EXHIBIT (a)(1)
LIMITED PARTNERSHIP UNIT
CONTRIBUTION AGREEMENT
THIS LIMITED PARTNERSHIP UNIT CONTRIBUTION AGREEMENT (this "Agreement") is
entered into by and between Insignia Financial Group, a corporation organized
under the laws of the State of Delaware; Market Ventures, L.L.C., a limited
liability company organized under the laws of the State of Delaware; Liquidity
Assistance, L.L.C., a limited liability company organized under the laws of the
State of Delaware; DGP Acquisition, L.L.C., a limited liability company
organized under the laws of the State of Delaware; LP 6 Acceptance Corporation,
a corporation organized under the laws of the State of Delaware; SP I
Acquisition, L.L.C., a limited liability company organized under the laws of the
State of Delaware; SP II Acquisition, L.L.C., a limited liability company
organized under the laws of the State of Delaware; SP III Acquisition, L.L.C., a
limited liability company organized under the laws of the State of Delaware; SP
V Acquisition, L.L.C., a limited liability company organized under the laws of
the State of Delaware; SP VI Acquisition, L.L.C., a limited liability company
organized under the laws of the State of Delaware; (each individually a
"Contributing Partner" and collectively the "Contributing Partners"), and
Insignia Properties, L.P., a limited partnership organized under the laws of the
State of Delaware (the "Partnership"). This Agreement and the First Amended and
Restated Agreement of Limited Partnership of Insignia Properties, L.P. (the
"Partnership Agreement") are entered into simultaneously with each other as of
the 31st day of December, 1996 and each shall be effective as of the Closing
Date, as defined herein (notwithstanding the foregoing, the Partnership
Agreement may become effective before the date of this Agreement).
RECITALS
A. Each Contributing Partner owns limited partner interests in limited
partnerships that principally own multi- family residential housing and, to
a lesser extent, commercial properties. The identity of each such
partnership, together with the number of limited partnership units owned by
each Contributing Partner, is set forth under the name of each Contributing
Partner in Exhibit A hereto (collectively, the "Limited Partner
Interests").
B. Insignia Properties Trust, a Maryland business trust ("IPT"), was formed in
May 1996, for the purpose of qualifying to act as a real estate investment
trust under the Internal Revenue Code of 1986, as amended. IPT is a
successor by merger to Insignia Properties Corporation, a Delaware
corporation formed on January 17, 1996.
C. It is contemplated that substantially all of IPT's assets will be held in,
and substantially all of its investments will be conducted through the
Partnership, which will hold, among other things, all of the Limited
Partner Interests.
D. Accordingly, each Contributing Partner hereby proposes to contribute the
Limited Partner Interests to the Partnership in exchange for which the
Partnership will issue limited partner units to Insignia Financial Group,
Inc., a Delaware corporation ("IFG").
In consideration of the foregoing and the mutual representations,
warranties, covenants and agreements contained herein, the Contributing Partners
and the Partnership hereby agree as follows:
ARTICLE I
CONTRIBUTION OF ASSETS
1.01 Contribution of the Assets. Subject to the terms and conditions of this
Agreement, on January 1, 1997 (the "Closing Date"), each Contributing
Partner shall assign and deliver to the Partnership as its Capital
Contribution (as defined in the Partnership Agreement) all of its right,
title and interest in and to the Limited Partner Interests in exchange for
the issuance to IFG of the aggregate number of limited partnership units in
the Partnership set forth on Exhibit B hereto (collectively, the
"Partnership Interests") (the number shown on Exhibit B is subject to
adjustment based on those final valuations of the Partnership Interests as
shown in that certain Confidential Memorandum by which IPT will offer
shares of beneficial interest).
1.02 Assignment of Ownership Interest. Effective as of the Closing Date, each
Contributing Partner shall grant, assign, transfer, convey and deliver to
the Partnership, all of such Contributing Partner's right, title and
interest in and to 100% of such Contributing Partner's Partnership Interest
in the Partnership(s) free and clear of all liens, encumbrances, security
interests and competing claims.
1.03 Assumption of Obligations. By acceptance of this Agreement the Partnership
hereby agrees from and after the Closing Date to be bound by all of the
terms and provisions of the Partnership Agreements applicable to each
Contributing Partner and each Contributing Partner Partnership Interest all
as set forth on Exhibit C hereto and assumes and agrees to perform, pay and
discharge in full, when due, all of each Contributing Partner's liabilities
and obligations under the Partnership Agreements and with respect to each
Contributing Partner's Partnership Interest; provided, however, that this
assumption
shall have application only to those liabilities and obligations of each
Contributing Partner first accruing or arising on or after the Closing Date
and shall have no application to any such liabilities and obligations
accruing or arising prior to the Closing Date.
ARTICLE II
EVENTS OCCURRING ON THE CLOSING DATE
2.01 Deliveries by the Contributing Partners. In addition to the Limited Partner
Interests to be delivered to the Partnership on the Closing Date, each
Contributing Partner shall deliver the following to the Partnership on the
Closing Date, each in form and substance satisfactory to the Partnership
and, unless otherwise agreed in writing by the Partnership, dated as of the
Closing Date:
(a) A copy of the resolutions of each Contributing Partner's Board of
Directors, certified by a duly authorized officer of such Contributing
Partner, authorizing or ratifying its execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby and thereby;
(b) A certificate of a duly authorized officer of each Contributing
Partner certifying the names and true signatures of the officers of
such Contributing Partner authorized to sign this Agreement and the
other documents to be delivered hereunder and thereunder; and
(c) Such other approvals and documents as the Partnership may reasonably
request as to the legality, validity, binding effect or enforceability
of this Agreement or any other agreement or document delivered
pursuant hereto.
2.02 Effect of Contribution. On the Closing Date, upon the satisfaction of the
condition precedent set forth in Section 4.01 below, in exchange for its
Capital Contribution (i) IFG will receive each Contributing Partner's
respective Percentage Interest and (ii) the Capital Account (as defined in
the Partnership Agreement) of IFG will be credited with the amount set
forth opposite its name on Exhibit A to the Partnership Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF CONTRIBUTING PARTNERS
3.01 Conveyance of Interest. Upon the Closing Date, assuming the satisfaction of
or waiver of all conditions set forth in Article IV hereof, all of the
Contributing Partner's right, title and interest in and to the Limited
Partner Interests will be transferred to the Partnership.
3.02 Organization. Each Contributing Partner is validly existing and in good
standing under the laws of their respective states or organization.
3.03 Authority. Each Contributing Partner has the corporate power and authority
to carry on its business as now conducted, and to execute and deliver this
Agreement and to perform its obligations hereunder and thereunder. The
execution, delivery and performance by each Contributing Partner of this
Agreement have been duly authorized by all necessary corporate action; and
this Agreement has been duly executed and delivered by each Contributing
Partner and is enforceable against each Contributing Partner in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, receivership, conservatorship, reorganization, liquidation,
moratorium or similar events affecting such Contributing Partner or its
assets, or by general principles of equity.
ARTICLE IV
CONDITIONS TO CLOSING; TERMINATION
4.01 Conditions Precedent to Contributing Partners' Obligation to Close. The
obligation of the Contributing Partners to consummate the transactions
contemplated hereby are subject to the satisfaction, as of the Closing
Date, the following condition, which may be waived in whole or in part by
the Contributing Partners prior to closing. Each Contributing Partner in
its sole discretion shall be satisfied that all necessary consents,
authorizations and approvals for the consummation of the transactions
contemplated hereby have been obtained from all applicable governmental
authorities and other third parties.
4.02 Termination. In the event that the condition precedent to the Contributing
Partners' obligation to consummate the transactions contemplated hereby as
set forth above has not been satisfied on or before the Closing Date, then
in such event this Agreement shall terminate and become null and void and
of no further force and effect and neither party shall have any further
obligation to the other.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.01 Amendment and Modification. This Agreement may be amended, modified or
supplemented only by written agreement of the parties hereto.
5.02 Waiver of Compliance; Consents. Any failure of a party to comply with any
obligation, covenant, agreement or condition herein may be waived by the
other party; provided, however, that any such waiver may be made only by a
written instrument signed by the party granting such waiver.
5.03 Assignment. This Agreement and all of its provisions hereof shall be
binding upon the parties hereto and their respective successors and
permitted assigns and shall inure to the benefit of the parties hereto,
their respective successors and permitted assigns.
5.04 Expenses. Whether or not the transactions contemplated by this Agreement
shall be consummated, all fees and expenses (including all fees of counsel
and accountants) incurred by any party in connection with the negotiation
and execution of this Agreement shall be borne by such party.
5.05 Further Assurances. From time to time, at the request of each Contributing
Partner or the Partnership and without further consideration, each party,
at its own expense, will execute and deliver such other documents, and take
such other action, as each Contributing Partner or the Partnership may
reasonably request in order to consummate more effectively the transactions
contemplated hereby and to vest in the Partnership good and marketable
title to the Limited Partner Interests.
5.06 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware (without regard to its
conflicts of law doctrines). The Contributing Partners and the Partnership
each (i) irrevocably submits to the jurisdiction of any Delaware State
court or Federal court sitting in Delaware in any action arising out of
this Agreement or any instrument or document delivered hereunder, (ii)
agrees that all claims in such action may be decided in such court, (iii)
waives, to the fullest extent it may effectively do so, the defense of
inconvenient forum and (iv) consents to the service of process by mail. A
final judgment in any such action shall be conclusive and may be enforced
in other jurisdictions. Nothing herein shall affect the right of any party
to serve legal process in any manner permitted by law or affect its right
to bring any action in any other court.
5.07 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument and shall
become a binding Agreement when one or more of the counterparts have been
signed by each of the parties and delivered to the other party.
5.08 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if delivered by hand or mailed
by registered or certified mail (return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall
be specified by like notice):
If to the Contributing Partners:
Insignia Financial Group, Inc.
One Insignia Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: President
Copy to: General Counsel
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxx
If to the Partnership:
Insignia Properties, L.P.
One Insignia Financial Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: General Partner
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxx
5.09 Headings. The article and section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
5.10 Entire Agreement. This Agreement, including the exhibits, schedules, other
documents and instruments referred to herein, together with the Partnership
Agreement embody the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
5.11 Severability. If any one or more provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never
been contained herein.
5.12 Inconsistency or Conflict. In the event of any inconsistency or conflict
between any provision of this Agreement and any provision of the
Partnership Agreement, the provision of this Agreement shall govern.
5.13 Exhibits. All Exhibits attached hereto are hereby incorporated in and made
a part as if set forth in full herein.
