UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____)
KOGER EQUITY, INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
500228101
(CUSIP Number)
John F. Hartigan, Esq.
Morgan, Lewis & Bockius LLP
801 South Grand Avenue
Los Angeles, CA 90017
(213) 612-2500
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
June 25, 1996
(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 /_/.
Check the following box if a fee is being paid with the statement |X|. (A fee is
not required only if the reporting person (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) 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).
Exhibit Index is on Page 11
Page 1 of 81 Pages
372958.8
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CUSIP No. 500228101 SCHEDULE 13D Page 2 of 81 Pages
- ------------------------- ----------------------
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Apollo Real Estate Investment Fund II, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 341,956 shares, plus 1,130,642 shares as to which
BENEFICIALLY the Reporting Person has an option to acquire
OWNED BY ------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING 0
PERSON WITH ------------------------------------------------------
9 SOLE DISPOSITVE POWER
341,956 shares, plus 1,130,642 shares as to which
the Reporting Person has an option to acquire
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,472,598
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.25%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
372958.8
<PAGE>
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CUSIP No. 500228101 SCHEDULE 13D Page 3 of 81 Pages
- ------------------------- ----------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Apollo Real Estate Advisors II, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 341,956 shares, plus 1,130,642 shares as to which the
SHARES Reporting Person has an option to acquire
BENEFICIALLY -----------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING -----------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
341,956 shares, plus 1,130,642 shares as to which
the Reporting Person has an option to acquire
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,472,598
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.25%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- -------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
372958.8
<PAGE>
STATEMENT PURSUANT TO RULE 13d-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "ACT")
Item 1. Security and Issuer.
This statement relates to shares of common stock (the "Common
Stock") of Koger Equity, Inc., a Florida corporation (the "Company") which has
its principal executive offices at 3986 Boulevard Center Drive, Suite 101,
Jacksonville, Florida 32207.
Item 2. Identity and Background.
This Statement is filed jointly by Apollo Real Estate Investment
Fund II, L.P., a Delaware limited partnership ("AREIF II"), and Apollo Real
Estate Advisors II, L.P., a Delaware limited partnership ("AREA II"). AREIF II
and AREA II are sometimes collectively referred to herein as the "Reporting
Persons."
AREIF II is principally engaged in the business of investment in
real estate and real estate-related interests. The address of AREIF II's
principal business and its principal office is c/o Apollo Real Estate Advisors
II, L.P., Two Manhattanville Road, Purchase, New York 10577.
AREA II is the managing general partner of AREIF II. AREA II is
principally engaged in the business of serving as managing general partner of
AREIF II. The address of AREA II's principal business and its principal office
is c/o Apollo Real Estate Advisors II, L.P., Two Manhattanville Road, Purchase,
New York 10577.
The sole general partner of AREA II is Apollo Real Estate Capital
Advisors II, Inc., a Delaware corporation ("Capital Advisors II"). Capital
Advisors II is principally engaged in the business of serving as general partner
of AREA II.
Attached hereto as Appendix A is information concerning the general
partners of the Reporting Persons, the executive officers and directors of
Capital Advisors II and certain other entities, which information is required to
be disclosed in response to Item 2 and General Instruction C to Schedule 13D.
All such persons identified on Appendix A disclaim beneficial ownership of
and any pecuniary interest in the shares of Common Stock beneficially owned by
the Reporting Persons.
Page 4 of 81 Pages
372958.8
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None of the Reporting Persons, Capital Advisors II, nor any of the
persons or entities referred to in Appendix A hereto, has, during the last five
years, been convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree, or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
As of the date hereof, the Reporting Persons are deemed to
beneficially own 1,472,598 shares of Common Stock. Of that amount, AREIF II owns
341,956 shares of Common Stock and has options to purchase, within sixty days
of June 25, 1996, a total of 1,130,642 additional shares of Common Stock. The
source of all funds used to acquire beneficial ownership of such shares of
Common Stock was investment funds from working capital of AREIF II. None of the
funds used to acquire beneficial ownership were borrowed funds or otherwise
obtained for the purpose of acquiring Common Stock. AREA II, managing general
partner of AREIF II, is deemed to beneficially own the shares of Common Stock
beneficially owned by AREIF II. The shares of Common Stock beneficially owned by
the Reporting Persons were acquired as described below.
Kronus Property Holdings, L.L.C., a Delaware limited liability
company and an affiliate of AREIF II ("Kronus"), entered into a Common Stock
Purchase and Sale Agreement, dated as of May 22, 1996 (the "Stock Purchase
Agreement"), by and among KRONUS, TCW SPECIAL CREDITS ("TCW"), a California
general partnership, for itself and as general partner or investment manager for
Weyerhauser Company Master Retirement Trust ("Weyerhauser Trust"), TCW Special
Credits Fund III ("Special Credits III") and The Common Fund for Bond
Investments ("Common Fund"), and TRUST COMPANY OF THE WEST ("West"), a
California corporation, for itself and as trustee for TCW Special Credits Trust
("Trust"). Pursuant to the Stock Purchase Agreement, Kronus purchased an
aggregate of 195,256 shares of Common Stock on May 31, 1996 for an aggregate
purchase price of $2,464,131. Subsequently on May 31, 1996, Kronus transferred
to AREIF II, at cost, the 195,256 shares purchased pursuant to the Stock
Purchase Agreement.
Kronus entered into an Option Agreement, dated as of May 22, 1996
(the "TCW Option Agreement"), by and among KRONUS, TCW, for itself and as
general partner or investment manager for Weyerhauser Trust, Special Credits III
and Common Fund, and WEST, for itself and as a trustee for Trust. Pursuant to
the terms of the TCW Option Agreement, Kronus was granted an irrevocable option
to purchase an aggregate of 685,142 shares of Common Stock in consideration of
$166,900 (which payment is to be fully credited against the exercise price if
the option is exercised on or prior to August 1, 1996 or, if an additional
payment is made, October 31, 1996). Pursuant to Section 21 of the TCW Option
Agreement and in consideration of all amounts previously paid by Kronus, Kronus
assigned the TCW Option Agreement to AREIF II, and AREIF II accepted and assumed
the TCW Option Agreement, as of June 3, 1996 pursuant to an assignment and
assumption agreement (the "TCW Assignment Agreement"). The Reporting Persons are
deemed to be beneficial owners of the shares of Common Stock for which the
options are granted by the TCW Option Agreement because such options are
presently exercisable.
Page 5 of 81 Pages
372958.8
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Kronus entered into an Option Agreement, dated as of May 24, 1996
(the "Tyndall Option Agreement"), by and between KRONUS and TYNDALL PARTNERS,
L.P., a Delaware limited partnership ("Tyndall"). Pursuant to the terms of the
Tyndall Option Agreement, Tyndall granted Kronus an irrevocable option to
purchase, on August 23, 1996 and, if an additional payment is made, prior to
October 31, 1996 (unless the Tyndall Option Agreement has been previously
terminated), 445,500 shares of Common Stock in consideration of $108,500 (which
payment is to be fully credited to the exercise price if the option is
exercised). Pursuant to Section 20 of the Tyndall Option Agreement and in
consideration of all amounts previously paid by Kronus, Kronus assigned the
Tyndall Option Agreement to AREIF II, and AREIF II accepted and assumed the
Tyndall Option Agreement, as of June 3, 1996 pursuant to an assignment and
assumption agreement (the "Tyndall Assignment Agreement"). The Reporting Persons
are deemed to be beneficial owners of the shares of Common Stock for which the
options are granted by the Tyndall Option Agreement because such options are
exercisable within sixty days.
The discussion herein of the TCW Stock Purchase Agreement, the TCW
Option Agreement, the Tyndall Option Agreement, the TCW Assignment Agreement and
the Tyndall Assignment Agreement is subject to and qualified in its entirety by
reference to such agreements, copies of which are attached hereto as exhibits
and incorporated herein by reference.
On June 27, 1996, AREIF II purchased in the open market 146,700
shares of Common Stock for an aggregate consideration, including brokerage
commissions, of approximately $1,915,904.50.
Item 4. Purpose of Transaction.
Each of the Reporting Persons acquired beneficial ownership of the
shares of Common Stock in the ordinary course of business for investment
purposes and not with the purpose of changing or influencing control of the
Company. Each of the Reporting Persons retains the right, however, to change
such investment intent, to acquire further shares of Common Stock or to sell or
otherwise dispose of all or a part of the shares of Common Stock beneficially
owned by such Reporting Persons in any manner permitted by law.
Although the foregoing currently reflects the present plans and
intentions of the Reporting Persons, the foregoing is subject to change at any
time. The Reporting Persons have and will, on an on-going basis, continue to
evaluate their investment in the Company. The Reporting Persons have consulted
with, and will continue to consult with, third party financial advisors
regarding such investment in the Company. In the event of a material change in
the present plans or intentions of the Reporting Persons, the Reporting Persons
will amend this Schedule 13D to reflect such change.
Page 6 of 81 Pages
372958.8
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Item 5. Interest in Securities of the Issuer.
(a) and (b) As of the date hereof, the Reporting Persons are deemed
to beneficially own an aggregate of 1,472,598 shares of the Common Stock, which
constitutes approximately 8.25% of the Common Stock outstanding.*
AREIF II owns 341,956 shares of Common Stock, as to which it has
sole voting and dispositive power. AREA II, general partner of AREIF II, is
deemed to beneficially own such 341,956 shares of Common Stock and have sole
voting and dispositive power.
By the terms of the TCW Option Agreement and the Tyndall Option
Agreement (each of which is attached hereto as an exhibit and incorporated
herein by reference), AREIF II has the right to acquire another 1,130,642 shares
of Common Stock.
(c) Except for (i) the private purchase of 195,256 shares of Common
Stock by AREIF II on May 31, 1996 at a price per share of $12.62 and (ii) the
open market purchase of 146,700 shares of Common Stock by AREIF II on June 27,
1996 at a price per share of $13.00, there have been no transactions in the
Common Stock effected by the Reporting Persons since April 25, 1996.
(d) The Reporting Persons have no knowledge of any persons who have
the right to receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, any Common Stock beneficially owned by the
Reporting Persons.
(e) Not applicable.
Item 6 Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The information set forth in Item 3, Item 4 and Item 5 above is
hereby incorporated by reference herein. Except as described above, the
Reporting Persons do not have any contracts, arrangements, understandings or
relationships with respect to any securities of the Company.
- --------
* All calculations of percentages of beneficial ownership in this Schedule
13D are based on there being 17,838,367 shares of Common Stock
outstanding, as of April 30, 1996, as disclosed in the Company's Quarterly
Report on Form 10-Q for the period ended March 31, 1996.
Page 7 of 81 Pages
372958.8
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Item 7. Material to be Filed as Exhibits.
EXHIBIT
NO. DESCRIPTION
1 Stock Purchase Agreement, dated as of May 22, 1996, by and among KRONUS,
TCW, for itself and as general partner or investment manager for
Weyerhauser Trust, Special Credits III and Common Fund, and WEST, for
itself and as trustee for Trust.
2 Option Agreement, dated as of May 22, 1996, by and among KRONUS, TCW, for
itself and as general partner or investment manager for Weyerhauser Trust,
Special Credits III and Common Fund, and WEST, and as a trustee for Trust.
3 Option Agreement, dated as of May 24, 1996, by and between KRONUS and
TYNDALL.
4 Assignment and Assumption Agreement, dated as of June 3, 1996, by and
between KRONUS and AREIF II, and acknowledged by TCW, for itself and as
general partner or investment manager for Weyerhauser Trust, Special
Credits III and Common Fund, and WEST, for itself as trustee for Trust.
5 Assignment and Assumption Agreement, dated as of June 3, 1996, by and
between KRONUS and AREIF II, and acknowledged by TYNDALL.
Page 8 of 81 Pages
372958.8
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: July 2, 1996
APOLLO REAL ESTATE INVESTMENT FUND II, L.P.
By: Apollo Real Estate Advisors II, L.P.
Managing Member
By: Apollo Real Estate Capital Advisors II, Inc.
General Partner
By: /s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Vice President,
Apollo Real Estate Capital Advisors II, Inc.
APOLLO REAL ESTATE ADVISORS II, L.P.
By: Apollo Real Estate Capital Advisors II, Inc.
General Partner
By: /s/ Michael D. Weiner
Name: Michael D. Weiner
Title: Vice President,
Apollo Real Estate Capital Advisors II, Inc.
Page 9 of 81 Pages
372958.8
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APPENDIX A
The following sets forth information with respect to the executive
officers and directors of Capital Advisors II, which is the sole general partner
of AREA II.
Messrs. Leon D. Black, John J. Hannan and William L. Mack are
executive officers and directors of Capital Advisors II. The principal
occupation of each of Messrs. Black and Hannan, each of whom is a citizen of the
United States, is to act as an executive officer and director of Apollo Capital
Management, Inc., a Delaware corporation ("Apollo Capital"), and of Lion Capital
Management, Inc., a Delaware corporation ("Lion Capital"). Messrs. Black and
Hannan are founding principals of Apollo Advisors, L.P. ("Apollo Advisors"),
Lion Advisors, L.P. ("Lion Advisors") and together with Mr. Mack of Apollo Real
Estate Advisors II, L.P. The principal occupation of Mr. Mack, who is a citizen
of the United States, is to act as a consultant to Apollo Advisors and as a
principal of Apollo Real Estate Advisors, L.P. and to act as President and
Managing Partner of the Mack Organization, an owner and developer of and
investor in office and industrial buildings and other commercial properties. The
principal business of Apollo Advisors and of Lion Advisors is to provide advice
regarding investments in securities and the principal business of Apollo Real
Estate Advisors, L.P. is to provide advice regarding investments in real estate
and real estate-related investments. The business address of each of Messrs.
Black, Hannan and Mack is c/o Apollo Real Estate Management II, L.P., 1301
Avenue of the Americas, New York, New York 10019.
Page 10 of 81 Pages
372958.8
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Exhibit Index
Exhibit Page
Ex-99.1 Exhibit I -- Stock Purchase Agreement, dated as of May 22, 12
1996, by and among KRONUS, TCW, for itself and
as general partner or investment manager for
Weyerhauser Trust, Special Credits III and
Common Fund, and WEST, for itself and as
trustee for Trust.
Ex-99.2 Exhibit II -- Option Agreement, dated as of May 22, 1996, by 29
and among KRONUS, TCW, for itself and as
general partner or investment manager for
Weyerhauser Trust, Special Credits III and
Common Fund, and WEST, and as a trustee for
Trust.
Ex-99.3 Exhibit III -- Option Agreement, dated as of May 24, 1996, by 52
and between KRONUS and TYNDALL.
Ex-99.4 Exhibit IV -- Assignment and Assumption Agreement, dated as 72
of June 3, 1996, by and between KRONUS and
AREIF II, and acknowledged by TCW, for itself
and as general partner or investment manager
for Weyerhauser Trust, Special Credits III and
Common Fund, and WEST, for itself as trustee
for Trust.
Ex-99.5 Exhibit V -- Assignment and Assumption Agreement, dated as 78
of June 3, 1996, by and between KRONUS and
AREIF II, and acknowledged by TYNDALL.
Page 11 of 81 Pages
372958.8
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Ex. 99.1
EXHIBIT I
COMMON STOCK PURCHASE AND SALE AGREEMENT
This Common Stock Purchase and Sale Agreement (the "Agreement"), dated as
of May 22, 1996, by and among TCW SPECIAL CREDITS, a California general
partnership, for itself (in its individual capacity, "TCW") and as general
partner or investment manager for the entities (other than TCW Trust (as defined
below)) set forth on Schedule I attached hereto (each entity set forth on
Schedule I (including TCW Trust), a "Selling Shareholder" and, collectively, the
"Selling Shareholders"), TRUST COMPANY OF THE WEST, a California corporation,
for itself (in its individual capacity, "Trust") and as trustee for TCW Special
Credits Trust, a California collective investment trust ("TCW Trust"), and
KRONUS PROPERTY HOLDINGS, L.L.C., a Delaware limited liability company
("Purchaser").
WITNESSETH:
WHEREAS, the Common Stock, par value $0.01 per share (including the common
stock purchase rights associated therewith, the "Common Stock"), of Koger
Equity, Inc., a Florida corporation (the "Company"), is publicly traded on the
American Stock Exchange under the symbol "KE";
WHEREAS, the Selling Shareholders collectively own 880,398 shares of the
Company's Common Stock as more particularly set forth on Schedule I attached
hereto under the heading "Total Shares" (as appropriately adjusted as necessary
to reflect a stock split, stock dividend, merger, consolidation,
reclassification, recapitalization or other similar transaction, the "Shares"),
which Shares constitute approximately 4.94% of the total issued and outstanding
shares of Common Stock;
WHEREAS, Purchaser desires to purchase a total of 195,256 of the Shares
from the Selling Shareholder, ("Initial Shares"), and the Selling Shareholder
desires to sell the Initial Shares to Purchaser, upon the terms and conditions
hereinafter set forth;
WHEREAS, Purchaser further desires to acquire from the Selling
Shareholders an option to purchase the remaining 685,142 Shares (the "Option
Shares"), and the Selling Shareholders desire to grant to Purchaser an option to
purchase the Option Shares, upon the terms and conditions set forth in a
separate Option Agreement to be executed and delivered simultaneous herewith;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and
Page 12 of 81 Pages
<PAGE>
conditions hereinafter set forth, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Purchase and Sale of Initial Shares. Subject to the terms and
conditions of this Agreement, on the Closing Date (as hereinafter defined) the
Selling Shareholders shall sell to Purchaser, and Purchaser shall purchase from
the Selling Shareholders, the number of Initial Shares set forth on Schedule I
under the heading "Initial Shares".
2. Purchase Price; Payment Terms.
(a) The purchase price (the "Purchase Price") payable per Share to
be purchased by Purchaser hereunder shall be $12.50 (appropriately adjusted as
necessary to reflect a stock split, stock dividend, merger, consolidation,
reclassification, recapitalization or other similar transaction with respect to
the Common Stock) plus interest on such amount from April 26, 1996 through the
date on which the Closing (as hereinafter defined) with respect to such Share
occurs at a rate of 10% per annum, compounded monthly, based on a year of 366
days.
(b) The aggregate Purchase Price for the Initial Shares shall be
paid by Purchaser to the Selling Shareholders at Closing by wire transfer of
immediately available funds to the account designated by the Selling
Shareholders on Schedule I hereto (or such other account designated in writing
by the Selling Shareholders at least forty-eight (48) hours prior to the time
for Closing).
3. Representations and Warranties of Selling Shareholders. TCW, Trust and
the Selling Shareholders (each on behalf of and with respect to itself) make the
following representations and warranties to Purchaser, each of which is true and
correct on the date hereof, shall remain true and correct to and as of the
Closing (as hereinafter defined) and shall survive the Closing:
(a) TCW, Trust and each Selling Shareholder are duly organized,
validly existing and in good standing under the laws of the State of California.
Each of TCW and Trust has all requisite entity power and authority to enter into
this Agreement and the other documents and instruments to be executed and
delivered by TCW and Trust, respectively, and to carry out the transactions
contemplated hereby and thereby. All entity actions and proceedings necessary to
be taken by or on the part of each of TCW and Trust in connection with the
transactions contemplated by this Agreement have been duly and validly taken.
(b) No other act or proceeding on behalf of TCW, Trust or any
Selling Shareholder is necessary to authorize this Agreement or the other
documents and instruments to be executed and delivered
Page 13 of 81 Pages
<PAGE>
by TCW, Trust and the Selling Shareholders pursuant hereto or the consummation
of the transactions contemplated hereby and thereby. This Agreement has been
duly and validly authorized, executed and delivered by TCW, Trust and the
Selling Shareholders and constitutes, and when executed and delivered, the other
documents and instruments to be executed and delivered by TCW, Trust and the
Selling Shareholders pursuant hereto will constitute, valid and binding
agreements of each of TCW, Trust and the Selling Shareholders enforceable
against TCW, Trust and such Selling Shareholders in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforceability of
creditors' rights generally and by general equitable principles. Neither the
execution, delivery and performance of this Agreement nor the consummation of
the transactions contemplated herein will, with or without the giving of notice
or the lapse of time, or both, (i) conflict with or result in any violation of
or default under (a) any provision of the articles of incorporation, partnership
agreement or bylaws, trust agreement or other governing document, each as
amended and/or restated to date, of TCW, Trust or any Selling Shareholder, (b)
any note, bond, mortgage, indenture, lease, agreement or other material
instrument, permit, concession, grant, franchise or license to which TCW, Trust
or any Selling Shareholder is a party or by which any of their properties or
assets may be bound (provided that no representation or warranty is being made
under this clause (b) as to the Amended and Restated Articles of Incorporation
of the Company (as the same may be further amended from time to time, the
"Articles")) or (c) any judgment, order, decree, injunction, law, statute, rule,
permit, license or regulation applicable to TCW, Trust or any Selling
Shareholder or any of their respective properties, or (ii) result in the
acceleration of any material obligation or the creation of any material lien,
charge or encumbrance upon any of the assets of TCW, Trust or any Selling
Shareholder. No authorization, consent or approval of, or declaration of, filing
with or notice to any third party or any governmental body or authority is
necessary for the execution, delivery and performance of this Agreement by TCW,
Trust or any Selling Shareholder.
(c) The Selling Shareholders are the record and beneficial owners of
the Initial Shares and Option Shares in the amounts set forth in Schedule I
hereto, free and clear of any and all liens, claims, charges, pledges, security
interests, voting or transfer restrictions and other encumbrances of any nature
whatsoever (subject to any encumbrances imposed thereon or with respect thereto
by the Articles or the restrictions on transfer contained in any applicable
securities laws, if any) and the Initial Shares and the Option Shares are held
by Sanwa Bank & Trust, as custodian, through an account on the book entry system
maintained by the Depositary Trust Corporation. Upon the Closing, the Selling
Shareholders shall convey to Purchaser good and
Page 14 of 81 Pages
<PAGE>
marketable title to the Initial Shares, free and clear of all liens, claims,
charges, pledges, security interests, voting or transfer restrictions and other
encumbrances of any nature whatsoever (subject to any encumbrances imposed
thereon or with respect thereto by the Articles or the restrictions on further
transfer contained in any applicable securities laws).
(d) None of the Selling Shareholders nor any directors, officers,
employees or agents thereof have retained, employed or used any broker or finder
in connection with the transactions provided for herein or in connection with
the negotiation thereof.
(e) None of the Selling Shareholders has offered, directly or
indirectly, any Shares beneficially owned thereby for sale, nor solicited any
offer to buy any such Shares, by means of any general advertising or by any
other form of general solicitation. None of the Selling Shareholders has
offered, directly or indirectly, any Shares beneficially owned thereby for sale,
nor solicited any offer to buy any such Shares, in any other manner that would
require the sale of the Shares to be subject to the registration requirements of
the Securities Act of 1933, as amended. Each of the Selling Shareholders
confirms that it did not acquire any Shares with a view to, or for, resale in
connection with any distribution thereof within the meaning of the Securities
Act of 1933, as amended, which would not be exempt from the registration
requirements of such Act.
(f) Each of the Selling Shareholders is solvent, does not have
unreasonably small capital and has not incurred debts beyond its ability to pay
as they mature, and is not subject to, nor to the best of its knowledge,
threatened by, any voluntary or involuntary reorganization, insolvency,
bankruptcy or similar federal or state proceeding.
4. Representations and Warranties of Purchaser. Purchaser makes the
following representations and warranties to TCW, Trust and the Selling
Shareholders, each of which is true and correct on the date hereof, shall remain
true and correct to and as of the Closing, and shall survive the Closing:
(a) Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. Purchaser
has all requisite entity power and authority to enter into this Agreement and
the other documents and instruments to be executed and delivered by Purchaser
pursuant hereto and to carry out the transactions contemplated hereby and
thereby. All entity actions and proceedings necessary to be taken by or on the
part of Purchaser, and all partnership actions and proceedings necessary to be
taken on the part of Apollo Real Estate Advisors II, L.P., a Delaware limited
partnership and the managing member of Purchaser (the "Managing Member"), in
connection with the
Page 15 of 81 Pages
<PAGE>
transactions contemplated by this Agreement have been duly and
validly taken.
(b) Neither any other act or proceeding on the part of Purchaser or
its members, nor any other partnership act or proceeding on the part of the
Managing Member or its partners, is necessary to authorize this Agreement or the
other documents and instruments to be executed and delivered by Purchaser
pursuant hereto or the consummation of the transactions contemplated hereby and
thereby. This Agreement has been duly and validly authorized, executed and
delivered by Purchaser and constitutes, and when executed and delivered, the
other documents and instruments to be executed and delivered by Purchaser
pursuant hereto will constitute, valid and binding agreements of Purchaser,
enforceable against the Purchaser in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforceability of creditors'
rights generally, and by general equitable principles.
(c) Neither the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated herein will,
with or without the giving of notice or the lapse of time, or both, (i) conflict
with or result in any violation of or default under (a) any provision of the
Certificate of Formation or the Operating Agreement of Purchaser, each as
amended and/or restated to date, (b) any note, bond, mortgage, indenture, lease,
agreement or other material instrument, permit, concession, grant, franchise or
license to which Purchaser is a party or by which any of its properties or
assets may be bound or (c) any judgment, order, decree, injunction, statute,
rule, permit, license or regulation applicable to Purchaser or any of its
properties, or (ii) result in the acceleration of any material obligation or the
creation of any material lien, charge or encumbrance upon any of the assets of
Purchaser. No authorization, consent or approval of, or declaration of, filing
with or notice to any governmental body or authority is necessary for the
execution, delivery and performance of this Agreement by Purchaser.
(d) Neither Purchaser nor any members, directors, partners,
officers, employees or agents thereof has retained, employed or used any broker
or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof.
(e) Purchaser is a sophisticated investor capable of evaluating the
merits and risks of investment in the Shares and of making an informed
investment decision with respect thereto. Purchaser acknowledges that it has
conducted its own review of the documents filed by the Company with the
Securities and Exchange Commission (including, without limitation, any exhibits
or
Page 16 of 81 Pages
<PAGE>
schedules) and that neither TCW, Trust nor any of the Selling Shareholders is
making any representations or warranties with respect to such documents or their
applicability to any of the transactions contemplated hereby. Neither TCW, Trust
nor any of the Selling Shareholders has made any representation or warranty to
Purchaser other than those set forth in Section 3. The Shares are being acquired
by Purchaser for investment only and not with a view to resale or other
distribution. Purchaser acknowledges and understands that the Shares being
acquired hereunder may be subject to restrictions on resale under applicable
federal or state securities laws in the absence of an exemption therefrom.
(f) Purchaser has, or will have on the Closing Date, cash or cash
equivalents available in an amount sufficient to consummate the transactions
contemplated hereby.
5. Option Agreement. Each of the Selling Shareholders and Purchaser
covenants and agrees to execute and deliver to the other, simultaneous with the
execution and delivery of this Agreement, an option agreement (the "Option
Agreement") with respect to the Option Shares, which Option Agreement shall be
in substantially the form attached hereto as Exhibit A.
6. Conditions Precedent to Purchaser's Obligations.
(a) Each and every obligation of Purchaser to be performed on the
Closing Date (as hereinafter defined) shall be subject to the satisfaction prior
to or at the Closing of each of the following conditions:
(i) Each of the representations and warranties made by TCW,
Trust and each Selling Shareholder in this Agreement shall be true and correct
in all material respects when made and shall be true and correct in all material
respects at and as of the Closing Date as though such representations and
warranties were made or given on and as of the Closing Date, except for any
representation or warranty that expressly indicates that it is being made as of
a specific date.
(ii) Each of TCW, Trust and the Selling Shareholders shall
have in all material respects performed and complied with all of its agreements
and obligations under this Agreement which are to be performed or complied with
by it prior to or on the Closing Date.
(iii) There shall not have been any injunction or restraining
order issued in or by any federal or state court or governmental authority that
enjoins or prohibits consummation of the transactions contemplated hereby or
imposes materially adverse limitations on Purchaser's ownership of or exercise
of rights relating to the Shares.
Page 17 of 81 Page
<PAGE>
7. Conditions Precedent to Selling Shareholders'
Obligations.
(a) Each and every obligation of the Selling Shareholders to be
performed on the Closing Date shall be subject to the satisfaction prior to or
at the Closing of the following conditions:
(i) Each of the representations and warranties made by
Purchaser in this Agreement shall be true and correct in all material respects
when made and shall be true and correct in all material respects at and as of
such Closing Date as though such representations and warranties were made or
given on and as of such Closing Date.
(ii) Purchaser shall have in all material respects performed
and complied with all of its agreements and obligations under this Agreement
which are to be performed or complied with by it prior to or on such Closing
Date.
(iii) There shall not have been any injunction or restraining
order issued in or by any federal or state court or governmental authority that
enjoins or prohibits consummation of the transactions contemplated hereby.
8. Closing. The closing of the purchase and sale of the Shares (the
"Closing") shall take place at the offices of Battle Fowler LLP, 75 E. 55th
Street, New York, New York, at 10:00 a.m. (Eastern time) on May 31, 1996, or at
such other time and place as the parties hereto shall mutually agree upon in
writing. The date on which the Closing occurs is referred to in this Agreement
as the "Closing Date."
9. Documents to Be Delivered by the Selling Shareholders at the Closing.
At the Closing, the Selling Shareholders shall deliver to Purchaser the
following documents, in each case duly executed or otherwise in proper form:
(a) Either (i) stock certificates representing the Shares, duly
endorsed for transfer or with duly executed stock powers attached thereto, or
(ii) other customary evidence of transfer of the Shares.
(b) A certificate signed by a duly authorized general partner of
TCW, on behalf of TCW and the Selling Shareholders (other than TCW Trust), and a
duly authorized officer of Trust, on behalf of Trust and TCW Trust, that each of
the representations and warranties made by TCW and the Selling Shareholders
(other than TCW Trust) and Trust and TCW Trust, respectively, in this Agreement
is true and correct in all material respects on and as of the Closing Date with
the same effect as though such representations and
Page 18 of 81 Pages
<PAGE>
warranties had been made or given on and as of the Closing Date, except for any
representation or warranty that expressly indicates that it is being made as of
a specific date, and that TCW and the Selling Shareholders (other than TCW
Trust) and Trust and TCW Trust, respectively, have performed and complied with
all of their respective obligations under this Agreement which are to be
performed or complied with on or prior to the Closing Date.
(c) All other documents, instruments or writings required to be
delivered by the Selling Shareholders at or prior to the Closing pursuant to
this Agreement and such other documents as the Purchaser may reasonably request.
10. Documents to Be Delivered by Purchaser at the Closing.
At the Closing, Purchaser shall deliver to TCW, on behalf of the
Selling Shareholders (other than TCW Trust), and Trust, on behalf of TCW Trust,
the following documents, in each case duly executed or otherwise in proper form:
(a) A wire transfer in payment of the Purchase Price for the Shares,
as required by Section 2 hereof.
(b) A certificate signed by a duly authorized representative of the
Managing Member, on behalf of Purchaser, that the representations and warranties
made by Purchaser in this Agreement are true and correct on and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date, and that Purchaser has
performed and complied with all of Purchaser's obligations under this Agreement
which are to be performed or complied with on or prior to the Closing Date.
(c) All other documents, instruments or writings required to be
delivered by the Purchaser at or prior to the Closing pursuant to this Agreement
and such other documents as the Selling Shareholders may reasonably request.
11. Indemnification.
(a) Subject to the terms and conditions of this Section 11, TCW,
Trust and each Selling Shareholder (each on behalf of and with respect to
itself) hereby agrees to indemnify, defend and hold harmless Purchaser and its
members, directors, partners, officers, employees and controlled and controlling
persons (hereinafter "Purchaser's Affiliates") from and against all Claims (as
hereinafter defined) asserted against, resulting to, imposed upon, or incurred
by Purchaser or Purchaser's Affiliates, by reason of, arising out of or
resulting from (a) the inaccuracy or breach of any representation or warranty of
TCW, Trust or such Selling Shareholder contained in this Agreement, or (b) the
breach of any
Page 19 of 81 Pages
<PAGE>
covenant of TCW, Trust or such Selling Shareholder contained in this Agreement.
As used in this Section 11, the term "Claim" shall mean all liabilities losses,
damages judgments, awards, settlements, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses).
(b) Subject to the terms and conditions of this Section 11,
Purchaser hereby agrees to indemnify, defend and hold harmless TCW, Trust and
the Selling Shareholders and their respective directors, officers, partners,
trustees, employees and controlled and controlling persons (hereinafter "Selling
Shareholders' Affiliates") from and against all Claims asserted against,
resulting to, imposed upon or incurred by any of the Selling Shareholders or the
Selling Shareholders' Affiliates, by reason of or resulting from (a) the
inaccuracy or breach of any representation or warranty of Purchaser contained in
this Agreement, or (b) the breach of any covenant of Purchaser contained in this
Agreement.
(c) The obligations and liabilities of any party to indemnify any
other person under this Section 11 with respect to Claims relating to third
parties shall be subject to the following terms and conditions:
(i) The party or parties to be indemnified (whether one or
more, the "Indemnified Party") will give the party from whom indemnification is
sought (the "Indemnifying Party") prompt written notice of any such Claim, and
the Indemnifying Party will undertake the defense thereof by representatives
chosen by it. Failure to give such notice shall not affect the Indemnifying
Party's duty or obligations under this Section 11, except to the extent the
Indemnifying Party is prejudiced thereby. The Indemnified Party shall make
available to the Indemnifying Party or its representatives all records and other
materials required by them and in the possession or under the control of the
Indemnified Party, for the use of the Indemnifying Party and its representatives
in defending any such Claim, and shall in other respects give reasonable
cooperation in such defense.
(ii) If the Indemnifying Party, within a reasonable time after
notice of any such Claim, fails to defend such Claim actively and in good faith,
the Indemnified Party will (upon further notice) have the right to undertake the
defense, compromise or settlement of such Claim or consent to the entry of a
judgment with respect to such Claim, on behalf of and for the account and risk
of the Indemnifying Party, and the Indemnifying Party shall thereafter have no
right to challenge the Indemnified Party's defense, compromise, settlement or
consent to judgment therein.
(iii) Anything in this subsection (c) to the contrary
notwithstanding, (x) if there is a reasonable probability that a
Page 20 of 81 Pages
<PAGE>
Claim may materially and adversely affect the Indemnified Party other than as a
result of money damages or other money payments, the Indemnified Party shall
have the right to participate in the defense of such Claim, and (y) the
Indemnifying Party shall not, without the written consent of the Indemnified
Party, settle or compromise any Claim or consent to the entry of any judgment
which does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the Indemnified Party of a release from all
liability in respect of such Claim.
12. Termination. This Agreement may be terminated by either TCW, the Trust
and the Selling Shareholders, on one hand, or the Purchaser, on the other hand,
if the Closing shall not have been consummated on or prior to May 31, 1996;
provided, however, that the obligations of each of the parties hereto under
Section 11, (solely with respect to events that shall have occurred prior to
such termination) and 14 through 26 shall continue in full force and effect
notwithstanding any such termination, and that except as otherwise expressly set
forth herein no party shall be relieved from any liability of any kind or nature
whatsoever resulting from or arising out of a breach thereby of this Agreement
occurring prior to such termination.
13. Further Assurances. From time to time prior to, at and after the
Closing, each party hereto shall use all commercially reasonable efforts to
carry out and effectuate the transactions contemplated by this Agreement.
14. Notices. Any notices required or allowed to be furnished pursuant to
the terms hereof shall be provided to TCW, Trust and the Selling Shareholders
and Purchaser at the addresses set forth with their signatures below. Notices
hereunder shall be in writing and may be hand delivered, mailed, delivered by
overnight courier service or, if facsimile numbers are provided below,
transmitted by facsimile. If mailed, such notices shall be sent by certified
mail, postage prepaid, return receipt requested. The date which is three (3)
business days after the date of mailing shall be deemed to be the date on which
the notice was given. The postmark affixed to such notice by the U.S. Post
Office shall be conclusively presumed to be the date of mailing for purposes of
this Section. In the case of notices given by hand delivery or overnight
courier, such notices shall be deemed given on the date of the actual receipt.
If transmitted by facsimile, such notices shall be deemed given on the date of
the actual facsimile transmission, except that if a facsimile transmission is
transmitted after business hours or on a weekend or legal holiday in the State
of New York, then the notice shall be deemed given on the next business day
following the transmission of the facsimile transmission.
15. Attorneys' Fees. In the event any party hereto finds it necessary to
bring any suit, action, or other proceeding at law or
Page 21 of 81 Pages
<PAGE>
equity to interpret, enforce or implement any of the terms, covenants or
conditions hereof or of any instrument executed pursuant to this Agreement, or
by reason of any breach or default hereunder, the party prevailing in any such
action or proceeding, including any bankruptcy proceeding and/or any appeal,
shall be paid all costs and reasonable attorneys' fees by the non-prevailing
party, and in the event any judgment is secured by such prevailing party, all
such costs and attorneys' fees shall be included in any such judgment,
attorneys' fees to be set by the court and not by the jury. No termination of
this Agreement upon any grounds or in any circumstances addressed herein or
otherwise will impair or limit a prevailing party's right to recover from the
other party its attorneys' fees and costs in accordance with the provisions of
this Section.
16. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York without regard to the
conflicts of law provisions thereof.
17. Assignment; Parties in Interest.
(a) Except as expressly provided herein, the rights and obligations
of a party hereunder may not be assigned, transferred or encumbered without the
prior written consent of the other parties. Notwithstanding the foregoing, TCW,
Trust and the Selling Shareholders hereby consent to Purchaser assigning its
rights hereunder to any of its affiliates which do not have unreasonably small
capital and are able to perform Purchaser's obligations under this Agreement (an
"Apollo Affiliate"), which includes, without limitation, Apollo Real Estate
Investment Fund, L.P. and Apollo Real Estate Investment Fund II, L.P.. Purchaser
agrees to notify TCW, Trust and the Selling Shareholders within five (5) days
after said assignment or any other assignment of Purchaser's rights under this
Agreement to which the Selling Shareholders may hereafter consent, and such
notification shall be accompanied by a copy of the instrument of assignment.
Notwithstanding the foregoing, TCW, Trust and the Selling Shareholders shall
have no obligation to execute and deliver closing documents pursuant to this
Agreement in favor of anyone other than the original Purchaser identified herein
or an Apollo Affiliate as assignee, unless TCW, Trust and the Selling
Shareholders receive written notification at least five (5) business days prior
to the Closing. An assignment by Purchaser of its rights under this Agreement to
any entity other than an Apollo Affiliate shall not release Purchaser from its
obligations and liabilities under this Agreement, including, without limitation,
its obligation to close the purchase of Shares if its assignee fails to close
this transaction or if Purchaser's notice of an assignment is not duly given to
the Selling Shareholders within the time period provided for herein. An
assignment by Purchaser of its rights under this Agreement to an Apollo
Affiliate shall release Purchaser from all obligations and liabilities under
this Agreement
Page 22 of 81 Pages
<PAGE>
and such Apollo Affiliate shall be solely obligated and liable. Such Apollo
Affiliate shall then be deemed to be the "Purchaser" with all rights under this
Agreement.
(b) This Agreement shall be binding upon, inure to the benefit of,
and be enforceable by the respective successors and permitted assigns of the
parties hereto. Nothing contained herein shall be deemed to confer upon any
other person any right or remedy under or by reason of this Agreement.
18. Expenses. Except as hereinafter set forth, each of the parties hereto
shall bear its own expenses and the expenses of its counsel and other agents in
connection with the transactions contemplated hereby. Notwithstanding the
foregoing, Selling Shareholders shall pay any sales, use, excise, transfer or
other similar tax imposed with respect to the transactions provided for in this
Agreement (and any interest or penalties related thereto).
19. Saturdays, Sundays and Legal Holidays. If the time for performance of
any of the terms, conditions and provisions hereof shall fall on a Saturday,
Sunday or legal holiday, then the time of such performance shall be extended to
the next business day thereafter.
20. Usage of Gender Specific Terms. As used herein, each of the masculine,
feminine and neuter genders shall include the other genders, the singular shall
include the plural, and the plural shall include the singular, wherever
appropriate to the context.
21. Entire Agreement; Amendment. This Agreement embodies the entire
agreement of the parties with respect to the transactions contemplated herein,
including the purchase and sale of the Shares, and all prior understandings and
agreements of the parties relating thereto are merged herein. This Agreement may
not be modified in any manner whatsoever except by a written instrument signed
by each of the Selling Shareholders and Purchaser.
22. Waiver. No delay in exercising any right or remedy of any of the
parties hereunder shall constitute a waiver thereof, and no waiver by either
Selling Shareholder, or by Purchaser, of the breach of any covenant of this
Agreement shall be construed as a waiver of any preceding or succeeding breach
of the same or any other covenant or condition of this Agreement.
23. Headings. The headings in this Agreement are inserted for convenience
only and shall not constitute a part hereof.
24. Severability. If any term, covenant or condition of this Agreement is
held to be invalid or unenforceable in any respect, such invalidity or
unenforceability shall not affect any other
Page 23 of 81 Pages
<PAGE>
provision hereof and this Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.
25. Public Announcements. The parties shall mutually agree on the content
and timing of any public disclosure in relation to the transactions contemplated
hereby, subject to applicable requirements of law.
26. Limitations on Liability. The parties hereto acknowledge and agree
that in no event shall any of the partners, members, officers, directors,
shareholders, employees, trustees, agents or investment managers (collectively
"Representatives") of TCW, Trust or any Selling Shareholder, on one hand, or of
the Managing Member or Purchaser, on the other hand, have any obligation or
liability to Purchaser, on the one hand, or TCW, Trust and the Selling
Shareholders, on the other hand, for any action taken or omitted by or on behalf
of any Selling Shareholder or Purchaser, respectively, hereunder or in
connection herewith (such obligation and liability being the sole responsibility
of such Selling Shareholder or Purchaser, respectively, hereunder). The parties
hereto further acknowledge and agree that all obligations and liabilities of
each Selling Shareholder, on one hand, and Purchaser, on the other hand, under
this Agreement or in connection herewith are enforceable solely against such
Selling Shareholder and its assets and not against the assets of TCW or Trust
and not against the assets of any Representative of Purchaser, respectively;
provided, however, that if such obligations and liabilities of each Selling
Shareholder are not specifically attributable to a particular Selling
Shareholder, then the obligations and liabilities of each Selling Shareholder
shall be several in the proportion of the aggregate Shares of each Selling
Shareholder set forth on Schedule I hereto and not joint and several. The
provisions of this Section 26 shall in no way limit or otherwise affect TCW's
responsibility or Trust's responsibility to Purchaser for any breach by TCW on
its own behalf, or Trust on its own behalf, respectively, hereunder.
27. Execution. This Agreement may be executed in separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Any party may execute this Agreement by
transmitting a copy of its signature by facsimile to the other parties. In such
event the signing party shall deliver an original of the signature page to each
of the other parties within one business day of signing, and
Page 24 of 81 Pages
<PAGE>
failure to so deliver such originals shall result in the facsimile copy of that
party's signature being treated as an original.
IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement as of the date and year first above written.
SELLING
SHAREHOLDERS: TCW SPECIAL CREDITS, a California general
partnership, as general partner or investment
manager of the entities set forth on Schedule I
attached hereto (other than TCW Special Credits
Trust)
By: TCW Asset Management Company, its
managing general partner
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
Address: c/o Oaktree Capital Management, LLC
550 South Hope Street, 22nd Floor
Los Angeles, California 90071
Attn: Bruce A. Karsh, President
Facsimile No.: (213) 694-1592
TRUST COMPANY OF THE WEST, a California corporation, as
trustee of TCW Special Credits Trust, a California
collective investment trust
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
Address: c/o Oaktree Capital Management, LLC
550 South Hope Street, 22nd Floor
Los Angeles, California 90071
Attn: Bruce A. Karsh, President
Facsimile No.: (213) 694-1592
Page 25 of 81 Pages
<PAGE>
TCW: TCW SPECIAL CREDITS, a California general
partnership
By: TCW Asset Management Company, its
managing general partner
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
Address: c/o Oaktree Capital Management, LLC
550 South Hope Street, 22nd Floor
Los Angeles, California 90071
Attn: Bruce A. Karsh, President
Facsimile No.: (213) 694-1592
TRUST: TRUST COMPANY OF THE WEST, a California
corporation
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
Address: c/o Oaktree Capital Management, LLC
550 South Hope Street, 22nd Floor
Los Angeles, California 90071
Attn: Bruce A. Karsh, President
Facsimile No.: (213) 694-1592
Page 26 of 81 Pages
<PAGE>
PURCHASER: KRONUS PROPERTY HOLDINGS, L.L.C., a Delaware
limited liability company
By: Apollo Real Estate Advisors II, L.P.,
its managing member
By: Apollo Real Estate Capital Advisors
II, Inc., its general partner
By: /s/ W. Edward Scheetz
Name: W. Edward Scheetz
Title: Vice President
Address: c/o Apollo Real Estate Advisors, L.P.
1301 Avenue of the Americas
38th Floor
New York, New York 10019
Attn: W. Edward Scheetz
Facsimile No.: (212) 261-4060
Page 27 of 81 Pages
<PAGE>
SCHEDULE I
Koger Equity, Inc.
Common Stock
Initial Option
Entity Percentage Shares Shares Total
Weyerhauser
Company Master
Retirement Trust 18.6 36,390 127,692 164,082
TCW Special
Credits Fund III 53.5 104,367 366,216 470,583
The Common Fund
for Bond
Investments 3.8 7,476 26,232 33,708
TCW Special
Credits Trust 24.1 47,023 165,002 212,025
----- ------- ------- --------
100.0 195,256 685,142 880,398
Wiring Instructions - TCW Special Credits
Sanwa Bank of California/Trust Operations
Monterey Park, California 91754
ABA Routing #122003516
Account: TCW Special Credits Escrow Account
A/C #400-3500
Ref: TCW/Koger/Apollo
Page 28 of 81 Pages
<PAGE>
Ex. 99.2
EXHIBIT II
OPTION AGREEMENT
THIS OPTION AGREEMENT, dated as of May 22, 1996 (the "Option Agreement"),
is entered into by and among TCW SPECIAL CREDITS, a California general
partnership, for itself (in its individual capacity, "TCW") and as general
partner or investment manager for the entities (other than TCW Trust (as defined
below)) set forth on Schedule I attached hereto (each entity set forth on
Schedule I (including TCW Trust), a "Grantor" and, collectively, the
"Grantors"), TRUST COMPANY OF THE WEST, a California corporation, for itself (in
its individual capacity, "Trust") and as trustee for TCW Special Credits Trust,
a California collective investment trust ("TCW Trust"), and KRONUS PROPERTY
HOLDINGS, L.L.C., a Delaware limited liability company ("Recipient").
W I T N E S S E T H:
WHEREAS, Grantors and Recipient have entered into a Common Stock Purchase
and Sale Agreement, dated as of May 22, 1996 (the "Agreement"), which agreement
is being executed simultaneously with this Option Agreement; and
WHEREAS, as a condition to Recipient's entry into the Agreement and in
consideration of the Option Payment (as hereinafter defined), Grantors have
agreed to grant to Recipient, on the terms and conditions set forth herein, an
Option (as hereinafter defined) entitling Recipient to purchase an aggregate of
685,142 shares (as appropriately adjusted as necessary to reflect a stock split,
stock dividend, merger, consolidation, reclassification, recapitalization or
other similar transaction, the "Option Shares") of the Common Stock, par value
$.01 per share (including the common stock purchase rights associated therewith,
the "Common Stock"), of Koger Equity, Inc., a Florida corporation (the
"Company").
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Grant of Option. Concurrently with the execution of the Agreement and
receipt of the Option Payment (as defined in Section 2 hereof), each Grantor
hereby grants to Recipient an irrevocable option (the "Option") to purchase the
Option Shares set forth opposite such Grantor's name on Schedule I hereto under
the heading "Option Shares". The Option shall be exercisable in whole or in part
at a price per Option Share (the "Exercise Price") equal to $12.50
(appropriately adjusted as necessary to reflect a stock split, stock dividend,
merger, consolidation,
Page 29 of 81 Pages
<PAGE>
reclassification, recapitalization or other similar transaction with respect to
the Common Stock), plus interest on such amount from April 26, 1996 to but not
including the date on which the Closing (as hereinafter defined) with respect to
the Option Shares occurs at a rate of 10% per annum, compounded monthly, based
on a year of 366 days. The Option Payment (as defined below) and the Additional
Option Payment (as defined below), if paid, shall be applied in full to payment
of the Exercise Price multiplied by the Option Shares purchased.
2. Option Payment. Simultaneously with the execution of this Option
Agreement, Recipient will pay to Grantors the aggregate sum of One Hundred
Sixty-Six Thousand Nine Hundred ($166,900) Dollars (the "Option Payment") (to be
paid among the Grantors according to the percentages set forth on Schedule I
hereto) in consideration of the granting of the Option. The Option Payment shall
be non-refundable and shall be paid by Recipient to Grantors by wire transfer of
immediately available funds to the account designated on Schedule I hereto.
3. Expiration Date; Additional Option Payment. The Option may be exercised
in whole or in part at any time prior to the Expiration Date (as hereinafter
defined). For purposes of this Option Agreement and the Option, the Expiration
Date shall mean the earliest to occur of the following: (a) 5:00 p.m. (Eastern
time) on May 31, 1996, if the Closing of the purchase and sale of the Initial
Shares pursuant to the Agreement has not occurred on or before such date; (b)
the termination of this Option Agreement pursuant to Section 16 hereof; and (c)
5:00 p.m. (Eastern time) on August 1, 1996 (unless extended as provided below).
In the event the Option has not been exercised and the Expiration Date has not
occurred on or before August 1, 1996, Recipient may, at its sole option, extend
the Expiration Date as set forth in clause (c) of the preceding sentence from
August 1, 1996 to October 31, 1996, by notifying Grantors in writing on or
before the close of business on July 26, 1996 of its intention to exercise such
right and payment to Grantors on or before August 1, 1996 of an additional
option payment of Three Hundred Thirty Three Thousand Eight Hundred ($333,800)
Dollars (the "Additional Option Payment") (to be paid among the Grantors
according to the percentages set forth on Schedule I hereto). Any such notice of
extension shall be irrevocable and the Additional Option Payment shall be
non-refundable and shall be paid by Recipient to Grantors by wire transfer of
immediately available funds to the account designated on Schedule I hereto (or
such other account as Grantors shall designate in writing) not later than the
close of business on August 1, 1996. Notwithstanding anything to the contrary
contained in this Agreement, if the Option is exercised the Option Payment and
the Additional Option Payment shall be applied in full to payment of the
Exercise Price multiplied by the Option Shares purchased.
Page 30 of 81 Pages
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4. Representations and Warranties of TCW, Trust and the Grantors. TCW,
Trust and Grantors (each on behalf of and with respect to itself) make the
following representations and warranties to Recipient, each of which is true and
correct on the date hereof, shall remain true and correct to and as of the
Closing (as hereinafter defined) and shall survive the Closing:
(a) TCW, Trust and each Grantor is duly organized, validly existing
and in good standing under the laws of the State of California. TCW, Trust and
each Grantor has all requisite entity power and authority to enter into this
Option Agreement and the other documents and instruments to be executed and
delivered by it pursuant hereto, and to carry out the transactions contemplated
hereby and thereby. All entity actions and proceedings necessary to be taken by
or on the part of each of TCW, Trust and each Grantor in connection with the
transactions contemplated by this Option Agreement have been duly and validly
taken.
(b) No other act or proceeding on behalf of TCW, Trust or any
Grantor is necessary to authorize this Option Agreement or the other documents
and instruments to be executed and delivered by TCW, Trust or any Grantor
pursuant hereto or the consummation of the transactions contemplated hereby and
thereby. This Option Agreement has been duly and validly authorized, executed
and delivered by TCW, Trust and the Grantors and constitutes, and when executed
and delivered, the other documents and instruments to be executed and delivered
by TCW, Trust and the Grantors pursuant hereto will constitute, valid and
binding agreements of TCW, Trust and the Grantors enforceable in accordance with
their respective terms against TCW, Trust and the Grantors.
(c) Neither the execution, delivery and performance of this Option
Agreement by TCW, Trust or any Grantor nor the consummation of the transactions
contemplated herein will, with or without the giving of notice or the lapse of
time, or both, (i) conflict with or result in any violation of or default under
(a) any provision of the articles of incorporation, partnership agreement,
bylaws, trust agreement or other governing document, each as amended and/or
restated to date, of TCW, Trust or any Grantor, (b) any note, bond, mortgage,
indenture, lease, agreement or other material instrument, permit, concession,
grant, franchise or license to which TCW, Trust or any Grantor is a party or by
which any of its properties or assets may be bound (provided that no
representation or warranty is being made under this clause (b) as to the Amended
and Restated Articles of Incorporation of the Company (as the same may be
further amended from time to time, (the "Articles")) or (c) any judgment, order,
decree, injunction, law, statute, rule, permit, license or regulation applicable
to TCW, Trust or any Grantor or any of its properties, or (ii) result in the
acceleration of any material
Page 31 of 81 Pages
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obligation or the creation of any material lien, charge or encumbrance upon any
of the assets of TCW, Trust or any Grantor. No authorization, consent or
approval of, or declaration of, filing with or notice to any third party or any
governmental body or authority is necessary for the execution, delivery and
performance of this Option Agreement by TCW, Trust or any Grantor.
(d) Grantors are the sole record and beneficial owners of the Option
Shares, free and clear of any and all liens, claims, charges, pledges and
security interests, voting or transfer restrictions and other encumbrances of
any nature whatsoever (subject to any encumbrances imposed thereon or with
respect thereto by the Articles or the restrictions on transfer contained in any
applicable securities laws, if any) and the Option Shares are held by Sanwa Bank
and Trust, as custodian, through an account on the book entry system maintained
by the Depositary Trust Corporation. Upon the Closing, Grantors shall convey to
Recipient good and marketable title to the Option Shares, free and clear of any
and all liens, claims, charges, pledges, security interests, voting or transfer
restrictions and other encumbrances of any nature whatsoever (subject to any
encumbrances imposed thereon or with respect thereto by the Articles or the
restrictions on transfer contained in any applicable securities laws).
(e) None of the Grantors nor any of the directors, officers,
employees or agents thereof has retained, employed or used any broker or finder
in connection with the transactions provided for herein or in connection with
the negotiation thereof.
(f) None of the Grantors has offered, directly or indirectly, any
Option Shares beneficially owned thereby for sale, nor solicited any offer to
buy any such Option Shares, by means of any general advertising or by any other
form of general solicitation. None of the Grantors has offered, directly or
indirectly, any Option Shares beneficially owned thereby for sale, nor solicited
any offer to buy any such Option Shares, in any other manner that would require
the sale of the Option Shares pursuant to the exercise of the Option granted
hereunder to be subject to the registration requirements of the Securities Act
of 1933, as amended. Each of the Grantors confirms that it did not acquire any
Option Shares with a view to, or for, resale in connection with any distribution
thereof within the meaning of the Securities Act of 1933, as amended, which
would not be exempt from the registration requirements of such Act.
(g) Each of the Grantors is solvent, does not have unreasonably
small capital and has not incurred debts beyond its ability to pay as they
mature, and is not subject to, nor to the
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best of its knowledge, threatened by, any voluntary or involuntary
reorganization, insolvency, bankruptcy or similar federal or state proceeding.
5. Representations and Warranties of Recipient. Recipient makes the
following representations and warranties to TCW, Trust and Grantors, each of
which is true and correct on the date hereof, shall remain true and correct to
and as of the Closing, and shall survive the Closing:
(a) Recipient is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. Recipient
has all requisite entity power and authority to enter into this Option Agreement
and the other documents and instruments to be executed and delivered by
Recipient pursuant hereto and to carry out the transactions contemplated hereby
and thereby. All entity actions and proceedings necessary to be taken by or on
the part of Recipient, and all partnership actions and proceedings necessary to
be taken on the part of Apollo Real Estate Advisors II, L.P., a Delaware limited
partnership and the managing member of Recipient (the "Managing Member"), in
connection with the transactions contemplated by this Option Agreement have been
duly and validly taken.
(b) Neither any other act or proceeding on the part of Recipient or
its members, nor any other partnership act or proceeding on the part of the
Managing Member or its partners, is necessary to authorize this Option Agreement
or the other documents and instruments to be executed and delivered by Recipient
pursuant hereto or the consummation of the transactions contemplated hereby and
thereby. This Option Agreement has been duly and validly authorized, executed
and delivered by Recipient and constitutes, and when executed and delivered, the
other documents and instruments to be executed and delivered by Recipient
pursuant hereto will constitute, valid and binding agreements of Recipient,
enforceable against Recipient in accordance with their respective terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforceability of creditors' rights
generally, and by general equitable principles.
(c) Neither the execution, delivery and performance of this Option
Agreement by Recipient nor the consummation of the transactions contemplated
herein will, with or without the giving of notice or the lapse of time, or both,
(i) conflict with or result in any violation of or default under (a) any
provision of the Certificate of Formation or the Operating Agreement of
Recipient, each as amended and/or restated to date, (b) any note, bond,
mortgage, indenture, lease, agreement or other material
Page 33 of 81 Pages
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instrument, permit, concession, grant, franchise or license to which Recipient
is a party or by which any of its properties or assets may be bound or (c) any
judgment, order, decree, injunction, statute, rule, permit, license or
regulation applicable to Recipient or any of its properties, or (ii) result in
the acceleration of any material obligation or the creation of any material
lien, charge or encumbrance upon any of the assets of Recipient. No
authorization, consent or approval of, or declaration of, filing with or notice
to any governmental body or authority is necessary for the execution, delivery
and performance of this Option Agreement by Recipient or the consummation of the
transactions contemplated herein.
(d) Neither Recipient nor any members, directors, partners,
officers, employees or agents thereof has retained, employed or used any broker
or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof.
(e) Recipient is a sophisticated investor capable of evaluating the
merits and risks of investment in the Option and the underlying Option Shares
and of making an informed investment decision with respect thereto. Recipient
acknowledges that it has conducted its own review of the documents filed by the
Company with the Securities and Exchange Commission (including, without
limitation, any exhibits or schedules) and that, except as expressly set forth
herein, neither TCW, Trust nor any of the Grantors is making any representations
or warranties with respect to such documents. The Option Shares are being
acquired by Recipient for investment only and not with a current view to resale
or other distribution. Recipient acknowledges and understands that the Option
Shares being acquired hereunder may be subject to restrictions on resale under
applicable federal or state securities laws in the absence of an exemption
therefrom.
(f) Recipient has, or will have at Closing, cash or cash equivalents
available in an amount sufficient to consummate the transactions contemplated
hereby.
6. Covenants of TCW, Trust and Grantors.
(a) From the date hereof until the earliest to occur of (i) the
termination of this Option Agreement in accordance with Section 16, (ii) the
Expiration Date, and (iii) the Final Date (as hereinafter defined in Section
10(a)), TCW, Trust and each of the Grantors covenants and agrees that it will
not, without the prior written consent of Recipient, directly or indirectly:
grant any proxies that would bind Recipient after its purchase of the Option
Shares; enter into any voting trust or other agreement or arrangement with
respect to the voting of any Option Shares that would bind Recipient after its
purchase of the
Page 34 of 81 Pages
<PAGE>
Option Shares; or sell, assign, transfer, encumber or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to the direct or indirect sale, assignment, transfer, encumbrance or
other disposition of, any Option Shares. TCW, Trust and each of the Grantors
agrees not to seek or solicit any such sale, assignment, transfer, encumbrance
or other disposition or any such contract, option or other arrangement or
assignment or understanding during such period.
(b) At anytime prior to the Final Date or the date of written notice
terminating this Option Agreement in accordance with Section 16, TCW, Trust and
each of the Grantors shall not, directly or indirectly, solicit or initiate any
offer or indication of interest from any person with respect to any proposal of
a merger or other business combination involving the Company or its subsidiaries
or any proposal or offer to acquire in any manner any equity interest in, or a
portion of the assets of, the Company or its subsidiaries.
(c) TCW, Trust and each of the Grantors covenants and agrees to
cooperate with Recipient and the Company in causing the event in Section 8(d) to
occur including, without limitation, responding to any inquiries from the
Federal Trade Commission (the "FTC") or the United States Department of Justice
("DOJ").
(d) TCW, Trust and each of the Grantors covenants and agrees that it
shall, upon the request of Recipient, take all reasonable efforts to obtain all
regulatory approvals necessary for consummation of the transaction contemplated
hereby.
7. Covenants of Recipient. Recipient covenants and agrees that in the
event it determines to exercise the Option it will promptly prepare and file all
documents with the FTC and the DOJ as are required to be filed by Recipient
pursuant to the Hart-Scott-Rodino Act of 1976, as amended (the "HSR Act"), with
respect to the Closing and shall furnish promptly all materials thereafter
requested by any of the regulatory agencies having jurisdiction over such
filings by Recipient, provided that the failure to obtain termination of any
applicable waiting period or clearance under the HSR Act shall not extend the
Expiration Date.
8. Conditions Precedent to Recipient's Obligations. Each and every
obligation of Recipient to be performed on the Closing Date (as hereinafter
defined) shall be subject to the satisfaction of Recipient prior to or at the
Closing of each of the following conditions:
(a) Each of the representations and warranties made by TCW, Trust
and the Grantors in this Option Agreement shall be true and correct in all
material respects when made and shall be
Page 35 of 81 Pages
<PAGE>
true and correct in all material respects at and as of the Closing Date as
though such representations and warranties were made or given on and as of the
Closing Date.
(b) TCW, Trust and each of the Grantors shall have in all material
respects performed and complied with all of its agreements, obligations and
covenants under this Option Agreement which are to be performed or complied with
by it prior to or on the Closing Date, including the delivery of the closing
documents specified in Section 11.
(c) There shall not have been any injunction or restraining order
issued in or by any federal or state court or governmental agency that enjoins,
restrains or prohibits consummation of the transactions contemplated hereby or
imposes materially adverse limitations on Recipient's ownership or exercise of
rights relating to the Option Shares.
(d) All applicable waiting periods shall have expired or early
termination shall have been received under the HSR Act to consummate the
Closing.
(e) The Closing shall occur on or before the Expiration Date.
9. Conditions Precedent to Grantors's Obligations. Each and every
obligation of Grantors to be performed on the Closing Date shall be subject to
the satisfaction of Grantors prior to or at the Closing of the following
conditions:
(a) Each of the representations and warranties made by Recipient in
this Option Agreement shall be true and correct in all material respects when
made and shall be true and correct in all material respects at and as of such
closing Date as though such representations and warranties were made or given on
and as of such closing Date.
(b) Recipient shall have in all material respects performed and
complied with all of its agreements, obligations and covenants under this Option
Agreement which are to be performed or complied with by it prior to or on such
Closing Date, including the delivery of the closing documents specified in
Section 12.
(c) There shall not have been any injunction or restraining order
issued in or by any federal or state court or governmental agency that enjoins,
restrains or prohibits consummation of the transactions contemplated hereby.
(d) The Closing shall occur on or before the Expiration Date.
Page 36 of 81 Pages
<PAGE>
10. Closing.
(a) The closing of the purchase and sale of the Option Shares upon
the exercise of the Option (the "Closing") shall take place at the offices of
Battle Fowler LLP, 75 East 55th Street, New York, NY 10022 at 10:00 a.m. (New
York time) on the fifth business day following the latter to occur of: (i) the
exercise of the Option (in whole or in part) by Recipient, as evidenced by
delivery of written notice of exercise and presentation and surrender of the
Option to Grantors at their principal office (as provided in Section 1 of the
Option), which exercise shall be irrevocable; and (ii) satisfaction of the
condition set forth in Section 8(d) (or at such other time and place as the
parties hereto shall mutually agree upon in writing). The date on which the
Closing occurs is referred to in this Option Agreement as the "Closing Date."
Notwithstanding the foregoing, and except as provided in Section 10(b) below,
the Closing shall take place on or before August 1, 1996 (the "Final Date").
(b) Without limiting Recipient's rights under Section 3, in the
event Recipient has exercised the Option, but the Closing has not occurred,
prior to August 1, 1996, Recipient may, at its sole option, extend the Final
Date as set forth in Section 10(a) above from August 1, 1996 to October 31,
1996, by notifying Grantors in writing or before the close of business on July
26, 1996 of its intention to exercise such right and payment to Grantors on or
before August 1, 1996 of the non-refundable Additional Option Payment as
provided in Section 3 above.
11. Documents to Be Delivered by Grantors at the Closing. At the Closing,
Grantors shall deliver to Recipient the following documents, in each case duly
executed or otherwise in proper form:
(a) Either (i) stock certificates representing the Option Shares,
duly endorsed for transfer or with duly executed stock powers attached thereto,
or (ii) other customary evidence of transfer of the Option Shares.
(b) A certificate signed by a duly authorized general partner of
TCW, on behalf of TCW and the Grantors (other than TCW Trust), and a duly
authorized officer of Trust, on behalf of Trust and TCW Trust, that each of the
representations and warranties made by TCW and the Grantors (other than TCW
Trust) and Trust and TCW Trust, respectively, in this Option Agreement is true
and correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made or given on
and as of such Closing Date, except for any representation or warranty that
expressly indicates that it is being made as of a specific date, and that TCW
and the Grantors (other than TCW Trust) and Trust and TCW
Page 37 of 81 Pages
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Trust, respectively, have performed and complied with all of their respective
obligations under this Agreement which are to be performed or complied with on
or prior to such Closing Date.
(c) All other documents, instruments or writings required to be
delivered by the Grantors at or prior to the Closing pursuant to this Option
Agreement and such other documents as Recipient may reasonably request.
12. Documents to Be Delivered by Recipient at the Closing.
At the Closing, Recipient shall deliver to TCW, on behalf of the
Grantors (other than TCW Trust), and Trust, on behalf of TCW Trust, the
following documents, in each case duly executed or otherwise in proper form:
(a) A wire transfer in payment of the aggregate Exercise Price for
the Option Shares, as determined in accordance with Section 1 hereof.
(b) A certificate signed by a duly authorized representative of the
Managing Member, on behalf of Recipient, that the representations and warranties
made by Recipient in this Option Agreement are true and correct on and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date, and that Recipient has
performed and complied with all of Recipient's obligations under this Option
Agreement which are to be performed or complied with on or prior to the Closing
Date.
(c) All other documents, instruments or writings required to be
delivered by Recipient at or prior to the Closing pursuant to this Option
Agreement and such other documents as Grantors may reasonably request.
13. Price Protection.
(a) For purposes of this Section 13, the following definitions
shall apply:
(i) The term "Act" means the Securities Exchange Act of
1934, as amended.
(ii) The term "Acquisition Transaction" shall mean:
(A) The Recipient, any Affiliate thereof or any "group"
(within the meaning of Section 13(d) and 14(d)(2) of the Act) of which the
Recipient or any Affiliate thereof is a member becomes the "beneficial
owner" (as defined in Rule 13d-3 promulgated pursuant to the Act) of
Page 38 of 81 Pages
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more than 50% of the outstanding Common Stock (other than as provided
in clause (C) below);
(B) The Recipient or any Affiliate thereof acquires all
or substantially all of the assets of the Company, in one transaction or a
series of related transactions; or
(C) The Company consolidates with or merges with or into
any other Person of which the Recipient or any Affiliate thereof
"beneficially owns" more than 50% of the outstanding voting stock.
(iii) The terms "Affiliate" shall have the meaning ascribed to
it in Rule 12b-2 of the General Rules and Regulations of the Act.
(iv) The term "Interim Interest" shall mean interest on the
Exercise Price from the Closing Date through the date the Acquisition
Transaction is completed at a rate of 10% per annum, compounded monthly, based
on a year of 366 days.
(v) The term "Person" shall mean any individual, firm,
partnership, corporation or other entity, including any successor (by merger or
otherwise) of such entity, or a group of any of the foregoing acting in concert.
(vi) The term "Price Protected Shares" shall mean:
(A) if Recipient or any Affiliate thereof consummates an
Acquisition Transaction of the type described in clauses (B) or (C) of the
definition thereof, the aggregate number of Initial Shares and Option
Shares purchased by Recipient or any Affiliate thereof; or
(B) if Recipient or any Affiliate thereof consummates an
Acquisition Transaction of the type described in clause (A) of the
definition thereof, (x) the aggregate number of Initial Shares and Option
Shares purchased by Recipient or any Affiliate thereof multiplied by (y)
the percentage of the Company's outstanding Common Stock owned by
Recipient and its Affiliates and all "groups" in which Recipient or any
Affiliate is a member upon consummation of such Acquisition Transaction;
provided, however, if Recipient and its Affiliates and all "groups" in
which Recipient or any Affiliate is a member owns 80% or more of the
Company's outstanding Common Stock and the remaining Common Stock is not
publicly held upon consummation of such an Acquisition Transaction, then
the aggregate number of Initial Shares and Option Shares purchased by
Recipient or any Affiliate thereof shall be deemed "Price Protected
Page 39 of 81 Pages
<PAGE>
Shares". Solely for purposes of illustration and not by way of limitation,
if, during the eighteen months following the date of this Option
Agreement, Recipient consummates an Acquisition Transaction of the type
described in clause (A) of the definition thereof pursuant to which
Recipient acquires 60% of the Company's outstanding Common Stock, then
only 60% of the aggregate number of Initial Shares and Option Shares shall
be Price Protected Shares and, therefore, entitled to receive the Excess
Amount (as defined below). If, during the eighteen months following the
date of this Option Agreement and after an Acquisition Transaction of the
type described in clause (A) of the definition thereof, Recipient, any
Affiliate thereof or any "group" in which Recipient or any Affiliate is a
member becomes beneficial owner of additional shares of the Company's
Common Stock, the number of Price Protected Shares shall be
proportionately increased to reflect such additional ownership.
(b) In the event Recipient or any Affiliate of Recipient
consummates, directly or indirectly, an Acquisition Transaction within eighteen
(18) months following the date of this Option Agreement, Recipient shall pay to
Grantors, within five (5) business days of the consummation of such Acquisition
Transaction, by wire transfer of immediately available funds to the account
designated on Schedule I hereto (or such other account designated in writing by
Grantors at least forty-eight (48) hours prior to the time for payment
hereunder), cash, or freely tradeable Common Stock (or restricted Common Stock
with registration rights on terms mutually agreed to by Recipient and Grantors)
(having a value based upon the average closing price of the Company's Common
Stock on the American Stock Exchange for the preceding ten trading days), equal
to the dollar amount (the "Excess Amount") calculated by multiplying (i) the
number of Price Protected Shares by (ii) the excess, if any, of (x) the
"Relevant Fair Market Value" (as defined below) of the per share cash,
securities and/or other property, as the case may be, Recipient (or an Affiliate
thereof) paid to Company shareholders in the Acquisition Transaction (as if the
Closings under the Agreement and this Option Agreement had not occurred and
Grantors participated in the Acquisition Transaction) less (y) the sum of (1)
the Exercise Price and (2) Interim Interest.
For purposes of this Section 13, it is agreed that (i) if the Acquisition
Transaction is of the type described in clause (A) resulting from the
acquisition of Company Common Stock in private transactions or open market
purchases, the "Relevant Fair Market Value" shall be an amount equal to the
average of the price per share paid by Recipient in the Acquisition
Transaction(s) in which it purchased the most expensive 10% of such Common
Stock, and in all other transactions described in clause (A) the amount
Page 40 of 81 Pages
<PAGE>
of cash paid, or the dollar value attributed to the securities or property paid,
in said Acquisition Transaction; (ii) if the Acquisition Transaction is of the
type described in clause (B), the "Relevant Fair Market Value" shall be the
average closing price of the Company Common Stock on the American Stock Exchange
for the ten trading days preceding the closing of the Acquisition Transaction;
and (iii) if the Acquisition Transaction is of the type described in clause (C),
the "Relevant Fair Market Value" shall be the amount of cash paid, or the dollar
value attributed to the securities or property paid, in such Acquisition
Transaction.
14. Repurchase Right.
(a) In the event this Agreement is terminated for any reason or the
Closing does not occur on or before the earlier of the Final Date and the date
of written notice of termination of this Option Agreement, then, for a period of
thirty (30) days following the date of written notice of termination of this
Option Agreement or the Final Date, as the case may be (the "Repurchase
Period"), Grantors shall have the right (but not the obligation) to repurchase,
upon three (3) days' prior written notice to Recipient, the Initial Shares
purchased by Recipient at a price per Initial Share equal to the Purchase Price
(as defined in the Agreement) (appropriately adjusted as necessary to reflect a
stock split, stock dividend, merger, consolidation, reclassification,
recapitalization or similar transaction with respect to the Common Stock, plus
(i) the Option Payment, (ii) the Additional Option Payment and (iii) interest on
all amounts paid by Recipient under the Agreement and this Option Agreement from
the date of such payment through the date of repurchase pursuant to this Section
14, at a rate of 10% per annum, compounded monthly, based on a year of 366 days,
which shall be paid by wire transfer on or before said 30 day period to an
account designated by Recipient after receipt of notice.
(b) From the date of this Option Agreement through the Repurchase
Period, Recipient covenants and agrees that it will not, without the prior
written consent of Grantors, directly or indirectly: grant any proxies that
would bind Grantors after their repurchase of the Initial Shares; enter into any
voting trust or other agreement or arrangement with respect to the voting of any
of the Initial Shares that would bind Grantors after their repurchase of the
Initial Shares; or sell, assign, transfer, encumber or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to the direct or indirect sale, assignment, transfer, encumbrance or
other disposition of, any of the Initial Shares then held by Recipient.
Page 41 of 81 Pages
<PAGE>
15. Indemnification.
(a) Subject to the terms and conditions of this Section 15, TCW,
Trust and each of the Grantors (each on behalf of and with respect to itself)
hereby agrees to, and hereby does, indemnify, defend and hold harmless Recipient
and its members, directors, partners, officers, employees and controlled and
controlling persons (hereinafter "Recipient's Affiliates") from and against all
Claims (as hereinafter defined) asserted against, resulting to, imposed upon, or
incurred by Recipient or Recipient's Affiliates, directly or indirectly, by
reason of, arising out of or resulting from (a) the inaccuracy or breach of any
representation or warranty of TCW, Trust or such Grantor contained in this
Option Agreement, or (b) the breach of any covenant of TCW, Trust or any Grantor
contained in this Option Agreement. As used in this Section 15, the term "Claim"
shall mean all debts, liabilities, losses, damages, judgments, awards,
settlements, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses).
(b) Subject to the terms and conditions of this Section 15,
Recipient hereby agrees to, and hereby does, indemnify, defend and hold harmless
TCW, Trust and each of the Grantors and its directors, officers, partners,
trustees, employees and controlled and controlling persons (hereinafter
"Grantors' Affiliates") from and against all Claims asserted against, resulting
to, imposed upon or incurred by TCW, Trust or any Grantor or Grantors'
Affiliates, directly or indirectly, by reason of or resulting from (a) the
inaccuracy or breach of any representation or warranty of Recipient contained in
this Option Agreement, or (b) the breach of any covenant of Recipient contained
in this Option Agreement.
(c) The obligations and liabilities of any party to indemnify any
other person under this Section 15 with respect to Claims relating to third
parties shall be subject to the following terms and conditions:
(i) The party or parties to be indemnified whether one or
more, the "Indemnified Party") will give the party from whom indemnification is
sought (the "Indemnifying Party") prompt written notice of any such Claim, and
the Indemnifying Party will undertake the defense thereof by representatives
chosen by it. Failure to give such notice shall not affect the Indemnifying
Party's duty or obligations under this Section 15, except to the extent the
Indemnifying Party is prejudiced thereby. So long as the Indemnifying Party is
defending any such Claim actively and in good faith, the Indemnified Party shall
not settle such Claim. The Indemnified Party shall make available to the
Indemnifying Party or its representatives all records and other materials
required by them and in the possession or under
Page 42 of 81 Pages
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the control of the Indemnified Party, for the use of the Indemnifying Party and
its representatives in defending any such Claim, and shall in other respects
give reasonable cooperation in such defense;
(ii) If the Indemnifying Party, within a reasonable time after
notice of any such Claim, fails to defend such Claim actively and in good faith,
the Indemnified Party will (upon further notice) have the right to undertake the
defense, compromise or settlement of such Claim or consent to the entry of a
judgment with respect to such Claim, on behalf of and for the account and risk
of the Indemnifying Party, and the Indemnifying Party shall thereafter have no
right to challenge the Indemnified Party's defense, compromise, settlement or
consent to judgment therein; and
(iii) Anything in this subsection (c) to the contrary
notwithstanding, (x) if there is a reasonable probability that a Claim may
materially and adversely affect the Indemnified Party other than as a result of
money damages or other money payments, the Indemnified Party shall have the
right to participate in the defense of such Claim, and (y) the Indemnifying
Party shall not, without the written consent of the Indemnified Party, settle or
compromise any Claim or consent to the entry of any judgment which does not
include as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all liability in respect of
such Claim.
16. Termination. This Option Agreement may be terminated by either TCW,
Trust and the Grantors, on the one hand, or Recipient, on the other, if the
Option shall not have been exercised prior to the Expiration Date or the Closing
shall not have been consummated prior to the Final Date; provided, however, that
the obligations of each of the parties hereto under Sections 14, 15 (solely with
respect to events that shall have occurred prior to such termination) and 18
through 30 shall continue in full force and effect notwithstanding any such
termination, and that no party shall be relieved from any liability of any kind
or nature whatsoever resulting from or arising out of a breach thereby of this
Option Agreement occurring prior to such termination.
17. Further Assurances. Subject to Recipient's discretion as to whether or
not it exercises the Option, from time to time prior to, at and after any
Closing, each party hereto shall use all commercially reasonable efforts to
carry out and effectuate the transactions contemplated by this Option Agreement.
18. Notices. Any notices required or allowed to be furnished pursuant to
the terms hereof shall be provided to TCW,
Page 43 of 81 Pages
<PAGE>
Trust or Grantors and Recipient at the addresses set forth with their signatures
below. Notices hereunder shall be in writing and may be hand delivered, mailed,
delivered by a nationally recognized overnight courier service or, if facsimile
numbers are provided below, transmitted by facsimile. If mailed, such notices
shall be sent by certified mail, postage prepaid, return receipt requested. The
date which is three (3) business days after the date of mailing shall be deemed
to be the date on which the notice was given. The postmark affixed to such
notice by the U.S. Post Office shall be conclusively presumed to be the date of
mailing for purposes of this Section. In the case of notices given by hand
delivery or overnight courier, such notices shall be deemed given on the date of
the actual receipt. If transmitted by facsimile, such notices shall be deemed
given on the date of the actual transmission, except that if a facsimile
transmission is transmitted after business hours or on a weekend or legal
holiday in the State of New York, then the notice shall be deemed given on the
next business day following the transmission of the facsimile transmission.
19. Attorneys' Fees. In the event any party hereto finds it necessary to
bring any suit, action, or other proceeding at law or equity to interpret,
enforce or implement any of the terms, covenants or conditions hereof or of any
instrument executed pursuant to this Option Agreement, or by reason of any
breach or default hereunder or thereunder, the party prevailing in any such
action or proceeding, including any bankruptcy proceeding and/or any appeal,
shall be paid all costs and reasonable attorneys' fees by the non-prevailing
party, and in the event any judgment is secured by such prevailing party, all
such costs and attorneys' fees shall be included in any such judgment,
attorneys' fees to be set by the court and not by the jury. No termination of
this Option Agreement upon any grounds or in any circumstances addressed herein
or otherwise will impair or limit a prevailing party's right to recover from the
other party its attorneys' fees and costs in accordance with the provisions of
this Section.
20. Governing Law. This Option Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without regard
to the conflicts of law provisions thereof.
21. Assignment; Parties in Interest.
(a) The rights of Recipient hereunder shall be freely assignable,
transferable or able to be encumbered without the prior written consent of any
other party. Notwithstanding the foregoing, if Recipient assigns its rights
under this Option Agreement to any entity other than an Apollo Affiliate (as
defined below), Recipient shall remain liable for payment of all
Page 44 of 81 Pages
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amounts due upon exercise of the Option. If Recipient assigns its rights under
this Option Agreement to an affiliate which does not have unreasonably small
capital and is able to perform Recipient's obligations under this Option
Agreement (an "Apollo Affiliate"), which affiliate includes, without limitation,
Apollo Real Estate Investment Fund, L.P. and Apollo Real Estate Investment Fund
II, L.P., such Apollo Affiliate shall assume all obligations of Recipient under
this Option Agreement and Recipient shall then be released of all obligations
and liabilities hereunder. Such Apollo Affiliate shall then be deemed to be the
"Recipient" with all rights and obligations hereunder, including without
limitation, free assignability pursuant to this Section 21.
(b) This Option Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the respective successors and permitted
assigns of the parties hereto. Nothing contained herein shall be deemed to
confer upon any other person any right or remedy under or by reason of this
Option Agreement.
22. Expenses. Except as hereinafter set forth, each of the parties hereto
shall bear its own expenses and the expenses of its counsel and other agents in
connection with the transactions contemplated hereby. Notwithstanding the
foregoing, Recipient shall pay any applicable filing fees under the HSR Act
relating to the transactions contemplated by the Agreement and this Option
Agreement and Grantors shall pay any sales, use, excise, transfer or other
similar tax imposed with respect to the transactions provided for in this Option
Agreement (and any interest or penalties related thereto).
23. Saturdays, Sundays and Legal Holidays. If the time for performance of
any of the terms, conditions and provisions hereof shall fall on a Saturday,
Sunday or legal holiday, then the time of such performance shall be extended to
the next business day thereafter.
24. Usage of Gender Specific Terms. As used herein, each of the masculine,
feminine and neuter genders shall include the other genders, the singular shall
include the plural, and the plural shall include the singular, wherever
appropriate to the context.
25. Entire Agreement; Amendment. This Option Agreement embodies the entire
agreement of the parties with respect to the transactions contemplated herein,
including the purchase and sale of the Option Shares, and all prior
understandings and agreements of the parties relating thereto are merged herein.
This Option Agreement may not be modified in any manner whatsoever except by a
written instrument signed by TCW, on behalf of the Grantors
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(other than TCW Trust), Trust, on behalf of TCW Trust, and Recipient.
26. Waiver. No delay in exercising any right or remedy of any of the
parties hereunder shall constitute a waiver thereof, and no waiver by Grantors,
or by Recipient, of the breach of any covenant of this Option Agreement shall be
construed as a waiver of any proceeding or succeeding breach of the same or any
other covenant or condition of this Option Agreement.
27. Headings. The headings in this Option Agreement are inserted for
convenience only and shall not constitute a part hereof.
28. Severability. If any term, covenant or condition of this Option
Agreement is held to be invalid or unenforceable in any respect, such invalidity
or unenforceability shall not affect any other provision hereof and this Option
Agreement shall be construed as if such invalid or unenforceable provision had
never been contained herein.
29. Public Announcements. The parties shall mutually agree on the content
and timing of any public disclosure in relation to the transactions contemplated
hereby, subject to applicable requirements of law.
30. Limitations on Liability. The parties hereto acknowledge and agree
that in no event shall any of the partners, members, officers, directors,
shareholders, employees, trustees, agents or investment managers (collectively
"Representatives") of TCW, Trust or any Grantor, on one hand, or of the Managing
Member or Recipient, on the other hand, have any obligation or liability to
Recipient, on the one hand, or TCW, Trust and the Grantors, on the other hand,
for any action taken or omitted by or on behalf of any Grantor or Recipient,
respectively, hereunder or in connection herewith (such obligation and liability
being the sole responsibility of such Grantor or Recipient, respectively,
hereunder). The parties hereto further acknowledge and agree that all
obligations and liabilities of each Grantor, on one hand, and Recipient, on the
other hand, under this Agreement or in connection herewith are enforceable
solely against such Grantor and its assets and not against the assets of TCW or
Trust, and solely against Recipient and its assets not against the assets of any
Representative of Recipient, respectively; provided, however, that if such
obligations and liabilities of each Grantor are not specifically attributable to
a particular Grantor, then the obligations and liabilities of each Grantor shall
be several in the proportion of the aggregate Shares of each Grantor set forth
on Schedule I hereto and not joint and several. The provisions of this Section
29 shall in no way limit or otherwise affect TCW's responsibility or Trust's
Page 46 of 81 Pages
<PAGE>
responsibility to Recipient for any breach by TCW on its own behalf, or Trust on
its own behalf, respectively, hereunder.
31. Execution. This Option Agreement may be executed in separate
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument. Any party may execute
this Option Agreement by transmitting a copy of its signature by facsimile to
the other party. In such event the signing party shall deliver an original of
the signature page to the other party within one (1) business day of signing,
and failure to so deliver such original shall result in the facsimile copy of
that party's signature being treated as an original.
Page 47 of 81 Pages
<PAGE>
IN WITNESS WHEREOF, the undersigned parties have executed this
Option Agreement as of the date and year first above written.
Grantors: TCW SPECIAL CREDITS, a California general
partnership, as general partner or investment
manager of the entities set forth on Schedule I
attached hereto (other than TCW Special Credits
Trust)
By: TCW Asset Management Company, its managing
general partner
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
Address: c/o Oaktree Capital Management, LLC
550 South Hope Street, 22nd Floor
Los Angeles, California 90071
Attn: Bruce A. Karsh, President
Facsimile No.: (213) 694-1592
TRUST COMPANY OF THE WEST, a California corporation, as trustee
of TCW Special Credits Trust, a California collective
investment trust
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
Address: c/o Oaktree Capital Management, LLC
550 South Hope Street, 22nd Floor
Los Angeles, California 90071
Attn: Bruce A. Karsh, President
Facsimile No.: (213) 694-1592
Page 48 of 81 Pages
<PAGE>
TCW: TCW SPECIAL CREDITS, a California general partnership
By: TCW Asset Management Company, its managing
general partner
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
Address: c/o Oaktree Capital Management, LLC
550 South Hope Street, 22nd Floor
Los Angeles, California 90071
Attn: Bruce A. Karsh, President
Facsimile No.: (213) 694-1592
TRUST: TRUST COMPANY OF THE WEST, a California corporation
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
Address: c/o Oaktree Capital Management, LLC
550 South Hope Street, 22nd Floor
Los Angeles, California 90071
Attn: Bruce A. Karsh, President
Facsimile No.: (213) 694-1592
Page 49 of 81 Pages
<PAGE>
RECIPIENT: KRONUS PROPERTY HOLDINGS, L.L.C., a Delaware
limited liability company
By: Apollo Real Estate Advisors II, L.P.,
its managing member
By: Apollo Real Estate Capital Advisors II,
Inc., its general partner
By: /s/ W. Edward Scheetz
Name: W. Edward Scheetz
Title: Vice President
Address: c/o Apollo Real Estate Advisors, L.P.
1301 Avenue of the Americas
38th Floor
New York, New York 10019
Attn: W. Edward Scheetz
Facsimile No.: (212) 261-4060
Page 50 of 81 Pages
<PAGE>
SCHEDULE I
Koger Equity, Inc.
Common Stock
Option
Entity Percentage Shares
Weyerhauser
Company Master
Retirement Trust 18.6 127,692
TCW Special
Credits Fund III 53.5 366,216
The Common Fund
for Bond
Investments 3.8 26,232
TCW Special
Credits Trust 24.1 165,002
----- -------
100.0 685,142
Wiring Instructions - TCW Special Credits
Sanwa Bank of California/Trust Operations
Monterey Park, California 91754
ABA Routing #122003516
Account: TCW Special Credits Escrow Account
A/C #400-3500
Ref: TCW/Koger/Apollo
Page 51 of 81 Pages
<PAGE>
Ex. 99.3
EXHIBIT III
OPTION AGREEMENT
THIS OPTION AGREEMENT, dated as of May 24, 1996 (the "Option Agreement"),
is entered into by and between TYNDALL PARTNERS, L.P., a Delaware limited
partnership (the "Grantor"), and KRONUS PROPERTY HOLDINGS, L.L.C., a Delaware
limited liability company ("Recipient").
W I T N E S S E T H:
WHEREAS, in consideration of the Option Payment (as hereinafter defined),
Grantor has agreed to grant to Recipient, on the terms and conditions set forth
herein, an Option (as hereinafter defined) entitling Recipient to purchase
445,500 shares (as appropriately adjusted as necessary to reflect a stock split,
stock dividend, merger, consolidation, reclassification, recapitalization or
other similar transaction, the "Option Shares") of the Common Stock, par value
$.01 per share (including the common stock purchase rights associated therewith,
the "Common Stock"), of Koger Equity, Inc., a Florida corporation (the
"Company").
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Grant of Option. Concurrently with receipt of the Option Payment (as
defined in Section 2 hereof), Grantor hereby grants to Recipient an irrevocable
option (the "Option") to purchase on August 23, 1996 and on no other date,
unless the Expiration Date (as hereinafter defined) has occurred prior to such
date, the Option Shares set forth on Schedule I. The Option shall be exercisable
in whole or in part at a price per Option Share (the "Exercise Price") equal to
$12.91 (appropriately adjusted as necessary to reflect a stock split, stock
dividend, merger, consolidation, reclassification, recapitalization or other
similar transaction with respect to the Common Stock). In the event the Closing
(as hereinafter defined) does not occur on August 23, 1996 and the Expiration
Date is extended pursuant to Section 3, the Exercise Price shall be $12.91
(appropriately adjusted as necessary to reflect a stock split, stock dividend,
merger, consolidation, reclassification, recapitalization or other similar
transaction with respect to the Common Stock), plus interest on such amount from
August 23, 1996 to but not including the date on which the Closing with respect
to the Option Shares occurs at a rate of 10% per annum, compounded monthly,
based on a year of 366 days. The Option Payment (as defined below) and the
Additional Option Payment (as defined below), if paid, shall be
Page 52 of 81 Pages
<PAGE>
applied in full to payment of the Exercise Price multiplied by
the Option Shares purchased.
2. Option Payment. Simultaneously with the execution of this Option
Agreement, Recipient will pay to Grantor the aggregate sum of One Hundred Eight
Thousand Five Hundred ($108,500) Dollars (the "Option Payment") in consideration
of the granting of the Option. The Option Payment shall be non-refundable and
shall be paid by Recipient to Grantor by wire transfer of immediately available
funds to the account designated on Schedule I hereto.
3. Expiration Date; Additional Option Payment. The Option may be exercised
in whole or in part on August 23, 1996 and on no other date, unless the
Expiration Date has previously occurred. For purposes of this Option Agreement
and the Option, the Expiration Date shall mean the earliest to occur of the
following: (a) the termination of this Option Agreement pursuant to Section 15
hereof and (b) 5:00 p.m. (Eastern time) on August 23, 1996 (unless extended as
provided below). In the event the Option has not been exercised and the
Expiration Date has not occurred on August 23, 1996, Recipient may, at its sole
option, extend the Expiration Date as set forth in clause (b) of the preceding
sentence from August 23, 1996 to October 31, 1996, by notifying Grantor in
writing on or before the close of business on August 16, 1996 of its intention
to exercise such right and payment to Grantor on or before August 23, 1996 of an
additional option payment of Two Hundred Seventeen Thousand ($217,000) Dollars
(the "Additional Option Payment"). Any such notice of extension shall be
irrevocable and the Additional Option Payment shall be non-refundable and shall
be paid by Recipient to Grantor by wire transfer of immediately available funds
to the account designated on Schedule I hereto (or such other account as Grantor
shall designate in writing) not later than the close of business on August 23,
1996. If the Expiration Date is extended in accordance with this Section 3, the
Option may then be exercised at any time prior to the Expiration Date.
Notwithstanding anything to the contrary contained in this Agreement, if the
Option is exercised the Option Payment and the Additional Option Payment shall
be applied in full to payment of the Exercise Price multiplied by the Option
Shares purchased.
4. Representations and Warranties of Grantor. Grantor makes the following
representations and warranties to Recipient, each of which is true and correct
on the date hereof, shall remain true and correct to and as of the Closing (as
hereinafter defined) and shall survive the Closing:
(a) Grantor is a duly organized and validly existing limited
partnership in good standing under the laws of the State of Delaware. Grantor
has all requisite partnership power and
Page 53 of 81 Pages
<PAGE>
authority to enter into this Option Agreement and the other documents and
instruments to be executed and delivered by it pursuant hereto, and to carry out
the transactions contemplated hereby and thereby. All partnership actions and
proceedings necessary to be taken by or on the part of Grantor, and all
partnership actions and proceedings necessary to be taken by or on the part of
Halo Capital Partners, L.P., a Delaware limited partnership and general partner
of the Grantor ("Halo"), in connection with the transactions contemplated by
this Option Agreement have been duly and validly taken.
(b) Neither any other act or proceeding on behalf of Grantor or its
partners, nor any other partnership act or proceeding on the part of Halo or its
partners, is necessary to authorize this Option Agreement or the other documents
and instruments to be executed and delivered by Grantor pursuant hereto or the
consummation of the transactions contemplated hereby and thereby. This Option
Agreement has been duly and validly authorized, executed and delivered by
Grantor and constitutes, and when executed and delivered, the other documents
and instruments to be executed and delivered by Grantor pursuant hereto will
constitute, valid and binding agreements of Grantor enforceable in accordance
with their respective terms against Grantor.
(c) Neither the execution, delivery and performance of this Option
Agreement by Grantor nor the consummation of the transactions contemplated
herein will, with or without the giving of notice or the lapse of time, or both,
(i) conflict with or result in any violation of or default under (a) any
provision of the Certificate of Limited Partnership, Agreement of Limited
Partnership or other governing document, each as amended and/or restated to
date, of Grantor, (b) any note, bond, mortgage, indenture, lease, agreement or
other material instrument, permit, concession, grant, franchise or license to
which Grantor is a party or by which any of its properties or assets may be
bound (provided that no representation or warranty is being made under this
clause (b) as to the Amended and Restated Articles of Incorporation of the
Company (as the same may be further amended from time to time, (the "Articles"))
or (c) any judgment, order, decree, injunction, law, statute, rule, permit,
license or regulation applicable to Grantor or any of its properties, or (ii)
result in the acceleration of any material obligation or the creation of any
material lien, charge or encumbrance upon any of the assets of Grantor. No
authorization, consent or approval of, or declaration of, filing with or notice
to any third party or any governmental body or authority is necessary for the
execution, delivery and performance of this Option Agreement by Grantor.
Page 54 of 81 Pages
<PAGE>
(d) Grantor is the sole record and beneficial owner of the Option
Shares, free and clear of any and all liens, claims, charges, pledges and
security interests, voting or transfer restrictions and other encumbrances of
any nature whatsoever (subject to any encumbrances imposed thereon or with
respect thereto by the Articles or the restrictions on transfer contained in any
applicable securities laws, if any) and the Option Shares are held by Bear
Stearns, as custodian, through an account on the book entry system maintained by
the Depositary Trust Corporation. Upon the Closing, Grantor shall convey to
Recipient good and marketable title to the Option Shares, free and clear of any
and all liens, claims, charges, pledges, security interests, voting or transfer
restrictions and other encumbrances of any nature whatsoever (subject to any
encumbrances imposed thereon or with respect thereto by the Articles or the
restrictions on transfer contained in any applicable securities laws).
(e) Neither Grantor nor any of its directors, officers, employees or
agents has retained, employed or used any broker or finder in connection with
the transactions provided for herein or in connection with the negotiation
thereof.
(f) Grantor has not offered, directly or indirectly, any Option
Shares beneficially owned by it for sale, nor solicited any offer to buy any
such Option Shares, by means of any general advertising or by any other form of
general solicitation. Grantor has not offered, directly or indirectly, any
Option Shares beneficially owned by it for sale, nor solicited any offer to buy
any such Option Shares, in any other manner that would require the sale of the
Option Shares pursuant to the exercise of the Option granted hereunder to be
subject to the registration requirements of the Securities Act of 1933, as
amended. Grantor confirms that it did not acquire any Option Shares with a view
to, or for, resale in connection with any distribution thereof within the
meaning of the Securities Act of 1933, as amended, which would not be exempt
from the registration requirements of such Act.
(g) Grantor is solvent, does not have unreasonably small capital and
has not incurred debts beyond its ability to pay as they mature, and is not
subject to, nor to the best of its knowledge, threatened by, any voluntary or
involuntary reorganization, insolvency, bankruptcy or similar federal or state
proceeding.
5. Representations and Warranties of Recipient. Recipient makes the
following representations and warranties to Grantor, each of which is true and
correct on the date hereof, shall remain true and correct to and as of the
Closing, and shall survive the Closing:
Page 55 of 81 Pages
<PAGE>
(a) Recipient is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. Recipient
has all requisite entity power and authority to enter into this Option Agreement
and the other documents and instruments to be executed and delivered by
Recipient pursuant hereto and to carry out the transactions contemplated hereby
and thereby. All entity actions and proceedings necessary to be taken by or on
the part of Recipient, and all partnership actions and proceedings necessary to
be taken on the part of Apollo Real Estate Advisors II, L.P., a Delaware limited
partnership and the managing member of Recipient (the "Managing Member"), in
connection with the transactions contemplated by this Option Agreement have been
duly and validly taken.
(b) Neither any other act or proceeding on the part of Recipient or
its members, nor any other partnership act or proceeding on the part of the
Managing Member or its partners, is necessary to authorize this Option Agreement
or the other documents and instruments to be executed and delivered by Recipient
pursuant hereto or the consummation of the transactions contemplated hereby and
thereby. This Option Agreement has been duly and validly authorized, executed
and delivered by Recipient and constitutes, and when executed and delivered, the
other documents and instruments to be executed and delivered by Recipient
pursuant hereto will constitute, valid and binding agreements of Recipient,
enforceable against Recipient in accordance with their respective terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforceability of creditors' rights
generally, and by general equitable principles.
(c) Neither the execution, delivery and performance of this Option
Agreement by Recipient nor the consummation of the transactions contemplated
herein will, with or without the giving of notice or the lapse of time, or both,
(i) conflict with or result in any violation of or default under (a) any
provision of the Certificate of Formation or Operating Agreement of Recipient,
each as amended and/or restated to date, (b) any note, bond, mortgage,
indenture, lease, agreement or other material instrument, permit, concession,
grant, franchise or license to which Recipient is a party or by which any of its
properties or assets may be bound or (c) any judgment, order, decree,
injunction, statute, rule, permit, license or regulation applicable to Recipient
or any of its properties, or (ii) result in the acceleration of any material
obligation or the creation of any material lien, charge or encumbrance upon any
of the assets of Recipient. No authorization, consent or approval of, or
declaration of, filing with or notice to any governmental body or authority is
necessary for the execution, delivery and
Page 56 of 81 Pages
<PAGE>
performance of this Option Agreement by Recipient or the consummation of the
transactions contemplated herein.
(d) Neither Recipient nor any members, directors, partners,
officers, employees or agents thereof has retained, employed or used any broker
or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof.
(e) Recipient is a sophisticated investor capable of evaluating the
merits and risks of investment in the Option and the underlying Option Shares
and of making an informed investment decision with respect thereto. Recipient
acknowledges that it has conducted its own review of the documents filed by the
Company with the Securities and Exchange Commission (including, without
limitation, any exhibits or schedules) and that, except as expressly set forth
herein, Grantor is not making any representations or warranties with respect to
such documents. The Option Shares are being acquired by Recipient for investment
only and not with a current view to resale or other distribution. Recipient
acknowledges and understands that the Option Shares being acquired hereunder may
be subject to restrictions on resale under applicable federal or state
securities laws in the absence of an exemption therefrom.
(f) Recipient has, or will have at Closing, cash or cash equivalents
available in an amount sufficient to consummate the transactions contemplated
hereby.
6. Covenants of Grantor and Halo.
(a) From the date hereof until the earliest to occur of (i) the
termination of this Option Agreement in accordance with Section 16, (ii) the
Expiration Date, and (iii) the Final Date (as hereinafter defined in Section
10(a)), Grantor covenants and agrees that it will not, without the prior written
consent of Recipient, directly or indirectly: grant any proxies that would bind
Recipient after its purchase of the Option Shares; enter into any voting trust
or other agreement or arrangement with respect to the voting of any Option
Shares that would bind Recipient after its purchase of the Option Shares; or
sell, assign, transfer, encumber or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance or other disposition
of, any Option Shares. Grantor agrees not to seek or solicit any such sale,
assignment, transfer, encumbrance or other disposition or any such contract,
option or other arrangement or assignment or understanding during such period.
Page 57 of 81 Pages
<PAGE>
(b) At anytime prior to the Final Date or the date of written notice
terminating this Option Agreement in accordance with Section 16, neither Grantor
nor Halo shall, directly or indirectly, take any action to solicit or initiate
any offer or indication of interest from any person with respect to any proposal
of a merger or other business combination involving the Company or its
subsidiaries or any proposal or offer to acquire in any manner any equity
interest in, or a portion of the assets of, the Company or its subsidiaries.
(c) Grantor covenants and agrees to cooperate with Recipient and the
Company in causing the event in Section 8(d) to occur including, without
limitation, responding to any inquiries from the Federal Trade Commission (the
"FTC") or the United States Department of Justice ("DOJ").
(d) Each of Grantor and Halo covenants and agrees that it shall,
upon the request of Recipient, take all reasonable efforts to obtain all
regulatory approvals necessary for consummation of the transaction contemplated
hereby.
7. Covenants of Recipient. Recipient covenants and agrees that in the
event it determines to exercise the Option it will promptly prepare and file all
documents with the FTC and the DOJ as are required to be filed by Recipient
pursuant to the Hart-Scott-Rodino Act of 1976, as amended (the "HSR Act"), with
respect to the Closing and shall furnish promptly all materials thereafter
requested by any of the regulatory agencies having jurisdiction over such
filings by Recipient, provided that the failure to obtain termination of any
applicable waiting period or clearance under the HSR Act shall not extend the
Expiration Date.
8. Conditions Precedent to Recipient's Obligations. Each and every
obligation of Recipient to be performed on the Closing Date (as hereinafter
defined) shall be subject to the satisfaction of Recipient prior to or at the
Closing of each of the following conditions:
(a) Each of the representations and warranties made by Grantor in
this Option Agreement shall be true and correct in all material respects when
made and shall be true and correct in all material respects at and as of the
Closing Date as though such representations and warranties were made or given on
and as of the Closing Date.
(b) Grantor shall have in all material respects performed and
complied with all of its agreements, obligations and covenants under this Option
Agreement which are to be performed or complied with by it prior to or on the
Closing Date, including the delivery of the closing documents specified in
Section 11.
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(c) There shall not have been any injunction or restraining order
issued, in or by any federal or state court or governmental agency, that
enjoins, restrains or prohibits consummation of the transactions contemplated
hereby or imposes materially adverse limitations on Recipient's ownership or
exercise of rights relating to the Option Shares.
(d) All applicable waiting periods shall have expired or early
termination shall have been received under the HSR Act to consummate the
Closing.
(e) The Closing shall occur on or before the Expiration Date.
9. Conditions Precedent to Grantor's Obligations. Each and every
obligation of Grantor to be performed on the Closing Date shall be subject to
the satisfaction of Grantor prior to or at the Closing of the following
conditions:
(a) Each of the representations and warranties made by Recipient in
this Option Agreement shall be true and correct in all material respects when
made and shall be true and correct in all material respects at and as of such
closing Date as though such representations and warranties were made or given on
and as of such closing Date.
(b) Recipient shall have in all material respects performed and
complied with all of its agreements, obligations and covenants under this Option
Agreement which are to be performed or complied with by it prior to or on such
Closing Date, including the delivery of the closing documents specified in
Section 12.
(c) There shall not have been any injunction or restraining order
issued in or by any federal or state court or governmental agency that enjoins,
restrains or prohibits consummation of the transactions contemplated hereby.
(d) The Closing shall occur on or before the Expiration Date.
10. Closing.
(a) The closing of the purchase and sale of the Option Shares upon
the exercise of the Option (the "Closing") shall take place at the offices of
Battle Fowler LLP, 75 East 55th Street, New York, NY 10022 at 10:00 a.m. (New
York time) on the fifth business day following the latter to occur of: (i) the
exercise of the Option (in whole or in part) by Recipient, as evidenced by
delivery of written notice of exercise and presentation and surrender of the
Option to Grantor at their principal office (as
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provided in Section 1 of the Option), which exercise shall be irrevocable; and
(ii) satisfaction of the condition set forth in Section 8(d) (or at such other
time and place as the parties hereto shall mutually agree upon in writing). The
date on which the Closing occurs is referred to in this Option Agreement as the
"Closing Date." Notwithstanding the foregoing, and except as provided in Section
10(b) below, the Closing shall take place on August 23, 1996 (the "Final Date").
(b) Without limiting Recipient's rights under Section 3, in the
event Recipient has exercised the Option, but the Closing has not occurred, on
August 23, 1996, Recipient may, at its sole option, extend the Final Date as set
forth in Section 10(a) above from August 23, 1996 to October 31, 1996, by
notifying Grantor in writing or before the close of business on August 16, 1996
of its intention to exercise such right and payment to Grantor on or before
August 23, 1996 of the non-refundable Additional Option Payment as provided in
Section 3 above.
11. Documents to Be Delivered by Grantor at the Closing. At the Closing,
Grantor shall deliver to Recipient the following documents, in each case duly
executed or otherwise in proper form:
(a) Either (i) stock certificates representing the Option Shares,
duly endorsed for transfer or with duly executed stock powers attached thereto
or (ii) other customary evidence of transfer of the Option Shares.
(b) A certificate signed by a duly authorized representative of
Grantor that each of the representations and warranties made by Grantor in this
Option Agreement is true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date, and that Grantor has
performed and complied with all of its obligations under this Option Agreement
which are to be performed or complied with on or prior to the Closing Date.
(c) All other documents, instruments or writings required to be
delivered by Grantor at or prior to the Closing pursuant to this Option
Agreement and such other documents as the Recipient may reasonably request.
12. Documents to Be Delivered by Recipient at the Closing.
At the Closing, Recipient shall deliver to Grantor the following
documents, in each case duly executed or otherwise in proper form:
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<PAGE>
(a) A wire transfer in payment of the aggregate Exercise Price for
the Option Shares, as determined in accordance with Section 1 hereof.
(b) A certificate signed by a duly authorized representative of the
Managing Member, on behalf of Recipient, that the representations and warranties
made by Recipient in this Option Agreement are true and correct on and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date, and that Recipient has
performed and complied with all of Recipient's obligations under this Option
Agreement which are to be performed or complied with on or prior to the Closing
Date.
(c) All other documents, instruments or writings required to be
delivered by Recipient at or prior to the Closing pursuant to this Option
Agreement and such other documents as Grantor may reasonably request.
13. Price Protection.
(a) For purposes of this Section 13, the following definitions
shall apply:
(i) The term "Act" means the Securities Exchange Act of
1934, as amended.
(ii) The term "Acquisition Transaction" shall
mean:
(A) The Recipient, any Affiliate thereof or any "group"
(within the meaning of Section 13(d) and 14(d)(2) of the Act) of which the
Recipient or any Affiliate thereof is a member becomes the "beneficial
owner" (as defined in Rule 13d-3 promulgated pursuant to the Act) of more
than 50% of the outstanding Common Stock (other than as provided in clause
(C) below);
(B) The Recipient or any Affiliate thereof acquires all
or substantially all of the assets of the Company, in one transaction or a
series of related transactions; or
(C) The Company consolidates with or merges with or into
any other Person of which the Recipient or any Affiliate thereof
"beneficially owns" more than 50% of the outstanding voting stock.
(iii) The terms "Affiliate" shall have the meaning ascribed to
it in Rule 12b-2 of the General Rules and Regulations of the Act.
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(iv) The term "Interim Interest" shall mean interest on the
Exercise Price from the Closing Date through the date the Acquisition
Transaction is completed at a rate of 10% per annum, compounded monthly, based
on a year of 366 days.
(v) The term "Person" shall mean any individual, firm,
partnership, corporation or other entity, including any successor (by merger or
otherwise) of such entity, or a group of any of the foregoing acting in concert.
(vi) The term "Price Protected Shares" shall mean:
(A) if Recipient or any Affiliate thereof consummates an
Acquisition Transaction of the type described in clauses (B) or (C) of the
definition thereof, the number of Option Shares purchased by Recipient or
any Affiliate thereof; or
(B) if Recipient or any Affiliate thereof consummates an
Acquisition Transaction of the type described in clause (A) of the
definition thereof, (x) the number of Option Shares purchased by Recipient
or any Affiliate thereof multiplied by (y) the percentage of the Company's
outstanding Common Stock owned by Recipient and its Affiliates and all
"groups" in which Recipient or any Affiliate is a member upon consummation
of such Acquisition Transaction; provided, however, if Recipient and its
Affiliates and all "groups" in which Recipient or any Affiliate is a
member owns 80% or more of the Company's outstanding Common Stock and the
remaining Common Stock is not publicly held upon consummation of such an
Acquisition Transaction, then the number of Option Shares purchased by
Recipient or any Affiliate thereof shall be deemed "Price Protected
Shares". Solely for purposes of illustration and not by way of limitation,
if, during the eighteen months following the date of this Option
Agreement, Recipient consummates an Acquisition Transaction of the type
described in clause (A) of the definition thereof pursuant to which
Recipient acquires 60% of the Company's outstanding Common Stock, then
only 60% of the number of Option Shares purchased by Recipient shall be
Price Protected Shares and, therefore, entitled to receive the Excess
Amount (as defined below). If, during the eighteen months following the
date of this Option Agreement and after an Acquisition Transaction of the
type described in clause (A) of the definition thereof, Recipient, any
Affiliate thereof or any "group" in which Recipient or any Affiliate is a
member becomes beneficial owner of additional shares of the Company's
Common Stock, the number of Price Protected Shares shall be
proportionately increased to reflect such additional ownership.
Page 62 of 81 Pages
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(b) In the event Recipient or any Affiliate of Recipient
consummates, directly or indirectly, an Acquisition Transaction within eighteen
(18) months following the date of this Option Agreement, Recipient shall pay to
Grantor, within five (5) business days of the consummation of such Acquisition
Transaction, by wire transfer of immediately available funds to the account
designated on Schedule I hereto (or such other account designated in writing by
Grantor at least forty-eight (48) hours prior to the time for payment
hereunder), cash, or freely tradeable Common Stock (or restricted Common Stock
with registration rights on terms mutually agreed to by Recipient and Grantor)
(having a value based upon the average closing price of the Company's Common
Stock on the American Stock Exchange for the preceding ten trading days), equal
to the dollar amount (the "Excess Amount") calculated by multiplying (i) the
number of Price Protected Shares by (ii) the excess, if any, of (x) the
"Relevant Fair Market Value" (as defined below) of the per share cash,
securities and/or other property, as the case may be, Recipient (or an Affiliate
thereof) paid to Company shareholders in the Acquisition Transaction (as if the
Closings under the Agreement and this Option Agreement had not occurred and
Grantor participated in the Acquisition Transaction) less (y) the sum of (1) the
Exercise Price and (2) Interim Interest.
For purposes of this Section 13, it is agreed that (i) if the Acquisition
Transaction is of the type described in clause (A) resulting from the
acquisition of Company Common Stock in private transactions or open market
purchases, the "Relevant Fair Market Value" shall be an amount equal to the
average of the price per share paid by Recipient in the Acquisition
Transaction(s) in which it purchased the most expensive 10% of such Common
Stock, and in all other transactions described in clause (A) the amount of cash
paid, or the dollar value attributed to the securities or property paid, in said
Acquisition Transaction; (ii) if the Acquisition Transaction is of the type
described in clause (B), the "Relevant Fair Market Value" shall be the average
closing price of the Company Common Stock on the American Stock Exchange for the
ten trading days preceding the closing of the Acquisition Transaction; and (iii)
if the Acquisition Transaction is of the type described in clause (C), the
"Relevant Fair Market Value" shall be the amount of cash paid, or the dollar
value attributed to the securities or property paid, in such Acquisition
Transaction.
14. Indemnification.
(a) Subject to the terms and conditions of this Section 14, Grantor
hereby agrees to, and hereby does, indemnify, defend and hold harmless Recipient
and its members, directors, partners, officers, employees and controlled and
controlling persons (hereinafter "Recipient's Affiliates") from and against
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<PAGE>
all Claims (as hereinafter defined) asserted against, resulting to, imposed
upon, or incurred by Recipient or Recipient's Affiliates, directly or
indirectly, by reason of, arising out of or resulting from (a) the inaccuracy or
breach of any representation or warranty of Grantor contained in this Option
Agreement, or (b) the breach of any covenant of Grantor contained in this Option
Agreement. As used in this Section 14, the term "Claim" shall mean all debts,
liabilities, losses, damages, judgments, awards, settlements, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses).
(b) Subject to the terms and conditions of this Section 14,
Recipient hereby agrees to, and hereby does, indemnify, defend and hold harmless
Grantor and its directors, officers, partners, employees and controlled and
controlling persons (hereinafter "Grantor's Affiliates") from and against all
Claims asserted against, resulting to, imposed upon or incurred by Grantor or
Grantor's Affiliates, directly or indirectly, by reason of or resulting from (a)
the inaccuracy or breach of any representation or warranty of Recipient
contained in this Option Agreement, or (b) the breach of any covenant of
Recipient contained in this Option Agreement.
(c) The obligations and liabilities of any party to indemnify any
other person under this Section 14 with respect to Claims relating to third
parties shall be subject to the following terms and conditions:
(i) The party or parties to be indemnified whether one or
more, the "Indemnified Party") will give the party from whom indemnification is
sought (the "Indemnifying Party") prompt written notice of any such Claim, and
the Indemnifying Party will undertake the defense thereof by representatives
chosen by it. Failure to give such notice shall not affect the Indemnifying
Party's duty or obligations under this Section 14, except to the extent the
Indemnifying Party is prejudiced thereby. So long as the Indemnifying Party is
defending any such Claim actively and in good faith, the Indemnified Party shall
not settle such Claim. The Indemnified Party shall make available to the
Indemnifying Party or its representatives all records and other materials
required by them and in the possession or under the control of the Indemnified
Party, for the use of the Indemnifying Party and its representatives in
defending any such Claim, and shall in other respects give reasonable
cooperation in such defense;
(ii) If the Indemnifying Party, within a reasonable time after
notice of any such Claim, fails to defend such Claim actively and in good faith,
the Indemnified Party will (upon further notice) have the right to undertake the
defense, compromise or settlement of such Claim or consent to the entry of
Page 64 of 81 Pages
<PAGE>
a judgment with respect to such Claim, on behalf of and for the account and risk
of the Indemnifying Party, and the Indemnifying Party shall thereafter have no
right to challenge the Indemnified Party's defense, compromise, settlement or
consent to judgment therein; and
(iii) Anything in this subsection (c) to the contrary
notwithstanding, (x) if there is a reasonable probability that a Claim may
materially and adversely affect the Indemnified Party other than as a result of
money damages or other money payments, the Indemnified Party shall have the
right to participate in the defense of such Claim, and (y) the Indemnifying
Party shall not, without the written consent of the Indemnified Party, settle or
compromise any Claim or consent to the entry of any judgment which does not
include as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all liability in respect of
such Claim.
15. Termination. This Option Agreement may be terminated by either party
if the Option shall not have been exercised prior to the Expiration Date or the
Closing shall not have been consummated prior to the Final Date; provided,
however, that the obligations of each of the parties hereto under Sections 14
(solely with respect to events that shall have occurred prior to such
termination) and 17 through 29 shall continue in full force and effect
notwithstanding any such termination, and that no party shall be relieved from
any liability of any kind or nature whatsoever resulting from or arising out of
a breach thereby of this Option Agreement occurring prior to such termination.
16. Further Assurances. Subject to Recipient's discretion as to whether or
not it exercises the Option, from time to time prior to, at and after any
Closing, each party hereto shall use all commercially reasonable efforts to
carry out and effectuate the transactions contemplated by this Option Agreement.
17. Notices. Any notices required or allowed to be furnished pursuant to
the terms hereof shall be provided to Grantor and Recipient at the addresses set
forth with their signatures below. Notices hereunder shall be in writing and may
be hand delivered, mailed, delivered by a nationally recognized overnight
courier service or, if facsimile numbers are provided below, transmitted by
facsimile. If mailed, such notices shall be sent by certified mail, postage
prepaid, return receipt requested. The date which is three (3) business days
after the date of mailing shall be deemed to be the date on which the notice was
given. The postmark affixed to such notice by the U.S. Post Office shall be
conclusively presumed to be the date of mailing for purposes of this Section. In
the case of notices given by hand delivery or overnight courier, such notices
shall
Page 65 of 81 Pages
<PAGE>
be deemed given on the date of the actual receipt. If transmitted by facsimile,
such notices shall be deemed given on the date of the actual transmission,
except that if a facsimile transmission is transmitted after business hours or
on a weekend or legal holiday in the State of New York, then the notice shall be
deemed given on the next business day following the transmission of the
facsimile transmission.
18. Attorneys' Fees. In the event any party hereto finds it necessary to
bring any suit, action, or other proceeding at law or equity to interpret,
enforce or implement any of the terms, covenants or conditions hereof or of any
instrument executed pursuant to this Option Agreement, or by reason of any
breach or default hereunder or thereunder, the party prevailing in any such
action or proceeding, including any bankruptcy proceeding and/or any appeal,
shall be paid all costs and reasonable attorneys' fees by the non-prevailing
party, and in the event any judgment is secured by such prevailing party, all
such costs and attorneys' fees shall be included in any such judgment,
attorneys' fees to be set by the court and not by the jury. No termination of
this Option Agreement upon any grounds or in any circumstances addressed herein
or otherwise will impair or limit a prevailing party's right to recover from the
other party its attorneys' fees and costs in accordance with the provisions of
this Section.
19. Governing Law. This Option Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without regard
to the conflicts of law provisions thereof.
20. Assignment; Parties in Interest.
(a) The rights of Recipient hereunder shall be freely assignable,
transferable or able to be encumbered without the prior written consent of any
other party. Notwithstanding the foregoing, if Recipient assigns its rights
under this Option Agreement to any entity other than an Apollo Affiliate (as
defined below), Recipient shall remain liable for payment of all amounts due
upon exercise of the Option. If Recipient assigns its rights under this Option
Agreement to an affiliate which does not have unreasonably small capital and is
able to perform Recipient's obligations under this Option Agreement (an "Apollo
Affiliate"), which affiliate includes, without limitation, Apollo Real Estate
Investment Fund, L.P. and Apollo Real Estate Investment Fund II, L.P., such
Apollo Affiliate shall assume all obligations of Recipient under this Option
Agreement and Recipient shall then be released of all obligations and
liabilities hereunder. Such Apollo Affiliate shall then be deemed to be the
"Recipient" with all rights and obligations
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hereunder, including without limitation, free assignability pursuant to this
Section 20.
(b) This Option Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the respective successors and permitted
assigns of the parties hereto. Nothing contained herein shall be deemed to
confer upon any other person any right or remedy under or by reason of this
Option Agreement.
21. Expenses. Except as hereinafter set forth, each of the parties hereto
shall bear its own expenses and the expenses of its counsel and other agents in
connection with the transactions contemplated hereby. Notwithstanding the
foregoing, Recipient shall pay any applicable filing fees under the HSR Act
relating to the transactions contemplated by this Option Agreement and Grantor
shall pay any sales, use, excise, transfer or other similar tax imposed with
respect to the transactions provided for in this Option Agreement (and any
interest or penalties related thereto).
22. Saturdays, Sundays and Legal Holidays. If the time for performance of
any of the terms, conditions and provisions hereof shall fall on a Saturday,
Sunday or legal holiday, then the time of such performance shall be extended to
the next business day thereafter.
23. Usage of Gender Specific Terms. As used herein, each of the masculine,
feminine and neuter genders shall include the other genders, the singular shall
include the plural, and the plural shall include the singular, wherever
appropriate to the context.
24. Entire Agreement; Amendment. This Option Agreement embodies the entire
agreement of the parties with respect to the transactions contemplated herein,
including the purchase and sale of the Option Shares, and all prior
understandings and agreements of the parties relating thereto are merged herein.
This Option Agreement may not be modified in any manner whatsoever except by a
written instrument signed by Grantor and Recipient.
25. Waiver. No delay in exercising any right or remedy of any of the
parties hereunder shall constitute a waiver thereof, and no waiver by Grantor,
or by Recipient, of the breach of any covenant of this Option Agreement shall be
construed as a waiver of any proceeding or succeeding breach of the same or any
other covenant or condition of this Option Agreement.
26. Headings. The headings in this Option Agreement are inserted for
convenience only and shall not constitute a part hereof.
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27. Severability. If any term, covenant or condition of this Option
Agreement is held to be invalid or unenforceable in any respect, such invalidity
or unenforceability shall not affect any other provision hereof and this Option
Agreement shall be construed as if such invalid or unenforceable provision had
never been contained herein.
28. Public Announcements. The parties shall mutually agree on the content
and timing of any public disclosure in relation to the transactions contemplated
hereby, subject to applicable requirements of law.
29. Limitations on Liability. The parties hereto acknowledge and agree
that in no event shall any of the partners, members, officers, directors,
shareholders, employees, trustees, agents or investment managers (collectively
"Representatives") of Grantor, on one hand, or of the Managing Member or
Recipient, on the other hand, have any obligation or liability to Recipient, on
the one hand, or Grantor, on the other hand, for any action taken or omitted by
or on behalf of Grantor or Recipient, respectively, hereunder or in connection
herewith (such obligation and liability being the sole responsibility of Grantor
or Recipient, respectively, hereunder). The parties hereto further acknowledge
and agree that all obligations and liabilities of Grantor, on one hand, and
Recipient, on the other hand, under this Agreement or in connection herewith are
enforceable solely against Grantor and its assets and solely against Recipient
and its assets and not against the assets of any Representative of Grantor or
Recipient, respectively.
30. Execution. This Option Agreement may be executed in separate
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument. Any party may execute
this Option Agreement by transmitting a copy of its signature by facsimile to
the other party. In such event the signing party shall deliver an original of
the signature page to the other party within one (1) business day of signing,
and failure to so deliver such original shall result in the facsimile copy of
that party's signature being treated as an original.
Page 68 of 81 Pages
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IN WITNESS WHEREOF, the undersigned parties have executed this
Option Agreement as of the date and year first above written.
Grantor: TYNDALL PARTNERS, L.P., a Delaware limited
partnership
By: Halo Capital Partners, L.P., its general partner
By: /s/ Jeffrey Halis
Name: Jeffrey Halis
Title: Authorized Signatory
Address: Tyndall Partners
500 Park Avenue - 5th Floor
New York, NY 10022
Attn: Jeffrey Halis
Facsimile No.: (212) 644-4482
RECIPIENT: KRONUS PROPERTY HOLDINGS, L.L.C., a Delaware limited
liability company
By: Apollo Real Estate Advisors II, L.P.,
its managing member
By: Apollo Real Estate Capital Advisors II,
Inc., its general partner
By: _______________________________
Name: W. Edward Scheetz
Title:Vice President
Address: c/o Apollo Real Estate Advisors, L.P.
1301 Avenue of the Americas
38th Floor
New York, New York 10019
Attn: W. Edward Scheetz
Facsimile No.: (212) 261-4060
Page 69 of 81 Pages
<PAGE>
IN WITNESS WHEREOF, the undersigned parties have executed this
Option Agreement as of the date and year first above written.
Grantor: TYNDALL PARTNERS, L.P., a Delaware limited
partnership
By: Halo Capital Partners, L.P., its general partner
By: ____________________________
Name: Jeffrey Halis
Title: Authorized Signatory
Address: Tyndall Partners
500 Park Avenue - 5th Floor
New York, NY 10022
Attn: Jeffrey Halis
Facsimile No.: (212) 644-4482
RECIPIENT: KRONUS PROPERTY HOLDINGS, L.L.C., a Delaware limited
liability company
By: Apollo Real Estate Advisors II, L.P.,
its managing member
By: Apollo Real Estate Capital Advisors II,
Inc., its general partner
By: /s/ W. Edward Scheetz
Name: W. Edward Scheetz
Title:Vice President
Address: c/o Apollo Real Estate Advisors, L.P.
1301 Avenue of the Americas
38th Floor
New York, New York 10019
Attn: W. Edward Scheetz
Facsimile No.: (212) 261-4060
Page 70 of 81 Pages
<PAGE>
SCHEDULE I
Koger Equity, Inc.
Common Stock
Option
Entity Shares
Tyndall Partners,
L.P. 445,500
Wiring Instructions
CitiBank
20 Exchange Place
New York, New York
ABA: #021000089
A/C: Bear Stearns
A/C# 0925-3186
FBO: Tyndall Partners
A/C# 102-18180-24
Page 71 of 81 Pages
<PAGE>
Ex. 99.4
EXHIBIT IV
ASSIGNMENT AND ASSUMPTION AGREEMENT
Assignment and Assumption Agreement, dated as of June 3,
1996, by and among KRONUS PROPERTY HOLDINGS, L.L.C., a Delaware limited
liability company ("Assignor"), and APOLLO REAL ESTATE INVESTMENT FUND II, L.P.,
a Delaware limited partnership ("Assignee").
R E C I T A L S
A. Assignor is a party to that certain Stock Purchase
Agreement, dated as of May 22, 1996 (the "Stock Purchase Agreement"), by and
among TCW SPECIAL CREDITS, a California general partnership, for itself and as
general partner or investment manager for the entities (other than TCW Trust (as
defined below)) set forth on Schedule I attached thereto, TRUST COMPANY OF THE
WEST, a California corporation, for itself and as trustee for TCW Special
Credits Trust, a California collective investment trust ("TCW Trust"), and
Assignor.
B. Assignor is a party to that certain Option Agreement, dated
as of May 22, 1996 (the "Option Agreement"), by and among TCW SPECIAL CREDITS, a
California general partnership, for itself and as general partner or investment
manager for the entities (other than TCW Trust (as defined below)) set forth on
Schedule I attached thereto, TRUST COMPANY OF THE WEST, a California
corporation, for itself and as trustee for TCW Special Credits Trust, a
California collective investment trust ("TCW Trust"), and Assignor.
C. The Stock Purchase Agreement and the Option Agreement shall
be referred to herein as the "Agreements".
D. Assignor entered into the Agreements pending the formation
and capitalization of Assignee.
E. Assignee is now duly formed, reasonably capitalized and
able to perform the obligations imposed by the Agreements.
F. Assignee has agreed to pay to Assignor all amounts
previously paid by Assignor in connection with the Agreements.
G. Section 17 of the Stock Purchase Agreement and Section 21
of the Option Agreement each permit Assignor to freely assign such agreement to
Assignee and, upon such assignment, releases Assignor of all obligations and
liabilities thereunder.
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NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and conditions
hereinafter set forth, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Assignment. Assignor hereby assigns to Assignee all of its
right, title and interest in and to each of the Agreements.
2. Assumption. Assignee hereby accepts such assignment and
reaffirms and assumes all the duties, obligations and liabilities of
Assignor set forth in each of the Agreements.
3. Stock Transfer. Assignor hereby transfers to Assignee all
shares of common stock of Koger Equity, Inc. owned by Assignor.
4. Representations and Warranties. In order to induce the
parties on the attached acknowledgement to execute such
acknowledgement, Assignee represents and warrants that it does not
have unreasonably small capital and is able to perform Assignor's
obligations under each of the Agreements.
5. Continuing Effect. The parties hereby agree that each of the
Agreements remain unchanged and in full force and effect except for
the substitution of the Assignee as a party in place of the Assignor.
6. Miscellaneous Provisions.
(a) Choice of Law. This Assignment and Assumption
Agreement will be construed in accordance with and governed by the laws
of the State of New York without reference to the conflicts of law
principles of that State.
(b) Successors and Assigns. This Assignment and
Assumption Agreement shall bind and inure to the benefit of the
parties and their respective successors and assigns.
(c) Entire Agreement. This Assignment and Assumption
Agreement, the Stock Purchase Agreement, the Option Agreement and any
other documents or instruments executed pursuant thereto or
contemplated thereby, shall represent the entire, integrated agreement
between the parties hereto and shall supersede all prior negotiations,
representations, or agreements pertaining thereto, either oral or
written.
(d) Counterparts. This Assignment and Assumption
Agreement may be executed in any number of counterparts (no one of
which need contain the signature of more than one party hereto so long
as each party hereto executes at least one such counterpart) with the
same effect as if the signature thereto and hereto were upon the same
instrument.
(e) Further Assurances. The parties hereto each agree
that it shall take whatever action or actions as are deemed by counsel
to any party hereto to be reasonably necessary, advisable or convenient
from time to time to effectuate the provisions or intent of this
Assignment and Assumption Agreement, and to that end,
Page 73 of 81 Pages
<PAGE>
each party agrees that it will execute, acknowledge, and deliver any
further instruments or documents as give force and effect to this
Assignment and Assumption Agreement or any of the provisions hereof, or
to carry out the intent of this Assignment and Assumption Agreement or
any of the provisions hereof.
IN WITNESS WHEREOF the parties have executed this Assignment
and Assumption Agreement on the date first above written.
KRONUS PROPERTY HOLDINGS, L.L.C., a Delaware limited
liability company
By: Apollo Real Estate Advisors II, L.P.,
its managing member
By: Apollo Real Estate Capital Advisors II, Inc.,
its general partner
By: /s/ Stuart Koenig
Name: Stuart Koenig
Title: Vice President
APOLLO REAL ESTATE INVESTMENT FUND II, L.P., a
Delaware limited partnership
By: Apollo Real Estate Advisors II, L.P.,
its general partner
By: Apollo Real Estate Capital Advisors II, Inc.,
its general partner
By: /s/ Stuart Koenig
Name: Stuart Koenig
Title: Vice President
Page 74 of 81 Pages
<PAGE>
ACKNOWLEDGEMENT
In reliance upon the representations and warranties contained in the
attached Assignment and Assumption Agreement, TCW SPECIAL CREDITS, a California
general partnership, for itself and as general partner or investment manager for
the entities (other than TCW Trust (as defined below)) set forth on Schedule I
attached hereto, and TRUST COMPANY OF THE WEST, a California corporation, for
itself and as trustee for TCW Special Credits Trust, a California collective
investment trust ("TCW Trust"), each expressly acknowledge and agree that upon
the assignment of all of the right, title and interest of KRONUS PROPERTY
HOLDINGS, L.L.C. ("Kronus") in and to each of the Agreements (as defined in the
attached Assignment and Assumption Agreement) by Kronus and assumption of all
obligations and liabilities of Kronus under each of the Agreements by APOLLO
REAL ESTATE INVESTMENT FUND II, L.P. ("Fund II") upon execution and delivery of
the attached Assignment and Assumption Agreement, Kronus shall be released of
any and all right, title and interest and any and all obligations and
liabilities under each of the Agreements and Fund II shall be entitled to all
rights, and be subject to all obligations and liabilities, of Kronus under the
Agreements.
TCW SPECIAL CREDITS, a California general
partnership, as general partner or
investment manager of the entities set forth
on Schedule I attached hereto (other than
TCW Special Credits Trust)
By: TCW Asset Management Company, its managing
general partner
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
Page 75 of 81 Pages
<PAGE>
TRUST COMPANY OF THE WEST, a California
corporation, as trustee of TCW Special
Credits Trust, a California collective
investment trust
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
TCW SPECIAL CREDITS, a California general
partnership
By: TCW Asset Management Company, its
managing general partner
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
TRUST COMPANY OF THE WEST, a California
corporation
By: /s/ Bruce A. Karsh
Name: Bruce A. Karsh
Title: Authorized Signatory
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
Page 76 of 81 Pages
<PAGE>
SCHEDULE I
Weyerhauser Company Master Retirement Trust
TCW Special Credits Fund III
The Common Fund for Bond Investments
TCW Special Credits Trust
Page 77 of 81 Pages
<PAGE>
Ex. 99.5
EXHIBIT V
ASSIGNMENT AND ASSUMPTION AGREEMENT
Assignment and Assumption Agreement, dated as of June 3, 1996,
by and among KRONUS PROPERTY HOLDINGS, L.L.C., a Delaware limited liability
company ("Assignor"), and APOLLO REAL ESTATE INVESTMENT FUND II, L.P., a
Delaware limited partnership ("Assignee").
R E C I T A L S
A. Assignor is a party to that certain Option Agreement, dated as
of May 24, 1996 (the "Option Agreement"), by and among TYNDALL PARTNERS, L.P., a
Delaware limited partnership ("Tyndall"), and Assignor.
B. Assignor entered into the Option Agreement pending the
formation and capitalization of Assignee.
C. Assignee is now duly formed, reasonably capitalized and able
to perform the obligations imposed by the Option Agreement.
D. Assignee has agreed to pay to Assignor all amounts previously
paid by Assignor in connection with the Option Agreement.
E. Section 20 of the Option Agreement permits Assignor to freely
assign such agreement to Assignee and, upon such assignment, releases Assignor
of all obligations and liabilities thereunder.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and conditions
hereinafter set forth, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Assignment. Assignor hereby assigns to Assignee all of
its right, title and interest in and to the Option Agreement.
2. Assumption. Assignee hereby accepts such assignment and
reaffirms and assumes all the duties, obligations and liabilities of
Assignor set forth in the Option Agreement.
3. Representations and Warranties. In order to induce
Tyndall to execute the attached acknowledgement, Assignee represents
and warrants that it does not have unreasonably small capital and is
able to perform Assignor's obligations under the Option Agreement.
Page 78 of 81 Pages
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4. Continuing Effect. The parties hereby agree that the
Option Agreement remains unchanged and in full force and effect except
for the substitution of the Assignee as a party in place of the
Assignor.
5. Miscellaneous Provisions.
(a) Choice of Law. This Assignment and Assumption
Agreement will be construed in accordance with and governed by the laws
of the State of New York without reference to the conflicts of law
principles of that State.
(b) Successors and Assigns. This Assignment and Assumption
Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns.
(c) Entire Agreement. This Assignment and Assumption
Agreement, the Option Agreement and any other documents or instruments
executed pursuant thereto or contemplated thereby, shall represent the
entire, integrated agreement between the parties hereto and shall
supersede all prior negotiations, representations, or agreements
pertaining thereto, either oral or written.
(d) Counterparts. This Assignment and Assumption Agreement
may be executed in any number of counterparts (no one of which need
contain the signature of more than one party hereto so long as each
party hereto executes at least one such counterpart) with the same
effect as if the signature thereto and hereto were upon the same
instrument.
(e) Further Assurances. The parties hereto each agree that
it shall take whatever action or actions as are deemed by counsel to any
party hereto to be reasonably necessary, advisable or convenient from
time to time to effectuate the provisions or intent of this Assignment
and Assumption Agreement, and to that end, each party agrees that it
will execute, acknowledge, and deliver any further instruments or
documents as give force and effect to this Assignment and Assumption
Agreement or any of the provisions hereof, or to carry out the intent of
this Assignment and Assumption Agreement or any of the provisions
hereof.
Page 79 of 81 Pages
<PAGE>
IN WITNESS WHEREOF the parties have executed this Assignment and
Assumption Agreement on the date first above written.
KRONUS PROPERTY HOLDINGS, L.L.C., a Delaware limited
liability company
By: Apollo Real Estate Advisors II, L.P.,
its managing member
By: Apollo Real Estate Capital Advisors II, Inc., its
general partner
By: /s/ Stuart Koenig
Name: Stuart Koenig
Title: Vice President
APOLLO REAL ESTATE INVESTMENT FUND II, L.P., a
Delaware limited partnership
By: Apollo Real Estate Advisors II, L.P.,
its general partner
By: Apollo Real Estate Capital Advisors II, Inc., its
general partner
By: /s/ Stuart Koenig
Name: Stuart Koenig
Title: Vice President
Page 80 of 81 Pages
<PAGE>
ACKNOWLEDGEMENT
In reliance upon the representations and warranties contained in
the attached Assignment and Assumption Agreement, TYNDALL PARTNERS, L.P., a
Delaware limited partnership, expressly acknowledges and agrees that upon the
assignment of all of the right, title and interest of KRONUS PROPERTY HOLDINGS,
L.L.C. ("Kronus") in and to the Option Agreement (as defined in the attached
Assignment and Assumption Agreement) by Kronus and assumption of all
obligations and liabilities of Kronus under the Option Agreement by APOLLO REAL
ESTATE INVESTMENT FUND II, L.P. ("Fund II") upon execution and delivery of the
attached Assignment and Assumption Agreement, Kronus shall be released of any
and all right, title and interest and any and all obligations and liabilities
under the Option Agreement and Fund II shall be entitled to all rights, and be
subject to all obligations and liabilities, of Kronus under the Option
Agreement.
TYNDALL PARTNERS, L.P., a Delaware limited partnership
By: Halo Capital Partners, L.P., its general partner
By: /s/ Jeffrey Halis
Name: Jeffrey Halis
Title: Authorized Signatory
Page 81 of 81 Pages
