1
EXHIBIT 99.3
FIRST SUPPLEMENTAL SETTLEMENT AGREEMENT
This First Supplemental Settlement Agreement (this "First
Supplemental Agreement"), dated as of October 15, 1997, is made by and among
XXXXXX X. XXXX ("RSH") and DART GROUP CORPORATION, a Delaware corporation
("Dart"), for purposes of supplementing and modifying that certain Settlement
Agreement dated as of October 6, 1995 between RSH and Dart (the "RSH/Dart
Settlement Agreement"). Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings ascribed to such terms in the
RSH/Dart Settlement Agreement.
WITNESSETH:
WHEREAS, Dart and RSH entered into the RSH/Dart Settlement
Agreement to settle certain lawsuits and other disputes between RSH and Dart
and its affiliates.
WHEREAS, on October 18, 1995 Xxxxxx X. Xxxx ("RMH"), Xxxxxx X.
Xxxx ("GGH") and Xxxxx X. Xxxx ("LGH"; RMH, GGH and LGH collectively referred
to as the "RGL Individuals") filed a lawsuit captioned Xxxxxx Xxxx, et al. v.
Xxxxx Xxxxxxxx, et al., Civ. A. No. 14620 (Del. Ch.), challenging certain of
the transactions pursuant to the RSH/Dart Settlement Agreement, contending that
such transactions had the effect of placing majority voting control of Dart in
the hands of the RGL Individuals and seeking a judicial declaration that
directors selected by the RGL Individuals are the properly empowered directors
of Dart (the "Section 225 Lawsuit");
WHEREAS, on November 6, 1995 Xxxxxxx X. Xxxx ("HHH") filed a
lawsuit captioned Xxxxxxx X. Xxxx v. Dart Group Corporation, et al., Civ. A.
No. 14685 (Del. Ch.), challenging the transactions pursuant to the RSH/Dart
Settlement Agreement (the "HHH Settlement Lawsuit");
WHEREAS, in connection with the Section 225 Lawsuit and the
HHH Settlement Lawsuit, the Delaware Court of Chancery entered an order (the
"Standstill Order") on December 6, 1995 that requires Dart to refrain from
taking or recognizing specified actions and that, in Section 8 of the
Standstill Order, requires Dart to give not less than seven (7) days' notice of
certain "extraordinary transactions" to the other parties to such lawsuits;
WHEREAS, on or about August 18, 1997, Dart and the RGL
Individuals and certain family trusts controlled by one or more of the RGL
Individuals (the "Family Trusts") entered into a settlement agreement pursuant
to which Dart, the RGL Individuals and the Family Trusts agreed to settle
certain lawsuits and other disputes between and among them on the terms, and
subject to the conditions, set forth therein (the "RGL/Dart Settlement
2
Agreement"), and on September 26, 1997 Dart, the RGL Individuals and the Family
Trusts closed under the RGL/Dart Settlement Agreement;
WHEREAS, there are presently pending as of the date of this
First Supplemental Agreement three bankruptcy cases in the United States
Bankruptcy Court for the District of Maryland (the "Bankruptcy Court") styled,
respectively, In re Seventy-Fifth Avenue Associates Limited Partnership, Case
No. 95-1-3103-DK (the "Seventy-Fifth Avenue Case"), In re Trak Chicago Limited
Partnership I, Case No. 95-1-3099-DK (the "Trak Chicago Case"), and In re
Combined Properties/Ontario Limited Partnership, Case No. 95-1-3095-DK (the
"Ontario Case") (collectively, the "Warehouse Bankruptcy Cases");
WHEREAS, by final order entered on or about June 12, 1997, the
Bankruptcy Court confirmed plans of reorganization in the Seventy-Fifth Avenue
Case and the Trak Chicago case (together, the "Warehouse Plans"), such plans to
become effective upon the satisfaction of certain conditions precedent set
forth therein.
NOW THEREFORE, for and in consideration of the premises and of
the mutual promises and agreements herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1. FIRST SUPPLEMENTAL SETTLEMENT.
1.1 SETTLEMENT TRANSACTIONS. The parties hereto agree
that the agreements contemplated by this First Supplemental Agreement shall be
implemented on the First Supplemental Closing Date (as defined in Section
1.3(b)) by the execution and delivery of the documents and the performance of
the transactions set forth below, at the times, in accordance with the
procedures and subject to the conditions set forth in this Section 1.1 and
Sections 1.2 and 1.3. In the event that the First Supplemental Closing Date
does not occur on or before October 31, 1997, this First Supplemental Agreement
and all of its terms and provisions shall be null and void and of no further
legal effect, unless on or prior to October 31, 1997 Dart and RSH shall have
each executed and delivered to the other a written agreement to extend the
First Supplemental Closing Date.
(a) The parties shall execute and deliver a First Amendment
to Purchase Agreement [Warehouse Partnership Interests], a First
Amendment to Disputed Partnership Interests Purchase Agreement
[Warehouses], and a First Amendment to Purchase Agreement [Pennsy
Warehouses] in the forms attached to this First Supplemental Agreement
as Exhibit A, Exhibit B, and Exhibit C, respectively.
(b) The parties shall execute and deliver, and Dart shall
cause Xxxxx-Xxxxxx to execute and deliver, a First Amendment to Real
Estate Master Agreement ("First Amendment to REMA") amending the Real
Estate Master Agreement dated as of October 6, 1995 (the "REMA") in the
form attached to this First Supplemental Agreement as Exhibit D.
2
3
(c) Dart shall concurrently receive in cash $2,200,000 from
the C-M Escrow Account, and RSH shall have have no right, title or
interest in such cash payment.
(d) Dart shall, and RSH shall cause Dart to, receive delivery
of (i) the original of that certain stock certificate No. 4 dated June
28, 1985 for 75,738 shares of Dart Class B Common Stock, which
certificate is in the name of Haft Equities General Limited
Partnership, duly endorsed for transfer or accompanied by appropriate
stock powers in blank on behalf of Haft Equities General Limited
Partnership or, in the event such original certificate has been lost,
an affidavit of lost certificate in form and substance reasonably
acceptable to Dart, and (ii) a written waiver of any claim of any
right, title or interest in and to such shares, in the form of Exhibit
E hereto, executed by RSH on behalf of himself and on behalf of Haft
Equities General Limited Partnership in his capacity as general
partner.
(e) Section 1.5(c) of the RSH/Dart Settlement Agreement shall
hereby be deemed to be amended and modified as provided in Section
8.2(f) of the REMA, as amended by the First Amendment to REMA.
1.2 CLOSING PROCESS; CONDITIONS; INTERRELATIONSHIP OF
SETTLEMENTS.
(a) STANDSTILL ORDER. The parties acknowledge that this First
Supplemental Agreement and the obligation of Dart and its affiliates and RSH to
close the transactions contemplated hereby, are subject to compliance by Dart
with Section 8 of the Standstill Order. Within two (2) business days after the
date of execution and delivery of this First Supplemental Agreement, Dart shall
send written notice of the transactions contemplated by this First Supplemental
Agreement in accordance with the terms of Section 8 of the Standstill Order,
unless all parties entitled to notice pursuant to Section 8 of the Standstill
Order shall have executed and delivered to Dart a written waiver of such notice
in form acceptable to Dart.
Notwithstanding any other provision of this First Supplemental Agreement,
neither the Dart Parties (as defined in the REMA) nor any of their affiliates
nor RSH shall be obligated to enter into any agreement or perform any
transaction contemplated by Section 1.1 or 1.3 until such time as the seven (7)
day notice period under Section 8 of the Standstill Order has expired or the
date that the written waiver of such notice shall have been executed and
delivered by all parties entitled to such notice pursuant to section 8 of the
Standstill Order, or if later, such date as no temporary restraining order,
preliminary injunction, permanent injunction or other court order (any of the
foregoing referred to as a "Settlement Injunction") is in effect that restrains
Dart or any affiliate of Dart from entering into such agreement or performing
such transaction.
(b) NO SEVERABILITY OF SUPPLEMENTAL SETTLEMENT DOCUMENTS.
The parties intend that the execution and delivery of the Supplemental
Settlement Documents (as defined in Section 1.3(a)), other than this First
Supplemental Agreement, and the performance of the transactions contemplated by
this First Supplemental Agreement are mutually dependent on
3
4
each other and that no Supplemental Settlement Document (other than this First
Supplemental Agreement) shall become effective, and none of the transactions
contemplated hereby to occur on the First Supplemental Closing Date shall be
consummated, unless all the transactions contemplated by this First
Supplemental Agreement and the other Supplemental Settlement Documents to occur
on the First Supplemental Closing Date are consummated simultaneously.
1.3 CLOSING.
(a) Dart and RSH agree to execute and deliver the documents
and instruments and consummate the transactions set forth in Section 1.1 (all
such documents, together with this First Supplemental Agreement and the
documents and instruments executed pursuant thereto, referred to herein as the
"Supplemental Settlement Documents") to which either is a party at a closing
(the "First Supplemental Closing") that shall take place at the offices of
Xxxxx, Day, Xxxxxx & Xxxxx, 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 on the
First Supplemental Closing Date, as defined below, subject to the outside date
set forth in Section 1.1 hereof. Except as otherwise provided herein, all
payments to be made as part of the closing of the transactions contemplated by
the Supplemental Settlement Documents shall be made by certified check, bank
check or wire transfer of immediately available funds pursuant to written
instructions from the party entitled to receive the payment.
(b) The First Supplemental Closing shall occur on the "First
Supplemental Closing Date", which shall be the date on which the Warehouse
Plans shall have become effective in accordance with their terms, subject to
the outside closing date set forth in Section 1.1 hereof, it being the
intention of the parties that the Effective Date of each of the Warehouse Plans
(as defined therein, respectively) and the First Supplemental Closing Date
shall all occur simultaneously.
(c) On the date of the First Supplemental Closing the parties
shall execute and deliver the Supplemental Settlement Documents and consummate
the transactions set forth in Section 1.1. The obligation of the Dart Parties
and their affiliates and RSH to consummate the First Supplemental Closing, and
the effectiveness of any Supplemental Settlement Document (other than this
First Supplemental Agreement), shall be subject to the satisfaction in full of
the following conditions, on or before the outside closing date set forth in
Section 1.1 hereof:
(i) SUPPLEMENTAL SETTLEMENT DOCUMENTS. Each of the
Supplemental Settlement Documents shall have been executed and
delivered;
(ii) ACKOWLEDGEMENTS OF EFFECTIVENESS OF PLANS OF
REORGANIZATION. RSH and Dart shall have caused to be executed and
exchanged between them Acknowledgements of Effectiveness for the Plans
in the forms attached hereto as Exhibit F;
(iii) PLANS OF REORGANIZATION. The terms and
conditions of the Warehouse Plans shall not have been amended, waived
or modified from the form of the Warehouse Plans confirmed by orders of
the Bankruptcy Court entered on or about
4
5
June 12, 1997 without the written approval of Dart; all conditions
precedent to the effectiveness of the Warehouse Plans and Dart's and/or
Trak Auto Corporation's obligations thereunder shall have been
satisfied in full but for closings having occurred with respect to the
settlement agreements described in Section 13.01 (d) of each such Plan,
it being the intention of the parties to this First Supplemental
Agreement that such closings shall be simultaneous with the First
Supplemental Closing; and the Warehouse Plans shall otherwise remain in
full force and effect in accordance with their respective terms; and
(iv) RSH ESCROW ACCOUNT. On the First Supplemental
Closing Date, $1,550,180 of the funds in the RSH Escrow Account shall
be disbursed to Dart in consideration of the withholding obligation
arising from the termination of the Options for 197,048 Class B Shares
pursuant to Section 8.2(a) of REMA, as amended by the First Amendment
to REMA (and upon such disbursement, RSH shall have no right, title or
interest in or claim to the funds so disbursed), and the balance of the
funds in the RSH Escrow Account shall be disbursed to RSH. RSH shall
indemnify Dart with respect to all such disbursements in accordance
with the provisions of Article 6 of this First Supplemental Agreement
and Section 10 of the First Amendment to REMA
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF DART
Dart, and if appropriate, Xxxxx-Xxxxxx Real Estate Company
("Xxxxx-Xxxxxx"), (each a "Dart Party"), represents and warrant to RSH, as of
the date hereof and on the First Supplemental Closing Date, that:
2.1 ORGANIZATION AND EXISTENCE. The Dart Party is a
corporation duly organized and validly existing under the laws of the State of
Delaware.
2.2 AUTHORIZATION. This First Supplemental Agreement has
been duly executed and delivered by Dart, and the other Supplemental Settlement
Documents to which the Dart Party will be a party will, at the time of their
delivery, be duly executed and delivered by it; the execution and delivery of
the Supplemental Settlement Documents to which it is or will be a party have
been duly authorized by all necessary corporate action.
2.3 BINDING EFFECT. This First Supplemental Agreement
is, and when executed and delivered by Dart, the other Supplemental Settlement
Documents to which the Dart Party will be a party will be, valid and binding
obligations of such Dart Party, enforceable against such Dart Party in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or like laws limiting the
remedies of creditors generally, and except that, in the discretion of the
court, equitable remedies may not be available for the enforcement thereof.
2.4 ABSENCE OF CONFLICT. The execution, delivery and
performance by such Dart Party of the Supplemental Settlement Documents to
which such Dart Party is or will be a party and the consummation of the
transactions contemplated thereby will not breach, violate
5
6
or conflict with any provision of, give rise to any right of acceleration of
any obligation under or constitute a default under (or constitute an event
which, with the giving of notice or lapse of time, or both, would give rise to
such a right or constitute such a default), or require the consent or waiver of
any other party to, (i) any mortgage, lease, note, contract, agreement or
instrument to which such Dart Party is a party; or (ii) any law, regulation,
order, judgment, writ, decree, decision or award by which such Dart Party is
bound.
2.5 NO CONSENTS. Except for the Standstill Order, no
consent, waiver, release, approval, order or authorization of, or notification
to, any third party or any government or government agency is required in
connection with the execution, delivery or performance by such Dart Party of
the Supplemental Settlement Documents to which such Dart Party is or will be a
party, or the consummation by such Dart Party of the transactions contemplated
thereby.
2.6 LITIGATION. Except for the Section 225 Lawsuit, the
HHH Settlement Lawsuit and the proceedings referred to in Section 1.3(b) and
the Warehouse Bankruptcy Cases, there are no actions, suits, proceedings,
investigations or claims pending or, to the knowledge of such Dart Party,
threatened against it, that relate to any of the transactions contemplated by
the Supplemental Settlement Documents and that, if successful, could restrain
or prohibit the consummation of such transactions.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF RSH
RSH represents and warrants to Dart, and, as appropriate, Xxxxx-Xxxxxx,
as of the date hereof and on the Closing Date, that:
3.1 BINDING EFFECT. This First Supplemental Agreement
is, and when executed by RSH, the other Supplemental Settlement Documents to
which RSH will be a party will be, valid and binding obligations of RSH,
enforceable against RSH in accordance with their respective terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization or
like laws limiting the remedies of creditors generally, and except that, in the
discretion of the court, equitable remedies may not be available for the
enforcement thereof.
3.2 ABSENCE OF CONFLICT. The execution, delivery and
performance by RSH of the Supplemental Settlement Documents to which he is or
will be a party and the consummation of the transactions contemplated thereby
will not breach, violate or conflict with any provision of, give rise to any
right of acceleration of any obligation under or constitute a default under (or
an event which with the giving of notice or lapse of time, or both, would give
rise to such a right or constitute such a default), or require the consent or
waiver of any other party to, (i) any mortgage, lease, note, contract,
agreement or instrument to which RSH is a party; or (ii) any law, regulation,
order, judgment, writ, decree, decision or award by which RSH is bound.
3.3 NO CONSENTS. No consent, waiver, release, approval,
order or authorization of, or notification to, any third party or any
government or government agency is
6
7
required in connection with the execution, delivery or performance by RSH of
the Supplemental Settlement Documents to which he is or will be a party, or the
consummation by RSH and the RSH Children Trusts of the transactions
contemplated thereby.
3.4 LIABILITIES. Except for liabilities, obligations and
commitments in an amount less than ONE HUNDRED THOUSAND DOLLARS ($100,000)
individually and TWO MILLION DOLLARS ($2,000,000) in the aggregate and RSH has
no liabilities, obligations or commitments, including, without limitation,
those for taxes of any kind, that, if adversely determined or not discharged or
performed by RSH, will create any Lien on or against any of the interests of
the RSH Obligors subject to the Pledge Agreements or the Warehouse Documents
(collectively, the "RSH Interests"). RSH is not a general partner of any
partnership whose liabilities (including contingent liabilities as guarantor
for any debt of any third party) exceed its assets. To the best knowledge of
RSH, there is no liability, commitment or obligation of RSH or any partnership
of which RSH is or has been a general partner, that affects or could affect any
of the RSH Interests in any respect.
3.5 LITIGATION. (a) There are no actions, suits,
proceedings, investigations or claims pending or, to the knowledge of RSH,
threatened against RSH, or any other party, or involving any of the RSH
Interests that affect or could affect any of the RSH Interests in any respect,
or that relate to any of the transactions contemplated by the Supplemental
Settlement Documents and that, if successful, could restrain or prohibit the
consummation of such transactions, and (b) none of RSH or any of the RSH
Interests is subject to any order, judgment, writ, decree, decision or award
that affects or could affect any of the RSH Interests in any respect.
3.6 NO VOLUNTARY BANKRUPTCY OF RSH. None of RSH or the RSH
Obligors has the present intention to do any of the following: (i) apply for,
or consent in writing to, the appointment of a receiver, trustee or liquidator;
(ii) file a voluntary petition seeking relief under the U.S. Bankruptcy Code,
or be unable, or admit in writing his or its inability, to pay his or its debts
as they become due; or (iii) make a general assignment for the benefit of
creditors.
ARTICLE 4. COVENANTS
4.1 COOPERATION. The parties shall cooperate in the
defense of any litigation challenging the validity of this First Supplemental
Agreement, the RGL/Dart Settlement Agreement or the RSH/Dart Settlement
Agreement and the transactions contemplated hereby and thereby. RSH hereby (a)
consents to the RGL/Dart Settlement Agreement and the transactions contemplated
thereby, (b) agrees to not file any lawsuit or initiate any proceeding
challenging the RGL/Dart Settlement Agreement or any of the transactions
contemplated thereby, and (c) waives and releases any claims he may have
against Dart, its affiliates, directors and officers arising out of or in
connection with the RGL/Dart Settlement Agreement and the transactions
contemplated thereby except for that certain right of indemnity under Section
7.4 of the Real Estate Master Agreement, as amended by the First Amendment to
Real
7
8
Estate Master Agreement, pursuant to which Dart has agreed to indemnify RSH
against fifty percent (50%) of any claims by Xxxxxx X. Xxxx or Xxxxx X. Xxxx
for a "gross-up" of income taxes due on payments of $4,400,000 in the aggregate
made to such individuals by Dart with respect to Seventy-Fifth Avenue
Associates Limited Partnership, Trak Chicago Limited Partnership I, 75th Avenue
Tier II Limited Partnership or Trak Chicago Tier II Limited Partnership.
4.2 FURTHER ASSURANCES. RSH and the Dart Parties each
shall execute and deliver, and RSH shall cause to be executed and delivered,
promptly such additional documents, assignments, certificates and instruments
as the other party to this First Supplemental Agreement may reasonably request
in order to effectuate more effectively the transactions contemplated by the
Supplemental Settlement Documents.
4.3 SPECIFIC PERFORMANCE. The Dart Parties and RSH each
acknowledge and agree that in the event of any breach of this First
Supplemental Agreement or any other Supplemental Settlement Document, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that the Dart Parties and RSH, in
addition to any other remedy to which they may be entitled at law or in equity,
shall be entitled to compel specific performance (including temporary
restraining orders) of this First Supplemental Agreement or any other
Supplemental Settlement Document in any action instituted in the Delaware Court
of Chancery or the United States District Court for the District of Delaware,
or, in the event neither of said courts would have jurisdiction over such
action, in any court of the United States or any state having subject matter
jurisdiction. The Dart Parties and RSH each consent to non-exclusive personal
jurisdiction in any such action brought in the Delaware Court of Chancery or
the United States District Court for the District of Delaware.
4.4 LIQUIDATION DISTRIBUTIONS. (a) In the event that
at any time after both the First Supplemental Closing and the closing of the
Simultaneous Purchase, the Put Option or the Call Option (each as defined in
the Buy/Sell/Offering Agreement) the Board of Directors of Dart (as distinct
from any of its subsidiaries or affiliates), after adopting a plan of complete
liquidation or after dissolution of Dart has been authorized in accordance with
Section 275 of the Delaware General Corporation Law (or any successor or
comparable statutory provision then applicable), may determine to pay a
liquidating distribution to the shareholders of Dart (the "Liquidating
Distribution"), then Dart, at its election in its sole discretion, after
providing notice to RSH in the same manner and at the same time as any notice
of liquidation provided to Dart's shareholders, may elect, simultaneously with
the payment of such Liquidating Distribution, to cap any and all actual and
contingent liabilities that it or any Dart Affiliates or any of their
respective affiliates may have to RSH for any reason, or to any other parties
arising out of the RSH/Dart Settlement Agreement and the transactions pursuant
thereto, by the establishment of a reserve fund for such purpose in the Reserve
Amount (as defined below), it being understood that any unused portion of such
reserve fund may be withdrawn by or on behalf of Dart (or any liquidating
trustee for Dart) or distributed to Dart's shareholders at any time after
December 31, 2002. For purposes of this Section 4.4(a), the Reserve Amount
shall be $1,000,000; provided, that if Dart commits funds in an escrow, trust,
letter of credit or similar arrangement for the payment, after the
8
9
Liquidating Distribution, of indemnification claims by members of the Executive
Committee or other members of Dart's Board of Directors, then the Reserve
Amount shall be equal to the greater of (i) one-third of the amount of funds so
committed or (ii) $1,000,000.
(b) The establishment of a reserve fund in accordance with clause
(a) of this Section 4.4 shall be effective to limit to the amount in such
reserve fund any and all actual and contingent liabilities that Dart or any
Dart Affiliates or any of their respective affiliates may have to RSH for any
reason, or to any other parties arising out of the RSH/Dart Settlement
Agreement and the transactions pursuant thereto, other than to the extent set
forth in clause (c) below; provided that each of the following conditions shall
have been satisfied: (i) notice of Dart's intention to make a Liquidating
Distribution (the "Liquidating Distribution Notice") was given no earlier than
one (1) year after the date of the First Supplemental Closing, and (ii) the
Liquidation Date shall have occurred no earlier than 240 calendar days after
the Liquidating Distribution Notice was given.
(c) Notwithstanding anything contained herein to the contrary,
nothing in this Section 4.4 shall limit (i) Dart's obligations to indemnify RSH
for pending or threatened claims of which Dart has written notice not later
than 60 days before the Liquidation Date or (ii) the coverage of RSH under any
policy of directors and officers liability insurance policy in effect at any
time.
ARTICLE 5. EFFECTIVENESS
5.1 LIMITED INITIAL EFFECTIVENESS OF AGREEMENT.
(a) Notwithstanding any other provision of this First Supplemental
Agreement, none of the agreements, obligations or commitments of Dart set forth
in this First Supplemental Agreement shall be effective on or prior to October
26, 1997 (except that Dart shall be obligated to give written notice of this
First Supplemental Agreement pursuant to Section 8 of the Standstill Order to
the other persons subject to the Standstill Order, not later than October 18,
1997 , unless all parties entitled to notice pursuant to Section 8 of the
Standstill Order shall have executed and delivered to Dart a written waiver of
such notice in form acceptable to Dart).
(b) This Agreement shall be null, void and of no effect, ab
initio, if on or before October 26, 1997 the Delaware Court of Chancery issues
any order, writ, injunction or decree restraining, enjoining or prohibiting in
any way the effectiveness of this First Supplemental Agreement or the
consummation of any of the transactions contemplated by this First Supplemental
Agreement.
5.2 RSH BOUND
All of the provisions of this First Supplemental Agreement shall be
binding on and effective with respect to RSH from the date stated in the first
sentence of this First Supplemental Agreement. RSH hereby acknowledges that
adequate and valid consideration
9
10
has been received for his agreement to be bound to all of the provisions of
this First Supplemental Agreement from this date, notwithstanding Dart's right
to elect not to be bound pursuant to Section 5.1.
ARTICLE 6. RSH INDEMNIFICATION AS TO CERTAIN ESCROW ACCOUNTS
6.1 RSH hereby agrees that he shall defend, indemnify and hold Dart,
its respective subsidiaries and affiliates, and each of their respective
officers, employees, directors, agents and representatives (the "Dart Parties")
harmless from and against any and all demands, claims, actions, suits,
proceedings, losses, damages, judgments, liabilities, costs and expenses,
including, without limitation, fees and expenses of legal counsel
(collectively, "Costs") asserted against or incurred by any Dart Party,
directly or indirectly, that arises from or in connection with any actual or
prospective release, distribution, withdrawal or other disposition of funds in
either the C-M Escrow Account or the RSH Escrow Account, as such terms are
defined in the REMA (whether to, in favor of, or for the benefit of RSH, Dart
or other person or entity) and that is based upon a claim or assertion that
such actual or prospective release, distribution, withdrawal or other
disposition violates or is subject to any security interest, lien or right of
Xxxxxxx X. Xxxx, Xxxxxx X. Xxxx, Xxxx X. Xxxx, Xxxxx X. Xxxx, New Frontiers
Investments LLC, Acquiport Midatlantic Retail, Inc., and any other person or
entity. As soon as is reasonably practicable after any Dart Party becomes
aware of any claim that it has to recover Costs under this Section 6.1, such
Dart Party shall notify RSH in writing, which notice shall describe the claim
in reasonable detail, and shall indicate the amount (estimated, if necessary
and to the extent feasible) of the claim. The failure of any Dart Party to
promptly give RSH such notice shall not preclude such Dart Party from obtaining
indemnification under this Section 6.1, except to the extent that such failure
has materially prejudiced RSH's rights or materially increased RSH's
liabilities and obligations hereunder. In the event of a third party claim
which is subject to indemnification under this Section 6.1, RSH shall have the
right, upon agreeing in writing that he is obligated to fully indemnify the
Dart Party for the full amount of the claim (to the extent such claim is proven
or settled) and providing satisfactory evidence to the Dart Party that RSH has
sufficient financial resources to provide such indemnification and defend such
claim properly, to assume the defense of such claim by counsel of his own
choosing reasonably acceptable to Dart. The Dart Party and RSH shall cooperate
with one another in the defense of such claim, including the settlement of the
matter on the basis stipulated by RSH (with RSH being responsible for all costs
and expenses of such settlement). If RSH within a reasonable time after notice
of a claim fails to vigorously defend the Dart Party, the Dart Party shall be
entitled to undertake the defense, compromise or settlement of such claim at
the expense of and for the account and risk of RSH.
ARTICLE 7. MISCELLANEOUS
7.1 RELATIONSHIP TO SETTLEMENT DOCUMENTS. This First
Supplemental Agreement and (if and when executed, delivered and effective in
accordance with the terms hereof) each of the Supplemental Settlement Documents
shall constitute "Settlement Documents" under the RSH/Dart Settlement
Agreement, the REMA and the other Settlement Documents. Without limiting the
foregoing, the indemnification provisions of Article 4 of the
10
11
RSH/Dart Settlement Agreement shall apply to this First Supplemental Agreement
and the other Supplemental Settlement Documents. Except as modified or
supplemented by this First Supplemental Agreement and (if and when executed,
delivered and effective in accordance with the terms hereof) the other
Supplemental Settlement Documents, the RSH/Dart Settlement Agreement, the REMA
and the other Settlement Documents shall each remain in full force and effect,
and no other changes shall have been deemed to have been effected by this First
Supplemental Agreement, or (if applicable) the other Supplemental Settlement
Documents.
7.2 EXPENSES. Except as otherwise expressly provided in
the Supplemental Settlement Documents, the parties shall pay their own
respective expenses incurred in connection with this First Supplemental
Agreement and the transactions hereunder, including, without limitation, any
fees for accountants and attorneys.
7.3 CROSS DEFAULT. The RSH/Dart Settlement Agreement,
this First Supplemental Agreement, the other Supplemental Settlement Documents
and the other Settlement Documents constitute one integrated whole. RSH agrees
that a material breach under any of the Settlement Documents by RSH, any RSH
Obligor or any partnership (general or limited), limited liability company or
corporation controlled by RSH shall constitute a material breach under each
other Settlement Document including this First Supplemental Agreement. The
Dart Parties agree that a material breach under any of the Settlement Documents
by Dart, Xxxxx-Xxxxxx or any partnership (general or limited), limited
liability company or corporation controlled by Dart shall constitute a material
breach under each other Settlement Document, including this First Supplemental
Agreement.
7.4 NOTICES. Any notices or consents required or
permitted by this First Supplemental Agreement shall be in writing and shall be
deemed given if delivered in person or if sent by certified mail, postage
prepaid, return receipt requested, or by facsimile (answerback required) as
follows, unless any such address is changed by notice hereunder:
11
12
If to the Dart Parties:
Dart Group Corporation
0000 00xx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Chairman of the Executive
Committee
and
Attn: Corporate Secretary
Facsimile: 000-000-0000
with copies to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxx, Day, Xxxxxx & Xxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Facsimile: 000-000-0000
If to RSH:
Xx. Xxxxxx X. Xxxx
00 Xx Xxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esq.
Grant & Eisenhofer, P.A.
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
7.5 GOVERNING LAW. This First Supplemental Agreement, and
the documents and instruments delivered pursuant hereto, except as otherwise
provided therein, shall be construed in accordance with and governed by the
laws of the State of Delaware, without regard to conflict of laws principles.
7.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
covenants, agreements, representations and warranties of the parties hereto
made in this First Supplemental Agreement shall survive until the second
anniversary of the First Supplemental Closing Date.
7.7 AMENDMENTS. This First Supplemental Agreement may be
amended only by a written agreement executed by the parties hereto.
12
13
7.8 ENTIRE AGREEMENT. This First Supplemental Agreement and
the other Settlement Documents set forth the entire understanding of the
parties hereto and supersede all prior agreements between them with respect to
the subject matter hereof, all prior negotiations between the parties are
merged in this First Supplemental Agreement and the other Settlement Documents,
and there are no promises, agreements, conditions, undertakings, warranties or
representations, oral or written, express or implied, between them other than
as herein set forth.
7.9 SEVERABILITY. If this First Supplemental Agreement or
any other Settlement Document or any one or more of the provisions contained in
this First Supplemental Agreement or any other Settlement Document, should be
held to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of all remaining provisions shall not in any way be
affected or impaired.
7.10 BINDING EFFECT. This First Supplemental Agreement, and
the documents and instruments delivered pursuant hereto, shall inure to the
benefit of, and shall be binding upon, their respective heirs, executors,
administrators, successors (including any representative, executor or
administrator of RSH's estate) and assigns of the parties.
7.11 WAIVER. No waiver of any of the provisions of this
First Supplemental Agreement or any other agreement referred to herein shall be
valid unless in writing and signed by the party against whom it is sought to be
enforced. The waiver by any party hereto of any matter provided for herein
shall not be deemed to be a waiver of any other matter provided for herein.
7.12 EXHIBITS. The Exhibits attached to this First
Supplemental Agreement are incorporated herein and shall be part of this First
Supplemental Agreement for all purposes.
7.13 HEADINGS. The headings in this First Supplemental
Agreement, and the headings in the Exhibits hereto, are solely for convenience
of reference and shall not be given any effect in the construction or
interpretation of this First Supplemental Agreement. Unless otherwise
specified, references in this First Supplemental Agreement to Sections or
Exhibits are references to Sections of, or Exhibits to, this First Supplemental
Agreement.
7.14 COUNTERPARTS. This First Supplemental Agreement may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all of which together shall constitute one and
the same instrument.
7.15 CHANCERY COURT APPROVAL. Dart shall (i) reasonably
promptly after the execution and delivery of both the First Supplemental
Settlement Agreement and the settlement agreement between Dart and Xxxxxxx
Xxxx, apply to the Delaware Court of Chancery for approval of the Settlement
Agreement, as amended by the First Supplemental Settlement Agreement, and
13
14
the settlement agreement between Dart and Xxxxxxx X. Xxxx, and (ii) use
reasonable efforts to obtain Delaware Chancery Court approval of the
above-referenced settlement agreements at the earliest date reasonably
practicable; provided, that nothing in this sentence shall require Dart to
waive any conditions to closing set forth in, to agree to any amendments of, or
to make any payments or incur any costs not expressly required by either the
Settlement Agreement, as amended by the First Supplemental Settlement
Agreement, or the settlement agreement between Dart and Xxxxxxx X. Xxxx; and
provided further, that any potential liability of Dart for breach of this
sentence shall be completely eliminated if Dart shall waive the condition set
forth in clause (ii) of the first sentence of Section 8 of the First Amendment
to REMA at any time on or before March 31, 1998.
IN WITNESS WHEREOF, RSH and Dart have executed this First
Supplemental Agreement, or have caused this First Supplemental Agreement to be
executed on their behalf, as of the date first above written.
/s/ Xxxxxx X. Xxxx
--------------------------------------
XXXXXX X. XXXX
DART GROUP CORPORATION
By: /s/Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
/s/ Xxxxxx Xxxxxxx
---------------------------------
Sr. Vice President and
Corporate Secretary
14
15
EXHIBIT A
FIRST AMENDMENT TO PURCHASE AGREEMENT
[WAREHOUSE PARTNERSHIP INTERESTS]
THIS FIRST AMENDMENT TO PURCHASE AGREEMENT [WAREHOUSE PARTNERSHIP
INTERESTS] (this "Amendment") is made as of October __, 1997 by and between
XXXXXX X. XXXX, personally ("Seller"), and DART GROUP CORPORATION
("Purchaser").
WITNESSETH:
WHEREAS, Seller and Purchaser are parties to that certain Purchase
Agreement [Warehouse Partnership Interests] dated as of October 6, 1995 (the
"Agreement");
WHEREAS, pursuant to that certain First Supplemental Settlement
Agreement dated as of October 15, 1997 (the "First Supplemental Settlement
Agreement"), Seller and Purchaser have resolved various disputes between them
and agreed to modify certain documents relating to the Settlement Agreement
between Seller and Purchaser dated as of October 6, 1995;
WHEREAS, the parties desire to amend the Agreement so as to reflect and
implement the foregoing.
NOW, THEREFORE, in consideration of the premises, One Dollar ($1.00),
the terms hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. To the extent any provision of the Agreement is in conflict
with or inconsistent with the First Supplemental Settlement Agreement or the
First Amendment to Real Estate Master Agreement of even or approximate date
hereof (the "First Amendment to REMA"), the Agreement is superseded and the
terms of the First Supplemental Settlement Agreement and the First Amendment to
REMA shall control.
2. Plans of reorganization under chapter 11 of the Bankruptcy
Code (the "Plans") have been confirmed and, simulateous herewith, are becoming
effective with respect to Seventy-Fifth Avenue Associates Limited Partnership
("75th Avenue LP") and Trak Chicago Limited Partnership I ("Trak Chicago").
The Plans are filed in the United States Bankruptcy Court for thr District of
Maryland, Southern Division, as Case Nos. 95-1-3103-DK (for 75th Avenue LP) and
95-1-3099-DK (for Trak Chicago). To the extent any provision of the Agreement
is in conflict with or inconsistent with the Plans or any document executed or
delivered in connection therewith, the Agreement is superseded and the terms of
the Plans or applicable document shall control; provided, however, that the
assignment of leases to be executed by 00xx Xxxxxx LP and Trak Chicago,
respectively, to implement the Plans shall
16
provide that third-party claims, if any, which are not discharged in bankruptcy
but which would be indemnified under the respective leases shall be retained by
75th Avenue LP and Trak Chicago, respectively, but that any such liability of
Dart or any Dart Affiliate (as defined in the Settlement Agreement, as amended)
or any of their respective affiliates shall be deemed an actual or contingent
liability that is subject to the election to cap liabilities set forth in
Section 4.4 of the First Supplemental Settlement Agreement.
3. Section 1.4 of the Agreement is hereby amended by adding to
the first sentence thereof, immediately preceding the term "('Ontario Newco')",
the following clause: ",which shall be solely-owned, at Purchaser's option, by
Purchaser, Trak Auto Corporation, or a designee of either Purchaser or Trak
Auto Corporation". Section 1.4 of the Agreement is hereby further amended by
deleting therefrom the following two sentences: "The organizational documents
of Ontario Newco are attached hereto as Exhibit F. (Said conveyance shall be a
capital contribution by said Partnership to Ontario Newco." Exhibit F is
hereby deleted from the Agreement.
4. Section 2.4 of the Agreement is hereby amended by inserting at
the beginning thereof the words "Unless Purchaser elects not to so require,"
and by changing the first letter of the immediately-following word "Upon" to
lower case.
5. Section 4.1 of the Agreement is hereby amended by inserting at
the beginning thereof the words "Except as Purchaser may elect not to so
require in the case of Combined Properties/Ontario Limited Partnership," and by
changing the first letter of the immediately-following word "On" to lower case.
6. Section 5.3 of the Agreement is hereby amended by changing the
Allocation, as defined therein, to read as follows:
"3301 Pennsy Drive Associates Limited Partnership (Penssy Drive
Warehouse I: Zero (-0-) Dollars;
Seventy-Fifth Avenue Associates Limited Partnership (75th Avenue
Headquarters and Wooded Lot): $15,550,000 (subject to reduction as set
forth above);
Trak Chicago Limited Partnership I (the Bridgeview Warehouse):
$4,200,000 (subject to reduction as set forth above);
Combined Properties/Ontario Limited Partnership (the Ontario
Warehouse): $3,300,000 (subject to reduction as set forth above)."
7. Section 6.5 of the Agreement is hereby amended as follows:
(a) Item (b) thereof is changed so as to read: "(b) except
as Purchaser may otherwise elect in the case of the Ontario Warehouse,
the lease amendments described herein with respect to each Property;"
and
2
17
(b) Item (b) is further changed by deleting the sentence
beginning "Notwithstanding the foregoing" and replacing it with:
"Notwithstanding the foregoing, for purposes of Sections 1 and 2 of
this Agreement, the Plan of Reorganization for a property or a
Partnership means a plan of reorganization that includes only items (a)
and (b) above, and Dart may elect in the case of the Ontario Property
to omit item (b)."
8. Section 6.8 of the Agreement is hereby amended by adding at
the beginning thereof the words "At Purchaser's election," and by deleting the
parenthetical "(a)" and changing the first letter of the immediately-following
word "If" to lower case.
9. Section 6.9 of the Agreement is hereby amended by adding at
the beginning thereof the words "At Purchaser's election," and by changing the
first letter of the immediately-following word "As" to lower case.
10. This Amendment shall be a part of, and interpreted in
accordance with, the Agreement except that if there is a conflict or
inconsistency between this Amendment and the Agreement, the terms of this
Amendment shall control. Except as set forth herein, the Agreement has not
been and is not hereby supplemented, amended or otherwise modified. As amended
herein, the Agreement is ratified and confirmed as being in full force and
effect.
11. This Amendment may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment under seal
as of the date first set forth above.
WITNESS: SELLER:
------------------------- ------------------------- (Seal)
XXXXXX X. XXXX, personally
PURCHASER:
ATTEST: DART GROUP CORPORATION
By:
----------------------- -----------------------------
[Corporate Seal] Name:
Title:
3
18
EXHIBIT B
FIRST AMENDMENT TO DISPUTED PARTNERSHIP
INTERESTS PURCHASE AGREEMENT [WAREHOUSES]
THIS FIRST AMENDMENT TO DISPUTED PARTNERSHIP INTERESTS PURCHASE
AGREEMENT [WAREHOUSES] (this "Amendment") is made as of October __, 1997 by and
between XXXXXX X. XXXX, personally ("Seller"), and DART GROUP CORPORATION
("Purchaser").
WITNESSETH:
WHEREAS, Seller and Purchaser are parties to that certain Disputed
Partnership Interests Purchase Agreement [Warehouses] dated October 6, 1995
(the "Agreement");
WHEREAS, pursuant to that certain First Supplemental Settlement
Agreement dated as of October 15, 1997 (the "First Supplemental Settlement
Agreement"), Seller and Purchaser have resolved various disputes between them
and agreed to modify certain documents relating to the Settlement Agreement
between Seller and Purchaser dated as of October 6, 1995;
WHEREAS, the parties desire to amend the Agreement so as to reflect and
implement the foregoing.
NOW, THEREFORE, in consideration of the foregoing, One Dollar ($1.00),
the terms hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. To the extent any provision of the Agreement is in conflict
with or inconsistent with the First Supplemental Settlement Agreement or the
First Amendment to Real Estate Master Agreement of even or approximate date
hereof (the "First Amendment to REMA"), the Agreement is superseded and the
terms of the First Supplemental Settlement Agreement or the First Amendment to
REMA shall control.
2. Plans of reorganization under chapter 11 of the Bankruptcy
Code (the "Plans") have been confirmed and, simulateous herewith, are becoming
effective with respect to Seventy-Fifth Avenue Associates Limited Partnership
("75th Avenue LP") and Trak Chicago Limited Partnership I ("Trak Chicago").
The Plans are filed in the United States Bankruptcy Court for thr District of
Maryland, Southern Division, as Case Nos. 95-1-3103-DK (for 75th Avenue LP) and
95-1-3099-DK (for Trak Chicago). To the extent any provision of the Agreement
is in conflict with or inconsistent with the Plans or any document executed or
delivered in connection therewith, the Agreement is superseded and the terms of
the Plans or applicable document shall control.
19
3. Section 1.1(a) of the Agreement is hereby amended by inserting
at the beginning thereof the words "At Purchaser's election with respect to
each Selling Entity," and by changing the word "each" to "such" in the clause
beginning "Seller shall cause each Selling Entity...".
4. This Amendment shall be a part of, and interpreted in
accordance with, the Agreement except that if there is a conflict or
inconsistency between this Amendment and the Agreement, the terms of this
Amendment shall control. Except as set forth herein, the Agreement has not
been and is not hereby supplemented, amended or otherwise modified. As amended
herein, the Agreement is ratified and confirmed as being in full force and
effect.
5. This Amendment may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment under seal
as of the date first set forth above.
WITNESS: SELLER:
------------------------- ------------------------- (Seal)
XXXXXX X. XXXX, personally
PURCHASER:
ATTEST: DART GROUP CORPORATION
By:
----------------------- -----------------------------
[Corporate Seal] Name:
Title:
2
20
EXHIBIT C
FIRST AMENDMENT TO PURCHASE AGREEMENT
[PENNSY DRIVE WAREHOUSES]
THIS FIRST AMENDMENT TO PURCHASE AGREEMENT [PENNSY DRIVE WAREHOUSES]
(this "Amendment") is made as of October __, 1997 by and between XXXXXX X.
XXXX, personally ("Seller"), and DART GROUP CORPORATION ("Purchaser").
WITNESSETH:
WHEREAS, Seller and Purchaser are parties to that certain Purchase
Agreement [Pennsy Drive Warehouses] dated as of October 6, 1995 (the
"Agreement");
WHEREAS, pursuant to that certain First Supplemental Settlement
Agreement dated as of October 15, 1997 (the "First Supplemental Settlement
Agreement"), Seller and Purchaser have resolved various disputes between them
and agreed to modify certain documents relating to the Settlement Agreement
between Seller and Purchaser dated as of October 6, 1995;
WHEREAS, the parties desire to amend the Agreement so as to reflect and
implement the foregoing.
NOW, THEREFORE, in consideration of the premises, One Dollar ($1.00),
the terms hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. To the extent any provision of the Agreement is in conflict
with or inconsistent with the First Supplemental Settlement Agreement or the
First Amendment to Real Estate Master Agreement dated October __, 1997 (the
"First Amendment to REMA"), the Agreement is superseded and the terms of the
First Supplemental Settlement Agreement and the First Amendment to REMA shall
control.
2. Section 4.3 of the Agreement is hereby amended by deleting the
dollar amount "$12,133,333" in the each place where it appears and substituting
therefor the dollar amount "$11,350,000" in each such place.
21
3. This Amendment shall be a part of, and interpreted in
accordance with, the Agreement except that if there is a conflict or
inconsistency between this Amendment and the Agreement, the terms of this
Amendment shall control. Except as set forth herein, the Agreement has not
been and is not hereby supplemented, amended or otherwise modified. As amended
herein, the Agreement is ratified and confirmed as being in full force and
effect.
11. This Amendment may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment under seal
as of the date first set forth above.
WITNESS: SELLER:
------------------------- ------------------------- (Seal)
XXXXXX X. XXXX, personally
PURCHASER:
ATTEST: DART GROUP CORPORATION
By:
----------------------- -----------------------------
[Corporate Seal] Name:
Title:
2
22
EXHIBIT D
CONTRIBUTION AND SUBORDINATION AGREEMENT
THIS CONTRIBUTION AND SUBORDINATION AGREEMENT (this "Agreement"), dated
__________ __, 1997, is made by and among, Dart Group Corporation, A Delaware
corporation ("Dart"), HHH/RSH Tier II Limited Partnership, a Maryland limited
partnership (the "Retained Partnership"), Xxxxxx X. Xxxx (RSH"), Xxxxxxx X.
Xxxx ("HHH"), the Releasing Guarantors listed on Schedule 1 hereto and the
Released Guarantors listed on Schedule 2 hereto.
Recitals
A. It is contemplated that Dart may make a $10 million loan (the "RSH/HHH
Loan") pursuant to the RSH/HHH Loan Agreement (as such term is defined
in the Settlement Agreement dated as of August 18, 1997, among Dart,
certain Affiliates of Dart, Xxxxxx X. Xxxx, Xxxxxx X. Xxxx and Xxxxx X.
Xxxx (the "Settlement Agreement")), repayment of which would be secured
in party by, among other things, all of HHH and RSH's rights, title and
interest in and to the Collateral (as defined in Section 2(a) of this
Agreement) and the Retained Partnership.
B. All of the parties to this Agreement, except Dart and the Retained
Partnership, are parties to an Indemnification Agreement, dated as of
July 31, 1994 (the "Indemnification Agreement"), under which HHH and
RSH agreed to indemnify Xxxxxx X. Xxxx ("RMH"), Xxxxxx X. Xxxx ("GGH")
and Xxxxx X. Xxxx ("LGH") and collectively "RGH") with respect to,
among other things, "all claims . . . made or incurred by, or asserted
against, any of [RGL]" in connection with all liabilities or
obligations that RMH, LGH or GGH may have in connection with "all
partnership, corporate and individually held interest of the Haft
Family in that collection of entities, through which the Haft Family
owns, operates or manages their privately held warehouses (the
"Combined Entities") . . . ." The Combined Entities, which include
guaranteed these indemnification obligations of HHH and RSH to RGL.
Each of the Combined Entities has certain rights to seek contribution
from the other Combined Entities in the event that it pays more than
its share of any of the guaranteed indemnification obligations.
C. If Dart makes the RSH/HHH Loan, the Retained Partnership, pursuant to
the terms and provisions of that certain Retained Partnership Guaranty,
will become a Guarantor under the Indemnification Agreement.
D. Dart is unwilling to make the RSH/HHH Loan unless the Releasing
Guarantors (1) release all rights of contribution they may have against
the Released Guarantors, and (2) subordinate any claims they now have,
or may hereafter have in the Collateral to the claims of Dart.
23
Agreements
NOW THEREAFTER, to induce Dart to enter into the RGL Settlement
Agreement, to enter into the RSH/HHH Loan Agreement and to make the loans
contemplated thereunder, the parties hereto hereby agree as follows:
1. Release of Released Guarantors. Each of the Releasing
guarantors irrevocably and unconditionally hereby releases each of the Released
Guarantors from any and all manner of claims, demands, damages, actions, causes
of action, contracts, agreements, charges, sums of money, claims for attorney's
fees and lawsuits of every kind and description whatsoever, in law or equity,
whether known or unknown, for contribution, or otherwise (a "Claim") under, or
in connection with, the Indemnification Agreement, that certain Settlement
Agreement dated as of August __, 1997 between RSH and HHH, and any other
agreements pursuant to which any of the Released Guarantors are jointly,
severally, or jointly and severally liable in any respect to HHH, RSH, RMH,
GGH, LGH or any entity directly or indirectly controlled by one or more of such
persons.
2. Subordination of Claims.
(a) Subordination of Claims. Any Claim, however arising,
which any Releasing Guarantor may now or hereafter have in or against or with
respect to any of the Collateral shall be subject, junior and subordinate to
any Claim that Dart or any affiliate of Dart now or hereafter has against the
Guarantors for, or with respect to any Collateral for, the obligations owing to
Dart under the RSH/HHH Loan and to any unsecured Claim or Dart or any affiliate
of Dart against any Guarantor or the Retained Partnership to the extent that
Dart or such affiliate has any secured or unsecured Claims arising in
connection with or relating to the RSH/HHH Loan. The term "Collateral" shall
mean: (i) all general and limited partnership interest or shares in Combined
Property/Forbes Limited Partnership, CP/Forbes Boulevard, Inc.,
Haft/Equities-Sully Plaza Limited Partnership, Combined Property/Ontario
Limited Partnership and 0000 Xxxxxx Xxxxx Associates Limited Partnership
(collectively, the "Collateral Entities"); and (ii) all property of and
interests in the property of the Collateral Entities and of the Retained
Partnership, whenever acquired and wherever located, that is collateral
security for the indebtedness to Dart arising under the RSH/HHH Loan,
including, without limitation, any direct or indirect interests in the Rolling
Valley, Maryland City and Sully shopping centers and the 0000 Xxxxxx Xxxxxxxxx
office building (but excluding any other property or interest of RSH, HHH or of
the Releasing guarantors that may hereafter be acquired by any of the
Collateral Entities or the Retained Partnership, if and to the extent such
acquisition was for less than fair value.
(b) Extent of Subordination. The subordinations and
priorities specified herein are applicable irrespective of the time, manner or
order of attachment or perfection of any security interest in the Collateral,
or the time or order of filing of any financing statements, or the giving or
failure to give notice of the acquisition or expected acquisition of any
purchase money security interest or other security interest. Such
subordinations and priorities shall remain effective notwithstanding the
amendment or modification of the documents governing the FSH/HHH Loan or
governing the grant of any security interest in the Collateral to secure
repayment of the indebtedness arising under the RSH/HHH Loan or the
commencement of a case by or against either Dart of any obligor under the
RSH/HHH Loan under Title 11 of the United
24
States Code or any similar insolvency or moratorium laws; except that such
subordination shall not be effective to the extent that Dart hereafter
increases the principal amount owing under the RSH/HHH Loan or extends the
maturity date thereof.
(c) Standstill. Until all of the obligations owed to
Dart, or any affiliate of Dart, under the HHH/RSH Loan have been paid in full,
no Releasing Guarantor shall accept any payment from the Retained Partnership
or any entity constituting (or the partnership interest in which, or capital
stock of which, constitute) a part of the Collateral. Each Releasing Guarantor
agrees to refrain from taking any action against the Collateral unless it shall
have obtained Dart's prior written consent or Dart shall have been repaid in
full for all amounts owing under the RSH/HHH Loan. No Releasing Guarantor
shall obtain or take any action to obtain any judgment under which it could
attach or seize any of the Collateral in any way until Dart shall have been
repaid in full for all amounts owing under the RSH/HHH Loan. If, prior to the
repayment in full of the RSH/HHH Loan, an RGH Release Party has been granted or
otherwise obtains possession of Collateral then, in addition to any obligations
or remedies imposed or provided under the Uniform Commercial Code (the "UCC")
or other applicable law, the RGL Release Parties shall hold such Collateral,
any right, title or interest therein and any proceeds thereof in trust for the
Dart Companies (the "Trust Property"), and turn over such Trust Property to the
Dart Companies as soon as practicable.
(d) Rights on Default. Each Releasing Guarantor
acknowledges that Dart has and is entitled to exercise all of the rights and
remedies of a secured creditor under the UCC with respect to the Collateral,
including, without limitation, the right to take possession of and dispose of
the Collateral after an event of default, and to accept the Collateral as
discharge of the obligations under the RSH/HHH Loan to the extent permitted
under the UCC. If Dart were to elect to sell the Collateral in a public or
private sale, conducted in accordance with the UCC, any purchaser of all or any
part of the Collateral shall take such Collateral free and clear of all rights
and interests of any of the Releasing Guarantors (including, without
limitation, any rights or interests of any of the RGL Releasing Guarantors in
the property or assets of any of the Collateral Partnerships(, and the
Releasing Guarantors shall have such rights and interests in and to the
proceeds of any such sale, after payment in full of all obligations owed to
Dart or any affiliate of Dart under the HHH/RSH Loan, as may be provided under
the UCC.
3. No Challenge to Dart Company Rights in the Collateral.
No Releasing Guarantor shall challenge the attachment, validity,
perfection, priority or extent of any Claim of Dart or any affiliate of Dart in
the Collateral or with respect to the Retained Partnership in any judicial,
administrative or alternative dispute resolution proceeding.
4. Waivers.
No delay on the part of a party hereto in exercising any right, power
or privilege granted hereunder shall operate as a waiver thereof, and no
purported waiver of any default, breach or violation of any term or provision
contained herein shall be deemed to be a waiver of such term or provision
unless the waiver is in writing and signed by the waiving party. No such
waiver shall in any event be deemed a waiver of any subsequent or other
default, breach or violation. The rights or remedies herein expressly
specified are cumulative and not exclusive of any other rights and remedies
which the parties would otherwise have.
25
5. Severability; Enforceability.
In case any provision of this Agreement shall be held to be illegal,
invalid or unenforceable under present or future laws effective while this
Agreement remains in effect, the legality, validity and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.
6. Governing Law.
This Agreement will be governed by and construed in accordance with the
laws of the Commonwealth of Virginia, without regard to its principles
concerning conflicts of law, and any actions under this Agreement may be
brought in the courts of the Commonwealth of Virginia or the United States
District Court for the Eastern District of Virginia.
7. Different Facts.
Each Releasing guarantor specifically acknowledges that the facts with
respect to which this Agreement is executed may turn out to be other than or
different from the facts now known to or believed by it to be true, and that it
therefore expressly assumes the risk of the facts turning out to be different
and agrees that this Agreement shall be in all respects effective and not
subject to termination or rescission by reason of any different facts.
8. Notices.
Notices given in connection with this Agreement shall be in writing and
be deemed to have been given when actually received by telecopy or otherwise or
five (5) days after being deposited in the United States mail, postage prepaid,
addressed to a party hereto at the address set forth below such party's
signature to this Agreement, or to such other address designated by such party
by notice to each other party.
9. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
10. Additional Parties.
HHH agrees that on and after the date hereof he shall cause any
entities that he now or hereafter controls, directly or indirectly, which
entities are or become indemnitors/guarantors under the Indemnification
Agreement to become parties hereto and to execute and deliver to Dart, the
Retained Partnership and RSH a counterpart hereof.
RSH agrees that on and after the date hereof, he shall cause any
entities that he now or hereafter controls, directly or indirectly, which
entities are or become indemnitors/guarantors under the Indemnification
Agreement to become parties hereto and to execute and deliver to Dart, the
Retained Partnership and HHH a counterpart hereof.
26
11. Amendments.
This Agreement may be amended only by a writing signed by duly
authorized representatives of all parties hereto.
In WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
DART GROUP CORPORATION
By:
---------------------------------
Name:
Title:
Address:
-----------------------------
-----------------------------
-----------------------------
COMBINED PROPERTIES/ONTARIO HAFT EQUITIES-BLADEN LIMITED
LIMITED PARTNERSHIP PARTNERSHIP
By: CP Holdings CA, Inc., General By: CP Holdings MD, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
0000 XXXXXX XXXXX ASSOCIATES XXX AND XXXXXXXX PARTNERSHIP
LIMITED PARTNERSHIP
By: CP Holdings MD, Inc., General By: CP Holdings MD, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
HAFT/EQUITIES SULLY PLAZA LIMITED PARTNERSHIP ROCK CREEK VILLAGE ASSOCIATES LIMITED
PARTNERSHIP
By: CP Holdings VA, Inc., General By: CP Holdings MD, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
COMBINED PROPERTIES/FORBES BOULEVARD LIMITED HAFT EQUITIES-ROSE HILL LIMITED PARTNERSHIP
PARTNERSHIP
By: CP/Forbes Boulevard, Inc., General By: CP Holdings VA, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
CP/FORBES BOULEVARD INC.
By:
---------------------------
Xxxxxx X. Xxxx, President
Address:
-------------------------------
-------------------------------
-------------------------------
COMBINED PROPERTIES/RESEDA 0000 XXXXXXXX XXXX LIMITED PARTNERSHIP
ASSOCIATES LIMITED PARTNERSHIP
By: CP Holdings CA, Inc., General By: CP Holdings VA, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
COMBINED PROPERTIES/MONTEBELLO LIMITED XXXXXXX COUNTY ASSOCIATES LIMITED PARTNERSHIP
PARTNERSHIP
By: CP Holdings CA, Inc., General By: CP Holdings MD, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
27
XXXX-XXX ASSOCIATES LIMITED PARTNERSHIP
By: CP Holdings VA, Inc., General
Partner
By:
-----------------------------
Xxxxxx X. Xxxx, President
Address:
-------------------------------
COMBINED PROPERTIES/SILVER HILL LIMITED ARROW LEASE ACQUISITION LIMITED PARTNERSHIP
PARTNERSHIP
By: CP Holdings MD, Inc., General By: CP Holdings MD, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
COMBINED PROPERTIES/40 WEST LIMITED PARTNERSHIP CP ACQUISITION LIMITED PARTNERSHIP
By: CP Holdings MD, Inc., General By: CP Holdings MD, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
COMBINED PROPERTIES/GREENWAY CENTER LIMITED CP/GREENBRIAR RETAIL INVESTMENTS LIMITED
PARTNERSHIP PARTNERSHIP
By: CP Holdings MD, Inc., General By: CP Greenbriar Retail, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
COMBINED PROPERTIES/XXXXXX XX/CP GREENBRIAR OFFICE INVESTMENTS LIMITED
XXXXXX PLAZA LIMITED PARTNERSHIP PARTNERSHIP
By: CP Holdings MD, Inc., General By: CP/Greenbriar Office, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
COMBINED PROPERTIES VIRGINIA PLAZA LIMITED XXXXXXXXX PLAZA LIMITED PARTNERSHIP
PARTNERSHIP
By: CP Holdings VA, Inc., General By: Xxxxxxxxx Plaza, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
COMBINED PROPERTIES/BULL RUN LIMITED CAPITAL RESOURCES LIMITED PARTNERSHIP
PARTNERSHIP
By: Bull Run, Inc., General By: Capital Resources I Corp., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
CP ACQUISITION II LIMITED PARTNERSHIP COMBINED PROPERTIES LIMITED PARTNERSHIP
By: CPALP, Inc., General By: CP Holdings MD, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
28
MCLEAN CHAIN BRIDGE LIMITED PARTNERSHIP RETAIL LEASE ACQUISITION LIMITED PARTNERSHIP
By: CP Holdings VA, Inc., General By: CP Holdings MD, Inc., General
Partner Partner
By: By:
--------------------------- -----------------------------
Xxxxxx X. Xxxx, President Xxxxxx X. Xxxx, President
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
TRAK CHICAGO LIMITED PARTNERSHIP I COMBINED PROPERTIES INCORPORATED
By: CP Holdings MD, Inc., General By:
Partner -----------------------------
Xxxxxx X. Xxxx, President
By:
--------------------------- Address:
Xxxxxx X. Xxxx, President ---------------------------------
---------------------------------
Address: ---------------------------------
----------------------------------
----------------------------------
----------------------------------
HAFT EQUITIES GENERAL LIMITED PARTNERSHIP CP/GREENBRIAR OFFICES, INC.
By: CP Holdings MD, Inc., General By:
Partner -----------------------------
By: Xxxxxx X. Xxxx, President
---------------------------
Xxxxxx X. Xxxx, President Address:
---------------------------------
Address: ---------------------------------
---------------------------------- ---------------------------------
----------------------------------
----------------------------------
SEVENTY-FIFTH AVENUE LIMITED PARTNERSHIP CP/GREENBRIAR RETAIL, INC.
By: CP Holdings MD, Inc., General By:
Partner -----------------------------
Xxxxxx X. Xxxx, President
By:
--------------------------- Address:
Xxxxxx X. Xxxx, President ---------------------------------
---------------------------------
Address: ---------------------------------
----------------------------------
----------------------------------
----------------------------------
RSH/HHH TIER II LIMITED PARTNERSHIP CPALP, INC.
By: By:
--------------------------- -----------------------------
, President Xxxxxx X. Xxxx, President
---------------
Address: Address:
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
BULL RUN, INC.
By:
---------------------------
Xxxxxx X. Xxxx, President
29
The undersigned, Xxxxxxx X. Xxxx, hereby agrees to be bound by the
terms of this Agreement personally and in his capacity as an officer and
general partner of the Combined Entities to the extent that the undersigned is
an officer or general partner of any of the Combined Entities.
------------------------------------
Xxxxxxx X. Xxxx
The undersigned, Xxxxxx X. Xxxx, hereby agrees to be bound by the terms
of this Agreement personally and in his capacity as an officer and general
partner of the Combined Entities to the extent that the undersigned is an
officer or general partner of any of the Combined Entities.
------------------------------------
Xxxxxx X. Xxxx