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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): AUGUST 23, 1999
EXCEL LEGACY CORPORATION
(Exact name of Registrant as specified in its charter)
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DELAWARE 0-23503 33-0781747
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer Identification No.)
of Incorporation)
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16955 VIA DEL CAMPO, SUITE 100
SAN DIEGO, CALIFORNIA 92127
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (858) 675-9400
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This Current Report on Form 8-K is filed by Excel Legacy Corporation, a
Delaware corporation (the "Company"), in connection with the matters described
herein.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 23, 1999, the Company sold to Wal Mart Real Estate Business
Trust, a Delaware trust ("Wal Mart"), eight properties that were previously
under lease to Wal Mart Stores, Inc. for aggregate consideration of
approximately $35 million in cash and the assumption of approximately $24
million in liabilities. The properties consist of retail centers located in (1)
Brighton, Colorado, (2) Orland Hills, Illinois, (3) Decatur, Indiana, (4)
Wabash, Indiana, (5) Big Rapids, Michigan, (6) Wyomissing, Pennsylvania, (7)
Temple, Texas and (8) Berlin, Wisconsin. In assessing the disposition of the
above described properties, the Company considered, among other factors, the
price negotiated with Wal Mart, the properties' various locations, comparative
rents available from other tenants in the locations, and the competition in the
related rental and real estate sales markets. The Company also assessed the
sources of potential expenses associated with owning, operating and leasing the
properties in the future, including, among other factors, estimated maintenance
expenses, capital improvements, expenses associated with possible redevelopment
and other operating expenses.
The sale was effected pursuant to a Purchase and Sale Agreement and
Escrow Instructions, dated as of August 2, 1999, by and between the Company and
Wal Mart which is incorporated by reference into this Form 8-K as Exhibit 10.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Pro Forma Condensed Consolidated Statements of Income of Excel
Legacy Corporation and Subsidiaries for the twelve months ended
December 31, 1998 and for the six months ended June 30, 1999,
and Pro Forma Condensed Consolidated Balance Sheet of Excel
Legacy Corporation and Subsidiaries as of June 30, 1999.
(c) Exhibits. The following exhibits are filed as part of this
report:
10.1 Purchase and Sale Agreement and Escrow Instructions,
dated as of August 2, 1999, by and between Excel Legacy
Corporation and Wal Mart Real Estate Business Trust.
99.1 Pro Forma Condensed Consolidated Statements of Income of
Excel Legacy Corporation and Subsidiaries for the twelve
months ended December 31, 1998 and for the six months
ended June 30, 1999, and Pro Forma Condensed
Consolidated Balance Sheet of Excel Legacy Corporation
and Subsidiaries as of June 30, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 1, 1999 EXCEL LEGACY CORPORATION
By: /s/ Gary B. Sabin
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Gary B. Sabin
Chairman, President and
Chief Executive Officer
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EXHIBIT INDEX
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Exhibit
Number Description
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10.1 Purchase and Sale Agreement and Escrow Instructions, dated as of
August 2, 1999, by and between Excel Legacy Corporation and Wal
Mart Real Estate Business Trust.
99.1 Pro Forma Condensed Consolidated Statements of Income of Excel
Legacy Corporation and Subsidiaries for the twelve months ended
December 31, 1998 and for the six months ended June 30, 1999,
and Pro Forma Condensed Consolidated Balance Sheet of Excel
Legacy Corporation and Subsidiaries as of June 30, 1999.
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EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
(SHOPPING CENTER)
BETWEEN
EXCEL LEGACY CORPORATION,
A DELAWARE CORPORATION
"SELLER"
AND
WAL-MART REAL ESTATE BUSINESS TRUST,
A DELAWARE TRUST
"PURCHASER"
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TABLE OF CONTENTS
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Article Page
I Definitions....................................................................1
II Purchase and Sale; Purchase Price; and Escrow..................................3
III Document and Physical Inspection; Due Diligence; Voluntary Termination.........4
IV Representations and Warranties.................................................5
V Covenants and Agreements.......................................................7
VI Conditions Precedent to Closing................................................8
VII Risk of Loss...................................................................9
VIII Closing; Closing Deliveries....................................................10
IX Brokers........................................................................12
X Pre-Closing Default; Remedies..................................................12
XI Miscellaneous..................................................................13
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Exhibits
A Legal Description
B General Provisions of Escrow
C Quitclaim Bill of Sale
D Assignment & Assumption of Lease and Security Deposits
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PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
(SHOPPING CENTER)
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (Shopping
Center) (this "Agreement") is made as of the 2nd day of August, 1999, by and
between EXCEL LEGACY CORPORATION, a Delaware corporation, or assigns (the
"Seller"), and WAL-MART REAL ESTATE BUSINESS TRUST, a Delaware trust (the
"Purchaser").
RECITALS
WHEREAS, Seller owns the Property (defined below); and
WHEREAS, Seller desires to sell, convey, assign, transfer and deliver to
Purchaser and Purchaser desires to purchase from Seller the Property on the
terms and conditions contained herein.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION of Ten Dollars ($10.00) and the mutual
covenants, agreements, representations and warranties herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Purchaser and Seller covenant and agree as follows:
ARTICLE I
DEFINITIONS
In addition to those terms defined elsewhere in this Agreement, the
following terms have the meanings set forth below:
"Agreement" means this Purchase and Sale Agreement and Escrow
Instructions dated as of the 2nd day of August, 1999, by and between Seller and
Purchaser.
"Broker" shall have the meaning given to such term in Article IX hereof.
"Closing" shall have the meaning given to such term in Section 8.01
hereof.
"Closing Date" shall have the meaning given to such term in Section 8.01
hereof.
"Closing Deposit" shall have the meaning given to such term in Section
2.02(b) hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Contingency Date" shall have the meaning given to such term in Section
3.02 hereof.
"Contingency Period" shall have the meaning given to such term in
Section 3.02 hereof.
"Cure Period" shall have the meaning given to such term in Section 3.03
hereof.
"Deed" shall have the meaning given to such term in Section 8.02(a)
hereof.
"Effective Date" shall mean the later date of the date this Agreement is
executed by Seller or Purchaser
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as such dates appear after each party's signature herein below.
"Escrow" shall have the meaning given to such term in Section 2.03
hereof.
"Escrow Agent" means Fidelity National Title Insurance Company National
Services Division located at 14643 Dallas Parkway, Suite 380, Dallas, TX 75240
Attn: Karen Moreau.
"Financing Contingency Date" shall the meaning given to such term in
Section 6.01(d) hereof.
"General Provisions" shall have the meaning given to such term in
Section 2.03 hereof.
"Improvements" shall mean all buildings, structures, fixtures and other
improvements located on, over and under the Land, which are owned by Seller,
including, but not limited to, the heating, ventilating, air conditioning,
lighting, plumbing, water, electrical, gas and sewer fixtures, equipment and
systems located thereon and the landscaping thereon.
"Earnest Money Deposit" shall have the meaning given to such term in
Section 2.02(a) hereof.
"Inspection Items" shall have the meaning given to such term in Section
3.01 hereof.
"Land" shall mean those certain parcels of real property, owned by
Seller, more specifically described by the legal descriptions set forth on
Exhibit "A" attached hereto and incorporated by reference.
"Leases" means all leases or other agreements under which persons or
entities rent or occupy space in the Property.
"Objection Matters" shall have the meaning given to such term in Section
3.03 hereof.
"Objection Notices" shall have the meaning given to such term in Section
3.03 hereof.
"Personal Property" shall have the meaning given to such term in Section
2.01(b) hereof.
"Preliminary Title Report" shall have the meaning given to such term in
Section 3.01(a) hereof.
"Property" shall have the meaning given to such term in Section 2.01
hereof.
"Purchase Price" shall have the meaning given to such term in Section
2.02 hereof.
"Purchaser" means Wal-Mart Real Estate Business Trust, a Delaware trust.
"Real Property" shall have the meaning given to such term in Section
2.01(a) hereof.
"Seller" means Excel Legacy Corporation, a Delaware corporation.
"Tenants" means the persons and entities renting or occupying space in
the Property under the Leases.
"Termination Notice" shall have the meaning given to such term in
Section 3.03 hereof.
"Title Company" means Fidelity National Title Insurance Company.
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"Title Policy" shall have the meaning given to such term in Section
8.02(b) hereof.
ARTICLE II
PURCHASE AND SALE; PURCHASE PRICE; AND ESCROW
Section 2.01 PURCHASE AND SALE OF PROPERTY. Subject to the terms and
conditions set forth in this Agreement, Seller agrees to sell, convey, assign,
transfer and deliver to Purchaser and Purchaser agrees to purchase from Seller
all of the following (collectively, the "Property"):
(a) REAL PROPERTY. The Land and Improvements, together with
Seller's interest in and to (i) all easements, rights-of-way relating or
appertaining to the Land and/or the Improvements; (ii) all sewer, septic and
waste disposal rights and interests applicable or appurtenant to and/or used in
connection with the operation of the Improvements; and (iii) any streets, roads,
alleys or other public ways adjoining or serving the Land (collectively, the
"Real Property")
(b) PERSONAL PROPERTY. Seller's interest, if any, in and to
(i) the fixtures, equipment, furnishings and furniture and warranties thereon;
and (ii) all tangible and intangible personalty and warranties thereon, in
either case, existing on the Effective Date and located on and used in
connection with the Real Property (collectively, the "Personal Property").
(c) LEASE. The Lease, together with all unapplied deposits
and other collateral therefor, all guarantees and other agreements by third
parties of the obligations of Tenants, all rentals, security and other deposits,
receivables, reimbursements and other items payable by Tenants and all claims
against Tenants.
Section 2.02 PURCHASE PRICE. The total purchase price for the Property
(the "Purchase Price") shall be Thirty Five Million Five Hundred Sixty Two
Thousand Dollars ($35,562,000) allocated per the Property as follows: a)
Wyomissing, PA, $6,412,084.; b) Temple, TX, $6,082,006; c) Berlin, WI,
$2,057,852; d) Orland Hills, IL, $8,003,662; e) Decatur, IL, $3,061,061; f) Big
Rapid, MI, $3,175,161; g) Brighton, CO $3,236,105; h) Wabash, IN, $3,534,069.
The Purchase Price shall be payable in immediately available funds at the
Closing, as follows:
(a) EARNEST MONEY DEPOSIT. Within five (5) calendar days
after the Effective Date, Purchaser shall deposit earnest money, in immediately
available funds, with the Escrow Agent in an amount equal to One Hundred
Thousand Dollars ($100,000) (such earnest money deposit, together with interest
thereon, is collectively referred to herein as the "Earnest Money Deposit"). In
the event the transaction contemplated by this Agreement fails to close, the
Earnest Money Deposit shall be distributed as provided herein.
(b) CLOSING DEPOSIT. The balance of the Purchase Price shall
be paid by Purchaser to Escrow Agent and distributed by Escrow Agent to Seller
at the Closing in accordance with the terms and conditions set forth in this
Agreement (the "Closing Deposit").
Section 2.03 ESCROW. Seller and Purchaser shall open the escrow account
(the "Escrow") with Escrow Agent within five (5) calendar days following the
Effective Date by depositing with Escrow Agent a fully executed counterpart
original of this Agreement. Upon such delivery, this Agreement shall constitute
joint escrow instructions to Escrow Agent, which joint escrow instructions shall
supersede all prior escrow instructions related to the Escrow, if any. The
General Provisions of Escrow, which are attached as Exhibit "B" to this
Agreement ("General Provisions"), are hereby incorporated in and made a part of
this Agreement, and Seller and Purchaser hereby expressly agree to the General
Provisions. Additionally, in the event neither Seller nor Purchaser have elected
to terminate this Agreement pursuant to the terms and conditions hereof, Seller
and Purchaser hereby
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agree to promptly execute and deliver to Escrow Agent any additional or
supplementary escrow instructions as may be reasonably necessary or convenient
to consummate the transaction contemplated by this Agreement; provided, however,
that such instructions shall not supersede this Agreement, and in all cases this
Agreement shall control unless such Seller and Purchaser agree otherwise.
ARTICLE III
DOCUMENT AND PHYSICAL INSPECTION
Section 3.01 DELIVERY OF INFORMATION. The following information shall
be delivered by Seller to Purchaser within two days prior to the Closing Date;
provided, however, that the unintentional failure to deliver one or more of the
following (whether before, on or after such period) shall not constitute a
default under this Agreement:
(a) PRELIMINARY TITLE REPORT. A current preliminary title
report and/or commitment for title insurance covering the Real Property,
together with a copy of all documents referred to as exceptions therein,
prepared and issued by the Title Company.
(b) LEASE. A copy of the Lease and documents which Seller
reasonably believes affect the ownership or operation of the Property, excluding
any loan documents securing indebtedness that will be paid in full by Seller at
or prior to Closing.
(c) SURVEY. A copy of the most recent survey in Seller's
possession, if any.
(d) EXISTING LOAN DOCUMENTS. A copy of the existing loan
documents in Seller's possession.
Section 3.02 INSPECTION PERIOD. Purchaser is hereby granted a period of
time beginning on the Effective Date of this Agreement and terminating one (1)
calendar day prior to the Closing Date (such later date is herein referred to as
the "Contingency Date," and such period of time beginning on the Effective Date
and ending on the Contingency Date is herein referred to as the "Contingency
Period") within which to conduct and complete an investigation and inspection of
all matters pertaining to the Property and Purchaser's purchase thereof,
including, but not limited to, the Inspection Items and the physical inspection
of the Property which physical inspection of the Property is described in
Section 3.04 hereof.
Section 3.03 DUE DILIGENCE ITEMS INSPECTION; CURE; TERMINATION. If
Purchaser is not satisfied with any of the Inspection Items or its review
thereof, Purchaser may give Seller one or more written notices (each, an
"Objection Notice," and, collectively, the "Objection Notices") at any time
prior to the expiration of the Contingency Period. Each Objection Notice shall
list each item of dissatisfaction or objection in particular (each, an
"Objection Matter," and, collectively, the "Objection Matters"). If the
Objection Notice(s) is not received by Seller or its agent on or before the
Contingency Date, Purchaser shall be deemed to have accepted all of the
Inspection Items and proceed to purchase the Property in its "As Is" condition.
If the Objection Notice(s) is submitted to Seller within the Contingency Period,
Seller may, without investigation and at its sole election, cure some or all of
the Objection Matters by giving Purchaser written notice of such election (the
"Cure Notice") within fifteen (15) days after receipt of the last of the
Objection Notices. If Seller elects to cure any of the Objection Matters, Seller
shall have one hundred twenty (120) days from the expiration of the Contingency
Date (the period of time beginning on the Contingency Date and ending one
hundred twenty (120) days thereafter is herein referred to as the "Cure Period")
to cure all of the Objection Matters and pay all costs associated with such cure
or elect not to cure the Objection Matters. If Seller either (i) fails to cure
the Objection Matters within the
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Cure Period, or (ii) elects not to cure one or more of the Objection Matters, or
(iii) fails to provide Purchaser with the Cure Notice, then Purchaser may
exercise one of the following options:
(a) Accept the condition of the Objection Matters in their
"As Is" condition by giving written notice to the Seller of the same within one
(1) day after (i) Purchaser has received from Seller the Cure Notice indicating
Seller's inability to cure or election not to cure one or more of the Objection
Matters or (ii) the expiration of the fifteen (15) day period in which Seller
should have provided the Cure Notice and close on the Property subject to all of
the other terms and conditions of this Agreement; or
(b) Terminate this Agreement in its entirety by giving
Seller written notice of such termination (the "Termination Notice") within one
(1) day after (i) Purchaser has received from Seller the Cure Notice indicating
Seller's inability to cure or election not to cure one or more of the Objection
Matters or (ii) the expiration of the fifteen (15) day period in which Seller
should have provided the Cure Notice. Upon Seller's receipt of said Termination
Notice, this Agreement shall become null and void and the Earnest Money Deposit
shall be immediately returned to Purchaser. In the event Purchaser fails to
provide to Seller the Termination Notice within said five (5) day period, then
Purchaser will be deemed to have waived its right to terminate and will be
deemed to have elected to accept the Objection Matters and take title to the
Property in its "As Is" condition as set forth in the option described in clause
(a) above.
Section 3.04 PHYSICAL INSPECTION. Purchaser or its representatives may
inspect the Property at all times prior to the Closing Date. Purchaser shall
have the right, at Purchaser's sole cost and expense, to conduct tests and
inspections, including environmental inspections, samplings, surveys, structural
and engineering inspections, and to examine all of the maintenance and other
records in Seller's possession relating to the Property. Purchaser's rights to
inspect the Property, as outlined herein, shall be subject to the rights of the
Tenant; provided, however, that Purchaser shall not be entitled to perform any
invasive testing on the Property (including, without limitation, any phase II
environmental testing) without Seller's prior written consent in each instance,
which consent may be withheld in Seller's sole and absolute discretion.
Purchaser hereby agrees to indemnify Seller against any damage caused to the
Property, personal injury or any damage caused to a Tenant's property resulting
from any of the activities which Purchaser conducts at the Property as outlined
herein and shall immediately pay for and repair any such damage which Purchaser
may cause to the Property, which indemnity shall survive the closing of the
transaction contemplated by this Agreement indefinitely.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants the following representations and warranties, which
shall be true and correct, to the best of its knowledge, as of the Closing Date:
(a) POWER AND AUTHORITY. Seller has the requisite power and
authority to enter into and perform the terms of this Agreement. The execution
and delivery of this Agreement and the consummation of the transaction
contemplated hereby have been duly authorized by all necessary parties and no
other proceeding on the part of Seller is necessary in order to permit Seller to
consummate the transaction contemplated hereby. This Agreement has been duly
executed and delivered by Seller and (assuming valid execution and delivery on
the part of Purchaser) is a legal, valid and binding obligation of Seller and
enforceable against it in accordance with the terms hereof.
(b) ORGANIZATION. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware.
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(c) LIABILITIES; LITIGATION; CONDEMNATION. There are no
existing or pending litigation, claims, condemnations or sales in lieu thereof,
contracts of sale, options to purchase or rights of first refusal which have not
been disclosed to Purchaser in writing prior to closing with respect to any
aspect of the Property nor have any such actions, suits, proceedings, claims or
other such matters been threatened or asserted.
(d) IMPROVEMENTS AND ASSESSMENTS. Seller has received no
notice of any pending improvements, liens, or special assessments to be made
against the Property by any governmental authority except as it relates to the
Azalea Drive extension relating to the Wal-Mart property located in Temple, TX.
(e) CLAIMS. There are no delinquent bills or claims in
connection with the construction of or any repairs to the Property.
(f) NON-FOREIGN STATUS. Seller is not a "foreign person"
within the meaning of Section 1445 of the Code.
Section 4.02 KNOWLEDGE OF SELLER. For purposes of this Agreement and
any document delivered at Closing, whenever the phrase "to the best of Seller's
knowledge" or the "knowledge" of Seller or words of similar import are used,
they shall be deemed to refer only to the actual knowledge of Mark T.Burton, and
not any implied, imputed or constructive knowledge, without any requirement of
independent investigation having been made or any duty to investigate.
Section 4.03 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
hereby represents and warrants the following representations and warranties,
which shall be true and correct as of the Effective and the Closing Date:
(a) ORGANIZATION. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware.
(b) POWER AND AUTHORITY. Purchaser now has, and at Closing
will have, the requisite power and authority to enter into and perform the terms
of this Agreement. The execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby have been duly authorized by
all necessary parties and no other proceeding on the part of Purchaser is
necessary in order to permit Purchaser to consummate the transaction
contemplated hereby. This Agreement has been duly executed and delivered by
Purchaser and (assuming valid execution and delivery on the part of Seller) is a
legal, valid and binding obligation of Purchaser and enforceable against it in
accordance with the terms hereof.
(c) RELEASE BY PURCHASER. Purchaser agrees that prior to
closing Purchaser, Wal-Mart Stores, Inc., a Delaware corporation together with
their successors and assigns, shall execute a document that releases and
discharges Seller and its past, present and future officers, directors,
employees, agents, representatives, attorneys, subsidiaries, parent and
affiliated corporations, successors and assigns (collectively, the "Legacy
Releasees") from any and all claims which Wal-Mart or any of its trustees,
representatives, agents, attorneys, successors or assigns, may now or hereafter
have or assert against any of the Legacy Releasees which arise out of the
litigation captioned Wal-Mart Real Estate Business Trust v. Excel Legacy
Corporation, Bell County Judicial District Case No. 172671-B, filed in Bell
County, Texas (hereinafter "The Litigation") and agrees to promptly dismiss The
Litigation, with prejudice.
(d) "AS IS" PURCHASE.
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(i) Purchaser is deemed to have inspected the
Property and analyzed the feasibility of its acquisition and use, and
specifically agreed to take the Property "AS IS, WHERE IS," subject only to the
express terms and conditions of this Agreement. This "AS IS, WHERE IS" condition
includes, but is not limited to, and Purchaser acknowledges that, except as may
otherwise be specifically set forth elsewhere in this Agreement, neither Seller
nor any of its consultants, brokers or agents have made any other
representations or warranties of any kind upon which Purchaser is relying as to
any matters concerning the Property, including, but not limited to, (i) soils
and geological condition, topography, area and configuration, (ii) availability
of utilities, public access and fire and police protection, (iii) applicable
planning, zoning and subdivision statutes, ordinances, regulations and permits,
(iv) any easement, license or encroachment which is not a matter of public
record, whether or not visible upon inspection of the Property, (v) the physical
condition of the Property, and (vi) any other matter relating to the Property or
to the development, management and operation thereof, including, but not limited
to, hazardous substances or materials, value, feasibility, cost, governmental
regulations, permits and fees, fire hazard, marketing and investment return.
Purchaser hereby releases Seller from any and all liability in connection with
any claims which Purchaser may have against Seller, and Purchaser hereby agrees
not to assert any claims for damage, loss, compensation, contribution, cost
recovery or otherwise, against Seller, whether in tort, contract or otherwise,
relating directly or indirectly to the existence of asbestos or hazardous
substances or materials on, or the environmental conditions of, the Property, or
arising under any environmental law, or relating in any way to the quality of
the indoor or outdoor environment of the Property. This release shall survive
the Closing.
(ii) To the extent that Seller has provided to
Purchaser any historical financial information regarding the Property relating
to certain periods of time in which Seller owned the Property, Seller and
Purchaser hereby acknowledge that such information is unaudited and has been
provided to Purchaser at Purchaser's request solely as illustrative material.
Except as may be specifically set forth elsewhere in this Agreement, Seller
makes no representation or warranty that such material is complete or accurate
or that Purchaser will achieve similar financial or other results with respect
to the operations of the Property, it being acknowledged by Purchaser that
Seller's operation of the Property and allocation of revenues or expenses may be
vastly different than Purchaser may be able to attain. Purchaser acknowledges
that it is a sophisticated and experienced purchaser of real estate and further
that Purchaser has relied upon its own investigation and inquiry with respect to
the operation of the Property and, except as may be specifically set forth
elsewhere in this Agreement, releases Seller from any liability with respect to
such historical financial information.
ARTICLE V
COVENANTS AND AGREEMENTS
During the period from and after the Effective Date through the Closing,
Seller hereby covenants and agrees as follows:
Section 5.01 CONTINUITY OF OPERATIONS. Seller shall carry on the
business of Seller with respect to the Property in substantially the same manner
as Seller has heretofore conducted such business and will not introduce any new
method of management, operation or accounting with respect to the Property.
Section 5.02 MAINTENANCE. Seller shall maintain the Property in its
present condition, subject to normal wear and tear, and, without limiting the
foregoing, Seller shall not diminish the quality or quantity of maintenance and
upkeep services heretofore provided to the Property.
Section 5.03 EXISTING LOAN, ENCUMBRANCES AND LIENS. Seller shall pay
off, in full, any and all existing loans relating to the Property on or before
the Closing Date and there shall be no loan, encumbrance or lien from any lender
or other creditor relating to the Property at Closing, unless such loan,
encumbrance and/or
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lien is specifically being assumed by Purchaser according to the terms and
conditions of this Agreement. Seller agrees that it will not enter into, request
or accept any changes in the terms of such existing loans, encumbrances or liens
without the prior written approval of Purchaser.
Section 5.04 NEW ENCUMBRANCES. Seller shall not grant or permit any new
encumbrances on or about the Property, including, but not limited to, any new
service or other contracts, title matters or leases or amendments thereto,
without the prior written consent of Purchaser, which consent shall not be
unreasonably withheld or delayed; provided, that, in the event that Seller must
make changes in any existing encumbrance or enter into any new encumbrance to
protect Seller's current investment interest in the Property due to vacancies or
problems from collecting rents from tenant(s) arising during the term of this
Agreement, Seller may make such change or enter into such new encumbrance
without Purchaser's prior consent. Notwithstanding the foregoing to the
contrary, in the event Seller, to the extent necessary to protect Seller's
investment interest in the Property, enters into a new service or other
operating contract, lease or amendments to a Lease, without Purchaser's consent
(Seller having requested Purchaser's consent and Purchaser having denied the
same), Purchaser shall have the option to either terminate this Agreement or
accept the Property "As Is" under the terms of such contract, new lease or
amendment.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
Section 6.01 CONDITIONS TO OBLIGATIONS OF PURCHASER. The Closing, and
Purchaser's obligation to purchase the Property, are subject to the
satisfaction, prior to the Closing Date, of all of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of Seller set forth in this Agreement shall be
true and correct in all material respects, to the best of Seller's knowledge, on
the Closing Date as though made at the Closing.
(b) DELIVERY OF ITEMS. Seller shall have delivered all
documents and instruments required to be delivered by or in behalf of Seller,
whether to Purchaser, Title Company, Escrow Agent or any other person or entity,
on or before the Closing Date.
(c) PERFORMANCE OF COVENANTS, OBLIGATIONS AND AGREEMENTS.
Seller shall have performed all of the covenants, obligations and agreements
under this Agreement to be performed by Seller on or before the Closing.
(d) FINANCING CONTINGENCY. This transaction shall be totally
contingent upon Purchaser being able to assume the existing financing relating
to all of the Property by no later than the Closing Date. Purchaser hereby
agrees that it has received and reviewed the existing loan documents and is
satisfied in assuming the loans according to the terms and conditions of the
existing loan documents thereof and desire to do so. Purchaser must provide
Seller written notice within one day prior to the Closing Date the Lenders of
the existing financing will not allow Purchaser to assume the existing loans. In
the event Purchaser provides Seller such written notice, this Contract shall
terminate in its entirety, become null and void and neither party shall have any
further obligation to the other party and Purchaser shall receive an immediate
return of all Earnest Money Deposit, including all interest thereon, if any. In
the event Purchaser fails to provide Seller said notice within the time period
as described herein, then Purchaser agrees that Purchaser will have deemed the
financing contingency as outlined in this paragraph as satisfied and said
financing contingency shall be deemed waived and Purchaser shall proceed to
close on the Property according to the remaining terms and conditions of this
Contract.
8
<PAGE> 11
Section 6.02 CONDITIONS TO OBLIGATIONS OF SELLER. The Closing, and
Seller's obligation to sell, convey, assign, transfer and deliver the Property
to Purchaser, are subject to the satisfaction, prior to or at the Closing Date,
of all of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of Purchaser set forth in this Agreement shall be
true and correct in all material respects on the Closing Date as though made at
the time of Closing.
(b) DELIVERY OF ITEMS. Purchaser shall have delivered all
documents and instruments required to be delivered by or in behalf of Purchaser,
whether to Seller, Title Company, Escrow Agent or any other person or entity, on
or before the Closing Date.
(c) PERFORMANCE OF COVENANTS, OBLIGATIONS AND AGREEMENTS.
Purchaser shall have performed all of the covenants, obligations and agreements
of Purchaser under this Agreement to be performed by Purchaser prior to the
Closing, including being able to assume the existing financing as describe in
Section 6.01(d) above. In the Lenders of the existing financing relating to the
Property do not allow Purchaser to assume the existing financing applicable to
the Property, Seller shall have the same right to terminate this agreement as
Purchaser has as described in Section 6.01(d) above and this Contract shall
terminate in its entirety, become null and void and neither party shall have any
further obligation to the other party and Purchaser shall receive an immediate
return of all Earnest Money Deposit, including all interest thereon, if any.
ARTICLE VII
RISK OF LOSS
Section 7.01 MINOR LOSS. Purchaser shall be bound to purchase the
Property for the full Purchase Price as required by the terms hereof, without
regard to the occurrence or effect of any damage to the Property or destruction
of any of the Improvements or condemnation of any portion of the Property;
provided, that (a) the cost to repair any such damage or destruction, or the
diminution of value of the remaining Property as a result of a partial
condemnation, is less than or equal to ten percent (10%) of the Purchase Price,
and (b) upon the Closing, there shall be a credit against the Purchase Price due
hereunder equal to the amount of any insurance proceeds or condemnation awards
collected by Seller as a result of any such damage or destruction or
condemnation, less any sums expended by Seller toward the restoration or repair
of the Property, and, if the proceeds or awards have not been collected as of
the Closing, then such proceeds or awards shall be assigned to Purchaser, except
to the extent needed to reimburse Seller for sums expended to repair or restore
the Property.
Section 7.02 MAJOR LOSS. If the amount of damage or destruction or
condemnation, as specified above, exceeds ten percent (10%) of the Purchase
Price, then Purchaser may, at its option to be exercised within five (5) days of
Seller's notice of the occurrence of such damage or destruction or condemnation,
elect to either (a) terminate this Agreement in its entirety, or (b) consummate
the transaction contemplated by this Agreement for the full Purchase Price as
required by the terms hereof. If Purchaser elects to terminate this Agreement,
then upon Seller's receipt of Purchaser's notice within said five (5) day
period, this Agreement shall be null and void, Purchaser shall be entitled to an
immediate return of the Earnest Money Deposit and neither party shall have any
further obligation one to the other, except as otherwise set forth herein. If
Purchase fails to provide such notice within said five (5) day period, or
Purchaser elects to proceed with the purchase of the Property, then upon the
Closing, there shall be a credit against the Purchase Price due hereunder equal
to the amount of any insurance proceeds or condemnation awards collected by
Seller as a result of any such damage or destruction or condemnation, less any
sums expended by Seller toward the restoration or repair of the Property, and,
if the
9
<PAGE> 12
proceeds or awards have not been collected as of the Closing, then such proceeds
or awards shall be assigned to Purchaser, except to the extent needed to
reimburse Seller for sums expended to repair or restore the Property.
Section 7.03 DEDUCTIBLES. In the event that Purchaser is required to or
elects to purchase the Property following any damage or destruction or
condemnation of the Property pursuant to Section 7.01 or Section 7.02 above,
Seller shall also provide Purchaser with a credit against the Purchase Price in
an amount equal to any deductible.
ARTICLE VIII
CLOSING; CLOSING DELIVERIES
Section 8.01 THE CLOSING. The closing of the transaction contemplated
by this Agreement (the "Closing") shall take place at the National Division
Offices of the Escrow Agent in Dallas, TX, on or before August 23, 1999, (the
"Closing Date").
Section 8.02 SELLER'S DELIVERIES AT CLOSING. On or before the Closing
Date, Seller shall deliver to Escrow Agent the following items:
(a) LIMITED WARRANTY DEED(S).
(b) TITLE POLICY. A proforma or marked-up commitment of a
title policy dated as of the Closing Date (the "Title Policy") evidencing title
in the same condition as Purchaser approved such title according to the terms
and conditions of this Agreement.
(c) QUITCLAIM BILL OF SALE. One (1) original of a Quitclaim
Bill of Sale in the form of Exhibit "C" attached hereto, duly executed by
Seller.
(d) ASSIGNMENT AND ASSUMPTION OF LEASES AND SECURITY
DEPOSITS. Two (2) counterpart originals of the Assignment and Assumption of
Leases and Security Deposits in form of Exhibit "D" attached hereto, duly
executed by Seller.
(e) ASSIGNMENT AND ASSUMPTION OF EXISTING LOAN DOCUMENTS.
Two (2) originals of an Assignment and Assumption of Existing Loan Documents as
applicable to the Property in form of Exhibit "E" attached hereto, duly executed
by Seller and Lenders or Lenders legal agents.
(f) SELLER'S AFFIDAVITS. (a) An affidavit declaring that, to
the best of Seller's knowledge, all charges related to the Property, as of the
Closing Date, have been paid current, excluding any charges that may be owed by
the Tenant; and (b) evidence that those acting for the Seller have full
authority to consummate the transaction contemplated by this Agreement, as
modified through Closing.
(g) CERTIFICATE OF NON-FOREIGN STATUS. A certificate that
Seller is not a "foreign person" within the meaning of Section 1445 of the Code.
(h) CLOSING STATEMENT. Seller's duly executed closing
statement.
Section 8.03 PURCHASER'S DELIVERIES AT CLOSING. On or before the
Closing Date, Purchaser shall deliver to Escrow Agent the following items:
10
<PAGE> 13
(a) CLOSING DEPOSIT. The Closing Deposit pursuant to Section
2.02(b) hereof. The Purchase Price shall be credited by the Earnest Money
Deposit previously deposited by Purchaser with Escrow Agent pursuant to Section
2.02(a) hereof, plus or minus any other credits, prorations or charges as set
forth in this Agreement.
(b) ASSIGNMENT AND ASSUMPTION OF LEASES AND SECURITY
DEPOSITS. Two (2) counterpart originals of the Assignment and Assumption of
Leases and Security Deposits in the form of exhibit "D" attached hereto, duly
executed by Purchaser.
(c) ASSIGNMENT AND ASSUMPTION OF EXISTING LOAN DOCUMENTS.
Two (2) originals of an Assignment and Assumption of Existing Loan Documents as
applicable to the Property in form of Exhibit "E" attached hereto, duly executed
by Seller and Lenders or Lenders legal agents.
(d) EVIDENCE OF AUTHORITY. Evidence that those acting for
the Purchaser have full authority to consummate the transaction contemplated by
this Agreement, as modified through Closing (including, but not limited to,
certified copies of the corporate or other resolutions authorizing the
transaction contemplated by this Agreement).
(e) CLOSING STATEMENT. Purchaser's duly executed closing
statement.
Section 8.04 PRORATIONS, COSTS AND EXPENSES.
(a) PRORATIONS AND ADJUSTMENTS. The following adjustments
and prorations shall be made as of the Closing Date. Such adjustments and
prorations shall be made on the basis of a 365-day year, with the Closing Date
considered to be for the benefit of the Purchaser, in accordance with the
following provisions:
(i) RENTS AND DEBT INTEREST EXPENSE. Purchaser and
Seller hereby agree that all expenses relating to the Property, including by not
limited to the operation, management and repair, Real and Personal Property
Taxes, Assessments and Insurance are the absolute obligation of the Tenant to
pay according to the terms and conditions under the existing Leases. Therefore,
there shall only be a proration of Tenants rents and interest relating to the
existing financing encumbering the Property as of the Closing Date.
(ii) SECURITY DEPOSITS. Tenant security deposits and
other refundable tenant deposits under the Leases shall be credited to Purchaser
at Closing.
(b) SELLER'S CLOSING COSTS. At Closing, Seller shall pay (i)
Seller's share of prorations and (ii) Seller's attorneys' fees.
(c) PURCHASER'S CLOSING COSTS. At Closing, Purchaser shall
pay (i) all recording costs and documentary transfer taxes, deed stamps and
other costs payable in connection with the recordation of the Deed and the
conveyance of the Real Property; (ii) all charges related to the Title Policy,
including any title endorsements; (iii) any costs associated with environmental
reports or inspections, (iv) all costs related to the survey, (v) Purchaser's
financing costs, including assumption fees relating to Purchaser's assumption of
the existing financing, (vi) the Escrow Agent's fees and costs associated with
the Escrow; (vii) Purchaser's share of prorations; and (viii) Purchaser's
attorneys' fees.
11
<PAGE> 14
ARTICLE IX
BROKERS
Section 9.01 BROKERS. Seller and Purchaser each specifically
acknowledge that there are no real estate commissions due in relation to the
transaction contemplated by this Agreement.
ARTICLE X
DEFAULT; REMEDIES
Section 10.01.SELLER'S PRE-CLOSING DEFAULT; PURCHASER'S REMEDIES. If
Seller defaults in performing any of Seller's obligations under this Agreement
for any reason, or if any of the representations or warranties of Seller herein
are determined to be untrue at Closing in any material respect, Purchaser may,
as its sole and exclusive remedies, elect to either (a) terminate this
Agreement, receive a full and immediate refund of the Earnest Money Deposit and
neither Seller nor Purchaser shall have any further rights, obligations or
liabilities under this Agreement, except as otherwise set forth herein; or (b)
seek to enforce the equitable remedy of specific performance of this Agreement.
Section 10.02.PURCHASER'S PRE-CLOSING DEFAULT; SELLER'S REMEDIES. If
Purchaser defaults in the closing of the transaction contemplated by this
Agreement or in performing any of Purchaser's covenants or obligations
hereunder, other than due to Seller's default or cause, or if any of the
representations or warranties of Purchaser herein are determined to have been
untrue when made in any material respect, then Seller shall, as its sole and
exclusive right and remedy, terminate this Agreement and retain the Earnest
Money Deposit and all interest earned thereon as liquidated damages, and
thereafter neither party shall have any further rights, obligations or
liabilities hereunder, except as otherwise set forth in this Agreement.
PURCHASER, BY ITS INITIALS FOLLOWING THIS SECTION, AND SELLER, BY ITS INITIALS
FOLLOWING THIS SECTION, AGREE THAT IF THE ESCROW FAILS TO CLOSE DUE TO
PURCHASER'S DEFAULT UNDER THIS AGREEMENT, THEN THE EARNEST MONEY DEPOSIT AND ALL
INTEREST EARNED THEREON SHALL CONSTITUTE LIQUIDATED DAMAGES TO SELLER, THE
PAYMENT OF WHICH SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY
FOR SUCH DEFAULT. SELLER AND PURCHASER AGREE THAT THE AFORESAID SUM IS A
REASONABLE AMOUNT FOR LIQUIDATED DAMAGES UNDER THE CIRCUMSTANCES EXISTING AT THE
TIME THIS AGREEMENT IS ENTERED INTO AND IS NOT INTENDED TO BE A PENALTY FOR
PURCHASER'S DEFAULT.
SELLER: PURCHASER:
------------- --------------
As material consideration for each party's agreement to the provisions
of this Section 10.02, each party hereby agrees to waive any and all rights
whatsoever to contest the validity of this Section 10.02 for any reason
whatsoever, including, but not limited to, that such provision was unreasonable
under circumstances existing at the time this Agreement was made. The provisions
of Section 10.02 are specifically intended to survive the Closing.
Section 10.03 SELLER'S POST-CLOSING DEFAULT; PURCHASER'S REMEDIES.
Notwithstanding anything to the contrary contained in this Agreement or in any
document executed in connection herewith, if the Closing shall have occurred,
then the aggregate liability of Seller arising pursuant to or in connection with
the representations, warranties, indemnification undertakings (if any),
covenants or other obligations (whether express or implied) of Seller under this
Agreement or any document executed in connection herewith shall not exceed Two
Hundred Fifty Thousand Dollars ($250,000.00) per each individual property as
identified on Exhibit "A".
12
<PAGE> 15
ARTICLE XI
MISCELLANEOUS
Section 11.01 NOTICES. Any notice, request, demand or other
communication required or permitted hereunder shall be given in writing and sent
by (a) personal delivery; (b) overnight nationwide delivery service with proof
of delivery; (c) registered or certified mail, return receipt requested, postage
prepaid; or (d) facsimile transmission and addressed to the parties at the
addresses indicated below (or to any other address designated by Seller or
Purchaser in writing and given in the manner set forth herein).
(a) SELLER'S ADDRESS. If to Seller, at the following
address:
Excel Legacy Corporation
801 South 500 East, Suite 201
West Bountiful, Utah 84010
Attention: Mark T. Burton
Telephone (801) 294-2400
Facsimile (801) 294-7479
(b) PURCHASER'S ADDRESS. If to Purchaser, at the following
address:
Wal-Mart Stores, Inc.
2001 S.E. 10th St.
Bentonville, AR 72712-6489
Attention: Brandt Rydell
Facsimile: 501-204-0096
Any notice or communication given in accordance with the
foregoing shall be deemed to have been given as of the date of the confirmed
receipt of the facsimile, or as of the date of delivery (if hand or courier
delivered), or as of three (3) days after mailing (if mailed registered or
certified, return receipt requested, postage prepaid).
Section 11.02 FURTHER ASSURANCES. Seller and Purchaser agree that each
party will, at any time prior to, at, or after the Closing, duly execute and
deliver to the other party any additional documents and instruments which either
Purchaser or Seller reasonably determine are necessary in connection with the
consummation of this Agreement and the failure of either party to demand such
document or instrument at or before the Closing shall not alleviate the
obligation of the other party to execute and deliver the same at any time upon
request of Purchaser or Seller.
Section 11.03 SURVIVAL OF SELLER'S REPRESENTATIONS, WARRANTIES AND
COVENANTS. All of the representations, warranties and covenants of Seller set
forth in this Agreement (or in any of the closing documents executed by Seller)
shall survive the Closing for a period not to exceed ninety (90) calendar days
from and after the Closing Date.
Section 11.04 POSSESSION. Purchaser shall be entitled to full possession
of the Property at Closing, subject to the rights of Tenants under the Leases.
Section 11.05 TERMINATION. In the event this Agreement is terminated by
Purchaser according to Purchaser's rights hereunder, this Agreement shall
terminate, become null and void and Seller and Purchaser shall
13
<PAGE> 16
have no further rights, obligations or liabilities one to the other hereunder,
and the Earnest Money Deposit shall be immediately returned to Purchaser.
Section 11.06 ASSIGNABILITY. Purchaser may not assign this Agreement
without the prior written consent of Seller which consent shall not be
unreasonable withheld. Purchaser may only assign this Agreement to a wholly
owned subsidiary or affiliate of Purchaser without Seller's written consent. In
any event if Purchaser assigns this Agreement, Purchaser shall remain obligated
to perform all of the terms and conditions of this Agreement as set forth
herein.
Section 11.07 WAIVER. Failure by Purchaser or Seller to insist upon or
enforce any of their rights shall not constitute a waiver thereof and nothing
shall constitute a waiver of Purchaser's rights to insist upon strict compliance
with the provision hereof. Either party hereto may waive the benefit of any
provision or condition for its benefit contained in this Agreement.
Section 11.08 ATTORNEYS FEES AND LEGAL EXPENSES. In the event of any
litigation between the parties hereto, concerning any breach of any of the
covenants or agreements contained herein, or any material inaccuracies in any of
the representations or warranties on the part of either party arising out of
this Agreement, the prevailing party shall be entitled to reasonable attorneys
fees and legal expenses, including, but not limited to, court costs.
Section 11.09 ENTIRE AGREEMENT. This Agreement embodies the entire
agreement between the parties hereto, and supersedes any prior understandings or
written or oral agreements between the parties concerning the Property. This
Agreement cannot be varied, modified, amended, altered or terminated, except by
written agreement executed by the parties.
Section 11.10 SECTION HEADINGS. The section headings contained in this
Agreement are for convenience only and shall in no way enlarge or limit the
scope or meaning of the various and several sections hereof.
Section 11.11 BINDING EFFECT. The terms and provisions of this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, legal representatives, successors and assigns.
Section 11.12 TIME. Time is of the essence in the performance of each
party's obligations, under this Agreement.
Section 11.13 GENDER AND NUMBER. Within this Agreement words of any
gender shall be held and construed to include any other gender and words in the
singular number shall be held and construed to include the plural, unless the
context otherwise requires.
Section 11.14 COUNTERPART. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same instrument.
Section 11.15 APPLICABLE LAW. This Agreement shall be governed by and
construed under the laws of the state in which the Property is located.
Section 11.16 RECEIPT OF EXECUTED COPIES. This Agreement may be
terminated by Seller in its entirety, at the option of Seller, if this Agreement
is not executed by Purchaser with a copy being received by facsimile by Seller
by no later than three (3) days after this Agreement has been executed by
Seller. In addition,
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<PAGE> 17
this Agreement may be terminated in its entirety, at the option of Seller, if an
original fully executed copy of the Agreement is not received by Seller by no
later than five (5) days after the date this Agreement has been executed by
Seller.
IN WITNESS, WHEREOF, Purchaser and Seller have executed this Agreement
on the dates set forth below.
SELLER:
EXCEL LEGACY CORPORATION, A DELAWARE CORPORATION
By: /s/ Mark T. Burton
----------------------------------------
Mark T. Burton
Its: Senior Vice President
---------------------------------------
Date: August 2, 1999
--------------------------------------
PURCHASER:
WAL-MART REAL ESTATE BUSINESS TRUST, A DELAWARE TRUST
By: /s/ Anthony L. Fuller
----------------------------------------
Anthony L. Fuller
Its: Vice President
---------------------------------------
Date: August 17, 1999
--------------------------------------
15
<PAGE> 1
EXHIBIT 99.1
EXCEL LEGACY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Twelve Months Ended December 31, 1998
and the Six Months Ended June 30, 1999
(Dollars in thousands, except per share information)
(Unaudited)
The following unaudited Pro Forma Condensed Consolidated Statements of
Income have been presented as if the sales of the eight properties to Wal Mart
Real Estate Business Trust ("Wal Mart") had occurred on January 1, 1998, the
date the Company began operating these properties. The unaudited Pro Forma
Condensed Consolidated Statements of Income should be read in conjunction with
the consolidated financial statements of the Company filed in the Annual Report
on Form 10-K for the fiscal year ended July 31, 1998, as amended, the Transition
Report on Form 10-Q for the five months ended December 31, 1998, and the
Quarterly Report on Form 10-Q for the quarter ended June 30, 1999. In
management's opinion, all adjustments necessary to reflect this transaction have
been made. The unaudited Pro Forma Condensed Consolidated Statements of Income
are not necessarily indicative of what actual results of operations of the
Company would have been had this transaction actually occurred as of January 1,
1998, do not include other transactions occurring after the periods presented,
nor do they purport to represent the results of operations of the Company for
future periods.
<TABLE>
<CAPTION>
For the Twelve Months Ended For the Six Months Ended
December 31, 1998 June 30, 1999
----------------------------------- -----------------------------------
Pro Forma Company Pro Forma Company
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
---------- ----------- --------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue .............................................. $ 23,155 $ (2,387) $20,768 $ 15,433 $ (1,107) $14,326
Operating Expenses:
Interest ......................................... 4,163 (1,658) 2,505 3,954 (953) 3,001
Depreciation and amortization .................... 2,975 (445) 2,530 2,079 (148) 1,931
Property operating expenses ...................... 8,344 -- 8,344 4,876 -- 4,876
General and administrative expenses .............. 3,539 -- 3,539 3,425 -- 3,425
-------- -------- ------- -------- -------- -------
19,021 (2,103) 16,918 14,334 (1,101) 13,233
Income before income taxes ........................... 4,134 (284) 3,850 1,099 (6) 1,093
Provision for income taxes ........................... 1,678 (114) 1,564 413 (2) 411
======== ======== ======= ======== ======== =======
Net income applicable to common shares ............... $ 2,456 $ (171) $ 2,285 $ 686 $ (4) $ 682
======== ======== ======= ======== ======== =======
Basic net income per common share .................... $ 0.10 $ 0.09 $ 0.02 $ 0.02
Diluted net income per common share .................. $ 0.06 $ 0.06 $ 0.01 $ 0.01
Basic Weighted Average Shares Outstanding ............ 25,205 25,205 33,458 33,458
Diluted Weighted Average Shares Outstanding .......... 41,312 41,312 54,755 54,755
</TABLE>
<PAGE> 2
EXCEL LEGACY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of June 30, 1999
(Dollars in thousands)
(Unaudited)
The following unaudited Pro Forma Condensed Consolidated Balance Sheet
has been presented as if the sale of the eight properties to Wal Mart had
occurred on June 30, 1999. The unaudited Pro Forma Condensed Consolidated
Balance Sheet should be read in conjunction with the consolidated financial
statements of the Company filed in the Annual Report on Form 10-K for the fiscal
year ended July 31, 1998, as amended, the Transition Report on Form 10-Q for the
five months ended December 31, 1998, and the Quarterly Report on Form 10-Q for
the quarter ended June 30, 1999. In management's opinion, all pro forma
adjustments have been made that are necessary to reflect this transaction. The
unaudited Pro Forma Condensed Balance Sheet is not necessarily indicative of
what the actual financial position would have been at June 30, 1999, does not
include other transactions occurring after June 30, 1999, nor does it purport to
present the future financial position of the Company.
<TABLE>
<CAPTION>
Historical Pro Forma Company
ASSETS Company Adjustments Pro Forma
- ------ ---------- ----------- --------
<S> <C> <C> <C>
Real estate, net ................................... $193,525 $(35,000) $158,525
Other assets ....................................... 97,155 11,000 108,155
-------- -------- --------
Total assets ................................. $290,680 $(24,000) $266,680
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages and notes payable ................... $118,596 $(24,000) $ 94,596
Other liabilities ............................. 3,908 -- 3,908
-------- -------- --------
Total liabilities ....................... 122,504 (24,000) 98,504
Minority interest .................................. 850 -- 850
Stockholders' equity ............................... 167,326 -- 167,326
-------- -------- --------
Total liabilities and stockholders' equity .... $290,680 $(24,000) $266,680
======== ======== ========
</TABLE>
