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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
HomeFed Corporation
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(Name of Issuer)
Common Stock, $.01 par value 436919104
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(Title of class of securities) (CUSIP number)
Stephen E. Jacobs, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
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(Name, address and telephone number of person authorized to
receive notices and communications)
October 20, 1998
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(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(b)(3) or (4), check the following box [_].
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, as amended (the "Exchange Act"), or otherwise subject to the liabilities
of that Section of the Exchange Act but shall be subject to all other provisions
of the Exchange Act.
(Continued on following page(s))
(Page 1 of 9 Pages)
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<TABLE>
<CAPTION>
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CUSIP No. 436919104 13D Page 2 of 9
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<S> <C> <C>
1 NAME OF REPORTING PERSON: Trust under Trust Agreement dated
August 14, 1998 between Leucadia
National Corporation and Joseph A.
Orlando, as Trustee
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [_]
PURSUANT TO ITEM 2(d) OR 2(e):
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6 CITIZENSHIP OR PLACE OF New York
ORGANIZATION:
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NUMBER OF 7 SOLE VOTING POWER: None
SHARES
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8 SHARED VOTING POWER: 4,117,986 (Does not
include (i) 37,056,112
shares that may be
acquirable by the Trust on
or after July 5, 1999
pursuant to a Stock
BENEFICIALLY Purchase Agreement dated
OWNED BY August 14, 1998 and (ii)
9,501,714 shares that
may be acquirable
by the Trust on or after
July 5, 1999 pursuant to
a Stock Purchase Agreement
dated October 20, 1998.)
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EACH 9 SOLE DISPOSITIVE POWER: NONE
REPORTING
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10 SHARED DISPOSITIVE POWER: 4,117,986 (Does not
include (i) 37,056,112
shares that may be
acquirable by the Trust on
or after July 5, 1999
pursuant to a Stock
Purchase Agreement dated
PERSON WITH August 14, 1998 and (ii)
9,501,714 shares that may
be acquirable by the Trust
on or after July 5, 1999
pursuant to a Stock
Purchase Agreement dated
October 20, 1998.)
<PAGE>
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY 4,117,986 (Does not
REPORTING PERSON: include (i) 37,056,112
shares acquirable by the Trust
on or after July 5, 1999
pursuant to a Stock Purchase
Agreement dated August
14, 1998 and (ii) 9,501,714
shares that may be acquirable
by the Trust on or after
July 5, 1999 pursuant to
a Stock Purchase Agreement
dated October 20, 1998.)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [x]
SHARES:
See Row 11
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 41.2%
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14 TYPE OF REPORTING PERSON: 00
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<PAGE>
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CUSIP No. 436919104 13D Page 4 of 9
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1 NAME OF REPORTING PERSON: Ian M. Cumming
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [_]
PURSUANT TO ITEM 2(d) OR 2(e):
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6 CITIZENSHIP OR PLACE OF USA
ORGANIZATION:
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NUMBER OF 7 SOLE VOTING POWER: None
SHARES
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BENEFICIALLY 8 SHARED VOTING POWER: 4,117,986 (1)
OWNED BY
----------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: None
REPORTING
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PERSON WITH 10 SHARED DISPOSITIVE POWER: 4,117,986 (1)
- ---------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY 4,117,986 (1)
REPORTING PERSON:
- ---------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [x]
SHARES:
See Note 1
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 41.2%
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14 TYPE OF REPORTING PERSON: IN
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(1) All of such shares of common stock of HomeFed Corporation are directly owned
by a Trust under a Trust Agreement dated August 14, 1998 between Leucadia
National Corporation for the benefit of its shareholders of record on August 25,
1998 and Joseph A. Orlando, as Trustee (the "Trust"). Does not include (i)
37,056,112 shares that may be acquirable by the Trust on or after July 5, 1999
pursuant to a Stock Purchase Agreement dated August 14, 1998 and (ii) 9,501,714
shares that may be acquirable by the Trust on or after July 5, 1999 pursuant to
a Stock Purchase Agreement dated October 20, 1998.
<PAGE>
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CUSIP No. 436919104 13D Page 5 of 9
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1 NAME OF REPORTING PERSON: Joseph S. Steinberg
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [_]
PURSUANT TO ITEM 2(d) OR 2(e):
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6 CITIZENSHIP OR PLACE OF USA
ORGANIZATION:
- ---------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: None
SHARES
----------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 4,117,986 (1)
OWNED BY
----------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: None
REPORTING
----------------------------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 4,117,986 (1)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY 4,117,986 (1)
REPORTING PERSON:
- ---------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [x]
SHARES:
See Note 1
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 41.2%
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14 TYPE OF REPORTING PERSON: IN
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</TABLE>
(1) All of such shares of common stock of HomeFed Corporation are directly owned
by a Trust under a Trust Agreement dated August 14, 1998 between Leucadia
National Corporation for the benefit of its shareholders of record on August 25,
1998 and Joseph A. Orlando, as Trustee (the "Trust"). Does not include (i)
37,056,112 shares that may be acquirable by the Trust on or after July 5, 1999
pursuant to a Stock Purchase Agreement dated August 14, 1998 and (ii) 9,501,714
shares that may be acquirable by the Trust on or after July 5, 1999 pursuant to
a Stock Purchase Agreement dated October 20, 1998.
<PAGE>
Item 1. Security and Issuer.
This Amendment No. 1 ("Amendment No. 1") amends the Statement on
Schedule 13D (the "Schedule 13D") filed on August 24, 1998 relating to the
common stock, $.01 par value (the "Common Stock"), of HomeFed Corporation, a
Delaware corporation (the "Company"). The address of the Company's principal
executive office is 529 East South Temple, Salt Lake City, Utah 84102.
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration.
The Transferred Shares were transferred to the Trust by Leucadia for
the benefit of the Beneficiaries without consideration. The information included
in response to Item 4 is specifically incorporated herein by reference.
Item 4. Purpose of Transaction.
On October 20, 1998, Leucadia transferred to the Trust the right to
purchase 9,501,714 shares of Common Stock (the "Transferred Shares") pursuant to
a Stock Purchase Agreement, dated as of October 20, 1998 (the "Stock Purchase
Agreement"), between Leucadia and the Company. Pursuant to the terms of the
Stock Purchase Agreement and subject to the satisfaction of certain conditions,
on or after July 5, 1999, the Trust would purchase the Transferred Shares from
the Company. The aggregate purchase price of $1,710,300 for the Transferred
Shares was advanced to the Company.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
The information set forth in response to Item 4 is specifically
incorporated herein by reference.
6
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Item 7. Materials to Be Filed as Exhibits
1. Stock Purchase Agreement, dated October 20, 1998, between
Leucadia National Corporation and HomeFed Corporation.
7
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: October 26, 1998
TRUST UNDER TRUST AGREEMENT DATED
AUGUST 14, 1998 BETWEEN LEUCADIA
NATIONAL CORPORATION AND JOSEPH A.
ORLANDO, AS TRUSTEE
By: /s/ Joseph A. Orlando
--------------------------------------
Joseph A. Orlando, as Trustee
/s/ Joseph S. Steinberg
--------------------------------------
Joseph S. Steinberg
/s/ Ian M. Cumming
--------------------------------------
Ian M. Cumming
8
<PAGE>
EXHIBIT INDEX
Exhibit No. Document
- ----------- --------
1 Stock Purchase Agreement, dated October 20, 1998,
between Leucadia National Corporation and HomeFed
Corporation.
9
STOCK PURCHASE AGREEMENT
BETWEEN
HOMEFED CORPORATION
AND
LEUCADIA NATIONAL CORPORATION
Dated as of October 20, 1998
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TABLE OF CONTENTS
Page
I. DEFINITIONS........................................................ 2
II. PURCHASE OF SECURITIES............................................. 2
2.1. Purchase of Securities....................................... 2
2.2. Anti-dilution................................................ 2
III. PURCHASE PRICE AND PAYMENT......................................... 2
3.1. Amount of Purchase Price..................................... 2
3.2. Payment of Purchase Price.................................... 3
IV. THE COMPANY'S REPRESENTATIONS AND WARRANTIES....................... 3
4.1. Organization................................................. 3
4.2. Due Authorization............................................ 3
4.3. Authorized and Outstanding Shares of Capital Stock........... 4
4.4. Authorization and Issuance of Securities..................... 4
4.5. Subsidiary Organizations..................................... 4
4.6. No Other Rights.............................................. 4
4.7. No Conflicts................................................. 4
4.8. No Consents.................................................. 5
4.9. Litigation................................................... 5
V. LUK's REPRESENTATIONS AND WARRANTIES............................... 5
5.1. Organization................................................. 5
5.2. Due Authorization............................................ 6
5.3. No Conflicts................................................. 6
5.4. LUK's Investment Intention................................... 6
5.5. Access to Data............................................... 7
VI. COVENANTS.......................................................... 7
6.1. Tax Compliance............................................... 7
6.2. Registration Rights.......................................... 7
VII. CONDITIONS PRECEDENT............................................... 7
7.1. Conditions Precedent to Obligations of LUK................... 7
7.2. Conditions Precedent to Obligations of the Company........... 8
i
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VIII. CLOSING............................................................ 9
8.1. Closing Date................................................. 9
8.2. Liquidated Damages........................................... 9
8.3. Specific Performance......................................... 10
IX. SECURITIES LAW MATTERS............................................. 10
9.1. Legends...................................................... 10
X. INDEMNIFICATION AND EXPENSES....................................... 10
10.1. Indemnification by the Company.............................. 10
10.2. Indemnification by LUK...................................... 10
XI. MISCELLANEOUS...................................................... 11
11.1. Notices..................................................... 11
11.2. Binding Effect; Benefits.................................... 12
11.3. Waiver...................................................... 12
11.4. Amendment................................................... 13
11.5. Assignability............................................... 13
11.6. Applicable Law.............................................. 13
11.7. Section and Other Headings.................................. 13
11.8. Severability................................................ 13
11.9. Counterparts................................................ 13
ii
<PAGE>
STOCK PURCHASE AGREEMENT
------------------------
STOCK PURCHASE AGREEMENT, dated as of October 20, 1998, between HomeFed
Corporation, a Delaware corporation having an office at 529 East South Temple,
Salt Lake City, Utah 84012 (the "Company"), and Leucadia National Corporation, a
New York corporation having an office at 315 Park Avenue South, New York, New
York 10010 ("LUK").
W I T N E S S E T H:
--------------------
WHEREAS, the Company emerged from bankruptcy under the United States
Bankruptcy Code, pursuant to a plan of reorganization (the "Plan") that became
effective on July 3, 1995 (the "Effective Date"); and
WHEREAS, the Plan prohibits the Company from issuing any additional
shares of stock prior to the fourth anniversary of the Effective Date; and
WHEREAS, approximately 41% of the issued and outstanding common
stock, par value $.01 per share of the Company (the "Common Stock") is owned by
a Trust for the benefit of the shareholders of record of LUK as of August 25,
1998 (the "LUK Shareholders Trust"); and
WHEREAS, on August 14, 1998, LUK and the Company entered into a
Stock Purchase Agreement (the "August Agreement") pursuant to which LUK or its
assignee will purchase from the Company and the Company will sell to LUK (or its
assignee), an additional 37,056,112 shares of Common Stock (the "August Shares")
subject to certain conditions, after July 5, 1999; and
WHEREAS, the August Agreement was assigned by LUK to the LUK
Shareholders Trust; and
WHEREAS, upon the terms and conditions hereinafter provided, the
Company has agreed to issue and sell to LUK (or its assignee) shares of its
Common Stock, and LUK has agreed to purchase such shares upon the terms and
conditions hereinafter provided;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, it is agreed as follows:
1
<PAGE>
I. DEFINITIONS
References to this "Agreement" shall mean this Stock Purchase Agreement,
including all amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to this Agreement as the same
may be in effect at the time such reference becomes operative.
The words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole, including the schedules and exhibits
hereto, as the same may from time to time be amended or supplemented, and not to
any particular section, subsection or clause contained in this Agreement.
II. PURCHASE OF SECURITIES
2.1. Purchase of Securities. Upon the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined herein) the Company
shall issue, sell and deliver to LUK, and LUK shall purchase from the Company
9,501,714 shares of Common Stock (the "Securities").
2.2. Anti-dilution. Subject to the provisions of Section 7.2(c) hereof, if
the Company issues additional shares of Common Stock (other than the August
Shares to be issued to the LUK Shareholders Trust) to any party other than LUK,
the number of shares of Common Stock constituting the Securities shall be
increased so that the Securities purchased on the Closing Date (including the
August Shares and the Common Stock owned by the LUK Shareholders Trust) will
give LUK, together with the LUK Shareholders Trust, an 89.6% interest in the
Company on a fully diluted basis.
III. PURCHASE PRICE AND PAYMENT
3.1. Amount of Purchase Price. The aggregate purchase price for the
Securities (the "Purchase Price") shall be $1,710,300; provided, however, that
if the number of shares constituting the Securities to be purchased under this
Agreement results in the percentage share ownership in the Company of LUK,
together with the LUK Shareholders Trust, being below 89.6% pursuant to Section
7.2(c), the Purchase Price shall be reduced proportionately based on a per share
price of $.179 per share.
3.2. Payment of Purchase Price. (a) On the date hereof, LUK shall advance
the entire Purchase Price to the Company.
2
<PAGE>
(b) Upon the terms and subject to the conditions set forth in this
Agreement, on the Closing Date the Company shall deliver to LUK the Securities
issued in the name of LUK or such other person or persons as LUK shall direct.
(c) Payment of the Purchase Price shall be made by wire transfer of
immediately available funds into an account designated by the Company.
IV. THE COMPANY'S REPRESENTATIONS AND WARRANTIES
The Company makes the following representations and warranties to LUK,
each and all of which shall survive the execution and delivery of this Agreement
and the Closing (as defined herein) hereunder:
4.1. Organization. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and operate its
properties and to conduct its business as currently being and as proposed to be
conducted. The Company is qualified as a foreign corporation to transact
business in California and in any other jurisdiction where it is required to be
so qualified, except where the failure to be so qualified would not have a
material adverse effect on the condition, financial or otherwise, or the results
of operations, business or business prospects of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect").
4.2. Due Authorization. The Company has the requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Company and, assuming that this Agreement has been duly executed and delivered
by LUK, constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity hereunder may be limited by federal or state securities laws and
except as enforce- ability may be limited by bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization and similar laws relating to or affecting
creditors' rights generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
4.3. Authorized and Outstanding Shares of Capital Stock. The authorized
capital stock of the Company consists of one hundred million (100,000,000)
shares of Common Stock, of which ten million (10,000,000) shares currently are
issued and outstanding as of the date hereof. No subscription, warrant, option
or other right to purchase or acquire any shares of any class of capital stock
of Company or securities
3
<PAGE>
convertible into such capital stock (other than the August Shares) is authorized
or outstanding, and other than this Agreement there is no commitment of Company
to issue any such shares, warrants, options or other such rights or securities
(other than the August Shares). After giving effect to the issuance of the
August Shares and the Securities pursuant to this Agreement, an aggregate of
56,557,826 shares of Common Stock will be outstanding, of which the Securities,
together with the August Shares and the other shares of Common Stock
beneficially owned by the LUK Shareholders Trust, will represent approximately
89.6% of the outstanding shares of Common Stock, unless the number of shares
constituting the Securities is reduced pursuant to Section 7.2(c) hereof.
4.4. Authorization and Issuance of Securities. The issuance of the
Securities has been duly authorized and, upon delivery to LUK of certificates
therefor against payment in accordance with the terms hereof, the Securities
will have been validly issued and fully paid and non-assessable, free and clear
of all pledges, liens, encumbrances and preemptive rights.
4.5. Subsidiary Organizations. Each subsidiary of the Company has been
duly organized and is validly existing and in good standing under the laws of
the State of California, has corporate power and authority to own, lease and
operate its properties and to conduct its business as currently being and as
proposed to be conducted and is not required to be qualified as a foreign entity
to transact business in any jurisdiction. All of the issued and outstanding
capital stock of each such subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and is owned directly by the Company.
4.6. No Other Rights. The issuance of the Securities is not subject to
preemptive or other similar rights.
4.7. No Conflicts. Neither the Company nor any of its subsidiaries is in
violation of its charter or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject, the effect of which
default in performance or observance would have a Material Adverse Effect. None
of the execution and delivery of this Agreement will conflict with or constitute
a breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which the
4
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Company or any of its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the certificate of incorporation or by-laws of the Company or any
applicable law, administrative regulation or administrative or court decree.
4.8. No Consents. No authorization, approval or consent of, or filing
with, any court or governmental authority or agency is necessary or required in
connection with the sale of the Securities hereunder or under the certificate of
incorporation of the Company or the execution, delivery or performance of this
Agreement or the Restated Certificate of Incorporation.
4.9. Litigation. There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending or, to
the best knowledge of the Company, threatened, against or affecting the Company
or any of its subsidiaries, which is reasonably likely to have a Material
Adverse Effect. There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending or, to the best
knowledge of the Company, threatened, which would materially and adversely
affect the consummation of the transactions contemplated by this Agreement.
V. LUK's REPRESENTATIONS AND WARRANTIES
LUK makes the following representations and warranties to the Company,
each and all of which shall survive the execution and delivery of this Agreement
and the Closing hereunder:
5.1. Organization. LUK has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of New York with
corporate power and authority to own, lease and operate its properties and to
conduct its business as currently being and as proposed to be conducted and to
enter into and perform its obligations under this Agreement. LUK is qualified as
a foreign corporation to transact business in each jurisdiction where it is
required to be so qualified, except where the failure to be so qualified would
not have a material adverse effect on the business, financial condition or
results of operation of LUK and its subsidiaries taken as a whole.
5.2. Due Authorization. LUK has the requisite corporate power and
authority to enter into this Agreement and consummate the transactions
contemplated hereby.
5
<PAGE>
This Agreement and the transactions contemplated hereby have each been duly
authorized, executed and delivered by LUK, and this Agreement constitutes a
legal, valid and binding agreement of the Company, enforceable against LUK in
accordance with its terms, except as rights to indemnity hereunder may be
limited by federal or state securities laws and except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance, moratorium,
reorganization and similar laws relating to or affecting creditors' rights
generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
5.3. No Conflicts. LUK is not in violation of its certificate of
incorporation or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which LUK is a party or by which it may be bound, or to which any
of the property or assets of LUK or any of its subsidiaries is subject, the
effect of which default in performance or observance would have a material
adverse effect on the condition, financial or otherwise, or the results of
operations, business or business prospects of LUK and its subsidiaries
considered as one enterprise. The execution and delivery of this Agreement will
not conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of LUK or any of its subsidiaries pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to which
LUK or any of its subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of LUK or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the certificate of incorporation or by-laws of LUK or any
applicable law, administrative regulation or administrative or court decree.
5.4. LUK's Investment Intention. LUK represents and warrants that it is
purchasing the Securities for its own account, for investment purposes and not
with a view to the distribution thereof, except in compliance with the
provisions of the Securities Act of 1933, as amended (the "Act"). LUK agrees
that it will not, directly or indirectly, offer, transfer, sell, assign, pledge,
hypothecate or otherwise dispose of any of the Securities (or solicit any offers
to buy, purchase, or otherwise acquire or take a pledge of any of the
Securities), except in compliance with the Act and the rules and regulations
thereunder.
5.5. Access to Data. LUK has had an opportunity to discuss the Company's
business, management, and financial affairs with its management and to review
the Company's records and facilities, and LUK is relying for purposes of this
Agreement
6
<PAGE>
upon its own due diligence review of the Borrower, not on any representation or
warranty of the Borrower other than as expressly set forth in this Agreement.
VI. COVENANTS
6.1. Tax Compliance. The Company shall pay all transfer, excise or similar
taxes in connection with the issuance, sale, delivery or transfer by the Company
to LUK of the Securities and shall save LUK and any other holder of the
Securities harmless without limitation as to time against any and all
liabilities with respect to such taxes. The Company shall not be responsible for
any taxes in connection with the transfer of the Securities by the holder
thereof. The obligations of Company under this Section 6.1 shall survive the
payment, prepayment or redemption of the Securities and the termination of this
Agreement.
6.2. Registration Rights. At any time after the date hereof, upon the
written request of LUK that the Company effect the registration under the Act
(which shall be a shelf registration if requested by LUK) of all or part of the
shares of Common Stock (including the Securities upon their issuance) owned or
to be owned by LUK (including any affiliate of LUK or any trust for the benefit
of LUK's shareholders) and specifying the intended method or methods of
disposition thereof, the Company shall cooperate with LUK and effect the
registration under the Act of such shares as soon as practicable after receipt
of such request.
VII. CONDITIONS PRECEDENT
7.1. Conditions Precedent to Obligations of LUK. The obligation of LUK to
purchase the Securities and to consummate the transactions contemplated by this
Agreement is subject to the following conditions:
(a) LUK shall have been furnished with certificates (dated the Closing
Date and in form and substance reasonably satisfactory to LUK) executed by an
officer of the Company certifying that (i) all representations and warranties of
the Company to LUK contained herein are true and correct in all material
respects as of the Closing Date, with the same force and effect as if made as of
the Closing Date; (ii) the Company shall have performed and complied in all
material respects with the covenants and provisions of this Agreement required
to be performed or complied with by it, on or prior to the Closing Date; and
(iii) after giving effect to the sale of Securities contemplated hereby, the
Company will not be in default under or breach
7
<PAGE>
of any material contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which the Company or any of its subsidiaries is
a party.
(b) LUK's receipt of certificates representing the Securities registered
in LUK's name or in the name of such persons as LUK shall direct.
(c) LUK's receipt of a copy of the Company's certificate of incorporation,
certified as of a recent date by the Secretary of State of the State of
Delaware, and a copy of the by-laws, certified by the Secretary or Assistant
Secretary of the Company as true and correct;
(d) LUK's receipt of governmental certificates or telegrams evidencing
that the Company is organized and in good standing in the State of Delaware;
(e) LUK's receipt of a certificate stating that the Development Management
Agreement, dated August 14, 1998 between the Company and Provence Hills
Development Company LLC (the "Development Management Agreement"), is in full
force and effect on the Closing Date and that neither party to such agreement
has given notice of termination to the other party to such agreement.
7.2. Conditions Precedent to Obligations of the Company. The obligation of
the Company to issue the Securities pursuant to this Agreement is subject to the
following conditions:
(a) The Company shall have been furnished with certificates (dated the
Closing Date and in form and substance reasonably satisfactory to the Company)
executed by an officer of LUK certifying that (i) all representations and
warranties of LUK to the Company contained herein are true and correct in all
material respects as of the Closing Date, with the same force and effect as if
made as of the Closing Date; and (ii) LUK shall have performed and complied in
all material respects with the covenants and provisions of this Agreement
required to be performed or complied with by it, on or prior to the Closing
Date.
(b) The Company shall have been furnished with an opinion of Weil, Gotshal
& Manges LLP dated the Closing Date to the effect that the issuance of the
Securities pursuant to this Agreement (taken together with the issuance of the
August Shares) shall not result in the application of any limitations under
Section 382 or Section 383 of the Internal Revenue Code of 1986, as amended (the
"Code"), on the use of the Tax Benefits (as defined in the Company's Restated
Certificate of Incorporation); provided, however, that if the Company fails to
receive the foregoing opinion, the Company will be obligated to deliver such
lesser number of shares under
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Article 2 hereof, which number shall constitute the Securities under this
Agreement, (taken together with the issuance of the August Shares) as shall
result in increases calculated under Sections 382(g)(1)(A) and (B) of the Code
aggregating 49.8 percentage points during the applicable "testing period" as
defined in Section 382 of the Code culminating on the Closing Date, and the
Company shall be furnished with an opinion of Weil, Gotshal & Manges LLP to the
effect that the issuance of the Securities (as so adjusted) pursuant to this
Agreement shall not result in the application of any Section 382 limitation on
the use of the Tax Benefits.
VIII. CLOSING
8.1. Closing Date. (a) The closing of the sale and purchase of the Shares
provided for in Article III hereof (the "Closing") shall take place at the
offices of Weil, Gotshal & Manges LLP, New York, New York at 10:00 a.m. (New
York City time) (or at such time and at such place as the parties may designate)
on the second business day following the date on which each of the conditions
specified in Article VII hereof has been fulfilled (or waived by the party
entitled to waive that condition), provided that in no event shall the Closing
take place prior to July 5, 1999. The date on which the Closing occurs is
referred to in this Agreement as the "Closing Date".
(b) In the event that LUK fails to close because the conditions set forth
in Section 7.1 have not been satisfied, the Company shall repay to LUK an amount
equal to the Purchase Price delivered to the Company on the date of this
Agreement pursuant to Section 3.2 of this Agreement, plus interest on such
Purchase Price, which shall accrue at the rate of 6% per annum from the date of
deposit of the Purchase Price with the Company through the date such Purchase
Price is repaid to LUK.
(c) In the event that the Purchase Price is reduced pursuant to Section
3.1 hereof, the Company shall repay to LUK at the Closing an amount equal to the
difference between the Purchase Price advanced to the Company on the date of
this Agreement and the reduced Purchase Price. If this payment is not made at
the Closing, the Company interest shall accrue on such amount at the rate of 6%
per annum from the Closing Date through the date such payment is made to LUK.
8.2. Liquidated Damages. If the Company fails to deliver the Securities at
the Closing (other than as a result of the exercise of its rights under Section
7.2 hereof), then the Company shall be required to repay the Purchase Price to
LUK and, at LUK's option, the Company shall either (i) repurchase the shares of
Common Stock owned by LUK at 200% of the fair market value for such shares as of
the Closing Date, but not less than a price per share of $1; or (ii) pay LUK
$2,000,000.
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The Company and LUK agree that the payment obligation contained in the foregoing
sentence is an integral part of the transactions contemplated by this Agreement
and constitute liquidated damages and not a penalty. If the Company fails to pay
such amount to LUK, then the Company shall pay the costs and expenses (including
reasonable legal fees and expenses) in connection with any action, including the
filing of any lawsuit or other legal action, taken to collect payment, together
with interest on the amount of any unpaid fee at the publicly announced prime
rate of Chase Manhattan Bank from the Closing Date to the date of prepayment.
8.3. Specific Performance. The parties hereto acknowledge that irreparable
damage would result if this Agreement were not specifically enforced, and they
therefore consent that the rights and obligations of the parties under this
Agreement, including the Company's obligation to sell the Securities to LUK, may
be enforced by a decree of specific performance issued by a court of competent
jurisdiction. Such remedy shall, however, not be exclusive and shall be in
addition to any other remedies which any party may have under this Agreement or
otherwise.
IX. SECURITIES LAW MATTERS
9.1. Legends. Unless the Securities are the subject of an effective
registration statement, each certificate representing the Securities shall bear
a legend substantially in the following form:
"THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED ("THE ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN EXEMPTION THEREFROM."
X. INDEMNIFICATION AND EXPENSES
10.1. Indemnification by the Company. The Company agrees to indemnify,
defend and hold LUK and its respective officers, directors, employees, agents
and controlling persons (collectively, the "LUK Indemnitees") harmless from and
against any and all expenses, losses, claims, damages and liabilities which are
incurred by or threatened against the LUK Indemnitees, or any of them,
including, without limitation, reasonable attorneys' fees and expenses, caused
by, or in any way resulting
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from or relating to the Company's breach of any of the representations,
warranties, covenants or agreements of the Company set forth in this Agreement.
10.2. Indemnification by LUK. LUK agrees to indemnify, defend and hold
harmless the Company and its respective officers, directors, employees, agents,
partners and controlling persons (collectively, the "Company Indemnitees")
harmless from and against any and all expenses, losses, claims, damages and
liabilities which are incurred by or threatened against the Company Indemnitees,
or any of them, including, without limitation, reasonable attorneys' fees and
expenses, caused by, or in any way resulting from or relating to LUK's breach of
any of the representations, warranties, covenants or agreements of LUK set forth
in this Agreement.
XI. MISCELLANEOUS
11.1. Notices. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to or served upon any of the parties by another, or whenever any of the
parties desires to give or serve upon another any such communication with
respect to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and either shall be
delivered in person with receipt acknowledged or by registered or certified
mail, return receipt requested, postage prepaid, or by telecopy and confirmed by
telecopy answerback addressed as follows:
If to Company at:
HomeFed Corporation
529 East South Temple
Salt Lake City, Utah 84012
Attn: Corinne A. Maki
Telecopy Number: (801) 524-1761
With a copy to:
Pillsbury Madison & Sutro LLP
101 West Broadway
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Suite 1800
San Diego, California 92101-8219
Attn: K. Michael Garrett
Telecopy Number: (619) 236-1995
If to LUK at:
Leucadia National Corporation
315 Park Avenue South
New York, New York 10010
Attn: Joseph S. Steinberg, President
Telecopy Number: (212) 598-3245
with a copy to:
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, New York 10153
Attn: Stephen E. Jacobs
Telecopy Number: (212) 310-8007
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
with receipt acknowledged, telecopied and confirmed by telecopy answerback, or
three (3) business days after the same shall have been deposited with the United
States mail.
11.2. Binding Effect; Benefits. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties to this
Agreement and their respective successors, transferees and permitted assigns.
Except as expressly set forth herein, nothing in this Agreement, express or
implied, is intended or shall be construed to give any person other than the
parties to this Agreement or their respective successors, transferees or
permitted assigns any legal or equitable right, remedy or claim under or in
respect of any agreement or any provision contained herein.
11.3. Waiver. Either party hereto may by written notice to the other (a)
extend the time for the performance of any of the obligations or other actions
of the other party under this Agreement; (b) waive compliance with any of the
conditions
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or covenants of the other party contained in this Agreement; and (c) waive or
modify performance of any of the obligations of the other party under this
Agreement. Except as provided in the preceding sentence, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of either party, shall be deemed to constitute a waiver by the
party taking such action, of compliance with any representations, warranties,
covenants or agreements contained herein. The waiver by either party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any preceding or succeeding breach and no failure by either party to
exercise any right or privilege hereunder shall be deemed a waiver of such
party's rights or privileges hereunder or shall be deemed a waiver of such
party's rights to exercise the same at any subsequent time or times hereunder.
11.4. Amendment. This Agreement may be amended, modified or
supplemented only by a written instrument executed by LUK and the Company.
11.5. Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by Company. Neither this Agreement nor any right, remedy, obligation
or liability arising hereunder or by reason hereof shall be assignable by LUK
without the prior written consent of the Company; provided, however, that
without the consent of the Company LUK may assign this Agreement and any or all
rights or obligations hereunder (including, without limitation, LUK's rights to
purchase the Securities and LUK's rights to seek indemnification hereunder) to
any affiliate of LUK or to any trust for the benefit of LUK's shareholders,
including the LUK Shareholders Trust. Upon any such permitted assignment, the
references in this Agreement to LUK shall also apply to any such assignee unless
the context otherwise requires; provided, however, that the conditions set forth
in Section 7.2 shall continue to apply to LUK.
11.6. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
11.7. Section and Other Headings. The section and other headings contained
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
11.8. Severability. In the event that any one or more of the provisions
contained in this Agreement shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision or provisions in every other respect and
the remaining provisions of this Agreement shall not be in any way impaired.
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11.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
HOMEFED CORPORATION
By: /s/ Timothy M. Considine
--------------------------------------
Name: Timothy M. Considine
Title: Chairman of the Board
LEUCADIA NATIONAL CORPORATION
By: /s/ Joseph A. Orlando
--------------------------------------
Name: Joseph A. Orlando
Title: Vice President and Chief
Financial Officer
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