SPECIAL CLOSING AGREEMENT
This Special Closing Agreement is made and effective as of January 31, 1995,
between and among NYLife Government Mortgage Plus Limited Partnership
("NYLife"), H.O. Associates, Ltd. ("HOA"), Robert M. Schiffman and Edwin B.
Branch (herein collectively the "General Partners"), Markborough Development
Company Limited ("Markborough"), and Foley & Lardner, as escrow agent ("Escrow
Agent").
WHEREAS, on this date HOA sold certain real property in Hillsborough County,
Florida (the "Property"), to Richland Properties, Inc.; and
WHEREAS, in connection with such sale, NYLife, HOA, the General Partners and
Related Mortgage Corporation ("Related") executed and delivered a Release
Agreement dated this date; and
WHEREAS, the Florida Department of Revenue ("DOR"), on or about April 1,
1994, initiated an inquiry (the "Inquiry") with respect to the nonpayment of
Florida documentary stamp taxes in connection with a Subordinated Mortgage
executed by HOA to and in favor of NYLife ("Subordinated Mortgage"); and
WHEREAS, as of this date DOR has not made a final determination with respect
to the Inquiry; and
WHEREAS, on this date NYLife, Related, HOA and others entered into a Closing
and Escrow Agreement (the "Closing Agreements"), pursuant to which the Escrow
Agent thereunder is holding two $75,000.00 letters of credit, one from
Markborough and one from the General Partners, as further described on Schedule
4 of the Closing Agreement; and
WHEREAS, the parties desire to establish a mechanism to fund the payment due,
if any, should the Inquiry be determined adversely.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. If the Inquiry is determined adversely, and neither HOA nor NYLife
determine to contest such matter, but rather to pay documentary stamps, interest
thereon and penalties, if any (the "Liability"), or if contested by either party
the contest is adversely determined, then and in any such an event, NYLife shall
pay the first $35,000.00 of the Liability, and the remainder of the Liability
shall be paid 65% by NYLife and 35% by HOA.
2. As promptly as is reasonably practical after the date hereof, the General
Partners and Markborough shall deliver to Escrow Agent an amendment to their
respective letters of credit reducing the amount thereof to $17,500.00 each.
Anything to the
contrary in the Closing Agreement notwithstanding, Escrow Agent shall, and is
hereby authorized and directed, to return to NYLife the letters of credit, as so
amended, upon their receipt, provided that the Final Closing as set forth in the
Closing Agreement has occurred. The Escrow Agent shall be in receipt of said
amended letters of credit prior to any release of the original letters of credit
to the General Partners and Markborough. If the Final Closing under the Closing
Agreement does not occur, Escrow Agent shall return both the original $75,000.00
letters of credit to NYLife as provided in the Closing Agreement, and shall
return the amendments thereto to the General Partners and to Markborough,
respectively. The letters of credit, as amended, shall be held by NYLife as
security for the performance of HOA's obligations under this Special Closing
Agreement. When HOA's obligations under this Agreement are fully performed and
discharged, or if the results of the Inquiry are such that HOA has no liability
under this Agreement, NYLife shall promptly return the letters of credit to the
Escrow Agent, who shall see to their proper distribution. Until the Inquiry is
finally resolved, Markborough and the General Partners shall renew their
respective letters of credit within 20 days of their negotiated expiration dates
such that they do not expire, failing which NYLife may draw upon the expiring
letter(s) of credit and hold the proceeds thereof as security for the
performance of HOA's obligations hereunder.
3. The obligations of HOA, the General Partners and Markborough under this
Agreement are new obligations of such parties, and as such, such parties agree
that the obligations expressly set forth herein have arisen immediately after
the execution and delivery of the Release Agreement.
IN WITNESS WHEREOF, the parties have executed this Special Closing Agreement
as of the date and year first above written.
NYLife Government Mortgage Plus /s/ Robert M. Schiffman
Limited Partnership, a ------------------------------
Massachusetts limited partnership By: Robert M. Schiffman
By: NYLife Realty, Inc., its
general partner
/s/ Edwin B. Branch
By: ------------------------------
--------------------------- Edwin B. Branch
Its: Vice President
Markborough Development Company
Limited, a Texas limited
partnership, formerly known as
H.O. Associates, Ltd. Markborough Florida, Inc., a
Florida corporation
/s/ Robert M. Schiffman
- ------------------------------ By: MPI Corp., its general partner
By: Robert M. Schiffman
Its: General Partner By:
---------------------------
Its: Asst Vice President
--------------------------
/s/ Edwin B. Branch
- ------------------------------
By: Edwin B. Branch Foley & Lardner
Its: General Partner
By:
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