AMENDMENT
NO. 1
PURCHASE AND SALE AGREEMENT
This Amendment No. 1 (this "Amendment"), dated as of April 30,
1998, is made by and among LNR Property Corporation, a Delaware corporation (the
"BUYER"), and Pacific Harbor Capital, Inc., a Delaware corporation (the
"SELLER").
RECITALS
Reference is made to that certain Purchase and Sale Agreement,
dated as of February 18, 1998 (the "Purchase Agreement"), by and among the
parties hereto. Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the Purchase Agreement.
The initial Closing Date contemplated under the Purchase
Agreement shall be May 1, 1998.
In connection with the initial Closing, the parties hereto
desire to amend the Purchase Agreement as set forth below.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises and
undertakings in this Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. INITIAL CLOSING.
a. EFFECTIVE DATE. Notwithstanding the dating of the various
documents delivered at the initial Closing, the parties
acknowledge and agree that the Closing shall be effective at
12:01 a.m. on May 1, 1998.
b. NEW PROJECTS. The parties acknowledge and agree that
Commencement Place Limited Partnership and the ▇▇▇▇▇▇ Project
are New Projects. Set forth on attached Schedule I is an
estimate of the out-of-pocket expenditures, including
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capital contributions, with respect to such New Projects,
actually expended by Seller.
c. LAKEWOOD. The parties acknowledge and agree that Amurcon
Corporation of Virginia ("AMURCON") has exercised its right of
first refusal and, unless Amurcon elects not to proceed with
such acquisition, the Lakewood Project is and shall remain a
Withdrawn Project. The Purchase Price shall be reduced by the
amount allocated to the Lakewood Project on Schedule 2(g) and
no further adjustments shall be made to the Purchase Price by
reason of the Lakewood Project; provided, however, that, if
Amurcon elects not to proceed with such the acquisition of the
Lakewood Project, the Lakewood Project shall be purchased by
Buyer and sold by Seller in accordance with Section 2(g) of
the Purchase Agreement.
d. OTHER WITHDRAWN PROJECTS. Attached hereto as Schedule II is a
list of the other Projects constituting Withdrawn Projects
which shall not be acquired at the initial Closing. With
respect to such Withdrawn Projects, the parties agree as
follows:
i. The parties shall use their commercially reasonable
best efforts and reasonably cooperate in obtaining
the remaining Seller Consents as soon as possible,
which efforts shall include, without limitation:
(1) Proceeding to promptly negotiate and execute
documentation with respect to the Park Crest
Project substantially in accordance with the
terms set forth on Exhibit A hereto;
(2) Proceeding to promptly negotiate and execute
documentation with respect to the ▇▇▇▇▇▇▇▇
Project and Wolf Project to the extent
changes are no more extensive than changes
required with respect to the Park Crest
Project;
(3) Proceeding to promptly negotiate and execute
documentation with respect to the Surrey Row
Project substantially in accordance with the
terms set forth on Exhibit B hereto;
(4) Proceeding to promptly negotiate and execute
documentation with respect to Harbor Equity
Limited Partnership No. II and Pacific
Harbor Fund Partnership in substantially the
form of the drafts distributed to General
American Life Insurance Company immediately
prior to Closing; provided, that, Buyer
shall not be obligated to obtain a letter of
credit to support the obligation to make
deficit or capital loans and, if General
American Life Insurance Company shall not
permit it, Seller agrees to not insist on
prioritization of claims;
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(5) In furtherance and not in limitation of the
undertakings of Buyer under Section 2(g)
hereof, Buyer agrees that, in connection
with the solicitation of the Seller Consents
for the Withdrawn Projects:
(a) It will execute and deliver
guarantees to third parties with
respect to the obligation to make
Scheduled Capital Contributions;
(b) It will execute and deliver
undertakings to lenders equivalent
to customary FNMA "key principal"
undertakings.
ii. As soon as possible (in any event, within three (3)
business days) after obtaining all required Seller
Consents relating to any Withdrawn Project, Seller
shall furnish copies thereof to Seller and the
parties shall cause such Withdrawn Project to be sold
by Seller to Buyer pursuant to the Purchase
Agreement. The documentation (in addition to any
documentation required in connection with applicable
Seller Consents) for such sale subsequent to the
initial Closing shall be effected as follows (with
only a legal opinion relating to Seller Consents in
the form contemplated in the Purchase Agreement to be
required):
(1) Buyer and Seller shall execute and deliver a
letter agreement specifying the Project to
be sold and the estimated Purchase Price;
(2) Seller's counsel shall prepare bills of
sale, assignments and assumption agreements
and related documentation consistent with
the documentation executed and delivered at
the initial Closing; and
(3) Buyer shall wire the Purchase Price
applicable to the Project and the Project
shall be transferred upon receipt.
2. INDEMNIFICATIONS. In addition to the other indemnification obligations
of Seller under the Purchase Agreement, Seller agrees as follows:
a. LIH REALTY CORPORATION. In the event Buyer is required to make
payments to LIH Realty Corporation ("LIH") under that certain
Unconditional Guaranty, dated on or about the date hereof (the
"GUARANTY"), from Buyer to LIH, and the obligation to make
such payment arose during any period prior to the Closing (and
to the extent such payment does not relate to projected tax
benefits for any period after the Closing), then Seller shall
indemnify Buyer from and against any payments. In the event
Buyer is required to make payments to LIH or Intel Corporation
("INTEL") under that certain Indemnification Agreement, dated
on or
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about the date hereof (the "INDEMNIFICATION AGREEMENT"), by
and among PacifiCorp Financial Services, Inc., Buyer, LIH and
Intel, then Seller shall indemnify Buyer from and against any
payments; provided, however, that (i) Buyer shall promptly
notify Seller of any claim by LIH or Intel of any claim under
the Guaranty or the Indemnification Agreement, (ii) Buyer
shall cooperate with Seller, at Seller's reasonable request
and expense, with respect to resisting payments on any such
claim, and (iii) with respect to the Indemnification
Agreement, Seller shall not be liable for any claim to the
extent such claim arose from the failure by Buyer or its
affiliates to manage Harbor Equity Limited Partnership or the
projects owned by any partnership in which HELP has an
interest in a commercially reasonable manner or any breach by
Buyer or its affiliates of its obligations under the Assumed
Obligations.
b. INDEMNIFICATION RELATING TO FENIX REDEVELOPMENT PARTNERSHIP,
LTD. Subject to the contest procedure rights in Section 9(j)
of the Purchase Agreement, in the event that the Internal
Revenue Service finally determines that Fenix Redevelopment
Partnership, Ltd. failed to achieve the minimum set-aside
requirements in the first year of the credit period applicable
to the Fenix Project, then Seller shall indemnify Buyer from
and against any loss of Credits caused by such determination.
c. INDEMNIFICATION RELATING TO PHC SOUTH FORTY LIMITED, INC.
Subject to the contest procedure rights in Section 9(j) of the
Purchase Agreement, in the event that the Internal Revenue
Service finally determines that PHC South Forty Limited, Inc.
failed to achieve the minimum set-aside requirements in the
first year of the credit period applicable to the South Forty
Project, then Seller shall indemnify Buyer from and against
any loss of Credits caused by such determination.
d. GENERAL. Seller acknowledges that the indemnification
obligations set forth in clauses (a), (b) and (c) above shall:
i. survive Closing and continue until the applicable
statute of limitations has run; and
ii. Not be included in the deductible referred to in
clause (A), or subject to the ceiling referred to in
clause (B), in each case in Section 8(b)(i) of the
Purchase Agreement.
3. POST-CLOSING ADJUSTMENTS. Promptly, in any event within thirty (30)
days after Closing (and any subsequent Closing with respect to any
Withdrawn Project), Seller shall prepare and deliver to Buyer a
detailed calculation of the Purchase Price (the "CLOSING TRUE-UP"),
including all adjustments, reimbursements and similar required payments
contemplated under the Purchase Agreement applicable to the Projects
transferred at such Closing.
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Buyer shall promptly, in any event within fifteen (15) days after
receipt of the Closing True-up provide in writing any objections or
corrections to the Closing True-up. If the parties are unable to
resolve their differences within twenty (20) days thereafter, a
nationally recognized independent accounting firm (not generally
representing the Buyer or Seller, unless the parties agree otherwise)
shall be appointed by the Buyer and Seller, which shall calculate the
Closing True-up, the determination of such accounting firm to be final.
In the event the final determination of such accounting firm causes a
decrease by more than five percent (5%) of the net amount payable to
Seller, the costs and expenses of the accounting firm for such
determination shall be for the account of Seller. In the event the
final determination of such accounting firm causes an increase by more
than five percent (5%) of the net amount payable to Seller, the costs
and expenses of the accounting firm for such determination shall be for
the account of Buyer. In all other events, the costs and expenses of
the accounting firm for such determination shall be shared equally by
Buyer and Seller. Upon the first business day following the final
determination of the Closing True-up (which shall be the fifteenth day
after receipt of the Closing True-up, if no objection is made, the date
upon which the parties resolve their differences, or the date of the
final determination of the accounting firm, as applicable), the Buyer
shall pay to Seller, or Seller shall reimburse Buyer, as the case may
be, the amount by which the Purchase Price determined by the Closing
True-up exceeds or is less than the Purchase Price paid at such
Closing.
4. POTENTIAL NEW PROJECTS. The parties acknowledge that set forth on
attached Schedule III is a list of projects in development by the
Affordable Housing Group which have not been approved by Buyer and are
not yet New Projects under the Purchase Agreement. On or before (i)
June 1, 1998, in the case of the Commerciantes Project and the Town
Center Apartments, or, (ii) in the case of the other projects listed on
Schedule III, the earlier of (A) ten days after receipt of an
allocation of tax credits from the applicable state housing agency, or
(B) December 31, 1998 (the applicable date referred to in clause (i) or
(ii) referred to as the "DETERMINATION DATE", Buyer shall do one of the
following.
a. APPROVED PROJECTS. Notify Seller that one or more such
Projects are approved by Buyer and pay to Seller by the
Determination Date the amount of out-of-pocket expenditures,
including capital contributions, with respect to such projects
which were incurred by Seller prior to Closing; or
b. NON-APPROVED PROJECTS. Notify Seller that one or more such
Projects are not to be approved by Buyer and, at Seller's
discretion, transfer the contracts and related rights to
Seller or cause such contracts and related rights to be
canceled. Seller shall indemnify Buyer from and against any
loss arising from such cancellation, unless such loss arose
from actions of Buyer after Closing (other than the
cancellation at the direction of Seller).
5. HASTINGS LOAN. In addition to the covenants set forth in Section 6(i)
of the Purchase Agreement, Seller agrees that, for a period of twelve
(12) months after the Closing, it
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shall not cause the Hastings Permanent Financing to occur unless it has
been notified in writing by the agency responsible for such decision
that the California property tax exemption shall not be provided to the
Hastings Park Project.
6. ARCS CREDITS. In the event Buyer or its Affiliates receives a credit of
the assumption fee paid to ARCS Commercial Mortgage, Co., L.P.
("ARCS"), as contemplated in that certain letter, dated March 31, 1998,
from ARCS to ▇▇▇▇▇▇ ▇▇▇▇▇▇, Buyer shall pay to Seller in dollars,
within two (2) business days of the receipt of the credit, equal to
seventy five percent (75%) of such credit (e.g., if Buyer or its
Affiliates receives a credit to the loan fee in the amount of $50,000,
Buyer shall pay $37,500 to Seller).
7. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇ APARTMENTS. In the event that, the parties hereto
are unable, using commercial reasonable good faith efforts, to
negotiate and execute documentation with respect to the ▇▇▇▇▇▇▇▇
Project and Wolf Project and to obtain the Seller Consents applicable
thereto consistent with the Section 1(d) above and the Purchase
Agreement on or before sixty (60) days after the date hereof, either
party may at its sole option, within twenty (20) days thereafter,
require Buyer to transfer to Seller and Seller to accept all of the
limited partnership interests in Calibre Altoona Associates, L.P. and
Calibre Boalsburg Associates, L.P. at a price which places the Buyer
and Seller in substantially the same economic position had such
transfer not occurred.
8. SCHEDULES. The Schedules to the Purchase Agreement are hereby amended
to read in their entirety as set forth on the corresponding Schedules
attached hereto.
9. NO FURTHER AMENDMENTS, ETC... Except as specifically modified herein,
the Purchase Agreement shall remain in full force and effect and no
provision hereof shall be deemed a waiver of any other provision of the
Purchase Agreement, unless expressly provided in writing.
10. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed in duplicate as of the day and year first above written.
SELLER: LNR PROPERTY CORPORATION,
a Delaware corporation
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
BUYER: PACIFIC HARBOR CAPITAL, INC.,
a Delaware corporation
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
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