Metroplex - Hilco Real Estate

Metroplex
On the Atlantic
BANKRUPTCY SALE
OFFERING MEMORANDUM
Qualifying Bid Deadline: February 16, 2016
15-Story, 126-Residence Multi-Family Building
120 Beach 26th Street, Far Rockaway, NY 11691
Contents
• Disclaimer
• Introduction & Inspection Dates
• Executive Summary
• Property Information
• Survey, Floor Plans, & Pictures
• Local Market Outlook
• Bidding Procedures
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Disclaimer
Hilco Real Estate (“Hilco”) has prepared this confidential Offering Memorandum for the purpose of providing a preliminary introduction to the real estate asset located at 120 Beach 26th Street in Far Rockaway,
Queens, New York, known as “Metroplex”. This Offering Memorandum is meant to assist you in evaluating whether or not to proceed with an in-depth investigation of this opportunity. The information
contained in this Offering Memorandum is to be used solely for evaluating your interest in submitting a bid on the asset. The Offering Memorandum and its contents are to be held strictly confidential at all
times and are not to be made available to or discussed with anyone other than those employees and advisors directly associated with your evaluation.
This Offering Memorandum does not contain all of the information that may be required to evaluate or to consider entering into any transaction. Hilco recommends that any recipient of this Offering
Memorandum conduct its own due diligence research. A Virtual Data Room containing detailed due diligence information has been assembled and is available for review and download by all parties after the
execution and approval of a non-disclosure agreement.
Hilco and its respective affiliates and representatives make no representations or warranties as to the accuracy of such information. Only those particular representations and warranties which may be made in
a definitive document when and if executed, and subject to such limitations and restrictions as may be specified, shall have any legal effect.
Hilco expressly disclaim any and all liability for any inaccuracy or for the incompleteness of any information contained herein, or in any other written or oral communication transmitted or made available to
interested parties. Hilco reserves the right to require the return of the Offering Memorandum at any time.
Under no circumstances should the Seller, its affiliates or any of their employees, customers, funding sources, or suppliers be contacted directly.
All inquiries with respect to this Offering Memorandum or requests for additional information should be directed to Hilco Real Estate, as specified below:
For more information please contact:
Hilco Global Headquarters
5 Revere Drive, Suite 320
Northbrook, IL 60062
www.hilcorealestate.com
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Jeff Azuse
Steve Madura
Senior Vice President
Hilco Real Estate, LLC
Direct: 847-418-2703
[email protected]
Senior Associate
Hilco Real Estate, LLC
Direct: 847-504-2478
[email protected]
Introduction & Inspection Dates
Under court order - Hilco Real Estate has been exclusively retained as part of the bankruptcy proceedings to offer for sale this luxury waterfront,
multi-family apartment building located at 120 Beach 26th Street in Far Rockaway, Queens, New York, known as “Metroplex”. This 15-story
building completed in 2008 includes 126 residences with high-end finishes, an 89-space parking garage, and a community common area. The
building is located directly on the coast of the Atlantic Ocean along the Rockaway Beach boardwalk and within walking distance to public transit
and neighboring parks.
Property Highlights:
- Newer construction with oceanfront views and easy access to the beach and boardwalk
- Part of a 25-year 421-A tax abatement program running through 2034
- Luxury building in a prime location with many amenities not offered by any of the area’s competition
- Original Metroplex Condominium Plan called for a sell-out of over $60,000,000
Included in this Offering Memorandum is detailed property information, pictures, local information and the Bidding Procedures. A data room
has been created on our web page which contains additional due diligence information to review prior to participating in the bidding process.
Access to the virtual data room will be provided upon receipt of a signed non-disclosure agreement available on our web page at
www.HilcoRealEstate.com/Metroplex.
Property Inspections:
12:00pm (Noon) on January 21, 28 & February 4, 11
Buyers and their experts (e.g., contractors, engineers, architects, financial advisors, etc.) are invited to inspect the property, review and obtain pertinent property
information, and speak with representatives about the bidding process.
Bid Information:
Qualifying Bid Deadline:
Tuesday, February 16, 2016 , 5:00 PM EST
Certified Funds Required to Bid:
5% Earnest Money Deposit Required with a qualifying bid
Sale Subject to Court Approval – See the Bidding Procedures located at the end of this Offering Memorandum.
Call for More Information:
Jeff Azuse – [email protected]
847.418.2703
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Steve Madura – [email protected]
847-504-2478
Executive Summary
Built in 2008, 120 Beach 26th Street, “Metroplex” is a prime 15-story, multi-family elevator apartment building totaling approximately 125,874
square feet. The building is situated on 1.03 acres and includes an interior two-story, 89-space parking garage. The building is comprised of 126
units: 54 one-bedroom, one-bathroom units and 72 two-bedroom, two-bathroom units. In addition there is a community area and former sales
office that can be adapted as amenity space for building residents. Originally, the building was constructed with the intent of being sold as
condominiums, but due to subsequent changes in market conditions, several units were rented as apartments. The building is currently vacant.
The property is ideally positioned for multiple potential uses and being vacant allows the new owner to execute a plan quickly and efficiently,
thus maximizing return on investment. Furthermore, as a result of this being a bankruptcy sale, the new owner will receive clean title free and
clear of liens and transfer taxes.
When Metroplex was originally brought to market, unit prices ranged from $293,000 to $703,225 or approximately $400/SF to $560/SF. After
Hurricane Sandy prices in the Rockaways declined, but in recent years market conditions have improved dramatically and in certain areas pricing
has risen to pre-Sandy levels. Rockaway Beach, Queens, and its seven miles of oceanfront are seeing a real estate resurgence and the immediate
area around 120 Beach 26th Street is poised to benefit from these rising prices, providing investors with an optimal time to take advantage of
this opportunity. Targeted end-users are not simply within the local neighborhoods, but affluent buyers from Brooklyn and Manhattan are
looking for more affordable vacation and weekend homes just a short subway ride away. These buyers seek properties that have the kind of city
amenities to which they are accustomed, such as rooftop decks, swimming pools, and fitness centers, all of which a property like Metroplex can
provide.
In addition to this rise in prices, recent nearby projects are selling out quickly, including Arverne By The Sea and The Beach House. Arverne By
The Sea, located 30 blocks away from Metroplex, is a joint venture between the Benjamin Companies and the Beechwood Organization.
Recently, it has sold out four new residential developments and the fifth residential development is 95% sold out. The developments include a
wide array of housing options from multi-family townhomes to mid-rise condos, and the current phase has two-family homes with prices starting
at $599,000. The recent development has brought major amenities to the area, including a brand new school, YMCA, transit plaza, and a Stop &
Shop. Similarly, The Beach House is a 43-unit condominium project that sold out and has current sales in the $415/SF range.
The rising popularity of the Rockaways, especially among young professionals, has also spawned an increase in retail and restaurant
development with new shops and eateries opening up every summer. From beach vendors to trendy restaurants, the Rockaway Beach area
offers an expanding mix of attractions for residents and visitors alike.
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Executive Summary Cont.
The Federal and local government have been committed to investing and improving the infrastructure of the Rockaways. The NYC Department of
Parks and Recreation has committed over $140,000,000 to redevelop and improve the Rockaway Beach Boardwalk. An influx of both private and
public investment is beginning to fill the surrounding area. Metroplex is well-positioned to benefit from this large scale investment in the area,
helping it to become one of the fastest growing residential neighborhoods in Queens.
Location:
Metroplex is located 20 miles from Manhattan, 17 miles from LaGuardia Airport, and 8 miles from John F. Kennedy Airport, and is accessible via
I-678, I-495, and the Rockaway Freeway. The property is served by several means of public transportation. The A-train subway stop at Beach 25th
Street is a 10-minute walk from the Property while the Q22 bus line runs east/west on Seagirt Blvd, two blocks from the Property. Additionally,
the Long Island Rail Road stops approximately 1.5 miles north of the Subject with a direct line to Jamaica, Queens (34 minutes).
Condition:
Signs of deferred maintenance are evident and the building will require some repairs and improvements. A property condition assessment is
available for download and review from our web page.
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Property Information
Address:
120 Beach 26th Street, Far Rockaway, NY 11691
Tax Block/Lots:
15817/1001-1127
Site Size:
1.03+/- AC (224’ x 195’)
Building Size:
125,874 SF (105,074 SF Residential & 20,800 SF Garage)
Type:
Multi-family building
Total Number of Units:
126 Units
Unit Mix:
54 one bedroom, one bathroom units
72 two bedroom, two bathroom units
Number of Stories:
15
Year Constructed:
2008
Zoning:
R4-1 (General Residence)
Flood Zone:
Zone AE. This property is located in an area of 100 year flooding. Measures have been
taken throughout the construction of the building to prevent future flooding.
Utilities:
Public water, sewer, natural gas, electricity, telephone, and cable. Individually
metered for electrical usage, other utilities would be provided as part of rent or
common area charges. Note, water and sewer systems are currently shutdown to the
building.
Real Estate Taxes:
421-A 25 Year Tax Abatement
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Property Information Cont.
Property Information Continued:
Frame/Exterior:
Structural steel frame with reinforced concrete or masonry floors and roofs
Exterior walls consist of brick veneer and EIFS.
Roof Covering:
Multi-tiered, flat asphalt four-ply built-up roofing.
Note: Building is designed to allow tenant access to the roof and the roof membrane is not
protected. An unfinished pool is also located on the upper level of the roof.
Interior Fixtures/Finishes:
The interior of the living units consists of painted gypsum board walls and ceilings.
Flooring is a mixture of wood and tile.
Interior lighting fixtures consist primarily of incandescent fixtures with some
fluorescent fixtures in the kitchens and bathrooms.
Typical bathroom fixtures include a floor mounted tank-type toilet, a lavatory
with a vanity, and a shower/bathtub with a ceramic tile surround.
The kitchens are equipped with wood cabinets, and granite countertops.
Note: An unspecified number of the units and common areas on multiple floors of the building have
been damaged due to pipe bursts and flooding. The remaining units appear to be in good
condition, requiring cleanup and minor repairs.
Appliances:
The appliances in the living units include natural gas ranges/ovens, refrigerators,
dishwashers, microwave ovens, and hook-ups for washing machines and dryers in
each unit. Some are stainless steel while others are white.
Note: Some units do not contain a full set of kitchen appliances.
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Property Information Cont.
Property Information Continued:
Elevators:
Two traction elevators, each with a weight capacity of 2,500 lbs service all floors.
Elevator machinery is located on the roof.
HVAC:
Heat is provided through a closed-loop hot water system provided by two natural gas
fired boilers. Hot water is circulated to dwelling unit baseboard fin-tubes by two 15HP B&G pumps. Air conditioning for the dwelling units is provided by through-wall
window air conditioning units.
Electrical:
Electrical service is provided from a pad-mounted transformer located near the
entrance to the management/leasing office. The main service to the building consists
of 2,500-amps 208/Y/120 volts and each living unit is provided 100 amperes.
Fire Protection:
Fire protection is provided by a wet-pipe fire sprinkler and stand-pipe system for the
common areas and units, while a dry-pipe system is used in the parking garage. The
system is complete with flow detection devices, deluge valves, air compressor, jockey
pump, fire department connections, and a fire pump mated to a 50-HP electric motor
that is controlled by a Hubbell manufactured fire pump controller.
Fire alarms consisted of hard-wired smoke detectors located in the dwelling units and
common areas. Battery pack emergency lighting, portable fire extinguishers, and a
central fire alarm panel are also included. Note, the fire protection system is
currently not operational.
Parking:
A reinforced concrete, ramp entry parking garage occupies the majority of the first
floor and a portion of the second flood. There are a total of 89 parking spaces,
including 60 spaces on the first floor and 29 spaces on the second. The garage is
unheated. Security is provided by overhead doors at the entrance to the building as
well as an automated gate system.
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Property Information - 421-A Tax Abatement Program
This property operates under a 25-year 421-A tax abatement program, which promotes multi-family residential
construction. The abatement program provides a declining property tax exemption based on the new value created. The
program is administered by the NYC Department of Housing Preservation and Development (HPD) and the Department of
Finance. According to the NYC Department of Finance, the building’s tax abatement expires in June 2034. During the first 21
years, the abatement provides for a 100% exemption on real estate taxes arising from the increase in assessed value on the
new construction. In the final 4 years, the exemption is reduced by 20% with the property fully taxable in year 26, as
detailed below:
Abatement Phase-Out Schedule
Benefit Year
Ending
% Tax Exemption
1-21
June 2009-June 2030
100%
22
June 2031
80%
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June 2032
60%
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June 2033
40%
25
June 2034
20%
The property’s 421-A tax abatement benefit has approximately 18 years remaining with a formal expiration of June 30,
2034; as such there are no taxes due on improvements.
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Tax Map
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Survey
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Property Photos
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Property Photos
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Aerial Area View
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1st Floor Plan
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2nd Floor Plan
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3rd Floor Plan
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4th-6th Floor Plan
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7th Floor Plan
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8th-11th Floor Plan
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12th Floor Plan
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13th-15th Floor Plan
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Far Rockaway, Queens, NY – Local Market Outlook
Queens:
Metroplex is situated within Far Rockaway Queens. Queens is the largest of the five boroughs in physical size, covering 109 square miles and is
the second most populous, with just over 2.2 million residents, based on the 2010 Census. While other areas such as Brooklyn have seen high
rates of new construction and redevelopment, rising real estate values in those areas are helping to make Queens an attractive alternative not
only due to its proximity to Manhattan but also its access to beaches and suburban Long Island. Queens also offers a rich public transit and
roadway transportation infrastructure.
LaGuardia and John F. Kennedy Airports are both located in Queens. These airports represent two of the nation's ten largest and busiest, and
afford unsurpassed air transportation for the borough residents and businesses. Travelers can fly directly from Queens to more places in the
world than any other east coast state.
Another positive economic trend is the increase in new housing that provides middle and upper middle income residents with modern
apartments and townhouses to help alleviate the chronic city housing shortage. The stabilization and renewal of neighborhoods has increased
property values and has physically improved the condition of the housing in the area. Housing comprises the majority of land uses in Queens.
Far Rockaway:
The Far Rockaway community is best known for its miles of sandy beaches and coastlines along the Atlantic Ocean, which attract more than four
million beachgoers from the local area and the region each summer. After Hurricane Sandy, more than $140 million has been invested to repair
and restore Rockaway Beach. The renovations included reconstruction and replacement of the boardwalk, new beach buildings including public
restrooms and lifeguard stations, and new shoreline protection and anti-erosion measures were created. Additionally, Rockaway Park recently
underwent a $30 million renovation and a new Far Rockaway Library is scheduled to open in 2016. Sources of private and public investment have
helped fund new growth for businesses, residents, and the community in general.
Most of the residential real estate in this growing area is owner occupied. Demand for new apartment development remains high and has great
potential. There have been several recent apartment and housing developments in the area, each of which have exhibited impressive absorption
rates. Far Rockaway offers strong potential for growth in terms of population, real estate development, and the local economy.
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Area Overview
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BIDDING PROCEDURES
This sale is governed by the following
Bidding Procedures that have been
approved by the Bankruptcy Court.
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BIDDING PROCEDURES
OVERVIEW:
On May 28, 2015, Metroplex on the Atlantic, LLC, as Debtor and Debtor in possession (collectively, the “Debtor”) filed a voluntary petition for
relief under chapter 11 of the United States Code (the “Bankruptcy Code”).
The Debtor and Secured Creditor (“Secured Creditor”) have agreed to a plan and are seeking to sell the Debtor’s property located at 120 Beach
26th Street, Far Rockaway, Queens, NY 11691(the “Property”) to the highest or best bidder subject to the Secured Creditor’s right to credit bid.
On January 8, 2016, the United States Bankruptcy Court for the Eastern District of New York entered an order (the “Bidding Procedures Order”),
which, among other things, authorized the Debtor to solicit bids and approved these procedures (the “Bidding Procedures”) for the
consideration of the highest or otherwise best price for the Property (“Property”), on the terms and conditions set forth herein.
These Bidding Procedures describe, among other things: (A) the procedures for bidders to submit bids for the Property; (B) the manner in which
bidders and bids become Qualified Bidders and Qualified Bids (each as defined below); (C) the negotiation of bids received; (D) the conduct of
one or more subsequent auctions (an “Auction”); and (E) the ultimate selection of the Successful Bidder(s) (as defined below) and Court
approval thereof (collectively, the “Bidding Process”).
The Debtor and Secured Creditor reserve the right to extend any of the bidding deadlines or other dates set forth in the Bidding Procedures
without further Order of the Bankruptcy Court, subject to providing notice as described below.
SUMMARY OF IMPORTANT DATES:
February 16, 2016, at 5:00 p.m. EST
Qualifying Bid Deadline
February 19, 2016, at 5:00 p.m. EST
Deadline for Debtor and Secured Creditor to inform Bidders that their bid qualified for the next
phase of the sales process per these Bidding Procedures (the “Designation Deadline”).
February 24, 2016 2:00 p.m. EST
Auction - Auction Location: To Be Determined
STEPS TO PARTICIPATE IN THIS OFFERING:
1)
2)
3)
4)
Review the Due Diligence information, including the Asset Purchase Agreement, located in the data room.
Inspect the Property -- a number of inspection dates will be provided to tour and inspect the Property.
Submit by February 16, 2016 your qualifying bid on the approved Asset Purchase Agreement along with a 5% earnest money deposit.
If your bid qualifies you will be invited to either submit a best and final bid, or participate in an auction on February 24, 2016.
The following procedures describe in more detail the requirements and terms of participation.
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BIDDING PROCEDURES – Cont.
FORM AND CONTENT OF A QUALIFED BID:
A bid is a signed asset purchase agreement (which form can be found in the Hilco Real Estate’s data room) from a Potential Bidder received by
the Qualifying Bid Deadline that identifies the purchaser by its legal name (including any equity holders or other financial backers, if the Potential
Bidder is an entity formed for the purpose of submitting bids or consummating a sale transaction), and any other party that will be participating
in connection with the bid or the sale transaction, and includes, at a minimum, the following information (each, a “Bid”):
1) Marked Agreement. Each Bid must include a copy of an asset purchase agreement reflecting the terms and conditions of its Bid, which
agreement must be marked to show any proposed amendments and modifications, if any, to the form of asset purchase agreement posted by
the Debtor in the Data Room (the “Marked Agreement”).
2) Unconditional Offer. A statement that the Bid is formal, binding and unconditional (except for those conditions expressly set forth in the
applicable Marked Agreement) and is not subject to any due diligence or financing contingency and is irrevocable until the first business day
following the closing of the proposed sale transaction, except as otherwise provided in these Bidding Procedures.
3) Form of Consideration. A statement confirming that the Bid is based on an all-cash offer.
4) Purchase Price
5) Adequate Assurance Information. Information supporting the Potential Bidder’s ability to comply with the requirements of the asset purchase
agreement, including the Potential Bidder’s financial wherewithal and willingness to perform under any contracts that are assumed and assigned
to the Potential Bidders.
A Potential Bidder must also accompany its Bid with: (A) a Deposit (as defined below); (B) the contact information of the specific person(s) whom
the Debtor, Secured Creditor or their advisors should contact in the event that they have any questions or wish to discuss the bid submitted by
the Potential Bidder; and (C) written evidence of available cash, a commitment for financing (not subject to any conditions other than those
expressly set forth in the applicable Marked Agreement) and such other evidence of ability to consummate the transaction.
The submission of a Bid by the Qualifying Bid Deadline shall constitute a binding and irrevocable offer to acquire the Property or other assets
reflected in such Bid.
The Secured Creditor under these Bidding Procedures is considered a Qualified Bidder.
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BIDDING PROCEDURES – Cont.
DEPOSIT:
To qualify as a Qualified Bid (as defined below), each Bid must be accompanied by a good faith cash deposit in the amount of five percent (5%) of
the proposed purchase price (the “Deposit”), to be deposited, prior to the Qualifying Bid Deadline, with an escrow agent selected by the Debtor
and Secured Creditor (the “Escrow Agent”) pursuant to the escrow agreement to be provided by the Debtor to the Potential Bidders (the
“Escrow Agreement”).
REVIEW OF BIDS:
The Debtors’ real estate advisor, Hilco Real Estate, LLC, will deliver, within one (1) business day after receipt thereof, copies of all Bids to the
Debtor and Secured Creditor. The Debtor and Secured Creditor will evaluate timely submitted bids, and may engage in negotiations with
Potential Bidders who submitted Bids complying with the preceding paragraphs as the Debtor and Secured Creditor deem appropriate in the
exercise of their business judgment, based upon the Debtor and Secured Creditor’s evaluation of the content of each Bid. In evaluating the bids,
the Debtor and Secured Creditor may take into consideration the following nonbinding factors:
1. the amount of the Bid;
2. the value to be provided to the Secured Creditor under the agreed to plan;
3. the transaction structure and execution risk, including conditions to, timing of and certainty of closing, termination provisions, availability of
financing and financial wherewithal to meet all commitments, and required governmental or other approvals; and
4. any other factors the Debtor and Secured Creditor may reasonably deem relevant.
DESIGNATION OF QUALIFIED BIDDERS:
A bid will be considered a “Qualified Bid,” and each Potential Bidder that submits a Qualified Bid will be considered a “Qualified Bidder,” if the
Debtor and Secured Creditor determine that such Bid meets the requirements set forth in these Bidding Procedures.
The Debtor and Secured Creditor reserve the right to work with any Bidder in advance of the Auction to cure any deficiencies in a Bid that is not
initially deemed a Qualified Bid. If a Bid is received and, in the Debtor and Secured Creditor’s judgment, it is not clear whether the Bid is a
Qualified Bid, the Debtor and Secured Creditor may consult with the Potential Bidder and seek additional information in an effort to establish
whether or not the Bid is a Qualified Bid.
The Debtor and Secured Creditor, in their sole discretion, will have the right to determine that a Bid is a Qualified Bid or not a Qualified Bid.
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BIDDING PROCEDURES – Cont.
PRE-AUCTION PROCEDURES:
Once the Bids are qualified, the Debtor and Secured Creditor may ask Qualified Bidders to submit best and final bids, or the Determination and
Announcement of a Baseline Bid and the Auction will be made.
The Debtor, Secured Creditor, and Real Estate Advisor shall make a determination regarding:
(A) the time and place for the Auction;
(B) the highest or best Qualified Bid to serve as the starting point at the Auction
Between the date the Debtor and Secured Creditor notify a Potential Bidder that it is a Qualified Bidder and is invited to participate in the
Auction, the Debtor and Secured Creditor may discuss, negotiate or seek clarification of any Qualified Bid from a Qualified Bidder. Without the
written consent of the Debtor and Secured Creditor, a Qualified Bidder may not modify, amend or withdraw its Qualified Bid, except for
proposed amendments to increase the purchase price or otherwise improve the terms of the Qualified Bid for the Debtor and Secured Creditor,
during the period that such Qualified Bid remains binding as specified herein; provided that any Qualified Bid may be improved at the Auction as
set forth herein.
Notwithstanding anything to the contrary contained herein, the Debtor and Secured Creditor may elect, in their reasonable discretion, to adjourn
any Auction.
FAILURE TO RECEIVE ONE OR MORE QUALIFIED BIDS:
If Debtor’s Real Estate Advisor does not receive one or more Qualified Bids by the Qualifying Bid Deadline, the Debtor and Secured Creditor may
cancel the Auction, and shall file and serve, by February 22, 2016 at 4:00 p.m. (Eastern Time), a notice indicating that the Auction has been
cancelled. Although, the Secured Creditor’s right to credit bid shall remain in effect.
AUCTION PROCEDURES:
If there are two or more Qualified Bids for the Auction, the Debtor and Secured Creditor may conduct an Auction on February 24, 2016 at 2:00
p.m. (Eastern Time), at a location to be determined and announced, or such other time as the Debtor and Secured Creditor, mutually agree. Only
a Qualified Bidder will be eligible to participate at an Auction, subject to such limitations as the Debtor and Secured Creditor may impose in good
faith. Professionals and/or other representatives of the Debtor and Secured Creditor will be permitted to attend and observe an Auction.
At any Auction, Qualified Bidders will be permitted to increase their bids. For each Baseline Bid, bidding will start at the purchase price and terms
proposed in the applicable Baseline Bid, and will proceed thereafter in increments of $100,000 of the applicable Baseline Bid (a “Minimum
Overbid Amount”).
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BIDDING PROCEDURES – Cont.
The Debtor and Secured Creditor may adopt rules for an Auction at any time that they reasonably determine to be appropriate to promote the
goals of the Bidding Process and are not inconsistent with these Bidding Procedures. At the start of an Auction, the Debtor and Secured Creditor
shall describe the terms of the applicable Baseline Bid. Any rules developed by the Debtor and Secured Creditor will provide that all bids in a
particular Auction will be made and received in one room, on an open basis, and all other bidders participating in that Auction will be entitled to
be present for all bidding and that all material terms of each Qualified Bid submitted in response to the Baseline Bid or to any successive bids
made at the Auction will be fully disclosed to all other bidders throughout the entire Auction. Each Qualified Bidder will be permitted a
reasonably amount of time to respond to the previous bid at the Auction.
The Debtor and Secured Creditor reserve the right to, and may, reject at any time before entry of the relevant Sale Order any bid that, in the their
judgment, is: (A) inadequate or insufficient; or (B) not in conformity with the requirements of the Bankruptcy Code, these Bidding Procedures or
the terms and conditions of the applicable sale transaction.
Prior to the conclusion of an Auction, the Debtor and Secured Creditor, will: (A) review and evaluate each bid made at the Auction on the basis of
financial and contractual terms and other factors relevant to the sale process, including those factors affecting the speed and certainty of
consummating a sale transaction; (B) determine the highest or best bid (a “Successful Bid”); (C) determine which Qualified Bid is the next highest
or best bid from the Auction (the “Back-Up Bid”); and (D) notify all Qualified Bidders participating in an Auction, prior to its conclusion, the
successful bidder for the Auction (the “Successful Bidder”), the amount and other material terms of the Successful Bid and the identity of the
party that submitted the Back-Up Bid for the Auction (the “Back-Up Bidder”).
Each Qualified Bidder shall be required to confirm, both before and after the Auction, that it has not engaged in any collusion with respect to the
submission of any bid, the bidding or the Auction.
POST-AUCTION PROCESS:
The Successful Bidder and the Back-Up Bidder shall, within one (1) business day after the close of the Auction, submit to the Debtor and Secured
Creditor fully executed revised documentation memorializing the terms of the Successful Bid and the Back-Up Bid. Promptly following the
submission of such documentation, the Debtor and Secured Creditor shall file with the Bankruptcy Court notice of the Successful Bid and
Successful Bidder. The Successful Bid may not be assigned to any party without the consent of the Debtor and Secured Creditor.
At a Sale Hearing, the Debtor and Secured Creditor will present a Successful Bid to the Bankruptcy Court for approval.
The Successful Bidder will be required to close on the transaction on March 24, 2016.
Unless otherwise required pursuant to the Debtor’s and Secured Creditor’s fiduciary duties, the Debtor and Secured Creditor shall not consider
any bids submitted after the conclusion of the Auction.
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BIDDING PROCEDURES – Cont.
TREATEMENT AND RETURN OF DEPOSITS:
Potential Bidders
Within three (3) business days after the Designation Deadline, the Escrow Agent shall return to each Potential Bidder that was determined not to
be a Qualified Bidder, such Potential Bidder’s Deposit, plus any interest accrued thereon. Upon the authorized return of such Potential Bidder’s
Deposit, the bid of such Potential Bidder shall be deemed revoked and no longer enforceable.
Qualified Bidders
The Deposit of a Qualified Bidder will be forfeited to the Secured Creditor if (A) the applicable Qualified Bidder attempts to modify, amend or
withdraw its Qualified Bid, except as permitted by these Bidding Procedures, during the time the Qualified Bid remains binding and irrevocable
under these Bidding Procedures, or (B) the Qualified Bidder is selected as the Successful Bidder and fails to enter into the required definitive
documentation or to consummate the transaction according to these Bidding Procedures and the terms of the applicable transaction documents
with respect to the Successful Bid. The Escrow Agent shall release the Deposit by wire transfer of immediately available funds to an account
designated by the Secured Creditor two (2) business days after the receipt by the Escrow Agent of a joint written notice by an authorized officer
of the Secured Creditor stating that the Qualified Bidder has breached or failed to satisfy its obligations or undertakings.
With the exception of the Deposit of a Successful Bidder and a Back-Up Bidder, the Escrow Agent shall return to any other Qualified Bidder any
Deposit, plus any interest accrued thereon, three (3) business days after the execution by the Successful Bidder and the Debtor of the
documentation memorializing the Successful Bid, but in no event later than seven (7) business days after the conclusion of a Sale Hearing.
Back-Up Bidder
The Escrow Agent shall return a Back-Up Bidder’s Deposit, plus any interest accrued thereon, within three (3) business days after the closing of
the Successful Bidder.
The Successful Bidder
The Deposit of a Successful Bidder shall be applied against the Purchase Price of such Successful Bidder upon the consummation of the
transaction proposed in the applicable Successful Bid.
Joint Notice to Escrow Agent
The Debtor and, as applicable, the Potential Bidder, Qualified Bidder, and/or Back-Up Bidder agree to execute an appropriate joint notice to the
Escrow Agent for the return of any Deposit, to the extent such return is required by these Bidding Procedures. If either party fails to execute such
written notice, the Deposit may be released by an order of the Bankruptcy Court.
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BIDDING PROCEDURES – Cont.
CONSENT TO JURISDICTION AND AUTHORITY AS CONDITION TO BIDDING:
All Potential Bidders shall be deemed to have (A) consented to the core jurisdiction of the Bankruptcy Court to enter any order or orders, which
shall be binding in all respects, in any way related to the Bidding Procedures, the Auction, or the construction and enforcement of any agreement
or any other document relating to the sale transaction, (B) waived any right to a jury trial in connection with any disputes relating to the Bidding
Procedures, the Auction, or the construction and enforcement of any agreement or any other document relating to the sale transaction, and (C)
consented to the entry of a final order or judgment in any way related to the Bidding Procedures, an Auction, or the construction and
enforcement of any agreement or any other document relating to the sale transaction if it is determined that the Bankruptcy Court would lack
Article III jurisdiction to enter such a final order or judgment absent the consent of the parties.
RESERVATION OF RIGHTS:
The Debtor and Secured Creditor reserve the right, in their reasonable discretion and subject to the exercise of their business judgment, to alter
or terminate these Bidding Procedures, to waive terms and conditions set forth herein with respect to all potential bidders, extend the deadlines
set forth herein, alter the assumptions set forth herein, conditions and deadlines of the Bidding and Auction Process to promote further bids
and/or to terminate discussions with any and all prospective acquirers and investors (except for the Buyer) at any time and without specifying
the reasons therefor, in each case to the extent not materially inconsistent with these Bidding Procedures and/or the Bidding Procedures Order;
provided further that the Debtor and Secured Creditors exercise of their discretion in evaluating bids and administering the Bidding and Auction
Process does not permit, and shall not be construed as permitting, the Debtor and Secured Creditor to materially deviate from the procedures,
terms, conditions and protections set forth in these Bidding Procedures and/or the Bidding Procedures Order.
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For Access to the Data Room Please visit our web page at www.HilcoRealEstate.com/Metroplex or Call or Email:
Jeff Azuse
(Direct) 847-418-2703
(Cell) 773-456-5032
[email protected]
Steve Madura
(Direct) 847-504-2478
(Cell) 630-400-1123
[email protected]
Hilco Global Headquarters
5 Revere Drive, Suite 320
Northbrook, IL 60062 USA
www.hilcorealestate.com
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