AMERICAN SPECTRUM MANAGEMENT CO. AMERICAN SPECTRUM REALTY, INC. Irvine, CA 92618 December 18 ,2009
Exhibit
10.45
AMERICAN
SPECTRUM MANAGEMENT CO.
AMERICAN
SPECTRUM REALTY, INC.
0000
Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx,
XX 00000
December
18 ,2009
Evergreen
Income & Growth REIT, Inc.
Evergreen
Realty Group, LLC
Evergreen
Realty Advisors, Inc.
Evergreen
Realty Property Management LLC
Real
Property Systems Inc.
Xxxx
XxXxxxxx
Xxxx
Xxxxxxxxxx
Xxxxx
Xxxxxxx
Xxxxxxx
Xxxxxx
x/x
Xxxxxxx Xxx, Xxx.
Xxxxxxxxx
Traurig, LLP
0000
Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Ladies
and Gentlemen:
Reference
is made to that certain Purchase Agreement by and among the American Spectrum
Parties and the Evergreen Parties (the “Purchase Agreement”) dated December 15,
2009. Capitalized terms used herein shall have the meanings following the use of
such terms or, if no definition is so set forth, such capitalized terms shall
have the meanings set forth in the Purchase Agreement.
The
Evergreen Parties have requested that certain amendments, modifications and/or
supplements be made to the Purchase Agreement. In order to continue to act in
good faith as required by the MOU, American Spectrum has agreed to such
amendments, modifications and/or supplements to the Purchase Agreement, as
follows:
1. Employee Costs. To the
extent Employee Costs (not to exceed Two Hundred Fifty Thousand Dollars
($250,000)) are incurred by American Spectrum Management Co. resulting from the
termination of former Employees of an Evergreen Party by American Spectrum
Management Co., any statutory amounts payable to such Employees who were at-will
Employees of an Evergreen Party shall not be included in the Offset Amount as
required by Section 2.6(d) of the Purchase Agreement. Moreover, Section 2.4(c)
of the Purchase Agreement shall be subject to the foregoing.
2. Future Actions by American Spectrum
Management Co. and American Spectrum Asset Co. American Spectrum
Management Co. and American Spectrum Asset Co. acknowledge that one or more of
the Evergreen Parties has fiduciary or other duties to holders of TIC Interests
and/or to other parties under certain Contracts. It is recognized that American
Spectrum Management Co. and American Spectrum Asset Co. shall have certain
obligations to these Persons by reason of certain rights being assigned to
and/or obligations being assumed by them pursuant to the Purchase Agreement
and/or by reason of Sub-Property Management Agreements which may be executed as
of the Closing Date. American Spectrum Management Co. and American Spectrum
Asset Co. shall undertake all obligations to such Persons and otherwise act in a
prudent and commercially reasonable fashion with respect to such Persons and
perform any obligations to such Persons as required by their respective
obligations to such Persons. Moreover, American Spectrum Management Co. shall
use its commercially reasonable efforts to maximize the Management Fees it earns
and collects during the Accounting Period.
3. Voluntary Termination of Management
Agreements. In the event that American Spectrum Management Co.
voluntarily and without consideration agrees to terminate a Management Agreement
during the Accounting Period without the approval of Evergreen Realty Group or
without agreeing to reassign such Management Agreement to Evergreen Realty
Group, such Management Agreement shall not be deemed terminated for purposes of
calculating the Adjusted Purchase Price pursuant to Section 2.6(c)(i) of the
Purchase Agreement.
4. Deferred Payments. Any proceeds which
would otherwise be received by the Parties entitled thereto pursuant to Section
5.14 of the Purchase Agreement shall first be applied toward the payment of any
interest and principal due by any Evergreen Party to REIT I or REIT II and thus
the proceeds of any such Deferred Payments shall not be paid to such Parties
until such time as all indebtedness (including accrued interest) due REIT I or
REIT II by any Evergreen Party has been discharged in full.
5. Evergreen Consents. Section 5.3 of the
Purchase Agreement is hereby deleted and the following substituted
therefor:
“5.3. Evergreen Consents. The Evergreen
Parties shall use their best efforts to obtain and deliver to American Spectrum
all of the consents of third Persons which are required to consummate the
transactions contemplated by this Agreement (the ‘Evergreen Consents’). The form of the
Evergreen Consents shall be subject to the reasonable approval of American
Spectrum. The Evergreen Parties and American Spectrum shall cooperate with each
other in connection with, the preparation of
and obtaining of the Evergreen Consents as soon as reasonably
possible.”
6. Typographical Corrections. The
reference to Section 5.14 in Section 2.6(b)(i) is hereby changed to Section 5.1
and the reference to Section 5.11 in Section 5.12 is changed to Section
5.12.
7. Definition of Direct Pay Liabilities.
The definition of “Direct Pay Liabilities” is hereby deleted and the following
substituted therefor:
“Direct Pay Liabilities. Direct Pay
Liabilities means the monetary liabilities to be paid to the Persons upon the
conditions and in the amounts described in Section 5.1. Exhibit M to the
Purchase Agreement is hereby deleted.”
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8. Direct Pay Liabilities. Section 5.1 is
hereby deleted and the following is substituted therefor:
“5.1 Direct Pay Liabilities. American
Spectrum Management Co. agrees to assume and pay Two Hundred Thousand Dollars
($200,000) to Xxxxxxxxx Traurig LLP on the Closing Date so long as a designee(s)
of American Spectrum has been added as a co-signer to all property bank
accounts. The balance of each property bank account will be transferred to
American Spectrum Management Co. as soon as is practical on or immediately after
the Closing. Evergreen Realty Group will cause each existing property bank
account to close within thirty (30) days after the Closing as is customary in
any management transition. Evergreen Realty Group will also provide American
Spectrum Management Co. at the Closing an irrevocable and unconditional letter
addressed to the financial institution(s) at which such accounts are situated
authorizing the transfer of such property bank accounts as above provided.
Payment of the balance of the Direct Pay Liabilities shall be made by American
Spectrum Management Co. promptly after Evergreen Realty Group makes request of
American Spectrum Management Co. to pay a third party vendor or similar vendor
of standard and customary services as set forth on the Aged Payable Summary as
of November 2009 of Evergreen Realty Group, a copy of which is attached hereto,
so long as (a) the payment to such third party vendor is reasonably necessary to
continue the operations of Evergreen Realty Group for the purposes set forth in
the second paragraph of Section 5.2, (b) the payee is set forth on such Aged
Payable Summary and (c) the aggregate amount so paid to all vendors does not
exceed Three Hundred Thousand Dollars ($300,000). To the extent amounts in
excess of Three Hundred Thousand Dollars ($300,000) are reasonably required to
keep the business operations effectively functioning in the Offices of Evergreen
to complete the matters referenced in the second paragraph of Section 5.2,
American Spectrum shall advance monies therefor under the American Spectrum
Note. Repayment of any amounts so advanced under the American Spectrum Note
(including interest thereon) shall be offset against the Purchase
Note.”
9. Opening of Bank Accounts. The first
paragraph of Section 5.2 shall be deleted and the following substituted
therefor:
“5.2 Opening of Bank Accounts/Relocation of
Offices. On or prior to the Closing Date, American Spectrum Management
Co. shall establish bank accounts for each of the Properties to be managed by
American Spectrum Management Co. under a Contract or Sub-Property Management
Agreement. American Spectrum Management Co. shall designate the necessary
accounts and signatories. On or prior to the Closing Date, the individuals
designated by American Spectrum Management Co. shall be added as co-signatories
to all bank accounts being held by an Evergreen Party respecting any such
Property. The American Spectrum Parries and the Evergreen Parties shall
cooperate to accomplish the foregoing. As soon as possible on or after the
Closing Date, all such monies will be transferred.”
10. Purchase Note.
Notwithstanding the provisions of Section 2.6(b)(i),
the Purchase Note shall be made payable to New West Realty, Inc. Notwithstanding
the provisions of (a) Section 2.6(b)(ii)(B), Twelve Thousand Dollars ($12,000)
of interest shall be paid monthly under the Purchase Note in arrears for the
first two calendar months of 2010 and thereafter shall be paid quarterly in arrears commencing
April 1, 2010 and (b) Section 2.6(b)(ii)(F), the Purchase Note may be bifurcated
into up to four (4) promissory notes on the Adjustment Date. The Purchase Note
attached to the Purchase Agreement as Exhibit I shall be modified to incorporate
the foregoing.
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11. Windermere Apartments. The owner(s) of
Windermere Apartments (No. 24 on Exhibit E) owes Evergreen Realty
Group One Hundred Twenty Five Thousand Six Hundred Eighty Two and 63/100 Dollars
($125,682.63) in property management fees which have been earned but not
paid. As such property management fees are collected by American Spectrum
Management Co., American Spectrum Management Co. will remit same to Evergreen
Realty Group.
If the
foregoing accurately sets forth our understanding, please so indicate by
executing and returning a copy of this letter.
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Very
truly yours,
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American
Spectrum Management Co.
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By:
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Xxxxxxx
X. Xxxxxx
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Name:
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Xxxxxxx
X. Xxxxxx
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Title:
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President |
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American
Spectrum Realty, Inc.
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By:
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Xxxxxxx
X. Xxxxxx
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Name:
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Xxxxxxx
X. Xxxxxx
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Title:
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President
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Agreed:
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Evergreen
Income & Growth RBIT, Inc.
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By:
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/s/
Xxxx XxXxxxxx
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Name:
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Xxxx XxXxxxxx |
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Title:
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President
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Evergreen
Realty Group, LLC
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By:
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/s/
Xxxx XxXxxxxx
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Name:
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Xxxx XxXxxxxx |
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Title:
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Member |
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Evergreen
Realty Advisors, Inc.
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By:
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/s/
Xxxx XxXxxxxx
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Name:
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Xxxx XxXxxxxx |
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Title:
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Evergreen
Realty Property Management LLC
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By:
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/s/
Xxxx XxXxxxxx
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Name:
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Xxxx XxXxxxxx |
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Title:
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Manager |
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Realty
Property Systems Inc.
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By:
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Name:
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Title:
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/s/
Xxxx XxXxxxxx
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Xxxx
XxXxxxxx
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Xxxx
Xxxxxxxxxx
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Xxxxx
Xxxxxxx
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Xxxxxxx
Xxxxxx
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Evergreen
Realty Advisors, Inc.
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By:
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Name:
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Title:
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Evergreen
Realty Property Management LLC
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By:
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Name:
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Title:
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Realty
Property Systems Inc.
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By:
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Name:
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Title:
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Xxxx
XxXxxxxx
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Xxxx
Xxxxxxxxxx
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/s/
Xxxxx Xxxxxxx
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Xxxxx
Xxxxxxx
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Xxxxxxx
Xxxxxx
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Evergreen
Realty Advisors, Inc.
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By:
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Name:
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Title:
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Evergreen
Realty Property Management LLC
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By:
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Name:
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Title:
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Realty
Property Systems Inc.
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By:
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Name:
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Title:
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Xxxx
XxXxxxxx
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/s/
Xxxx Xxxxxxxxxx
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Xxxx
Xxxxxxxxxx
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Xxxxx
Xxxxxxx
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Xxxxxxx
Xxxxxx
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Evergreen
Realty Advisors, Inc.
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By:
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Name:
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Title:
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Evergreen
Realty Property Management LLC
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By:
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Name:
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Title:
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Realty
Property Systems Inc.
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By:
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/s/
Xxxxxxx Xxxxxx
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Name:
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Xxxxxxx
Xxxxxx
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Title:
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Xxxx
XxXxxxxx
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Xxxx
Xxxxxxxxxx
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Xxxxx
Xxxxxxx
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/s/
Xxxxxxx Xxxxxx
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Xxxxxxx
Xxxxxx
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