UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 12)*
ARVIDA/JMB PARTNERS, L.P.
(Name of Issuer)
Limited Partnership Interests and Assignee Interests Therein
(Title of Class of Securities)
None
(CUSIP Number)
John P. Saldarelli
Raleigh Capital Associates L.P.
100 South Bedford Road
Mount Kisco, New York 10549
(914) 242-7700
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 9, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d- 1(g), check the
following box //.
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
AMENDMENT NO. 12 TO SCHEDULE 13D
This Amendment No. 12 amends certain information contained in the final
amendment to Schedule 14D-1 (as amended prior to the date hereof, the "Final
Amendment") filed by Raleigh Capital Associates L.P. ("Raleigh"), Raleigh GP
Corp., Rockland Partners, Inc. and Zephyr Partners on August 6, 1996 with
respect to the securities of Arvida/JMB Partners, L.P. ("Arvida"), which
constituted the initial filing on Schedule 13D under Section 13(d) of the Act.
Capitalized terms used but not defined herein have the meanings ascribed to them
in the Final Amendment.
This Statement hereby amends the items identified below, or the particular
paragraphs of such items which are identified below.
Item 4. Purpose of Transaction
Item 4 is hereby amended to add the following:
Raleigh, Arvida /JMB Managers, Inc., the general partner of Arvida (the
"Arvida General Partner"), The St. Joe Company, a Florida corporation (the
"Purchaser"), and American Real Estate Partners, L.P. ("AREP") have entered into
a Buy/Sell Agreement, dated as of November 6, 1998 (the "Agreement"), pursuant
to which, among other things (and subject to various conditions and limitations
set forth therein): (i) Raleigh must elect, on or prior to December 10, 1998,
either (a) to sell all of its Arvida Units to the Purchaser at a price
determined by the Arvida General Partner (the "Buy/Sell Price") and delivered to
Raleigh pursuant to a notice, dated November 11, 1998 (the "Buy/Sell Notice") (a
"Sale Election"), or (b) to purchase from the Arvida General Partner
substantially all of its assets, including the general partner interest and the
interests of the Associate Limited Partners in Arvida (collectively, the "GP
Assets") (a "Purchase Election"). If Raleigh makes a Purchase Election, it must
also make a tender offer (the "Tender Offer") for any and all outstanding Arvida
Units at a price equal to or greater than the Buy/Sell Price, which Tender Offer
would close contemporaneously with the closing of the purchase and sale of the
GP Assets. As of the closing of such purchase and sale, Raleigh would become the
general partner of Arvida. Nothing herein shall be deemed to commence a Tender
Offer, which Tender Offer would be commenced by Raleigh only following its
making a Purchase Election pursuant to, and subject to the terms and conditions
set forth in, the Agreement. Raleigh is currently conducting a "due diligence"
investigation of Arvida and the Arvida General Partner to enable it to determine
whether to make a Sale Election or a Purchase Election. No such determination
has yet been made. The Agreement and the Buy/Sell Notice are filed herewith as
Exhibits 1 and 2, respectively, and are incorporated by reference herein in
their entirety.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer
Item 6 is hereby amended to add the following:
The paragraph set forth under Item 4 of this Amendment No. 12 is hereby
incorporated herein by reference.
Item 7. Material to Be Filed as Exhibits
Exhibit 1. Buy/Sell Agreement dated as of November 6, 1998, among
Raleigh Capital Associates, L.P., American Real Estate
Partners, L.P., The St. Joe Company and Arvida/JMB
Managers, Inc.
Exhibit 2. Buy/Sell Notice dated November 11, 1998, delivered by
The St. Joe Company and Arvida/JMB Managers, Inc. to
Raleigh Capital Associates, L.P.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statements is true, complete and
correct.
Dated: November 13, 1998
RALEIGH CAPITAL ASSOCIATES L.P.
By: Zephyr Partners,
General Partner
By: GP Aeolus, Inc.,
General Partner
By: /S/ EDWARD MATTNER
Name: Edward Mattner
Title: Vice President
By: AREHGP, Inc.,
General Partner
By: /S/ JOHN SALDARELLI
Name: John Saldarelli
Title: President
ZEPHYR PARTNERS
By: GP Aeolus, Inc.,
General Partner
By: /S/ EDWARD MATTNER
Name: Edward Mattner
Title: Vice President
By: AREHGP, Inc.,
General Partner
By: /S/ JOHN SALDARELLI
Name: John Saldarelli
Title: President
[Signature Page for Amendment No. 12 to Schedule 13D
re ARVIDA/JMB PARTNERS, L.P.]
<PAGE>
GP AEOLUS, INC.
By: /S/ EDWARD MATTNER
Name: Edward Mattner
Title: Vice President
AREHGP, INC.
By: /S/ JOHN SALDARELLI
Name: John Saldarelli
Title: President
AMERICAN REAL ESTATE HOLDINGS LIMITED PARTNERSHIP
By: American Property Investors, Inc.
General Partner
By: /S/ JOHN SALDARELLI
Name: John Saldarelli
Title: Vice President
AMERICAN PROPERTY INVESTORS, INC.
By: /S/ JOHN SALDARELLI
Name: John Saldarelli
Title: Vice President
/S/ CARL C. ICAHN
CARL C. ICAHN
[Signature Page for Amendment No. 12 to Schedule 13D
re ARVIDA/JMB PARTNERS, L.P.]
RALEIGH BUY/SELL AGREEMENT
THIS AGREEMENT is made as of November _, 1998, among Raleigh Capital
Associates, L.P., a Delaware limited partnership ("Raleigh"), American Real
Estate Partners, L.P., a Delaware limited partnership ("AREP"), The St. Joe
Company, a Florida corporation ("Purchaser"), and Arvida/JMB Managers, Inc., a
Delaware corporation (the "General Partner"), which is the general partner of
Arvida/JMB Partners, L.P., a Delaware limited partnership (the "Partnership").
Raleigh owns 105,955 (the "Raleigh Interests") limited partnership
interests, or assignee interests therein, of the Partnership (the "Interests")
and claims to own an additional 792 Interests (the "Disputed Interests").
Raleigh desires to either sell all of the Raleigh Interests to Purchaser or
commence a cash tender offer for any and all outstanding Interests pursuant to
the terms hereunder. The General Partner and Raleigh have agreed upon an orderly
process for determining whether, and at what price, Raleigh shall either sell
the Raleigh Interests or commence an all cash tender offer for any and all of
the Interests (the "Offer").
If Raleigh elects pursuant to the terms hereof to commence, and closes, the
Offer as contemplated in this Agreement, subject to the terms and conditions of
this Agreement, the General Partner hereby agrees to transfer to Raleigh in
exchange for the consideration set forth herein, pursuant to Section 6.1B of the
Amended and Restated Agreement of Limited Partnership of the Partnership (the
"Partnership Agreement"), substantially all of its assets, including without
limitation (i) its general partnership interest in the Partnership, (ii) that
certain net worth note in the principal amount of $20,942,731 issued to the
General Partner by Northbrook Corporation, a Delaware corporation, (the "Net
Worth Note"), and (iii) its .1% interest as a general partner in Arvida/JMB
Partners, a Florida general partnership ("Arvida/JMB"), whereupon Raleigh will
succeed to the business of the General Partner and will be admitted to the
Partnership as a successor to the General Partner. In connection therewith, the
General Partner shall cause the transfer of (x) the associate limited
partnership interest in the Partnership of Arvida/JMB Limited Partnership, an
Illinois limited partnership ("A/J L.P."), subject to obtaining A/J L.P.'s
consent to such transfer, and (y) the associate limited partnership interest in
the Partnership of Arvida/JMB Associates, an Illinois general partnership
("A/J") (together with the general partnership interest, the Net Worth Note and
other assets of the General Partner, the "GP Assets") to entities designated by
Raleigh (the "Associate Limited Partner Assignees") in exchange for the
consideration set forth herein. Immediately thereafter, the parties will cause
to be filed with the Secretary of State of Delaware an amendment to the
Certificate of Limited Partnership of the Partnership reflecting the admission
of Raleigh as a general partner. The General Partner will thereupon withdraw
from the Partnership and the parties will cause to be filed with the Secretary
of State of Delaware a second amendment to the Certificate of Limited
Partnership of the Partnership reflecting the withdrawal of the General Partner.
Subject to the terms and conditions of this Agreement, the Purchaser shall
purchase the Raleigh Interests, should Raleigh elect pursuant to the terms
hereof to sell the Raleigh Interests. The General Partner has asked its
financial advisor, Lehman Brothers Inc. ("Lehman"), for its estimate of the
range of the hypothetical liquidation value of an Interest in the Partnership
(the "Lehman Estimated Liquidation Value") as of August 31, 1998, which has been
determined in a manner consistent with past practice.
NOW, THEREFORE, in consideration of the mutual covenants, agreements and
understandings herein contained and intending to be legally bound, the parties
hereto agree as follows:
1. Buy/Sell Notice. On a business day on or prior to November 11, 1998, the
General Partner and the Purchaser shall deliver to Raleigh by facsimile and
overnight courier service written notice (the "Buy/Sell Notice") of a price per
Interest, which price shall be within the range of the Lehman Estimated
Liquidation Value, reduced by the amount per Interest distributed by the
Partnership after August 31, 1998 (other than the distribution of $50 per
Interest paid on or about September 10, 1998 (the "September 1998 Distribution")
which was taken into account in determining the Lehman Estimated Liquidation
Value) (the "Buy/Sell Price"). The Buy/Sell Price, which shall be automatically
reduced by the amount per Interest actually distributed by the Partnership (as
of the date of such distribution) after the September 1998 Distribution and
prior to any applicable Closing hereunder, is the price at which (i) Purchaser
is willing to purchase the Raleigh Interests and (ii) the General Partner has
determined that, in the absence of another tender offer or change of control
transaction at a higher price, it will recommend the Offer to Interestholders
who need or want liquidity and will express no opinion and remain neutral with
respect to the Offer for all other Interestholders. The Buy/Sell Notice shall
also set forth, as of August 31, 1998, the purchase price for all of the GP
Assets other than the Net Worth Note (the "GP Assets Purchase Price") which
shall be determined by the General Partner in accordance with Exhibit A hereto
(whose determination shall be controlling absent manifest error). The Buy/Sell
Notice shall include (i) a written statement by Lehman of the Lehman Estimated
Liquidation Value as of August 31, 1998, which statement shall include a
description, in reasonable detail, of the methodology employed by Lehman in
determining such value and a confirmation by Lehman that the Lehman Estimated
Liquidation Value was determined in a manner consistent with past practice,
accompanied by a copy of any additional or backup material, if any, provided to
the General Partner in connection therewith and (ii) material showing the
General Partner's calculation of the GP Assets Purchase Price as of August 31,
1998 in sufficient detail to enable Raleigh to verify the accuracy of such
calculation.
2. Response Notice. (a) By 5:00 p.m., New York time on the twentieth
business day after the date on which the Buy/Sell Notice is faxed to Raleigh,
Raleigh must deliver to the General Partner and the Purchaser by facsimile and
overnight courier service written notice (the "Response Notice") to the General
Partner specifying whether it has elected to either (i) sell all, but not less
than all, of the Raleigh Interests (together with any Disputed Interests, the
dispute as to which has been resolved in Raleigh's favor and which have been
transferred to Raleigh prior to the date of the Raleigh Interests Closing (as
hereinafter defined) and such transfer is reflected on the books and records of
the Partnership (the "Resolved Interests")) at the Buy/Sell Price to Purchaser
(the "Sale Election") or (ii) commence the Offer at a price equal to or greater
than the Buy/Sell Price (the "Purchase Election"), it being understood by the
parties hereto that Raleigh may conduct due diligence as contemplated by Section
8(a) for 15 business days and then consider whether to make
a Sale Election or a Purchase Election during the next succeeding 5 business
days (e.g. if the Buy/Sell Notice is faxed on October 19, Raleigh must fax and
deposit with an overnight courier the Response Notice no later than November
16). Raleigh's Response Notice shall be accompanied by an Officer's Certificate
conforming to the requirement of the last paragraph of Section 10 hereof.
Consistent with the terms of Section 1 above, if Raleigh makes a Purchase
Election, it may deduct from the Offer price the amount of any distributions per
Interest made or declared by the Partnership after the September 1998
Distribution, through the date of the Offer Closing (as hereinafter defined).
(b) The parties hereto hereby agree that the General Partner's delivery of
a Buy/Sell Notice conforming to the requirements of Section 1 hereof creates a
binding obligation on Raleigh (i) to make either a Sale Election or a Purchase
Election and (ii) if a Purchase Election is made, subject to Section 4 hereof,
(A) to commence the Offer, and consummate the purchase for cash of all Interests
validly tendered to Raleigh in connection therewith (and not withdrawn), in
accordance with the terms hereof and (B) to consummate the purchase of the GP
Assets at the prices and in the manner set forth herein. If for any reason
whatsoever (x) Raleigh fails to timely deliver the Response Notice or (y)
Raleigh delivers what purports to be a Response Notice, but that Response Notice
does not comply with the requirements set forth herein for either a Sale
Election or a Purchase Election, then Raleigh hereby makes the Sale Election and
the purchase and sale of the Raleigh Interests shall be consummated in
accordance with the terms hereof. The parties further agree that (1) Raleigh's
making of a Sale Election conforming to the requirements of Section 2(a) hereof
creates a binding obligation on (A) the Purchaser, unless one or more of the
conditions set forth in Section 3(a) hereof has not been satisfied or waived by
the Purchaser, to purchase and Raleigh to sell the Raleigh Interests and any
Resolved Interests at the Raleigh Interests Closing (as hereinafter defined) at
the price and in the manner hereinafter set forth, and (B) the General Partner
to effect the transfer of the Raleigh Interests and the Resolved Interests from
Raleigh to the Purchaser in accordance with the terms hereof, and (2) Raleigh's
delivery of a Purchase Election conforming to the requirements of Section 2(a)
hereof and its conduct and consummation of the Offer in conformity with Section
4(a) hereof creates a binding obligation on the General Partner, subject to
Sections 5 and 14 hereof, to consummate, and to cause A/J and, if applicable,
A/J L.P. to consummate, the sale of the GP Assets in accordance with the terms
hereof.
3. Sale Closing. (a) If a Sale Election is made (or deemed to be made), the
closing of the purchase and sale of the Raleigh Interests and any Resolved
Interests (the "Raleigh Interests Closing") shall, subject to satisfaction or
waiver by the Purchaser and the General Partner of the conditions set forth
herein, take place on the earlier of (i) the tenth business day after the date
on which Raleigh makes a Sale Election pursuant to the Response Notice and (ii)
the thirtieth business day after the delivery of the Buy/Sell Notice, if Raleigh
does not timely deliver a Response Notice or if the Response Notice delivered
does not comply with the terms hereof (the "Raleigh Interests Closing Date").
The Raleigh Interests Closing shall take place at the offices of Arvida/JMB
Managers, Inc., a Delaware corporation, 900 North Michigan Avenue, Chicago,
Illinois 60611.
The Purchaser's obligation to consummate the Raleigh Interests Closing
shall be subject to the satisfaction or waiver in writing by the Purchaser of
the following conditions (except that a waiver of the conditions set forth in
clause (A) of paragraph (i), paragraph (ii) insofar as it relates to such clause
(A), paragraph (v) or paragraph (vi) must be made by each of the Purchaser and
the General Partner):
(i) since the date of this Agreement, no preliminary or permanent
injunction or other order of any federal or state court, government or
governmental authority or agency shall have been issued and shall remain in
effect which (A) makes illegal, delays or otherwise directly or indirectly
restrains or prohibits the purchase of the Raleigh Interests and any Resolved
Interests by Purchaser, (B) imposes or confirms limitations on the ability of
Purchaser effectively to exercise full rights of ownership of any Interests,
including, without limitation, the right to vote Interests on all matters
properly presented to the Partnership's Interestholders, (C) requires
divestiture by Purchaser of a material amount of Interests; or (D) would
materially adversely affect the business, properties, assets, liabilities,
financial condition, operations or results of operation of the Partnership taken
as a whole;
(ii) since the date of this Agreement, there shall not be any action taken
by, or any statute, rule, regulation or order enacted, promulgated or issued by,
any federal or state court, government or governmental authority or agency,
which would, directly or indirectly, result in any of the consequences referred
to in clauses (A) through (D) of paragraph (i) above;
(iii) since the date of this Agreement (A) no change or development shall
have occurred and remain in effect in the business, properties, assets,
liabilities, financial condition, operations, or results of operations of the
Partnership which is or would reasonably be expected to be materially adverse to
the Partnership taken as a whole, (B) no material breach by the General Partner
of its obligations under Section 8(b) hereof shall have occurred and remain in
effect, and (C) there shall have been no taking of action constituting, or
authorization or proposal by the General Partner of, an Organic Change pursuant
to the "proviso" clause of clause (E) of Section 8(b);
(iv) since the date of this Agreement, there shall not have occurred and
remain in effect (A) any general suspension of trading in, or limitation on
prices for, securities on any national securities exchange or in the over-the
counter market in the United States, (B) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States, (C) any
limitation by any governmental authority on the extension of credit by lending
institutions, or any imposition by any governmental authority of currency
controls, in the United States or (D) in the case of any of the foregoing
existing at the date of this Agreement, a material acceleration or worsening
thereof;
(v) the delivery by Raleigh of the Officer's Certificate described in the
last paragraph of Section 10 below;
(vi) the execution and delivery by Raleigh to the General Partner of the
Release Agreement pursuant to Section 14 hereof; and
(vii) the execution and delivery by Raleigh to the Purchaser of the
Purchaser Release Agreement substantially in the form of Exhibit B hereto (the
"Purchaser Release Agreement"), provided that the Purchaser has
contemporaneously executed and delivered to Raleigh a counterpart of such
Purchaser Release Agreement.
(b) At the Raleigh Interests Closing, the parties hereto shall
consummate the sale and purchase of the Raleigh Interests and any Resolved
Interests as follows:
(i) Purchaser shall deliver to Raleigh an amount equal to the
Buy/Sell Price multiplied by the number of Interests comprising the Raleigh
Interests and any Resolved Interests by wire transfer of immediately available
funds to an account designated by Raleigh to the General Partner in writing not
less than two business days prior to the Raleigh Interests Closing ("Raleigh
Interests Purchase Price").
(ii) Raleigh shall deliver to Purchaser one or more Assignments of
Interests in substantially in the form of Exhibit C hereto and all other
documents, instruments or writings and such other certificates of authority and
documents as Purchaser, the Partnership and their respective counsel may
reasonably request in connection with the purchase and sale of the Raleigh
Interests and any Resolved Interests, including without limitation any lien
releases and/or acknowledgments and consents from Raleigh's lenders.
(iii) As of the Raleigh Interests Closing, Raleigh shall irrevocably
transfer and assign to Purchaser all of the Raleigh Interests and any Resolved
Interests against payment to Raleigh of the Raleigh Interests Purchase Price in
accordance with Section 3(b)(i) hereof. Raleigh hereby authorizes and directs
the Partnership and the General Partner to transfer and assign to Purchaser all
of Raleigh's rights and interests in the Raleigh Interests and any Resolved
Interests to Purchaser as of the date of the Raleigh Interests Closing in
accordance with the immediately preceding sentence. RALEIGH SPECIFICALLY WAIVES
THE RIGHT TO RECEIVE AFTER THE RALEIGH INTERESTS CLOSING (i) ANY AND ALL
DISTRIBUTIONS AS SET FORTH IN THE PARTNERSHIP AGREEMENT WITH RESPECT TO THE
RALEIGH INTERESTS AND ANY RESOLVED INTERESTS HEREBY ASSIGNED (OTHER THAN
DISTRIBUTIONS MADE BY THE PARTNERSHIP PRIOR TO THE DATE OF THE RALEIGH INTERESTS
CLOSING WITH RESPECT TO THE RALEIGH INTERESTS OR THE RESOLVED INTERESTS)
("DISTRIBUTIONS") AND (ii) ANY AND ALL ALLOCATIONS OF PROFITS AND LOSSES AS SET
FORTH IN THE PARTNERSHIP AGREEMENT AND ALLOCATED WITH RESPECT TO THE RALEIGH
INTERESTS AND ANY RESOLVED INTERESTS HEREBY ASSIGNED FOR ANY PERIOD AFTER THE
LAST DAY OF THE FISCAL QUARTER IN WHICH SUCH RALEIGH INTERESTS CLOSING OCCURS
("PROFITS AND LOSSES"). Raleigh hereby irrevocably transfers and assigns to
Purchaser, effective as of the Raleigh Interests Closing, any and all such
Distributions (and in the event such Distributions are made to it, Raleigh shall
promptly pay or reimburse the amount of such Distributions to Purchaser) and any
and all such Profits and Losses.
(iv) Purchaser hereby constitutes and appoints the General Partner, with
full power of substitution, its true and lawful attorney-in-fact for itself and
in its name, place and stead to make, execute, sign, acknowledge, swear to,
deliver, record and file any documents or instruments which may be considered
necessary or desirable by the General Partner to carry out fully the provisions
of the Partnership Agreement, which power of attorney hereby granted shall be
deemed to be coupled with an interest and shall be irrevocable and survive
incapacity, dissolution or termination of Purchaser or any delivery by Purchaser
of an assignment of the whole or any portion of its interest in the Partnership.
Purchaser hereby accepts all of the terms of the Partnership Agreement. RALEIGH
SPECIFICALLY WAIVES THE RIGHT TO RECEIVE AFTER SUCH CLOSING (I) ANY AND ALL
DISTRIBUTIONS MADE WITH RESPECT TO THE SUBSEQUENTLY RESOLVED INTERESTS (OTHER
THAN DISTRIBUTIONS MADE WITH RESPECT TO SUCH SUBSEQUENTLY RESOLVED INTERESTS
PRIOR TO THE DATE OF SUCH CLOSING) AND (II) ANY AND ALL ALLOCATIONS OF PROFITS
AND LOSSES AS SET FORTH IN THE PARTNERSHIP AGREEMENT AND ALLOCATED WITH RESPECT
TO THE SUBSEQUENTLY RESOLVED INTERESTS ASSIGNED AT SUCH CLOSING FOR ANY PERIOD
AFTER THE LAST DAY OF THE FISCAL QUARTER IN WHICH SUCH CLOSING OCCURS.
(c) If after the Raleigh Interests Closing or any Raleigh Interests Call
Exercise the dispute as to the ownership of any Disputed Interests has been
resolved in Raleigh's favor and such Disputed Interests have been transferred to
Raleigh and such transfer is recognized on the books and records of the
Partnership ("Subsequently Resolved Interests"), for 90 days after the Raleigh
Interests Closing, Purchaser may, in its sole discretion, elect to purchase all
(but not less than all) of the Subsequently Resolved Interests for a purchase
price equal to the Buy/Sell Price (including, if applicable, any reduction in
such Price as a result of distributions made with respect to the Subsequently
Resolved Interests prior to the closing of such purchase). Purchaser shall elect
to purchase Subsequently Resolved Interests, if at all, by written notice to
Raleigh no later than the end of such 90 day period. The closing of such
purchase shall take place on the fifth business day after the expiration of such
90 day period and shall otherwise be substantially in accordance with the
provisions of Section 5(b).
4. The Offer. (a) If a Purchase Election is made, Raleigh shall commence
the Offer not later than the twentieth business day after the date on which
Raleigh makes a Purchase Election pursuant to the Response Notice.
Notwithstanding anything to the contrary herein, the Offer shall comply in all
material respects with the requirements of Sections 14(d) and 14(e) of the
Securities Exchange Act of 1934, as amended, and the regulations thereunder
("Securities Exchange Act"), all other applicable laws and with the terms of
this Agreement. The closing of the purchase and sale of the Interests tendered
pursuant to the Offer (the "Offer Closing"), may be conditioned on only the
following:
(i) since the making of the Purchase Election, no preliminary or permanent
injunction or other order of any federal or state court, government or
governmental authority or agency shall have been issued and shall remain in
effect which (A) makes illegal, delays or otherwise directly or indirectly
restrains or prohibits the making of the Offer or the acceptance for payment,
purchase of or payment for any Interests by Raleigh, or the purchase and sale of
the GP Assets in the manner contemplated hereby, (B) imposes or confirms
limitations on the ability of Raleigh effectively to exercise full rights of
ownership of any Interests or the GP Assets or to exercise its powers as general
partner of the Partnership subsequent to the GP Assets Closing, including,
without limitation, the right to vote Interests on all matters properly
presented to the Partnership's Interestholders, (C) requires divestiture by
Raleigh of a material amount of Interests; or (D) would materially adversely
affect the business, properties, assets, liabilities, financial condition,
operations or results of operation of the Partnership taken as a whole or
provides that the Partnership would dissolve upon consummation of the transfer
of the GP Assets in the manner contemplated hereby;
(ii) (A) since the making of the Purchase Election, there shall not be any
action taken by, or any statute, rule, regulation or order enacted, promulgated
or issued by, any federal or state court, government or governmental authority
or agency, which would, directly or indirectly, result in any of the
consequences referred to in clauses (A) through (D) of paragraph (i) above and
(B) if Raleigh is advised by its counsel that a filing under HSR (as defined in
Section 10(b)) is required, the applicable waiting period shall have expired or
been terminated;
(iii) since the making of the Purchase Election (A) no change or
development shall have occurred and remain in effect in the business,
properties, assets, liabilities, financial condition, operations, or results of
operations of the Partnership which is or would reasonably be expected to be
materially adverse to the Partnership taken as a whole, (B) no material breach
by the General Partner of its obligations under Sections 4(b), 4(c), 4(d) or
8(b) of this Agreement shall have occurred and remain in effect, and (C) there
shall have been no taking of action constituting, or authorization or proposal
by the General Partner of, an Organic Change pursuant to the "proviso" clause of
clause (E) of Section 8(b);
(iv) since the making of the Purchase Election, there shall not have
occurred and remain in effect (A) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange or in
the over-the counter market in the United States, (B) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (C) any limitation by any governmental authority on the extension of
credit by lending institutions, or any imposition by any governmental authority
of currency controls, in the United States or (D) in the case of any of the
foregoing existing at the time of the making of the Purchase Election, a
material acceleration or worsening thereof;
(v) the occurrence, contemporaneously with the Offer Closing, of the GP
Assets Closing, provided that Raleigh has satisfied all of its obligations with
respect to the purchase of the GP Assets; and
(vi) the execution and delivery by the General Partner and JMB Realty
Corporation ("JMB") of the Indemnification and Release Agreement and the
execution and delivery by the JMB Principals (as hereinafter defined) of the
letter annexed to the Indemnification and Release Agreement as Exhibit B, in
each case pursuant to Section 14 hereof.
Raleigh shall keep the Offer open for no more than 40 business days and no
less than 30 business days and shall promptly purchase for cash any and all
Interests validly tendered (and not withdrawn) prior to the expiration of the
Offer (the date on which the Offer expires in accordance with this sentence, as
the same may be extended in accordance with the proviso set forth below, the
"Final Expiration Date"); provided, however, that Raleigh may extend the Final
Expiration Date under the following circumstances: (A) if there is in effect, on
such date, any preliminary or permanent injunction or other order of any federal
or state court, government or governmental authority or agency of the type
described in Section 4(a)(i) (an "Offer Injunction"), the Final Expiration Date
may be extended to the earliest practicable date on which the Offer may expire
in accordance with the Securities Exchange Act following the earlier to occur of
(1) the vacation or dissolution of such Offer Injunction and the dissemination
to Interestholders of additional offering materials containing any necessary
disclosure relating thereto or (2) the last day of the Cooperation Period; (B)
the Final Expiration Date may be extended to the earliest practicable date on
which the Offer may expire in accordance with the Securities Exchange Act
following the dissemination to Interestholders of additional offering materials
prepared for the purpose of complying with comments by the staff of the
Securities and Exchange Commission (the "Commission"), provided that Raleigh
shall use commercially reasonable efforts to comply with such comments as
promptly as practicable; (C) in the event that a competing offer for Interests
is commenced by a third party bidder who is not affiliated with Raleigh (a
"Competing Offer"), the Final Expiration Date may be extended to the earliest
practicable date on which the Offer may expire in accordance with the Securities
Exchange Act following an increase in the Offer price to a price equal to or
higher than the price offered by the competing bidder and the dissemination to
Interestholders of amended offering materials disclosing such increase, provided
that the Offer is extended for the purpose of making such increase prior to the
occurrence of the Final Expiration Date theretofore in effect; and (D) in the
event that Raleigh is advised by its counsel that a filing under HSR will be
required in order to consummate the GP Assets Closing, the Final Expiration Date
of the Offer may be extended to the earliest practicable date on which the Offer
may expire in accordance with the Securities Exchange Act following the making
of such filing and any required filing by the General Partner, the expiration or
termination of any applicable waiting period and the dissemination to
Interestholders of additional offering materials containing any necessary
disclosure relating thereto. Raleigh shall make a filing under HSR in connection
with the consummation of the Offer Closing and the GP Assets Closing, the GP
Assets Call Exercise or the closing of a Permitted Transaction, if such filing
is required under HSR. Raleigh shall make all decisions regarding the conduct of
the Offer and the acquisition and transfer of Interests pursuant thereto, except
that Raleigh shall not amend or otherwise modify the terms of the Offer or
conduct the Offer or acquire or transfer Interests in a manner that violates or
is inconsistent with its obligations under this Agreement, including without
limitation, Raleigh shall not condition its Offer on the satisfaction of any
conditions other than those provided for in this Agreement. At the Offer
Closing, Raleigh shall, unless one or more of the conditions set forth in
Section 4(a) hereof has not been satisfied or waived by Raleigh, purchase all
Interests validly tendered prior to the Final Expiration Date (and not
withdrawn) pursuant to the Offer. Raleigh shall retain at its sole expense a
firm (the "Information Agent") to solicit tenders from Interestholders and to
provide Interestholders with information about the opportunity to tender
Interests in the Offer.
(b) If Raleigh makes the Offer at or above the Buy/Sell Price in a timely
manner in accordance with the terms hereof in all material respects and unless
another tender offer or change of control transaction is proposed at a higher
price, the General Partner (i) will recommend the Offer to Interestholders who
need or want liquidity, and (ii) will remain neutral with respect to the Offer
for all other Interestholders. The General Partner may change any recommendation
it has made to Interestholders with respect to the Offer to reflect such other
tender offer or change of control transaction at a higher price (but no such
proposal of a higher priced tender offer or change of control transaction or
change by the General Partner of its recommendation with respect to the Offer
shall release the General Partner from its obligation to consummate the sale of
the GP Assets to Raleigh in accordance with the terms and conditions hereof).
The General Partner shall, and shall cause the Partnership and its transfer
agent (consistent with its standard practices and procedures) to cooperate with
Raleigh in promulgating the Offer in the manner hereinafter set forth in this
Section 4(b). Within 5 business days following the date on which Raleigh makes a
Purchase Election pursuant to the Response Notice, the General Partner will
cause the Partnership, at Raleigh's cost and expense not to exceed $1,000, to
furnish Raleigh with a list, as of the most recent practicable date and in
computer readable form, of the names, addresses and numbers of Interests held by
Interestholders of the Partnership (the "List"), together with such computer
processing data as is reasonably necessary to make use of such computer readable
List and a printout of the List for verification purposes. The General Partner
will not, and will not cause or permit its affiliates to, take any action that
in its judgment would reasonably be expected to result in the conditions to the
Offer set forth in Section 4(a) (other than the condition in Section
4(a)(iii)(C)) above not to be satisfied. In addition, the General Partner (i)
will comply, and cause the Partnership to comply, in all material respects with
the Securities Exchange Act in connection with the Offer, and (ii) subject to
satisfaction in all material respects of the conditions and requirements for
transfer of Interests generally imposed or required by the Partnership and its
transfer agent, including delivery of duly completed forms of assignment and
payment of all applicable transfer fees, will, if the GP Assets Closing (as
hereinafter defined) has not yet occurred, recognize the transfer to Raleigh of
Interests acquired in the Offer and, if requested by Raleigh, will admit Raleigh
as a limited partner with respect to all Raleigh Interests and all Interests
acquired by Raleigh in the Offer and as to which the transfer to Raleigh has
been recognized. The General Partner shall make a filing under HSR in connection
with the consummation of the Offer Closing and the GP Assets Closing, the GP
Assets Call Exercise or the closing of a Permitted Transaction if required under
HSR.
(c) Other than as provided in this Agreement, the General Partner will not,
and will cause its affiliates not to, directly or indirectly, purchase or
otherwise acquire beneficial ownership of Interests, enter into any agreement
with a third party for the General Partner or any of its affiliates to purchase
or otherwise acquire beneficial ownership of any Interests, or make any offer to
purchase or otherwise acquire beneficial ownership of Interests (other than the
Raleigh Interests and any Resolved Interests), at any time commencing on the
date hereof through and including the earliest to occur of (i) the Raleigh
Interests Closing, (ii) the Final Expiration Date, (iii) an Offer Default (as
hereinafter defined), or (iv) the termination of this Agreement.
(d) In connection with the Offer, Raleigh with respect to the Raleigh
Interests will consent to, and with respect to all Interests tendered in the
Offer will obtain the consent of the tendering Interestholders to, waive and
amend Section 7.1 of the Partnership Agreement of the Partnership so as to
permit the transfer and/or assignment to Raleigh of all Interests tendered in
the Offer, notwithstanding that such transfer and/or assignment may or would
result in the termination of the Partnership under the applicable provisions of
the Internal Revenue Code of 1986, as amended. Subject to Raleigh complying in
all material respects with the requirements of Section 4 in the conduct of the
Offer, the General Partner will cooperate with Raleigh in giving effect to, and
will consent to, any such waiver and amendment of the Partnership Agreement;
provided, however, nothing herein shall be deemed to require the General Partner
to recommend in favor of any such waiver and amendment or to assist or
participate in the solicitation of consents with respect thereto.
(e) Anything herein to the contrary notwithstanding, if a Competing Offer
is commenced for any and all Interests at a price in excess of the Offer price,
Raleigh may elect, in its sole discretion, at any time such Competing Offer
remains outstanding to sell all, but not less than all, of the Raleigh Interests
(and any Resolved Interests) to the competing bidder pursuant to the Competing
Offer. If the Raleigh Interests are sold pursuant to such Competing Offer,
Raleigh shall be released from its obligation to consummate the Offer and
Raleigh and the General Partner shall each be released from their respective
obligations to consummate the purchase and sale of the GP Assets.
(f) Anything herein to the contrary notwithstanding, if Raleigh makes a
Purchase Election, it shall be released from its obligations to commence the
Offer pursuant to Section 4(a) hereof if one or more of the conditions set forth
in Section 4(a)(i), (ii), (iii) or (iv) has not been satisfied as of the date by
which Raleigh would otherwise be required to commence the Offer. In the event
that Raleigh commences the Offer notwithstanding the failure of any such
condition to be satisfied as of the commencement date of the Offer, its
commencement of the Offer will not constitute a waiver of its right to assert
the failure of such condition, or any other condition set forth in Section 4(a),
to be satisfied as the basis for a decision to terminate the Offer without
purchasing any Interests tendered pursuant thereto.
(g) If Raleigh makes a Purchase Election, Raleigh and the Purchaser shall
execute and deliver to each other the Purchaser Release Agreement.
5. GP Assets Closing. (a) The closing of the purchase and sale of the GP
Assets (the "GP Assets Closing") shall be conditioned upon the consummation of
the Offer Closing (it being understood that the conditions set forth in Section
4(a) hereof are conditions to Raleigh's obligation to consummate the purchase of
the GP Assets as well as conditions to Raleigh's obligation to purchase
Interests tendered pursuant to the Offer; provided that any waiver of any such
conditions by Raleigh under Section 4(a) shall also constitute a waiver of such
conditions under this Section 5) and shall take place contemporaneously
therewith. The GP Assets Closing shall take place at the offices of Arvida/JMB
Managers, Inc., a Delaware corporation, 900 North Michigan Avenue, Chicago,
Illinois 60611. The General Partner's obligation to consummate the GP Assets
Closing shall be subject to the satisfaction, or waiver in writing by the
General Partner, of the following conditions:
(i) since the date of this Agreement, no preliminary or permanent
injunction or other order of any federal or state court, government or
governmental authority or agency shall have been issued and shall remain in
effect which (A) makes illegal, delays, or otherwise directly or indirectly
restrains or prohibits the purchase or sale of the GP Assets in the manner
contemplated hereby or (B) provides that the Partnership would dissolve upon
consummation of the transfer of the GP Assets in the manner contemplated hereby;
(ii) (A) since the date of this Agreement, there shall not be any action
taken by, or any statute, rule, regulation or order enacted, promulgated or
issued by, any federal or state court, government or governmental authority or
agency, which would, directly or indirectly, result in any of the consequences
referred to in clauses (A) or (B) of paragraph (i) above and (B) if the General
Partner is advised by its counsel that a filing under HSR is required in
connection with the GP Assets Closing, the GP Assets Call Exercise or the
closing of a Permitted Transaction, the applicable waiting period shall have
expired or been terminated;
(iii) Raleigh shall have (concurrently with the GP Asset Closing, the
closing of the GP Asset Call or closing of a Permitted Transaction) either (A)
arranged for the refinancing by the Partnership of all amounts outstanding or
reasonably expected to be outstanding under the Credit Agreement and
Construction Loan identified on Schedule 1 hereto (hereinafter the "Credit
Agreement" and the "Construction Loan," respectively); (B) purchased the
Partnership's notes to the lenders under the Credit Agreement and Construction
Loan; (C) made or caused an affiliate to make a loan to the Partnership in a
principal amount sufficient to enable the Partnership to pay off all outstanding
liabilities and obligations under the Credit Agreement and Construction Loan; or
(D) obtained the consent of the lenders required pursuant to the Credit
Agreement and Construction Loan;
(iv) the execution and delivery by Raleigh of the Indemnification and
Release Agreement and the execution and delivery by the Raleigh Principal (as
hereinafter defined) of the letter annexed to the Indemnification and Release
Agreement as Exhibit A, in each case pursuant to Section 14 hereof; and
(v) Raleigh shall have previously executed and delivered to Purchaser the
Purchaser Release Agreement.
In order to enable Raleigh to determine whether to terminate the Offer without
purchasing tendered Interests on account of the failure of the condition set
forth in Section 4(a)(v) hereof (or, if applicable, whether to waive such
condition), the General Partner will notify Raleigh as promptly as reasonably
practicable under the circumstances, of its intention not to consummate the
closing of the purchase and sale of the GP Assets on account of a failure of the
either or both of the conditions set forth in Section 5(a)(i) or (ii).
(b) The parties acknowledge and agree that the transfer of the associate
limited partnership interest in the Partnership of A/J L.P. is subject to the
consent of its partners in accordance with the terms of its partnership
agreement. Anything herein to the contrary notwithstanding, in the event such
consent is not obtained by the GP Assets Closing, any GP Asset Call Exercise or
the closing of any Permitted Transaction as the case may be, Raleigh shall not
purchase such associate limited partnership interest (but shall remain obligated
to purchase, and the General Partner shall remain obligated to sell, all of the
other GP Assets in accordance with the terms hereof). In the event that the
associated limited partnership interest of A/J L.P. is not transferred to
Raleigh pursuant to the immediately preceding sentence, the GP Assets Purchase
Price shall be reduced by 10%.
(c) At the GP Assets Closing, the parties hereto shall consummate the sale
and purchase of the GP Assets as follows:
(i) (A) Raleigh, on its own behalf and on behalf of the Associate Limited
Partner Assignees, shall deliver to the General Partner, on its behalf and on
behalf of A/J and, if applicable, A/J L.P., an amount equal to the GP Assets
Purchase Price (reduced, if applicable, in accordance with Section 5(b) above)
by wire transfer of immediately available funds to an account designated by the
General Partner to Raleigh in writing not less than two business days prior to
the GP Assets Closing and (B) Raleigh shall assign to the General Partner a
note, in the form of Exhibit D hereto, issued by AREP to Raleigh in a principal
amount equal to the principal amount then outstanding on the Net Worth Note (the
"Raleigh Net Worth Note").
(ii) (A) The General Partner shall transfer to Raleigh substantially all of
its assets pursuant to Section 6.1B of the Partnership Agreement, including
without limitation (1) its general partnership interest in the Partnership, (2)
the Net Worth Note and (3) its .1% interest as a general partner in Arvida/JMB,
and shall cause each of A/J and, subject to Section 5(b) above, A/J L.P. to
transfer to the Associate Limited Partner Assignees its associate limited
partner interest in the Partnership. With respect to such transfer of GP Assets,
the General Partner shall deliver to Raleigh one or more Assignments of GP
Assets in form and substance reasonably satisfactory to Raleigh and its counsel
and all other documents, instruments or writings and such other certificates of
authority and documents in form and substance reasonably satisfactory to Raleigh
and its counsel, as Raleigh may reasonably request.
(B) Concurrently with such transfer, Raleigh and the General Partner shall
also execute and deliver all documents and instruments contemplated by Section
11.2 of the Partnership Agreement in connection with the admission of a
successor general partner, whereupon Raleigh will succeed to the business of the
General Partner and will be admitted to the Partnership as a successor to the
General Partner. Raleigh and the General Partner will cause an appropriate
certificate of amendment of the Partnership's Certificate of Limited Partnership
to be filed with the Secretary of State of Delaware (and, if required, shall
make any necessary filing in each jurisdiction in which the Partnership is
qualified to do business) reflecting the admission of Raleigh as a general
partner pursuant to this paragraph.
(C) Upon consummation of the transaction contemplated by this Section 5(c)
and in accordance with Section 6.1C of the Partnership Agreement, the General
Partner shall withdraw from the Partnership and Raleigh and the General Partner
will cause an appropriate certificate of amendment of the Partnership's
Certificate of Limited Partnership to be filed with the Secretary of State of
Delaware (and, if required, shall make any necessary filing in each jurisdiction
in which the Partnership is qualified to do business) reflecting the withdrawal
of the General Partner and each associate limited partner as partners of the
Partnership.
(d) Effective at the GP Assets Closing, the General Partner shall, and
shall cause A/J and, if applicable, A/J L.P. to, irrevocably transfer and assign
to Raleigh and the Associate Limited Partner Assignees, as the case may be, the
GP Assets against payment to the General Partner of the GP Assets Purchase Price
and assignment of the Raleigh Net Worth Note in accordance with Sections 5(a),
(b) and (c) hereof. The General Partner, A/J and, if applicable, A/J L.P. each
hereby authorizes and directs the Partnership to transfer and assign to Raleigh
and the Associate Limited Partner Assignees, as the case may be, all of its
rights and interests in the GP Assets as of the date of the GP Assets Closing in
accordance with the immediately preceding sentence. THE GENERAL PARTNER, A/J
AND, IF APPLICABLE, A/J L.P. EACH SPECIFICALLY WAIVES THE RIGHT TO RECEIVE AFTER
THE GP ASSETS CLOSING (i) ANY AND ALL DISTRIBUTIONS AS SET FORTH IN THE
PARTNERSHIP AGREEMENT WITH RESPECT TO THE GP ASSETS HEREBY ASSIGNED ("GP
DISTRIBUTIONS") AND (ii) ANY AND ALL ALLOCATIONS OF PROFITS AND LOSSES AS SET
FORTH IN THE PARTNERSHIP AGREEMENT AND ALLOCATED WITH RESPECT TO THE GP ASSETS
HEREBY ASSIGNED FOR ANY PERIOD AFTER THE LAST DAY OF THE FISCAL QUARTER IN WHICH
THE GP ASSETS CLOSING OCCURS ("GP PROFITS AND LOSSES"). The General Partner, A/J
and, if applicable, A/J L.P. each hereby irrevocably transfers and assigns to
Raleigh effective as of the GP Assets Closing any and all such GP Distributions
(and in the event such GP Distributions are made to them, the General Partner,
A/J and, if applicable, A/J L.P. shall promptly pay or reimburse the amount of
such GP Distributions to Raleigh) and any and all such GP Profits and Losses.
(e) Effective at the GP Assets Closing, each of the General Partner and A/J
and, if applicable, A/J L.P. hereby constitutes and appoints Raleigh, with full
power of substitution, its true and lawful attorney-in-fact for itself and in
its name, place and stead to make, execute, sign, acknowledge, swear to,
deliver, record and file any documents or instruments which may be considered
necessary or desirable by Raleigh to carry out fully the provisions of the
Partnership Agreement, which power of attorney hereby granted shall be deemed to
be coupled with an interest and shall be irrevocable and survive the incapacity,
dissolution or termination of the General Partner, but is limited to matters
necessary for Raleigh to exercise authority as, and to consummate the transfer
of the interest in the Partnership of, the General Partner of the Partnership.
Raleigh hereby accepts all of the terms of the Partnership Agreement.
6. Raleigh Interests Call. (a) If Raleigh makes a Purchase Election in the
Response Notice, but (i) does not commence the Offer within twenty business days
thereafter for any reason other than the failure of the condition in Section
4(a)(iii)(B) to be satisfied, (ii) the Offer does not comply in all material
respects with the requirements set forth herein and any such deficiency is not
remedied within five business days after the General Partner provides written
notice to Raleigh describing such deficiency in reasonable detail, or (iii) does
not, for any reason other than the failure of one or more of the conditions in
Section 4(a)(iii)(B), 4(a)(v) (other than as a result of a breach or default by
Raleigh in failing to close the purchase of the GP Assets in accordance with
this Agreement) or 4(a)(vi) to be satisfied, close the Offer and consummate the
purchase of any and all Interests validly tendered (and not withdrawn) pursuant
thereto (each, an "Offer Default"), then, Purchaser may, at any time within 90
days after the occurrence of such Offer Default, purchase all of the Raleigh
Interests and any Resolved Interests (the "Raleigh Interests Call") at a price
(the "Raleigh Interests Call Price") equal to (x) if the Offer Default arises as
a result of Raleigh's failure to commence the Offer pursuant to Section 4(f)
hereof or a failure to purchase Interests tendered pursuant to the Offer as a
result of the failure of one or more of the conditions in Section 4(a)(i),
4(a)(ii), 4(a)(iii)(A) or (C), or 4(a)(iv) to be satisfied, 100% of the Buy/Sell
Price or (y) in the case of any other Offer Default, 80% of the Buy/Sell Price,
and in either case otherwise substantially in accordance with, and subject to,
Sections 3(a), 3(b)(ii)-(iv) and 14. Notwithstanding the foregoing, if Raleigh
terminates the Offer and does not consummate the purchase of any and all
Interests validly tendered and not withdrawn because an Injunction (as defined
in Section 15 hereof) is in effect (an "Injunction Termination"), an Injunction
Termination shall not constitute an Offer Default or trigger a Raleigh Interests
Call. To exercise the Raleigh Interests Call, Purchaser shall deliver within
said 90 day period a written notice to Raleigh specifying that Purchaser has
elected to purchase all, but not less than all, of the Raleigh Interests and any
Resolved Interests at the Raleigh Interests Call Price (the "Raleigh Interests
Call Exercise"). The closing of the purchase and sale of the Raleigh Interests
shall occur on the later of (i) the fifth business day following the Raleigh
Interests Call Exercise by the Purchaser or (ii) as soon as practicable
following the satisfaction or waiver of the conditions to closing set forth in
Section 3 hereof (the date on which such closing occurs being hereinafter
referred to as the "Raleigh Interests Call Closing Date"); provided, however,
that the Raleigh Interests Call Closing Date shall occur, if at all, no later
than 60 business days after the Raleigh Interests Call Exercise. Such closing
shall be held substantially in accordance with, and subject to, Sections 3 and
14 hereof, except that the purchase price payable to Raleigh shall be the
applicable percentage of the Buy/Sell Price (i.e., 100% or 80%, as the case may
be) determined in accordance with this Section 6(a).
(b) As of the Raleigh Interests Call Closing Date , Raleigh hereby
irrevocably transfers and assigns to Purchaser all of the Raleigh Interests and
any Resolved Interests. Raleigh hereby authorizes and directs the Partnership
and the General Partner to transfer and assign to Purchaser all of Raleigh's
rights and interests in the Raleigh Interests and any Resolved Interests to
Purchaser as of the first day of the fiscal quarter next succeeding the fiscal
quarter in which the Raleigh Interests Call closing date occurs (the "Raleigh
Interests Call Closing Date"). RALEIGH SPECIFICALLY WAIVES THE RIGHT TO RECEIVE
AFTER THE RALEIGH INTERESTS CALL CLOSING DATE (i) ANY AND ALL DISTRIBUTIONS FOR
ANY PERIOD AND (ii) ANY AND ALL ALLOCATIONS OF PROFITS AND LOSSES AS SET FORTH
IN THE PARTNERSHIP AGREEMENT AND ALLOCATED WITH RESPECT TO THE RALEIGH INTERESTS
AND ANY RESOLVED INTERESTS HEREBY ASSIGNED FOR ANY PERIOD AFTER THE LAST DAY OF
THE FISCAL QUARTER IN WHICH THE RALEIGH INTERESTS CALL CLOSING DATE OCCURS.
Raleigh hereby irrevocably transfers and assigns to Purchaser any and all such
Distributions (and in the event such Distributions are made to it, Raleigh shall
promptly pay or reimburse the amount of such Distributions to Purchaser) and any
and all such Profits and Losses.
(c) Effective as of the Raleigh Interests Call Closing Date, each of
Purchaser and Raleigh hereby constitutes and appoints the General Partner, with
full power of substitution, its true and lawful attorney-in-fact for itself and
in its name, place and stead to make, execute, sign, acknowledge, swear to,
deliver, record and file any documents or instruments which may be considered
necessary or desirable by the General Partner to carry out fully the provisions
of the Partnership Agreement, which power of attorney hereby granted shall be
deemed to be coupled with an interest and shall be irrevocable and survive
incapacity, dissolution or termination of Purchaser or Raleigh or any delivery
by Purchaser or Raleigh of an assignment of the whole or any portion of its
interest in the Partnership. Purchaser hereby accepts all of the terms of the
Partnership Agreement.
(d) The Raleigh Interests Call constitutes liquidated damages with respect
to any Offer Default and shall be the sole and exclusive remedy available to
Purchaser and the General Partner with respect to any such Default, provided,
however that if the Purchaser exercises the Raleigh Interests Call and Raleigh
fails to transfer the Raleigh Interests to Purchaser upon a Raleigh Interests
Call Exercise for any reason other than Purchaser's or the General Partner's
failure to perform any obligation required to be performed by either of them
hereunder in connection with such Raleigh Interests Call Exercise, then such
Raleigh Interests Call shall not be Purchaser's or General Partner's sole and
exclusive remedy with respect to the Offer Default triggering the Raleigh
Interests Call, and Purchaser and the General Partner shall be entitled to all
remedies available to it under this Agreement, at law or in equity with respect
thereto.
7. GP Assets Call. (a) If Raleigh makes a Sale Election and has satisfied
all conditions and taken all actions required to be satisfied or taken by it in
connection with the purchase and sale of the Raleigh Interests and the Purchaser
does not, for any reason, other than the failure of the conditions in Section
3(a)(v) or 3(a)(vi) to be satisfied, consummate such purchase and sale (a
"Purchaser Default") in accordance with the terms and conditions hereof, then
Raleigh may, at any time within 90 days after the occurrence of the Purchaser
Default, purchase, subject to the provisions described below relating to A/J
L.P., the GP Assets (the "Purchaser Triggered GP Assets Call") at a price equal
to (x) if the Purchaser Default arises as a result of the failure of one or more
of the conditions in Section 3(a)(i), 3(a)(ii), 3(a)(iii)(A) or (C), or 3(a)(iv)
to be satisfied, 100% of the GP Assets Purchase Price plus the assignment of
100% of the Raleigh Net Worth Note, or (y) in the case of any other Purchaser
Default, 80% of the GP Assets Purchase Price plus the assignment of 100% of the
Raleigh Net Worth Note, and in either case otherwise substantially in accordance
with, and subject to, Sections 5 (other than the first sentence of Section 5(a))
and 14. If Raleigh makes a Purchase Election and has satisfied all conditions
and taken all actions required to be satisfied or taken in connection with the
consummation of the Offer Closing and the GP Assets Closing, and (i) the General
Partner or A/J fails to consummate the GP Assets Closing in accordance with the
terms and conditions of this Agreement, or (ii) the General Partner breaches in
any material respect any of its obligations pursuant to Section 8(b) (a "Section
8(b) Default") or Section 4(b), (c) or (d) hereof and such breach, if curable,
is not cured within five business days after Raleigh provides the General
Partner written notice describing such breach in reasonable detail (such Section
8(b) Default, or any such default under Section 4(b), (c) or (d), being
hereinafter sometimes referred to as a "General Partner Default"), then at any
time within 90 days after the later to occur of the consummation of the Offer or
the General Partner Default, Raleigh may purchase, subject to the provisions
described below relating to A/J L.P., the GP Assets (the "General Partner
Triggered GP Assets Call") at a price equal to 80% of the GP Assets Purchase
Price plus the assignment of 100% of the Raleigh Net Worth Note, and otherwise
substantially in accordance with, and subject to, Sections 5 (other than the
first sentence of Section 5(a)) and 14. The Purchaser Triggered GP Assets Call
and the General Partner Triggered GP Assets Call are herein collectively
referred to as the "GP Assets Call". To exercise the GP Assets Call, Raleigh
shall deliver within the applicable 90 day period a written notice to the
General Partner specifying that Raleigh has elected to purchase the GP Assets at
the applicable GP Assets Call Price (the "GP Assets Call Exercise"). The closing
of the purchase and sale of the GP Assets shall occur on the later of (i) the
fifth business day following the GP Assets Call Exercise by Raleigh or (ii) as
soon as practicable following the satisfaction or waiver by the General Partner
of the conditions to such closing set forth in Section 5 hereof (other than the
first sentence of Section 5(a)) and by Raleigh of the conditions set forth in
Sections 4(a)(i) through (iv) and Section 4(a)(vi) hereof (except that, for this
purpose, the conditions in Sections 4(a)(i) through (iv) shall apply only to
events occurring since the GP Assets Call Exercise and, if such GP Assets Call
is a Purchaser Triggered GP Assets Call, references in such Sections to the
making of the Offer and purchase of Interests pursuant thereto shall be deemed
to be deleted) (the date on which such closing occurs being hereinafter referred
to as the "GP Assets Call Closing Date"); provided, however, that, subject to
Section 15, the GP Assets Call Closing Date shall occur, if at all, no later
than 60 business days after the GP Assets Call Exercise. Such closing shall be
held substantially in accordance with, and subject to, Sections 5 (except for
the first sentence of Section 5(a)) and 14 hereof, except that the purchase
price payable to the General Partner, A/J and, if applicable, A/J L.P. shall be
the applicable percentage of the GP Purchase Price (i.e., 100% or 80%, as the
case may be) determined in accordance with this Section 7(a) plus the assignment
of 100% of the Raleigh Net Worth Note.
(b) As of the GP Assets Call Closing Date, the General Partner, A/J and, if
applicable, A/J L.P. each hereby irrevocably transfers and assigns to Raleigh
and the Associate Limited Partner Assignees, as the case may be, all of the GP
Assets in accordance with, and subject to the conditions set forth in, Section 5
(other than the first sentence of Section 5(a)) hereof. The General Partner, A/J
and, if applicable, A/J L.P. each hereby authorizes and directs the Partnership
to transfer and assign to Raleigh and the Associate Limited Partner Assignees,
as the case may be, all of its rights and interests in the GP Assets on the GP
Assets Call Closing Date in accordance with the immediately preceding sentence.
THE GENERAL PARTNER, A/J AND, IF APPLICABLE, A/J L.P. EACH SPECIFICALLY WAIVES
THE RIGHT TO RECEIVE AFTER THE GP ASSETS CALL CLOSING DATE (i) ANY AND ALL GP
DISTRIBUTIONS AND (ii) ANY AND ALL ALLOCATIONS OF GP PROFITS AND LOSSES FOR ANY
PERIOD AFTER THE LAST DAY OF THE FISCAL QUARTER IN WHICH THE GP ASSETS CALL
CLOSING DATE OCCURS.
(c) Effective as of the GP Assets Call Closing Date, the General Partner
and each of A/J and, if applicable, A/J L.P. hereby constitutes and appoints
Raleigh, with full power of substitution, its true and lawful attorney-in-fact
for itself and in its name, place and stead to make, execute, sign, acknowledge,
swear to, deliver, record and file any documents or instruments which may be
considered necessary or desirable by Raleigh to carry out fully the provisions
of the Partnership Agreement, which power of attorney hereby granted shall be
deemed to be coupled with an interest and shall be irrevocable and survive the
incapacity, dissolution or termination of the General Partner or A/J or, if
applicable, A.J. L.P., but is limited to matters necessary for Raleigh to
exercise authority as, and to consummate the transfer of the interests in the
Partnership of, the General Partner, A/J, and, if applicable, A/J L.P. Raleigh
hereby accepts all of the terms of the Partnership Agreement.
(d) The GP Assets Call constitutes liquidated damages with respect to any
Purchaser Default or any General Partner Default, and shall be the sole and
exclusive remedy available to Raleigh against Purchaser and/or the General
Partner with respect to any such Default; provided, however, that if Raleigh
exercises the GP Assets Call and the General Partner fails to transfer, or to
cause A/J to transfer, their GP Assets to Raleigh upon a GP Assets Call Exercise
for any reason other than Raleigh's failure to perform any obligation required
to be performed by it hereunder in connection with such GP Assets Call Exercise,
then such GP Assets Call shall not be Raleigh's sole and exclusive remedy with
respect to the Default triggering the GP Assets Call and Raleigh shall be
entitled to all remedies available to it under this Agreement, at law or in
equity with respect thereto.
8. Access to Information; Conduct of Business; Assistance.
(a) The General Partner and the Partnership have provided Raleigh and its
representatives with access to certain limited information relating to the
business and operations of the General Partner and the Partnership and certain
related matters (the "Diligence Information") and acknowledge that, in order for
Raleigh to be in a position to determine whether to make a Sale Election or a
Purchase Election pursuant to Section 2(a) hereof, it will require additional
Diligence Information. Accordingly, on and subject to the terms and conditions
of that certain Confidentiality Agreement, dated as of the date hereof, between
Raleigh and the Partnership (the "Confidentiality Agreement"), during the period
commencing on the date the Buy/Sell Notice is faxed through and including the
fifteenth business day after the date the Buy/Sell Notice is faxed, the General
Partner will reasonably promptly provide, and will cause the Partnership
reasonably promptly to provide, Raleigh and its representatives with access to
such additional Diligence Information relating to the Partnership, its
subsidiary entities and the General Partner as Raleigh and such representatives
may reasonably request; provided, however, that Raleigh shall limit access to
any Diligence Information reasonably designated in writing as sensitive by the
General Partner in accordance with the Confidentiality Agreement. Subject to the
Confidentiality Agreement, the General Partner, upon request by Raleigh, will
(or will cause the Partnership to), at Raleigh's expense, make photocopies of
any written Diligence Information other than that designated as sensitive for
review outside of the Partnership's offices or other offices at which such
Diligence Information is maintained. In order to effect an orderly transition of
control of the Partnership's business to Raleigh following Raleigh's making a
Purchase Election pursuant to Section 2 hereof, during the period (the
"Additional Access Period") commencing on the date Raleigh makes such Purchase
Election through the earlier to occur of (A) the date of an Offer Default and
(B) the Standstill Termination Date, (i) the General Partner will provide, and
will cause the Partnership to provide, Raleigh and its representatives with
access to such Diligence Information relating to the Partnership and the General
Partner as Raleigh may reasonably request (subject to the limitations set forth
above in this Section 8(a)) and with reasonable access to employees of the
Partnership; and (ii) the Purchaser will provide Raleigh and its representatives
with reasonable access to employees of the Sub-manager who have responsibility
for matters relating to the Partnership.
(b) Except as otherwise contemplated by this Agreement, during the period
commencing on the date hereof through and including the earliest to occur of:
(i) Raleigh Interests Closing or the Raleigh Interests Call Effective Date, (ii)
the GP Assets Closing, the GP Assets Call Closing Date or the closing date of a
Permitted Transaction, (iii) an Offer Default, (iv) the Offer Closing (v) the
date that Raleigh notifies the General Partner in writing that Raleigh,
notwithstanding having made a Purchase Election, has determined to terminate the
Offer on account of a failure of one or more conditions in Section 4(a) to be
satisfied, (vi) the date on which Raleigh delivers notices that it has exercised
its rights under Section 4(f) not to commence the Offer, (vii) the date
specified in clause (E) of Section 9(a)(i) hereof, and (viii) the date specified
in clause (G) of Section 9(a)(i) hereof (such earliest date, the "Section 8
Termination Date"), the General Partner shall not, and shall cause the
Partnership not to, take, authorize or propose the taking of, any action outside
of the ordinary course of the business of the General Partner or the
Partnership, including without limitation: (A) the issuance or redemption of,
authorization or proposal to issue or redeem any Interests of any class, or any
securities convertible into, or rights, warrants or options to acquire, any such
Interests or other convertible securities, (B) the issuance or redemption of,
authorization or proposal to issue or redeem any other securities (other than
the issuance or redemption of debt securities in the ordinary course of
business) by the Partnership; (C) the refinancing of any of the Partnership's
properties, or incurrence of other indebtedness by the Partnership, in each such
case, other than in the ordinary course of the Partnership's business and
consistent with past practice; (D) the declaration or payment of any
distribution, other than in cash and consistent with past practice (with any
distribution out of Cash Flow (as defined in the Partnership Agreement) being
deemed consistent with past practice), on any Partnership interests; and (E) the
authorization, proposal or announcement of an intention to propose any merger,
consolidation or business combination transaction involving the Partnership,
acquisition by the Partnership of material assets, disposition by the
Partnership of all or substantially all of its assets, material change in the
Partnership's capitalization or any comparable event (each an "Organic Change");
provided, however that notwithstanding the foregoing, the General Partner and
the Partnership may take action constituting, or authorize or propose, an
Organic Change and any financing or recapitalization in connection therewith to
the extent that the General Partner determines in the good faith exercise of its
judgment, after consultation with counsel, that the failure to take action
constituting, or authorize or propose, such Organic Change would reasonably be
expected to constitute a violation of its fiduciary duty to Interestholders.
(c) If requested by Raleigh, the General Partner shall use its reasonable
efforts to assist Raleigh and the transfer agent in resolving claims with
respect to the Disputed Interests; provided, however, nothing herein shall be
deemed to require the General Partner to expend any of its or the Partnership's
funds or to pursue any legal action in connection with assisting in the
resolution of such claims. In the event Raleigh makes the Purchase Election, the
General Partner, if requested by Raleigh, will cooperate with Raleigh in any
discussions Raleigh may have with the transfer agent for the purpose of
negotiating a reduction in the transfer fees payable in connection with the
transfer of Interests acquired by Raleigh pursuant to the Offer. Notwithstanding
the foregoing, nothing herein shall be deemed to require the General Partner or
the Partnership to terminate, or otherwise modify or change the terms of, its
relationship with the transfer agent. If requested by Raleigh, the General
Partner shall cooperate with Raleigh (i) in any discussions Raleigh may have
with the lenders under the Credit Agreement and the Construction Loan with
respect to obtaining the consent of such lenders to the transactions
contemplated hereby and/or (ii) in connection with the refinancing of the
Partnership's indebtedness under the Credit Agreement and the Construction Loan.
The General Partner will not permit the Partnership or Arvida (as hereinafter
defined) to agree to any amendment, modification or waiver of the Management and
Supervisory Agreement (as hereinafter defined), the Sub-Management Agreement (as
hereinafter defined) or the License Agreement included as Exhibit A to the
Management and Supervisory Agreement (hereinafter the "License Agreement"),
which amendment, modification or waiver would have the effect of terminating any
such agreement or releasing Arvida, the Sub-Manager (as hereinafter defined) or
the licensor under the License Agreement (the "Licensor") from any material
obligation thereunder prior to the date on which Arvida, the Sub-Manager or
Licensor would be entitled to terminate any such agreement as of the date
hereof. The General Partner will not take or omit to take, or cause the
Partnership or Arvida to take, or omit to take, any action constituting a
material breach of the Sub-Management Agreement by Arvida or a material breach
of the Management and Supervisory Agreement or License Agreement by the
Partnership or Arvida. The obligations of the General Partner under this Section
8(c) shall terminate on the Section 8 Termination Date.
9. Standstill.
(a) Raleigh Standstill.
(i) During the period commencing on the date hereof and either (x) ending
on the earliest of (such earliest date, the "Standstill Termination Date") (A)
the GP Assets Closing, the GP Assets Call Closing Date or the closing date of a
Permitted Transaction, (B) the termination of this Agreement by Raleigh pursuant
to Section 13(a)(iii) hereof, (C) the later of (I) the date that Raleigh
notifies the General Partner in writing that Raleigh, notwithstanding having
made the Purchase Election, has determined to terminate the Offer on account of
a failure of one or more of the conditions set forth in Section 4(a) to be
satisfied, or (II) in the event such termination of the Offer constitutes an
Offer Default pursuant to Section 6(a), 120 days after the occurrence of such
Offer Default, provided, in the case of an Offer Default, that the Raleigh
Interests Call has not been timely exercised prior to such Standstill
Termination Date or, if so exercised, the closing of the assignment of the
Raleigh Interests and any Resolved Interests has not occurred in accordance with
Section 6 hereof for any reason other than a breach by Raleigh of its
obligations pursuant to said Section, (D) if, in accordance with Section 4(f),
Raleigh does not commence the Offer, then 120 days after Raleigh delivers notice
that it has exercised its rights under Section 4(f), provided, that the Raleigh
Interests Call has not been timely exercised prior to such Standstill
Termination Date or, if so exercised, the closing of the assignment of the
Raleigh Interests has not occurred in accordance with Section 6 hereof for any
reason other than a breach by Raleigh of its obligations under this Agreement,
(E) 120 days after the date designated in Section 3(a) hereof as the Raleigh
Interests Closing Date, if the Purchaser elects not to consummate the Raleigh
Interests Closing on account of a failure in one or more of the conditions set
forth in Section 3(a) (other than the condition set forth in clause (v) or (vi)
of Section 3(a)) to be satisfied or waived, (F) an Injunction Termination
occurs, or (G) 120 days after the occurrence of a Purchaser Default, provided
that a Purchaser Triggered GP Assets Call has not been timely exercised or, if
so exercised, the closing of the assignment of the GP Assets to Raleigh pursuant
to Section 7 hereof has not occurred for any reason other than a breach by
Raleigh of its obligations under this Agreement, or (y) if none of the events
described in clause (x) occurs, then continuing indefinitely (such period herein
the "Standstill Period"), neither Raleigh, nor any person or entity controlling,
controlled by or under common control with Raleigh (the "Standstill Persons"),
may, with regard to any matter, either directly or indirectly, (1) request a
meeting of Interestholders, (2) solicit proxies or consents, (3) participate in
a solicitation of proxies or consents or a request for a meeting of
Interestholders or (4) work in concert with, encourage, facilitate, support or
assist in any manner a third party in such third party's solicitation of proxies
or consents or request for a meeting of Interestholders; except that any
Standstill Person may solicit proxies or consents (A) as contemplated by
Sections 4(d) or 15 of this Agreement, (B) in support of solicitations made by
the General Partner after the date hereof or (C) in the case where another
person has initiated a proxy or consent solicitation at a time while the Offer
is outstanding which if successful would materially and adversely affect the
consummation of the Offer Closing or the GP Assets Closing, Raleigh may, but
shall have no obligation to, solicit proxies or consents for the purpose of
defeating such solicitation. For purposes of this Agreement, "solicit,"
"solicitation" and "proxies" shall have the meaning given to such terms under
Regulation 14A under the Securities Exchange Act.
(ii) Except as expressly permitted by this Agreement, during the Standstill
Period no Standstill Person may initiate, propose, encourage or otherwise
solicit or participate in any form of business combination or similar
transaction involving the Partnership, including a merger, consolidation,
exchange offer, tender offer, or sale or liquidation of the Partnership's
assets, or any form of restructuring, recapitalization or similar transaction
with respect to the Partnership (each a "Business Combination"), without the
prior approval of the General Partner. If the General Partner approves a
Business Combination or recommends a Business Combination to Interestholders,
Standstill Persons may participate therein on terms no less advantageous than
those offered to any other Interestholder of the Partnership, in its capacity as
an Interestholder. Notwithstanding the provisions of Section 9(a)(i) or (ii)
hereof, any Standstill Person may: (A) bid for, offer to purchase or purchase
any property or properties of the Partnership which the Partnership has publicly
announced an intention to sell or liquidate or with respect to which the
Partnership has retained a broker to facilitate the sale or liquidation thereof;
and (B) subject to clause (iii) of this Section 9(a), vote any Interests owned
by such Standstill Person in any manner such Standstill Person deems appropriate
in connection with any matter put to a vote of Interestholders, or consent to
any proposal for which Interestholder consents are solicited, by the General
Partner or any unrelated third party, and may grant a proxy to the General
Partner or any unrelated third party soliciting proxies with respect to any
Interests owned by such Standstill Person.
(iii) No Standstill Person may deposit any Interests in a voting trust or
subject any Interests to any arrangement or agreement with respect to the voting
of such Interests inconsistent with the terms of this Agreement or become or
participate as a member of a "group" that includes any third party and that
constitutes a "beneficial owner" of any Interests (with such quoted terms having
the meanings ascribed to them in Section 13(d) of the Securities Exchange Act
and the rules and regulations thereunder) other than a voting arrangement or
agreement solely among, or a group consisting solely of, Raleigh and its
affiliates.
(b) General Partner Standstill.
(i) In the event Raleigh acquires the GP Assets pursuant to a GP Assets
Closing, a GP Assets Call Exercise or a Permitted Transaction (collectively, a
"GP Standstill Event"), neither the General Partner, nor any person or entity
controlling, controlled by or under common control with General Partner (the "GP
Persons"), may, with regard to any matter, either directly or indirectly, (1)
request a meeting of Interestholders, (2) solicit proxies or consents, (3)
participate in a solicitation of proxies or consents or a request for a meeting
of Interestholders, or (4) work in concert with, encourage, facilitate, support
or assist in any manner a third party in such third party's solicitation of
proxies or consents or request for a meeting of Interestholders.
(ii) Except as expressly permitted by this Agreement, following a GP
Standstill Event, no GP Person may initiate, propose, encourage or otherwise
solicit or participate in any form of Business Combination involving the
Partnership, without the prior approval of Raleigh or the successor general
partner. If Raleigh or the successor general partner approves a Business
Combination or recommends a Business Combination to Interestholders, GP Persons
may participate therein on terms no less advantageous than those offered to any
other Interestholder of the Partnership, in its capacity as an Interestholder.
Notwithstanding the provisions of Section 9(b)(i) or (ii) hereof, any GP Person
may: (A) bid for, offer to purchase or purchase any property or properties of
the Partnership which the Partnership has publicly announced an intention to
sell or liquidate or with respect to which the Partnership has retained a broker
to facilitate the sale of liquidation thereof; and (B) subject to clause (iii)
of this Section 9(b), vote any Interests owned by such GP Person in any manner
such GP Person deems appropriate in connection with any matter put to a vote of
Interestholders, or consent to any proposal for which Interestholder consents
are solicited, by the general partner or any unrelated third party, and may
grant a proxy to the general partner or any unrelated third party soliciting
proxies with respect to any Interests owned by such GP Person.
(iii) No GP Person may deposit any Interests in a voting trust or subject
any Interests to any arrangement or agreement with respect to the voting of such
Interests inconsistent with the terms of this Agreement or become or participate
as a member of a "group" that includes any third party and that constitutes a
"beneficial owner" of any Interests (with such quoted terms having the meanings
ascribed to them in Section 13(d) of the Securities Exchange Act and the rules
and regulations thereunder) other than a voting arrangement or agreement solely
among, or a group consisting solely of, the General Partner and its affiliates.
10. Raleigh Representations. Raleigh represents and warrants to Purchaser,
the Partnership and the General Partner that the statements contained in this
Section 10 are correct and complete as of the date of this Agreement and shall
be correct and complete as of the Raleigh Interests Closing or upon the date on
which the Raleigh Interests Call is exercised as though then made:
(a) Raleigh is a limited partnership duly organized, validly existing and
in good standing under the laws of Delaware and is qualified to do business in
every jurisdiction in which its ownership of property or conduct of business
requires it to qualify and the failure to so qualify would have a material
adverse effect on Raleigh's business, operations or financial condition. Raleigh
possesses all requisite power and authority and all material licenses, permits
and authorizations necessary to carry out the transactions contemplated by this
Agreement.
(b) This Agreement has been duly executed and delivered by Raleigh and
constitutes the legal, valid and binding obligation of Raleigh, enforceable
against Raleigh in accordance with its terms, and the Indemnification and
Release Agreement, the Release Agreement and/or the Purchaser Release Agreement,
to the extent required to be executed and delivered by Raleigh hereunder (the
"Raleigh Ancillary Documents"), will upon such execution and delivery constitute
the legal, valid and binding obligations of Raleigh enforceable against Raleigh
in accordance with their respective terms. The execution, delivery and
performance by Raleigh of this Agreement and the consummation by Raleigh and the
Associate Limited Partner Assignees of the transactions contemplated hereby and
thereby will not (i) subject to complying with the terms of the Partnership
Agreement, violate any provision of any law, rule, regulation, agreement,
document or instrument to which Raleigh or any of the Associate Limited Partner
Assignees is subject or (ii) conflict or violate any order, judgment,
injunction, award or decree applicable to Raleigh or any of the Associate
Limited Partner Assignee. Except for materials required to be filed with the
Commission pursuant to the Securities Exchange Act and any filing under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR"), the
execution, delivery and performance by Raleigh of this Agreement and the
consummation by Raleigh and the Associate Limited Partner Assignees of the
transactions contemplated hereby does not require any consent of or any filing
with any court or administrative or governmental body or agency or any third
party, except that the sale of the Raleigh Interests and the Resolved Interests
hereunder by Raleigh would require the consent of ING (U.S.) Capital Corporation
("ING") or the repayment by Raleigh of its outstanding indebtedness to ING
pursuant to that certain Term Loan Agreement dated May 15, 1998, (the "ING Term
Loan Agreement") which consent shall be obtained as of the Raleigh Interests
Closing Date or the Raleigh Interest Call Closing Date, as the case may be. To
the actual knowledge of Raleigh, (i) no material breach or default by Raleigh or
any of its affiliates under the ING Term Loan Agreement or under any related
pledge or security agreement has occurred and is continuing and (ii) no request
has been made by or on behalf of Raleigh or ING or any of their respective
affiliates to register a lien in favor of ING or any of its affiliates on any of
the transfer records of the Partnership with respect to the Raleigh Interests or
the Disputed Interests.
(c) Raleigh owns of record and beneficially all of the Raleigh Interests
(and if any Resolved Interest are transferred to Raleigh subsequent to the date
hereof, will, upon the effective date of such transfer, own of record and
beneficially such Resolved Interests, free and clear of any claims, liens,
encumbrances, security interests, options, charges or restrictions whatsoever
("Liens") (other than the Lien of ING (U.S.) Capital Corporation and as set
forth in the Partnership Agreement), and has all requisite legal right, power
and authority to transfer such Raleigh Interests (and Resolved Interests) to
Purchaser. Upon transfer of the Raleigh Interests (and any such Resolved
Interests) to Purchaser at the Raleigh Interests Closing or upon exercise of the
Raleigh Interests Call and receipt by Raleigh of the consideration therefor,
Purchaser will acquire the Raleigh Interests (and any such Resolved Interests)
free and clear of any Liens (other than Liens created or arising out of actions
taken by the Purchaser and other than as set forth in the Partnership
Agreement).
(d) Raleigh and the Associate Limited Partner Assignee and their respective
partners, officers and directors have such knowledge and experience in financial
and business matters that Raleigh is capable of evaluating the merits and risks
of the exercise of the Sale Election or the Purchase Election. In entering into
this Agreement, Raleigh has relied solely upon its own investigation and
analysis, its knowledge of the industry in which the Partnership conducts its
business and the representations and warranties of Purchaser and the General
Partner expressly set forth in this Agreement, and not upon any other
representations, warranties or statements of any kind. Raleigh and each of the
Associate Limited Partner Assignees is an "accredited investor" within the
meaning given to the term under SEC Regulation D.
As a condition to exercising the Purchase Election, the Sale Election or
the GP Assets Call, Raleigh shall deliver at the time of exercise of such
Election or Call and at the Closing thereunder to the General Partner and the
Partnership an Officer's Certificate certifying that (i) all of the foregoing
representations and warranties are true and correct as of such time, (ii)
Raleigh has received information with respect to all matters that Raleigh
considers material to Raleigh's decision to exercise the Sale Election, the
Purchase Election or GP Assets Call, and (iii) Raleigh, the Associate Limited
Partner Assignees, their attorneys and/or any accountants and other persons
Raleigh has retained to advise it with respect to the exercise of the Sale
Election, the Purchase Election or the GP Assets Call have had ample opportunity
to ask questions of and receive answers from a person acting on behalf of the
Partnership concerning the transactions contemplated by this Agreement.
11. Purchaser Representations. Purchaser represents and warrants to Raleigh
and the General Partner that the statements contained in this Section 11 are
correct and complete as of the date of this Agreement and shall be correct and
complete as of the Raleigh Interests Closing or upon the date the Raleigh
Interests Call is exercised as though then made:
(a) Purchaser is a corporation organized, validly existing and in good
standing under the laws of Florida. Purchaser possesses all requisite power and
authority to carry out the transactions contemplated by this Agreement.
(b) This Agreement has been duly executed and delivered by Purchaser and
constitutes the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, and the Purchaser Release
Agreement, to the extent required to be executed and delivered by the Purchaser
hereunder, will upon such execution and delivery constitute the legal, valid and
binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms. The execution, delivery and performance by Purchaser
of this Agreement and the Purchaser Release Agreement and the consummation by
Purchaser of the transactions contemplated hereby and thereby will not (i)
violate any provision of any law, rule, regulation, agreement, document or
instrument to which the Purchaser is subject or (ii) conflict or violate any
order, judgment, injunction, award or decree applicable to Purchaser.
(c) The Purchaser has received information with respect to all matters that
the Purchaser considers material to its decision to enter into this Agreement
and to purchase the Raleigh Interests in the event that Raleigh makes a Sale
Election or the Purchaser exercises the Raleigh Interests Call, and acknowledges
that the Purchaser, its attorneys and/or any accountants and other persons the
Purchaser has retained to advise it with respect to the transactions
contemplated by this Agreement (including the purchase of the Raleigh Interests
and any Resolved Interests) have had ample opportunity to ask questions of and
receive answers from persons acting on behalf of the Partnership concerning the
Raleigh Interests and any Resolved Interests and the transactions contemplated
hereby.
(d) The officers, directors and partners of the Purchaser have such
knowledge and experience in financial and business matters that the Purchaser is
capable of evaluating the merits and risks of the purchase of the Raleigh
Interests and any Resolved Interests pursuant to this Agreement. In entering
into this Agreement, the Purchase has relied solely upon its own investigation
and analysis, its knowledge of the industry in which the Partnership conducts
its business and the representations and warranties of Raleigh and the General
Partner expressly set forth in this Agreement, and not upon any other
representations, warranties or statements of any kind. The Purchaser is
acquiring the Raleigh Interests and any Resolved Interests for investment
purposes only and not with a view to the distribution thereof.
(e) Purchaser hereby represents and warrants that St. Joe/Arvida Company,
L.P., a Delaware limited partnership ("St. Joe/Arvida"), shall not permit or
consent to any amendment of the Sub-Management Agreement or License Agreement
that would have the effect of terminating either such agreement or releasing
Sub-Manager/Licensor from any of its material obligations thereunder prior to
the date on which such party would be entitled to terminate either such
agreement as of the date hereof.
12. General Partner Representations. The General Partner represents and
warrants to Raleigh that the statements contained in this Section 12 (and to the
Purchaser that the statements contained in Sections 12(a) and 12(b)) are correct
and complete as of the date of this Agreement and shall be correct and complete
as of the GP Assets Closing, the GP Asset Call Effective Date or the closing
date of a Permitted Transaction, as the case may be, (or, in the case of the
Purchaser, as of the Raleigh Interests Closing or the Raleigh Interests Call
Effective Date, as the case may be) as though then made:
(a) The General Partner is a corporation duly organized, validly existing
and in good standing under the laws of Delaware and is qualified to do business
in every jurisdiction in which its ownership of property or conduct of business
requires it to qualify. The General Partner possesses all requisite power and
authority and all material licenses, permits and authorizations necessary to own
and operate its properties, to carry on its businesses as now conducted and
presently proposed to be conducted and to carry out the transactions
contemplated by this Agreement.
(b) This Agreement has been duly executed and delivered by the General
Partner and constitutes the legal, valid and binding obligation of the General
Partner, enforceable against the General Partner in accordance with its terms,
and the Indemnification and Release Agreement or the Release Agreement, to the
extent required to be executed and delivered by the General Partner (the
"General Partner Ancillary Document"), will upon such execution and delivery
constitute the legal, valid and binding obligation of the General Partner
enforceable against the General Partner in accordance with its terms. Except as
set forth on Schedule 1, the execution, delivery and performance by the General
Partner of this Agreement and the General Partner Ancillary Document and the
consummation by the General Partner of the transactions contemplated hereby and
thereby will not (i) subject to complying with the terms of the Partnership
Agreement, violate any provision of any law, rule, regulation, agreement,
document or instrument to which the General Partner is subject, (ii) conflict or
violate any order, judgment, injunction, award or decree applicable to the
General Partner. Except as set forth on Schedule 1 and except for materials
required to be filed with the Commission pursuant to the Securities Exchange Act
and any filing under HSR, the execution, delivery and performance by the General
Partner of this Agreement and the consummation by the General Partner and the
associate limited partners of the transactions contemplated hereby do not
require any filing with any court or administrative or governmental body or
agency or the consent of any third party, other than the consent of the partners
of A/J L.P. as described in Section 5(b) hereof.
(c) The General Partner owns of record and beneficially the Net Worth Note,
the general partner interest in Arvida/JMB and the general partner interest in
the Partnership, and each associate limited partner owns of record and
beneficially its associate limited partnership interest in the Partnership, in
each case, free and clear of all Liens, other than as set forth in the
Partnership Agreement, and, subject to the terms of the Partnership Agreement,
each has the requisite legal right, power and authority to transfer such GP
Assets to Raleigh or its respective Associate Limited Partner Assignees. Upon
transfer of the GP Assets to Raleigh and such respective Associate Limited
Partner Assignees and receipt by the General Partner and the associate limited
partners of the consideration therefor, Raleigh and such Associate Limited
Partner Assignees will acquire their respective GP Assets free and clear of any
Liens (other than Liens created or arising out of actions taken by Raleigh or
any such Associated Limited Partner Assignees, and other than as set forth in
the Partnership Agreement).
(d) The sole assets of the General Partner as of the date hereof consist of
its general partner interest in the Partnership, a 0.1% interest in Arvida/JMB,
the Net Worth Note and other assets which in the aggregate are immaterial to the
business of the General Partner taken as a whole. As of the date hereof, the
General Partner is the sole general partner of the Partnership.
(e) The balances of the General Partner's Capital Account (as
defined in the Partnership Agreement) and A/J's Capital Account in the
Partnership as of December 31, 1997 were $531,569 and $0.00, respectively, and
as of December 31, 1998 will be not less than $531,569 and $0.00, respectively.
(f) The aggregate amount distributed to Interestholders through the date
hereof is $293,218,306 or $725.79 per Interest.
(g) The General Partner represents and warrants that: (i) except in the
event of a material breach by one of the parties thereto of its obligations
thereunder, the Sub-Management, Advisory and Supervisory Agreement (the
"Sub-Management Agreement") dated as of November 12, 1997, by and between Arvida
Company, an Illinois corporation ("Arvida"), and St. Joe/Arvida ("Sub-
Manager"), provides that it continues in effect until the Management, Advisory
and Supervisory Agreement (the "Management and Supervisory Agreement"), dated as
of September 10, 1987, by and between the Partnership and Arvida has terminated;
(ii) except in the event of a material breach by the Partnership of its
obligations thereunder, the Management and Supervisory Agreement is subject to
termination by Arvida only upon sixty days prior notice to the Partnership,
which notice may be given only in the event that, and on or after the date on
which, an affiliate of JMB Realty Corporation, a Delaware corporation, ceases to
be a general partner of the Partnership and (iii) to its actual knowledge, no
material breach or default by the Partnership of its obligations under the
Management and Supervisory Agreement or by Arvida of its obligations under the
Sub-Management Agreement has occurred and is continuing.
13. Termination. (a) Anything to the contrary herein notwithstanding, this
Agreement may be terminated and the transactions contemplated hereby abandoned
at any time prior to the Raleigh Interests Closing or the Closing of the Offer:
(i) by mutual written consent of the parties hereto;
(ii) by the General Partner or the Purchaser, if Raleigh has committed a
material breach of its representations, warranties, covenants or agreements and
has failed to cure such breach within 5 days after receipt of written notice of
such breach from the General Partner or if the Purchaser elects not to purchase
the Raleigh Interests as a result of the failure of one or more of the
conditions set forth in Section 3(a) to be satisfied or waived; or
(iii) by Raleigh, if the General Partner or Purchaser has committed a
material breach of its representations, warranties, covenants or agreements and
has failed to cure such breach within 5 days after receipt of written notice of
such breach from Raleigh or if Raleigh elects not to purchase Interests pursuant
to the Offer as a result of the failure of any one or more of the conditions set
forth in Section 4(a) to be satisfied or waived.
(b) If this Agreement is terminated and the transactions contemplated
hereby are abandoned, this Agreement shall become void and of no further force
or effect, except for the provisions of Sections 6, 7, 8, 9, 13, 14, 16 through
19 and 21 through 26 and except for the Confidentiality Agreement, which shall
remain in full force and effect. Nothing in this Section 13 shall be deemed to
release any party from any liability for any breach by such party of the terms
and provisions of this Agreement (with respect to which any and all claims shall
survive) or to impair the right of any party to compel specific performance by
any other party of its obligations under this Agreement.
14. Mutual Release; Indemnity.
In connection with the Raleigh Interests Closing or the Raleigh Interests
Call Exercise, on the one hand, or the GP Assets Closing, the GP Assets Call
Exercise or the closing of a Permitted Transaction, on the other hand, it is the
desire of the parties to resolve any and all claims or disputes among them with
respect to all matters relating to the Partnership, including without limitation
any and all claims with respect to their interests as general and/or limited
partners (or as holders of assignee interests therein) and with respect to their
prior conduct (herein collectively "claims"). Accordingly, the parties in
connection with, and as a further condition to the consummation of any such
Closing or Call Exercise, shall execute and deliver, in the case of the Raleigh
Interests Closing or the Raleigh Interests Call Exercise, a Release Agreement in
the form of Exhibit E hereto, and in the case of the GP Assets Closing, the GP
Assets Call Closing or the closing of a Permitted Transaction, an
Indemnification and Release Agreement in the form of Exhibit F hereto. In the
case of the GP Assets Closing, the GP Assets Call Closing or the closing of a
Permitted Transaction, (a) the General Partner shall also cause JMB to execute
and deliver the Indemnification and Release Agreement and shall cause Judd
Malkin and Neil Bluhm (the "JMB Principals") to execute and deliver a letter
agreement in the form of Exhibit B to the Indemnification and Release Agreement
and (b) Raleigh shall cause Carl C. Icahn (the "Raleigh Principal") to execute
and deliver a letter agreement in the form of Exhibit A to the Indemnification
and Release Agreement.
15. Injunction of GP Assets Closing. Anything herein to the contrary
notwithstanding, in the event (i) that Raleigh and the General Partner are
unable to consummate the GP Assets Closing following a Purchase Election or a
Purchaser or General Partner Triggered GP Assets Call as a result of the
issuance of an injunction or other order by any federal or state court,
government or governmental authority or agency which by its terms prohibits
consummation of the GP Assets Closing or (ii) an injunction or other order has
been issued by any federal or state court, government or governmental authority
or agency which provides that the Partnership would dissolve upon consummation
of the GP Assets Closing (an "Injunction"):
(a) If Raleigh has made a Purchase Election and the Offer is outstanding at
the time an Injunction is issued, Raleigh, subject to its obligations under
Section 15(c), may (i) extend the Offer, on one or more occasions, through the
last day of the Cooperation Period (as hereinafter defined); and (ii) (A) at any
time during the Cooperation Period terminate the Offer without purchasing any
Interests tendered pursuant thereto pursuant to an Injunction Termination as
contemplated by Section 6(a) hereof or (B) purchase all Interests validly
tendered (and not withdrawn) pursuant to the Offer in accordance with the terms
of the Offer and this Agreement. The period commencing on the date an Injunction
is first issued (the "Issuance Date") and ending on the earliest to occur of (x)
an Injunction Termination, (y) the date on which such Injunction is vacated,
dissolved or overturned on appeal pursuant to a non-appealable order of a court
of competent jurisdiction and (z) the six-month anniversary of the Issuance Date
is hereinafter referred to as the "Cooperation Period."
(b) The provisions of this paragraph (b), and of paragraphs (c), (d) and
(e) of this Section 15, shall apply whether or not the Offer is outstanding at
the time an Injunction is issued. In the event that any third party initiates an
action in any federal or state court or before any government or governmental
authority or agency seeking the issuance of an Injunction, Raleigh and the
General Partner shall cooperate in connection with responding to, and shall
jointly resist, the efforts of such third party, and if an Injunction is issued,
shall through the expiration of the Cooperation Period cooperate and use
reasonable efforts to cause such Injunction to be vacated, dissolved or
overturned on appeal. After the expiration of the Cooperation Period, the
General Partner shall continue such cooperation as long as Raleigh desires to
continue such efforts and continues to believe, in its reasonable judgment after
consultation with counsel, that there is a reasonable likelihood of successfully
resisting the issuance of, or vacating, dissolving or overturning such
Injunction on appeal, provided that (i) Raleigh has closed the Offer and
purchased all Interests validly tendered (and not withdrawn) pursuant to the
Offer in accordance with the terms of the Offer and this Agreement or (ii)
Raleigh is seeking to acquire the GP Assets pursuant to Section 7 hereto
pursuant to a Purchaser Triggered GP Asset Call. Raleigh and the General Partner
shall each bear 50% of the reasonable costs and expenses incurred by each of
them during the Cooperation Period (including the reasonable fees and expenses
of their respective counsel) pursuant to this paragraph (b). Costs and expenses
incurred by each of Raleigh and the General Partner after the Cooperation Period
shall be for its own account.
(c) If an Injunction, by its terms, is to remain in effect unless and until
Interestholder consent has been obtained, then, during the Cooperation Period:
(i) Raleigh will vote all of the Raleigh Interests and, if applicable, all
Interests acquired by it in the Offer in favor of a proposal made to
Interestholders to transfer the GP Assets to Raleigh in accordance with the
terms of this Agreement (a "Transfer Proposal"); (ii) if Raleigh does not then
own a sufficient number of Interests to cause such Transfer Proposal to be
adopted without the solicitation of consents from other Interestholders, Raleigh
will use reasonable efforts to solicit the requisite Interestholder consents as
promptly as practicable following the issuance of the Injunction, such
solicitation to be conducted in all material respects in compliance with the
Securities Exchange Act and other applicable law; (iii) if no Interestholder
consent solicitation is required, because Raleigh owns a sufficient percentage
of the Interests to approve the Transfer Proposal without obtaining the consent
of other Interestholders, Raleigh will prepare and disseminate to
Interestholders any information statement or other disclosure materials required
under the Securities Exchange Act or other applicable law in connection with the
adoption of the Transfer Proposal; (iv) the General Partner will use reasonable
efforts to cooperate with Raleigh in connection with any such solicitation
pursuant to clause (ii) or dissemination pursuant to clause (iii) above. Raleigh
and the General Partner will each bear 50% of the reasonable costs and expenses
incurred by Raleigh, including without limitation the reasonable fees and
expenses of Raleigh's counsel, relating to any solicitation of Interestholder
consents pursuant to clause (ii) above or any dissemination of any information
statement or other disclosure materials pursuant to clause (iii) above.
(d) If Raleigh, prior to the expiration of the Cooperation Period,
successfully causes such Injunction to be vacated, dissolved or overturned on
appeal or, if applicable, obtains the requisite Interestholder consent, the GP
Assets Closing will, subject to satisfaction of the requirements of Sections 5
(other than the first sentence of Section 5(a)) and 14, take place on the fifth
business day following the later to occur of: (A) the receipt of such consent or
(B) the earliest day on which such Closing is permitted to take place under the
terms of the Injunction or applicable law.
(e) If Raleigh has closed the Offer and purchased all Interests validly
tendered (and not withdrawn) pursuant to the Offer in accordance with the terms
of the Offer and the Agreement, or Raleigh is seeking to acquire the GP Assets
pursuant to Section 7 hereof pursuant to a Purchaser Triggered GP Assets Call
but, as of the expiration of the Cooperation Period, has not successfully caused
such Injunction to be vacated, dissolved or overturned on appeal, or, if
applicable, obtained the consent of a sufficient number of Interestholders to
consummate the GP Assets Closing or GP Asset Call Exercise in satisfaction of
the requirements of such Injunction, it may, in its sole discretion and at its
sole cost and expense, continue to pursue any appropriate litigation to the
extent permitted pursuant to paragraph (b) above as well as, if applicable, any
subsequent consent solicitations it wishes in order to obtain the necessary
consent to acquire the GP Assets in a transaction that is a Permitted
Transaction (as hereinafter defined). The General Partner will continue to
cooperate with Raleigh in connection with any efforts of Raleigh in accordance
with the immediately preceding sentence. If Raleigh is successful in causing
such Injunction to be vacated, dissolved or overturned on appeal or, if
applicable, in obtaining any such requisite consents, Raleigh may, at any time
within 90 days thereafter, elect to either (x) purchase the GP Assets in a
Permitted Transaction or (y) not purchase the GP Assets. In the event Raleigh
elects to purchase such GP Assets, the General Partner shall be obligated to
sell, and to cause A/J (and, if applicable, A/J L.P.) to sell, such GP Assets as
provided herein. A "Permitted Transaction" is any acquisition of the GP Assets
by Raleigh in which the purchase price for such assets is paid in cash at the
closing of such acquisition and is equal to the GP Assets Purchase Price plus
the assignment of 100% of the Raleigh Net Worth Note, which shall be delivered
at such Closing; provided, however, that in the event the Permitted Transaction
occurs following a Purchaser or GP Triggered Assets Call exercised by Raleigh
and the purchase price of the GP Assets pursuant to such Call, as determined in
accordance with Section 7 hereof, would have been 80% (rather than 100%) of the
GP Assets Purchase Price (other than the Raleigh Net Worth Note), then the price
payable by Raleigh in such Permitted Transaction will be the product obtained by
multiplying the price determined in accordance with the foregoing formula by 80%
(other than the Raleigh Net Worth Note, which shall be for 100% of its face
amount). The closing of any such Permitted Transaction shall be substantially in
accordance with, and subject to, Section 5 (other than the first sentence of
Section 5(a) hereof) and Section 14 hereof.
16. Guaranty of Raleigh Obligations. In order to induce the General Partner
and the Purchaser to enter into this Agreement, AREP hereby guarantees the
performance by Raleigh (including any assignee of Raleigh) of its obligations
under this Agreement; provided, however, that in any action or proceeding
against AREP to enforce such guaranty, AREP shall have available to it any
defenses which would have been available to Raleigh or such assignee under this
Agreement. AREP represents and warrants to the Purchaser and the General Partner
that it has the power and authority to enter into this Agreement, and that this
Agreement has been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of it enforceable in accordance with its terms.
17. Notices. Any notice provided for in this Agreement shall be in writing
and shall either be personally delivered, or sent by facsimile and deposited
with a reputable overnight courier for next day deliver on the same date on
which the facsimile is sent, to the recipient at the addresses indicated below:
To Raleigh:
c/o Icahn Associates Corp.
767 Fifth Avenue, 47th Floor
New York, New York 10153
Attn: Martin L. Hirsch
Facsimile: (212) 750-5841
with a copy to:
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
Attn: Marc Weitzen, Esq.
Facsimile: (212) 626-0799
To the General Partner:
Arvida/JMB Managers, Inc.
c/o JMB Realty Corporation
900 North Michigan Avenue
Chicago, IL 60601
Attn: Gary Nickele
Facsimile: (312) 915-1023
with a copy to:
Kirkland & Ellis
200 East Randolph
Chicago, IL 60601
Attn: Michael H. Kerr, P.C.
Facsimile: 312-861-2200
To Purchaser:
The St. Joe Company
400 du Pont Center
1650 Prudential Drive
Jacksonville, Florida 32207
Attn: Robert M. Rhodes
Facsimile: 904-858-5296
18. Applicable Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Illinois without giving effect to
principles of conflict of law thereof; provided, however that matters governed
by the Partnership Agreement shall be governed by and interpreted in accordance
with the laws of the State of Delaware.
19. Entire Agreement. This Agreement, including any documents, instruments,
writings and certificates delivered pursuant to this Agreement, and the
Confidentiality Agreement by and between Raleigh and the Partnership contain all
of the terms, conditions, representations and warranties agreed upon by the
parties relating to the subject matter of this Agreement and supersedes all
other prior and contemporaneous agreements, negotiations, correspondence,
undertakings and communications of the parties, oral or written, respecting such
subject matter.
20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which,
together, shall constitute one and the same agreement.
21. Expenses. Each party hereto shall pay its own expenses incurred in
connection with the negotiation, preparation and execution of this Agreement. If
any action is commenced to enforce the terms of this Agreement, the party that
does not prevail in such action shall reimburse the prevailing party for the
reasonable fees and expenses (including attorneys' fees and expenses) incurred
by such prevailing party in connection with the portions of such action on which
such party prevailed.
22. Amendments. This Agreement may not be modified, amended, altered or
supplemented except by a written agreement signed by the Purchaser, Raleigh and
the General Partner; provided, however, that any modification, amendment,
alteration or supplement to this Agreement (each, an "Amendment") made
subsequent to the Offer Closing may be made by a written agreement signed solely
by Raleigh and the General Partner, unless such Amendment expressly modifies, in
a manner adverse to the Purchase, any right or obligation of the Purchaser
hereunder. If any term or provision of this Agreement is held by a court of
competent jurisdiction to be invalid, void, unenforceable or against public
policy, the remainder of terms shall in no way be affected, impaired or
invalidated.
23. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the successors to, and permitted assigns of, the parties
hereto, provided that the Partnership shall be a third party beneficiary of, and
shall be entitled to enforce, the provisions of Sections 4 and 9 of this
Agreement. This Agreement shall not be assignable by any of the parties hereto
without prior written consent of the other parties; provided, however, that, in
the event Raleigh makes the Purchase Election and/or exercises the GP Assets
Call, Raleigh may assign to one or more of its affiliates its rights and
obligations under this Agreement with respect to the making and conduct of the
Offer and the purchase of the GP Assets, subject to AREP remaining obligated
pursuant to Section 16 hereof in the event of a failure by the assignee to
perform; provided, further, that if the proposed assignee is other than a
newly-formed entity, organized for the purpose of making the Offer or purchasing
the GP Assets, as the case may be, then such assignment shall be subject to the
prior consent of the General Partner, which consent shall not be unreasonably
withheld, conditioned or delayed; provided, further, that, in the event Raleigh
makes the Sale Election or the Purchaser exercises the Raleigh Interests Call,
Purchaser may assign to one or more of its affiliates its rights and obligations
under this Agreement with respect to the purchase of the Raleigh Interests and
any Resolved Interests (and any Subsequently Resolved Interests), subject to the
Purchaser remaining obligated to perform in the event of a failure by the
assignee to perform.
24. Injunctive Relief. The parties hereto acknowledge and agree that each
party would be irreparably damaged in the event any of the provisions of this
Agreement are not performed by the other parties hereto in accordance with their
specific terms or are otherwise breached and that the remedies at law for any
such breach are inadequate and the non-breaching party would suffer direct and
continuing injury as a result of such breach. Accordingly, it is agreed that the
parties hereto shall be entitled, without necessity of furnishing a bond, to
injunctive relief (including a temporary restraining order or a preliminary
injunction) to prevent breaches of any provision of this Agreement and to
specifically enforce any provision in an action instituted in any court of the
United States or any state thereof having subject matter jurisdiction, in
addition to, and not in limitation of, any other remedy to which the parties may
be entitled, at law or in equity.
25. Survival. All representations and warranties shall survive any Closing
or Call Exercise hereunder.
26. Exchange of Notes. On the fifth business day following the GP Assets
Closing Date, the GP Assets Call Exercise or the closing of a Permitted
Transaction, Raleigh and the General Partner shall exchange the Net Worth Note
for the Raleigh Net Worth Note, without further consideration payable by either
party to the other. Except as provided in the preceding sentence, (i) Raleigh
may not assign, transfer or negotiate the Net Worth Note and (ii) the General
Partner may not assign, transfer or negotiate the Raleigh Net Worth Note. All
principal and interest payable with respect to each note as of the date of
exchange shall be payable to the assignee of such note. * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
RALEIGH CAPITAL ASSOCIATES L.P.
By: Zephyr Partners
Its: General Partner
By: GP Aeolus, Inc.
Its: General Partner
By: /s/ Robert J. Mitchell
Its: Vice President
By: AREHGP, Inc.
Its: General Partner
By: /s/ John Saldarelli
Its: President
THE ST. JOE COMPANY
By: /s/ Michael M. Regan
Its: Vice President
ARVIDA/JMB MANAGERS, Inc.
By: /s/ Stephen R. Lovelette
Its: Vice President
As to Section 16 and Sections 18 through 24 only:
AMERICAN REAL ESTATE PARTNERS, L.P.
By: American Property Investors, Inc.
Its: General Partner
By: /s/ John Saldarelli
Its: Vice President
EXHIBIT A
The GP Assets Purchase Price shall be an amount equal to the sum of (i) the
present value of the projected cash distributions of the Partnership to be made
with respect to the GP Assets pursuant to the Partnership's Amended and Restated
Agreement of Limited Partnership (as amended to date, the "Partnership
Agreement") and that certain Stipulation of Settlement in Carlstrom et al. v.
Arvida/JMB Managers, Inc. et al. dated April 1, 1997 (the "Stipulation"), and
(ii) the present value of the projected cash distributions of Arvida/JMB to be
made with respect to the GP Assets pursuant to Arvida/JMB's Fourth Amended and
Restated Agreement of Partnership (as amended to date), determined as follows:
(A)(1) the projected gross amount of each of the Partnership's
distributions (each such distribution hereinafter referred to as a
"Partnership Distribution"), and the timing of such distributions,
shall be as determined in connection with the Lehman Estimated
Liquidation Value; (2) the gross amount of each Partnership
Distribution distributable with respect to the GP Assets (each such
amount hereinafter referred to as a "GP Partnership Distribution")
shall be determined in accordance with the Partnership Agreement and
the Stipulation; (3) each GP Partnership Distribution shall be
discounted at an annual rate, compounded daily, of 15% (the "Applicable
Rate") from its estimated date of distribution (as determined in
connection with the Lehman Estimated Liquidation Value) to August 31,
1998 to determine the present values of such GP Partnership
Distributions as of such date (the "GP Partnership Distribution Present
Values"); (4) the GP Partnership Distribution Present Values shall be
added together; and (5) the sum of the GP Partnership Distribution
Present Values determined under the immediately preceding clause (A)(4)
above shall be increased at the Applicable Rate from August 31, 1998
through the date of closing (the "Closing") of the sale of the GP
Assets (i.e., the GP Assets Closing, the GP Assets Call Closing Date or
the closing of a Permitted Transaction, as the case may be); and
(B)(1) the projected gross amount of each of Arvida/JMB's
distributions after August 31, 1998 (each such distribution hereinafter
referred to as an "Arvida/JMB Distribution"), and the timing of such
distributions, shall be estimated by the General Partner; (2) each
Arvida/JMB Distribution shall be multiplied by 0.1% to determine the
gross amount of such Arvida/JMB Distribution distributable with respect
to the GP Assets (each such amount hereinafter referred to as a "GP
Arvida/JMB Distribution"); (3) each GP Arvida/JMB Distribution shall be
discounted at the Applicable Rate from its estimated date of
distribution to August 31, 1998 to determine the present values of such
GP Arvida/JMB Distributions as of such date (the "GP Arvida/JMB
Distribution Present Values"); (4) the GP Arvida/JMB Distribution
Present Values shall be added together; and (5) the sum of GP
Arvida/JMB Distribution Present Values determined under clause (B)(4)
above shall be increased at the Applicable Rate from August 31, 1998
through the date of Closing provided that, in no event may the amount
determined under this clause (B)(5) exceed $300,000.
The GP Assets Purchase Price shall be the sum of the amounts determined
in clauses (A)(5) and (B)(5) above. In the event that any distributions (the
"Subject Distributions") are received by the General Partner and the associates
limited partners subsequent to the date of the September 1998 Distribution, the
GP Assets Purchase Price shall be reduced by the amount of each Subject
Distribution, increased at the Applicable Rate from the date such Subject
Distribution is distributed through the date of Closing.
Capitalized terms used, but not defined in this Exhibit A have the
meanings ascribed to such terms in the Raleigh Buy/Sell Agreement (to which this
is Exhibit A).
November 11, 1998
VIA FACSIMILE AND OVERNIGHT COURIER
Raleigh Capital Associates, L.P.
c/o Icahn Associates Corporation
767 Fifth Avenue
47th Floor
New York, NY 10153
Re: Buy/Sell Notice
Gentlemen:
Pursuant to Section 1 of that certain Raleigh Buy/Sell Agreement (the "Buy/Sell
Agreement"), dated as of November 6, 1998, by and among Raleigh Capital
Associates, L.P., American Real Estate Partners, L.P., The St. Joe Company and
Arvida/JMB Managers, Inc., the undersigned hereby deliver to you the Buy/Sell
Notice. Capitalized terms used but not otherwise defined herein have the same
meanings as in the Buy/Sell Agreement.
1. The Buy/Sell Price is $430 per Interest.
2. The GP Assets Purchase Price, as of August 31, 1998, is $24,497,091.
3. Attached hereto as Exhibit 1A is a written statement by Lehman of
the Lehman Estimated Liquidation Value as of August 31, 1998,
together with a description of the methodology employed by Lehman
in determining such value and a confirmation that the Lehman
Estimated Liquidation Value was determined in a manner consistent
with past practice.
4. Attached hereto as Exhibit 1B is a copy of additional or backup
material provided to the General Partner in connection with the
statement by Lehman described in No. 3 above.
5. Attached as Exhibit 2 hereto is material showing the General
Partner's calculation of the GP Assets Purchase Price as of August
31, 1998.
Very truly yours,
THE ST. JOE COMPANY
By: /s/ Michael M. Regan
Its: Vice President
ARVIDA/JMB MANAGERS, INC.
By: /s/ Stephen R. Lovelette
Its: Vice President
cc w/encl: Gordon Altman Butowsky
Weitzen Shalov & Wein
Attention: Marc Weitzen, Esq.
