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THE SOUTHSHORE CORPORATION
10750 East Briarwood
Englewood, Colorado 80112
October 5, 1998
Dear Shareholders:
As you may know, the Special Meeting of Shareholders of the
Company has been adjourned from October 1, 1998 until November 12,
1998. One of the purposes of the meeting was to consider and vote
upon the approval of a Real Estate Purchase and Sale Agreement
which was enclosed with the Proxy Statement and described therein.
That agreement is no longer in effect, and a new agreement to sell
the Company's water park property was signed on September 28, 1998.
We enclose herewith a copy of the new agreement with a Supplement
to the Proxy Statement.
We request that you review the enclosures, complete the
enclosed blue Proxy and return it in the enclosed envelope. YOUR
PREVIOUS PROXY WILL NOT BE EFFECTIVE FOR THE NOVEMBER 12, 1998
SPECIAL MEETING, SO IT IS IMPORTANT THAT YOU COMPLETE AND RETURN
THE ENCLOSED BLUE PROXY.
Thank you for your assistance and patience in this matter.
Call me at (303) 649-9875 if you have any questions.
Very truly yours,
THE SOUTHSHORE CORPORATION
By /s/ Kenneth M. Dalton
Kenneth M. Dalton, President
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P R O X Y
THE SOUTHSHORE CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Kenneth M. Dalton with the power to
appoint a substitute, and hereby authorizes him to represent and to vote
as designated below, all the shares of common stock of The Southshore
Corporation held of record by the undersigned on July 24, 1998, at a
Special Meeting of Shareholders to be held on November 12, 1998, or
any adjournment thereof.
1. The sale of substantially all the Company's assets pursuant to
a Real Estate Purchase and Sale Agreement for $1,985,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. The sale of substantially all of the Company's assets to a back-
up purchaser, South Suburban Park & Recreation District, in the event
there is no closing on the Real Estate Purchase and Sale Agreement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN
ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATIONS ABOVE. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE
TIME OF THE MAILING OF THE NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS TO
THE UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders, Proxy Statement and Supplement.
Dated: __________________, 1998.
________________________________________
________________________________________
Signature(s) of Shareholder(s)
Signature(s) should agree with the name(s) stenciled hereon. Executors,
administrators, trustees, guardians and attorneys should indicate when
signing. Attorneys should submit powers of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
SOUTHSHORE CORPORATION. PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED
PREADDRESSED ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO
VOTE IN PERSON IF YOU ATTEND THE MEETING.
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THE SOUTHSHORE CORPORATION
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
ADJOURNED TO NOVEMBER 12, 1998
To the Shareholders of The Southshore Corporation
PLEASE TAKE NOTICE, that a Special Meeting of Shareholders of
The Southshore Corporation scheduled to be held on October 1, 1998,
at 10:00 a.m. at 10750 East Briarwood, Englewood, Colorado, has
been adjourned to November 12, 1998 for the following purposes:
1. To consider the sale of substantially all the
Company's assets pursuant to a Real Estate Purchase and Sale
Agreement.
2.To consider the sale of substantially all of the
Company's assets to a back-up purchaser, South Suburban Park
& Recreation District, in the event there is no closing on the
Real Estate Purchase and Sale Agreement.
3. To transact such other business as may properly come
before the meeting.
Accompanying this notice is a Proxy and a Supplement to Proxy
Statement with respect to these matters.
The enclosed Proxy, on blue paper, needs to be returned in the
enclosed envelope since your previous Proxy, if any, will not be
effective at the adjourned meeting.
Whether or not you expect to be present at the meeting,
please sign and date the enclosed Proxy and return it in the
enclosed envelope provided for that purpose. Your Proxy may be
revoked at any time prior to the time that it is voted. Only
shareholders of record at the close of business on July 24, 1998,
will be entitled to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Kenneth M. Dalton
President
October 5, 1998
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THE SOUTHSHORE CORPORATION
10750 East Briarwood
Englewood, Colorado 80112
SUPPLEMENT TO PROXY STATEMENT OF SEPTEMBER 1, 1998
DATED OCTOBER 5, 1998
On October 1, 1998 the Company adjourned its Special Meeting to consider
and vote on the sale of its water park property to November 12, 1998. The
reason for the adjournment is that the purchaser in the Real Estate Purchase
and Sale Agreement described in and enclosed with the Proxy Statement
informed the Company that certain contingencies in paragraph 9 of that
Agreement relating to zoning restrictions could not be resolved to the
satisfaction of ORIX Real Estate Equities, Inc. and thus he was terminating
the agreement.
A new purchaser, Cottonwood Brook, LLC, has signed a new Real Estate
Purchase and Sale Agreement for the property, a copy of which is enclosed.
The essential differences between the new agreement and the one with John C.
Botdorf (included with the Proxy Statement) are as follows:
1. There is no real estate commission. Thus the Company will net
$50,000 more from the new Agreement.
2. The due diligence period is extended from September 28, 1998 to
October 12, 1998.
3. The closing date is extended from October 28, 1998 to November 12,
1998.
4. The contingencies for going forward in paragraph 9 have been
revised; however, in both instances they provide the respective
purchaser with broad termination rights, which are typical in real
estate transactions.
5. The escrow deposit, on execution, has been increased to $75,000 from
$40,000.
Management is informed that the new purchaser is affiliated with the
entity that owns a 25-acre undeveloped parcel which borders the west property
line of the Company's property. E. Jerry James is the manager of both
entities.
Management believes the new agreement is at least as favorable to the
Company as the agreement with Mr. Botdorf particularly since it will net the
Company an additional $50,000. Management further represents that: (1)
neither the new purchaser nor anyone affiliated therewith is in any way
affiliated with the Company, (2) no officer or director of the Company would
have any future relationship with the purchaser, or any affiliate thereof,
(3) the new agreement was negotiated on a fully arm's length basis, and (4)
the purchase price represents fair value for the property.
The Board of Directors unanimously recommends to the shareholders the
approval of the sale of the Company's water park property pursuant to the
attached Real Estate Purchase and Sale Agreement.
This Supplement and form of Proxy are being mailed to shareholders on or
about October 6, 1998.
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REAL ESTATE PURCHASE AND SALE AGREEMENT
Cottonwood Brook LLC ("Purchaser") hereby offers to purchase
the Southshore Water Park including all of the assets described
below along with the real estate consisting of approximately 15.89
acres of land from The Southshore Corporation, hereinafter called
the Seller ("Seller"). The property is located in the NW 1/4 of
Sec. 26, T5S, R67W of the 6th P.M., Arapahoe County, Colorado and
is commonly known as the Southshore Water Park. The Property is
further described and depicted on Exhibit A attached hereto.
1. Terms of Purchase.
Purchaser shall agree to provide up to the sum of $1,985,000
in cash at the closing to acquire the assets of The Southshore
Corporation, retire its obligations, and fund the reserve
requirements for the Property. Purchaser's funds shall be
allocated as follows:
A) $ 75,000 on execution hereof
B) $1,910,000 at closing
Total $1,985,000 cash consideration from Purchaser
==========
The purchase price shall include all of the following:
a) 15.89 acres in fee delivered free and clear except
the 1998 real estate taxes and approved exceptions.
b) All the rights, title, and interest vested in the
Southshore Water Park.
c) All Personal property and improvements, including
but not limited to all the pools, equipment,
slides, pumps, tables, chairs, kitchen equipment,
utensils, computers, lockers, supplies, rafts,
tubes, gift shop inventory, tools, registers,
locks, keys, plans, studies, data and any other
information or personal property now occupied and
used in connection with the operation of the
Property.
d) All vested water and mineral rights.
Purchaser and Seller shall complete an inventory list of the
above personal property which shall be attached hereto as
Exhibit B.
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2. Escrow/Due Diligence Period.
Purchaser and Seller shall agree to open escrow at Stewart
Title Co., Denver, Colorado on acceptance of this Offer. The
provisions of this Offer shall constitute joint instructions
to the escrow holder; provided, however, that the parties
shall execute such additional instructions as requested by the
escrow holder not inconsistent with the provisions of this
Offer. Purchaser shall have until October 12, 1998 to approve
in writing the contingency described in Paragraph (9). If
Purchaser does not approve the conditions in Paragraph (9)
prior to October 12, 1998, Purchaser shall be entitled to a
refund of the deposit plus all interest. Purchaser shall
deposit the sum of $75,000, which deposit plus interest shall
be credited at the closing as earnest money deposit or when
the contingency is removed, whichever is earlier, in an
interest bearing account with Stewart Title Co. on execution
hereof. This deposit shall become non-refundable upon removal
of the contingency. Financing shall not be a contingency.
Closing shall be November 12, 1998, or sooner by mutual
agreement or 30 days from removal of the contingencies.
3. Costs.
A. Seller.
Seller to pay for standard coverage owner's policy of
title insurance with said escrow company in the amount of
the purchase price; Seller's legal fees and expenses;
one-half of the escrow fees; any documentary or transfer
taxes or fees; deed preparation charges; and all other
costs and expenses incurred by Seller.
B. Purchaser.
Purchaser to pay for Purchaser's legal fees and expenses;
one-half of the escrow fees; deed recording charges; and
all other costs or expenses incurred by Purchaser.
4. Proration.
Premiums on insurance policies (except the patron liability
policy) and operating expenses shall be prorated as of the
date of recordation of the deed of Purchaser. Property tax
shall be prorated to the date of closing.
5. Title.
As soon as reasonably possible following acceptance, Seller
shall furnish to Purchaser, at no cost to Purchaser, a
preliminary title report and a ALTA survey on the Property,
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together with full copies of all documents of record reflected
therein, including, but not limited to, covenants, conditions,
restrictions, reservations, easements, rights and rights of
way of record, liens and other matters of record. Purchaser
shall have until September 28, 1998 to approve title.
In the event of disapproval of title by Purchaser, Seller
shall, at its option, have ten (10) business days from receipt
of said notice of disapproval within which to attempt to
obtain the elimination for any such disapproved exceptions.
In the event that such disapproval items are not so
eliminated, the escrow shall be terminated. Failure of
Purchaser to approve in writing any exceptions within the time
limit specified above shall be deemed to be an automatic
disapproval of said Preliminary Title Report in its entirety.
Any extensions of said time periods set forth above must be in
writing and approved by Purchaser and Seller.
6. Seller Representations.
Seller hereby warrants to the best of Seller's knowledge: (A)
it has no knowledge of any latent or patent defects in the
title to the land or the real and personal property
improvement therein; (B) it has not received nor is aware of
any notification from the Department of Building and Safety,
the Tri-county Health Department, or any other city, county,
or state authority having jurisdiction, requiring any work to
be done on the subject Property, or advising Seller it is in
violation of existing laws, ordinances or regulations. Seller
represents and warrants to the best of Seller's knowledge that
the Property is free and clear of all hazardous materials,
asbestos, petroleum and related products and underground
storage tanks.
Seller represents there are no outstanding contractor, vendor,
supplier, or service provider claim of any kind against the
business or Property that will survive the close of escrow.
In the event any prior claim shall surface after the closing
of escrow, Seller shall be responsible for any payments owed.
Seller warrants and represents to the best of its knowledge
that the financial results attached hereto as Exhibit C and
prepared by Seller are true and accurate and that the results
reasonably reflect the operating history of the Southshore
Water Park.
In the event any such notice or notices are received by Seller
prior to the close of escrow and Seller is unable to or does
not elect to perform the work required in said notice or
remedy the violation, at Seller's sole cost and expense, said
notices shall be submitted to Purchaser for his examination
and written approval. Should Purchaser disapprove such
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notices, then this Offer shall become null and void, the
escrow shall be canceled. The parties agree, however, that in
deciding whether or not to proceed with the transaction
contemplated herein, Purchaser shall rely solely on its own
due diligence inspection and not on any representations by the
Seller.
7. Seller's Contingency.
Closing shall be specifically contingent upon Seller obtaining
approval from a majority of the shareholders of Seller at a
meeting duly called to consider such matter. Management of
Seller will use their best efforts to obtain such approval and
does not view such approval as problematic.
8. Executed Offer Governs.
Upon execution of this Offer by all parties hereto, the
contract resulting from such execution supersedes any and all
prior arrangements, verbal discussions, and representations
and warranties between the parties hereto or their agents
regarding the subject Property. Neither Purchaser, Seller or
Broker shall be bound by any understanding, agreement,
promise, representation or stipulation, expressed or implied,
nor specified herein.
9. Conditions of Offer.
Purchaser shall have until October 12, 1998 to approve in its
absolute and sole discretion the viability of developing South
Shore Water Park as an alternative use.
In the event the above contingency is not satisfied,
eliminated or waived, then the parties hereto shall have no
further liabilities to each other, and this Agreement shall
become null and void.
10. Delivery of Property.
Upon close of escrow, Seller shall deliver possession of the
subject Property to Purchaser. Seller shall cooperate with
Purchaser to provide assistance in turning over operation of
the business. Seller shall agree to provide Purchaser basic
operating information in written form regarding the operation
of the wave pool and children's pool.
11. Time of Acceptance.
This Offer shall expire unless accepted by Seller and such
acceptance is delivered to Purchaser on or before September
28, 1998.
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12. Time is of the Essence.
It is expressly understood by all parties hereto that time is
of the essence of this Offer.
13. Consideration.
Should for any reason the Purchaser fail to purchase the
Property, all of the work product as a result of the
Purchaser's efforts, i.e., site plans, approvals, M.O.U. with
the city regarding fees, etc. will be assigned to the Seller
free from any obligations or liabilities.
14. Due Diligence.
Seller will furnish to Purchaser the commitment documents,
topographical survey, annual audited financial statements and
quarterly financial statements for the past 3 years on the
operations of the water park and has made the Property
available for Purchaser's inspection.
Purchaser shall conduct its Due Diligence Inspections of the
Property and shall determine by the end of the Due Diligence
Period (as per paragraph 2 above) whether it wishes to
consummate the contemplated purchase and sale transaction.
Seller shall cooperate with Purchaser in conducting its Due
Diligence Inspections of the Property. In this regard, Seller
shall allow representatives of Purchaser reasonable
opportunities to review relevant documentation relating to the
Property in Seller's possession and Seller shall permit
Purchaser's agents and representatives reasonable access to
the Property to conduct reasonable tests and inspections.
Purchaser further agrees to indemnify, defend and hold Seller
harmless from any and all liability, claims, losses and
expenses of any type which may arise directly or indirectly
from Purchaser's entry onto the Property and/or Purchaser's
Due Diligence Inspections of the Property, except as may
result solely from Seller's willful misconduct or gross
negligence. Purchaser shall, at its sole expense, return the
property to its original, pre-inspection state, including
without limitation, prompt repair of any damage to the
Property caused by Purchaser, its agents, servants, employees,
and/or consultants.
Purchaser shall, at all times, keep the Property free from
liens of any type which may arise as the result of Purchaser's
Due Diligence Inspections. Purchaser further agrees that it
shall keep confidential all information belonging to Seller
which Purchaser may review or receive in the course of its Due
Diligence Inspections, unless Seller specifically agrees
otherwise.
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15. Purchaser represents that Cottonwood Brook LLC is a duly
organized Colorado Limited Liability Company and has the power
and authority to enter into the transaction contemplated
herein.
16. Execution.
The parties to this Agreement acknowledge that they have read,
accepted and approved the terms and conditions of this Offer
and have the authority to enter into this contract. Purchaser
and Seller agree to cooperate with each other to enter into
any additional agreements that may be required in order to
consummate this transaction.
PURCHASER:
COTTONWOOD BROOK LLC,
a Colorado Limited Liability Company
600 17th Street, Suite 2309
Denver, Colorado 80202
(Date) September 28, 1998
BY(Signature) /s/ E. Jerry James
(Name and Title) E. Jerry James, Manager
600 17th Street, Suite 2309
Denver, Colorado 80202
ACCEPTED AND AGREED:
SELLER:
The Southshore Corporation
10750 East Briarwood Ave.
Englewood, Colorado 80112
(Date) September 28, 1998
BY(Signature) /s/ Kenneth M. Dalton
(Name and Title) Kenneth M. Dalton, President
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EXHIBIT A
DESCRIPTION OF REAL PROPERTY
Lot 1, Block 1, Southshore
Subdivision Filing No. One,
County of Arapahoe, State of
Colorado
