<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDED 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 20,
1995
CORPORATE PROPERTY ASSOCIATES 7, A CALIFORNIA LIMITED PARTNERSHIP
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 0-15778 13-3327950
- ----------------------- -------------------- ---------------------
(State of Organization) (Commission File No.) (IRS Employer
Identification Number)
50 Rockefeller Plaza, 2nd Floor
New York, NY 10020
---------------------------------------
(Address of principal executive offices)
(212) 492-1100
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(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. DISPOSITION OF PROPERTY
-----------------------
On December 11, 1986, Corporate Property Associates 7, a California
limited partnership (the "Partnership"), purchased a fee simple interest in an
improved parcel of real property located in Jupiter, Palm Beach County, Florida
(the "Jupiter Property") in addition to the equipment (the "Equipment") located
at the Jupiter Property. At the closing, the Jupiter Property and Equipment
were net leased to HL Associates Limited ("HL Associates"), whose obligations
were unconditionally guaranteed by Maruki U.S.A. Company, Inc. ("Maruki").
In August 1988, HL and Maruki filed for protection from creditors under
Chapter 11 of the Federal Bankruptcy Code and in November 1988, the Partnership
evicted HL and obtained possession of the Jupiter Property. Once obtaining
possession, the Partnership operated the food service facility on the Jupiter
Property through Jupiter Food Service, Inc., a separate wholly-owned subsidiary.
On December 20, 1995, the Partnership sold to Crab House Inc. the
Jupiter Property, the Equipment and all intangible property associated with the
operation of the food service facility for a net sales price of $4,140,000. At
the closing, the Jupiter Property was assigned to U.S. Properties Operating,
L.P., a partnership related to the Crab House, Inc., which took title to the
real estate and personal property. The Partnership applied approximately
$2,613,000 of the net sale proceeds to repayment of the remaining debt on the
Jupiter Property, which debt was held by Juplox associates, a Georgia
partnership. The remaining proceeds were applied to working capital.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(b) PRO FORMA FINANCIAL INFORMATION
Pro Forma Annualized statement of Taxable Operations and Cash Generated
(Unaudited)
PRO FORMA FINANCIAL STATEMENTS
The following unaudited pro forma financial statements for the Company
have been prepared based upon certain pro forma adjustments to the historical
financial statements of the Company.
The statement covers only the properties or interests in entities owning
properties which have been disposed of by the Company and its wholly-owned
subsidiaries and does not cover any properties which the Company may acquire or
dispose of in the future or any future financings of these properties.
<PAGE>
CORPORATE PROPERTY ASSOCIATES 7
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the year ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Forma Adjustment Pro Forma
---------- -------------------- ---------
Revenues:
<S> <C> <C> <C>
Rental income from operating leases $ 4,298,952 $ 4,298,952
Interest income for direct financing leases 2,283,445 2,283,445
Other interest income 203,166 203,166
Revenues of hotel operations 5,410,689 5,410,689
------------- ------------
Total revenue 12,196,252 12,196,252
------------- ------------
Expenses:
Interest 2,456,129 ($230,515) 2,225,614
Depreciation 1,361,952 (226,084) 1,135,868
General and administrative 600,271 600,271
Property expenses 299,608 299,608
Amortization 70,067 (6,075) 63,992
Writedown to net realizable value 319,685 319,685
Operating expenses of hotel operations 4,016,639 4,016,639
------------- ------------- ------------
Total expenses 9,124,351 (462,674) 8,661,677
------------- ------------- -------------
Income before loss from equity investment, net gains
on sale, discontinued operations and extraordinary item 3,071,901 462,674 3,534,575
Loss from equity investment 135,621 135,621
------------- -------------- ------------
Income before net gains on sale, discontinued operations
and extraordinary item 2,936,280 462,674 3,398,954
Net gain on sale of real estate 1,019,362 (1,019,362) -
------------- -------------- -------------
Income from continuing operations 3,955,642 (556,688) 3,398,954
Earnings from discontinued operations 246,847 (246,847) -
------------- -------------- ------------
Income before extraordinary item 4,202,489 (803,535) 3,398,954
Extraordinary gain on extinguishment of debt 1,323,858 (1,323,858) -
------------- -------------- ------------
Net income $5,526,347 ($2,127,393) $3,398,954
============= ============== ============
</TABLE>
CORPORATE PROPERTY ASSOCIATES 7
PRO FORMA CONSOLIDATED STATEMENT OF TAXABLE INCOME and AFTER-TAX CASH FLOW
For the year ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Net income per consoldiated pro forma income for the
year ended December 31, 1995 $ 3,398,954
Differences in depreciation between tax and GAAP (528,477)
Amortization of deferred gains (21,514)
Straight-line lease adjustments 170,647
Writedown to net realizable value 319,685
---------------
Pro forma taxable income 3,339,295
Add: Depreciation expense 1,664,345
Less: amortization of mortgage principal (1,514,763)
---------------
After-tax cash flow $ 3,488,877
===============
</TABLE>
<PAGE>
1. Basis of Presentation:
The unaudited pro forma consolidated statement of income of Corporate
Property Associates 7 and Subsidiaries (the "Partnership") for the year ended
December 31, 1995 and the related pro forma consolidated statement of taxable
income and after-tax cash flow have been prepared based on the historical
financial statements of the the Partnership. As the sale of the Jupiter
Property was completed on December 31, 1995, pro forma consolidated balance
sheets at December 31, 1995 and March 31, 1996 and a pro forma consolidated
statement of income for the three-month period ended March 31, 1996 have not
been prepared as there are no significant pro forma adjustments to such
historical statements. Substantially all assets and liabilities relating to the
Jupiter Property and the food service facility operated by the Partnership had
been transferred or settled before December 31, 1995. In addition, the
Partnership's results of operations for the three-month period ended March 31,
1996 do not include revenues or expenses relating to the Jupiter Property or
food service operation. The pro forma consodliated statements of income and
taxable income and after-tax cash flow have been prepared as if the dispositions
of the Jupiter Property and the food service facility which had been operated by
the Partnership at the Jupiter Property had occurred on January 1, 1995. The
pro forma financial information should be read in conjunction with the
historical financial statements of the Partnership. The pro forma financial
results are not necessarily indicative of the results of operations had the
dispositions occurred on January 1, 1995 nor are they necessarily indicative of
results of operations for future periods.
2. Pro Forma Adjustments:
A. The pro forma adjustments on the pro forma consolidated statement of income
consist of (i) the elimination of specifically identified expenses relating to
the ownership of the Jupiter Property and the mortgage debt collateralized by
the Jupiter Property with such expenses consisting of depreciation, interest
expense and amortization of deferred financing costs, (ii) elimination of
earnings from discontinued operations as such earnings are from the food service
facility which was operated by the Partnership as a
<PAGE>
distinct business segment subsequent to the eviction of the lessee in November
1988, (iii) elimination of the gain on sale of the Jupiter Property and (iv)
elimination of the gain on extinguishment of the debt on the Jupiter Property
mortgage loan. The mortgage loan agreement provided for the forgiveness of
certain interest and principal amounts if certain prepayments were made in
December 1995.
B. The pro forma tax adjustments to the pro forma consolidated statement of
taxable income and after-tax cash flow consist of (i) differences in
depreciation for tax and financial reporting purposes due to (a) the use of
different depreciable lives for tax and financial reporting purposes on assets
which have been classified as operating leases and depreciation charged for tax
purposes on assets which have been classified as direct financing leases for
which no depreciation incurred for financial reporting purposes, (ii)
amortization of deferred gains which had not been deferred for tax purposes as
the entire benefit for tax purposes was recognized in prior periods, (iii) the
effect of straight-line lease adjustments and writedowns to net realizable value
which are not recognized for tax purposes. The pro forma after-tax adjustments
consist of (i) adding depreciation expense as a noncash charge consisting of the
sum of pro forma depreciation of $1,135,868 and the depreciation adjustment to
taxable income of $528,477 and (ii) the cash flow effect of paying principal on
mortgages. All adjustments exclude the effect of the owning and operating the
Jupiter Property.
<PAGE>
(c) EXHIBITS
The following exhibits are filed as part of this Current Report on Form
8-K:
Exhibit No. Exhibit Page No.
- ---------- ------- -------
2.1 Agreement of Sale dated December 12,
1995 between Corporate Property
Associates 7, the seller, and Crab
House, Inc., as buyer.
2.2 Assignment Agreement dated December 19, 1995
Crab House, Inc., Assignor, and U.S. Restaurant
Properties Operating L.P., Assignee.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, on this
11th day of July, 1996.
CORPORATE PROPERTY ASSOCIATES 3
By: W.P. Carey & Co., Inc.,
its managing general partner
By: __________________________
______________________________
Michael D. Roberts
First Vice President and
Controller
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, on this
11th day of July, 1996.
CORPORATE PROPERTY ASSOCIATES 3
By: W.P. Carey & Co., Inc.,
its managing general partner
By: /s/ Michael D. Roberts
_____________________________
Michael D. Roberts
First Vice President and
Controller
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Exhibit Page No.
- ---------- ------- -------
2.1 Agreement of Sale dated December 12,
1995 between Corporate Property
Associates 7, the seller, and Crab
House, Inc., as buyer.
2.2 Assignment Agreement dated December 19, 1995
Crab House, Inc., Assignor, and U.S. Restaurant
Properties Operating L.P., Assignee.
<PAGE>
EXHIBIT 2.1
<PAGE>
AGREEMENT OF SALE
-----------------
THIS AGREEMENT OF SALE (this "Agreement"), is made as of this _____
---------
day of December, 1995, between Corporate Property Associates 7, a California
limited partnership, having an address at 50 Rockefeller Plaza, New York, New
York 10020 ("Seller"), and Crab House, Inc., a Florida corporation, having an
address at c/o Bayport Restaurant Group, 4000 Hollywood Blvd., Suite 695-S,
Hollywood, Florida 33201, ("Buyer").
W I T N E S S E T H :
-------------------
Seller and Buyer, intending to be legally bound and in consideration
of the mutual covenants and agreements hereinafter set forth, hereby agree as
follows:
1. PURCHASE AND SALE. (a) Seller shall sell and convey to Buyer,
-----------------
and Buyer shall purchase from Seller: the lands and premises, together with the
buildings and improvements thereon, known as "Harpoon Louie's", being more
particularly described in Exhibit A hereto (the "Premises"), together with all
--------
fixtures, building equipment and other articles of personal property owned by
Seller and located on and used in connection with the Premises more particularly
described in Exhibit A-1 hereto (the "Personalty"); and also together with the
----------
intangibles associated with the restaurant operated on the Premises, including
but not limited to, the good will of the restaurant as operated by Seller (the
"Intangibles"). The Premises, the Personalty and the Intangibles are hereinafter
- ------------
collectively referred to as the "Property".
--------
(b) Seller shall also assign and convey to Buyer and Buyer shall
accept and purchase from Seller: (1) the use of the name "Harpoon Louie's," from
the Closing Date through the time of closing of the restaurant on the 31st of
December, 1995, and (2) all food and beverages located on the Premises at the
time the parties take inventory (the "Inventory") which the parties agree they
---------
will do the evening before the Closing.
(c) Anything herein to the contrary notwith-standing, the Purchase
Price shall not include the items mentioned in subparagraph 1(b)(1) and (2) and
the price to be paid for those items (the "Inventory Price") shall be the price
---------------
Seller paid for the Inventory. This additional amount shall also be paid to
Seller by Buyer at the time of Closing.
2. CONSIDERATION. Buyer will purchase the Property and pay therefor
-------------
the sum of Four Million One Hundred Forty Thousand Dollars ($4,140,000.00) (the
"Purchase Price"), payable in the following manner:
--------------
<PAGE>
(a) Two Hundred Thousand Dollars ($200,000.00) by wire transfer
of immediately available federal funds to
Akerman, Senterfitt & Eidson, P.A. (the "Escrow Agent") upon execution of this
------------
Agreement by Buyer (such amount when so paid, together with any interest earned
thereon, being herein called, the "Deposit"), to be held in escrow by Escrow
-------
Agent and disbursed in accordance with the terms of this Agreement.
(b) The balance of the Purchase Price, Three Million Nine Hundred
Forty Thousand Dollars ($3,940,000.00), at Closing, by wire transfer of
immediately available federal funds, subject only to closing apportionments and
adjustments as hereinafter set forth, to Escrow Agent to be held in escrow and
disbursed in accordance with the terms of this Agreement.
3. CLOSING.
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(a) Consummation of the transaction contemplated hereby (the
"Closing") shall occur at the offices of Seller's counsel, Reed Smith Shaw &
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McClay, 2500 One Liberty Place, Philadelphia PA, 19103 at 10:00 A.M. on December
19, 1995, or on such earlier date and at such other place as the parties may
agree. The date that the Closing occurs is hereinafter referred to as the
"Closing Date".
- -------------
(b) If by the Closing Date Escrow Agent has not received all
documentation necessary in Escrow Agent's opinion to release the first mortgage
payoff funds to the mortgage holder, Escrow Agent shall retain in escrow the
funds necessary to pay off the first mortgage, including interest, until such
time as Escrow Agent has obtained all documents necessary in Escrow Agent's
opinion to release the payoff funds to the mortgage holder.
4. TRANSFER DOCUMENTS. At the time and place of Closing, upon
------------------
payment in full of the Purchase Price and the Inventory Price and satisfaction
of all of Buyer's obligations under this Agreement, Seller shall:
(a) convey and deliver title to the Premises to Buyer by a
special warranty deed, in form substantially as set forth on Exhibit B hereto,
subject to all matters set forth in Exhibit C hereto and all matters agreed upon
by Buyer and Seller on or prior to the Closing;
(b) execute and deliver a Bill of Sale in form substantially as
set forth on Exhibit D hereto, with respect to the Personalty and the Inventory;
(c) deliver the keys to and possession of the Property to Buyer.
2
<PAGE>
The instruments of transfer referred to in subsections 4(a) and (b)
are hereinafter collectively referred to as the "Transfer Documents".
------------------
5. APPORTIONMENTS AND ALLOCATION OF EXPENSES.
-----------------------------------------
(a) As may be more particularly set forth below, the following
items shall be apportioned as of midnight on the Closing Date: (1) real estate
taxes; (2) personal property taxes, if any; (3) water and sewer charges and
municipal garbage and rubbish removal charges, if any; and (3) amounts payable
under any property contracts which are being assumed by Buyer.
(b) Real estate taxes and personal property taxes shall be
prorated for real estate taxes and personal property taxes levied by each taxing
body based on the tax year (whether calendar or fiscal) used by such taxing body
in levying such taxes. If the Closing occurs before the tax rate is fixed, the
apportionment of taxes shall be upon the basis of the tax rate for the next
preceding year applied to the latest assessed valuation.
(c) Charges for the consumption of electricity, fuel oil, water,
steam and gas, telephone services and other utility services, if any, shall be
apportioned as of midnight on the Closing Date.
(d) The cost of all real estate and personal property transfer
taxes shall be borne by Buyer. Buyer shall be responsible for all costs of title
examination, title insurance premiums, the cost of obtaining or updating any
surveys of the Premises (copies of which shall be provided to Seller), the costs
of obtaining engineer and environmental reports, the costs of recording any
Transfer Documents which are to be recorded, and all documentary stamp taxes and
intangible taxes. Each party shall bear its own legal fees and expenses incurred
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
(e) The provisions of this Section 5 shall survive the Closing.
6. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. The obligations of
--------------------------------------------
Seller hereunder are and shall be subject to satisfaction of each of the
following conditions at or prior to the Closing:
(a) Buyer shall have complied with all of the terms, covenants
and conditions hereof to be complied with on the part of Buyer as of or prior to
the Closing;
(b) Buyer shall have executed and delivered the Transfer
Documents to which it is a party and shall have delivered
3
<PAGE>
all documents and items required to be delivered on or before Closing by the
express terms of this Agreement;
(c) Buyer shall have directed in writing that the Escrow Agent
pay the Deposit to Seller (to be credited against the Purchase Price) and Seller
shall have received the same (the Escrow Agent being authorized and directed to
pay the Deposit to Seller upon receipt of such written notice from Buyer); and
(d) Buyer shall have paid the balance of the Purchase Price and
the Inventory Price.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. The obligations of
-------------------------------------------
Buyer hereunder are and shall be subject to satisfaction of each of the
following conditions at or prior to the Closing:
(a) Seller shall have complied with all of the terms, covenants
and conditions hereof to be complied with on the part of Seller as of or prior
to the Closing; and
(b) Seller shall have executed and delivered the Transfer
Documents and shall have delivered all documents and items required to be
delivered on or before Closing by the express terms of this Agreement.
8. RISK OF LOSS. The risk of loss with respect to the Property or any
------------
part thereof from damage or destruction by fire or other casualty shall remain
upon Seller until Closing. If, between the date hereof and the Closing Date,
any portion of the Property shall be damaged or destroyed by fire or other
casualty which would cost Buyer $50,000 or less to repair or replace, the
Purchase Price shall be reduced by the cost of repairing or replacing the
Property so damaged or destroyed and Seller shall retain all insurance proceeds
paid on account of such damage, destruction, casualty or loss. If such cost
would exceed $50,000, Buyer shall have the option, exercisable by notice to
Seller given within fifteen (15) days after Buyer learns of said damage,
destruction, casualty or loss, to either (a) terminate this Agreement by written
notice to such effect to Seller and the Escrow Agent, whereupon the Escrow Agent
shall forthwith refund the Deposit to Buyer, this Agreement shall terminate and
neither party shall have any further obligation or liability to the other
hereunder (except with respect to those provisions which by the express terms of
this Agreement are to survive termination hereof), or (b) elect to proceed with
this Agreement and pay the full Purchase Price, in which case Seller shall
assign to Buyer any insurance proceeds to which Seller may be entitled as a
result of such damage, destruction, casualty or loss. If Buyer fails to give
such written notice, Seller shall deliver to Buyer a notice ("Seller Notice")
informing Buyer that it has five days from receipt of Seller's Notice to
provide Seller with a written notice of what option it will choose. If Buyer
fails to respond to
4
<PAGE>
Seller's Notice within five days after receipt thereof, Buyer shall conclusively
be deemed to have chosen option (b). The date for Closing shall be extended to
the extent necessary to accommodate the foregoing schedule.
9. EMINENT DOMAIN. If all or a substantial portion of the Property
--------------
shall be taken by reason of the exercise of the power of eminent domain prior to
the Closing or if proceedings are commenced for such a taking prior to the
Closing, then Buyer shall have the option to either (a) terminate this Agreement
by written notice to such effect to Seller and the Escrow Agent, whereupon the
Escrow Agent shall forthwith refund the Deposit to Buyer, this Agreement shall
terminate and neither party shall have any further obligation or liability to
the other hereunder (except with respect to those provisions which by the
express terms of this Agreement are to survive termination hereof), or (b) elect
to proceed with this Agreement and pay the full Purchase Price, in which event
Seller shall assign to Buyer all damages or awards to which Seller may be
entitled and which may be assigned by Seller pursuant to applicable law. Within
five (5) days after notification of any such taking or proceedings, but in no
event later than the Closing, Seller shall notify Buyer thereof.
If such taking is not for all or a substantial portion of the
Property, then Buyer shall remain obligated to close hereunder subject to such
taking, in which event Seller shall assign all damages or awards to which Seller
may be entitled and which may be assigned by Seller pursuant to applicable law.
10. INSURANCE. Buyer understands that (a) risk of loss passes to
---------
Buyer at the time set forth in Section 8; (b) Buyer may have an insurable
interest in the Property upon the signing of this Agreement; and (c) to protect
Buyer's own interest Buyer should retain or place in force adequate fire and
casualty insurance with extended coverage on the Property as of the effective
date of this Agreement.
11. BROKERS. No broker was involved in connection with the
-------
transaction contemplated hereby. Each party hereby indemnifies and holds the
other party harmless from and against any and all claims for any broker's
commission or similar compensation which may be payable to any broker, finder or
other person or entity based solely upon such party's own acts. The provisions
of this Section 11 shall survive the Closing.
12. INSPECTION OF PROPERTY. THE PROPERTY IS BEING SOLD ON AN "AS IS,
----------------------
WHERE IS" BASIS, AND SELLER MAKES ABSOLUTELY NO REPRESENTATIONS OR WARRANTIES,
EXPRESSED OR IMPLIED, WITH RESPECT TO THE PHYSICAL CONDITION, ENVIRONMENTAL,
TITLE OR ANY OTHER MATTER RELATING TO THE PROPERTY (INCLUDING WITHOUT LIMITATION
ANY WARRANTY OF INCOME POTENTIAL OR OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE). Buyer acknowledges and agrees that it is
5
<PAGE>
relying solely on its own due diligence review in purchasing the Property.
13. [INTENTIONALLY OMITTED]
-----------------------
14. SELLER'S REPRESENTATIONS. Seller represents and warrants to
------------------------
Buyer that:
(a) Seller is a duly organized and validly subsisting limited
partnership with full power to execute and deliver this Agreement and all
Transfer Documents and to consummate the transactions contemplated hereby.
(b) Seller is not a foreign person within the meaning of Section
1445(b)(2) of the Internal Revenue Code of 1986, as amended.
(c) After Closing is consummated, Seller shall not use the name
"Harpoon Louie's" in connection with any property owned or leased by Seller, or
any other entity in any way related to Seller, that is located within twenty
miles of the Premises.
(d) Seller shall cooperate with Buyer in connection with Buyer's
attempt to renew the lease of the pier provided such cooperation does not cause
the Seller to incur any additional expense.
(e) Seller has good and marketable title to the Personalty free
and clear of all liens, security interests and encumbrances.
All of the above representations shall survive the Closing for a
period of ten years except representation 14(c) which shall survive the Closing
for a period of thirty years.
15. REMEDIES UPON DEFAULT BY BUYER. In the event of a default by
------------------------------
Buyer in the performance of any of the terms, covenants and conditions hereof to
be performed on the part of Buyer, then, after Seller has delivered written
notice of such default to Buyer and Buyer has failed to cure such default within
fifteen (15) days thereafter (provided that, in the case of a default in Buyer's
obligation to consummate Closing at the time and on the date required by Section
3 hereof, no such notice shall be required and no cure period shall be available
to Buyer), Seller shall have all rights and remedies at law and in equity
because of such breach and shall receive from the Escrow Agent the Deposit and
retain same either on account of the Purchase Price or as monies to be applied
toward Seller's damages, as Seller may elect. If Seller elects to sue Buyer at
law for damages, Seller agrees to take reasonable measures to mitigate its
damages resulting from Buyer's default.
6
<PAGE>
16. REMEDIES UPON DEFAULT BY SELLER. In the event of a default by
-------------------------------
Seller in the performance of any of the terms, covenants and conditions hereof
to be performed on the part of Seller, then, after Buyer has delivered written
notice of such default to Seller and Seller has failed to cure such default
within fifteen (15) days thereafter (provided that, in the case of a default in
Seller's obligation to consummate Closing at the time and on the date required
by Section 3 hereof, no such notice shall be required and no cure period shall
be available to Seller), Escrow Agent shall return the Deposit to Buyer and
Buyer shall, subject to Section 18 hereof, have all rights and remedies at law
and in equity because of such breach; however, Seller's liability shall be
limited to the assets of the Seller partnership. If Buyer elects to sue Seller
at law for damages, Buyer agrees to take reasonable measures to mitigate its
damages resulting from Seller's default.
17. ESCROW AGENT.
------------
(a) Escrow Agent agrees to hold the Deposit in an interest
bearing account at an interest rate acceptable to Buyer and with a financial
institution acceptable to Buyer and Seller. At the Closing, the Escrow Agent
shall pay the Deposit to Seller. If necessary, Escrow Agent shall continue to
hold the funds required to pay off the first mortgage encumbering the Premises
after Closing and shall disburse such funds in accordance with the provisions of
Paragraph 3(b) hereof.
(b) If the Escrow Agent receives a written statement executed by
Buyer that title to the Property has not been conveyed under this Agreement
because of the inability of Seller to close under this Agreement, or because of
a default by Seller causing a failure to close under this Agreement or because
of Buyer's termination of this Agreement as permitted by and in accordance with
the provisions herein contained (other than a termination properly made under
and in accordance with Section 12 hereof), Escrow Agent shall, within three
business days after receipt of such written statement, deliver a copy of said
statement to Seller, and shall return the Deposit to Buyer on the tenth business
day after receipt by Escrow Agent of said statement from Buyer unless Escrow
Agent, prior to such return, receives from Seller a written statement contesting
the accuracy of Buyer's statement and demanding retention of the Deposit by
Escrow Agent.
(c) If the Escrow Agent receives a written statement executed by
Seller that title to the Property has not been conveyed under this Agreement
because of the inability of Buyer to close under this Agreement, or because of a
default by Buyer under this Agreement, Escrow Agent shall, within three business
days after receipt of such written statement, deliver a copy of said statement
to Buyer and deliver the Deposit to Seller on the tenth business day after
receipt by Escrow Agent of said statement from Seller unless Escrow Agent, prior
to such return,
7
<PAGE>
receives from Buyer a written statement contesting the accuracy of Seller's
statement and demanding retention of the Deposit by Escrow Agent.
(d) Upon receipt by Escrow Agent of a written contesting
statement from Seller under subsection (b) above, or from Buyer under subsection
(c) above, Escrow Agent shall retain the Deposit and thereafter deliver the same
to either Seller or Buyer (or otherwise) as Seller and Buyer direct by a written
statement jointly executed by them; provided, however, Escrow Agent may, at any
time before receiving any such jointly executed statement and on notice to
Seller and Buyer, surrender the Deposit to a court of competent jurisdiction, by
means of an interpleader action or otherwise, for such disposition as may be
directed by such court.
(e) Escrow Agent shall not be liable to either Seller or Buyer in
connection with its performance as escrow agent hereunder, except in the event
of its gross negligence and/or wilful disregard of the escrow provisions set
forth in this Agreement. Escrow Agent may rely and/or act upon any instrument or
document reasonably believed by it to be genuine and to be executed and/or
delivered by the proper person. Seller and Buyer hereby agree to indemnify,
defend and hold Escrow Agent harmless from and against any cost, loss or expense
(including reasonable attorneys' fees and disbursements) suffered or incurred by
Escrow Agent as a result of it being named in or as a result of it commencing
and prosecuting any litigation or proceeding required or permitted under this
Agreement; provided, however, the foregoing indemnity will not apply to cost,
loss or expense incurred by Escrow Agent as a result of its gross negligence
and/or wilful disregard of the escrow provisions set forth in this Agreement.
(f) Upon delivery of the Deposit to Buyer, Seller or a court of
competent jurisdiction under and pursuant to the provisions of this Section 17,
the Escrow Agent shall be relieved of all liability, responsibility or
obligation with respect to or arising out of the Deposit and any and all of its
obligations arising therefrom.
18. LIMITATION OF SELLER'S LIABILITY IN CERTAIN CIRCUMSTANCES.
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Notwithstanding anything to the contrary contained in this Agreement, in the
event Seller is unable to convey title to the Premises in accordance with the
terms of this Agreement because of an incurable title defect or a title defect
which requires an expenditure of more than $10,000 to remedy (but excluding a
lien or encumbrance or other title defect intentionally and knowingly created by
Seller), the sole liability of Seller shall be to join with Buyer in a direction
to the Escrow Agent to refund to Buyer the Deposit and any other monies paid on
account of the Purchase Price. Upon the delivery of any such
8
<PAGE>
direction, the Escrow Agent shall forthwith refund the Deposit to Buyer, this
Agreement shall terminate and neither party shall have any further obligation or
liability to the other hereunder (except with respect to those provisions which
by the express terms of this Agreement are to survive termination hereof).
Buyer, nevertheless, may (but shall not be obligated to) accept such title as
Seller is able to convey, without reduction of the Purchase Price or any credit
or allowance against the same and without any liability on the part of Seller.
19. TIME OF ESSENCE. Time is of the essence in the performance of
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all obligations hereunder.
20. NOTICES. Except as otherwise expressly provided herein, all
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notices and other communications (collectively, "notices") under this Agreement
shall be in writing (including facsimile transmission) and shall be either
personally delivered or delivered by the United States Mail, postage prepaid, or
by facsimile transmission with receipt confirmed, to the following addresses or
addressees:
Seller: Corporate Property Associates 7
c/o W.P. Carey & Co., Inc.
50 Rockefeller Plaza
New York, New York 10020
Attention: Mr. Anthony S. Mohl
FAX NO. (212) 977-3022
With a copy to:
Carol Ann Mueller, Esquire
Reed Smith Shaw & McClay
2500 One Liberty Place
Philadelphia, Pennsylvania 19103
FAX NO. (215) 851-1420
Buyer: Crab House, Inc.
c/o Bayport Restaurant Group
4000 Hollywood Blvd., Suite 695-S
Hollywood, Florida 33201
Attention: Mr. David Connor
FAX NO. (305) 961-8778
With a copy to:
David S. Mandel, Esquire
Astor Weiss Kaplan & Rosenblum
The Bellevue, 6th Floor
Philadelphia, Pennsylvania 19102
FAX NO. (215) 790-0509
All notices and certifications shall be effective upon receipt, or in the case
of facsimile transmission, upon machine confirmation
9
<PAGE>
of receipt. Either party may designate by notice given to the other party a new
address to which notices hereunder shall thereafter be sent.
21. COVENANT NOT TO RECORD. Buyer will not record this Agreement and
----------------------
any recording or attempted recording of this Agreement shall constitute a
default by Buyer hereunder.
22. ENTIRE AGREEMENT. All understandings and agreements, oral or
----------------
written, heretofore had between the parties with respect to the subject matter
hereof are merged in this Agreement, which alone fully and completely expresses
their agreement, and the same is entered into after full investigation, neither
party relying upon any statement or representation not embodied in this
Agreement made by the other party. This Agreement may not be amended, nor any
provision hereof waived, in whole or in part, except by a writing signed by the
party against whom enforcement of such amendment or waiver is sought.
23. CONSTRUCTION. In this Agreement, unless the context otherwise
------------
clearly requires, references to the plural include the singular, the singular
the plural, and the part the whole; the neuter case includes the masculine and
feminine cases; and "or" is not exclusive. In this Agreement, "include,"
"includes," "including" and similar terms are not limiting; and "hereof,"
"herein," "hereunder" and similar terms refer to this Agreement as a whole and
not to any particular provision. Section and other headings in this Agreement
are for reference only and shall not affect the interpretation of this Agreement
in any respect. This Agreement has been fully negotiated between the applicable
parties, each party having the benefit of legal counsel, and accordingly any
doctrine of construction of ambiguities against the party controlling the
drafting, shall not apply to this Agreement.
24. ASSIGNMENT; BINDING EFFECT. Buyer may, at the Closing, assign
--------------------------
its rights and obligations hereunder to an assignee or nominee in order to take
title to the Property. Such rights and obligations may not be otherwise
assigned. This Agreement shall be binding upon and inure to the benefit of
Seller and its successors and assigns and Buyer and its successors and permitted
assigns.
25. GOVERNING LAW. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Florida.
26. COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute but one and the same agreement.
27. WAIVER OF TENDER. Formal tender of the Transfer Documents and
----------------
the Purchase Price are waived by the parties hereto.
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<PAGE>
28. EFFECTIVE DATE. The date of formation of this Agreement (herein
--------------
called the "date of this Agreement" or the "date hereof") shall for all purposes
be the date the last of Buyer, Seller and Escrow Agent executes this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the respective dates set forth below.
CORPORATE PROPERTIES
ASSOCIATES 7
SEVENTH CAREY CORPORATE PROPERTY, INC., GENERAL
PARTNER
By: ______________________________
Its: ______________________________
Date of Execution:___________, 1995
CRAB HOUSE, INC.
By: ______________________________
Its: ______________________________
Date of Execution:____________, 1995
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<PAGE>
JOINDER
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The undersigned hereby joins in the foregoing Agreement of Sale for
the express and limited purpose of becoming and assuming the duties of the
"Escrow Agent" referenced therein.
AKERMAN, SENTERFITT & EIDSON,
P.C., Escrow Agent
By: ______________________________
Title: ______________________________
Date of Execution: ____________, 1995
12
<PAGE>
EXHIBIT A
---------
Description of Premises
-----------------------
<PAGE>
EXHIBIT A-1
-----------
List of Personalty
------------------
<PAGE>
EXHIBIT B
---------
Form of Deed
------------
<PAGE>
EXHIBIT C
---------
Permitted Encumbrances/Title Commitment
---------------------------------------
<PAGE>
EXHIBIT D
---------
Bill of Sale
------------
<PAGE>
EXHIBIT 2.2
<PAGE>
This Assignment Agreement (the "Agreement") is dated this 19th day of
December, 1995, by and between CRAB HOUSE, INC., a Florida corporation ("Crab
House") and U.S. RESTAURANT PROPERTIES OPERATING L.P., a Delaware limited
partnership ("Assignee").
RECITALS:
A. Crab House entered into an Agreement of Sale (the "Contract") dated
December 12, 1995, with Corporate Property Associates 7, a California limited
partnership (the "Seller"), to acquire real property and improvements (the
"Property"), described on Exhibit A to the Contract.
B. Crab House desires to assign, and Assignee desires to acquire, Crab
House's right, title and interest in the Contract. All terms not otherwise
defined herein shall have the meanings assigned to them in the Contract.
Now, Therefore, for good and valuable consideration, the sufficiency of
which is hereby expressed, the parties hereby agree as follows:
1. Assignment of Contract Rights. Crab House hereby assigns, and
-----------------------------
Assignee hereby assumes, Crab House's right to acquire the Premises, Personalty
and other property under the Contract. Assignee shall acquire the Premises and
Personalty through a direct deed of conveyance and bill of sale from the Seller.
2. Intangible Rights. To the extent that Assignee acquires the good
-----------------
will, going concern value and other intangible rights under the Contract (the
"intangible rights"), Assignee shall transfer such intangible rights to Crab
House through a bill of sale substantially in the form of Exhibit A attached
hereto. ---------
<PAGE>
5. Prorations and Post Closing Adjustments. Any Closing prorations
---------------------------------------
and any post closing adjustments, whether positive or negative, shall be the
property or liability, as the case may be, of Crab House and not Assignee.
6. Failure of Buyer to Close. If, as a result of a failure to close
-------------------------
the purchase of the Premises under the Contract, any liability is imposed on the
Buyer under Section 15 of the Contract (including any forfeiture of the
Deposit), Assignee shall pay all costs and expenses imposed upon the Buyer if
the failure to consummate closing was due to any action or inaction on the part
of Assignee; otherwise Crab House shall pay all such costs and expenses
(including forfeiture of the Deposit).
7. Failure of Seller to Close. If, as a result of a failure to close
--------------------------
the purchase of the Premises under the Contract, any liability is imposed on
Seller under Section 16 of the Contract, Crab House shall be entitled to a
refund of the Deposit, and any further damages paid by Seller shall be allocated
among Crab House and Assignee based on the damages established by each party.
8. Condition Precedent. It shall be a condition precedent to
-------------------
Assignee's and Crab House's obligations hereunder that a mutually acceptable
Lease Agreement is executed between Assignee and Crab House with respect to the
Premises.
9. Representations and Warranties. Crab House hereby makes the
------------------------------
following warranties and covenants to Assignee: (a) Crab House has full
corporate power and authority to enter into this Agreement and this Agreement
will not result in a default by either Crab House or Assignee under the
Contract, and (b) at closing Crab House will cause a Title Policy to be issued
in the name of Assignee, in substantially the form attached to the Contract, and
cause the survey provided to Assignee by Crab House to be re-certified to
Assignee.
10. Miscellaneous. Both Crab House and Assignee shall cooperate with
-------------
one another and in a timely manner execute all documents reasonably required to
give effect to the purchase and sale provided for herein. If any provision of
this Agreement is adjudicated by a court having jurisdiction over a dispute
arising herefrom to be invalid or otherwise unenforceable for any reason, such
invalidity or unenforceabilty shall not affect the other provisions hereof. This
Agreement, shall be governed and construed in accordance with the laws of the
State of Florida. This Agreement is the entire agreement between Crab House and
Assignee concerning the sale of the Premises and no modification hereof or
subsequent agreement relative to the subject matter hereof shall be binding on
either party unless reduced to writing and signed by the party to be bound. The
provisions of this Assignment shall survive Closing of the sale of the Premises.
11. Multiple Counter-Parts. This Agreement may be executed in one or
----------------------
more counterpart copies, each of which shall be deemed an original.
<PAGE>
In Witness Whereof, the parties here executed this Agreement as of the
date and year first above written.
CRAB HOUSE, INC.
/s/ William K.
By: ____________________________________
William K.
Name: __________________________________
President
Its: ___________________________________
U.S. RESTAURANT PROPERTIES OPERATING L.P.
By: U.S. RESTAURANT PROPERTIES, INC.
/s/ Robert Stetson
By: ____________________________________
Robert Stetson
Name: __________________________________
CEO - MOP
Its: ___________________________________
ASSIGNMENT AGREEMENT - PAGE 3
CRAB HOUSE, INC. - U. S. RESTAURANT PROPERTIES OPERATING L.P.
