligations under this Agreement. In the event that Hazardous Materials placed
on the Property prior to closing are discovered after closing, Seller shall
remain obligated hereunder, with such obligation to survive the closing and
delivery and recording of the deed described in paragraph 8. of this Agreement
and Purchaser's possession of the Property, to diligently pursue and
accomplish the clean up of Hazardous Materials in a manner consistent with
all applicable Environmental Laws and at Seller's sole cost and expense.
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<PAGE> 3
Further, in the event that neither party elects to terminate this Agreement
as provided above, Seller shall indemnify and save harmless and defend
Purchaser, its officers, servants, agents and employees from and against any
and all claims, suits, actions, damages, liabilities, expenditures or causes
of action of whatsoever kind arising from Hazardous Materials placed on the
Property prior to closing whether the Hazardous Materials are discovered prior
to or after closing. Seller shall defend, at his sole cost and expense, any
legal action, claim or proceeding instituted by any person against Purchaser
as a result of any claim, suit, or cause of action for injuries to body,
life, limb or property for which Hazardous Materials placed on the Property
prior to closing are alleged to be a contributing legal cause. Seller shall
save Purchaser harmless from and against all judgments, orders, decrees,
attorney's fees, costs, expenses and liabilities in and about any such claim,
suit, investigation or defense thereof, which may be entered, incurred or
assessed as a result of the foregoing.
The contractual limitation on Seller's contractual obligation to indemnify
Purchaser and clean up the Property as specified in this paragraph 4.B. shall
not be construed to limit Seller's legal liability under any Environmental Law
for Hazardous Materials located on the Property or to limit Purchaser's legal
and equitable remedies against Seller under any Environmental Laws for
Hazardous Materials located on the Property.
5. SURVEY. Seller shall, at his sole cost and expense and not less than
------
30 days prior to the Option Expiration Date, deliver to DSL a current boundary
survey of the Property prepared by a professional surveyor and mapper licensed
by the State of Florida which meets the standards and requirements of DSL
("Survey"). It is Seller's responsibility to ensure that the surveyor and
mapper contacts the Bureau of Survey and Mapping in DSL regarding these
standards and requirements and the cost of the Survey prior to the commencement
of the Survey. The Survey shall be certified to Purchaser and the title
insurer and the date of certification shall be within 90 days before the date
of closing, unless this 90 day time period is waived by DSL and by the title
insurer for purposes of deleting the standard exceptions for survey matters
and easements or claims of easements not shown by the public records from
the owner's title policy. If the Survey shows any encroachment on the
Property or that improvements intended to be located on the Property encroach
on the land of others, the same shall be treated as a title defect. Seller's
vesting deed legal description has been reviewed without the benefit of a
field survey or comprehensive title research. The legal description of the
Property described in Exhibit "A" may be modified prior to closing to match
the final DSL-approved legal description of the Property. Purchaser shall
reimburse Seller for 50% of the DSL approved cost of Survey, not to exceed
$29,985.00, upon Seller's submission of the necessary documentation to DSL
which evidences payment in full of the Survey costs by Seller. This
reimbursement is contingent upon a sale of the Property to Purchaser.
6. TITLE INSURANCE. Seller shall, at his sole cost and expense and
---------------
within 45 days of Purchaser's approval of this contract, furnish to Purchaser
a marketable title insurance commitment, to be followed by an owner's
marketable title insurance policy (ALTA Form "B") from a title insurance
company, approved by Purchaser, insuring marketable title of Purchaser to
the Property in the amount of the final Purchase Price. Seller shall require
that the title insurer delete the standard exceptions of such policy referring
to: (a) all taxes, (b) unrecorded rights or claims of parties in possession,
(c) survey matters, (d) unrecorded easements or claims of easements, and
(e) unrecorded mechanics' liens.
7. DEFECTS IN TITLE. If the title insurance commitment or Survey
----------------
furnished to Purchaser pursuant to this Agreement discloses any defects in
title which are not acceptable to Purchaser, Seller shall, within 90 days
after notice from Purchaser, remove said defects in title. Seller agrees to
use diligent effort to correct the defects in title within the time provided
therefor, including the bringing of necessary suits, but in no event shall
Seller be obligated to spend more than $100,000 to cure or remove such
defects. However, should the cost to cure or remove such defects in title
exceed $100,000, Seller may elect to terminate this Agreement and neither
party shall have any further obligations under this Agreement. If Seller is
unsuccessful in removing the title defects within said time Purchaser shall
have the option to either: (a) accept the title as it then is with a
reduction in the Purchase Price by an amount mutually agreed
Page 3
<PAGE> 4
to by the parties, (b) accept the title as it then is with no reduction in the
Purchase Price, (c) extend the amount of time that Seller has to cure the
defects in title, or (d) terminate this Agreement, thereupon releasing
Purchaser and Seller from all further obligations under this Agreement. If
Seller fails to make a diligent effort to remove the title defects, Seller
shall be in default and the provisions of paragraph 17. of this Agreement
shall apply.
8. INTEREST CONVEYED. At closing, Seller shall execute and deliver to
-----------------
Purchaser a special warranty deed in a form acceptable to Purchaser, conveying
marketable title to the Property in fee simple free and clear of all liens,
reservations, restrictions, easements, leases, tenancies and other
encumbrances, except for those that are acceptable encumbrances, pursuant to
Paragraph 7, in the opinion of Purchaser and do not impair the marketability
of the title to the Property.
9. PREPARATION OF CLOSING DOCUMENTS. Upon execution of this Agreement,
--------------------------------
Seller shall submit to Purchaser a properly completed and executed beneficial
interest affidavit and disclosure statement as required by Sections 286.23,
375.031(1) and 380.08(2), Florida Statutes, on DSL forms provided by
Purchaser. Seller shall prepare the deed described in paragraph 8. of this
Agreement, Purchaser's and Seller's closing statements and the title,
possession and lien affidavit certified to Purchaser and title insurer in
accordance with Section 627.7842, Florida Statutes, and an environmental
affidavit on DSL forms provided by Purchaser. All prepared documents shall be
submitted to Purchaser for review and approval at least 15 days prior to the
Option Expiration Date.
10. PURCHASER'S REVIEW FOR CLOSING. Purchaser will approve or reject each
------------------------------
item required to be provided by Seller under this Agreement within 30 days
after receipt of all of the required items. Seller will have 30 days thereafter
to cure and resubmit any rejected item. In the event Seller fails to timely
deliver any item, or Purchaser rejects any item after delivery, Purchaser may
in its discretion extend the Option Expiration Date.
11. EXPENSES. Seller will pay the documentary revenue stamp tax and all
--------
other taxes associated with the conveyance, the cost of recording the deed
described in paragraph 8. of this Agreement and any other recordable
instruments which Purchaser deems necessary to assure good and marketable
title to the Property. All other closing expenses, including without
limitation, attorney's fees shall be paid by the party incurring such expenses.
12. TAXES AND ASSESSMENTS. If this option is not assigned to the
---------------------
Trustees, all real estate taxes and assessments which are or which may become
a lien against the Property shall be prorated between the parties to the date
of closing. Notwithstanding any provision herein to the contrary, if this
option is assigned to the Trustees, all real estate taxes and assessments
which are or which may become a lien against the Property shall be satisfied
of record by Seller at closing. If this option is assigned to the Trustees,
and the Trustees acquire fee title to the Property between January 1 and
November 1, Seller shall, in accordance with Section 196.295, Florida Statutes,
place in escrow with the county tax collector an amount equal to the current
taxes prorated to the date of transfer, based upon the current assessment and
millage rates on the Property. In the event the Trustees acquire fee title to
the Property on or after November 1, Seller shall pay to the county tax
collector an amount equal to the taxes that are determined to be legally due
and payable by the county tax collector.
13. CLOSING PLACE AND DATE. The closing shall be on or before 15 days
----------------------
after Purchaser exercises the option; provided, however, that if a defect
exists in the title to the Property, title commitment, Survey, environmental
site assessment, or any other documents required to be provided or completed
and executed by Seller, the closing shall occur either on the original closing
date or within 60 days after receipt of documentation curing the defects,
whichever is later. The date, time and place of closing shall be set by
Purchaser.
14. RISK OF LOSS AND CONDITION OF REAL PROPERTY. Seller assumes all risk
-------------------------------------------
of loss or damage to the Property prior to the date of closing and warrants
that the Property shall be transferred and conveyed to Purchaser in the same
or essentially the same condition as of the date of Seller's execution of this
Agreement, ordinary wear and tear and acts of God or other natural forces
Page 4
<PAGE> 5
excepted. However, in the event the condition of the Property is altered by an
act of God or other natural force beyond the control of Seller, Purchaser may
elect, at its sole option, to terminate this Agreement and neither party shall
have any further obligations under this Agreement. Seller represents and
warrants that, as of closing, there are no parties other than Seller in
occupancy or possession of any part of the Property. Seller agrees to clean
up and remove all abandoned personal property, refuse, garbage, junk, rubbish,
trash and debris from the Property to the satisfaction of Purchaser prior to
the exercise of the option by Purchaser.
15. RIGHT TO ENTER PROPERTY AND POSSESSION. Seller agrees that from the
--------------------------------------
date this Agreement is executed by Seller, Purchaser and its agents, upon
reasonable notice, shall have the right to enter the Property for all lawful
purposes in connection with this Agreement, subject to the rights, privileges,
terms and conditions in the following leases (collectively referred to as the
"Leases"): (a) Cattle Grazing and Farming Lease dated October 30, 1993 by and
between Sugarmill Woods, Inc. and Jesse Thomas; (b) Cattle Grazing and Farming
Lease, dated December 17, 1994 by and between Sugarmill Woods, Inc. and
Jesse Thomas, John Thomas and Jimmie Sunday; and (c) Cattle Grazing and
Farming Lease, dated December 17, 1994 between LOVE-PGI Partners, L.P.,
a Missouri limited partnership, and Jesse Thomas, John Thomas and Jimmie
Sunday. The Leases will be terminated prior to closing. Seller shall deliver
possession of the Property to Purchaser at closing.
16. ACCESS. Seller warrants that there is legal ingress and egress for
------
the Property over public roads or valid, recorded easements for the use and
benefit of and as an appurtenance to the Property.
17. DEFAULT. If Seller defaults under this Agreement, Purchaser may waive
-------
the default and proceed to closing, seek specific performance, or refuse to
close and elect to receive the return of any money paid, each without waiving
any action for damages, or any other remedy permitted by law or in equity
resulting from Seller's default.
18. BROKERS. Each party represents that no persons, firms, corporations
-------
or other entities are entitled to a real estate commission or other fees as a
result of this Agreement or subsequent closing, except as accurately disclosed
on the disclosure statement required in paragraph 9. Seller shall indemnify
and hold Purchaser harmless from any and all such claims, whether disclosed
or undisclosed.
19. RECORDING. This Agreement, or notice of it, may be recorded by
---------
Purchaser in the appropriate county or counties. In the event Purchaser
records this Agreement and defaults under this Agreement and this transaction
does not close, Purchaser will execute and deliver a quit claim deed to Seller
which releases all Purchaser's interest in the Property.
20. ASSIGNMENT. This Agreement may be assigned by Purchaser only to the
----------
Trustees, in which event Purchaser will provide written notice of assignment
to Seller. This Agreement may not be assigned by Seller without the prior
written consent of Purchaser.
21. TIME. Time is of essence with regard to all dates or times set forth
----
in this Agreement. If the date for performance of any act hereunder falls on a
Saturday, Sunday or legal holiday, then the time for performance shall be
deemed extended to the next successive business day.
22. SEVERABILITY. In the event any of the provisions of this Agreement
------------
are deemed to be unenforceable, the enforceability of the remaining provisions
of this Agreement shall not be affected.
23. SUCCESSORS IN INTEREST. Upon Seller's execution of this Agreement,
----------------------
Seller's successors and assigns will be bound by it. Upon Purchaser's approval
of this Agreement and Purchaser's exercise of the option, Purchaser and
Purchaser's successors and assigns will be bound by it. Whenever used, the
singular shall include the plural and one gender shall include all genders.
24. ENTIRE AGREEMENT. This Agreement contains the entire agreement
----------------
between the
Page 5
<PAGE> 6
parties pertaining to the subject matter contained in it and supersedes all
prior and contemporaneous agreements, representations and understandings of the
parties. No supplement, modification or amendment to this Agreement shall be
binding unless executed in writing by the parties.
25. WAIVER. Failure of either party to insist upon strict performance
------
of any covenant or condition of this Agreement, or to exercise any right
herein contained, shall not be construed as a waiver or relinquishment for
the future of any such covenant, condition or right; but the same shall remain
in full force and effect.
26. AGREEMENT EFFECTIVE. This Agreement or any modification, amendment
-------------------
or alteration thereto, shall not be effective or binding upon any of the
parties hereto until it has been executed by all of the parties hereto.
27. COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, but all such counterparts, when duly executed, shall constitute
one and the same Agreement.
28. ADDENDUM. Any addendum attached hereto that is signed by the parties
--------
shall be deemed a part of this Agreement.
29. NOTICE. Whenever either party desires or is required to give notice
------
unto the other, it must be given by written notice, and either delivered
personally by a nationally recognized overnight delivery service or mailed
to the appropriate address indicated on the first page of this Agreement, or
such other address as is designated in writing by a party to this Agreement.
Any notice delivered or mailed as herein provided shall be deemed effectively
given or received on the date of delivery if delivered by hand or delivery
service or on the date indicated on the return receipt if mailed.
30. SURVIVAL. The covenants, warranties, representations, indemnities
--------
and undertakings of Seller set forth in this Agreement shall survive the
closing, the delivery and recording of the deed described in paragraph 8. of
this Agreement and Purchaser's possession of the Property.
31. APPROVAL. All of Seller's obligations under this Agreement are
--------
contingent upon approval of this Agreement by the shareholders of PGI, Inc. by
April 1, 1997. Seller shall provide written evidence of approval of this
Agreement by the shareholders of PGI, Inc. by April 1, 1997. Either party may
terminate this Agreement if the requisite shareholder approval is not
obtained, and thereafter neither party shall have any further obligations
under this Agreement.
THIS AGREEMENT IS INITIALLY TRANSMITTED TO THE SELLER AS AN OFFER. IF THIS
AGREEMENT IS NOT EXECUTED BY THE SELLER ON OR BEFORE JANUARY 20, 1997, THIS
OFFER WILL BE VOID UNLESS THE PURCHASER, AT ITS SOLE OPTION, ELECTS TO ACCEPT
THIS OFFER. IF THIS OPTION IS ASSIGNED TO THE TRUSTEES, THE EXERCISE OF THIS
OPTION IS SUBJECT TO: (1) APPROVAL OF THE PURCHASE PRICE AS SET FORTH IN
PARAGRAPH 3.A. BY THE TRUSTEES, (2) CONFIRMATION THAT THE FINAL ADJUSTED
PURCHASE PRICE IS NOT IN EXCESS OF THE DSL APPROVED VALUE OF THE PROPERTY,
AND (3) DSL APPROVAL OF ALL DOCUMENTS TO BE FURNISHED HEREUNDER BY SELLER.
THE STATE OF FLORIDA'S PERFORMANCE AND OBLIGATION TO PAY UNDER THIS AGREEMENT
IS CONTINGENT UPON AN ANNUAL APPROPRIATION BY THE LEGISLATURE.
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<PAGE> 7
THIS IS INTENDED TO BE A LEGALLY BINDING AGREEMENT ON SELLER UPON SELLER'S
EXECUTION OF THE AGREEMENT. IF NOT FULLY UNDERSTOOD, SEEK THE ADVICE OF AN
ATTORNEY PRIOR TO SIGNING.
SELLER
SUGARMILL WOODS, INC.,
a Florida corporation
/s/ Terry Bopp By: /s/ Laurence A. Schiffer
- ---------------------------------- --------------------------------
Witness as to Seller
Name: Laurence A. Schiffer
------------------------------
/s/ George R. Heinz
- ----------------------------------
Witness as to Seller Its: President
-------------------------------
59-1440671
-----------------------------------
F.E.I.D. No.
January 14, 1997
-----------------------------------
Date signed by Seller
(CORPORATE SEAL)
LOVE-PGI Partners, L.P., a Missouri
limited partnership
By: Love Investment Company,
--------------------------------
a Missouri corporation
--------------------------------
Its: Managing General Partner
-------------------------------
By: /s/ Laurence A. Schiffer
--------------------------------
/s/ Terry Bopp Name: Laurence A. Schiffer
- ---------------------------------- --------------------------------
Witness as to Seller
Its: President
-------------------------------
/s/ George R. Heinz
- ----------------------------------
Witness as to Seller 43-1441822
-----------------------------------
F.E.I.D. No.
January 14, 1997
-----------------------------------
Date signed by Seller
(CORPORATE SEAL)
Page 7
<PAGE> 8
PURCHASER
THE NATURE CONSERVANCY, a
nonprofit District of Columbia
corporation authorized to
transact business in the State
of Florida as The Nature Conservancy,
Inc.
By: /s/ Robert Bendick, Jr.
------------------------------------
/s/ ???????? Name: Robert Bendick, Jr.
- ---------------------------------- ----------------------------------
Witness as to Purchaser
Its: Regional Director
-----------------------------------
/s/ Jeri Vetler
- ----------------------------------
Witness as to Purchaser (CORPORATE SEAL)
53-62-42652
---------------------------------------
F.E.I.D. No.
1/31/97
---------------------------------------
Date signed by Purchaser
STATE OF MISSOURI )
)
COUNTY OF ST. LOUIS )
The foregoing instrument was acknowledged before me this 14th day of
January, 1997, by Laurence A. Schiffer, as President of Sugarmill Woods, Inc.,
a Florida corporation, on behalf of the corporation. Such person(s) (Notary
Public must check applicable box):
[X] is/are personally known to me.
[ ] produced a current driver license(s).
[ ] produced --------------------- as identification.
/s/ Terry Bopp
(NOTARY PUBLIC SEAL) ---------------------------------------
Notary Public
- ------------------------------------
TERRY BOPP TERRY BOPP
Notary Public - Notary Seal ---------------------------------------
STATE OF MISSOURI (Printed, Typed or Stamped Name of
St. Louis County Notary Public)
My Commission Expires: July 11, 1998
- ------------------------------------ Commission No.: N/A
------------------------
My Commission Expires: July 11, 1998
-----------------
Page 8
<PAGE> 9
STATE OF MISSOURI )
)
COUNTY OF ST. LOUIS )
The foregoing instrument was acknowledged before me this 14th day of
January, 1997, by Laurence A. Schiffer, as President of Love Investment
Company, a Missouri corporation, for and on behalf of the corporation as the
Managing General Partner of LOVE-PGI Partners, L.P., a Missouri limited
partnership. Such person(s) (Notary Public must check applicable box):
[X] is/are personally known to me.
[ ] produced a current driver license(s).
[ ] produced --------------------- as identification.
/s/ Terry Bopp
(NOTARY PUBLIC SEAL) ---------------------------------------
Notary Public
- ------------------------------------
TERRY BOPP TERRY BOPP
Notary Public - Notary Seal ---------------------------------------
STATE OF MISSOURI (Printed, Typed or Stamped Name of
St. Louis County Notary Public)
My Commission Expires: July 11, 1998
- ------------------------------------ Commission No.: N/A
------------------------
My Commission Expires: July 11, 1998
-----------------
STATE OF FLORIDA )
)
COUNTY OF SEMINOLE )
The foregoing instrument was acknowledged before me this 31st day of
January, 1997, by Robert L. Bendick, Jr., as Regional Director of the Nature
Conservancy, a non-profit District of Columbia corporation authorized to
transact business in the State of Florida as The Nature Conservancy, Inc.,
on behalf of the corporation. He is personally known to me.
(NOTARY PUBLIC SEAL) /s/ Jeri Vetter
SEAL ---------------------------------------
Notary Public
JERI VETTER
Notary Public ---------------------------------------
STATE OF FLORIDA (Printed, Typed or Stamped Name of
My Commission CC588460 Notary Public)
Expires Sep. 25, 2000
Commission No.:
------------------------
My Commission Expires:
-----------------
Page 9
<PAGE> 10
EXHIBIT "A"
All of the lands described herein as lying in Citrus County, Florida, are
portions of previously platted Sugarmill Woods as per the map or plat thereof
recorded in Plat Book 9, Page 86, through Plat Book 11, Page 22, inclusive,
of the Public Records of Citrus County, Florida:
All of Section 13, Township 20 South, Range 18 East, Citrus County, Florida,
LESS the Southeast 1/4 thereof, ALSO LESS right-of-way for State Road 581,
ALSO LESS road right-of-way as conveyed by instrument recorded in Official
Records Book 156, Page 463 of the Public Records of Citrus County, Florida.
AND
All of Section 14, Township 20 South, Range 18 East, Citrus County, Florida,
LESS the Southeast 1/4 of the Southwest 1/4 of said Section 14, ALSO LESS the
Southwest 1/4 of the Southeast 1/4 of said Section 14.
AND
That part of Section 15, Township 20 South, Range 18 East, Citrus County,
Florida, lying Easterly of a Florida Power Corporation right-of-way as
conveyed by instrument recorded in Official Records Book 177, Page 391 of the
Public Records of Citrus County, Florida.
AND
That part of Section 22, Township 20 South, Range 18 East, Citrus County,
Florida, lying Easterly of a Florida Power Corporation right-of-way as
conveyed by instrument recorded in Official Records Book 177, Page 391 of
the Public Records of Citrus County, Florida.
AND
The West 1/4 of Section 23, Township 20 South, Range 18 East, Citrus County,
Florida.
AND
The Southwest 1/4, AND the South 1/2 of the Northwest 1/4, AND the Northwest
1/4 of the Northwest 1/4, AND the Southwest 1/4 of the Northeast 1/4, AND the
West 1/2 of the Southeast 1/4, all lying in and being a part of Section 26,
Township 20 South, Range 18 East, Citrus County, Florida, LESS right-of-way
for County Road 480 (formerly known as State Road 480) as shown on said plat
of Sugarmill Woods.
AND
Page 10
<PAGE> 11
EXHIBIT "A" (cont.)
That part of Section 27, Township 20 South, Range 18 East, Citrus County,
Florida, lying Easterly of a Florida Power Corporation right-of-way as
conveyed by instrument recorded in Official Records Book 177, Page 391 of the
Public Records of Citrus County, Florida, LESS right-of-way for County Road
480 (formerly known as State Road 480) as shown on said plat of Sugarmill
Woods.
AND
That part of Section 34 Township 20 South, Range 18 East, Citrus County,
Florida, lying Easterly of a Florida Power Corporation right-of-way as
conveyed by instrument recorded in Official Records Book 177, Page 391 of
the Public Records of Citrus County, Florida.
AND
The Southwest 1/4 of the Southwest 1/4, AND the North 1/2 of the Southwest 1/4,
AND the Northwest 1/4, all lying in and being a part of Section 35 Township
20 South, Range 18 East, Citrus County, Florida, LESS right-of-way for County
Road 480 (formerly known as State Road 480) as shown on said plat of Sugarmill
Woods.
AND
That part of Tract-TC of said Sugarmill Woods lying Easterly of the Easterly
boundary of that certain parcel of land described in Official Records Book
957, Page 1452 of the Public Records of Citrus County, Florida, LESS
right-of-way for U.S. Highway 98.
AND
Tract-TC of Sugarmill Woods as per the map or plat thereof recorded in Plat
Book 14, Pages 1 through 102 inclusive, of the Public Records of Hernando
County, Florida, LESS right-of-way for U.S. Highway 98.
Page 10a
<PAGE> 12
EXHIBIT "A" (cont.)
AND
A portion of that certain parcel of land described in Official Records
Book 957, Page 1452 of the Public Records of Citrus County, Florida, lying in
and being a part of Tract T.C. as per the map or plat of Sugarmill Woods,
Cypress Village recorded in Plat Book 9, Pages 86 through 150 inclusive, and
Plat Book 10, Pages 1 through 150 inclusive, and Plat Book 11, Pages 1 through
16, of the Public Records of Citrus County, Florida, lying in and being a part
of Sections 28 and 33 of Township 20 South, Range 18 East, Citrus County,
Florida, being more particularly described as follows:
For a point of reference, commence at the Northwest corner of said Tract T.C.;
thence S. 76 deg. 23 feet 40 inches E. along the North boundary of said Tract
T.C., said boundary being the Southerly right-of-way boundary of County Road
480 (formerly known as State Road 480) as shown on said Sugarmill Woods,
Cypress Village, a distance of 1336.28 feet for a POINT OF BEGINNING, said
point being the Northeast corner of that certain parcel of land described
in Official Records Book 864, Page 963 of the Public Records of Citrus County,
Florida; thence along the Northerly boundary of said Tract T.C., and the
Southerly right-of-way boundary of said County Road 480, the following two (2)
courses: (1) continue S. 76 deg. 23 feet 40 inches E. a distance of
620.11 feet; (2) S. 77 deg. 14 feet 35 inches E., a distance of 553.55 feet;
thence S. 00 deg. 00 feet 27 inches E. along the Easterly boundary of said
certain parcel described in Official Records Book 957, Page 1452 of the Public
Records of Citrus County, Florida, a distance of 9327.11 feet to a point on
the Northeasterly right-of-way boundary of U.S. Highway 98, said boundary
being 132.00 feet Northeasterly of the centerline of said U.S. Highway 98, as
described in quit-claim deed recorded in Deed Book 97, Page 121 of the Public
Records of Citrus County, Florida; thence the following two (2) courses along
said Northeasterly right-of-way boundary: (1) N. 47 deg. 53 feet 58 inches W.,
a distance of 3126.49 feet to a point of curvature; thence Northwesterly
29.33 feet along the arc of a curve to the left, said curve having a radius
of 5861.30 feet, a central angle of 00 deg 17 feet 12 inches, and a chord
bearing and distance of N. 48 deg. 03 feet 08 inches W., 29.33 feet, to a
point of intersection with the Easterly boundary of a 100 foot wide Florida
Power Corporation easement as shown on said Sugarmill Woods, Cypress Village;
thence N. 00 deg. 00 feet 27 inches W. along said Easterly boundary, a distance
of 3393.69 feet to the Southwest corner of the "Treatment Plant Parcel" as
described in Official Records Book 799, page 1720, of the Public Records of
Citrus County, Florida; thence the following six (6) courses along the
boundaries of said Treatment Plant Parcel: (1) N. 89 deg. 59 feet 33 inches E.,
a distance of 1050.00 feet; (2) N. 00 deg. 00 feet 27 inches W., a distance
of 1250.00 feet; (3) N. 89 deg. 59 feet 33 inches E., a distance of 700.00
feet; (4) N. 00 deg. 00 feet 27 inches W., a distance of 1224.60 feet;
(5) N. 23 deg. 24 feet 54 inches W., a distance of 664.57 feet;
(6) S. 68 deg. 15 feet 14 inches W., a distance of 309.24 feet; thence
N. 00 deg. 00 feet 27 inches W., a distance of 64.59 feet to the Southwest
corner of said certain parcel of land described in Official Records Book 864,
Page 963 of the Public Records of Citrus County, Florida; thence
N. 00 deg. 00 feet 27 inches W. along the Easterly boundary of said certain
parcel, a distance of 1051.14 feet to the POINT OF BEGINNING.
Page 11
<PAGE> 13
EXHIBIT "A" (cont.)
LESS AND EXCEPT the following described property in Citrus County, Florida:
Commence at the Northwest corner of Section 28, Township 20 South, Range 18
East, Citrus County, Florida, thence N. 89 deg. 57 feet 27 inches E along the
North line of said Section 28 a distance of 147.35 feet to a point on the
Southerly right-of-way line of County Road No. 480 as shown on plat of
Sugarmill Woods Cypress Village, Plat Book 9, Pages 86-150, Plat Book 10,
Pages 1-150, Plat Book 11, Pages 1-16 and as Amended in Plat Book 9, Page 87A
of the Public Records of Citrus County, Florida, thence S 76 deg. 23 feet 40
inches E along said Southerly right-of-way line a distance of 188.44 feet to
the Northwest corner of Tract T-C, as shown on said Plat of Sugarmill Woods,
also being a point on the Westerly right-of-way line of a Florida Power
Corporation Easement as recorded in Deed Book 86, Page 87 Public Records of
Citrus County, Florida, thence S 0 deg. 00 feet 27 inches E along said
Westerly right-of-way line a distance of 1892.11 feet, thence S 88 deg. 58
feet 16 inches E 100.02 feet to a point on the Easterly right-of-way line of
said Florida Power Corporation Easement said point also being the Northwest
corner of land described in Official Record Book 799, Page 1720 through 1722,
Public Records of Citrus County, Florida, thence S 0 deg. 00 feet 27 inches E
along said Easterly right-of-way also being the Westerly boundary of said
described lands 2506.26 feet to the Southwest corner of said lands and the
Point of Beginning, thence N 89 deg. 59 feet 33 inches E along the Southerly
line of said described lands a distance of 320.00 feet, thence S 00 deg. 00
feet 27 inches E parallel to the Easterly right-of-way line of said Florida
Power Corporation Easement, a distance of 320.00 feet, thence S 89 deg. 59
feet 33 inches W, parallel to the Southerly boundary line of said described
lands to a point on the Easterly right-of-way line of said Florida Power
Corporation Easement, a distance of 320.00 feet, thence N 0 deg. 00 feet 27
inches W along said Easterly right-of-way line a distance of 320.00 feet to
the Point of Beginning.
Containing 2.35 acres more or less
Page 12
<PAGE> 14
ADDENDUM
--------
BENEFICIAL INTEREST AND DISCLOSURE AFFIDAVIT
(OTHER)
STATE OF MISSOURI )
)
COUNTY OF ST. LOUIS )
Before me, the undersigned authority, personally appeared Laurence A.
Schiffer, ("affiant"), this 14th day of January, 1997, who, first being duly
sworn, deposes and says:
1) That Sugarmill Woods, Inc., a Florida corporation whose address is
212 South Central, Suite 100, St. Louis, MO 63015-3506 are the record owners
of the Property. As required by Section 286.23, Florida Statutes, the
following is a list of every "person" (as defined in Section 1.01(3),
Florida Statutes) holding 5% or more of the beneficial interest in the
disclosing entity: (if more space is needed, attach separate sheet)
<TABLE>
<CAPTION>
Name Address Approx. Interest
---- ------- ------- --------
<S> <C> <C>
Al Johns 26400 Seminole Lakes Blvd. 5%
Punta Gorda, FL 33955
BIB Holdings (USA) Inc. Metro Center, 1 Station Place 12%
Stamford, CT 06902
Andrew S. Love, Jr. 212 S. Central, #201 5%
St. Louis, MO 63105
Harold Vernon Estate Unknown 13%
</TABLE>
2) That to the best of the affiant's knowledge, all persons who have a
financial interest in this real estate transaction or who have received or
will receive real estate commissions, attorney's or consultant's fees or
-----------------------------------------------------------
any other fees or other benefits incident to the sale of the Property are:
- --------------------------------
<TABLE>
<CAPTION>
Name/Amount Address Reason for Payment
----------- ------- ------ --- -------
<S> <C>
Ronald R. Richmond, Esq. 1435 E. Piedmont, #201 Attorney
$150,000 (est) Tallahassee, FL 32312
Buddy Selph (Tommie Dawson Realty) 675 Ponce De Leon Blvd. Real Estate
$100,000 (est) Brooksville, FL 34601 Broker
Peper, Martin, Jensen, Maichel and Hetlage 720 Olive Street Attorney
$20,000 (est) St. Louis, MO 63101
Berryman & Henigar 640 East Highway 44 Consultant
$7,500 (est) Crystal River, FL 34429-4399
D. C. Johnson & Assoc. 11911 S. Curley St. Surveyor
$59,971 (est) San Antonio, FL 33576
Coastal Engineering Assoc., Inc. 966 Candlelight Blvd. Environmental
$4,500 (est) Brooksville, FL 34601
Rogers Appraisal Group, Inc.<F1> 3581 Cardinal Point Drive
Jacksonville FL 32257 Appraisal
Hunnicut-Arnold, Inc.<F2> 1357 Feather Sound Drive, #350
$14,000 (total appraisal est) Clearwater, FL 34622
</TABLE>
Page 13
<PAGE> 15
3) That, to the best of the affiant's knowledge, the following is a true
history of all financial transactions (including any existing option or
purchase agreement in favor of affiant) concerning the Property which have
taken place or will take place during the last five years prior to the
conveyance of title to the State of Florida: (if non-applicable, please
indicate "None" or "Non-Applicable")
<TABLE>
<CAPTION>
Name and Address Type of Amount of
of Parties Involved Date Transaction Transaction
- ------------------- ---- ----------- -----------
<S> <C> <C> <C>
First Union/PGI March 28, 1996 Loan Modification
First Union/PGI May 13, 1994 Loan Modification
BancFlorida/PGI July 8, 1992 Loan Modification
</TABLE>
This affidavit is given in compliance with the provisions of Sections
286.23, 375.031(1), and 380.08(2), Florida Statutes.
AND FURTHER AFFIANT SAYETH NOT. AFFIANT
/s/ Laurence A. Schiffer
---------------------------------------
Laurence A. Schiffer
STATE OF MISSOURI )
)
COUNTY OF ST. LOUIS )
The foregoing instrument was acknowledged before me this 14th day of
January, 1997, by Laurence A. Schiffer. Such person(s) (Notary Public must
check applicable box):
[X] is/are personally known to me.
[ ] produced a current driver license(s).
[ ] produced --------------------- as identification.
/s/ Terry Bopp
(NOTARY PUBLIC SEAL) ---------------------------------------
Notary Public
- --------------------------------------
TERRY BOPP TERRY BOPP
Notary Public - Notary Seal ---------------------------------------
STATE OF MISSOURI (Printed, Typed or Stamped Name of
St. Louis County Notary Public)
My Commission Expires: July 11, 1998
- ------------------------------------- Commission No.: N/A
------------------------
My Commission Expires: July 11, 1998
-----------------
Page 14
<PAGE> 16
ADDENDUM
--------
BENEFICIAL INTEREST AND DISCLOSURE AFFIDAVIT
(OTHER)
STATE OF MISSOURI )
)
COUNTY OF ST. LOUIS )
Before me, the undersigned authority, personally appeared Laurence A.
Schiffer, ("affiant"), this 14th day of January, 1997, who, first being duly
sworn, deposes and says:
1) That LOVE-PGI Partners, L.P., a Missouri corporation whose address is
212 South Central, Suite 100, St. Louis, MO 63105-3506 are the record owners
of the Property. As required by Section 286.23, Florida Statutes, the
following is a list of every "person" (as defined in Section 1.01(3),
Florida Statutes) holding 5% or more of the beneficial interest in the
disclosing entity: (if more space is needed, attach separate sheet)
<TABLE>
<CAPTION>
Name Address Approx. Interest
---- ------- ------- --------
<S> <C> <C>
BIB Holdings (USA) Inc. Metro Center, 1 Station Place 30%
Stamford, CT 06902
Dan Baty 3131 Elliott, Suite 500 6%
Seattle, WA 98121
Andrew S. Love, Jr. 212 S. Central, #201 15%
St. Louis, MO 63105
Southwest Bank 2301 S. Kingshighway 6%
St. Louis, MO 63110
</TABLE>
2) That to the best of the affiant's knowledge, all persons who have a
financial interest in this real estate transaction or who have received or
will receive real estate commissions, attorney's or consultant's fees or
-----------------------------------------------------------
any other fees or other benefits incident to the sale of the Property are:
- --------------------------------
<TABLE>
<CAPTION>
Name Address Reason for Payment
---- ------- ------------------
<C> <S>
Amount
------
Combined with Sugarmill Woods contract.
</TABLE>
Page 15
<PAGE> 17
3) That, to the best of the affiant's knowledge, the following is a true
history of all financial transactions (including any existing option or
purchase agreement in favor of affiant) concerning the Property which have
taken place or will take place during the last five years prior to the
conveyance of title to the State of Florida: (if non-applicable, please
indicate "None" or "Non-Applicable")
<TABLE>
<CAPTION>
Name and Address Type of Amount of
of Parties Involved Date Transaction Transaction
- ------------------- ---- ----------- -----------
<S> <C> <C> <C>
Sugarmill Woods, Inc. & July 9, 1992 Warranty Deed on $2,213,324.51
& Love-PGI Partners, L.P. 350 A
Love Real Estate Company July 1, 1992 Mortgage & Security $1,041,649.00
& Love-PGI Partners, L.P. Agreement on 350 A
Love-PGI Partners, L.P. September 1, 1996 Subordination Agreement
Love Real Estate Company
& Federal Deposit Insurance Corporation
</TABLE>
This affidavit is given in compliance with the provisions of Sections
286.23, 375.031(1), and 380.08(2), Florida Statutes.
AND FURTHER AFFIANT SAYETH NOT. AFFIANT
/s/ Laurence A. Schiffer
---------------------------------------
Laurence A. Schiffer
STATE OF MISSOURI )
)
COUNTY OF ST. LOUIS )
The foregoing instrument was acknowledged before me this 14th day of
January, 1997, by Laurence A. Schiffer. Such person(s) (Notary Public must
check applicable box):
[X] is/are personally known to me.
[ ] produced a current driver license(s).
[ ] produced --------------------- as identification.
/s/ Terry Bopp
(NOTARY PUBLIC SEAL) ---------------------------------------
Notary Public
- -------------------------------------
TERRY BOPP TERRY BOPP
Notary Public - Notary Seal ---------------------------------------
STATE OF MISSOURI (Printed, Typed or Stamped Name of
St. Louis County Notary Public)
My Commission Expires: July 11, 1998
- ------------------------------------- Commission No.: N/A
------------------------
My Commission Expires: July 11, 1998
-----------------
Page 16
<PAGE> 18
ADDENDUM
--------
(NON-FLORIDA LIMITED PARTNERSHIP)
(NON-FLORIDA CORPORATE GENERAL PARTNER)
A. At the same time that Seller submits the closing documents required by
paragraph 9. of this Agreement, Seller shall also submit the following to
DSL:
1. Copies of the written partnership agreement and certificate of
limited partnership and all amendments thereto,
2. Certificates of Good Standing from the Secretary of State of the
State of Florida and the Secretary of State of the State of Missouri for
the Seller and the general partner of the Seller,
3. All certificates, affidavits, resolutions or other documents as
may be required by DSL or the title insurer, which authorize the sale
of the Property to Purchaser in accordance with the terms of this
Agreement and evidence the authority of one or more of the general
partners of Seller to execute this Agreement and all other documents
required by this Agreement, and
4. Copy of proposed opinion of counsel as required by paragraph B.
below.
B. As a material inducement to Purchaser entering into this Agreement and
to consummate the transaction contemplated herein, Seller covenants, represents
and warrants to Purchaser as follows:
1. Seller's execution of this Agreement and the performance by Seller
of the various terms and conditions hereof, including, without
limitation, the execution of all agreements, notices and other
documents hereunder, have been duly authorized by the requisite
partnership authority of Seller.
2. Seller is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of Missouri and is duly
licensed and in good standing and qualified to own real property in the
State of Florida.
3. The general partner of Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Missouri and is duly licensed or qualified and in good standing in the
State of Florida.
4. The general partner of Seller has the requisite authority to
execute this Agreement on behalf of the Seller and to perform the
various terms and conditions hereof, including without limitation the
authority to execute all agreements, notices and other documents
required hereunder.
5. This Agreement, when executed and delivered, will be valid
and legally binding upon Seller and enforceable in accordance with
its terms and neither the execution of this Agreement and the other
instruments to be executed hereunder by Seller, nor the performance
by it of the various terms and conditions hereto will violate the
terms of the partnership agreement or certificate of limited
partnership or any amendment thereto.
At the closing, Seller shall deliver to Purchaser an opinion of counsel to the
effect that the covenants, representations and warranties contained above in
this paragraph B. are true and correct as of the closing date. In rendering
the foregoing opinion, such counsel may rely as to factual matters upon
certificates
Page 17
<PAGE> 19
or other documents furnished by beneficiaries, partners, officers, officials
and other counsel of Seller, and upon such other documents and data as such
beneficiaries, partners, officers, officials and counsel may deem appropriate.
SELLER PURCHASER
LOVE-PGI Partners, L.P. a Missouri THE NATURE CONSERVANCY, a nonprofit
limited partnership District of Columbia corporation
authorized to transact business in the
By: Love Investment Company, State of Florida as The Nature
--------------------------------- Conservancy, Inc.
a Missouri corporation
---------------------------------
Its: Managing General Partner By: /s/ Robert L. Bendick, Jr.
-------------------------------- ----------------------------------
ROBERT L. BENDICK, JR.
Its: Regional Director
---------------------------------
By: /s/ Laurence A. Schiffer
---------------------------------
Name: Laurence A. Schiffer
-------------------------------
Its: President
--------------------------------
43-1441822
- -------------------------------------
F.E.I.D. No.
January 14, 1997
- -------------------------------------
Date signed by Seller
(CORPORATE SEAL)
January 14, 1997 1/31/97
- ------------------------------------- --------------------------------------
Date Signed by Seller Date signed by Purchaser
Page 18
<PAGE> 20
ADDENDUM
--------
(CORPORATE/FLORIDA)
A. At the same time that Seller submits the closing documents required by
paragraph 9. of this Agreement, Seller shall also submit the following to DSL:
1. Corporate resolution which authorizes the sale of the Property to
Purchaser in accordance with the provisions of this Agreement and a
certificate of incumbency,
2. Certificate of good standing from the Secretary of State of the
State of Florida, and
3. Copy of proposed opinion of counsel as required by paragraph B.
below.
B. As a material inducement to Purchaser entering into this Agreement and
to consummate the transaction contemplated herein, Seller covenants,
represents and warrants to Purchaser as follows:
1. The execution of this Agreement and the performance by it of the
various terms and conditions hereof, including, without limitation, the
execution of all agreements, notices and other documents hereunder,
have been duly authorized by the requisite corporate authority of
Seller.
2. Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida and is duly
qualified to own real property in the State of Florida.
3. This Agreement, when executed and delivered, will be valid and
legally binding upon Seller and enforceable in accordance with its
terms and neither the execution of this Agreement and the other
instruments to be executed hereunder by Seller, nor the performance
by it of the various terms and conditions hereto will violate the
Articles of Incorporation or By-Laws of Seller.
At the closing, Seller shall deliver to Purchaser an opinion of counsel to the
effect that the covenants, representations and warranties contained above in
this paragraph B. are true and correct as of the closing date. In rendering
the foregoing opinion, such counsel may rely as to factual matters upon
certificates or other documents furnished by partners, officers, officials
and other counsel of Seller, and upon such other documents and data as such
partners, officers, officials and counsel may deem appropriate.
SELLER PURCHASER
SUGARMILL WOODS, INC., THE NATURE CONSERVANCY, a nonprofit
a Florida corporation District of Columbia corporation
authorized to transact business in the
By: /s/ Laurence A. Schiffer State of Florida as The Nature
--------------------------------- Conservancy, Inc.
Name: Laurence A. Schiffer
---------------------------------
Its: President By: /s/ Robert L. Bendick, Jr.
-------------------------------- ----------------------------------
59-1440671 ROBERT L. BENDICK, JR.
- -------------------------------------
F.E.I.D. No. Its: Regional Director
---------------------------------
(CORPORATE SEAL) (CORPORATE SEAL)
January 14, 1997 1/31/97
- ------------------------------------- --------------------------------------
Date Signed by Seller Date signed by Purchaser
Page 19
<PAGE> 21
ENVIRONMENTAL AFFIDAVIT
-----------------------
(OTHER)
Laurence Schiffer ("Affiant"), being first duly sworn, deposes and says that
Affiant on behalf of Seller (as hereinafter defined) makes these
representations to the BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST
FUND OF THE STATE OF FLORIDA ("Purchaser"), and Affiant further states:
1. That the Affiant is the President of Sugarmill Woods, Inc., a
Florida corporation and the President of Love Investment Company, a Missouri
corporation, Managing General Partner of LOVE-PGI Partners, L.P., a Missouri
limited partnership (collectively "Seller") and in such capacity has
personal knowledge of the matters set forth herein, and he has been authorized
by the Seller to make this Affidavit on Seller's behalf.
2. That Seller is the sole owner in fee simple and now in possession
of the following described property together with improvements located thereon
located in Citrus and Hernando counties, Florida, to-wit:
See Exhibit "A" attached hereto and by this reference made
a part hereof (hereinafter the "Property").
3. That Seller is conveying the Property to BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT TRUST FUND OF THE STATE OF FLORIDA.
4. For purposes of this Affidavit the term "Environmental Law"
shall mean any and all federal, state and local statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental restrictions
relating to the protection of the environment or human health, welfare
or safety, or to the emission, discharge, seepage, release or threatened
release of Hazardous Materials (as hereinafter defined) into the environment
including, without limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the handling of such Hazardous Materials. For
purposes of this Affidavit the term "Hazardous Materials" shall mean any
contaminant, chemical, waste, irritant, petroleum product, waste product,
radioactive material, flammable or corrosive substance, explosive,
poly-chlorinated biphenyls, asbestos, hazardous or toxic substance, material
or waste of any kind, or any other substance which is regulated by any
Environmental Law.
5. As of the date of Seller's conveyance of the Property to BOARD
OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST FUND OF THE STATE OF FLORIDA,
Seller warrants and represents to Purchaser, its successors and assigns
that:
(i) Seller has not placed, or permitted to be placed, any
Hazardous Materials on the Property, and, to the best of Seller's knowledge,
no other person or entity has placed, or permitted to be placed, any
Hazardous Materials on the Property.
(ii) To the best of Seller's knowledge, there does not exist
on the Property any condition or circumstance which requires or may, in the
future, require cleanup, removal or other remedial action or other response
under Environmental Laws on the part of Seller or a subsequent owner of all
or any portion of the Property or which would subject Seller or a
subsequent owner of all or any portion of the Property to liability,
penalties, damages or injunctive relief.
(iii) To the best of Seller's knowledge, no underground
treatment, buried, partially buried or above ground storage tanks, storage
vessels, sumps, drums, containers, water, gas or oil wells, or landfills are
or have ever been located on the Property.
(iv) Seller, and to the best of Seller's knowledge, any other
Page 20
<PAGE> 22
person or entity that has owned, occupied or possessed the Property, has never
violated, and is presently in compliance with, all Environmental Laws
applicable to the Property.
(v) No warning notice, notice of violation, administrative
complaint, judicial complaint or other formal or informal notice has been
issued by any federal, state or local environmental agency alleging that
conditions on the Property are in violation of any Environmental Law.
(vi) Seller is not subject to any judgment, decree, order or
citation related to or arising out of Environmental Laws, and Seller has not
been named or listed as a potentially responsible party by any governmental
body or agency in a matter arising under any Environmental Law.
6. That Seller makes this Affidavit for the purpose of inducing
Purchaser to purchase the Property, and Seller acknowledges that Purchaser
will rely upon the representations and warranties set forth in this Affidavit.
SELLER
SUGARMILL WOODS, INC.,
a Florida corporation
/s/ Terry Bopp By: /s/ Laurence A. Schiffer
- ----------------------------------- ---------------------------------
Witness as to Seller Name: Laurence A. Schiffer
---------------------------------
/s/ George R. Heinz Its: President
- ----------------------------------- --------------------------------
Witness as to Seller 59-1440671
-------------------------------------
F.E.I.D. No.
January 14, 1997
-------------------------------------
Date Signed by Seller
(CORPORATE SEAL)
LOVE-PGI Partners, L.P. a Missouri
limited partnership
By: Love Investment Company,
---------------------------------
a Missouri corporation
---------------------------------
Its: Managing General Partner
--------------------------------
By: /s/ Laurence A. Schiffer
---------------------------------
/s/ Terry Bopp Name: Laurence A. Schiffer
- ----------------------------------- -------------------------------
Witness as to Seller Its: President
--------------------------------
/s/ George R. Heinz 43-1441822
- ----------------------------------- -------------------------------------
Witness as to Seller F.E.I.D. No.
January 14, 1997
-------------------------------------
Date signed by Seller
(CORPORATE SEAL)
Page 21
<PAGE> 23
STATE OF MISSOURI )
)
COUNTY OF ST. LOUIS )
The foregoing instrument was acknowledged before me this 14th day of
January, 1997, by Laurence A. Schiffer, as President of Sugarmill Woods,
Inc., a Florida corporation, on behalf of the corporation. Such person(s)
(Notary Public must check applicable box):
[X] is/are personally known to me.
[ ] produced a current driver license(s).
[ ] produced --------------------- as identification.
/s/ Terry Bopp
(NOTARY PUBLIC SEAL) ---------------------------------------
Notary Public
- ------------------------------------
TERRY BOPP TERRY BOPP
Notary Public - Notary Seal ---------------------------------------
STATE OF MISSOURI (Printed, Typed or Stamped Name of
St. Louis County Notary Public)
My Commission Expires: July 11, 1998
- ------------------------------------ Commission No.: N/A
------------------------
My Commission Expires: July 11, 1998
-----------------
STATE OF MISSOURI )
)
COUNTY OF ST. LOUIS )
The foregoing instrument was acknowledged before me this 14th day of
January, 1997, by Laurence A. Schiffer, as President of Love Investment
Company, a Missouri corporation, for and on behalf of the corporation as the
Managing General Partner of LOVE-PGI Partners, L.P., a Missouri limited
partnership. Such person(s) (Notary Public must check applicable box):
[X] is/are personally known to me.
[ ] produced a current driver license(s).
[ ] produced --------------------- as identification.
/s/ Terry Bopp
(NOTARY PUBLIC SEAL) ---------------------------------------
Notary Public
- ------------------------------------
TERRY BOPP TERRY BOPP
Notary Public - Notary Seal ---------------------------------------
STATE OF MISSOURI (Printed, Typed or Stamped Name of
St. Louis County Notary Public)
My Commission Expires: July 11, 1998
- ------------------------------------ Commission No.: N/A
------------------------
My Commission Expires: July 11, 1998
-----------------
Page 22
<PAGE> 1
Exhibit 11 PAGE 1 OF 1
- ----------
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
FACTS FOR COMPUTATION OF NET LOSS PER SHARE
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
1) Net loss for period $ (2,895,000) $ (2,442,000)
2) Average shares outstanding before assumed
exercise of stock options and conversion of
preferred stock and debentures 3,317,555 3,317,555
------------ ------------
4) Average shares outstanding from assumed
conversion of preferred stock 3,760,000 3,760,000
------------ ------------
5) Average shares outstanding from assumed
conversion of debentures 1,341,076 1,341,076
------------ ------------
6) Cumulative preferred dividends in arrears $ 640,000 $ 640,000
------------ ------------
7) Interest and amortization charged against income
for debentures during period $ 759,000 $ 759,000
------------ ------------
ADJUSTMENT OF NET LOSS:
- ----------------------
Primary
-------
Net loss for period (Line 1) $ (2,895,000) $ (2,442,000)
Less cumulative preferred dividends in arrears (Line 6) (640,000) (640,000)
------------ ------------
8) Adjusted net loss for primary net loss per share $ (3,535,000) $ (3,082,000)
------------ ------------
Fully Diluted
-------------
Adjusted net loss for primary net loss per share (Line 8) $ (3,535,000) $ (3,082,000)
Add cumulative preferred dividends in arrears on preferred
stock assumed converted(Line 6) 640,000 640,000
Add interest and amortization charged against income for
debentures during period (Line 7) 759,000 759,000
Tax effect on Line 7 -- <FA> -- <FA>
------------ ------------
9) Adjusted net loss for fully diluted net loss per share $ (2,136,000) $ (1,683,000)
------------ ------------
ADJUSTMENT OF AVERAGE SHARES OUTSTANDING:
- -----------------------------------------
Primary
-------
Average shares outstanding (Line 2) 3,317,555 3,317,555
Average shares outstanding (Line 3) -- --
------------ ------------
10) Shares assumed outstanding for primary net loss per share 3,317,555 3,317,555
------------ ------------
Fully Diluted
-------------
Average shares outstanding (Line 2) 3,317,555 3,317,555
Average shares outstanding from assumed conversion
of preferred stock (Line 4) 3,760,000 3,760,000
Average shares outstanding from assumed conversion
of debentures (Line 5) 1,341,076 1,341,076
------------ ------------
11) Shares assumed outstanding for fully diluted net loss per share 8,418,631 8,418,631
------------ ------------
NET LOSS PER SHARE:
- -------------------
Before Adjustment
- -----------------
(Line 1 - Line 2) $ (.87) $ (.74)
------------ ------------
Primary
-------
Net loss (Line 8 - Line 10) $ (1.07) $ (.93)
------------ ------------
Fully Diluted <FB>
-------------
Net loss <FB> $ (1.07) $ (.93)
------------ ------------
<FN>
<FA> No tax calculation has been made because of full utilization of all
available tax benefits for financial account purposes.
<FB> Fully diluted net loss per share is the same as primary net loss per
share due to anti-dilutive effect of assumed exercise of stock options
and conversion of preferred stock and debentures to common stock.
</TABLE>
<PAGE> 1
<TABLE>
EXHIBIT 21 PGI INCORPORATED PAGE 1 OF 1
- ---------- ----------------
SUBSIDIARIES
------------
<CAPTION>
State of Incorporation Relationship
---------------------- ------------
<S> <C> <C>
Sugarmill Woods, Inc. Florida Wholly owned <F1>
Sugarmill Woods Management, Inc. Florida Wholly owned <F1>
Deep Creek Utilities, Inc. Florida Wholly owned <F1>
Southern Woods, Incorporated Florida Wholly owned by Sugarmill Woods, Inc.
Burnt Store Marina, Inc. Florida Wholly owned <F1>
Punta Gorda Isles Sales, Inc. Florida Wholly owned <F1>
Burnt Store Utilities, Inc. Florida Wholly owned <F1>
Gulf Coast Credit Corporation Florida Wholly owned <F1>
Sugarmill Woods Sales, Inc. Florida Wholly owned by Sugarmill Woods, Inc.
Sugarmill Construction, Inc. Florida Wholly owned by Sugarmill Woods, Inc.
<FN>
- ---------------------------------------
<F1> Included in the Company's consolidated financial statements.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,152,000
<SECURITIES> 0
<RECEIVABLES> 1,150,000
<ALLOWANCES> (806,000)
<INVENTORY> 9,016,000
<CURRENT-ASSETS> 0<F1>
<PP&E> 363,000
<DEPRECIATION> (317,000)
<TOTAL-ASSETS> 11,317,000
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 21,533,000
<COMMON> 332,000
0
2,000,000
<OTHER-SE> (24,844,000)
<TOTAL-LIABILITY-AND-EQUITY> 11,317,000
<SALES> 0
<TOTAL-REVENUES> 838,000
<CGS> 0
<TOTAL-COSTS> 11,000
<OTHER-EXPENSES> 1,210,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,512,000
<INCOME-PRETAX> (2,895,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,895,000)
<EPS-PRIMARY> (1.07)
<EPS-DILUTED> (1.07)
<FN>
<F1> CURRENT ASSETS AND CURRENT LIABILITIES VALUES ARE
ZERO BECAUSE OF AN UNCLASSIFIED BALANCE SHEET.
</TABLE>
