1
Exhibit 99.3
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT, dated as of September 27, 1996 is between
GMAC COMMERCIAL EQUITY INVESTMENTS, INC., a Pennsylvania corporation
("GMAC-CM"), FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, an Ohio
business trust ("FUR"), and CARGILL FINANCIAL SERVICES CORPORATION, a Delaware
corporation ("CFSC").
W I T N E S S E T H:
- - - - - - - - - --
FUR, GMAC-CM and CFSC desire to form a limited liability company
("NEWCO") under the laws of the State of Delaware under the name "Southwest
Shopping Centers Co. I, L.L.C." to own, manage and operate, directly or
indirectly, nine (9) regional shopping malls, or interests therein, including
partnership interests (the "PROPERTIES") to be acquired by Newco (or LLC #2 or
LLC #3, as hereinafter defined), as the designee of FUR under a Purchase
Agreement dated June 12, 1996, as amended (the "PURCHASE AGREEMENT"), between
Marathon U.S. Realties, Inc., a Delaware corporation ("MARATHON"), as seller,
and FUR, as purchaser, all on the terms and conditions set forth in this
Investment Agreement, the LLC Agreements and the Management Agreements. A list
of the Properties is attached as SCHEDULE 1.
It is hereby agreed as follows:
SECTION 1. DEFINITIONS.
------------
The following terms used herein shall have the respective meanings
given below, such definitions to be equally applicable to both singular and
plural forms of the terms defined:
"ACQUISITION LOAN" shall mean the $165,000,000 loan to be made by the
GMAC Lender to LLC #2 on the Closing Date pursuant to the Acquisition Loan
Documents.
"ACQUISITION LOAN DOCUMENTS" shall mean the financing and related
security documentation entered into between LLC #2 and GMAC Lender providing for
the Acquisition Loan.
"AFFILIATE" of any Person shall mean any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such Person. A Person shall be deemed to control another Person if such
first Person owns, directly or indirectly, more than 50% of the voting stock of
the second Person or has the power, directly or indirectly, to elect or remove a
majority of the members of the Board of Directors, trustees or comparable
governing body of such second Person.
2
"CFSC" shall have the meaning given thereto in the opening paragraph.
"CFSC INVESTMENT" shall mean the contribution of $38,132,286 made by
CFSC Subsidiary to Newco on the Closing Date in payment for its limited
liability company interest therein (including $35,000,000 for its Senior
Preferred Capital).
"CFSC LLC #2 INVESTMENT" shall mean the contribution of $259,891 made
by CFSC Subsidiary in LLC #2 Manager on the Closing Date in payment for its
limited liability company interest therein.
"CFSC LLC #3 INVESTMENT" shall mean the contribution of $7,823 made by
CFSC Subsidiary in LLC #3 on the Closing Date in payment for its limited
liability company interest therein.
"CFSC PARTY" shall mean, as applicable, CFSC or CFSC Subsidiary.
"CFSC SUBSIDIARY" shall mean CFSC Capital Corp. XXXI, a Delaware
corporation.
"CLOSING DATE" shall have the meaning given in SECTION 2(a) of this
Investment Agreement.
"COMMON CAPITAL" shall have the meaning given thereto in the LLC #1
Agreement.
"FUR" shall have the meaning given thereto in the opening paragraph.
"FUR INVESTMENT" shall mean the contribution of $29,724,409 made by FUR
Subsidiary to Newco on the Closing Date in payment for its limited liability
company interest therein (including $26,500,000 for its Series A Preferred
Capital).
"FUR LLC #2 INVESTMENT" shall mean the contribution of $267,538 made by
▇▇▇ ▇▇▇▇▇▇▇ Subsidiary in LLC #2 Manager on the Closing Date in payment for its
limited liability company interest therein.
"FUR LLC #3 INVESTMENT" shall mean the contribution of $8,053 made by
FUR Subsidiary in LLC #3 on the Closing Date in payment for its limited
liability company interest therein.
"FUR PARTY" shall mean, as applicable, FUR, FUR Subsidiary, ▇▇▇ ▇▇▇▇▇▇▇
Subsidiary or FUMI.
2
3
"▇▇▇ ▇▇▇▇▇▇▇ SUBSIDIARY" shall mean First Southwest II, Inc., a
Delaware corporation and wholly-owned subsidiary of FUR.
"FUR SUBSIDIARY" shall mean First Union Southwest L.L.C., a Delaware
limited liability company of which FUR and First Southwest I, Inc., a
wholly-owned subsidiary of FUR, are the members.
"GMAC-CM" shall have the meaning given thereto in the opening
paragraph.
"GMAC-CM INVESTMENT" shall mean the contribution of $44,580,315 made by
GMAC-CM to Newco on the Closing Date in payment for its limited liability
company interest therein (including $38,500,000 for its Series B Preferred
Capital).
"GMAC-CM LLC #2 INVESTMENT" shall mean the contribution of $504,499
made by GMAC-CM in LLC #2 Manager on the Closing Date in payment for its limited
liability company interest therein.
"GMAC-CM LLC #3 INVESTMENT" shall mean the contribution of $15,186 made
by GMAC-CM in LLC #3 on the Closing Date in payment for its limited liability
company interest therein.
"GMAC LENDER" shall mean GMAC Commercial Mortgage Corporation.
"INVESTMENTS" shall mean, collectively, the CFSC Investment, the FUR
Investment and the GMAC-CM Investment.
"LLC #1 AGREEMENT" shall mean the Limited Liability Company Agreement
of Newco substantially in the form of Exhibit A-1 to be dated as of the Closing
Date among FUR Subsidiary, CFSC Subsidiary and GMAC-CM.
"LLC #2 AGREEMENT" shall mean the Limited Liability Company Agreement
of Southwest Shopping Centers Co. II, L.L.C. substantially in the form of
Exhibit A-2 to be dated as of the Closing Date among Newco and LLC #2 Manager.
"LLC #2 MANAGER" shall mean First SW, II, L.L.C., a Delaware limited
liability company.
"LLC #2 MANAGER AGREEMENT" shall mean the Limited Liability Company
Agreement of LLC #2 Manager substantially in the form of Exhibit A-4 to be dated
as of the Closing Date among ▇▇▇ ▇▇▇▇▇▇▇ Subsidiary, GMAC-CM and CFSC
Subsidiary.
"LLC #3 AGREEMENT" shall mean the Limited Liability Company Agreement
of Temple Shopping Center Co., L.L.C. substantially in the form of Exhibit A-3
to be
3
4
dated as of the Closing Date among Newco, FUR Subsidiary, CFSC Subsidiary and
GMAC-CM.
"LLC AGREEMENTS" shall mean, collectively, the LLC #1 Agreement, the
LLC #2 Agreement, the LLC #2 Manager Agreement and the LLC #3 Agreement.
"LLC #2" shall mean Southwest Shopping Centers Co. II, L.L.C.
"LLC #3 shall mean Temple Shopping Center Co., L.L.C.
"MANAGEMENT AGREEMENTS" shall mean, collectively, (i) with respect to
each of the Properties other than Temple Mall, a form of Management and Leasing
Agreement between FUMI and Newco or LLC #2, as applicable, in substantially the
form of Exhibit A to LLC #1 Agreement, and (ii) with respect to LLC #3, the
existing Management Agreement for such Property, as assigned to FUMI on the
Closing Date.
"MARATHON" shall have the meaning given thereto in the Witnesseth
paragraph.
"NEWCO" shall have the meaning given thereto in the Witnesseth
paragraph.
"PERSON" shall mean any individual, corporation, limited liability
company, partnership, association, trust or other entity or organization.
"PROPERTIES" shall have the meaning given thereto in the Witnesseth
paragraph.
"PURCHASE AGREEMENT" shall have the meaning given thereto in the
Witnesseth paragraph.
"SENIOR PREFERRED CAPITAL" shall have the meaning given thereto in the
LLC #1 Agreement.
"SENIOR PREFERRED DISTRIBUTION" shall have the meaning given thereto in
the LLC #1 Agreement.
"SERIES A PREFERRED CAPITAL" shall have the meaning given thereto in
the LLC #1 Agreement.
"SERIES B PREFERRED CAPITAL" shall have the meaning given thereto in
the LLC #1 Agreement.
"SERIES B PREFERRED DISTRIBUTION" shall have the meaning given thereto
in the LLC #1 Agreement.
4
5
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
SECTION 2. INVESTMENTS.
------------
(a) INVESTMENTS BY FUR. Subject to the terms and conditions of this
Investment Agreement, FUR agrees (i) to cause FUR Subsidiary to make the FUR
Investment in Newco on the closing date under the Purchase Agreement (the
"Closing Date"), (ii) to cause ▇▇▇ ▇▇▇▇▇▇▇ Subsidiary to make the FUR LLC #2
Investment in LLC #2 Manager on the Closing Date, and (iii) to cause FUR
Subsidiary to make the FUR LLC #3 Investment in LLC #3 on the Closing Date. FUR
covenants that FUR Subsidiary will always be controlled, directly or indirectly,
by FUR.
(b) INVESTMENTS BY GMAC-CM. Subject to the terms and conditions of this
Investment Agreement, GMAC-CM agrees (i) to make the GMAC-CM Investment in Newco
on the Closing Date, (ii) to make the GMAC-CM LLC #2 Investment in LLC #2
Manager on the Closing Date, and (iii) to make the GMAC-CM LLC #3 Investment in
LLC #3 on the Closing Date.
(c) INVESTMENT BY CFSC. Subject to the terms and conditions of this
Investment Agreement, CFSC agrees (i) to cause CFSC Subsidiary to make the CFSC
Investment in Newco on the Closing Date, (ii) to cause CFSC Subsidiary to make
the CFSC LLC #2 Investment in LLC #2 Manager on the Closing Date, and (iii) to
cause CFSC Subsidiary to make the CFSC LLC #3 Investment in LLC #3 on the
Closing Date. CFSC covenants that CFSC Subsidiary will always be controlled,
directly or indirectly, by CFSC.
SECTION 3. CONDITIONS PRECEDENT
--------------------
(a) The obligations of FUR to take the actions on the Closing Date
specified in SECTION 2(a) shall be subject to the fulfillment to the
satisfaction of, or waiver in writing by, FUR on or prior to the Closing Date of
the following conditions precedent:
(i) MARATHON TRANSACTION. The conditions precedent under the
Purchase Agreement to the consummation of the transaction with Marathon
shall have been met or waived, it being understood and agreed that FUR
shall have the right in its sole discretion to decide whether such
conditions precedent in the Purchase Agreement have been fulfilled or
to waive the same.
(ii) OTHER INVESTMENTS. GMAC-CM and CFSC Subsidiary shall
have made their respective Investments on the Closing Date
contemplated by SECTIONS 2(b) and 2(c), respectively, and LLC #2
5
6
Manager and LLC #1 shall have made the investment in LLC #2
contemplated by the Acquisition Loan Documents.
(iii) ACQUISITION LOAN. GMAC Lender shall have funded the
Acquisition Loan.
(iv) WARRANTIES. The respective representations and warranties
of GMAC-CM and CFSC set forth in SECTIONS 4(b) and 4(c), respectively,
shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though made on and as of the
Closing Date.
(v) PERFORMANCE. GMAC-CM and CFSC shall each have performed
and complied in all material respects with all agreements and
conditions contained herein required to be performed or complied with
on or prior to the Closing Date.
(vi) LITIGATION. No material action or proceeding shall have
been instituted nor shall have any governmental action been threatened
before any court or governmental agency, nor shall any order, judgment
or decree have been issued or proposed to be issued by any court or
governmental agency to set aside, restrain, enjoin or prevent the
performance of this Investment Agreement and the transactions
contemplated hereby.
(vii) OPINIONS. FUR shall have received a favorable opinion of
counsel for each of GMAC-CM and CFSC, dated the Closing Date, addressed
to FUR and substantially in the form of SCHEDULES 2 and 3,
respectively.
(viii) [Intentionally omitted].
(ix) SWAP AGREEMENT. Newco shall have entered into an interest
rate swap agreement with respect to the Senior Preferred Distribution
and the Series B Preferred Distribution on terms satisfactory to FUR.
(b) The obligations of GMAC-CM to take the actions on the Closing Date
specified in SECTION 2(b) shall be subject to the fulfillment to the
satisfaction of, or waiver in writing by, GMAC-CM on or prior to the Closing
Date of the following conditions precedent:
6
7
(i) MARATHON TRANSACTION. The conditions precedent under the
Purchase Agreement to the consummation of the transaction with Marathon
shall have been met or waived, it being understood and agreed that
GMAC-CM shall have the right in its sole discretion to decide whether
such conditions precedent in the Purchase Agreement have been fulfilled
or to waive the same.
(ii) OTHER INVESTMENTS. FUR and CFSC shall have made their
respective Investments on the Closing Date contemplated by SECTIONS
2(a) and 2(c), respectively, and LLC #2 Manager and LLC #1 shall have
made the investment in LLC #2 contemplated by the Acquisition Loan
Documents.
(iii) ACQUISITION LOAN. GMAC Lender shall have funded the
Acquisition Loan.
(iv) WARRANTIES. The respective representations and warranties
of FUR and CFSC set forth in SECTIONS 4(a) and 4(c), respectively,
shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though made on and as of the
Closing Date.
(v) PERFORMANCE. FUR and CFSC shall each have performed and
complied in all material respects with all agreements and conditions
contained herein required to be performed or complied with on or prior
to the Closing Date.
(vi) LITIGATION. No material action or proceeding shall have
been instituted nor shall have any governmental action been threatened
before any court or governmental agency, nor shall any order, judgment
or decree have been issued or proposed to be issued by any court or
governmental agency to set aside, restrain, enjoin or prevent the
performance of this Investment Agreement and the transactions
contemplated hereby.
(vii) OPINIONS. GMAC-CM shall have received a favorable
opinion of counsel for each of FUR and CFSC, dated the Closing Date,
addressed to GMAC-CM and substantially in the form of SCHEDULES 4 and
3, respectively.
(viii) [Intentionally omitted].
(ix) SWAP AGREEMENT. Newco shall have entered into an
interest rate swap agreement with respect to the Senior Preferred
7
8
Distribution and the Series B Preferred Distribution on terms
satisfactory to GMAC-CM.
(c) The obligations of CFSC to take the actions on the Closing Date
specified in SECTION 2(c) shall be subject to the fulfillment to the
satisfaction of, or waiver in writing by, CFSC on or prior to the Closing Date
of the following conditions precedent:
(i) MARATHON TRANSACTION. The conditions precedent under the
Purchase Agreement to the consummation of the transaction with Marathon
shall have been met or waived, it being understood and agreed that CFSC
shall have the right in its sole discretion to decide whether such
conditions precedent in the Purchase Agreement have been fulfilled or
to waive the same.
(ii) OTHER INVESTMENTS. FUR and GMAC-CM shall have made their
respective Investments on the Closing Date contemplated by SECTIONS
2(a) and 2(b), respectively, and LLC #2 Manager and LLC #1 shall have
made the investment in LLC #2 contemplated by the Acquisition Loan
Documents.
(iii) ACQUISITION LOAN. GMAC Lender shall have funded the
Acquisition Loan.
(iv) WARRANTIES. The respective representations and warranties
of FUR and GMAC-CM set forth in SECTIONS 4(a) and 4(b), respectively,
shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though made on and as of the
Closing Date.
(v) PERFORMANCE. FUR and GMAC-CM shall each have performed and
complied in all material respects with all agreements and conditions
contained herein required to be performed or complied with on or prior
to the Closing Date.
(vi) LITIGATION. No material action or proceeding shall have
been instituted nor shall have any governmental action been threatened
before any court or governmental agency, nor shall any order, judgment
or decree have been issued or proposed to be issued by any court or
governmental agency to set aside, restrain, enjoin or prevent the
performance of this Investment Agreement and the transactions
contemplated hereby.
8
9
(vii) OPINIONS. CFSC shall have received a favorable opinion
of counsel for each of FUR and GMAC-CM, dated the Closing Date,
addressed to CFSC and substantially in the form of SCHEDULES 4 and 2,
respectively.
(viii) [Intentionally omitted].
(ix) SWAP AGREEMENT. Newco shall have entered into an interest
rate swap agreement with respect to the Senior Preferred Distribution
and the Series B Preferred Distribution on terms satisfactory to CFSC.
(x) CASH FLOW COVERAGE RATIO. CFSC shall have satisfied itself
that the coverage ratio for payment of the Senior Preferred
Distribution from net cash flow available for distributions (cash flow
available after debt service on Acquisition Loan, operating expenses,
reserves, tenant improvements and leasing commissions) will not be less
than 1.60 to 1.00.
(d) AUTHORIZATION, EXECUTION, AND DELIVERY OF DOCUMENTS. The
obligations of FUR, GMAC-CM and CFSC to take their respective actions on the
Closing Date under SECTIONS 2(a), 2(b) and 2(c), respectively, shall further be
subject to the conditions precedent that this Investment Agreement and each of
the following documents shall have been duly authorized, executed and delivered
by the respective parties thereto and shall be in full force and effect:
(i) each of the LLC Agreements; and
(ii) each of the Management Agreements (or, in the case of
LLC #3, the applicable Assignment Agreement).
SECTION 4. REPRESENTATIONS AND WARRANTIES.
-------------------------------
(a) REPRESENTATIONS AND WARRANTIES OF FUR. FUR represents and
warrants to GMAC-CM and CFSC that:
(i) DUE ORGANIZATION. FUR is a business trust duly organized
and existing under the laws of the State of Ohio and has the power,
authority and legal right to enter into, and perform its obligations
under, this Investment Agreement. Each other FUR Party is a corporation
(or, in the case of FUR Subsidiary, a limited liability company) duly
organized and existing under the laws of the State of Delaware and has
the power, authority and legal right to enter into, and perform its
obligations under,
9
10
each LLC Agreement to which it is or will be a party and, in the case
of FUMI, the Management Agreements.
(ii) DUE AUTHORIZATION; ENFORCEABILITY. This Investment
Agreement has been duly authorized, executed and delivered by FUR and
constitutes a valid and legally binding obligation of FUR. Each LLC
Agreement to which a FUR Party is or will be a party has been duly
authorized, and when executed and delivered by such FUR Party, will
constitute its valid and legally binding obligation. The Management
Agreements have been duly authorized by FUMI, and when executed and
delivered by FUMI, will constitute its valid and legally binding
obligations.
(iii) NO VIOLATION. The execution and delivery by FUR of this
Investment Agreement, the execution and delivery by each FUR Party of
each LLC Agreement to which such FUR Party is or will be a party and
the execution and delivery by FUMI of the Management Agreements are
not, and the performance by FUR or such FUR Party, as applicable, of
its obligations hereunder and thereunder will not be, inconsistent with
its Declaration of Trust, certificate of incorporation or limited
liability company agreement, as applicable, or bylaws, do not and will
not contravene any law, governmental rule or regulation, judgment or
order applicable to it, and do not and will not contravene any
provision of, or constitute a default under, any material indenture,
mortgage, contract or other instrument to which FUR or such FUR Party
is a party or by which it or its property is bound or require the
consent or approval of, the giving of notice to, the registration with
or the taking of any action in respect of or by, any Federal or state
governmental authority or agency, except such as have been duly
obtained, given or accomplished and are in full force and effect.
(iv) LITIGATION. There is no litigation, proceeding or
investigation pending, or to FUR's actual knowledge, threatened against
FUR or any FUR Party which questions the validity or legality of this
Investment Agreement or of any action taken or to be taken by FUR or
any FUR Party pursuant to or in connection with the provisions of this
Investment Agreement.
(v) ERISA. FUR represents and warrants that no FUR Party will
purchase or hold its interest in any of the LLC Agreements with plan
assets of any "employee benefit plan" (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended,
("ERISA")) which is subject to Title I of ERISA or a "plan" covered by
Section 4975 of the Internal Revenue Code of 1986, as amended.
10
11
(vi) BROKERS. All negotiations relating to this Investment
Agreement and the transactions contemplated hereunder have been carried
on by FUR without the intervention of any person as the result of any
action by FUR (and, so far as known to FUR, without the intervention of
any other person), in such manner as to give rise to any valid claim
against FUR for a brokerage commission, finder's fee or like payment,
except for NatWest Markets, whose fees and expenses are to be paid by
Newco under Section 24(o) of the LLC #1 Agreement.
(vii) PURCHASE FOR INVESTMENT. FUR Subsidiary is purchasing
its membership interests in Newco and LLC #3, and ▇▇▇ ▇▇▇▇▇▇▇
Subsidiary is purchasing its membership interest in LLC #2 Manager, for
its own account with no present intention of distributing any such
membership interest or any part thereof in any manner which would
violate the Securities Act. FUR acknowledges that the membership
interests of FUR Subsidiary and ▇▇▇ ▇▇▇▇▇▇▇ Subsidiary, as applicable,
have not been registered under the Securities Act, and that neither
Newco nor any such other limited liability company contemplates any
filing, and is not legally required to file, any such registration
statement. FUR Subsidiary and ▇▇▇ ▇▇▇▇▇▇▇ Subsidiary are each an
"accredited investor" as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act.
(b) REPRESENTATIONS AND WARRANTIES OF GMAC-CM. GMAC-CM represents
and warrants to FUR and CFSC that:
(i) DUE ORGANIZATION. GMAC-CM is a corporation duly organized
and validly existing in good standing under the laws of the
Commonwealth of Pennsylvania and has the corporate power, authority and
legal right to enter into and perform its obligations under this
Investment Agreement and each LLC Agreement to which it is or will be a
party.
(ii) DUE AUTHORIZATION; ENFORCEABILITY. This Investment
Agreement has been duly authorized, executed and delivered by GMAC-CM
and constitutes a valid and legally binding obligation of GMAC-CM. Each
LLC Agreement to which GMAC-CM is or will be a party has been duly
authorized, and when executed and delivered by GMAC-CM, will constitute
its valid and legally binding obligation.
(iii) NO VIOLATION. The execution and delivery by GMAC-CM
of this Investment Agreement and each LLC Agreement to which GMAC-CM
is or will be a party is not, and the performance by GMAC-CM of its
obligations hereunder and thereunder will not be, inconsistent with its
11
12
charter or bylaws, do not and will not contravene any law, governmental
rule or regulation, judgment or order applicable to it, and do not and
will not contravene any provision of, or constitute a default under,
any material indenture, mortgage, contract or other instrument to which
GMAC-CM is a party or by which it or its property is bound, or require
the consent or approval of, the giving of notice to, the registration
with or the taking of any action in respect of or by, any governmental
authority or agency, except such as have been obtained, given or
accomplished and are in full force and effect.
(iv) LITIGATION. There is no litigation, proceeding or
investigation pending, or to GMAC-CM's actual knowledge, threatened
against GMAC-CM which questions the validity or legality of this
Investment Agreement or of any action taken or to be taken by GMAC-CM
pursuant to or in connection with the provisions of this Investment
Agreement.
(v) ERISA. GMAC-CM represents and warrants that it will not
purchase or hold its interest in any of the LLC Agreements with plan
assets of any "employee benefit plan" (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended,
("ERISA")) which is subject to Title I of ERISA or a "plan" covered by
Section 4975 of the Internal Revenue Code of 1986, as amended.
(vi) BROKERS. All negotiations relating to this Investment
Agreement and the transactions contemplated hereunder have been carried
on by GMAC-CM without the intervention of any person as the result of
any action by GMAC-CM (and, so far as known to GMAC-CM, without the
intervention of any other person), in such manner as to give rise to
any valid claim against GMAC-CM for a brokerage commission, finder's
fee or like payment, except for NatWest Markets, whose fees and
expenses are to be paid by Newco under Section 24(o) of the LLC #1
Agreement.
(vii) PURCHASE FOR INVESTMENT. GMAC-CM is purchasing its
membership interests in Newco, LLC #2 Manager and LLC #3 for its own
account with no present intention of distributing any such membership
interest or any part thereof in any manner which would violate the
Securities Act. GMAC-CM acknowledges that the membership interests have
not been registered under the Securities Act, and that neither Newco
nor any such other limited liability company contemplates any filing,
and is not legally required to file, any such registration statement.
GMAC-CM is an "accredited investor" as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act.
12
13
(c) REPRESENTATIONS AND WARRANTIES OF CFSC. CFSC represents and
warrants to FUR and GMAC-CM that:
(i) DUE ORGANIZATION. CFSC is a corporation duly organized and
validly existing in good standing under the laws of the State of
Delaware and has the corporate power, authority and legal right to
enter into and perform its obligations under this Investment Agreement.
CFSC Subsidiary is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware and has the
corporate power, authority and legal right to enter into and perform
its obligations under each LLC Agreement to which it is or will be a
party.
(ii) DUE AUTHORIZATION; ENFORCEABILITY. This Investment
Agreement has been duly authorized, executed and delivered by CFSC and
constitutes a valid and legally binding obligation of CFSC. Each LLC
Agreement to which CFSC Subsidiary is or will be a party has been duly
authorized, and when executed and delivered by CFSC Subsidiary, will
constitute its valid and legally binding obligation.
(iii) NO VIOLATION. The execution and delivery by CFSC of this
Investment Agreement, and the execution and delivery by CFSC Subsidiary
of each LLC Agreement to which it is or will be a party, are not, and
the performance by CFSC or CFSC Subsidiary, as applicable, of its
obligations hereunder and thereunder will not be, inconsistent with its
charter or bylaws, do not and will not contravene any law, governmental
rule or regulation, judgment or order applicable to it, and do not and
will not contravene any provision of, or constitute a default under,
any material indenture, mortgage, contract or other instrument to which
CFSC or CFSC Subsidiary is a party or by which it or its property is
bound, or require the consent or approval of, the giving of notice to,
the registration with or the taking of any action in respect of or by,
any governmental authority or agency, except such as have been
obtained, given or accomplished and are in full force and effect.
(iv) LITIGATION. There is no litigation, proceeding or
investigation pending, or to CFSC's actual knowledge, threatened
against CFSC or CFSC Subsidiary which questions the validity or
legality of this Investment Agreement or of any action taken or to be
taken by CFSC or CFSC Subsidiary pursuant to or in connection with the
provisions of this Investment Agreement.
(v) ERISA. CFSC represents and warrants that CFSC Subsidiary
will not purchase or hold its interest in any of the LLC Agreements
with
13
14
plan assets of any "employee benefit plan" (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended,
("ERISA")) which is subject to Title I of ERISA or a "plan" covered by
Section 4975 of the Internal Revenue Code of 1986, as amended.
(vi) BROKERS. All negotiations relating to this Investment
Agreement and the transactions contemplated hereunder have been carried
on by CFSC without the intervention of any person as the result of any
action by (and, so far as known to CFSC, without the intervention of
any other person), in such manner as to give rise to any valid claim
against CFSC for a brokerage commission, finder's fee or like payment
(vii) PURCHASE FOR INVESTMENT. CFSC Subsidiary is purchasing
its membership interests in Newco, LLC #2 Manager and LLC #3 for its
own account with no present intention of distributing any such
membership interest or any part thereof in any manner which would
violate the Securities Act. CFSC acknowledges that the membership
interests of CFSC Subsidiary have not been registered under the
Securities Act, and that neither Newco nor any such other limited
liability company contemplates any filing, and is not legally required
to file, any such registration statement. CFSC Subsidiary is an
"accredited investor" as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act.
SECTION 5. CONFIDENTIALITY.
----------------
Each party and its Affiliates shall treat all data and information
furnished by a party hereto or an Affiliate to the other party hereto or to one
of its Affiliates which is marked "Confidential" or contains a similar
proprietary notice clause as confidential, and shall take or cause to be taken
such reasonable precautions as are necessary to prevent disclosure thereof to
others during the term of this Investment Agreement and for a period of three
(3) years from the date of this Investment Agreement; PROVIDED, HOWEVER, that
this obligation shall not be applicable:
(i) to the extent such data or information was part of the
public domain at the time of its disclosure to such party;
(ii) to the extent such data or information became generally
available to the public or otherwise part of the public domain after
its disclosure to such party other than through any act or omission of
such party or its Affiliate in breach of this Investment Agreement;
14
15
(iii) to the extent such data or information was subsequently
disclosed to such party by a third party on a nonconfidential basis who
had no obligation to either party or any Affiliate of either party or
Newco (whether directly or indirectly) not to disclose such
information; or
(iv) to the extent that a party can demonstrate that such data
or information was in such party's possession at the time of disclosure
and was not acquired, directly or indirectly, from the other party or
an Affiliate on a confidential basis.
Each party may disclose such data and information to (i) its respective
Affiliates, (ii) its directors, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of its investment in Newco), (iii) its financial advisors and
other professional advisors, (iv) any investor to which such party sells or
offers to sell its interest in Newco in accordance with Section 18(a) of the LLC
Agreement, (v) any federal or state regulatory authority having jurisdiction
over such party, (vi) any national securities exchange or nationally recognized
rating agency that requires access to information about such party's investment
portfolio or (vii) upon prompt notice to the other parties hereto, any other
Person to which such delivery or disclosure may be necessary or appropriate (w)
to effect compliance with any law, rule, regulation or order applicable to such
party, (x) in response to any subpoena or other legal process, or (y) in
connection with any litigation to which such party is a party; provided that
each party shall take all reasonable measures to impose upon any such Person
described in clauses (i)-(iv) of this SECTION 5 an obligation to respect the
confidential nature of the data and information disclosed substantially in
accordance with the terms of this SECTION 5. The provisions of this SECTION 5
shall survive the termination of this Investment Agreement.
SECTION 6. NOTICES.
--------
All communications, notices and consents provide for herein shall be in
writing and be given in person (or air freight delivery) or by means of
facsimile or other wire transmission (with request for assurance of receipt in a
manner typical with respect to communications of that type) or by mail, and
shall become effective (x) on delivery if given in person or by air freight
delivery, (y) on the date of transmission if sent by telecopy or other wire
transmission, or (z) five business days after being deposited in the mails, with
proper postage for first class registered or certified air mail, prepaid.
Notices shall be addressed as follows:
(i) if to FUR, at: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
15
16
with a copy to: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(ii) if to GMAC-CM, at: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to: Commercial Capital Initiatives, Inc.
Wall Street Plaza
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
(iii) if to CFSC, at: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or at such other address as either party hereto may from time to time designate
by notice duly given in accordance with the provisions of this Section to the
other party hereto.
SECTION 7. GOVERNING LAW; WAIVER OF JURY TRIAL.
------------------------------------
(a) GOVERNING LAW. This Investment Agreement shall be governed by and
construed in accordance with the law of the State of Delaware, without regard to
its conflict of law rules.
(b) WAIVER OF JURY TRIAL. Each of FUR, GMAC-CM and CFSC hereby waives
any right to a trial by jury in any suit, action or proceeding arising out of or
relating to this Investment Agreement and agrees that any such suit, action or
proceeding shall be tried before a court and not before a jury.
SECTION 8. TERMINATION.
------------
In the event that the Closing Date contemplated by SECTION 2 hereof has
not occurred prior to October 31, 1996, then FUR, GMAC-CM or CFSC, acting alone,
may upon notice to the other parties terminate this Investment Agreement
together with any LLC Agreement and any Management Agreement which has
theretofore been executed and delivered by the parties or their respective
Affiliates; PROVIDED, HOWEVER, that no such termination shall relieve any party
from any breach or default of any of its duties or obligations under this
Investment Agreement which may have occurred
16
17
prior to the date of such termination; and provided further that the provisions
of SECTIONS 5 and 10(F) shall survive any such termination.
SECTION 9. REPLACEMENT OF SENIOR PREFERRED CAPITAL.
----------------------------------------
Newco will have the right under the LLC #1 Agreement to redeem the
Senior Preferred Capital and the Common Capital of CFSC at any time after the
Closing Date. FUR and CFSC agree that GMAC-CM may act on behalf of Newco in
directing the terms and conditions of any such redemption and the resultant
replacement Senior Preferred Capital. Each of FUR and CFSC agrees to cooperate
in good faith with GMAC-CM and Newco in connection with any such redemption and
replacement and to execute and deliver such amendments to the LLC Agreements and
other agreements as may be necessary or advisable to consummate such
replacement, provided that (i) the after-tax future economic return of FUR
Subsidiary and the other rights, obligations and benefits of FUR (taking into
account, among other things, FUR's REIT status) under the LLC Agreements as a
result of the replacement are not in any way adversely affected and (ii) the
selection and identity of any person replacing CFSC in Newco, LLC #2 Manager and
LLC #3 shall be subject to FUR's reasonable approval. All costs and expenses of
negotiating and documenting the refinancing (including, without limitation, the
fees and expenses of counsel for FUR and Newco) shall be for the account of
GMAC-CM.
SECTION 10. MISCELLANEOUS.
--------------
(a) COUNTERPARTS. This Investment Agreement may be executed in any
number of counterparts and by either party hereto on separate counterparts, each
of which, when so executed and delivered, shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
(b) SURVIVAL. All covenants, agreements, indemnities, representations
and warranties contained in this Investment Agreement and in any agreement,
document or certificate delivered pursuant hereto or in connection herewith,
shall survive the execution and delivery of this Investment Agreement and the
consummation of the transactions contemplated hereby.
(c) BINDING EFFECT. All covenants, agreements, indemnities,
representations and warranties in this Investment Agreement, the LLC Agreements
and the Management Agreements, and in any agreement, document or certificate
delivered hereunder or thereunder, shall bind the party making the same and its
permitted successors and assigns and shall inure to the benefit of each party
for whom made and their respective permitted successors and assigns. Except as
otherwise indicate, all references herein to any party to this Investment
Agreement, the LLC Agreements and the Management Agreements shall include the
permitted successors and assigns
17
18
of such party. Notwithstanding the foregoing, no party hereto shall assign its
rights or obligations under this Investment Agreement without the prior written
consent of the other parties, which consent may be withheld in each such other
party's sole discretion.
(d) AMENDMENTS, SUPPLEMENTS, ETC. Neither this Investment Agreement nor
any of the terms hereof may be amended, modified or supplemented orally, but
only by an instrument in writing signed by the party against which enforcement
of such change is sought.
(e) HEADINGS. The headings of the sections and paragraphs of this
Investment Agreement have been inserted for convenience of reference only and
shall in no way restrict or otherwise modify any of the terms or provisions
hereof.
(f) EXPENSES. The fees and expenses of FUR and GMAC-CM (including,
without limitation, the reasonable fees and expenses of their outside counsel
with respect to this Investment Agreement, the Purchase Agreement and the
Acquisition Loan Documents) shall be paid by Newco, LLC #2 or LLC #3, as
applicable; such fees and expenses of CFSC shall be paid by GMAC-CM.
(g) ENTIRE AGREEMENT. This Investment Agreement together with the LLC
Agreements and the Management Agreements embody the entire agreement and
understanding between the parties with respect to the subject matter hereof and
thereof, and supersede any agreements, representations, warranties or
understandings, oral or written, between the parties with respect to the subject
matter of this Investment Agreement, the LLC Agreement and the Management
Agreements entered into prior to the date hereof.
(h) LIMITATION OF LIABILITY. Notwithstanding anything contained herein
to the contrary, this Investment Agreement is made and executed on behalf of FUR
by its officers on behalf of the trustees thereof, and none of the trustees or
any additional or successor trustee hereafter appointed, or any beneficiary,
officer, employee or agent of FUR shall have any liability in his personal or
individual capacity, but instead, all parties shall look solely to the property
and assets of FUR for satisfaction of claims of any nature arising under or in
connection with this Investment Agreement.
(i) NO CONSEQUENTIAL OR LOST PROFIT DAMAGES. No party to this
Investment Agreement, nor any Affiliate of any such party, shall seek or be
entitled to incidental, indirect or consequential damages or damages for lost
profits in any claim made under this Investment Agreement or in connection with
the transactions contemplated hereby.
18
19
IN WITNESS WHEREOF, the parties hereto have each caused this Investment
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the date first above given.
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------
Its: VICE PRESIDENT AND SECRETARY
----------------------------
GMAC COMMERCIAL
EQUITY INVESTMENTS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Its: SENIOR VICE PRESIDENT
----------------------------
CARGILL FINANCIAL
SERVICES CORPORATION
By: /s/ AUTHORIZED OFFICER
------------------------------
Its: AUTHORIZED OFFICER
----------------------------
20
EXHIBITS
--------
Exhibit A-1 Form of LLC #1 Agreement
Exhibit A-2 Form of LLC #2 Agreement
Exhibit A-3 Form of LLC #3 Agreement
Exhibit A-4 Form of LLC #2 Manager Agreement
SCHEDULES
---------
Schedule 1 List of Properties
Schedule 2 Opinion of Counsel for GMAC-CM
Schedule 3 Opinion of Counsel for CFSC
Schedule 4 Opinion of Counsel for FUR
