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crediting a liability account, “Due to Summit Trust”, and
debiting an asset account, “Due from Shareholders”.
Also on or about August 20, 1987, PK Ventures and Zephyr
agreed to enter into a Management and Guaranty Inducement
Agreement. Under the terms of the Management and Guaranty
Inducement Agreement, PK Ventures and Zephyr agreed that
PK Ventures would provide certain management services to Zephyr,
guarantee certain debts of Zephyr and the Zephyr purchasers, and
indemnify Mills with respect to his existing guarantees of
Zephyr’s debt. In connection with the Management and Guaranty
Inducement Agreement, PK Ventures agreed to guarantee the
following: (1) $500,000 of the purchase price to be paid by the
Zephyr purchasers for Zephyr’s stock; (2) payment of the amounts
due under Zephyr’s promissory note to NCNB National Bank of
Florida in the original principal amount of $2,615,000;
(3) payment of the amounts due under Zephyr’s promissory note to
Southeast Bank, N.A., in the principal amount $950,000; and
(4) liabilities that Zephyr incurred in the ordinary course of
its business.
On or about November 23, 1987, Summit Trust approved a
6-month renewal of the Summit Trust loan. The terms of the
renewal required that the principal balance of the Summit Trust
loan bear interest at a rate of 1.5 percent over the rate of the
$1 million certificate of deposit being held as collateral, that
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