Item 1.01. Entry into a Material Definitive Agreement
On February 5, 2020, after review by an independent director of Santa Fe
Financial Corporation ("Santa Fe" or the "Company") and the receipt of a
fairness opinion from a third-party independent firm, which states that the
contemplated transaction is fair to the shareholders of the Company, with the
aforesaid Board reviewed and resolved to accept, the Board of Directors of the
Company has approved the issuance to The InterGroup Corporation ("InterGroup")
of 97,500 shares of common stock, par value $0.10 per share, of the Company.
Before the issuance of the stock referenced in the preceding sentence,
InterGroup had the power to vote 86.3% of the voting shares of the Company,
which includes the power to vote an approximately 4% interest in the common
stock in the Company owned by InterGroup's Chairman and President pursuant to a
voting trust agreement entered into on June 30, 1998. Subsequent to this
issuance, InterGroup has the power to vote 87.3% of the issued and outstanding
common stock of the Company, which includes the power to vote an approximately
3.7% interest in the common stock in the Company under the aforementioned voting
trust agreement. Mr. Winfield, Chairman of the Board of InterGroup and the
Company, is a control person of both entities. In exchange for the issuance of
Santa Fe common stock to InterGroup, InterGroup is contributing to Santa Fe
4,460 shares of common stock (the "Common Stock") of Intergroup Woodland
Village, Inc., an Ohio corporation ("Woodland Village"). As a result of the
contribution, Woodland Village has become a wholly owned subsidiary of the
Company. The issuance and contribution are being made pursuant to a Contribution
Agreement (the "Contribution Agreement") between the Company and InterGroup,
dated February 5, 2020, a copy of which is included as Exhibit 10.1 hereto and
is incorporated by reference herein. The Contribution Agreement also contains a
provision for a potential subsequent earn out to InterGroup pursuant to terms
set forth therein.
Item 3.02. Unregistered Sales of Equity Securities
The information contained in Item 1.01 of this Current Report on Form 8-K
regarding the Contribution Agreement and the issuance of the Common Stock is
incorporated by reference in this Item 3.02. The shares of Common Stock issued
pursuant to the Contribution Agreement have been issued in reliance on an
exemption from registration under Section 4(a)(2) of the Securities Act of 1933,
as amended.
The information contained in this Current Report on Form 8-K shall not be deemed
"filed" for purposes of Section 18 of the Exchange Act, or incorporated by
reference in any filing under the Securities Act of 1933, as amended or the
Exchange Act, except as shall be expressly set forth by specific reference in
such a filing. The furnishing of the information in this Current Report on Form
8-K is not intended to, and does not, constitute a representation that such
furnishing is required by Regulation FD or that the information contained in
this Current Report on Form 8-K constitutes material investor information that
is not otherwise publicly available. This Current Report on Form 8-K and
exhibits may contain these types of statements, which are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, and which involve risks, uncertainties and reflect the Registrant's
judgment as of the date of this Current Report on Form 8-K. Forward-looking
statements may relate to, among other things, operating results and are
indicated by words or phrases such as "expects," "should," "will," and similar
words or phrases. These statements are subject to inherent uncertainties and
risks that could cause actual results to differ materially from those
anticipated at the date of this Current Report on Form 8-K. The Company
disclaims any obligation to, and will not, update any forward-looking statements
to reflect events or circumstances after the date hereof. Investors are
cautioned not to rely unduly on forward-looking statements when evaluating the
information presented within.
ITEM 9.01. Financial Statements and Exhibits
(d) Exhibits
The following exhibits are filed herewith:
Exhibit 10.1 Contribution Agreement, dated February 5, 2020, by and between
The InterGroup Corporation and Santa Fe Financial Corporation
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