AGREEMENT REGARDING CERTAIN ASSETS
THIS AGREEMENT REGARDING CERTAIN ASSETS (this "AGREEMENT") is entered
into and dated as of July 18, 1997 (the "SIGNING DATE") between Angeles
Mortgage Investment Trust, an unincorporated California business trust
("AMIT"), and Insignia Financial Group, Inc., a Delaware corporation ("IFG").
AMIT and IFG are sometimes collectively referred to as the "PARTIES," and
individually referred to as a "PARTY."
RECITALS
A. Capitalized terms used in this Agreement, but not otherwise defined,
shall have the meanings set forth in that certain Agreement and Plan
of Merger dated as of the Signing Date among AMIT, Insignia Properties
Trust, IFG and MAE GP Corporation (the "MERGER AGREEMENT").
B. In furtherance of and in connection with the transactions contemplated
by the Merger Agreement, the Parties desire to provide for, among
other things, an arrangement pursuant to which IFG may purchase
certain assets of AMIT in order to assist AMIT in qualifying as a
diversified investment company within the meaning of Section
368(a)(2)(F)(ii) of the Code upon the consummation of such purchase (a
"DIVERSIFIED INVESTMENT COMPANY").
AGREEMENT
NOW, THEREFORE, for good, valid and binding consideration, the receipt
and sufficiency of which are hereby acknowledged, each Party, intending to be
legally bound, hereby agrees as follows:
ARTICLE 1.
PURCHASE OF CERTAIN ASSETS
Section 1.1 Purchase of Certain Assets. On the terms and subject to
the conditions contained in this Agreement, at the Closing (as defined below)
AMIT shall sell, assign, transfer and deliver to IFG, and IFG shall purchase,
receive and accept from AMIT, all right, title and interest (free of all liens
and encumbrances) in and to one or more whole loans, or senior participation
interest therein (to the extent permitted by the applicable loan agreement), to
be selected by IFG, to the extent necessary and in an amount sufficient to
qualify AMIT as a Diversified Investment Company (collectively, the "PURCHASE
ASSETS"); provided, however, that IFG shall have no obligation pursuant to this
Agreement to purchase from AMIT any Purchase Assets if the aggregate amount of
the Purchase Price (as defined below) of the assets which must be sold in order
to qualify AMIT as a Diversified Investment Company (a) is greater than
thirteen million dollars ($13,000,000) or (b) in connection with any other
assets transferred or otherwise disposed of after the Signing Date and not
reinvested in the ordinary course of AMIT's business, would violate, in the
opinion of IFG and its counsel, the "continuity of business enterprise"
requirement as defined in Treasury Regulation Section 1.368-1(d)(3).
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Section 1.2 Option to Purchase Certain Assets. To the extent that the
aggregate amount of the Purchase Price of the assets which must be sold in
order to qualify AMIT as a Diversified Investment Company is greater than
thirteen million dollars ($13,000,000), AMIT hereby grants to IFG an option to
purchase from AMIT all right, title and interest (free of all liens and
encumbrances) in and to one or more loans, or participation interest therein
(to the extent permitted by the applicable loan agreement), to be selected by
IFG, to the extent necessary and in an amount sufficient to qualify AMIT as a
Diversified Investment Company (such assets and the Purchase Assets are
sometimes collectively referred to as the "ASSETS").
Section 1.3 Purchase Price.
(a) Purchase Price. The purchase price for the Assets shall be an
amount equal to the fair market value of such Assets as of the Closing
Date (as defined below); provided, however, that in no event shall such
purchase price of any Asset be less than the net book value of such Asset
(the "PURCHASE PRICE").
(b) Payment of Purchase Price. The Purchase Price shall be payable by
IFG to AMIT on the Closing Date by wire transfer of immediately available
funds to a bank account which shall be specified by AMIT no later than
three (3) business days prior to the Closing Date.
Section 1.4 Closing. The consummation of the transactions contemplated
by this Agreement (the "CLOSING") shall take place at the offices of GGFC&M,
1900 Avenue of the Stars, Suite 2100, Los Angeles, California, on the business
day immediately prior to the consummation of the transactions contemplated by
the Merger Agreement (the "CLOSING DATE").
Section 1.5 Identification of Assets. AMIT shall provide to IFG, not
later than thirty (30) days prior to the Closing Date, all documents necessary
for IFG to calculate the aggregate amount of the assets owned by AMIT which
must be sold in order to qualify AMIT as a Diversified Investment Company. IFG
shall deliver to AMIT, not later than fifteen (15) days prior to the Closing
Date, a written notice which specifically identifies the particular assets
which will constitute the Assets and sets forth the Purchase Price.
Section 1.6 Term. This Agreement shall terminate upon the earlier to
occur of the Closing or the termination of the Merger Agreement.
Notwithstanding any provision to the contrary except for Section 5.1 (if
applicable), no Party shall have any further obligation whatsoever pursuant to
or under this Agreement immediately upon the termination of the Merger
Agreement.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF AMIT
AMIT represents and warrants to IFG that the statements contained in
this Article 2 are correct and complete as of the Signing Date and will be
correct and complete as of the Closing Date.
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Section 2.1 Organization. AMIT is an unincorporated business trust
duly formed and validly existing under the laws of the State of California, and
has taken no action which would cause its dissolution.
Section 2.2 Authority Relative to Transactions. AMIT has all requisite
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance by AMIT of this
Agreement and the consummation by AMIT of the transactions contemplated hereby
have been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and legally binding obligation of AMIT, enforceable against
AMIT in accordance with its terms and conditions.
Section 2.3 Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which AMIT is subject or any
provision of the charter or bylaws of AMIT or (ii) except for the Merger
Agreement, conflict with, result in a breach or the acceleration of, constitute
a default under, create in any Person the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument or other arrangement to which AMIT is a party or by which
it is bound or to which any of its assets is subject (or result in the
imposition of any lien upon any of its assets).
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF IFG
IFG represents and warrants to AMIT that the statements contained in
this Article 3 are correct and complete as of the Signing Date and will be
correct and complete as of the Closing Date.
Section 3.1 Organization. IFG is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
Section 3.2 Authority Relative to Transactions. IFG has all requisite
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance by IFG of this
Agreement and the consummation by IFG of the transactions contemplated hereby
have been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and legally binding obligation of IFG, enforceable against
IFG in accordance with its terms and conditions.
Section 3.3 Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which IFG is subject or any
provision of the charter or bylaws of IFG or (ii) conflict with, result in a
breach or the acceleration of, constitute a default under, create in any Person
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license,
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instrument or other arrangement to which IFG is a party or by which it is bound
or to which any of its assets is subject (or result in the imposition of any
lien upon any of its assets).
ARTICLE 4.
CONDITIONS PRECEDENT TO CLOSING
Section 4.1 Conditions to Obligations of IFG. The obligation of IFG to
consummate the transactions contemplated by this Agreement is subject to
satisfaction or waiver of each of the conditions set forth in this Section 4.1.
(a) Shareholder Approval. The Merger Agreement shall have received
the requisite approval from the shareholders of each of IPT and AMIT.
(b) Accuracy of Representations and Warranties. The representations
and warranties made by AMIT in this Agreement shall be true and correct as
of the Closing Date.
(c) Opinion of Counsel. IFG shall have received an opinion of AGSH&F
addressed to IFG dated as of the Closing Date, in form reasonably
satisfactory to IFG, that, after giving effect to the transactions
contemplated by this Agreement, based upon certificates and letters
acceptable to AGSH&F and subject to customary exceptions, assumptions and
qualifications, AMIT should qualify as a Diversified Investment Company.
(d) Consents. AMIT shall have obtained all consents and approvals
necessary to transfer the Assets free and clear of all liens and
encumbrances.
(e) Deliveries. AMIT shall have delivered to IFG:
(i) Such executed bills of sale, endorsements, assignments,
registrations and other instruments of transfer and conveyance, all
in form and substance reasonably satisfactory to counsel for IFG, as
shall be effective to vest in IFG all right, title and interest in
and to the Assets, free and clear of all liens and encumbrances;
(ii) A written acknowledgement from AMIT that, to the best of
its knowledge, the transfer of Assets as contemplated by this
Agreement shall be sufficient to qualify AMIT as a Diversified
Investment Company; and
(iii) Such other documents, instruments and certificates as IFG
may reasonably request for the transactions contemplated by this
Agreement.
Section 4.2 Conditions to Obligations of AMIT. The obligation of AMIT
to consummate the transactions contemplated by this Agreement is subject to
satisfaction or waiver of each of the conditions set forth in this Section 4.2.
(a) Shareholder Approval. The Merger Agreement shall have received
the requisite approval from the shareholders of each of IPT and AMIT.
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(b) Accuracy of Representations and Warranties. The representations
and warranties made by IFG in this Agreement shall be true and correct as
of the Closing Date.
(c) Opinion of Counsel. IFG shall have received the opinion specified
in Section 4.1(c).
(d) Deliveries. IFG shall have delivered to AMIT:
(i) The Purchase Price; and
(ii) Such other documents, instruments and certificates as AMIT
may reasonably request for the transactions contemplated by this
Agreement.
ARTICLE 5.
MISCELLANEOUS
Section 5.1 Remedy for Breach of Section 1.1. Assuming that (a) all
conditions to IFG's obligation to acquire the Purchase Assets have been
satisfied or waived by IFG and (b) AMIT is not then in default of any of its
obligations hereunder, then in the event IFG breaches or fails to perform in
all material respects its obligations set forth in Section 1.1 hereof, IFG will
not, and will cause MAE and its Affiliates (as such term is defined in the IFG
Confidentiality Agreement) (collectively, the "IFG Group") not to, directly or
indirectly, through representatives or otherwise, for the period ending 18
months from the Signing Date:
(a) own or acquire (whether by tender offer or otherwise) more than
9.8% (aggregating all holdings of the IFG Group for this purpose) of the
issued and outstanding shares of AMIT Class A;
(b) vote any of the shares of AMIT Class A or AMIT Class B in any
election of AMIT's board of trustees except in accordance with the vote of
the holders of a majority of the shares of AMIT Class A held by
shareholders who are not members of the IFG Group; or
(c) solicit proxies from, or present any proposals to, AMIT's
shareholders with respect to any matter which a majority of AMIT's board
of trustees have not approved in advance.
Section 5.2 Severability. If any provision of this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement and the
application of such provision to any other part or to any other circumstance
shall not be affected or impaired thereby.
Section 5.3 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the Parties; provided, however, that this Agreement may
not be assigned by any Party without the prior written consent of the other
Party. Notwithstanding the immediately preceding sentence, IFG may assign this
Agreement to any controlled affiliate of IFG (other than IPT or IPLP) with the
prior written consent of AMIT, which consent shall not be unreasonably
withheld; provided,
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however, that IFG shall remain liable for the payment of the Purchase Price in
the event that any permitted assign of IFG fails to pay in full the Purchase
Price.
Section 5.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall for all purposes be deemed to be an
original and all of which when taken together shall constitute the same
instrument.
Section 5.5 Headings. The captions and headings used in this Agreement
are inserted for convenience only, and shall not be deemed to constitute part
of this Agreement or to affect the construction or interpretation hereof.
Section 5.6 Waiver. Any of the terms or conditions of this Agreement
may be waived in writing at any time by the Party which is entitled to the
benefits thereof. No waiver of any provision of this Agreement shall be deemed
or shall constitute a waiver of such provision at any time in the future or a
waiver of any other provision hereof.
Section 5.7 No Third-Party Beneficiaries. Nothing in this Agreement,
express or implied, shall create or confer upon any Person, other than the
Parties or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities.
Section 5.8 Notices. Except as otherwise provided herein, any notice,
request, instruction, consent or other document required or permitted to be
given pursuant to this Agreement shall be in writing and delivered personally,
by telecopy, by a nationally-recognized overnight courier service or by
registered or certified mail, postage prepaid, as follows:
If to AMIT:
Angeles Mortgage Investment Trust
000 Xxxxx Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxxxxx
Phone number: 000-000-0000
Fax number: 000-000-0000
copy (which shall not constitute notice to AMIT) to:
Xxxxxxxxx Glusker Fields Claman & Machtinger LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx, Esq.
Fax number: 000-000-0000
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If to IFG:
Insignia Financial Group, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxxxx Xxxxxx
Phone number: 000-000-0000
Fax number: 000-000-0000; and
copy (which shall not constitute notice IFG) to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, Esq.
Fax number: 000-000-0000
or at such other address as shall be specified in writing by that Party. Any
notice, request, instruction, consent or other document delivered as provided
herein shall be deemed effectively given upon actual receipt by the Party (but
not necessarily the individual person) to be notified.
Section 5.9 Governing Law. This Agreement shall be construed in
accordance with and governed by the Laws of the State of California applicable
to agreements made and to be performed wholly within such jurisdiction.
Section 5.10 Interpretation.
(a) References. Except as specifically stated otherwise, references
to articles and sections refer to articles and sections in this Agreement.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall include
the masculine, feminine and neuter gender.
(b) Drafting. No provision of this Agreement shall be interpreted in
favor of, or against, either of the Parties by reason of the extent to
which such Party or its counsel participated in the drafting thereof or by
reason of the extent to which any such provision is inconsistent with any
prior draft hereof or thereof.
Section 5.11 Public Announcements. Except and to the extent required
by law or the rules of any stock exchange, each Party will not, without the
prior written consent of the other Party, and each will direct their
representatives not to, make, directly or indirectly, any public comment,
statement, or communication with respect to, or otherwise to disclose or to
permit the disclosure of this transaction or any of the terms, conditions, or
other aspects of this Agreement. If any of the Parties is required by law or
the rules of any stock exchange to make any such disclosure, that Party must
first provide to the other Party for approval (which will not be unreasonable
withheld) the content of the proposed disclosure, the reason that such
disclosure is required by law, and the time and place that the disclosure will
be made.
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Section 5.12 Entire Agreement. The Agreement constitutes the sole
understanding of the Parties with respect to the matters contemplated hereby
and supersedes and renders null and void all prior agreements and
understandings, written and oral, between the Parties with respect to such
matters. None of the Parties shall be liable or bound to any other Person in
any manner by any promises, conditions, representations, warranties or
covenants except as specifically set forth herein.
Section 5.13 Amendment. No amendment, modification or alteration of
the terms or provisions of this Agreement shall be binding unless the same
shall be in writing and duly executed by the Party against whom such amendment,
modification or alteration is sought to be enforced.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to
executed by a duly authorized officer as of the Signing Date.
Angeles Mortgage Investment Trust ("AMIT")
By:
----------------------------------------
Xxxxxx X. Xxxxxxxxx
President
Insignia Financial Group, Inc. ("IFG")
By:
-----------------------------------------
Xxxxxx X. Xxxxxx
Chairman of the Board of Directors
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