SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
-------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 2-5061
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AMPAL-AMERICAN ISRAEL CORPORATION
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(Exact name of registrant as specified in its charter)
New York 13-0435685
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1177 Avenue of the Americas, New York, New York 10036
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 782-2100
-----------------------------
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares outstanding of each of the issuer's classes of common
stock is Common - 3,000,000; Class A - 20,880,869 (as of April 30, 1995).
<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION
---------------------------------
Index to Form 10-Q
Page
----
Part I Financial Information
Consolidated Statements of Income...................... 1
Consolidated Balance Sheets............................ 2
Consolidated Statements of Cash Flows.................. 4
Consolidated Statements of Changes in
Shareholders' Equity.................................. 6
Notes to the Consolidated Financial Statements......... 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations......... 8
Part II Other Information...................................... 10
<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1995 1994
- ---------------------------------------------------------------------------
(Dollars in thousands, except per share data) (Unaudited) (Unaudited)
(Note 2)
REVENUES
Equity in earnings of affiliates............. $ 2,723 $ 2,990
Food processing and manufacturing............ 11,282 9,934
Interest:
Related parties............................. 2,211 3,058
Others...................................... 1,259 347
Gains on issuance of shares by subsidiary and
affiliate (Note 3).......................... - 2,692
Realized and unrealized gains on investments. 722 -
Rental income................................ 969 767
Other........................................ 443 387
-------- --------
Total revenues.......................... 19,609 20,175
-------- --------
EXPENSES
Food processing and manufacturing............ 10,536 10,238
Interest:
Related parties............................. 786 817
Others...................................... 2,937 2,940
Other........................................ 1,744 1,535
-------- --------
Total expenses.......................... 16,003 15,530
-------- --------
Income before income taxes................... 3,606 4,645
Income taxes................................. 2,020 1,971
-------- --------
NET INCOME.............................. $ 1,586 $ 2,674
======== ========
Earnings per Class A share................... $ .06 $ .10
===== =====
Weighted average number of Class A and
equivalent shares outstanding (in thousands) 25,218 22,968
The accompanying notes are an integral part of the consolidated financial
statements.
- 1 -
<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
ASSETS AS AT 1995 1994
- -----------------------------------------------------------------------------
(Dollars in thousands) (Unaudited) (Note 2)
Cash and cash equivalents...................... $ 49,629 $ 42,104
Deposits, notes and loans receivable:
Related parties.............................. 80,565 90,462
Others....................................... 1,932 3,786
Investments.................................... 129,139 131,537
Property and equipment, less accumulated
depreciation of $12,140 and $11,616........... 30,962 30,914
Other assets................................... 45,866 44,077
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TOTAL ASSETS................................... $ 338,093 $ 342,880
========== ==========
The accompanying notes are an integral part of the consolidated financial
statements.
- 2 -
<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND MARCH 31, DECEMBER 31,
SHAREHOLDERS' EQUITY AS AT 1995 1994
- ----------------------------------------------------------------------------
(Dollars in thousands) (Unaudited) (Note 2)
LIABILITIES
Notes and loans payable:
Related parties............................... $ 21,746 $ 24,837
Others........................................ 19,611 19,226
Debentures...................................... 80,340 84,491
Accounts and income taxes payable, accrued
expenses and minority interests................ 40,718 40,832
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Total liabilities....................... 162,415 169,386
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SHAREHOLDERS' EQUITY
4% Cumulative, Participating, Convertible
Preferred Stock, $5 par value; authorized
650,000 shares; issued and outstanding
205,785 and 206,608 shares..................... 1,029 1,033
6-1/2% Cumulative, Convertible Preferred Stock,
$5 par value; authorized 4,282,850 shares;
issued and outstanding 1,109,242 and 1,114,927
shares......................................... 5,546 5,575
Class A Stock, $1 par value; authorized
30,000,000 shares; issued and outstanding
20,861,688 and 20,840,518 shares............... 20,862 20,841
Common Stock, $1 par value; authorized, issued
and outstanding 3,000,000 shares............... 3,000 3,000
Additional paid-in capital...................... 57,197 57,185
Retained earnings............................... 90,593 89,007
Cumulative translation adjustments.............. (1,999) (2,636)
Unrealized loss on marketable securities........ (550) (511)
---------- ----------
Total shareholders' equity.............. 175,678 173,494
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...... $ 338,093 $ 342,880
========== ==========
The accompanying notes are an integral part of the consolidated financial
statements.
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<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 1994
- -----------------------------------------------------------------------------
(Dollars in thousands) (Unaudited) (Unaudited)
Cash flows from operating activities:
Net income................................. $ 1,586 $ 2,674
Adjustments to reconcile net income to net
cash provided by operating activities:
Equity in earnings of affiliates.......... (2,723) (2,990)
Gains on issuance of shares by
subsidiary and affiliate................. - (2,692)
Realized and unrealized gains on
investments.............................. (722) -
Translation loss (gain)................... 62 (52)
Depreciation expense...................... 587 527
Amortization expense...................... 1,184 1,237
Minority interests........................ (167) (279)
(Increase) decrease in other assets........ (2,172) 8
Increase in accounts and income taxes
payable, accrued expenses and minority
interests................................. 140 1,143
Investments made in trading securities..... (1,419) -
Proceeds from sale of trading securities... 3,787 -
Dividends received from affiliates......... 3,029 4,277
-------- --------
Net cash provided by operating activities. 3,172 3,853
-------- --------
Cash flows from investing activities:
Deposits, notes and loans receivable
collected:
Related parties........................... 13,702 11,323
Others.................................... 192 2,490
Deposits, notes and loans receivable
granted:
Related parties........................... (505) (1,009)
Others.................................... (20) (336)
Investments made in:
Available-for-sale securities............. (1,128) -
Affiliates and others..................... (4,012) (28,038)
Proceeds from sale of investments:
Others.................................... 5,678 2,398
Purchase of property and equipment......... (484) (429)
-------- --------
Net cash provided by (used in) investing
activities............................... 13,423 (13,601)
-------- --------
The accompanying notes are an integral part of the consolidated financial
statements.
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<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 1994
- ------------------------------------------------------------------------------
(Dollars in thousands) (Unaudited) (Unaudited)
Cash flows from financing activities:
Notes and loans payable received:
Related parties........................... $ - $ 261
Others.................................... 4,041 639
Notes and loans payable repaid:
Related parties........................... (3,258) (8,081)
Others.................................... (3,725) (1,415)
Debentures issued by subsidiary............ - 4,360
Debentures repaid.......................... (6,449) (11,442)
Proceeds from issuance of shares........... - 57,602
-------- --------
Net cash (used in) provided by financing
activities............................... (9,391) 41,924
Effect of exchange rate changes on cash
and cash equivalents....................... 321 (196)
-------- --------
Net increase in cash and cash equivalents... 7,525 31,980
Cash and cash equivalents at beginning
of period.................................. 42,104 3,178
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Cash and cash equivalents at end of
period..................................... $ 49,629 $ 35,158
======== ========
Supplemental Disclosure of Cash Flow Information
Cash paid during the period:
Interest:
Related parties........................... $ 425 $ 505
Others.................................... 2,227 2,603
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Total interest paid..................... $ 2,652 $ 3,108
======== ========
Income taxes paid.......................... $ 1,055 $ 1,134
======== ========
The accompanying notes are an integral part of the consolidated financial
statements.
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<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1995 1994
- -----------------------------------------------------------------------------
(Dollars in thousands) (Unaudited) (Unaudited)
4% PREFERRED STOCK
Balance, beginning of year................... $ 1,033 $ 1,068
Conversion of 823 and 1,622 shares into
Class A Stock............................... (4) (7)
-------- --------
Balance, end of period....................... $ 1,029 $ 1,061
======== ========
6-1/2% PREFERRED STOCK
Balance, beginning of year................... $ 5,575 $ 6,011
Conversion of 5,685 and 56,519 shares into
Class A Stock............................... (29) (282)
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Balance, end of period....................... $ 5,546 $ 5,729
======== ========
CLASS A STOCK
Balance, beginning of year................... $ 20,841 $ 16,225
Issuance of shares upon conversion of
Preferred Stock............................. 21 178
Issuance of shares in a public offering*..... - 4,317
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Balance, end of period....................... $ 20,862 $ 20,720
======== ========
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year................... $ 57,185 $ 10,605
Conversion of Preferred Stock................ 12 111
Proceeds from issuance of shares in a public
offering.................................... - 46,516
-------- --------
Balance, end of period....................... $ 57,197 $ 57,232
======== ========
RETAINED EARNINGS
Balance, beginning of year................... $ 89,007 $ 82,079
Net income................................... 1,586 2,674
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Balance, end of period....................... $ 90,593 $ 84,753
======== ========
CUMULATIVE TRANSLATION ADJUSTMENTS
Balance, beginning of year................... $ (2,636) $ (2,171)
Foreign currency translation adjustment...... 637 (90)
-------- --------
Balance, end of period....................... $ (1,999) $ (2,261)
======== ========
UNREALIZED (LOSS) GAIN ON MARKETABLE SECURITIES
Balance, beginning of year................... $ (511) $ 4,300**
Unrealized loss.............................. (39) (1,571)
-------- --------
Balance, end of period....................... $ (550) $ 2,729
======== ========
* Issuance of 4,500,000 shares, including 182,066 shares held in treasury.
** Represents cumulative effect of adoption of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities."
The accompanying notes are an integral part of the consolidated financial
statements.
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<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. As used in these financial statements, the term the "Company" refers to
Ampal-American Israel Corporation ("Ampal") and its consolidated
subsidiaries.
2. The December 31, 1994 consolidated balance sheet presented herein was
derived from the audited December 31, 1994 consolidated financial statements
of the Company.
Reference should be made to the Company's consolidated financial statements
for the year ended December 31, 1994 for a description of the accounting
policies which have been continued without change. Also, reference should
be made to the notes to the Company's December 31, 1994 consolidated
financial statements for additional details of the Company's consolidated
financial condition, results of operations and cash flows. The details in
those notes have not changed except as a result of normal transactions in
the interim. Certain amounts in the 1994 statement of income have been
reclassified to conform with the current period's presentation. All
adjustments (of a normal recurring nature) which are, in the opinion of
management, necessary to a fair presentation of the results of the interim
period have been included.
3. In March 1994, Pri Ha'emek (Canned and Frozen Food) 88 Ltd. ("Pri Ha'emek"),
the Company's then 66.7%-owned subsidiary, conducted an initial public
offering in Israel on the Tel Aviv Stock Exchange. In connection with this
offering, the Company realized a gain on issuance of shares of $2.3 million
($1.5 million net of taxes). The Company's interest in Pri Ha'emek was
diluted initially to 51.25%. Subsequent to the public offering, the Company
has purchased additional shares and convertible debentures and at March 31,
1995 its interest was 56.2%. If all warrants and convertible debentures
were to be exercised, the Company's interest would be diluted to 39.2%. If
the Company's interest in Pri Ha'emek decreases below 50%, Pri Ha'emek's
results will no longer be consolidated with the Company's but will be
recorded by the equity method of accounting.
During the first quarter of 1994, Granite Hacarmel Investments Ltd.
("Granite") issued additional shares upon conversions of its debentures.
The Company's interest in Granite was diluted from 21.6% to 21.2% and the
Company recorded a gain on issuance of shares of approximately $.3 million
($.2 million, net of taxes).
4. On April 12, 1995, one of the Company's subsidiaries acquired an option from
Massachusetts Mutual Life Insurance Company ("Mass Mutual") to purchase the
290,000 square-foot office building which houses the Consulate of the
Government of Israel in New York and many other Israel Government offices as
well as other tenants. The building is located at 800 Second Avenue, New
York, New York. At the request of Mass Mutual, the purchase price will not
be publicly announced by the Company unless and until the option is
exercised; but if consummated, the purchase would represent a significant
acquisition for the Company. The option may be exercised any time on or
before June 12, 1995. If the option is exercised, the closing is scheduled
to take place on June 28, 1995.
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<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Consolidated net income decreased from $2.7 million for the three-month period
ended March 31, 1994 to $1.6 million for the same period in 1995. The decrease
in net income in 1995 resulted primarily from the absence of gains on issuance
of shares which were recorded in 1994 and which were partially offset by
unrealized gains on investments in 1995.
Equity in earnings of affiliates decreased because of a net decline in earnings
of affiliates accounted for by the equity method.
Food processing revenues and expenses increased as a result of the increased
sales volume of Pri Ha'emek (Canned and Frozen Food) 88 Ltd.'s ("Pri Ha'emek")
products in the domestic market.
In the quarter ended March 31, 1995, the Company recorded $.8 million of
unrealized gains on marketable securities, which are classified as trading
securities, in the statement of income. At March 31, 1995, the aggregate fair
value of trading securities amounted to approximately $5.7 million.
In the quarter ended March 31, 1994, the Company recorded gains on issuances of
shares of $2.3 million ($1.5 million net of tax) by Pri Ha'emek and $.3 million
($.2 million net of tax) by Granite Hacarmel Investments Ltd.
The increase in the effective income tax rate from 42% in 1994 to 56% in 1995
resulted from changes in the components of taxable income and the utilization of
tax loss carryforwards in 1994 which were not available in 1995.
On April 12, 1995, one of the Company's subsidiaries acquired an option from
Massachusetts Mutual Life Insurance Company ("Mass Mutual") to purchase the
290,000 square-foot office building which houses the Consulate of the Government
of Israel in New York and many other Israel Government offices as well as other
tenants. The building is located at 800 Second Avenue, New York, New York. At
the request of Mass Mutual, the purchase price will not be publicly announced by
the Company unless and until the option is exercised; but if consummated, the
purchase would represent a significant acquisition for the Company. The option
may be exercised any time on or before June 12, 1995. If the option is
exercised, the closing is scheduled to take place on June 28, 1995.
Liquidity and Capital Resources
- -------------------------------
At March 31, 1995, cash and cash equivalents were $49.6 million as compared with
$42.1 million at December 31, 1994. The increase of $7.5 million is primarily a
result of investments in cash equivalents of funds received from sales and
maturities of short-term investments during the quarter ended March 31, 1995.
In addition, at March 31, 1995 investments included $7.7 million of short-term,
interest-bearing securities as compared with $11.6 million at December 31, 1994.
- 8 -
<PAGE>
In January 1995, the Company invested $1.5 million and acquired a 20% interest
in Epsilon Investment House Ltd. ("Epsilon") and its affiliate Renaissance
Investment Company Ltd. Epsilon is an investment bank which provides portfolio
management and its affiliate provides underwriting services in Israel through
its subsidiaries.
In January 1995, the Company acquired 260,416 common shares, equal to a 4.1%
interest in M-Systems Flash Disk Pioneers Ltd. ("M-Systems"), for $1 million and
received warrants to purchase an additional 130,206 common shares at $4.61 per
share until June 30, 1998. M-Systems is an Israeli company engaged in the
development, manufacturing and marketing of data storage media based on "flash
memory," a new silicon memory chip.
Deposits, notes and loans receivable, notes and loans payable, and debentures
decreased as a result of scheduled repayments.
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<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None.
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Item 2. Changes in Securities - None.
---------------------
Item 3. Defaults upon Senior Securities - None.
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders - None.
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Item 5. Other Information - None.
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Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Index to Exhibits:
Exhibit 10 - Agreement of Sale and Purchase, dated
April 12, 1995, between Massachusetts Mutual
Life Insurance Company and Ampal Realty
Corporation regarding the premises located at
800 Second Avenue, New York, New York................... Page E-1*
Exhibit 11 - Schedule Setting Forth the Computation
of Earnings per Class A Share........................... Page E-73*
Exhibit 27 - Financial Data Schedule
(b) A Report on Form 8-K, dated March 28, 1995, was filed, reporting that
on March 28, 1995, the Registrant's Board of Directors approved a
stock repurchase program relating to the Registrant's Class A Stock.
* Refers to a separately bound exhibit volume
- 10 -
<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
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 thereunto duly authorized.
AMPAL-AMERICAN ISRAEL CORPORATION
By:/s/ Lawrence Lefkowitz
---------------------------------
Lawrence Lefkowitz
President
(Principal Executive Officer)
By:/s/ Alan L. Schaffer
---------------------------------
Alan L. Schaffer
Vice President - Finance
and Treasurer
(Principal Financial Officer)
By:/s/ Alla Kanter
---------------------------------
Alla Kanter
Controller
(Principal Accounting Officer)
Dated: May 15, 1995
- 11 -
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
----------- -----------
10 Agreement of Sale and Purchase, dated April 12, 1995, between
Massachusetts Mutual Life Insurance Company and Ampal Realty
Corporation regarding the premises located at 800 Second Avenue,
New York, New York
11 Schedule Setting Forth the Computation of Earnings per Class A
Share
27 Financial Data Schedule
- 12 -
Exhibit 10
AGREEMENT OF SALE AND PURCHASE
between
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY,
Seller
and
AMPAL REALTY CORPORATION,
Purchaser
Premises:
800 Second Avenue
New York, New York
<PAGE>
INDEX
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Article Caption Page
------- ------- ----
I Inclusions in Sale . . . . . . . . . . . . . . . . . . . . . . 1
II Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . 3
III Representations . . . . . . . . . . . . . . . . . . . . . . . 5
IV State of Title of Property . . . . . . . . . . . . . . . . . . 10
V Title Insurance and Ability of Seller to Convey . . . . . . . 13
VI Closing Costs and Gains Tax . . . . . . . . . . . . . . . . . 15
VII Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . 18
VIII Real Estate Tax Protests . . . . . . . . . . . . . . . . . . . 19
IX Inspection Period; Condition of Property . . . . . . . . . . . 20
X Operations Pending Closing . . . . . . . . . . . . . . . . . . 26
XI Casualty and Eminent Domain . . . . . . . . . . . . . . . . . 30
XII Assessments . . . . . . . . . . . . . . . . . . . . . . . . . 36
XIII Closing Adjustments . . . . . . . . . . . . . . . . . . . . . 36
XIV Closing Documents . . . . . . . . . . . . . . . . . . . . . . 46
XV Violations . . . . . . . . . . . . . . . . . . . . . . . . . . 51
XVI Sales Tax . . . . . . . . . . . . . . . . . . . . . . . . . . 51
XVII Unpaid Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 52
XVIII Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 53
-i-
<PAGE>
XIX Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
XX Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
XXI Conditions; Survival . . . . . . . . . . . . . . . . . . . . . 57
XXII Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 59
XXIIIBrokerage Commissions . . . . . . . . . . . . . . . . . . . . 60
XXIV Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
XXV Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 63
Schedule Caption
- -------- --------
A Description of Land
B Schedule of Leases
C Schedule of Service and Maintenance
Agreements
D Form of Release re: Government of Israel Lease
E Covenants, Restrictions, Easements
and Agreements of Record
F Form of Deed
G Bill of Sale
H Assignment and Assumption of Service,
Maintenance and Concessionaire
Agreements
I Assignment of Leases
-ii-
<PAGE>
J Assignment of Licenses and/or Permits
K Post-Closing Adjustment Letter
L FIRPTA Certificate
M Information for Real Estate 1099-S Report Filing
N Acknowledgment of Purchaser's Attorneys
O Form of Tenant Estoppel Statement
P Form of Letter Agreement re: CSI International, Inc.
Q Wire Instructions
R Pending Litigation
S Licenses and Permits
T Form of Notice to Tenants
U Intentionally Omitted
V Description of Insurance Coverage
-iii-
<PAGE>
THIS AGREEMENT OF SALE AND PURCHASE (hereinafter called this
"Agreement") made as of this 12th day of April, 1995, by and between
--------- -----
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, a Massachusetts corporation having
an office at 1295 State Street, Springfield, Massachusetts 01111 (hereinafter
called "Seller"), and AMPAL REALTY CORPORATION, a New York corporation having an
------
office at 1177 Avenue of the Americas, New York, New York 10036 (hereinafter
called "Purchaser").
---------
W I T N E S S E T H :
- - - - - - - - - -
Seller hereby agrees to sell and convey to Purchaser, and Purchaser
hereby agrees to purchase from Seller, upon the terms and conditions hereinafter
set forth, the "Property" (as such term is defined in Article I hereof).
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, and subject to the terms and
conditions hereof, Seller and Purchaser hereby covenant and agree as follows:
ARTICLE I
INCLUSIONS IN SALE
------------------
The term "Property" shall mean the following:
--------
<PAGE>
1.1. The land described on Schedule A annexed hereto (hereinafter
called the "Land").
----
1.2. All of Seller's right, title and interest in and to the
buildings, structures and improvements, together with all and singular
tenements, hereditaments and appurtenances thereunto belonging or in anywise
appertaining, including, without limitation, any development rights, now erected
or situate on the Land, now situate on or appurtenant to such buildings,
structures and improvements (hereinafter collectively called the "Building"),
--------
including, but not limited to, the fixtures, equipment, machinery and personal
property owned by Seller, and not being the property of any space tenant or
occupant at the Building.
1.3. All right, title and interest of Seller, if any, in and to any
land lying in the bed of any street, road or avenue, opened or proposed, in
front of or adjoining the Land, to the center line thereof, and any strips and
gores adjacent to the Land, and all right, title and interest of Seller in and
to any award made or to be made in lieu thereof and in and to any unpaid award
for damage to the Land and Building by reason of change of grade of any street,
and at the Closing (as such term is hereinafter defined) Seller shall execute
and deliver all proper instruments for the conveyance of all right, title and
interest of Seller in and to any such award and the assignment and collection
thereof.
1.4. All space leases now or hereafter covering offices, stores and
other spaces situate at or within the Building (hereinafter collectively called
the "Leases"), and
------
-2-
<PAGE>
all of the right, title and interest of the landlord under the Leases, and,
subject to the provisions of Section 13.1.10 hereof, all security deposits or
prepaid rent paid or deposited by space tenants or occupants in respect of
Leases (hereinafter individually called a "Tenant" and collectively called the
------
"Tenants"), which shall not have been applied in accordance with the provisions
-------
of such Leases.
ARTICLE II
PURCHASE PRICE
--------------
2.1. The purchase price (hereinafter called the "Purchase Price")
--------------
for the Property shall be the sum of * DOLLARS. Purchaser agrees to pay
-------
the Purchase Price as follows:
2.1.1. * DOLLARS (hereinafter called the "Deposit") paid
------- -------
simultaneously herewith by wire transfer of immediate clearance
"Federal Reserve Funds" (as such term is hereinafter defined) to the
escrow account of Seller's attorneys, Bachner, Tally, Polevoy &
Misher. The proceeds of such wire transfer shall be held in escrow as
hereinafter provided.
2.1.2. * DOLLARS (hereinafter called the "Cash Balance")
------- ------------
shall be paid by Purchaser at the "Closing" (as such term is defined
in Section 13.1 hereof)
* Confidential portion omitted pursuant to Rule 24b-2
under Section 24 of the Securities Exchange Act of 1934, as
amended and filed separately with the Securities and Exchange
Commission.
-3-
<PAGE>
by wire transfer of immediate clearance Federal Reserve Funds to the
account designated on Schedule Q annexed hereto; provided, however,
that Seller may direct as aforesaid that the Cash Balance be wire
transferred to a different account or accounts (but not more than
three (3) designated recipients) by notice to Purchaser given not less
than two (2) business days prior to the Closing. As used herein, the
term "Federal Reserve Funds" shall be deemed to mean the receipt by a
---------------------
bank or banks in the continental United States designated by Seller of
U.S. dollars in form that does not require further clearance and may
be applied at the direction of Seller by such recipient bank or banks
on the day of receipt of advice that such funds have been wire
transferred. The description of the manner in which such funds are to
be transmitted and the number of designated recipients thereof shall
apply with respect to the Cash Balance as well as any other funds to
be paid to Seller hereunder, including but not limited to any funds to
be paid to Seller as a result of the adjustments to be made pursuant
to Article XIII hereof.
2.2. The Deposit and all interest accrued thereon shall be payable in
accordance with Article XXIV hereof.
-4-
<PAGE>
ARTICLE III
REPRESENTATIONS
---------------
3.1. Seller represents and warrants to Purchaser as follows:
3.1.1. As of the date hereof, Seller owns fee simple title to the
Property, subject only to the Permitted Encumbrances (as such term is
defined in Section 4.1 hereof) and to such other matters as are disclosed
in the Contract Title Report (as such term is defined in Section 5.1
hereof).
3.1.2. To Seller's actual knowledge, the only Leases as of the date
hereof are those listed on Schedule B annexed hereto, subject to possible
assignments not consented to by Seller. To Seller's actual knowledge, a
true and correct copy of each of the Leases set forth on Schedule B,
including, without limitation, all amendments thereto, has been delivered
by Seller to Purchaser simultaneously herewith in velobound binders
(hereinafter called the "Lease Binders") and initialled by Seller and
-------------
Purchaser and/or their respective counsel. The Lease Binders contain
copies of all of the Leases, including, without limitation, all amendments
thereto, in Seller's actual possession. No representation is made as to
subleases of space in the Building.
3.1.3. To Seller's actual knowledge, the only service and
maintenance agreements affecting the Building as of the date hereof are
those listed on Schedule C annexed hereto (such agreements, together with
any renewals thereof
-5-
<PAGE>
or substitutions therefor or additions thereto provided such renewals,
substitutions and additions are made in the ordinary course of Seller's
business, being hereinafter collectively called the "Service and
-----------
Maintenance Agreements"). To Seller's actual knowledge, a true and correct
----------------------
copy of each Service and Maintenance Agreement, including, without
limitation, all amendments thereto, has been delivered by Seller to
Purchaser simultaneously herewith in velobound binders (hereinafter called
the "Service and Maintenance Agreement Binders") and initialled by Seller
-----------------------------------------
and Purchaser and/or their respective counsel. The Service and Maintenance
Agreement Binders contain copies of all of the Service and Maintenance
Agreements, including, without limitation, all amendments thereto, in
Seller's actual possession.
3.1.4. As of the date hereof, none of the employees employed at the
Property is an employee of Seller.
3.1.5. As of the date hereof, there are no legal actions or proceedings
pending with respect to the Property except as set forth on Schedule R
annexed hereto and except that, as to any actions or proceedings covered by
insurance, the foregoing representation and warranty contained in this
Section 3.1.5 is made to Seller's actual knowledge only.
-6-
<PAGE>
3.1.6. Attached hereto as Schedule S is a list of all licenses and
permits relating to the Property in the actual possession of Seller as of
the date hereof (hereinafter called the "Licenses and Permits").
--------------------
3.1.7. All brokerage commissions payable on account of the Leases have
been paid, other than commissions payable on account of the renewal or
extension of any Lease or the leasing of any additional space thereunder
effected after the date of this Agreement.
3.2. If any space in the Building is vacant on the Closing Date (as
such term is defined in Section 18.1 hereof), Purchaser shall accept the
Property subject to such vacancy, provided that the vacancy was not caused by
Seller terminating a Lease in violation of any restrictions contained in this
Agreement.
3.3. The instruments set forth in the Lease Binders and the Service
and Maintenance Agreement Binders constitute the sole reliance by Purchaser with
respect to the terms and conditions therein set forth, Purchaser acknowledging
that, in the event of any conflict between the matters set forth in any such
instrument and any representation contained in this Agreement, it has relied
upon the instrument as set forth in the Lease Binders and Service and
Maintenance Agreement Binders in entering into this Agreement.
3.4. Each party hereto represents to the other that each person or
entity executing this Agreement by or on behalf of the representing party has
the authority to act
-7-
<PAGE>
on its behalf and to bind it, and that each person or entity executing any
closing documents by or on its behalf, has been or will be duly authorized to
act on its behalf, and that the performance of this Agreement will not be in
violation of its by-laws, charter or partnership agreement, or any law,
ordinance, rule, regulation or order of any governmental body having
jurisdiction, or the provisions of any agreements to which it is a party or by
the terms of which it is bound, and, at the Closing, each party shall furnish to
the other party and to the "Title Company" (as such term is defined in
Section 5.1 hereof), reasonably satisfactory evidence of such authority and
approval. This Section shall survive the Closing.
3.5. Seller does not warrant that any particular Lease will be in
force or effect at the Closing or that the tenants will have performed their
obligations thereunder. The termination of any Lease prior to the Closing shall
not affect the obligations of Purchaser under this Agreement or entitle
Purchaser to an abatement of or credit against the Cash Balance or give rise to
any other claim on the part of Purchaser, provided, however, that Seller shall
not terminate any Lease in violation of Section 10.1.3 hereof.
3.6. To the extent that Purchaser has actual knowledge of any default
or any misrepresentation or incorrect warranty of Seller made in this Agreement,
in the Lease Binders or in the Service and Maintenance Agreement Binders,
Purchaser shall promptly notify Seller of same. Seller shall have the right to
adjourn the Closing for up
-8-
<PAGE>
to ninety (90) days for the purpose of curing any such default,
misrepresentation or incorrect warranty.
3.7. Except as provided in Section 3.4, none of the representations or
warranties contained in this Article 3 shall survive the Closing.
3.8. With respect to the Lease with the Government of Israel
(hereinafter called the "Government of Israel Lease"), at Closing, Seller shall
--------------------------
permit Purchaser a credit against the Purchase Price in an amount (hereinafter
called the "Government of Israel Credit") equal to:
---------------------------
(i) $786,171.00, which amount represents the balance, as of the
date of this Agreement, of all unpaid work allowances
(i.e., $661,171.00) and the moving allowance (i.e.,
$125,000.00) under the Government of Israel Lease, reduced
by
(ii) any disbursements of such unpaid work allowances or moving
allowance made to the tenant under the Government of Israel
Lease by Seller after the date of this Agreement and on or
before the Closing Date, and, in connection therewith,
Seller shall deliver to Purchaser at Closing a certificate
of Seller setting forth the amounts of any such
disbursements referred to in this clause (ii).
In consideration of the payment by Seller of the Government of Israel Credit, at
Closing Purchaser shall execute and deliver a release of Seller from all further
obligations and liabilities whatsoever arising under or relating to the
Government of Israel Lease, in the form annexed hereto as Schedule D
(hereinafter called the "Government of Israel Release"). Purchaser acknowledges
----------------------------
that Seller shall have no additional liability or obligations to Purchaser in
the event the Government of Israel claims that the unpaid
-9-
<PAGE>
balance of the work allowances and moving allowance under its Lease exceeds
$786,171.00, other than to permit Seller to credit the Government of Israel
Credit, computed as set forth above, against the Purchase Price (i.e., in no
event shall the Government of Israel Credit exceed $786,171.00). The provisions
of the immediately preceding sentence shall not be deemed to limit Purchaser's
right to terminate this Agreement on or before the last day of the Inspection
Period in accordance with the provisions of Section 9.1 hereof.
ARTICLE IV
STATE OF TITLE OF PROPERTY
--------------------------
4.1. Purchaser shall accept title to the Property subject to the
following (hereinafter collectively called the "Permitted Encumbrances"):
----------------------
4.1.1. Any and all present and future zoning restrictions,
regulations, requirements, laws, ordinances, resolutions and orders of
any city, town or village in which the Property lies, and of all
boards, bureaus, commissions, departments and bodies of any municipal,
county, state or federal sovereign or other governmental authority now
or hereafter having or acquiring jurisdiction of the Property or the
use and improvement thereof;
-10-
<PAGE>
4.1.2. The state of facts shown on the survey made by Charles
J. Dearing dated June 10, 1957, last redated March 31, 1994 by visual
inspection made by Roland K. Link (hereinafter called the "Contract
--------
Survey"), and any other state of facts shown on an accurate survey of
------
the Property, or any part thereof, provided such other state of facts
does not materially adversely affect Purchaser's ability to use the
Building for its present uses;
4.1.3. The Leases listed on the Schedule of Leases and any
(i) extensions, renewals or modifications thereof, or (ii) new Leases,
in either case entered into in accordance with this Agreement.
Nothing in this Section 4.1.4 shall be deemed to prohibit Seller from
terminating any Lease in accordance with Section 10.1.3 hereof;
4.1.4. The covenants, restrictions, easements, and agreements
of record listed on Schedule E annexed hereto, and such other
covenants, restrictions, easements and agreements of record, if any,
affecting the Property, or any part thereof, provided such other
covenants, restrictions, easements and agreements of record are not
violated by existing structures and do not materially adversely affect
the uses of the Building as used at present;
-11-
<PAGE>
4.1.5. Any state of facts a physical inspection of the
Property would show;
4.1.6. The Service and Maintenance Agreements set forth on
Schedule C annexed hereto and any renewals thereof or substitutions
therefor or additions thereto provided such renewals, substitutions
and additions are made in the ordinary course of Seller's business and
are terminable upon not more than thirty (30) days prior written
notice;
4.1.7. All violations and/or notes or notices of violations of
law or municipal ordinances, orders, or requirements noted in or
issued by any governmental authority having jurisdiction against or
affecting the Property;
4.1.8. Real estate taxes and assessments for the fiscal year
in which the Closing occurs;
4.1.9. Any mechanics or other liens placed against the
Property by reason of work performed by or on behalf of any Tenant of
the Building or by or on behalf of Purchaser; and
4.1.10. Any exception to coverage by the Title Company provided
that the Title Company insures same against collection out of or
enforcement against the Property without additional premium or charge
or indemnity (unless Seller, in its sole discretion, elects to pay
such additional premium or charge and/or to provide such indemnity).
-12-
<PAGE>
ARTICLE V
TITLE INSURANCE AND ABILITY OF SELLER TO CONVEY
-----------------------------------------------
5.1. Purchaser agrees to make, promptly after the signing hereof,
application for a title insurance policy from Ticor Title Guarantee Company
(hereinafter called the "Title Company"). Purchaser hereby acknowledges receipt
-------------
of a copy of the Title Company's report dated March 7, 1995 (hereinafter called
the "Contract Title Report"), and the Contract Survey, and Purchaser hereby
---------------------
acknowledges and agrees that Purchaser has no objection to title as set forth in
the Contract Title Report and in the Contract Survey, except that Seller shall
cause Items 4, 5, 6, 7, 8, 12, 13 and 14 on Schedule B of the Contract Title
Report to be omitted as exceptions to coverage. With respect to any
continuation of the Contract Title Report or an updated Contract Survey,
Purchaser shall deliver to Seller's attorneys, Bachner, Tally, Polevoy & Misher,
380 Madison Avenue, New York, New York 10017, Attention: Martin D. Polevoy,
Esq., a copy of such continuation or updated survey together with a written
statement by Purchaser or Purchaser's attorneys of any objections to title which
have appeared for the first time in such continuation or on such updated survey
(hereinafter called a "Subsequent Title Objection"), within five (5) days of
--------------------------
receipt of such continuation or updated survey, but in any event not later than
fifteen (15) days prior to the Closing Date unless such change of circumstances
occurred within such fifteen (15) day period. In the event Purchaser sends a
written statement to Seller which shall set forth one or more
-13-
<PAGE>
Subsequent Title Objections which Seller is unable to remedy prior to the
Closing Date, Seller shall not be obligated to remove any such Subsequent Title
Objections (except as expressly provided in Section 5.2 hereof), but if Seller
elects to attempt to remedy such Subsequent Title Objections, Purchaser hereby
grants to Seller a reasonable adjournment of the Closing Date during which time
Seller may attempt to remedy same.
5.2. If there shall be any liens, charges, easements, agreements of
record, encumbrances or other objections to title, other than Permitted
Encumbrances (which Purchaser agrees to take subject to) (hereinafter
collectively called "Title Objections") which were caused by, resulted from or
----------------
arose out of the grant by Seller to any person or entity of a mortgage or
security interest under the Uniform Commercial Code affecting the Property or
the performance of work at the direction and on behalf of Seller upon all or any
portion of the Property, then Seller shall remove such Title Objections. If
Seller fails to remove any Title Objection in accordance with the provisions of
the immediately preceding sentence, Purchaser, nevertheless, may elect (at or
prior to the Closing) to consummate the transaction provided for herein subject
to any such Title Objection as may exist as of the Closing with a credit against
the Cash Balance payable at the Closing equal to the sum necessary to remove
such Title Objection(s). If Purchaser shall not so elect, Purchaser may
terminate this Agreement and the sole liability of Seller shall be to return to
Purchaser the Deposit together with any interest accrued thereon. Upon such
return of the Deposit together with any interest accrued thereon, this Agreement
shall be
-14-
<PAGE>
null and void, and the parties hereto shall be relieved of all further
obligations and liability under this Agreement.
ARTICLE VI
CLOSING COSTS AND GAINS TAX
---------------------------
6.1. Purchaser shall pay the costs of examination of title and any
owner's policy of title insurance to be issued insuring Purchaser's title to the
Property, as well as all other title charges, survey fees, and any and all other
costs or expenses incident to the recordation of documents required in order to
transfer title pursuant to the terms of this Agreement.
6.2. Seller shall pay the following amounts payable in connection with
the transfer of the "Deed" (as hereinafter defined):
(i) the amount imposed pursuant to Article 31 of the New York
State Tax Law (hereinafter called the "Tax Law");
-------
(ii) the amount due in connection with the Real Property Transfer
Tax imposed by Title 11 of Chapter 21 of the Administrative Code of
the City of New York; and
(iii) the amount imposed pursuant to Article 31-B of the Tax Law,
as determined by the "Tax Department" (as such term is defined in
Section 6.4 hereof).
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<PAGE>
The provisions of this Section 6.2 shall survive the Closing.
6.3. All other closing costs shall be allocated to and paid by Seller
and Purchaser in accordance with the manner in which such costs are customarily
borne by such parties in sales of similar property in New York City; provided,
however, that each party shall bear its own attorneys' fees.
6.4. Purchaser shall cause to be delivered to Seller not less than
thirty (30) days prior to Closing the New York State Real Property Transfer
Gains Tax Questionnaire Transferee (TP-581) with all relevant information
completed thereon (hereinafter called the "Transferee Questionnaire") duly
------------------------
executed and acknowledged. Purchaser agrees generally to cooperate with Seller
with respect to the preparation and filing of the Transferee Questionnaire. For
this purpose Purchaser agrees to execute and deliver to Seller any additional
documentation that may be required by the New York State Department of Taxation
and Finance (hereinafter called the "Tax Department") to effectuate the
--------------
transaction which is the subject of this Agreement, by reason of a change in the
consideration payable hereunder for the Property for purposes of the tax imposed
by Article 31-B of the New York State Tax Law or otherwise; including, if
necessary, any amended Transferee Questionnaire required in connection with any
New York State Real Property Transfer Gains Tax Supplemental Return (TP-583)
filed by Seller to reflect a change in such consideration. Seller shall,
provided it has theretofore received from Purchaser the duly executed and
acknowledged Transferee Questionnaire, submit
-16-
<PAGE>
(y) such Transferee Questionnaire, and (z) the New York State Real Property
Transfer Gains Tax Questionnaire Transferor (TP-580) duly executed and
acknowledged by Seller to the Tax Department not less than twenty-five (25)
days prior to the Closing. If, for any reason, the Tax Department fails to
deliver to Seller the original New York State Real Property Transfer Gains Tax
Tentative Assessment and Return, Transferor Copy (TP-582) (hereinafter called
the "Return"), prior to the date scheduled for Closing herein, then Seller shall
------
be entitled to an adjournment of the Closing as a result of such delay, and in
such event, the parties hereto shall, promptly after Seller's receipt of the
Return, endeavor to reschedule the Closing Date to a mutually convenient date
and time (provided, however, no such adjourned Closing Date shall occur later
than 30 days after the Return is delivered to Seller). If the original of the
Return is received by Purchaser from the Tax Department, Purchaser shall
promptly deliver the original thereof to Seller. Purchaser shall promptly
forward to Seller copies of any and all correspondence received by it from the
Tax Department relating to the taxes imposed by Articles 31 or 31-B of the New
York State Tax Law with respect to this transaction, whether received before, at
or after the Closing, and shall refer to Seller all inquiries from the Tax
Department relating to such taxes, whenever received. Purchaser shall not
assert before any taxing authority, including but not limited to the Tax
Department, that Purchaser paid Seller consideration for the Property in excess
of the amount reported as consideration payable to Seller on the Transferee
Questionnaire (including any amended Transferee Questionnaire) as filed
-17-
<PAGE>
by Seller with the Tax Department, and Purchaser hereby indemnifies and holds
Seller harmless from and against any loss or liability resulting from the
foregoing provisions of this sentence. The provisions of the two (2)
immediately preceding sentences shall survive the Closing.
ARTICLE VII
ASSUMPTIONS
-----------
7.1. Purchaser agrees to assume as of the Closing, all of the Leases
(including, without limitation, the obligation to pay for (X) any unpaid
brokerage commissions payable on account of the renewal or extension of any
Lease or the leasing of any additional space thereunder effected after the date
of this Agreement, or (Y) unpaid work allowances or credits, and to complete
and pay for any incomplete items of construction required thereunder), and all
of the Service and Maintenance Agreements, by execution of the respective
assignments of the same as provided in Section 14.2 hereof. Notwithstanding
the foregoing, Seller shall remain liable for any unpaid work allowances or
credits payable under (and the commercially reasonable cost of any incomplete
items of construction required under) Leases in effect as of the date of this
Agreement for any premises demised thereunder as to which the Tenant has taken
actual occupancy; provided, however, that Purchaser will be liable for the
payment of any work allowances, moving allowances, credits, Tenant loans or
advances or any other monies payable to or
-18-
<PAGE>
for the benefit of Tenants which become due on or after the Closing Date under
(i) the Government of Israel Lease, and (ii) the Lease with the Permanent
Mission of the Government of Barbados. This Section shall survive the Closing.
ARTICLE VIII
REAL ESTATE TAX PROTESTS
------------------------
8.1. All real estate assessment protests and proceedings affecting the
Property for the tax year in which title closes and prior years, if any, will be
prosecuted under Seller's direction and control. In the event of any reduction
in the assessed valuation of the Property for any such fiscal year, the net
amount of any tax savings, shall (a) with respect to fiscal years ending prior
to the Closing be payable to Seller, and (b) with respect to the fiscal year in
which the Closing shall occur, after deduction of expenses and attorneys' fees,
be adjusted between Seller and Purchaser as of the "Adjustment Date" (as such
term is hereinafter defined) in each instance net of sums due to space tenants
which shall be paid to each space tenant entitled to such sums. If any
reduction in assessment shall be granted for a fiscal year in, or prior to, the
year in which title closes in the form of a credit for taxes payable at or after
Closing, Seller shall be entitled to receive a sum equal to such credit when
granted after adjustment as provided in the immediately preceding sentence.
This Section shall survive Closing.
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<PAGE>
ARTICLE IX
INSPECTION PERIOD; CONDITION OF PROPERTY
----------------------------------------
9.1. (a) Seller grants to Purchaser and/or its authorized agents and
representatives the right to enter upon the Property at reasonable times during
normal business hours to inspect the Property. The inspection right described
in the preceding sentence may be exercised only during the period (hereinafter
called the "Inspection Period") commencing on the date of this Agreement and
-----------------
ending at 5:00 p.m. on the earlier to occur of (i) June 12, 1995, or (ii) the
date on which Purchaser notifies Seller in writing that Purchaser has waived its
right to terminate this Agreement pursuant to subsection 9.1(d) hereof.
Purchaser shall notify Seller of its intention, or the intention of its agents
or representatives, to enter the Property at least 48 hours prior to such
intended entry. If Purchaser intends to conduct any physical testing or
sampling of the Property, Purchaser shall describe such testing and sampling in
its notice and shall obtain Seller's prior written consent thereto. Purchaser
shall bear the cost of all inspections and tests conducted by Purchaser or its
authorized agents or representatives. At Seller's option, Seller may be
present for any inspection or test, and if Seller so elects to be present,
Seller will make its representative reasonably available during ordinary
business hours of business days for such purpose. Purchaser's rights to have
access to and to inspect the Property shall be expressly subject to the rights
of Tenants under the Leases and to any security requirements of the Tenants.
-20-
<PAGE>
(b) During the Inspection Period, Seller agrees to permit Purchaser
and/or its authorized agents or representatives the right to inspect the
following items (to the extent same are in the possession of Seller or its
managing agent) at reasonable times during normal business hours, such
inspection to be held, at Seller's option, at the office of the managing agent
of Seller, or Seller's attorneys, or at the Property (hereinafter collectively
called the "Documents"):
---------
(i) copies of bills for real estate taxes and assessments
(special or otherwise),
(ii) Seller's most current rent roll,
(iii) operating statements for the period beginning July 1, 1994,
(iv) a summary of all capital expenditures for the period
beginning July 1, 1994,
(v) Tenant files, including original Leases, and
(vi) the Licenses and Permits.
Purchaser at its expense shall have the right to make photocopies of the
Documents. Notwithstanding anything in this Section 9.1 to the contrary,
Purchaser shall not have the right to inspect or make copies of any appraisals
of or engineering reports for the Property, any documents in Seller's possession
involving Seller's acquisition of the Property, any internal budgets or
projections, any information regarding prospective purchasers, or any federal or
state income tax returns.
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<PAGE>
(c) In connection with its inspection of the Property, Purchaser and
its agents and representatives shall:
(i) not communicate directly with Seller's employees, Tenants or
managing agent (other than Stephen Schofel of Williams Real
Estate, Inc.);
(ii) not interfere with the operation and maintenance of the
Property;
(iii) promptly repair to its current condition any part of the
Property or any personal property owned or held by Seller or
any Tenant or any other person or entity to the extent
damaged during Purchaser's inspection;
(iv) not injure or otherwise cause bodily harm to Seller, its
agents, contractors and employees or any Tenant or any other
person or entity;
(v) maintain (or cause its engineer or contractor performing the
applicable physical inspection of the Property to maintain)
general liability insurance with a combined single limit of
liability (personal injury and property damage) not less
that $2,000,000 per occurrence, covering any accident or
damage arising in connection with the presence of Purchaser,
its agents and representatives in, on or about the Property,
and naming Seller and its managing agent as additional
insureds, and a certificate evidencing such insurance shall
be furnished to Seller prior to any entry into or upon the
Property by Purchaser or its agents or representatives
pursuant to Section 9.1(a) hereof;
(vi) promptly pay when due the costs of all tests,
investigations, and examinations done with regard to the
Property by Purchaser or on Purchaser's behalf;
(vii) not permit any liens to attach to the Property by reason of
the exercise of its rights hereunder; and
(viii) restore the Property to the condition and state of repair in
which the same was found before any such inspection or tests
were undertaken.
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<PAGE>
Purchaser hereby agrees to indemnify, defend and hold Seller, its officers,
directors, agents, and employees, and their respective heirs, successors and
assigns, harmless from and against any and all liens, claims, causes of action,
demands, suits, obligations, damages, losses, penalties, costs and expenses
(including reasonable attorneys' fees) arising out of any violation of the
provisions of this Section 9.1(c). Purchaser hereby grants to Seller a
security interest in the Deposit to secure the foregoing indemnification, and
Seller shall have the right (but shall not be obligated) to cure any violation
of this Section 9.1(c) which is not cured within ten (10) days after Purchaser's
receipt of written notice thereof by paying or bonding any such violation with
the Deposit. In the event Seller draws on the Deposit pursuant to the preceding
sentence, Purchaser shall be required to replace such sums within five (5)
business days of receiving written notice from Seller that it has drawn funds
from the Deposit. The failure by Purchaser to timely replace such funds shall be
deemed a default hereunder by Purchaser resulting in Seller having the right to
exercise any of its remedies arising out of a default by Purchaser.
(d) If, during the Inspection Period, Purchaser shall, for any
reason, in Purchaser's sole discretion, judgment and opinion, be dissatisfied
with any aspect of the Property or any item examined by Purchaser pursuant to
this Section 9.1, including, without limitation, failure to receive Tenant
estoppel statements satisfactory to Purchaser in number and content in its sole
discretion, Purchaser shall be entitled, as its sole and exclusive remedy, to
terminate this Agreement by giving written notice to Seller on or
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<PAGE>
before the last day of the Inspection Period, time being of the essence with
respect to the giving of such notice. In the event Purchaser timely gives such
notice of termination, this Agreement shall terminate, and upon such
termination, neither Seller nor Purchaser shall have any further obligation or
liability to the other hereunder (other than those provisions hereof which
expressly survive a termination), and the Deposit (including all interest
actually earned thereon while in escrow), save and except the sum of $25,000.00
(hereinafter called the "Deposit Holdback"), shall be promptly returned to
----------------
Purchaser. Upon Purchaser's return to Seller of all copies of the Documents
and any other information furnished to Purchaser by Seller regarding any part of
the Property (hereinafter collectively called "Purchaser's Information") in
-----------------------
accordance with Section 25.15 hereof, the Deposit Holdback shall be returned to
Purchaser. If Purchaser shall fail to timely notify Seller in writing of its
option to terminate this Agreement on or before the last day of the Inspection
Period, the termination right described in this Section 9.1 (d) shall be null
and void.
(e) Notwithstanding any provision of this Agreement, no termination
of this Agreement shall terminate Purchaser's obligations pursuant to this
Section 9.1, and such obligations shall expressly survive the Closing hereunder
or any such termination.
9.2. Purchaser acknowledges that it has made or will make its own
analysis and evaluation of the income potential and profits and expenses of the
Property as well as the physical condition, layout, leases, footage, rents,
income, expenses and
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<PAGE>
operation of the Property, and that Seller has not made and does not make any
representations as to any of the foregoing or any other matter or thing
affecting or related to the Property or to this Agreement, including but not
limited to environmental matters and zoning, except as herein specifically set
forth, and that neither party is relying upon any statement or representation
made by the other not embodied in this Agreement. Purchaser hereby expressly
acknowledges that no such representation has been made and agrees to take the
Property "as is", in substantially its present condition, subject to ordinary
use, wear, tear and natural deterioration and subject to casualty and
condemnation as more particularly set forth in Article XI hereof. Seller is not
liable or bound in any manner by any verbal or written statements,
representations, real estate "set-ups" or information pertaining to the Property
or its physical condition, layout, leases, footage, rents, income, expenses,
operation or any other matter or thing furnished by any agent, employee,
servant, or any other person, unless specifically set forth in this Agreement.
Without limiting the generality of this Section 9.2, it is expressly understood
that Seller is making no representation or warranty, express or implied, as to
the accuracy of the Documents delivered to Purchaser pursuant to Section 9.1
hereof or any information contained therein.
9.3. Purchaser acknowledges that it has had or will have an
opportunity to conduct its own environmental investigation of the Property and
the property adjacent to the Property. Purchaser agrees to take the Property
subject to any and all
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environmental conditions affecting or related to the Property. Purchaser agrees
to assume all environmental costs and liabilities arising out of or in any way
connected to the Property. Purchaser hereby releases Seller from any obligation
to pay any such costs and liabilities. The provisions of this Section shall
survive the Closing.
ARTICLE X
OPERATIONS PENDING CLOSING
--------------------------
10.1. Seller agrees that between the date hereof and the Closing
Seller shall:
10.1.1. Continue to operate the Property substantially in the
manner heretofore operated by Seller. Notwithstanding the provisions
of the immediately preceding sentence, Seller shall not be required to
expend more than $100,000 during the term of this Agreement
(hereinafter called "Seller's Repair Amount") on repairs and
----------------------
replacements to the Building (including, but not limited to,
materials, labor, supervision and overhead). If the cost of such
repairs and replacements shall exceed Seller's Repair Amount, and if
Purchaser does not notify Seller, within three (3) business days after
delivery of a notice from Seller setting forth such repairs and
replacements, that Purchaser agrees to pay at Closing for all sums
actually expended by Seller in excess of Seller's Repair Amount
(hereinafter called
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the "Excess Amount"), then Seller may terminate this Agreement by
-------------
written notice to Purchaser given at any time thereafter. Upon the
giving of such notice, the Deposit, including any interest actually
earned thereon while in escrow, shall be returned to Purchaser and
neither party shall have any further liability to the other party
hereunder, except for those provisions which expressly survive a
termination of this Agreement. In the event Purchaser agrees to pay
the Excess Amount, such Excess Amount shall be paid by Purchaser at
Closing in the manner specified in Section 2.1.2 hereof.
10.1.2. Subject to and in accordance with Section 9.1 hereof,
afford Purchaser reasonable access to the Property, at reasonable
times on reasonable notice; provided, however, Purchaser may not
enter any portion of the Property unless accompanied by a
representative of Seller, and if Seller so elects to accompany
Purchaser, Seller will make its representative reasonably available
during ordinary business hours of business days for such purpose.
Purchaser also agrees that Purchaser's rights to have access to and to
inspect the Property shall be expressly subject to the rights of
Tenants under the Leases and to any security requirements of the
Tenants, and that Seller shall not be required to incur any cost or
expense or commence any action to afford Purchaser such access.
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10.1.3. From and after the last day of the Inspection Period to
the Closing Date, not, without Purchaser's prior written consent,
terminate any Lease (whether or not the Tenant is in default
thereunder), except that Seller may terminate the following Leases by
reason of the default by the Tenants thereunder: CSI International,
Inc., Moore Business Forms, Inc., and 800-2nd Operating, Inc. In
addition, Seller may terminate any other Lease as to which the Tenant
thereunder is in default if the nature of such default (i) creates or
threatens to create an unsafe condition in the Building, or (ii)
relates to the failure of the Tenant to pay any rent or additional
rent under the Lease for a period in excess of thirty (30) days beyond
its due date.
10.1.4. From and after the last day of the Inspection Period,
not enter into any new lease for space in the Building which is vacant
as of the date hereof or which may hereafter become vacant or modify
any existing Lease without first giving Purchaser written notice of
the identity of the proposed tenant (in the case of a new lease),
together with (i) a summary of the terms thereof in reasonable detail,
(ii) such financial information regarding the prospective tenant as
Seller has obtained, and (iii) a statement of the amount of the
brokerage commission, if any, payable in connection therewith and the
terms of payment thereof. If Purchaser
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objects to such proposed lease or amendment, Purchaser shall so notify
Seller within five (5) Business Days (as such term is defined in
Section 18.1 hereof) after the giving of Seller's notice to
Purchaser, in which case Seller shall not enter into the proposed
lease or amendment. Purchaser shall pay to Seller on the first day of
each month between the date hereof and the Closing Date, by cashier's
or bank check payable to the direct order of Seller, the rent and
additional rent that would have been payable under the proposed lease
or amendment from the date on which the tenant's obligation to pay
rent would have commenced if Purchaser had not so objected until the
Closing Date, less (i) the amount of the brokerage commission
specified in Seller's notice, (ii) the cost of tenant improvement work
required to be performed by the landlord under the terms of the
proposed lease or amendment to suit the premises to the tenant's
occupancy, and (iii) the amount of cash work allowances required to be
given by the landlord to the tenant under the terms of the proposed
lease or amendment (hereinafter collectively called the "Reletting
---------
Expenses"), prorated in each case over the term of the proposed lease
--------
or amendment (as the case may be) and apportioned as of the Closing
Date. If Purchaser does not so notify Seller of its objection, Seller
shall have the right to enter into the proposed lease or amendment, as
the case may be, with the tenant identified in Seller's
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notice and Purchaser shall pay to Seller, in the manner specified in
Section 2.1.2 hereof, the Reletting Expenses, to the extent actually
incurred by Seller, prorated in each case over the term of the lease
and apportioned as of the later of the Closing Date or the rent
commencement date. Such payment shall be made by Purchaser to Seller
at the Closing.
10.1.5. Subject to the provisions of Section 10.1.1 hereof,
keep the Licenses and Permits in force and effect and renew any
Licenses and Permits which expire prior to the Closing.
10.1.6. Continue to carry fire and extended casualty coverage
with respect to the Building comparable to the insurance currently
carried by Seller with respect to same, which insurance coverage is
described on Schedule V annexed hereto.
ARTICLE XI
CASUALTY AND EMINENT DOMAIN
---------------------------
11.1. The risk of loss or damage to the Property by fire or other
casualty, until the time of the delivery of the Deed as herein provided, is
assumed by Seller but without any obligation or liability by Seller to repair
the same. If loss or damage to the Property occurs for which the estimated cost
or repair and restoration is equal to or exceeds $11,000,000.00 (such estimate
to be made by a reputable contractor selected by
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Seller and approved by Purchaser, such approval not to be unreasonably withheld
or delayed), then Seller shall have the right to terminate this Agreement by
written notice to Purchaser given within ninety (90) days after the date of such
casualty. If and to the extent the Closing Date would have otherwise occurred
within such ninety (90) day period, Seller shall be entitled to an adjournment
of the Closing Date to a date not later than ninety (90) days after the date of
such casualty pending its determination of whether to terminate this Agreement.
In the event that Seller does not elect to terminate this Agreement under
circumstances where Seller is permitted to do so under this Section 11.1,
Purchaser shall have the following options:
11.1.1. of declaring this Agreement terminated, in which event
the Deposit, together with any interest accrued thereon, shall be
returned to Purchaser, and upon such payment, this Agreement shall be
null and void and the parties hereto shall be relieved and released of
and from any further liability with respect to each other; or
11.1.2. of accepting (i) the Deed upon payment in full of the
Purchase Price and without any abatement of the Purchase Price by
reason of such loss or damage, (ii) payment of the amount of any
insurance proceeds to the extent actually collected by Seller in
connection with such fire or other casualty, less the amount of the
actual expenses incurred by Seller in collecting such proceeds and in
making repairs to the Property
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occasioned by such fire or other casualty, and (iii) an assignment
(without warranty or recourse to Seller) of Seller's rights to any
payments to be made subsequent to the Closing Date under any hazard
insurance policy or policies in effect with respect to the Property;
provided, however, Purchaser shall not be entitled to the payment of
insurance proceeds or an assignment of Seller's right to insurance
proceeds in excess of the cost of repairing any loss or damage to the
Property, and in the event of any excess proceeds, Seller shall be
entitled to same.
If Purchaser shall fail to exercise its option set forth in
Section 11.1.1 hereof within ten (10) days after any notice to Purchaser of loss
or damage to the Property, Purchaser shall be deemed to have exercised its
option set forth in Section 11.1.2 hereof.
If loss or damage to the Property occurs for which the estimated cost
or repair and restoration (as estimated by the Appointed Contractor) is less
than $11,000,000.00, then neither party shall have the right to terminate the
Contract, and Seller shall have the following options:
11.1.3. of conveying the Property at Closing in accordance with
the provisions of this Agreement upon payment in full of the Purchase
Price and without any abatement of the Purchase Price by reason of
such loss or damage, and paying to Purchaser the amount of any
insurance
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proceeds to the extent actually collected by Seller in connection with
such fire or other casualty, less the amount of the actual expenses
incurred by Seller in collecting such proceeds and in making repairs
to the Property occasioned by such fire or other casualty, and
assigning to Purchaser (without warranty or recourse to Seller)
Seller's rights to any payments to be made subsequent to the Closing
Date under any hazard insurance policy or policies in effect with
respect to the Property; provided, however, Purchaser shall not be
entitled to the payment of insurance proceeds or an assignment of
Seller's right to insurance proceeds in excess of the cost of
repairing any loss or damage to the Property, and in the event of any
excess proceeds, Seller shall be entitled to same; or
11.1.4. of making the necessary repairs or replacements to the
Property, in which event this Agreement shall continue in full force
and effect and Seller shall be entitled to a reasonable adjournment of
the Closing Date, not to exceed one hundred eighty (180) days for the
purpose of making such repairs or replacements.
The parties agree that only Seller (and not Purchaser) shall have the right
to negotiate the settlement of insurance claims resulting from a fire or other
casualty affecting the Property, and such right shall survive the Closing.
Notwithstanding the foregoing, Seller agrees that, in any circumstances
hereunder where Purchaser will
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receive an assignment of Seller's right to payment of insurance proceeds, Seller
will not, at any time following the last day of the Inspection Period, agree to
the settlement of such insurance claim without Purchaser's consent, which
consent shall not be unreasonably withheld or delayed. In the event Purchaser
withholds its consent to a proposed insurance settlement, then, Seller may, at
Seller's election, give notice to Purchaser accelerating the Closing Date to a
date set forth in such notice (which shall be not less than five (5) business
days following the giving of .such notice). In such event, time shall be of the
essence with respect to Purchaser's obligation to close on such accelerated
Closing Date. Nothing contained herein shall be deemed to prohibit Seller from
settling any such insurance claim at any time without Purchaser's consent to the
extent necessary to obtain insurance proceeds in an amount sufficient to cover
the cost of emergency repairs or replacements to the Building or repairs or
replacements required to avoid the termination of any Lease.
11.2. If prior to the Closing all or any part of the Property is
taken by condemnation or a taking in lieu thereof, the following shall apply:
11.2.1. In the event a material part of the Property is taken,
Purchaser, by written notice to Seller (effective only if delivered
within fifteen (15) days after Purchaser receives notice of such
taking), may elect to cancel this Agreement prior to the Closing Date.
In the event that Purchaser shall so elect, the Deposit, together with
any interest accrued
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thereon, shall be returned to Purchaser, and upon such payment, this
Agreement shall be null and void and the parties hereto shall be
relieved and released of and from any further liability hereunder and
with respect to each other.
11.2.2. In the event a minor or immaterial part of the Property
is taken, or in the event of a change of legal grade, neither party
shall have any right to cancel this Agreement and title shall
nonetheless close in accordance with this Agreement without any
abatement of the Purchase Price or any liability or obligation on the
part of Seller by reason of such taking; provided, however, that
Seller shall, at the Closing, (i) turn over and deliver to Purchaser
the amount of any award or other proceeds of such taking to the extent
actually collected by Seller as a result of such taking less the
amount of the actual expenses incurred by Seller in collecting such
award or other proceeds and in making repairs to the Property
occasioned by such taking, and (ii) deliver to Purchaser an assignment
(without warranty or recourse to Seller) of Seller's right to any such
award or other proceeds which may be payable subsequent to the Closing
Date as a result of such taking.
11.2.3. The term "material part", as distinguished from a
"minor or immaterial part", as used herein shall mean a portion of the
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Property having a value (based upon an appraisal by an appraiser
acceptable to Seller, subject to Purchaser's approval, which shall not
be unreasonably withheld or delayed) in excess of $11,000,000.
11.3. This Article shall survive the Closing and is intended to be
an express provision to the contrary within the meaning of Section 5-1311 of the
General Obligations Law.
ARTICLE XII
ASSESSMENTS
-----------
12.1. If on or after the date hereof, the Property or any part
thereof shall be or shall have been affected by any real estate tax assessment
or assessments which are or may become payable in one or more installments,
Purchaser agrees to take title to the Property (without reduction in or
adjustment of the Purchase Price) subject to all unpaid installments becoming
due and payable after the date hereof.
ARTICLE XIII
CLOSING ADJUSTMENTS
-------------------
13.1. The following are to be apportioned or adjusted at the
closing of title to the Property pursuant to this Agreement (hereinbefore and
hereinafter called
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the "Closing") as of midnight of the day of the Closing (hereinafter called the
-------
"Adjustment Date"):
---------------
13.1.1. Rents, as and when collected.
(a) If any Tenant is in arrears in the payment of rent on
the Closing Date, rents received from such Tenant after the
Closing shall be applied in the following order of priority:
(a) first to the month immediately preceding the month in which
the Closing occurred; (b) then to the month in which the Closing
occurred; (c) then to any month or months following the month in
which the Closing occurred; and (d) then to the period prior to
the month immediately preceding the month in which the Closing
occurred.
With respect to the rent arrearages owed by CSI
International, Inc., at Closing Seller and Purchaser shall
execute a letter agreement in the form annexed hereto as Schedule
P.
(b) Seller may collect any additional rent (including
percentage rent, utility charges, electric charges, escalation
charges for taxes, labor, operating expenses, common area
charges, insurance, and escalations in rent based upon indexes
such as CPI, porter's wage, or other wages, etc.) which is due
and payable prior to the Adjustment Date but which apply to
periods beyond the
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Adjustment Date, and there shall be a pro rata adjustment and
credit given to Purchaser for such period. If such charges have
not been billed, or if billed, have not been collected by Seller
as of the Closing, then, when the amount of such additional rent
is determined and collected by Purchaser from such Tenants,
Purchaser will remit to Seller a fraction thereof, the
denominator of which shall be the number of months (or part
thereof) in the period covered by the bill and the numerator of
which shall be the number of months (or part thereof) in the
particular billing period for which such items have been paid
that shall have elapsed from the commencement of such billing
period to and including the Adjustment Date. With respect to
percentage rent, Purchaser shall have no obligation to conduct an
audit of any Tenant's records with respect to percentage rent for
periods preceding the Closing (except as may be required pursuant
to the provisions of any such Tenant's Lease), but Purchaser
agrees that if it conducts such an audit on its behalf with
respect to any lease year of such Tenant in which the Adjustment
Date falls or with respect to any prior year, then such audit
shall include such portion of such Tenant's lease year as
precedes the Closing Date and that Purchaser shall furnish a copy
of such audit to Seller. Seller shall
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deliver to Purchaser at Closing its records with respect to
calculation and billing of escalation rents under the Leases.
At the Closing, to the extent that actual amounts are not
available, the parties shall make apportionments under this Section
based upon Seller's reasonable estimate of the relevant amounts, such
estimated amounts to be adjusted when the actual amounts are
determined.
Subject to subsection 13.1.1(a) hereof, all rents and monies to
which either party shall be entitled under this Section which are
collected by the other party shall be received and held in trust by
such other party and promptly delivered to the party entitled to same
after deducting the proportionate share of any reasonable attorneys'
fees, costs and expenses of collection thereof.
Within a reasonable time after Purchaser has made its
calculations of the final cost reimbursement payments in respect of
the pertinent fiscal periods and prior to billing Tenants therefor
(and in any event not less than 60 days prior to any deadline
contained in any Lease for the rendition of any such bill), Purchaser
shall prepare and submit to Seller a final calculation of the amounts
and other items to be apportioned pursuant to this Agreement as of the
Closing Date (the "Final Report"). Seller shall raise any objections
------------
it has to the Final Report within sixty (60) days after
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Seller's receipt of the Final Report by written notice to Purchaser
given within said sixty (60) day period and stating in reasonable
detail Seller's objections, and Purchaser shall allow Seller and its
authorized representatives reasonable access during business hours to
its books and records pertinent to the Property to permit Seller to
review the Final Report and to ascertain its accuracy. If Seller
fails to raise any such objections within said sixty (60) day period,
then the Final Report shall be binding on the parties. If Seller
shall raise any objections to the Final Report as provided above, then
Seller and Purchaser shall meet within ten (10) days after submission
of Seller's notice thereof and attempt to resolve such objections. If
any objections are not resolved within said ten (10) day period, such
objections may thereafter be submitted by either party to the American
Arbitration Association for determination. Pending such
determination, Purchaser shall bill the Tenants for the higher amount
of additional rent in question (i.e., as between Seller's and
Purchaser's respective calculations thereof). Such determination
shall be final and conclusive on the parties and judgment may be
entered thereon in any court of competent jurisdiction. The rules of
the American Arbitration Association applicable to commercial
arbitrations shall apply to any such arbitration. The Final Report
shall be deemed amended by agreement of
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the parties or determination of such firm, and, within ten (10) days
after such agreement or determination (or, if Seller raises no
objections to the Final Report, the expiration of the sixty (60) day
objection period), Purchaser shall make any required adjustments with
the Tenants. Thereafter, Seller promptly shall pay to Purchaser, or
Purchaser shall pay to Seller promptly upon collection, as the case
may be, the amount determined to be due from such party to the other
in accordance with this Section based upon the Final Report, as the
same may have been amended. If a determination is required, the
parties shall bear the fees and expenses of the arbitrators handling
such determination equally.
13.1.2. Real estate taxes, on the basis of the fiscal year for
which assessed. If the Closing shall occur before the tax rate or
assessment is fixed, the apportionment of such real estate taxes at
the Closing shall be upon the basis of the tax rate for the
immediately preceding year applied to the latest assessed valuation;
however, adjustment will be made upon the actual tax amount, when
determined.
13.1.3. Tax and utility company deposits, or deposits with any
supplier of goods, if any, shall not be prorated and shall be refunded
to Seller.
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13.1.4. Water charges and sewer rents on the basis of the
fiscal year, but if there be water meters on the Property, Seller, to
the extent the same is obtainable, shall furnish a reading effective
through the Adjustment Date, or if not feasible to so read, to a date
not more than thirty (30) days prior to the Adjustment Date, and the
unfixed meter charges based thereon for the intervening period shall
be apportioned on the basis of such last reading. Upon the taking of
a subsequent actual reading, such apportionment shall be readjusted
and Seller or Purchaser, as the case may be, will promptly deliver to
the other the amount determined to be so due upon such readjustment.
If Seller is unable to furnish such prior reading, any reading
subsequent to the Closing will be apportioned on a per diem basis from
the date of such reading immediately prior thereto and Seller shall
pay the proportionate charges due up to the date of Closing. Unpaid
water meter bills which are the obligations of tenants in accordance
with the terms of Leases shall not be adjusted nor shall the same be
deemed an objection to title and Purchaser will take title subject
thereto.
13.1.5. Amounts paid or payable with respect to assignable
licenses and permits, if any, affecting the Property.
13.1.6. Amounts paid or payable in respect of the Service and
Maintenance Agreements.
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13.1.7. Proration of vault charges or taxes (or similar charges
or taxes) shall be based upon the last bill received, or title company
report, prorated at the last known rate to the Adjustment Date. No
proration shall be made if such vault charge is the obligation of a
Tenant in possession.
13.1.8. Seller and Purchaser shall make their own separate
arrangements for the closing and opening of separate accounts for
utility charges, including, but not limited to, electricity, gas,
steam, telephone and other utilities (other than such charges which
are tenants' obligations under Leases), and such charges shall not be
prorated, except to the extent that any such separate account has not
been established (or separate meter read) on the Adjustment Date, in
which case any such amounts shall be prorated for such period based
upon the most current bill.
13.1.9. The value of building inventory and supplies (e.g.,
soap, cleaning powder, light bulbs, etc.) in unopened containers, in
accordance with an inventory prepared by Seller, shall be credited to
Seller. The value thereof shall be determined based upon the cost
thereof to the extent practical.
13.1.10. (a) In the event any security deposits of Tenants
(other than those which are marketable securities, letters of credit,
or other non-cash items) are invested in a time account with a penalty
for early
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withdrawal, such security deposits shall be transferred, at Seller's
option, either (i) by direct assignment of the bank accounts in which
the same are deposited, or (ii) by Seller retaining all rights in the
bank accounts and paying to Purchaser the amount of the security
deposits to be delivered pursuant to this Agreement by separate check
or wire transfer (as Seller elects) at the Closing. In either event,
there shall be credited to Seller all interest earned or accrued to
the Adjustment Date less such portion of the interest to which the
respective Tenant would be entitled pursuant to its Lease or by law.
No allocation shall be made of security deposits properly applied
prior to the Adjustment Date. Security deposits applied after the
Adjustment Date shall be applied in the order of priority set forth in
paragraph (a) of Section 13.1.1 hereof. Security deposits held in the
form of marketable securities shall be assigned and delivered to
Purchaser at Closing, with any interest thereon through the Adjustment
Date credited to Seller, less such portion to which the Tenant would
be entitled. Security deposits held in the form of letters of credit
shall be assigned and delivered to Purchaser at Closing; provided,
however, that if the consent or authorization of the issuer of any
such letter of credit is required, the failure to obtain such consent
shall not constitute grounds for Purchaser or Seller
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to adjourn the Closing, but Seller shall cooperate with Purchaser in
obtaining such consent subsequent to the Closing.
(b) In the event that any Tenant which owes past due
rent as of the Closing is evicted from the Building and its Lease is
terminated, then promptly after such eviction and termination, such
Tenant's security deposit shall be applied in the following order of
priority: (i) first to the reimbursement of Purchaser's reasonable
costs and expenses in obtaining such eviction and termination, and
(ii) then in the order of priority set forth in Section 13.1.1 hereof.
13.1.11. Proration shall be made of fuel on the Property on the
Adjustment Date based upon a reading made by Seller's supplier as
close as obtainable to the Adjustment Date (reasonably adjusted to the
quantity present on the Adjustment Date). The value thereof shall be
calculated at Seller's last cost (including sales tax).
The provisions of this Section 13.1 shall survive the Closing.
13.2. The parties hereto agree to make a good faith effort to
determine the adjustments to be made at Closing pursuant to this Article at
least three (3) days prior to the Closing Date.
13.3. In the event the net apportionments and adjustments as
provided in Section 13.1 hereof result in a payment due Seller, then such
payment shall be made at
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the Closing in the manner set forth in Section 2.1.2 hereof. In the event that,
despite Purchaser's good faith efforts, the parties hereto are unable to
determine the amount of the adjustments to be paid to Seller at the Closing, if
any, on or before the date which is three (3) days prior to the Closing Date,
such amount may be paid by Purchaser to Seller at the Closing by cashier's or
bank check or by a certified check of Purchaser drawn upon a bank which is a
member of The New York Clearing House Association (or any successor organization
thereto), in any event to Seller's direct order.
13.4. In the event the net apportionments and adjustments as
provided in Section 13.1 hereof result in a payment due Purchaser, then such
payment shall be made at the Closing by way of a credit against the Cash
Balance.
13.5. Except as otherwise provided in this Agreement, the customs
in respect of title closings, recommended by The Real Estate Board of New York,
Inc. shall apply to all apportionments.
ARTICLE XIV
CLOSING DOCUMENTS
-----------------
14.1. Seller shall deliver or cause to be delivered to Purchaser
on the Closing Date:
14.1.1. A Bargain and Sale Deed without Covenant against
Grantor's Acts containing the covenant required by Section 13 of the
Lien
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Law in the form annexed hereto as Schedule F (hereinbefore and
hereinafter called the "Deed").
----
14.1.2. A Bill of Sale in the form annexed hereto as Schedule G
conveying to Purchaser all personal property owned by Seller and
located at the Property on the Closing Date and used in connection
with the maintenance and operation of the Property.
14.1.3. A letter to each Tenant advising it of the change of
ownership in accordance with General Obligations Law Section 7-105 in
the form annexed hereto as Schedule T.
14.1.4. An Assignment of the Service and Maintenance Agreements
in the form annexed hereto as Schedule H.
14.1.5. An Assignment of the Leases in the form annexed hereto
as Schedule I.
14.1.6. All records within Seller's possession reasonably
required for the operation of the Property, including the Service and
Maintenance Agreements, plans, surveys, original Leases, lease files,
licenses, permits, warranties, guaranties, insurance policies assigned
to Purchaser at Closing, records of expenditures for repairs and
maintenance, and certificate of occupancy.
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14.1.7. An assignment of all assignable licenses and permits in
the form annexed hereto as Schedule J.
14.1.8. Keys and combinations to locks at the Property to the
extent in Seller's possession.
14.1.9. A duly executed letter agreement agreeing to correct
any errors in prorations as soon after the Closing as amounts are
finally determined in the form of Schedule K annexed hereto
(hereinafter called the "Post-Closing Adjustment Letter").
------------------------------
14.1.10. Evidence reasonably acceptable to Purchaser and the
Title Company authorizing the consummation of the transaction
contemplated by this Agreement and the execution and delivery of
documents on behalf of Seller.
14.1.11. The FIRPTA certificate in the form of Schedule L
annexed hereto.
14.1.12. The Real Property Transfer Tax Return pursuant to
Chapter 46, Title II of the New York City Administrative Code
(hereinafter called the "RPT Return").
----------
14.1.13. The New York State Combined Real Property Transfer
Gains Tax Affidavit Real Estate Transfer Tax Return Credit Line
Mortgage
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<PAGE>
Certificate (TP-584) (completing Schedules C and D thereon)
(hereinafter called the "Tax Affidavit").
-------------
14.1.14. Information for Real Estate 1099-S Report Filing in the
form annexed hereto as Schedule M in accordance with Sec. 6045 of the
Internal Revenue Code of 1986, as amended.
14.1.15. A Non-Multiple Dwelling Affidavit.
14.1.16. An updated Schedule of Leases in the form of Schedule B
annexed hereto, together with a schedule of rent arrears prepared by
Seller's managing agent.
14.1.17. Such other documents as may be reasonably required by
Purchaser or the Title Company to consummate the transaction which is
the subject of this Agreement, including affidavits limited to
Seller's actual knowledge as to the status of bankruptcies or
judgments or emergency repair work or similar work lienable by the
City of New York, to the extent any of the foregoing appear as
exceptions on any update to the Contract Title Report.
14.2. Purchaser shall deliver or cause to be delivered to Seller
on the Closing Date:
14.2.1. The Cash Balance.
-49-
<PAGE>
14.2.2. Duplicate originals of the Assignment of Leases, the
Assignment of Service Contracts, and the Post-Closing Adjustment
Letter duly executed by Purchaser.
14.2.3. Evidence reasonably acceptable to Seller and the Title
Company authorizing the consummation by Purchaser of the transaction
which is the subject of this Agreement and the execution and delivery
of documents on behalf of Purchaser.
14.2.4. The RPT Return.
14.2.5. The Tax Affidavit.
14.2.6. An acknowledgement of receipt of the Information for
Real Estate 1099-S Report Filing by Purchaser's attorneys in the form
annexed hereto as Schedule N.
14.2.7. The Government of Israel Release duly executed by
Purchaser.
14.2.8. Such other documents as may be reasonably required by
Seller or the Title Company to consummate the transaction contemplated
by this Agreement.
14.3. Within ten (10) days after the date of this Agreement,
Seller shall deliver to each Tenant an estoppel statement in the form annexed
hereto as Schedule O, together with a notice requesting that such Tenant
promptly execute and deliver such
-50-
<PAGE>
estoppel statement to Seller. Seller shall deliver to Purchaser copies of all
executed estoppel statements reasonably promptly after receipt of same by
Seller. Seller shall use reasonable efforts to obtain executed estoppel
statements from all Tenants prior to the end of the Inspection Period, but
Seller shall not be obligated to commence any action against any Tenant or to
expend any moneys to obtain such estoppels.
ARTICLE XV
VIOLATIONS
----------
15.1. Seller shall have no obligation to comply with or cure, and
Purchaser shall accept title subject to (i) any notes or notices of violations
of law or municipal ordinances, orders or requirements noted in or issued by any
governmental authority having jurisdiction against or affecting the Property at
the Closing Date, including, but not limited to, violations that are the
obligation of a Tenant to cure, and (ii) sidewalk notices, emergency repair
notices, water tap claims, parking violations or other matters of notice which
do not constitute liens against the Property in a specified sum.
ARTICLE XVI
SALES TAX
---------
16.1. Although it is not anticipated that any sales tax shall be
due and payable, Purchaser agrees that Purchaser shall save, defend, indemnify
and hold Seller
-51-
<PAGE>
harmless from and against any and all liability for any sales tax which may now
or hereafter be imposed upon Seller or the Property with respect to the sale of
any personal property. The parties hereto agree that no part of the Purchase
Price is attributable to personal property. The provisions of this Section
shall survive the Closing.
ARTICLE XVII
UNPAID TAXES
------------
17.1. The amount of any unpaid real estate taxes, assessments,
water charges and sewer rents other than items subject to proration as
heretofore provided which Seller is obligated to pay and discharge may, at the
option of Seller, be allowed to Purchaser out of the Cash Balance provided
official bills therefor with interest and penalties thereon calculated to said
date are furnished by Seller at the Closing.
17.2. If on the Closing Date there are any liens or encumbrances
which are not Permitted Encumbrances, Seller may use any portion of the Cash
Balance to satisfy the same, provided Seller shall either deliver to Purchaser
at Closing instruments in recordable form sufficient to satisfy such liens and
encumbrances of record together with the cost of recording or filing said
instruments, or pay such sums or perform such acts as will enable the Title
Company to insure Purchaser that such lien(s) will not be collected out of the
Property without additional premium or charge or indemnity (unless Seller, in
-52-
<PAGE>
its sole discretion, elects to pay such additional premium or charge and/or to
provide such indemnity).
17.3. The existence of (i) any taxes, assessments, water charges,
or sewer rents referred to in Section 17.1 hereof or (ii) any other liens or
encumbrances, if Seller elects to proceed pursuant to the provisions of
Section 17.2 hereof, shall not be deemed Title Objections provided that Seller
shall comply with the respective requirements set forth in Sections 17.1 and
17.2 hereof.
17.4. If request is made of Purchaser within a reasonable time
prior to the Closing Date, Purchaser agrees to provide at the Closing separate
certified checks or official cashier's checks, as requested, aggregating the
amount of the Cash Balance, to facilitate the satisfaction of any unpaid (and
due) real estate taxes, assessments, water charges or sewer rents, and, if
Seller elects to proceed pursuant to the provisions of Section 17.2 hereof, the
payment of any liens and encumbrances referred to in Section 17.2 hereof.
ARTICLE XVIII
CLOSING
-------
18.1. The Deed shall be delivered upon receipt of the payments
provided for in Article II hereof and the documents referred to in Section 14.2
hereof at the offices of Seller's attorneys, Bachner, Tally, Polevoy & Misher,
380 Madison Avenue, New York, New York 10017 at 9:30 A.M. on June 28, 1995, or
such earlier Business Day as
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<PAGE>
Purchaser shall elect upon not less than ten (10) days prior notice to Seller.
Time shall be of the essence as to Purchaser's obligations to close the
transaction which is the subject of this Agreement on June 28, 1995. For
purposes of this Agreement, the "Closing Date" shall mean the date on which the
------------
Closing occurs. The term "Business Day" as used in this Agreement shall mean
------------
all days except Saturdays, Sundays and all days observed by the Federal
Government or New York State as legal holidays.
ARTICLE XIX
NOTICES
-------
19.1. Except as otherwise provided in this Agreement, any and all
notices, elections, demands, requests and responses thereto permitted or
required to be given under this Agreement shall be in writing, signed by the
party giving the same or by its attorneys, and shall be deemed to have been
properly given and shall be deemed effective upon being (i) personally
delivered, or (ii) delivered by express overnight delivery service with receipt
for delivery, or (iii) deposited in the United States mail, postage prepaid,
certified with return receipt requested, to the other party at the address of
such other party set forth below or at such other address within the continental
United States as such other party may designate by notice specifically
designated as a notice of change of address and given in accordance herewith;
provided, however, that the time period in which a response to any such notice,
election, demand or request must be given shall commence
-54-
<PAGE>
on the date of receipt thereof. Personal delivery to a party or to any officer,
partner, agent or employee of such party at said address shall constitute
receipt. Rejection or other refusal to accept or inability to deliver because
of changed address of which no notice has been received shall also constitute
receipt. Any such notice, election, demand, request or response shall be
addressed as follows:
(i) To Seller:
Massachusetts Mutual Life Insurance
Company
c/o Cornerstone Real Estate Advisers, Inc.
311 South Wacker Drive, Suite 980
Chicago, Illinois 60606
Attention: Ms. Elena Walsh
and
Massachusetts Mutual Life Insurance
Company
c/o Cornerstone Real Estate Advisers, Inc.
1500 Main Street, Suite 1400
Springfield, Massachusetts 01115-5288
Attention: John Wooton, Esq.
with a copy to be given simultaneously to:
Bachner, Tally, Polevoy & Misher
380 Madison Avenue
New York, New York 10017-2513
Attention: Martin D. Polevoy, Esq.
-55-
<PAGE>
(ii) To Purchaser:
Ampal Realty Corporation
1177 Avenue of the Americas
New York, New York 10036
Attention: Lawrence Lefkowitz, Esq.
with a copy to be given simultaneously to:
Kronish, Lieb, Weiner & Hellman
1114 Avenue of the Americas
New York, New York 10036-7798
Attention: William Jay Lippman, Esq.
ARTICLE XX
DEFAULT
-------
20.1. If Purchaser fails to accept title and pay the Cash Balance
in accordance with this Agreement, the Deposit together with all interest
accrued thereon, if any, shall be retained by Seller as liquidated damages. The
provisions herein contained for liquidated and agreed-upon damages are bona fide
provisions for such and are not a penalty, the parties agreeing that by reason
of Seller binding itself to the sale of the Property and by reason of the
withdrawal of the Property from sale at a time when other parties would be
interested in acquiring the Property, that Seller will have sustained damages if
Purchaser defaults, which damages will be substantial but will not be capable of
determination with mathematical precision and, therefore, as aforesaid, this
provision for liquidated and agreed-upon damages has been incorporated in this
Agreement as a
-56-
<PAGE>
provision beneficial to both parties. Notwithstanding the foregoing provisions
of this Section, there shall be no limitation on Seller's remedies in the event
of any misrepresentation of Purchaser pursuant to the provisions of Section 23.1
hereof.
20.2. Reference is hereby made to Sections 21.1 and 21.2 hereof
for Purchaser's exclusive remedies in the event of a breach of representation or
failure to perform any agreement set forth in this Agreement on the part of
Seller. If Seller shall refuse to deliver the Deed to Purchaser pursuant to the
provisions of this Agreement, whether or not Purchaser shall have elected to
accept title in accordance with the provisions of Section 5.2 hereof, Purchaser
shall be deemed to have elected to terminate this Agreement, and Purchaser shall
be entitled to a refund of the Deposit together with any interest accrued
thereon. In lieu of a return of the Deposit, Purchaser may elect to sue for
specific performance provided Purchaser notifies Seller of its election to
commence an action for specific performance within thirty (30) days after the
date scheduled for the Closing and actually commences such action in a court of
competent jurisdiction within sixty (60) days after the date scheduled for
Closing.
ARTICLE XXI
CONDITIONS; SURVIVAL
--------------------
21.1. (a) If Purchaser shall have actual knowledge, or should
have knowledge by inspection of the Property or of the public records at or
before the Closing,
-57-
<PAGE>
that (i) any representation of Seller hereunder is untrue, as of the date
represented, or (ii) Seller has failed to perform, observe or comply with any
covenant, agreement or condition on its part to be performed hereunder,
Purchaser shall notify Seller of same within five (5) days after discovery by
Purchaser, and Purchaser's failure to so notify Seller shall be deemed to
constitute Purchaser's waiver of same as a condition to Closing and otherwise.
(b) In the event that (A) any of Seller's representations made
in Section 3.1 hereof are not true as of the date hereof (and for the purposes
hereof a representation shall be untrue only if factually untrue and having a
material adverse business or legal impact on Purchaser), and (B) Purchaser has
actual knowledge, or should have actual knowledge by inspection of the Property
or of the public records at or before the Closing that any of Seller's
representations referred to in clause (A) of this sentence are untrue, then
Purchaser may, as its sole remedy (whether at law or in equity), all other
claims for damages or specific performances being expressly waived by Purchaser,
elect to terminate this Agreement, and the sole liability of Seller shall be to
return to Purchaser the Deposit together with any interest accrued thereon, and
thereupon, this Agreement shall be null and void and the parties hereto shall be
relieved of all further obligations and liability under this Agreement.
21.2. Except as specifically set forth to the contrary in this
Agreement, none of the representations, warranties, covenants, indemnities,
agreements, obligations
-58-
<PAGE>
or commitments made by Seller in this Agreement shall survive the Closing, the
same being merged in the conveyance. If survival is herein provided and no time
specified, such matter shall be the basis for a claim against Seller only if
asserted in writing within the one year next following the Closing Date.
ARTICLE XXII
ASSIGNMENT
----------
22.1. No assignment of Purchaser's interest hereunder is permitted
and any such prohibited assignment shall not be valid or binding on Seller
unless Seller shall expressly consent thereto in writing. Notwithstanding the
foregoing, Purchaser shall be permitted to assign this Agreement on one occasion
at any time after the date of this Agreement and prior to the date which is
thirty-five (35) days prior to the date scheduled for the Closing to an entity
which controls, is controlled by or is under common control with Purchaser,
provided that Purchaser gives Seller written notice of such assignment at least
three (3) business days prior to the effective date thereof accompanied by (i)
reasonable proof of the control relationship between Purchaser and the assignee,
(ii) the executed instrument of assignment (which shall be in form and content
reasonably satisfactory to Seller) pursuant to which the assignee agrees to
assume all obligations and liabilities of Purchaser under this Agreement, and
(iii) completed and executed New York State Real Property Transfer Gains Tax
Transferor and Transferee Questionnaires
-59-
<PAGE>
relating to such assignment. In the event Purchaser assigns this Agreement in
accordance with all of the provisions of the immediately preceding sentence, the
assignor (i.e., Ampal Realty Corporation) shall have no further obligations or
liabilities under this Agreement.
ARTICLE XXIII
BROKERAGE COMMISSIONS
---------------------
23.1. Purchaser represents and warrants to Seller that it has
dealt with no broker, finder or consultant other than Stonehenge Partners, Inc.
(hereinafter called "Broker"), in connection with the transaction which is the
------
subject of this Agreement; that all negotiations involving Purchaser with
respect to the terms of this Agreement were conducted by or through Broker; and
that in the event any claim is made for a broker's, finder's or consultant's
commission or fee by anyone other than Broker as a result of any acts or actions
of Purchaser or its representatives or affiliates with respect to the within
transaction Purchaser, its heirs, successors and assigns do hereby agree to
indemnify, defend and hold Seller harmless from any and all loss, liability,
cost, damage or expense with respect to such claims (including, without
limitation, reasonable attorneys' fees and disbursements) without any charge or
cost to Seller. Seller shall pay the brokerage commission to Broker in
accordance with Seller's agreement with Broker if and when title passes
hereunder. Purchaser has also advised Seller that Purchaser has been advised in
connection with this transaction by Moshe Indig, whose compensation in
connection with
-60-
<PAGE>
this transaction shall be paid by Purchaser. Purchaser, its heirs, successors
and assigns do hereby agree to indemnify, defend and hold Seller harmless from
any and all loss, liability, cost, damage or expense with respect to any claims
(including, without limitation, reasonable attorneys' fees and disbursements)
made by Moshe Indig. In addition, at Closing Purchaser shall deliver to Seller
a release of Seller duly executed by Moshe Indig releasing Seller from all
claims for brokerage commissions or other compensation, such release to be in
form reasonably satisfactory to Seller. Purchaser hereby grants to Seller a
security interest in the Deposit to secure the indemnifications contained in
this Section 23.1, and Seller shall have the right (but shall not be obligated)
to apply the Deposit or portions thereof to cure any breach by Purchaser of the
indemnification provisions of this Section 23.1 which is not cured within ten
(10) days after Purchaser's receipt of written notice thereof. In the event
Seller draws on the Deposit pursuant to the preceding sentence, Purchaser shall
be required to replace such sums within five (5) business days of receiving
written notice from Seller that it has drawn funds from the Deposit. The failure
by Purchaser to timely replace such funds shall be deemed a default hereunder by
Purchaser resulting in Seller having the right to exercise any of its remedies
arising out of a default by Purchaser. The provisions of this Section 23.1
shall survive the Closing or any termination of this Agreement for any reason
whatsoever.
-61-
<PAGE>
ARTICLE XXIV
ESCROW
------
24.1. The parties hereto have mutually requested that Bachner,
Tally, Polevoy & Misher act as escrow agent (hereinbefore and hereinafter called
the "Escrow Agent") for the purpose of holding the Deposit in accordance with
------------
the terms of this Agreement and the Escrow Letter executed by and among Seller,
Purchaser and Escrow Agent contemporaneously with the execution of this
Agreement (hereinafter called the "Escrow Letter"). Purchaser recognizes that
------ ------
Escrow Agent represents Seller herein and has agreed to act as Escrow Agent as
an accommodation to both parties hereto. Purchaser further acknowledges and
agrees that in the event of any dispute between the parties to this Agreement or
the Escrow Letter, Escrow Agent shall be free to continue its representation of
Seller with regard to these matters. The Deposit, together with the interest
accrued thereon, if any, shall be held by Escrow Agent until the earlier of
(y) the Closing, or (z) such time as Seller or Purchaser may be entitled to a
refund thereof in accordance with this Agreement, at which time Escrow Agent
shall remit said sum, together with any interest actually accrued thereon, to
the party entitled thereto in accordance with this Agreement. At the Closing,
the Deposit, together with any interest actually accrued thereon, shall be paid
to Seller.
-62-
<PAGE>
ARTICLE XXV
MISCELLANEOUS
-------------
25.1. This Agreement cannot be changed, modified, discharged or
terminated by any oral agreement or any other agreement unless the same is in
writing and signed by the party against whom enforcement of the change,
modification, discharge or termination is sought. Neither Seller nor Purchaser
has made representations of any kind with respect to the subject of this
Agreement except as the same may be expressly set forth in this Agreement.
25.2. The Article and Schedule headings herein are for convenience
only, and are not to be used in determining the meaning of this Agreement or any
part hereof.
25.3. This Agreement and its interpretation and enforcement shall
be governed by the laws of the State of New York.
25.4. This Agreement shall be binding on the successors and
assigns of the parties hereto.
25.5. If any term or provision of this Agreement, or any part of
such term or provision, or the application thereof to any person or circumstance
shall to any extent be held invalid or unenforceable, the remainder of this
Agreement or the application of such term or provision or remainder thereof to
persons or circumstances other than those as to which it is held invalid and
unenforceable shall not be affected thereby and each
-63-
<PAGE>
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
25.6. All Schedules which are annexed to this Agreement are a part
of this Agreement and are incorporated herein by reference.
25.7. The provisions of this Agreement are for the sole benefit of
the parties to this Agreement and their successors and permitted assigns and
shall not give rise to any rights by or on behalf of anyone other than such
parties and no party is intended to be a third party beneficiary hereof.
25.8. Neither Purchaser or its agents nor Seller or its agents
shall make any disclosure of the terms of this Agreement without the prior
written consent of the other; provided that the foregoing shall not be construed
to prevent Seller or Purchaser from (i) subject to the remaining provisions of
this Section 25.8, making any disclosure required by any applicable law or
regulation, or (ii) making, on a confidential basis, such disclosures as Seller
or Purchaser reasonably deem necessary or appropriate to its legal counsel or
accountants (including outside auditors) or Purchaser's lending institution, or
(iii) making such filings with the Securities and Exchange Commission
(hereinafter called the "SEC"), American Stock Exchange or other regulatory
---
agency which Purchaser reasonably believes are required by law. In addition,
following the expiration of the Inspection Period and provided this Agreement is
not terminated in accordance with the provisions of Section 9.1(d) hereof,
Purchaser shall be permitted to issue a press release
-64-
<PAGE>
announcing the transaction contemplated hereby, provided such press release has
been approved in advance by Seller, such approval not to be unreasonably
withheld (it being understood that such press release may disclose the Purchase
Price). In connection with any filing of this Agreement with the SEC, American
Stock Exchange or other regulatory agency, Purchaser will apply for an order of
the SEC under Rule 24b-2 promulgated under the Securities Exchange Act of 1934,
as amended (hereinafter called the "Exchange Act") (or any other applicable rule
------------
under the Exchange Act or the Securities Act of 1933, as amended) granting
confidential treatment to the Purchase Price set forth in Section 2.1 of this
Agreement (including, without limitation, the Deposit and the Cash Balance) for
a period (hereinafter called the "Confidential Period") of (i) 90 days, if this
-------------------
Agreement is not terminated pursuant to Section 9.1(d) hereof and (ii) until
December 31, 2009 (or such earlier date as is agreed to by the SEC, American
Stock Exchange or such other regulatory agency, as the case may be), if this
Agreement is so terminated. Purchaser will request that such order be issued
and maintained during the Confidential Period. At the request of Purchaser,
Seller shall confirm to the SEC, American Stock Exchange or such other
regulatory agency, as the case may be, that Seller is joining in such request
for confidential treatment. This Section 25.8 shall (i) survive the Closing,
and (ii) notwithstanding any other provision in this Agreement to the contrary,
survive any termination of this Agreement.
-65-
<PAGE>
25.9. This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Agreement to be drafted.
25.10. This Agreement may be executed in any number of
counterparts, each of which shall, when executed, be deemed to be an original
and all of which shall be deemed to be one and the same instrument.
25.11. This Agreement shall not become a binding obligation upon
Seller until the same has been fully executed by Purchaser and Seller and until
a fully executed original counterpart thereof has been delivered by Seller to
Purchaser.
25.12. Neither this Agreement nor any other document related
hereto nor any memorandum thereof shall be recorded, and any such recording
shall be void and of no force or effect.
25.13. In the event that any litigation arises under this
Agreement, the prevailing party shall be entitled to recover, as a part of its
judgment, reasonable attorneys' fees.
25.14. All understandings and agreements heretofore had between
the parties hereto with respect to the subject matter of this Agreement are
merged into this Agreement, which alone fully and completely expresses their
agreement with respect to the subject matter of this Agreement.
-66-
<PAGE>
25.15. Purchaser acknowledges that the Purchaser's Information
furnished and to be furnished to Purchaser hereunder is being so furnished on
the condition that Purchaser maintain the confidentiality thereof. Accordingly,
Purchaser shall, and shall cause (i) if applicable, its directors, officers and
other personnel and (ii) its agents, employees and representatives to hold in
strict confidence and not disclose to any other party without the prior written
consent of Seller any of the information in respect of the Property delivered
to Purchaser by Seller or any of its agents, representatives or employees.
Purchaser shall return all of the Purchaser's Information, on or before ten (10)
days after the first to occur of (a) such time as Purchaser determines that it
shall not acquire the Property, or (b) such time as this Agreement is terminated
for any reason. Notwithstanding anything to the contrary hereinabove set forth,
Purchaser may disclose such information (i) on a need-to-know basis to its
employees or members of professional firms serving it in connection with this
transaction, and (ii) as is requested by an institutional lender in connection
with Purchaser's financing of the purchase of the Property. The provisions of
this Section 25.15 shall survive any termination of this Agreement for any
reason whatsoever.
-67-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as
of the day and year first above written.
SELLER:
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: Cornerstone Real Estate Advisers, Inc.,
Its Agent
By: /s/ Steven P. Wallace
-----------------------------
Name: Steven P. Wallace
Title: Managing Director
PURCHASER:
AMPAL REALTY CORPORATION
By: /s/ Lawrence Lefkowitz
-------------------------------
Name: Lawrence Lefkowitz
Title: President
-68-
<TABLE><CAPTION>
Exhibit 11
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
SCHEDULE SETTING FORTH COMPUTATION OF EARNINGS PER CLASS A SHARE
----------------------------------------------------------------
THREE MONTHS ENDED MARCH 31, 1995 1994
----------------------------------------------------------------------------------------
(Amounts in thousands, except per share data) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Weighted average number of shares
outstanding:
4% Preferred...................... 206 213
6-1/2% Preferred.................. 1,112 1,170
Class A........................... 20,852 18,393
Common............................ 3,000 3,000
======= =======
Weighted average number of shares out-
standing assuming conversion of pre-
ferred stock into Class A shares:
Class A........................... 25,218 89.37% 22,968 88.45%
Common............................ 3,000 10.63 3,000 11.55
------- ------- ------- -------
28,218 100.00% 25,968 100.00%
======= ======= ======= =======
NET INCOME....................... $ 1,586 $ 2,674
======= =======
Allocation of net income on the
basis of the respective dividend
rights of the above classes of
stock, pro rata:
Class A........................... $ 1,417 89.37% $ 2,365 88.45%
Common............................ 169 10.63 309 11.55
------- ------- ------- -------
$ 1,586 100.00% $ 2,674 100.00%
======= ======= ======= =======
Earnings per Class A share........... $ .06 $ .10
===== =====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Registrant's Form 10-Q for the Quarterly Period Ended March 31, 1995
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 49,629
<SECURITIES> 129,139
<RECEIVABLES> 82,497
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 45,866
<PP&E> 43,102
<DEPRECIATION> 12,140
<TOTAL-ASSETS> 338,093
<CURRENT-LIABILITIES> 40,718
<BONDS> 121,697
<COMMON> 23,862
0
6,575
<OTHER-SE> 145,241
<TOTAL-LIABILITY-AND-EQUITY> 338,093
<SALES> 11,282
<TOTAL-REVENUES> 19,609
<CGS> 0
<TOTAL-COSTS> 10,536
<OTHER-EXPENSES> 1,744
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,723
<INCOME-PRETAX> 3,606
<INCOME-TAX> 2,020
<INCOME-CONTINUING> 1,586
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,586
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
