Exhibit 10(c)
Land Development Associates S.E.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
July 8, 1998
Supra and Company, ▇.▇.
▇ ▇▇▇▇▇▇ #▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇ Lebron, President
Re: Purchase of Supra's Interest in LDA and Related Matters
Dear ▇▇. ▇▇▇▇▇:
This letter sets forth the agreement between Land Development Associates
S.E., a Puerto Rico special partnership ("LDA"), Supra and Company, S.E., a
Puerto Rico special partnership ("Supra"), Supra Development Corporation
("Supra Development"), ▇▇▇▇▇▇ Construction Company, Inc. ("▇▇▇▇▇▇"), and
▇▇▇▇▇ ▇▇▇▇▇ Lebron ("▇▇▇▇▇"), regarding the exercise by LDA of its right of
first refusal to purchase Supra's partnership interest in LDA pursuant to
Article Nineteen of LDA's Partnership Agreement, and certain related
transactions.
1. Purchase, Sale, Assignment, Lien Releases
a. Supra hereby agrees to on the Closing Date sell, grant, assign
and transfer to LDA all of Supra's right, title and interest as a partner
in and to LDA (the "Partnership Interest") and the "Subordinated Cash Flow
Note" issued by LDA to Supra on August 2, 1994 (the "Cash Flow Note") free
and clear of any lien, encumbrance, assignment, or security interest. Supra
on even date hereof delivers to San ▇▇▇▇ Abstract Company (the "Escrow
Agent") the Assignment of Partnership Interest attached hereto as Exhibit
1A.1 (the "Partnership Interest Assignment") and the original of the Cash
Flow Note duly endorsed to the order of LDA (Exhibit 1A.2).
▇. ▇▇▇▇▇▇ hereby agrees to release the Cash Flow Note from the
assignment to it made by Supra subject to the payment of Two Million Four
Hundred Thousand Dollars ($2,400,000).
2. Purchase Price
a. The purchase price for the Partnership interest and the Cash
Flow Note is Five Million Five Hundred Thousand Dollars ($5,500,000)
divided as follows:
(i) Cash Flow Note Two Million Four Hundred Thousand Dollars
($2,400,000), and
(ii) Partnership Interest Three Million One Hundred Thousand
Dollars ($3,100,000).
b. On even date hereof LDA delivers to ▇▇▇▇▇▇ in partial payment
of the amount shown in (i) above, the amount of One Million Dollars
($1,000,000) of which ▇▇▇▇▇▇ hereby acknowledges receipt.
3. Closing
a. At the Closing (defined in Section 6.a below), LDA shall
deliver to the Escrow Agent the amount of Four Million Five Hundred
Thousand Dollars ($4,500,000) by manager or cashier check as follows:
(i) in the amount shown in the Bank Release (defined below),
payable to the order of First Bank of Puerto Rico (the "Bank");
(ii) in the amount of One Million Four Hundred Thousand Dollars
($1,400,000) to the order of ▇▇▇▇▇▇; and
(iii) in an amount equal to the difference, if any, between Four
Million Five Hundred Thousand Dollars ($4,500,000) and the sum of the
amounts referred to in (i) and (ii), payable to the order of Supra.
b. At the Closing, Supra shall deliver to the Escrow Agent the
release attached hereto as Exhibit 3B duly executed by the Bank (the "Bank
Release").
c. At the Closing, the Escrow Agent, upon receipt of the checks
mentioned in a. above and the document mentioned in b. above, shall deliver
to:
(i) LDA, the Partnership Interest Assignment, the Cash Flow
Note, and the Bank Release;
(ii) the Bank, the check mentioned in a. (i) above;
(iii) ▇▇▇▇▇▇, the check mentioned in a. (ii) above; and
(iv) Supra, the check, if any, mentioned in a. (iii) above.
4. Representations and Warranties
a. LDA represent and warrant to Supra that (i) it has all
necessary partnership power and authority to execute, deliver and perform
its obligations under this Agreement and the agreements and instruments
contemplated hereby to which it is a party, (ii) such execution, delivery
and performance will not violate or conflict with any applicable statute,
law, regulation or governmental order, or, any agreement to which LDA is a
party; and (iii) this Agreement evidences the legal valid and binding
agreements of LDA enforceable against LDA in accordance with their terms
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors rights
and by general equitable principles.
b. Each of Supra, Supra Development, ▇▇▇▇▇▇, and ▇▇▇▇▇ represents
and warrants to LDA that, as of this date and the Closing Date, (i) Supra,
▇▇▇▇▇▇, and Supra Development have all necessary power and authority to
execute, deliver and perform their obligations under this Agreement and the
agreements and instruments contemplated hereby to which each is a party,
(ii) such execution, delivery and performance will not violate or conflict
with any applicable statute, law, regulation or governmental order, or,
assuming the pledge or assignment releases referred to herein are obtained,
any agreement to which Supra, ▇▇▇▇▇▇, Supra Development or ▇▇▇▇▇ is a
party; (iii) this Agreement evidences the legal valid and binding agreement
of Supra, Supra Development, ▇▇▇▇▇▇, and ▇▇▇▇▇ enforceable against them, in
accordance with its terms except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors rights and by general equitable principles; (iv) Supra
is the owner of the Partnership Interest and the Cash Flow Note subject to
no liens, encumbrances, security interest, or assignments, except the ones
held by the Bank and ▇▇▇▇▇▇ hereinbefore mentioned; (v) Supra Development
is the managing partner (Socio Gestor) of and owner (beneficially and of
record) of 10% interest in Supra with all the necessary power and authority
to execute and deliver on behalf of Supra this Agreement and the agreements
and instruments contemplated hereby to which Supra is a party; (vi) ▇▇▇▇▇
is the owner (beneficially and of record) of all of the issued and
outstanding stock of Supra Development and has the necessary power and
authority to cause the execution, delivery and performance by Supra
Development, as managing partner (Socio Gestor) of Supra, of this Agreement
and the agreements and instruments contemplated hereby to which Supra is a
party; (v) ▇▇▇▇▇ is the owner of 90% partnership interest in Supra; and (v)
the grant, sale, assignment, and transfer by Supra of the Cash Flow Note
and the Partnership Interest as contemplated herein and in the Partnership
interest Assignment, will convey to LDA fee simple (pleno dominio) title to
the Cash Flow Note and the Partnership Interest subject to no liens,
encumbrances, security interests, or assignments.
c. The foregoing representations and warranties shall survive the
Closing Date.
5. Closing Conditions:
a. The obligations of LDA hereunder to be completed in connection
with the Closing are subject to (i) the representations and warranties of
Supra, Supra Development and ▇▇▇▇▇ set forth herein being true in all
material respects as of the Closing Date, (ii) delivery of the agreements,
documents and instruments described in Section 3b and, (iii) delivery to
LDA of an opinion of counsel to Supra in form and substance satisfactory to
LDA as to the due authorization, execution and delivery and enforceability
of this Agreement and the other agreements and instruments contemplated
hereby, and (iv) the absence of any injunction, governmental order, or
proceeding prohibiting the consummation, or questioning the validity or
legality, of the transactions contemplated hereby.
b. The obligations of Supra hereunder to be completed in
connection with the Closing are subject to (i) the representations and
warranties of LDA set forth herein being true in all material respects as
of the Closing Date; (ii) delivery by LDA of the checks described in
Section 3a hereof; (iii) delivery to Supra of opinions of counsel to LDA as
to the due authorization, execution, and delivery and enforceability of
this Agreement; and (iv) the absence of any injunction, governmental order,
or proceeding prohibiting the consummation, or questioning the validity or
legality, of the transactions contemplated hereby.
6. Closing/Termination.
a. The closing of the transactions contemplated by Section 1
hereof(the Closing") shall be held at the offices of Fiddler ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ on the Closing Date, which shall be at 10:00 a.m. San ▇▇▇▇ time
on July 31, 1998 (the "Closing Date"), or such other date as shall be
mutually agreed by the parties hereto.
b. Prior to the Closing, this Agreement may be terminated and the
transactions contemplated hereby abandoned:
(i) upon mutual agreement in writing by the parties hereto;
(ii) by LDA, in the event that as of the Closing Date the
conditions under Section 5a of its obligations to close have not been
satisfied, by reason other than those under the control of LDA, or
(iii) by Supra, in the event that as of the Closing Date, the
conditions under Section 5b to its obligation to close have not been
satisfied by reason other than those under the control of Supra.
7. Remedies.
a. In the event LDA shall fail to fulfill its obligations
hereunder for causes other than the ones established as events of
termination in Section 6b(ii) and the Closing shall not occur, this
Agreement shall be resolved as of the date hereof and the Escrow Agent
shall deliver to Supra and ▇▇▇▇▇▇ the documents and Cash Flow Note
delivered by Supra and ▇▇▇▇▇▇ to it pursuant to Sections 2a and 3b hereof;
and Supra's sole remedy shall be to forfeit the One Million Dollars
($1,000,000) mentioned in Section 1a. hereof; and no other remedy shall
accrue to Supra, including without limitation, specific performance. Hence
forth, Supra shall be entitled to sell and transfer the Partnership
Interest to ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ under the same terms and conditions
notified to by Supra to LDA by letter dated May 26, 1998, without having to
comply with Article 19 of the Partnership Agreement.
b. In the event Supra shall fail to fulfill its obligations
hereunder for causes other than the ones established as events of
termination in Section 4b(i) and (iii) hereof and the Closing shall not
occur:
(i) ▇▇▇▇▇▇ shall, on demand, pay to LDA the One Million
Dollars ($1,000,000) mentioned in Section 2 hereof; plus ten percent
interest thereon from the date of such demand until full payment thereof;
and LDA shall keep possession of and hold a security interest on the Cash
Flow Note as collateral to secure the payment obligation of ▇▇▇▇▇▇
hereunder, upon the payment of which LDA shall deliver the Cash Flow Note
to ▇▇▇▇▇▇; and
(ii) Supra, Supra Development and ▇▇▇▇▇ shall reimburse LDA for
all direct expenses incurred in the negotiation and preparation of; and
compliance with this Agreement (including, without limitation, attorneys
fees and costs, and financing fees and costs).
c. In the event that, the Closing having occurred, any of Supra,
Supra Development, ▇▇▇▇▇▇, or ▇▇▇▇▇ shall have breached any representation,
warranty, covenant or obligation made by it in this Agreement or any
document delivered pursuant hereto:
(i) LDA shall have the right to traditional contract remedies,
including injunctive relief and actual (excluding consequential and
compensatory) damages (including attorneys fees and costs necessary to
enforce this Agreement or to defend any claims asserted in violation of
this Agreement) proximately caused by such breach; and
(ii) Supra, Supra Development, and ▇▇▇▇▇▇, jointly and
severally (solidariamente), will indemnify, defend and hold harmless LDA
and its partners, employees, officers, attorneys, servants,
representatives, affiliates, predecessors, administrators, beneficiaries,
agents, successors, and assigns (collectively, the "Indemnified Persons")
for, and will pay to the Indemnified Persons the amount of; any loss,
liability, claim, actual (excluding consequential and compensatory) damage,
expense (including costs of investigation and defense and reasonable
attorneys' fees), whether or not involving a third-party claim
(collectively, "Damages"), proximately caused by such breach.
8. Miscellaneous.
a. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
b. This Agreement may be executed in counterparts.
c. This Agreement and the agreements and instruments to be
delivered pursuant hereto set forth the entire agreement among the parties
regarding the subject matter hereof and supersede all prior agreements
relating to the subject matter hereof. This Agreement and the agreements
and instruments to be delivered pursuant hereto may not be amended or
modified except by a written instrument executed by the party against whom
enforceability is sought.
d. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Puerto Rico, without regard to the
conflict-of-laws rules thereof.
If you agree to the terms outlined above, please countersign in the
spaces provided below.
Very truly yours,
LAND DEVELOPMENT ASSOCIATES S.E.
By: Interstate General Properties Limited Partnership S.E.,
its managing partner
By: Interstate General Company L.P.,
its managing general partner
By: Interstate General Management Corporation,
its managing general partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Senior Vice President
Agreed to: Agreed to:
SUPRA AND COMPANY, S ▇. ▇▇▇▇▇▇ CONSTRUCTION COMPANY
By: Supra Development Corp. By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ Lebron
its managing general partner -------------------------
▇▇▇▇▇ ▇▇▇▇▇ Lebron
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ Lebron President
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▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Presidnet
Agreed to:
▇▇▇▇▇ ▇▇▇▇▇ Lebron
/s/ ▇▇▇▇▇ ▇▇▇▇▇ Lebron
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