<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): December 5, 1997
CEDAR INCOME FUND, LTD
(Exact name of registrant as specified in its charter)
Iowa 0-14510 42-1241468
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) No.) Identification No.)
4333 Edgewood Road N.E., 52499
Cedar Rapids, Iowa (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (319) 398-8975
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On December 5, 1997, Cedar Income Fund, Ltd. announced that it has
entered into a Memorandum of Understanding with an unaffiliated entity
(the "Buyer") pursuant to which the Buyer, subject to certain conditions,
will commence a cash tender offer on or prior to January 15, 1998, for
all of the outstanding shares of common stock of Cedar for $7.00 per
share. It is anticipated that the closing of the tender offer will be
subject to certain conditions, including the tender of at least a
majority of the outstanding shares of Cedar. AEGON USA, Inc., beneficial
owner of approximately 26% of the outstanding shares of Cedar, has agreed
with the Buyer, subject to certain conditions, to tender its shares of
Cedar. A news release issued on December 5, 1997, is incorporated by
reference to Item 7(c) of this report, and included as an exhibit hereto.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
(2.1) Memorandum of Understanding dated as of December 5, 1997,
between Cedar Income Fund, Ltd. and SKR Management Corp.
(2.2) Escrow Agreement dated as of December 5, 1997, between
Cedar Income Fund, Ltd., SKR Management Corp. and American
Title Company.
(2.3) Tender Agreement dated as of December 5, 1997, between
various subsidiaries of AEGON USA, Inc. and SKR Management
Corp.
(99) News release dated December 5, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
CEDAR INCOME FUND, LTD
/s/ Alan F. Fletcher
Alan F. Fletcher
Vice President and Treasurer
(principal financial officer)
Dated: December 8, 1997
<PAGE>
EXHIBIT INDEX
Exhibit
Item Title or Description
2.1 Memorandum of Understanding dated as of December 5, 1997, between
Cedar Income Fund, Ltd. and SKR Management Corp.
2.2 Escrow Agreement dated as of December 5, 1997, between Cedar Income
Fund, Ltd., SKRManagement Corp. and American Title Company.
2.3 Tender Agreement dated as of December 5, 1997, between various
subsidiaries of AEGON USA, Inc. and SKR Management Corp.
99 News Release dated December 5, 1997.
<PAGE>
EXHIBIT 2.1
Memorandum of Understanding
This Memorandum of Understanding is made and entered into as of the
5th day of December, 1997, by and between Cedar Income Fund, Ltd., an
Iowa corporation (hereinafter referred to as "Cedar"), and SKR Management
Corp., a New York corporation (hereinafter referred to as "SKR").
W i t n e s s e t h:
Whereas, Cedar is in the business of owning and operating commercial
property;
Whereas, SKR is proposing to make an all cash tender offer of not
less than $7.00 per share for all of the outstanding shares of common
stock, $1.00 par value per share of Cedar (the "Shares") (hereinafter
referred to as the "Tender Offer"), and is willing to deposit $750,000 in
cash as an earnest money deposit (hereinafter referred to as the "Earnest
Money Deposit") in connection with the Tender Offer, all upon the terms
and conditions hereinafter set forth; and
Whereas, the Earnest Money Deposit will be held by American Title
Company, as agent (the "Agent"), pursuant to an Escrow Agreement dated as
of the date hereof (the "Escrow Agreement");
Now, Therefore, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, the parties hereto hereby agree as follows:
1. Earnest Money Deposit. Concurrently with the execution of this
Agreement, SKR is making the Earnest Money Deposit to the Agent to be
held for the benefit of Cedar in accordance with the terms of this
Agreement. The Earnest Money Deposit shall be held by the Agent pursuant
to the Escrow Agreement.
2. Retention of Earnest Money Deposit. Cedar shall be entitled to
retain the Earnest Money Deposit for its own benefit, except under the
following circumstances (each hereinafter referred to as a "Repayment
Event"):
(i) SKR notifies Cedar in writing within fifteen days after
the execution of this Agreement by both parties that, based upon an
inspection of one or more of the properties owned by Cedar, SKR
estimates in good faith that there exists environmental problems
with respect to one or more of the properties respecting which the
owner or operator of said properties could reasonably be expected to
incur liability of at least $100,000 in the aggregate in connection
with the remediation of such problems and/or the payment of fines,
penalties or damages to third parties; or
(ii) Cedar enters into a contract with a third party for the
sale or other disposition of all or substantially all of the assets
of Cedar or the merger or consolidation of Cedar into another
entity, or any reclassification or restructuring involving or
affecting the Shares prior to or during the pendency of the Tender
Offer; or
(iii) provided SKR has commenced (as defined under Rule 14d-2
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) the Tender Offer within 60 days after the execution of this
Agreement by both parties in full compliance with all applicable
Federal and state laws, and subject only to the Tender Offer
Conditions, as such term is hereinafter defined (hereinafter
referred to as the "Tender Offer"), SKR fails to accept for payment
by February 12, 1998 all Shares tendered pursuant to the Tender
Offer solely as a result of a failure of the Tender Offer
Conditions; or
(iv) the Administrative and Advisory Agreement between Cedar
and Aegon USA Realty Advisors, Inc. ("Advisors"), and the Management
Agreement between Cedar and Aegon USA Realty Management, Inc.
("Management") shall not have been terminated by all parties thereto
effective upon consummation of the Tender Offer; or
(v) a breach by Cedar of its covenants contained in this
Agreement; or
(vi) the Board of Directors of Cedar does not recommend to the
shareholders of Cedar that they tender their shares pursuant to the
Tender Offer or withdraws such a recommendation; or
(vii) the payment for all outstanding Shares tendered pursuant
to the Tender Offer, provided such payment occurs prior to
February 12, 1998.
As used herein, the term "Tender Offer Conditions" shall mean: (i) there
being validly tendered and not withdrawn prior to the expiration of the
Tender Offer at least a majority of the outstanding Shares, (ii) the
expiration or termination of any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the receipt
of any applicable governmental approval or consent, and (iv) the absence
of any order or any action or proceeding, by or before any court or
governmental, administrative or regulatory authority or agency which does
or would reasonably be expected to unreasonably delay or burden, restrain
or prohibit the consummation of the Tender Offer or seek to obtain
material damages in connection therewith.
3. Repayment of Earnest Money Deposit; Release to Cedar. (i)
Within five business days after the occurrence of a Repayment Event,
Cedar shall instruct the Agent to pay to SKR the Earnest Money Deposit
together with any other funds held pursuant to the Escrow Agreement and
thereafter none of the parties hereto shall have any further rights or
remedies hereunder. (ii) The Earnest Money Deposit together with any
other funds held pursuant to the Escrow Agreement shall be released by
the Agent to Cedar, and SKR's right to a return of such amount pursuant
to a Repayment Event shall terminate, upon the earliest to occur of (a)
January 15, 1998 if SKR has not commenced (as defined under said Rule 14d-
2) the Tender Offer by such date, (b) February 12, 1998, as may be
extended as contemplated hereunder, and (c) December 31, 1997, if SKR
shall not have delivered to Cedar by 5:00 p.m. Central Time on such date
a signed letter in form and substance reasonably acceptable to Cedar from
a bank or other financial institution having capital and surplus of at
least $75,000,000 committing such bank or financial institution to
finance the acquisition of the Shares by SKR pursuant to the Tender
Offer, subject only to such conditions (including, without limitation,
the appraised value of any collateral to be pledged) as are reasonably
customary in letters of such type. Upon a release of the Earnest Money
Deposit pursuant to this Section 3, this Agreement shall terminate.
4. Conduct of Business. Until the earliest to occur of (a) the
date of acceptance for payment by SKR of any Shares tendered in the
Tender Offer, (b) termination of the Tender Offer, or (c) February 12,
1998, Cedar agrees to conduct its business and to hold its assets in the
ordinary course consistent with past practice and, without the prior
written consent of SKR, will not (i) enter into any material agreements,
except for indemnity agreements with the officers and directors of Cedar,
the purchase of officers and directors liability insurance coverage for 3
years with an aggregate premium not to exceed $60,000, and the incurrence
of reasonable expenses related to the transactions contemplated by this
Agreement, (ii) make any material changes in its business or assets,
(iii) amend or modify its articles of incorporation or bylaws,
(iv) declare or pay any cash or stock dividends or distributions to
shareholders except regular quarterly dividends in an amount not to
exceed $.10 per share per quarter or such greater amount as Cedar deems
necessary to maintain its status as a "real estate investment trust"
pursuant to Section 856 et seq. of the Internal Revenue Code of 1986, as
amended, (v) issue any equity securities of Cedar or any securities
convertible or exercisable into such equity securities, or (vi) incur any
indebtedness (other than in connection with build outs associated with
leasing activities and accounts payable incurred in the ordinary course
of business consistent with past practice) other than in the ordinary
course of business consistent with past practice but not in an amount to
exceed $25,000 for any individual incurrence or $100,000 in the
aggregate. In the event of the sale of Corporate Center East Phase I
pursuant to and in accordance with the option currently outstanding ( a
copy of which has previously been delivered to SKR), Cedar agrees to
segregate and retain the proceeds from such sale until the earliest to
occur of (a), (b) or (c) above and SKR hereby consents to such sale.
Notwithstanding the foregoing, in the event the Tender Offer is not
commenced (as defined under said Rule 14d-2) by January 15, 1998, this
provision shall be of no further force or effect.
5. Fiduciary Limitations. Subject to the provisions of (i), (ii)
and (iii) in this Section 5 set forth below, Cedar agrees that it shall
(a) not, and that it shall not authorize or permit any of its officers,
directors, employees, agents and representatives (including, without
limitation, any investment banker, attorney or accountant) to, initiate,
solicit or encourage (including by way of furnishing information or
assistance), or take any other action to facilitate, any inquiries
concerning, or the making or implementation of, any proposal relating to,
or that may reasonably be expected to lead to any Competing Transaction
(as defined below), or engage in any negotiations concerning, agree to or
endorse, provide any confidential information or data to any person
relating to a Competing Transaction; and (b) notify SKR promptly if any
such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, Cedar, or any of its officers, directors,
employees, agents or representatives (such notification to include the
terms and assumptions of the inquiry or proposal, the identity of the
parties making such inquiry or proposal and, if such inquiry or proposal
is in writing, a copy of the inquiry or proposal). Notwithstanding the
foregoing, nothing contained in this Agreement shall prohibit Cedar from:
(i) furnishing information to, or entering into discussions,
negotiations or a transaction with, any person or entity that makes
an unsolicited contact in connection with a bona fide Competing
Transaction, if, and only to the extent that:
(a) the Board of Directors of Cedar determines in good
faith that such action is required for the Board of Directors
to comply with its fiduciary duties to shareholders imposed by
law;
(b) prior to Cedar furnishing any confidential
information to such other person, such other person executes a
confidentiality agreement with Cedar in customary form;
(c) prior to furnishing such information to, or entering
into discussions (other than responding to an initial inquiry)
or negotiations with, such person or entity, Cedar provides
written notice to SKR to the effect that it is furnishing
information to, or entering into discussions or negotiations
with, such person or entity; and
(d) Cedar keeps SKR reasonably informed of the status of
any such discussions or negotiations;
(ii) terminating and concluding any discussions regarding
proposals with respect to a Competing Transaction received by Cedar
prior to the execution of this Agreement by both parties; or
(iii) taking or disclosing to the shareholders of Cedar a
position with respect to any such Competing Transaction, or this
transaction that, in the judgment of the Board of Directors of
Cedar, as determined in good faith, is required for the Board of
Directors to comply with its fiduciary duties to shareholders
imposed by law, and, to the extent applicable, complying with
Rule 14e-2 promulgated under the Exchange Act with regard to a
Competing Transaction.
As used herein, "Competing Transaction" means any of the following
transactions (other than the transactions contemplated by this Agreement)
involving Cedar: (i) any merger, consolidation, share exchange, business
combination or similar transaction; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of thirty-five percent
(35%) or more of the assets of Cedar; (iii) any tender offer or exchange
offer for thirty-five percent (35%) or more of the outstanding shares of
capital stock of Cedar; (iv) any person acquiring beneficial ownership
of, or any group (as such term is defined under Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder) being
formed which beneficially owns or has the right to acquire beneficial
ownership of, thirty-five percent (35%) or more of the outstanding shares
of capital stock of Cedar; or (v) any public announcement of a proposal,
plan or intention to do any of the foregoing or any agreement to engage
in any of the foregoing.
6. Recommendation of Cedar's Board. Subject to the provisions of
Section 5 hereof and the receipt and nonwithdrawal of an opinion of
Raymond James & Associates, Inc. that the consideration to be paid to the
holders of Shares in the Tender Offer is fair to the shareholders of
Cedar from a financial point of view, Cedar agrees to recommend in the
Schedule 14d-9 to be filed by Cedar in connection with the Tender Offer
to its shareholders that they tender their Shares in the Tender Offer.
7. Environmental Testing. Cedar agrees to provide SKR and its
representatives with reasonable access to all of its properties during
the fifteen day period following the execution of this Agreement by both
parties for purposes of conducting environmental inspections of said
properties.
8. Tender Offer. Without the prior written consent of Cedar, SKR
shall not (i) decrease the price per share or change the form of
consideration payable in the Tender Offer, (ii) decrease the number of
Shares sought in the Tender Offer, or (iii) change the Tender Offer
Conditions or impose additional conditions to the Tender Offer. Upon the
terms and subject to the Tender Offer Conditions, SKR will accept for
payment and purchase, as soon as permitted under the terms of the Tender
Offer, all Shares properly and validly tendered and not withdrawn prior
to the expiration of the Tender Offer.
9. Director and Officer Liability. SKR agrees that Sections 4.2,
4.4 and Article X of the Restated Articles of Incorporation of Cedar in
effect on the date of this Agreement shall not be amended, repealed or
otherwise modified for a period of 60 months after the consummation of
the Tender Offer in any manner that would reasonably be expected to
adversely affect the rights thereunder of individuals who at any time
prior to such consummation were directors or officers of Cedar in respect
of actions or omissions occurring at or prior to such consummation
(including, without limitation, the transactions contemplated by this
Agreement), unless such modification is required by law.
Each present or former officer or director of Cedar shall have
rights as a third party beneficiary under this Section 9 as separate
contractual rights for his or her benefit and such right shall be
enforceable by such person, its heirs and personal representatives and
shall be binding on Cedar and its successors and assigns.
Cedar shall cause the resignation of its officers and directors
effective upon consummation of the Tender Offer.
10. Break-up Fee. (i) In the event that Cedar enters into an
agreement in respect of a Competing Transaction prior to or during the
pendency of the Tender Offer or Cedar's board of directors does not
recommend to the shareholders of Cedar that they tender their Shares
pursuant to the Tender Offer or withdraws such a recommendation, then
Cedar shall be obligated concurrently with either such event to pay to
SKR, no later than the closing date of the Competing Transaction, a cash
fee of $100,000.
(ii) Upon payment of the amount specified in clause (i) of this
Section 10, Cedar shall have no further liability or obligation
whatsoever to SKR. The provisions of clause (i) of this Section 10
shall be of no force and effect and no payment shall be made to SKR
if: (a) SKR for any reason (other than the occurrence of any of the
events specified in clause (i) of this Section 10) determines not to
pursue the transaction with Cedar contemplated by this Agreement or
SKR fails to pay for all Shares validly tendered in the Tender
Offer; or (b) any regulatory approval required for the consummation
of Tender Offer is not obtained.
11. Notice. Each notice, request, demand, approval or other
communication which may be or is required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been
properly given when delivered personally at the address set forth below
for the intended party during normal business hours at such address, when
sent by facsimile or other electronic transmission to the respective
facsimile transmission numbers of the parties set forth below (with
receipt confirmed), or when sent by recognized overnight courier or three
(3) business days after being sent by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Cedar:
Cedar Income Fund, Ltd.
4333 Edgewood Road N.E.
Cedar Rapids, Iowa 52499
Attention: Maureen DeWald,
Vice President and Secretary
Facsimile: (319) 369-2188
If to SKR:
SKR Management Corp.
44 South Bayles Avenue
Port Washington, New York 11050
Attention: Brenda Walker,
Vice President
Facsimile: (516) 883-5975
Notices shall be given to such other addressee or address, or both, or by
way of such other facsimile transmission number, as a particular party
may from time to time designate by written notice to the other party
hereto. Each notice, request, demand, approval or other communication
which is sent in accordance with this Section shall be deemed given and
received for all purposes of this Agreement as of two business days after
the date of deposit thereof for mailing in a duly constituted United
States post office or branch thereof, one business day after deposit with
a recognized overnight courier service or upon confirmation of receipt of
any facsimile transmission. Notice given to a party hereto by any other
method shall only be deemed to be given and received when actually
received in writing by such party.
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of State of Iowa.
13. Entire Agreement. This Agreement contains all of the terms and
conditions agreed upon by the parties hereto, and no other agreements,
oral or otherwise, regarding the subject matter hereof shall be deemed to
exist or bind the parties hereto unless in writing and executed by the
parties hereto.
14. Reasonable Best Efforts. Subject to the terms and conditions
of this Agreement, each party will use its reasonable best efforts to
take, or cause to be taken, all action and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and
regulations to consummate the transactions contemplated by this
Agreement. If required by SKR, Cedar agrees to provide a list of
shareholders to SKR for the purpose of allowing SKR to mail the
appropriate materials to shareholders with respect to the Tender Offer.
15. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and assigns.
16. Amendments. This Agreement cannot be amended except in a
writing signed by both parties hereto.
17. Assignment. SKR may assign its rights under this Agreement to
a new entity formed by SKR or persons affiliated with SKR for the purpose
of consummating the transactions contemplated by this Agreement;
provided, however, that SKR shall remain primarily liable for the
obligations contained in this Agreement.
18. Acknowledgment. Notwithstanding Section 2 (iv) above, SKR
acknowledges that, pursuant to an Agreement of Co-Tenancy dated as of
September 28, 1988, Life Investors Insurance Company of America ("LIICA")
has the right, during the term of the co-tenancy contemplated by such
agreement, to manage Germantown Square Shopping Center and the right to
appoint a third party to do so. SKR acknowledges that LIICA has
appointed Advisors and Management to perform such function and hereby
consents to such appointment.
19. Option for Extension of Certain Dates. SKR shall have the
option to extend the February 12, 1998, date contained in Sections
2(iii), 2(vi), 3(ii)(b) and 4(c) of this Agreement until March 16, 1998,
by giving written notice of its election to extend such date to Cedar
prior to 5:00 p.m. Central Time on February 12, 1998, provided that
either (i) SKR delivers to the Escrow Agent for the benefit of Cedar
$250,000 in immediately available funds to be held as an increase in the
Earnest Money Deposit prior to 5:00 p.m. Central Time on February 12,
1998, or (ii) the Tender Offer is required to be held open beyond
February 12, 1998 as a result of an increase by SKR in the per share cash
consideration to be paid in the Tender Offer. Any additional funds so
delivered shall be considered part of the Earnest Money Deposit to be
held pursuant to, and subject to all the terms and conditions of, this
Agreement and the Escrow Agreement.
In Witness Whereof, the parties hereto have executed this Agreement
as of the day and year first above written.
Cedar Income Fund, Ltd.
/s/ Maureen DeWald
Vice President
SKR Management Corp.
/s/ Leo S. Ullman
President
EXHIBIT 2.2
Escrow Agreement
This Escrow Agreement is made and entered into as of December 5,
1997 by and between Cedar Income Fund, Ltd., an Iowa corporation
("Cedar"), SKR Management Corp., a New York corporation ("SKR"), and
American Title Company (the "Escrow Agent").
Whereas, concurrently with the execution of this Agreement, Cedar
and SKR are entering into a Memorandum of Understanding (the "MOU") which
provides for, among other things, the deposit by SKR of $750,000 (which
amount may be increased in certain circumstances) with the Escrow Agent
to be held for the benefit of Cedar (the "Earnest Money Deposit"); and
Whereas, the Earnest Money Deposit is to be held by the Escrow Agent
for the benefit of Cedar pursuant to the terms of this Agreement;
Now, Therefore, in consideration of the premises and the agreements
herein contained, Cedar, SKR and the Escrow Agent agree as follows:
1. SKR hereby deposits $750,000 in immediately available
funds with the Escrow Agent. By its execution hereof, the Escrow
Agent acknowledges receipt of such deposit. Such deposit is
referred to herein as the "Earnest Money Deposit." The Earnest
Money Deposit shall be held in a separate account of the Escrow
Agent segregated from all other assets or funds of or held by the
Escrow Agent. Such separate account shall be designated as the
"Cedar Escrow Account."
2. Investment of Earnest Money Deposit. The Earnest Money
Deposit shall be invested in either (a) The One Group Government
Money Market Fund, or (b) The One Group Treasury Only Money Market
Fund. All investment earnings on the Earnest Money Deposit shall be
held pursuant to this Agreement and distributed to either Cedar or
SKR as provided in Section 3 hereof. The Escrow Agent shall have no
responsibility for the loss of principal or interest as a result of
the investment of any funds held pursuant to this Agreement,
provided that such funds are invested in accordance with the
instructions set forth in this Section 2.
3. Distribution of Earnest Money Deposit. (a) The Escrow
Agent shall distribute the Earnest Money Deposit, together with
investment earnings thereon, to SKR promptly upon receipt of written
notice from Cedar that a Repayment Event (as defined in the MOU) has
occurred. (b) The Escrow Agent shall distribute the Earnest Money
Deposit, together with investment earnings thereon, to Cedar
promptly upon receipt of written notice from Cedar that it is
entitled to such distribution pursuant to Section 3(ii) of the MOU.
(c) There shall be no partial distributions of funds held pursuant
to this Agreement.
4. Resignation of Escrow Agent. The Escrow Agent may resign
as escrowee hereunder by giving written notice of its resignation to
Cedar and SKR. Within 20 days after delivery of such resignation
notice to Cedar and SKR, Cedar shall appoint a successor Escrow
Agent, which shall be reasonably acceptable to SKR, and, upon
consent in writing by such successor Escrow Agent to such
appointment, the resigning Escrow Agent shall deliver the Earnest
Money Deposit and any investment earnings thereon then held pursuant
to this Agreement to such successor Escrow Agent. Each successor
Escrow Agent shall be subject to the same duties and shall have the
same rights as the initial Escrow Agent hereunder.
5. General Provisions. This Agreement shall be subject to
the following additional terms and conditions:
(a) The Escrow Agent shall have no rights, titles,
powers, authorities or discretions in respect of the Earnest
Money Deposit at any time held pursuant to this Agreement,
except as herein expressly provided.
(b) Each notice, request, demand, approval or other
communication which may be or is required or permitted to be
given under this Agreement shall be in writing and shall be
deemed to have been properly given when delivered personally at
the address set forth below for the intended party during
normal business hours at such address, when sent by facsimile
or other electronic transmission to the respective facsimile
transmission numbers of the parties set forth below (with
receipt confirmed), or when sent by recognized overnight
courier or by the United States registered or certified mail,
return receipt requested, postage prepaid, addressed as
follows:
(i) if to Cedar, at:
Cedar Income Fund, Ltd.
4333 Edgewood Road N.E.
Cedar Rapids, Iowa 52499
Attention: Maureen DeWald,
Vice President and Secretary
Facsimile: (319) 369-2188
Confirm: (319) 398-8818
(ii) if to the Escrow Agent, at:
American Title Company
3131 Turtle Creek Blvd., Suite 101
Dallas, Texas 75219
Attention: Bo Feagin
Facsimile: (214) 528-8927
Confirm: (214) 747-2794
(iii) if to SKR, at:
SKR Management Corp.
44 South Bayles Avenue
Port Washington, New York 11050
Attention: Brenda Walker,
Vice President
Facsimile: (516) 883-5975
Confirm: (516) 883-5577
Notices shall be given to such other addressee or address, or
both, or by way of such other facsimile transmission number, as
a particular party may from time to time designate by written
notice to the other party hereto. Each notice, request,
demand, approval or other communication which is sent in
accordance with this Section shall be deemed given and received
for all purposes of this Agreement as of two business days
after the date of deposit thereof for mailing in a duly
constituted United States post office or branch thereof, one
business day after deposit with a recognized overnight courier
service or upon confirmation of receipt of any facsimile
transmission. Notice given to a party hereto by any other
method shall only be deemed to be given and received when
actually received in writing by such party.
(c) In the event conflicting demands are made upon the
Escrow Agent, the Escrow Agent may, in its sole discretion,
withhold performance of its duties hereunder until such time as
such conflicting demands shall have been withdrawn or the
rights of the respective parties shall have been settled by
court adjudication or otherwise.
(d) The Escrow Agent's duties and responsibilities shall
be limited to those expressly set forth in this Escrow
Agreement.
(e) If any moneys held pursuant to this Agreement are at
any time attached, garnished, or levied upon under any court
order or in case the payment, assignment, transfer, conveyance
or delivery of any such moneys shall be stayed or enjoined by
any court order, or in case any order, judgment or decree shall
be made or entered by any court affecting such moneys, then and
in any of such events the Escrow Agent is authorized, in its
sole discretion, to rely upon and comply with any such order,
writ, judgment or decree which the Escrow Agent is advised by
legal counsel of its own choosing is binding upon it; and if
the Escrow Agent complies with any such order, writ, judgment
or decree the Escrow Agent shall not be liable to any person,
firm or corporation by reason of such compliance even though
such order, writ, judgment or decree may be subsequently
reversed, modified, annulled, set aside or vacated.
(f) The Escrow Agent shall not be personally liable for
any action taken or omitted hereunder if taken or omitted by it
in good faith and in the exercise of its own best judgment.
The Escrow Agent shall also be fully protected in relying upon
any written notice, demand, certificate or document which it in
good faith believes to be genuine.
(g) The Escrow Agent shall be entitled to receive
reasonable compensation for its services hereunder and to
reimbursement for all of its expenses incurred in the
performance of its duties hereunder (including, without
limitation, reasonable fees and disbursements of its counsel),
which compensation and reimbursement shall be paid from time to
time by Cedar and SKR in equal shares.
(h) Cedar and SKR hereby agree to indemnify the Escrow
Agent for, and to hold it harmless against, any loss, liability
or expense incurred without willful misconduct, gross
negligence or bad faith on the part of the Escrow Agent,
arising out of or in connection with entering into this
Agreement and carrying out its duties hereunder, including the
reasonable costs and expenses of defending itself against any
such claim of liability.
(i) Whenever under the terms hereof the time for
performing an act falls upon a Saturday, Sunday or holiday,
such time shall be extended to the next business day.
(j) This Escrow Agreement shall be construed, enforced,
and administered in accordance with the laws of the State of
Iowa.
In Witness Whereof, Cedar, SKR and the Escrow Agent have caused this
Escrow Agreement to be executed as of the date first above written.
Cedar Income Fund, Ltd. SKR Management Corp.
/s/ Maureen DeWald /s/ Leo S. Ullman
Vice President President
American Title Company
/s/ Joseph Stoutt
Vice President
EXHIBIT 2.3
Tender Agreement
Tender Agreement (the "Agreement"), dated as of December 5, 1997,
among the undersigned stockholders (the "Stockholders") of Cedar Income
Fund, Ltd., an Iowa corporation (the "Company"), and SKR Management
Corp., a New York corporation ("Buyer").
Whereas, concurrently with the execution of this Agreement, the
Company and Buyer are entering into a Memorandum of Understanding (the
"Memorandum of Understanding"), which contemplates the Tender Offer (as
such term is defined in the Memorandum of Understanding) by Buyer;
Whereas, the Stockholders, which are subsidiaries of AEGON USA,
Inc., own the shares of common stock, $1.00 par value per share of the
Company (the "Common Stock") set forth opposite such Stockholders'
respective names on Exhibit A hereto (such shares set forth on Exhibit A
being referred to as the "Shares");
Whereas, in order to induce Buyer to enter into the Memorandum of
Understanding and in consideration of the substantial expenses incurred
and to be incurred by Buyer in connection therewith, the Stockholders
have agreed to enter into and perform this Agreement.
Now, Therefore, for good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the parties
hereto agree as follows:
1. Agreement to Tender Shares. Subject to Sections 4 and 5
of this Agreement, each of the Stockholders shall tender or cause to
be tendered to the Buyer pursuant to the Tender Offer all of such
Stockholder's Shares.
2. Limitation on Sales. During the term of this Agreement,
each Stockholder agrees not to sell, assign, transfer, pledge or
dispose of any of such Stockholder's Shares, except pursuant to the
Tender Offer.
3. Stockholder's Representations. Each Stockholder severally
represents that: (i) such Stockholder has the complete and
unrestricted power and unqualified right to enter into and perform
the terms of this Agreement; (ii) this Agreement constitutes a valid
and binding agreement with respect to such Stockholder, enforceable
against such Stockholder in accordance with its terms; and (iii)
such Stockholder owns the number of Shares indicated opposite such
Stockholder's name on Exhibit A hereto free and clear of any liens,
claims or encumbrances, and has the sole and unrestricted
dispositive power with respect to such Shares.
4. Term of Agreement; Termination. The term of this
Agreement shall commence on the date hereof and such term and this
Agreement shall terminate upon the earliest to occur of (i) the
consummation of the Tender Offer, (ii) the termination or
abandonment of the Tender Offer by Buyer, (iii) the execution by
Cedar of an agreement in respect of a Competing Transaction (as such
term is defined in the Memorandum of Understanding), (iv) the date
on which the Board of Directors of Cedar ceases to recommend to the
shareholders of Cedar that they tender their Common Stock to Buyer
pursuant to the Tender Offer (v) termination of the Memorandum of
Understanding, or (vi) February 12, 1998 (unless Buyer receives an
extension of such date pursuant to Section 19 of the Memorandum of
Understanding, in which case such date shall be March 16, 1998);
provided, however, that, upon the occurrence of a Triggering Event
(as defined below), the provisions of Section 5 shall remain
operative for so long as is necessary for such provisions to operate
in accordance with their terms. Upon such termination, no party
shall have any further obligations or liabilities hereunder;
provided, that the provisions of Sections 5(f) and 5(g) shall
survive termination of this Agreement and any such termination shall
not relieve any party from liability for any breach of this
Agreement prior to such termination.
5. Buyer Purchase Option. (a) Upon receipt of notice from
any Stockholder of a "Triggering Event" (as defined below), Buyer
shall have the right and option, without the obligation
(the "Option"), exercisable in accordance with the terms and
provisions set forth herein, to purchase the Shares owned by the
Stockholders.
(b) As used herein, "Triggering Event" shall mean the
occurrence of the following: (i) the proposal by any person or
group of persons of a Competing Transaction in which the
consideration to be received by holders of Cedar Common Stock is in
excess of $7.00 per share in cash and which is applicable to each
share of Cedar Common Stock outstanding (other than any shares of
Cedar Common Stock owned by the person or group of persons proposing
such Competing Transaction or any of their respective affiliates),
and (ii) the withdrawal by the Board of Directors of Cedar of its
recommendation or proposed recommendation to the shareholders of
Cedar that they tender their shares in the Tender Offer.
(c) Each Stockholder agrees to provide written notice of a
Triggering Event to Buyer not later than the next business day after
its having knowledge of the occurrence thereof. Such notice may be
given by AEGON USA, Inc. or any entity affiliated with AEGON USA,
Inc., on behalf of the Stockholders.
(d) Buyer shall have until 5:00 p.m. Central Time on the third
business day after receipt of the written notice referred to in
Section 5(c) above to notify the Stockholders in writing of its
intent to purchase the Shares pursuant to the Option. The Option
may only be exercised as to all of the Shares covered by this
Agreement. In the event such written notice is not received by the
Stockholders by such time, the Option shall terminate. Such notice
from the Buyers to the Stockholders may be given to the party giving
the notice contemplated by Section 5(c) on behalf of the
Stockholders.
(e) Unless otherwise agreed by the parties, the closing of any
sale and purchase of the Shares pursuant to the Option shall take
place either (i) at the offices of Cedar on the second business day
prior to the proposed consummation of a Competing Transaction giving
rise to a Triggering Event, or (ii) through the tender of the Shares
to Buyer pursuant to the Tender Offer. Payment of the purchase
price for the Shares shall be made in cash in immediately available
funds.
(f) The purchase price payable by Buyer upon exercise of the
Option shall be equal to the price per share payable in the
Competing Transaction giving rise to the Triggering Event; provided,
however, in the event the price per share paid by Buyer in the
Tender Offer or in such Competing Transaction is increased (i) after
Buyer has given notice of its intent to exercise the Option, then
Buyer shall pay to the Stockholders in cash at the closing
contemplated by Section 5(e) above an additional amount per share
for the Shares to be purchased pursuant to the Option equal to the
difference between (x) the highest price per share paid or to be
paid by Buyer in the Tender Offer or in such Competing Transaction,
as applicable, and (y) the per share purchase price previously
anticipated to be paid by Buyer to the Stockholders, or (ii) after
Buyer has purchased the Shares pursuant to the Option, then Buyer
shall promptly pay to the Stockholders in cash an additional amount
per share for the Shares so purchased equal to the difference
between (x) the highest price per share paid by Buyer in the Tender
Offer or in any Competing Transaction, as applicable, and (y) the
per share purchase price previously paid by Buyer to the
Stockholders.
(g) Notwithstanding the foregoing, if the Shares are purchased
by Buyer pursuant to the Option, and subsequent thereto either (i)
the Tender Offer is not consummated (other than as a result of a
failure of the Tender Offer because at least a majority of the
outstanding shares of Cedar were not tendered), or (ii) a Competing
Transaction giving rise to a Triggering Event is not consummated,
then upon notice by any Stockholder, the Stockholders shall have the
right to repurchase the Shares from Buyer at the same price paid by
Buyer therefor on the business day following the giving of such
notice. Payment of the purchase price for the Shares shall be made
in cash in immediately available funds. Buyer shall deliver such
Shares free and clear of any liens, claims or encumbrances created
or incurred as a result of any action or inaction of Buyer.
6. Entire Agreement. This Agreement supersedes all prior
agreements, written or oral, among the parties hereto with respect
to the subject matter hereof and contains the entire agreement among
the parties with respect to the subject matter hereof. This
Agreement may not be amended, supplemented or modified, and no
provisions hereof may be modified or waived, except by an instrument
in writing signed by all parties hereto. No waiver of any
provisions hereof by any party shall be deemed a waiver of any other
provisions hereof by any such party, nor shall any such waiver be
deemed a continuing waiver of any provision hereof by such party.
7. Notice. Each notice, request, demand, approval or other
communication which may be or is required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have
been properly given when delivered personally at the address set
forth below for the intended party during normal business hours at
such address, when sent by facsimile or other electronic
transmission to the respective facsimile transmission numbers of the
parties set forth below (with receipt confirmed), or when sent by
recognized overnight courier or three (3) business days after being
sent by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to Buyer:
SKR Management Corp.
44 South Bayles Avenue
Port Washington, New York 11050
Attention: Brenda Walker, Vice President
Facsimile: (516) 883-5975
If to the Stockholders, as set forth on Exhibit A:
Notices shall be given to such other addressee or address, or both,
or by way of such other facsimile transmission number, as a
particular party may from time to time designate by written notice
to the other party hereto. Each notice, request, demand, approval
or other communication which is sent in accordance with this Section
shall be deemed given and received for all purposes of this
Agreement as of two business days after the date of deposit thereof
for mailing in a duly constituted United States post office or
branch thereof, one business day after deposit with a recognized
overnight courier service or upon confirmation of receipt of any
facsimile transmission. Notice given to a party hereto by any other
method shall only be deemed to be given and received when actually
received in writing by such party.
8. Miscellaneous.
(a) This Agreement shall be deemed a contract made under, and
for all purposes shall be construed in accordance with, the laws of
the State of Iowa, without reference to its conflicts of law
principles.
(b) If any provision of this Agreement or the application of
such provision to any person or circumstances shall be held invalid
or unenforceable by a court of competent jurisdiction, such
provision or application shall be unenforceable only to the extent
of such invalidity or unenforceability, and the remainder of the
provision held invalid or unenforceable and the application of such
provision to persons or circumstances, other than the party as to
which it is held invalid, and the remainder of this Agreement, shall
not be affected.
(c) This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument.
(d) All Section headings herein are for convenience of
reference only and are not part of this Agreement, and no
construction or reference shall be derived therefrom.
In Witness Whereof, the parties hereto have executed and delivered
this Tender Agreement as of the date first written above.
SKR Management Corp.
/s/ Leo S. Ullman
President
Stockholders:
PFL Life Insurance Company
/s/ Lindsay Schumacher
Vice President
Bankers United Life Assurance Company
/s/ Lindsay Schumacher
Vice President
Life Investors Insurance Company of America
/s/ Lindsay Schumacher
Vice President
Aegon USA Realty Advisors, Inc.
/s/ Lindsay Schumacher
Vice President
First AUSA Life Insurance Company
/s/ Lindsay Schumacher
Vice President
Exhibit A
Name, Address and Facsimile Number Number of Shares
of Stockholder
PFL Life Insurance Company 375,550
4333 Edgewood Road NE
Cedar Rapids, IA 52499
Attention: Maureen DeWald
Fax: 319-369-2188
Bankers United Life Assurance 84,700
Company
4333 Edgewood Road NE
Cedar Rapids, IA 52499
Attention: Maureen DeWald
Fax: 319-369-2188
Life Investors Insurance Company 76,000
of America
4333 Edgewood Road NE
Cedar Rapids, IA 52499
Attention: Maureen DeWald
Fax: 319-369-2188
AEGON USA Realty Advisors, Inc. 44,317
4333 Edgewood Road NE
Cedar Rapids, IA 52499
Attention: Maureen DeWald
Fax: 319-369-2188
First AUSA Life Insurance Company 4,000
4333 Edgewood Road NE
Cedar Rapids, IA 52499
Attention: Maureen DeWald
Fax: 319-369-2188
EXHIBIT 99
CONTACT: Alan F. Fletcher
Vice President and Treasurer
(319) 398-8849
FOR IMMEDIATE RELEASE
CEDAR INCOME FUND, LTD. REPORTS AN AGREEMENT
CEDAR RAPIDS, IOWA--December 5, 1997--Cedar Income Fund,
Ltd. today announced that it has entered into a Memorandum
of Understanding with an unaffiliated entity (the "Buyer")
pursuant to which the Buyer, subject to certain conditions,
will commence a cash tender offer on or prior to January 15,
1998, for all of the outstanding shares of common stock of
Cedar for $7.00 per share. It is anticipated that the
closing of the tender offer will be subject to certain
conditions, including the tender of at least a majority of
the outstanding shares of Cedar. AEGON USA, Inc.,
beneficial owner of approximately 26% of the outstanding
shares of Cedar, has agreed with the Buyer, subject to
certain conditions, to tender its shares of Cedar.
"This transaction is consistent with the expectation of the
Company since its inception to liquidate approximately ten
years following the Company's initial public offering
(completed in 1986)," stated Patrick E. Falconio, Chairman
of the Board of Directors of Cedar and also an officer of
AEGON.
Cedar Income Fund, Ltd. is a real estate investment trust
headquartered in Cedar Rapids, Iowa and administered by
AEGON USA Realty Advisors, Inc. Shares of Cedar Income
Fund, Ltd. are traded over-the-counter on the NASDAQ System
under the symbol CEDR.
