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all improvements on that land, all rights and interests
appurtenant to that land (collectively, the Atrium Land), and
certain other property (together, the Atrium Property). In
consideration of LBC's conveyance of the Atrium Property, ARICO
agreed to pay a purchase price of $17,100,000 by means of a
promissory note.
The Atrium Sale Agreement contained a recital stating as
follows: “Seller [LBC] desires to sell the [Atrium] Property to
Purchaser [ARICO] and Purchaser desires to purchase the Property
from Seller on the terms and conditions set forth in the
Agreement.”
Section 8.13 of the Atrium Sale Agreement states as follows:
The parties hereto hereby acknowledge and agree that
the transaction relating to the Property contemplated
by this Agreement is, for tax purposes, a purchase,
sale, and lease transaction. Furthermore, the parties
hereby agree that following the Closing, each party
shall report the transaction as a purchase, sale, and
lease on their respective income tax returns; and
specifically, that (a) Seller shall report the
transaction as a sale on its income tax return and
shall recognize the gain or loss therefrom either
currently or on an installment basis, and (b) Purchaser
shall report the transaction as a purchase on its
income tax return.
The Atrium Sale Agreement also provided that certain other
agreements would be executed by the parties and related entities
(the Atrium Sale Agreement and related agreements shall hereafter
be referred to collectively as the 1988 Atrium Transaction). One
of those agreements was an agreement titled “Atrium Lease”, dated
December 30, 1988, between LBC and LAL, as landlords, and UBD, as
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