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EXHIBIT 2.1
ACQUISITION AGREEMENT
dated as of
JUNE 28, 2000
by and among
APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
AIMCO PROPERTIES, L.P.,
NHP Management company
and
AIMCO/NHP PROPERTIES, INC.,
as Buyers,
and
XXX X. XXXXXXX,
XXXXXXX X. XXXXX,
XXXXXX X. XXXXXXX,
XXXX X. XXXXXXXX,
XXXX X. XXXXXX,
and
XXXXXXX X. XXXXXXXXX,
as Sellers
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Table of Contents
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ARTICLE I. DEFINITIONS............................................................................................1
1.1. Definitions..............................................................................................1
ARTICLE II. CONTRIBUTION, PURCHASE AND SALE OF ASSETS............................................................17
2.1. Contribution, Purchase and Sale of Assets...............................................................17
2.2. Consideration; Assumption of Liabilities; Sale and Contributions........................................18
2.3. Purchase Price Adjustments..............................................................................19
2.4. Warrants................................................................................................22
2.5. Deposit.................................................................................................22
2.6. Escrow..................................................................................................23
ARTICLE III. PRE-CLOSING REORGANIZATIONS.........................................................................24
3.1. Restructurings..........................................................................................24
ARTICLE IV. CLOSING..............................................................................................24
4.1. Closing.................................................................................................24
4.2. [INTENTIONALLY OMITTED].................................................................................27
4.3. Conventional Portfolio..................................................................................27
4.4. Deliveries by Sellers at the Closing....................................................................28
4.5. Deliveries by Buyers at the Closing.....................................................................31
4.6. No Duplicative Deliveries...............................................................................34
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLER GROUP........................................................34
5.1. Organization and Qualification..........................................................................35
5.2. HUD Properties..........................................................................................35
5.3. Financial Statements and Cash Flows.....................................................................36
5.4. Organizational Documents................................................................................36
5.5. Litigation..............................................................................................36
5.6. Absence of Undisclosed Liabilities......................................................................37
5.7. Absence of Changes......................................................................................37
5.8. Benefit Plans and Employee Matters......................................................................37
5.9. Properties..............................................................................................38
5.10. Personal Property; Leases...............................................................................38
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5.11. Fee Agreements..........................................................................................39
5.12. Compliance with Law; Licenses, Permits and Approvals....................................................39
5.13. Insurance...............................................................................................39
5.14. No Investment Company...................................................................................40
5.15. Intercompany Liabilities................................................................................40
5.16. Environmental...........................................................................................40
5.17. Tax Representations and Warranties as to the Companies..................................................41
5.18. Reports and Financial Statements........................................................................43
5.19. Books and Records.......................................................................................44
5.20. Consents and Approvals; No Violation....................................................................44
5.21. Brokers and Financial Advisors..........................................................................44
5.22. Transactions with Affiliates............................................................................44
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF EACH SELLER........................................................44
6.1. Ownership Interests.....................................................................................45
6.2. Investment Representations..............................................................................46
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF BUYERS............................................................47
7.1. Organization and Qualification..........................................................................48
7.2. Authority Relative to this Agreement....................................................................48
7.3. Consents and Approvals; No Violation....................................................................49
7.4. Litigation..............................................................................................49
7.5. Organizational Documents................................................................................49
7.6. OP Units; Amended and Restated Warrants.................................................................50
7.7. Reports, Financial Statements and Private Placement Memorandum..........................................50
7.8. Investment Company Status...............................................................................50
7.9. Partnership Status......................................................................................50
7.10. Financial Capability....................................................................................50
7.11. Due Diligence...........................................................................................51
7.12. Property Information....................................................................................51
7.13. Brokers and Financial Advisors..........................................................................51
7.14. "Blue Sky" Permits......................................................................................51
7.15. Net Worth...............................................................................................51
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Table of Contents
(continued)
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ARTICLE VIII. COVENANTS..........................................................................................51
8.1. Notification of Certain Matters.........................................................................51
8.2. Consents and Approvals..................................................................................51
8.3. Conduct of Business Pending the Closing.................................................................52
8.4. Sale of Acquired Assets.................................................................................53
8.5. Access and Investigation................................................................................53
8.6. No Negotiations with Third Parties......................................................................53
8.7. Public Announcements....................................................................................54
8.8. Insurance...............................................................................................54
8.9. Employees...............................................................................................54
8.10. Transaction Costs.......................................................................................55
8.11. Payments to Financial Advisors..........................................................................55
8.12. Correspondence with Limited Partners....................................................................55
8.13. Post-Closing Access.....................................................................................55
8.14. No Endorsements.........................................................................................56
8.15. Offer Documents.........................................................................................56
8.16. Lease Document..........................................................................................56
8.17. Performance of Obligations..............................................................................56
8.18. Further Assurances......................................................................................57
ARTICLE IX. CONDITIONS TO CLOSING................................................................................57
9.1. Conditions to Each Party's Obligation to Effect the Closing.............................................57
9.2. Conditions to Obligations of Buyers to Effect the Closing...............................................57
9.3. Conditions to Obligations of Sellers to Effect the Closing..............................................58
ARTICLE X. TERMINATION, WAIVER AND AMENDMENT.....................................................................59
10.1. Termination.............................................................................................59
10.2. Effect of Termination...................................................................................60
10.3. Failure to Close........................................................................................60
10.4. Extension of Time, Waiver, Etc..........................................................................61
ARTICLE XI. SELLER LIABILITY LIMITS..............................................................................62
11.1. Limitation on Liability.................................................................................62
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11.3. No Reliance.............................................................................................65
11.4. Survival of Representations and Warranties; Reliance by Buyers..........................................65
11.5. Attachments; Exhibits; Schedules........................................................................66
ARTICLE XII. MISCELLANEOUS PROVISIONS...........................................................................66
12.1. Governing Law...........................................................................................66
12.2. Entire Agreement........................................................................................66
12.3. Modification; Waiver....................................................................................66
12.4. Notices.................................................................................................66
12.5. Expenses................................................................................................68
12.6. Assignment..............................................................................................68
12.7. Survival of Covenants...................................................................................68
12.8. Intentionally Omitted...................................................................................68
12.9. Successors and Assigns..................................................................................68
12.10. Counterparts............................................................................................68
12.11. Headings................................................................................................68
12.12. Disclosure Memorandum...................................................................................68
12.13. Time of Essence.........................................................................................68
12.14. Construction............................................................................................69
12.15. Exhibits................................................................................................69
12.16. Attorneys' Fees.........................................................................................69
12.17. Seller's Knowledge......................................................................................69
12.18. Jurisdiction and Venue..................................................................................69
12.19. No Third Party Beneficiaries............................................................................69
12.20. Escrow Agent............................................................................................69
12.21. JURY TRIAL WAIVER.......................................................................................70
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EXHIBITS
EXHIBIT 2.1 Acquired Assets..................................................................................
EXHIBIT A Acknowledgment and Acceptance of Admission of
Limited Partner...............................................................................A-1
EXHIBIT B Assignment and Assumption of Corporate Debt ..................................................B-1
EXHIBIT C Form of Assignment of Derivative Security.....................................................C-1
EXHIBIT C-1 Form of Assignment and Assumption of Fee Agreements..........................................C1-1
EXHIBIT D Form of Assignment of Partnership Interests, Membership
Interests, Stock Interests, and Withdrawal of Partner, Member and
Shareholder...................................................................................D-1
EXHIBIT E Form of Assignment and Assumption of Xxxxxxx Property Loans
and Xxxxxxx Subordinated Note.................................................................E-1
EXHIBIT F Intentionally Omitted.........................................................................F-1
EXHIBIT G Form of Assignment of Trademarks..............................................................G-1
EXHIBIT H Form of Assignment and Assumption of Xxxxxxx Loans............................................H-1
EXHIBIT I Form of Buyers' Release of Sellers............................................................I-1
EXHIBIT J Intentionally Omitted.........................................................................J-1
EXHIBIT K Form of Consulting Agreement..................................................................K-1
EXHIBIT L Form of Co-Sale Agreements....................................................................L-1
EXHIBIT M Intentionally Omitted.........................................................................M-1
EXHIBIT N Intentionally Omitted.........................................................................N-1
EXHIBIT O Form of Holdback Security Agreement...........................................................O-1
EXHIBIT P Form of ILPI and BAC Agreement................................................................P-1
EXHIBIT Q Form of License Agreement (FF&E)..............................................................Q-1
EXHIBIT R Form of Transitional Trademark License Agreement (Oxford).....................................R-1
EXHIBIT S Form of Option Sale Agreement ................................................................S-1
EXHIBIT T Form of Sellers' Release of Oxford Entities...................................................T-1
EXHIBIT T-1 Form of Oxford Entities' Release of Sellers .................................................T1-1
EXHIBIT U Form of Registration Rights Agreement.........................................................U-1
EXHIBIT V Form of Amended and Restated Warrant Agreement................................................V-1
EXHIBIT W Form of SLP Offer Agreement...................................................................W-1
EXHIBIT X Form of Sellers' Release of Buyers............................................................X-1
EXHIBIT Y Form of Tax Matters Agreement.................................................................Y-1
EXHIBIT Z Form of FIRPTA Certificates...................................................................Z-1
EXHIBIT AA Form of Directors and Officer Resignations...................................................AA-1
EXHIBIT BB Form of Press Release........................................................................BB-1
EXHIBIT CC Form of Fee Schedule for Escrow Agent........................................................CC-1
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INDEX OF DISCLOSURE SCHEDULES
SCHEDULE NO. SCHEDULE NAME
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Disclosure Schedule 1.1 OAMCO General Partners
Disclosure Schedule 2.1 Allocation of Purchase Price
Disclosure Schedule Excluded Oxford Assets
Definition 1
Disclosure Schedule Excluded Seller Assets
Definition 2
Disclosure Schedule 2.2(c) Assumed Liabilities (two categories "subject to" and
"assumed" liabilities)
Disclosure Schedule 2.3(a) Proforma Schedule of Net Cash Flows for the Year 2000
Disclosure Schedule 2.3(c) Cash Balance Methodology
Disclosure Schedule 2.3(e) Purchase Price Per Diem Allocations
Disclosure Schedule 3.1 Restructuring of and Organizations on or before Closing
Disclosure Schedule 3.3 Dissolution of Certain Oxford Entities
Disclosure Schedule 4.3 Required Consents of Lenders
Disclosure Schedule 5.1(b) States of Incorporation, Formation or Organization of the
General Partners
Disclosure Schedule 5.1(c) States of Formation of the Property-Owning Entities,
Investment Tier Partnerships, OPR and OTEF
Disclosure Schedule 5.2(a) HUD/State Agency Real Properties and Leasehold Interests
Disclosure Schedule 5.2(b) HUD Previous Participation Issues
Disclosure Schedule 5.3 List of Financial Statements provided to Buyers
Disclosure Schedule 5.4 Organizational Structure Charts
Disclosure Schedule 5.5 Litigation and Tax Audits
Disclosure Schedule 5.5(a) Persons having Ownership Interests in the General Partners
of Property-Owning Entities
Disclosure Schedule 5.7 Changes in Financial Statements
Disclosure Schedule 5.8(a) Liabilities under Benefit Plans to Current Employees
Disclosure Schedule 5.8(b) Employee/Labor Matters
Disclosure Schedule 5.9(a) List of all properties; street addresses and owners (including
third party rights of first refusal and ground leases)
Disclosure Schedule 5.9(b) Violations of Laws at the Properties
Disclosure Schedule 5.9(c) Properties being considered for refinance or sale
Disclosure Schedule 5.9(d) Uncured Monetary Defaults
Disclosure Schedule 5.10 Leases and Liens on Personal Property
Disclosure Schedule 5.11 List of Fee Agreements
Disclosure Schedule 5.12 Licenses, Permits and Approvals and any violations of law
of Oxford Entities
Disclosure Schedule 5.13(a) Insurance Policies
Disclosure Schedule 5.13(b) Insurance Losses and payments made since January 1, 1999
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Disclosure Schedule 5.15 Intercompany Liabilities (Company to Company)
Disclosure Schedule 5.16 Environmental Reports
Disclosure Schedule 5.16(a) Environmental (Non-Compliance)
Disclosure Schedule 5.16(b) Environmental (Claims)
Disclosure Schedule 5.16(c) Environmental (Locations of Properties storing or disposing
of Materials of Environmental Concern; underground tanks;
asbestos)
Disclosure Schedule 5.16(d) Environmental (Permits)
Disclosure Schedule 5.16(f) All Properties owned, leased or operated by Oxford Entities
since 1990
Disclosure Schedule 5.17 Exceptions to Tax Representations
Disclosure Schedule 5.17(j)(i) List of Entities treated as Partnerships for tax
purposes
Schedule 5.17(j)(ii) List of Entities treated as S-Corporations for tax
purposes
Disclosure Schedule List of Entities treated as Corporations for tax purposes
5.17(j)(iii)
Disclosure Schedule 5.17(n) Fair Market Value of Unlimited Tax Lock Out Properties
and Limited Tax Lock Out Properties
Disclosure Schedule 5.20 Required HUD 2530 Approvals
Disclosure Schedule 5.21 Seller's Broker
Disclosure Schedule 5.22 Indebtedness Owed by any Oxford Entity to any of Sellers or
Sellers' Affiliates (and Sellers to Oxford Entities) (including
obligators, principal amount outstanding and accrued but
unpaid interest as of the Effective Date
Disclosure Schedule 6.1(b) Liens and Security Interests on Acquired Assets
Disclosure Schedule 7.3 Required Buyer Consents
Disclosure Schedule 7.13 Buyer's Broker
Disclosure Schedule 11.1 Sellers' Ratable Percentages and Maximum Liability Cap
Disclosure Schedule Indemnification Agreements
Definition 3
Disclosure Schedule List of Xxxxxxx Property Loans
Definition 5
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT, executed and effective as of June 28, 2000
(the "Effective Date"), by and among Apartment Investment and Management
Company, a Maryland corporation ("AIMCO"), AIMCO Properties, L.P., a Delaware
limited partnership ("AIMCO OP"), AIMCO/NHP Properties, Inc., a Delaware
corporation ("AIMCO/NHP") and NHP Management Company, a District of Columbia
corporation ("NHP" and, together with AIMCO, AIMCO/NHP and AIMCO OP, the
"Buyers"), Xxx X. Xxxxxxx, an individual ("Xxxxxxx"), Xxxxxxx X. Xxxxx, an
individual ("Xxxxx"), Xxxxxx X. Xxxxxxx, an individual ("Xxxxxxx"), Xxxx X.
Xxxxxxxx, an individual ("Schifrin"), Xxxx X. Xxxxxx, an individual ("Xxxxxx"),
and Xxxxxxx X. Xxxxxxxxx, an individual ("Xxxxxxxxx", and, together with
Xxxxxxx, Lavin, Downing, Schifrin and Xxxxxx, the "Sellers")(the "Agreement").
WHEREAS, Sellers desire to sell and/or contribute their respective
interests in the Acquired Assets (as hereinafter defined) to Buyers in exchange
for cash, units of limited partnership interest in AIMCO OP ("OP Units"), and/or
shares of AIMCO Stock (as hereinafter defined), and Buyers desire to accept such
interests in exchange for such consideration; and
WHEREAS, the parties hereto agree that each and every provision
incorporated in this Agreement has been a material inducement for Buyers and
Sellers entering into the transaction contemplated by this Agreement, including,
without limitation the representations and warranties and the indemnifications
of Buyers and Sellers.
NOW, THEREFORE, in consideration of the foregoing and the covenants of
the parties set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, subject to the terms
and conditions set forth herein, the parties hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1. Definitions. The capitalized terms used in this Agreement and not
otherwise defined herein shall have the following meanings (unless the context
otherwise requires, such capitalized terms shall include the singular and plural
and the conjunctive and disjunctive forms of the terms defined):
"Accredited Investor" shall have the meaning ascribed thereto in
Regulation D of the Rules and Regulations promulgated under the Securities Act.
"Acknowledgment" shall mean an Acknowledgment and Acceptance of
Admission of Limited Partner, substantially in the form of Exhibit A.
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"Acquired Assets" shall mean, without duplication, the assets set
forth on Exhibit 2.1, subject to adjustment and/or exclusion as provided by the
terms of this Agreement.
"Acquired Business" shall mean, (i) the Acquired Assets and (ii) the
Assumed Liabilities.
"Actual AIMCO Market Price" shall mean, as of any Determination Date,
the average of the high and low reported sale prices (regular way) of AIMCO
Stock on the New York Stock Exchange on each of twenty (20) consecutive full
trading days ending on the fifth (5th) full trading day prior to the
Determination Date.
"ADA" shall mean the Americans with Disabilities Act of 1990.
"Affiliate" shall mean, with respect to any Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such Person within the meaning of
SEC Rule 144(a)(1).
"Agreed Representations and Warranties" shall have the meaning set
forth in Section 11.2.
"AIMCO Market Price" shall mean, as of any Determination Date, (i) the
average of the high and low reported sale prices (regular way) of AIMCO Stock on
the New York Stock Exchange on each of twenty (20) consecutive full trading days
ending on the fifth (5th) full trading day prior to the Determination Date, (ii)
$40 per share if the average determined pursuant to clause (i) is less than $40
per share or (iii) $45 per share if the average determined pursuant to clause
(i) is greater than $45 per share.
"AIMCO/SEC Reports" shall have the meaning set forth in Section 7.7.
"AIMCO Stock" shall mean shares of Class A Common Stock, par value
$.01 per share, of AIMCO.
"Amended and Restated Warrant Agreement" shall mean a warrant
agreement in the form of Exhibit V.
"Applicable Sellers' Cap" shall have the meaning set forth in Section
11.1(c).
"Approvals" shall have the meaning set forth in Section 5.12.
"Assignment and Assumption of Corporate Debt" shall mean an Assignment
and Assumption of Corporate Debt, substantially in the form of Exhibit B.
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"Assignment and Assumption of Derivative Security" shall mean an
Assignment and Assumption of Derivative Security, substantially in the form of
Exhibit C.
"Assignment and Assumption of Fee Agreements" shall mean an Assignment
and Assumption of Fee Agreements, substantially in the form of Exhibit C-1.
"Assignment and Assumption of Partnership Interest" shall mean an
Assignment and Assumption of Partnership Interest, substantially in the form of
Exhibit D.
"Assignment and Assumption of Xxxxxxx Property Loans and Xxxxxxx
Subordinated Note" shall mean an Assignment and Assumption of Xxxxxxx Property
Loans and Xxxxxxx Subordinated Note, substantially in the form of Exhibit E.
"Assignment of Cash Accounts" shall mean an Assignment of Cash
Accounts, substantially in the form of Exhibit F, which shall include all of
Sellers' right, title and interest in and to the Cash Accounts, including
without limitation the OTEF Escrows.
"Assignment of Trademarks" shall mean the Assignment of Trademarks,
substantially in the form of Exhibit G.
"Assignment and Assumption of Xxxxxxx Loans" shall mean the Assignment
and Assumption of Xxxxxxx Loans substantially in the form of Exhibit H.
"Assumed Liabilities" shall mean the liabilities, instruments and
agreements set forth or described on Disclosure Schedule 2.2(c).
"Audit" shall mean any audit, assessment of Taxes, other examination
by any Tax Authority, proceeding or appeal of such proceeding relating to Taxes.
"Benefit Plans" shall mean all Employee Pension Benefit Plans, all
Employee Welfare Benefit Plans, all stock bonus, stock ownership, stock option,
stock purchase, stock appreciation rights, phantom stock, and other stock plans
(whether qualified or non-qualified), and all other pension, welfare, severance,
retirement, bonus, deferred compensation, incentive compensation, insurance
(whether life, accident and health, or other and whether key man, group, workers
compensation, or other), profit sharing, disability, thrift, day care, legal
services, leave of absence, layoff, and supplemental or excess benefit plans,
and all other benefit contracts, arrangements, or procedures having the effect
of a plan, in each case, existing on or before the Closing Date, under which any
of Sellers or the Companies is or may hereafter become obligated in any manner
(including without limitation obligations to make contributions or other
payments).
"Business Day" shall mean a day other than Saturday, Sunday, or any
day on which the principal commercial banks located in New York or Maryland are
authorized or obligated to close under the laws of the State of New York or
Maryland.
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"Buyers' Representatives" shall mean officers, directors and persons
exercising control over the Buyers.
"Buyers' Release of Sellers" shall mean a release agreement in the
form attached hereto as Exhibit I.
"Buyers' Securities" shall mean AIMCO Stock and/or OP Units or such
combination thereof as may be specified by Sellers pursuant to the terms of this
Agreement.
"Buyers' Transaction Costs" shall mean (i) the fees and expenses
payable to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP and any other counsel of
Buyers for legal services rendered to Buyers in connection with the transactions
contemplated hereby, (ii) the fees and expenses of Xxxxxx Xxxxxxxx LLP and Ernst
& Young in connection with Buyers' financial review of the Acquired Business and
any other matter on behalf of Buyers in connection with the transactions
contemplated hereby; (iii) all fees, costs, expenses and charges incurred in
connection with obtaining the HUD Approvals to the extent provided for in this
Agreement, (iv) one-half of any and all transfer and recordation taxes and/or
fees due and payable in connection with the transactions contemplated by this
Agreement, (v) all other costs and expenses incurred by Buyers in connection
with the transactions contemplated hereby, including without limitation, the
Holdback Security Agreement, and (vi) the fees and expenses of Xxxxxxx Xxxxx &
Company payable in connection with the transactions contemplated hereby,
pursuant to that certain letter agreement, dated November 18, 1999.
"Cash Accounts" means all cash accounts or escrows associated with the
operations or financing of the Property-Owning Entities that are maintained by
or for the benefit of the Property-Owning Entities or their lenders or
servicers, including without limitation any accounts that contain debt service
reserves or serve as additional collateral for indebtedness of the Property-
Owning Entities.
"Change in Control" shall mean the occurrence of any of the following
events:
(i) an acquisition (other than directly from AIMCO) of any voting
securities of AIMCO (the "Voting Securities") by any "person" (as the term
"person" is used for purposes of Section 13(d) or Section 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) immediately
after which such person has "beneficial ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) ("Beneficial Ownership") of 20% or
more of the combined voting power of AIMCO's then outstanding Voting Securities;
provided, however, in determining whether a Change in Control has occurred,
Voting Securities that are acquired in a Non-Control Acquisition (as hereinafter
defined) shall not constitute an acquisition that would cause a Change in
Control. "Non-Control Acquisition" shall mean an acquisition by (A) an employee
benefit plan (or a trust forming a part thereof) maintained by (1) AIMCO or (2)
any corporation, partnership or other Person of which a majority of its voting
power or its equity securities or equity interest is owned directly or
indirectly by AIMCO or in which AIMCO serves as a general partner
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or manager (a "Subsidiary"), (B) AIMCO or any Subsidiary, or (C) any Person in
connection with a Non-Control Transaction (as hereinafter defined); or
(ii) approval by the stockholders of AIMCO of: (A) a merger,
consolidation, share exchange or reorganization involving AIMCO, unless the
stockholders of AIMCO, immediately before such merger, consolidation, share
exchange or reorganization, own, directly or indirectly immediately following
such merger, consolidation, share exchange or reorganization, at least 50% of
the combined voting power of the outstanding voting securities of the
corporation that is the successor in such merger, consolidation, share exchange
or reorganization in substantially the same proportion as their ownership of the
Voting Securities immediately before such merger, consolidation, share exchange
or reorganization (a "Non-Control Transaction"); (B) a complete liquidation or
dissolution of AIMCO; or (C) an agreement for the sale or other disposition of
all or substantially all of the assets of AIMCO to any person (other than a
transfer to a Subsidiary).
"Changed Conditions" shall have the meaning set forth in Section
11.4(b).
"Closing" shall mean consummation of all actions required to be
performed by all of the parties hereto pursuant to this Agreement with respect
to each of the transactions contemplated by this Agreement.
"Closing Date" shall mean the date (or dates, as described herein) on
which the Closing occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Commercially reasonable efforts" or "commercially reasonable steps,"
when used with respect to any party, shall mean the reasonable efforts of a
party without the requirement that such party incur any out-of-pocket expenses
other than routine administrative costs, except to the extent expressly provided
for in this Agreement.
"Companies" shall mean, collectively, OHC, ORFG, the General Partners,
and any direct or indirect Subsidiary of the foregoing.
"Company Assets" shall mean, collectively, all real, personal and
intangible property owned or leased directly by any of the Companies, and (i)
not on behalf of any Property-Owning Entity, and (ii) excluding the Excluded
Assets.
"Confidentiality Agreement" shall mean that certain Confidentiality
Agreement by and between Buyers and Sellers, dated December 2, 1997, as amended
to date.
"Consents" shall have the meaning set forth in Section 8.2.
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"Consulting Agreement" shall mean the Consulting Agreement in the form
attached hereto as Exhibit K.
"Contract" shall mean any indenture, deed of trust, mortgage, loan
agreement, or other material document or instrument or agreement, oral or
written, to which any of the Companies is a party or by which any of the
Companies or their assets or properties is bound, but excluding any of the
foregoing documents, instruments or agreements executed on behalf of
Property-Owning Entities, OTEF, ORP, or the Investment Tier Partnerships.
"Contributed Assets" shall mean the Acquired Assets identified for
contribution on Exhibit 2.1.
"Conventional Portfolio" shall mean all Properties other than HUD
Properties.
"Co-Sale Agreement" shall mean the Co-Sale Agreement, in the form
attached hereto as Exhibit L.
"Damages" shall mean any and all costs, damages, liabilities, fines,
fees, penalties, judgments, interest obligations, assessments, deficiencies,
losses, and expenses (including without limitation punitive, treble, or other
exemplary damages, amounts paid in settlement, interest, court costs, costs of
investigation, reasonable fees and expenses of attorneys, accountants,
actuaries, and other experts, and other reasonable expenses of litigation or of
any claim, default or assessment).
"Deposit" shall have the meaning provided in Section 2.5.
"Derivative Security" shall mean the rights and obligations created
pursuant to that certain Intercreditor and Collateral Agency Agreement
("Intercreditor Agreement"), dated December 10, 1993, by and among ML Oxford
Finance Corp., NHP-HG, Inc. and Oxford Realty Financial Group, Inc. (formerly
known as Oxford Asset Management Corporation), and that certain Second Amended
and Restated Loan Agreement, dated December 10, 1993, by and among ML Oxford
Finance Corp. and the affiliated Oxford entities identified therein.
"Determination Date" shall mean any date specified in this Agreement
for a determination of the Actual AIMCO Market Price or the AIMCO Market Price.
"Direct General Partnership Interests" shall mean all of Xxxxxxx'x
existing general partnership interests in the Property-Owning Entities and the
Employee Partnerships, in each case owned by Xxxxxxx individually.
"Disclosure Certificate" shall mean the certificate delivered by
Sellers to Buyers at Closing certifying that all Agreed Representations and
Warranties shall be true and correct in all material respects as of the Closing
Date.
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"Disclosure Memorandum" shall mean that memorandum delivered by
Sellers to Buyers on the date hereof containing all of the Disclosure Schedules
referenced in this Agreement.
"Employee Partnerships" means (i) Oxford Associates '76 Limited
Partnership, Oxford Associates '77 Limited Partnership, Oxford Associates '78
Limited Partnership, Oxford Associates '79 Limited Partnership, Oxford
Associates '80 Limited Partnership, Oxford Associates '81 Limited Partnership,
Oxford Associates '82 Limited Partnership, Oxford Associates '83 Limited
Partnership, Oxford Associates '84 Limited Partnership, Oxford Associates '85
Limited Partnership, and Oxford Associates '86 Limited Partnership, (ii) Oxford
Managers I Limited Partnership, Oxford Managers II Limited Partnership, and
Oxford Managers IIIA Limited Partnership, (iii) Oxford Partners I Limited
Partnership, Oxford Partners II Limited Partnership, and Oxford Partners III
Limited Partnership, (iv) Xxxxxxx Associates Limited Partnership, (v) Oxford
Fund I Limited Partnership, (vi) Oxford Fund II Limited Partnership, (vii) OTEF
II Associates Limited Partnership, (viii) Oxford Bethesda I LP, and (ix) Oxford
Bethesda II LP.
"Employee Pension Benefit Plan" shall mean each employee pension
benefit plan (whether or not insured), as defined in Section 3(2) of ERISA,
which is or was in existence on or before any Closing Date, and to which any of
the Oxford Entities is or would hereafter become obligated in any manner.
"Employee Welfare Benefit Plan" shall mean each employee welfare
benefit plan (whether or not insured), as defined in Section 3(1) of ERISA,
which is or was in existence on or before any Closing Date, and to which any of
Sellers or the Oxford Entities is or would hereafter become obligated in any
manner.
"Environmental Assessment" shall have the meaning set forth in Section
8.5(b).
"Environmental Claim" means any claim, action, cause of action,
investigation or notice by any Person alleging potential liability (including,
without limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, or penalties) arising out of, based on or resulting from (a)
the presence, or release into the environment, of any Material of Environmental
Concern at any location owned by the Property-Owning Entities, or (b)
circumstances forming the basis of any violation, of any Environmental Law.
"Environmental Laws" means all federal, state, local and laws and
regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), including, without limitation, laws
and regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
"Environmental Permits" shall have the meaning set forth in Section
5.16(d).
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"Environmental Reports" shall mean those environmental site assessment
reports delivered by Sellers to Buyers or their representatives, a list of which
is set forth in Disclosure Schedule 5.16.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended (including without limitation any successor act), and the rules
and regulations promulgated thereunder.
"ERISA Affiliate" shall mean any Person under common control or a
member of a controlled group of corporations (as defined in Sections 414(b) and
(c) of the Code) with the Sellers, the Oxford Entities or any of their
subsidiaries.
"Escrow Agent" shall mean Chicago Title Insurance Company, 0000 00xx
Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000 (Attention: Xxxx Xxxxxx;
telephone number 202-466- 2266).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Assets" shall mean collectively the Excluded Seller Assets
and the Excluded Oxford Assets.
"Excluded Oxford Assets" shall mean the assets and all liabilities
related thereto set forth in Disclosure Schedule Definition 1.
"Excluded Seller Assets" shall mean the assets and all liabilities
related thereto set forth in Disclosure Schedule Definition 2.
"Fee Agreements" shall mean, without duplication, the fee agreements,
participation agreements, residual receipt notes, senior notes, incentive
management fees and other agreements that evidence the right of Sellers, OHC,
ORFG or their respective Subsidiaries to receive payments, other than as set
forth in the Organizational Documents, as set forth on Disclosure Schedule 5.11.
"Financial Statements" shall have the meaning set forth in Section
5.3.
"GAAP" shall mean generally accepted accounting principles,
consistently applied throughout the specified period and in the immediately
prior comparable period.
"General Partner Interests" shall mean, all of the membership,
partnership or other ownership interests in the General Partners other than
those identified as Excluded Assets.
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"General Partner Shares" shall mean all of Sellers' respective
ownership interests in all of the General Partners.
"General Partners" shall mean the Persons that directly own general
partnership or managing membership interests in Property-Owning Entities, all as
more particularly set forth on Disclosure Schedule 5.1(b), but shall expressly
exclude (i) any individuals, (ii) any entity owned or controlled by Persons
other than any of the Sellers or the Companies, (iii) the Direct General
Partnership Interests, (iv) ZIMCO Entities, and (v) OEC III.
"Governmental Authority" shall mean any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether Federal, state or
local, domestic or foreign, including, without limitation, HUD and the United
States Department of Justice.
"HAP Contract" means any existing Housing Assistance Payments Contract
applicable to a Property, between the United States of America acting through
its Secretary of Housing and Urban Development, and any Company or its
predecessor in interest, as such contract may have been amended from time to
time.
"Holdback Security Agreement" shall mean a Holdback Security Agreement
in the form attached hereto as Exhibit O.
"HUD" means the United States Department of Housing and Urban
Development and any applicable state housing finance agency.
"HUD Approval" shall have the meaning set forth in Section 8.2(c).
"HUD Condition" shall mean the condition to Closing set forth in
Section 9.1(b).
"HUD Loan Documents" means, collectively, the promissory notes, the
mortgages, the regulatory agreements and other security documents related to the
HUD Properties to which either HUD or a state housing finance agency is a party.
"HUD Partnerships" shall mean the Property-Owning Entities set forth
on Disclosure Schedule 5.2(a) that own HUD Properties.
"HUD Properties" shall mean the real properties and leasehold
interests set forth on Disclosure Schedule 5.2(a).
"ILPI and BAC Agreement" shall mean that certain ILPI and BAC
Agreement in the form attached hereto as Exhibit P.
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"Indemnification Agreement" shall mean that certain Indemnification
Agreement by and between the parties hereto to be entered into simultaneously
herewith.
"Indemnity Agreements" shall have the meaning set forth in Disclosure
Schedule Definition 3.
"Intercompany Liabilities" shall mean the indebtedness, notes, loan
agreements and other instruments set forth on Disclosure Schedule 5.15.
"Investment Tier Partnerships" shall mean North Gate-Oxford Limited
Partnership, OMEGA, and Xxxxxxxxx-Oxford Associates Limited Partnership One.
"IRS" shall mean the United States Internal Revenue Service or any
successor agency.
"Laws" shall mean all laws, rules, regulations, ordinances, decrees
and orders of all applicable Federal, state, city and other Governmental
Authorities other than Environmental Laws.
"Leases" shall mean, with respect to any Property, the leases,
licenses, tenancies and other occupancy agreements in effect at such Property.
"License Agreement (FF&E)" shall mean the License Agreement
substantially in the form of Exhibit Q.
"License Agreement (Oxford)" shall mean the License Agreement
substantially in the form of Exhibit R.
"Lien" shall mean any mortgage, pledge, assessment, security interest,
lease or sublease (other than residential leases or subleases entered into by
Persons occupying all or a portion of a residential unit at any of the
Properties or commercial leases), lien, adverse claim, levy, charge, option,
rights of others or restrictions (whether on voting, sale, transfer, disposition
or otherwise) or other encumbrance of any kind, whether imposed by agreement,
understanding, law or equity, or any conditional sale contract, title retention
contract, or other contract to give or to refrain from giving any of the
foregoing.
"Manager" shall mean the Affiliate of Buyers that manages certain of
the Properties as of the date of this Agreement.
"Material Adverse Effect" shall mean a material adverse effect on (i)
the validity or enforceability of this Agreement, on the ability of Sellers or
Buyers to perform their obligations under this Agreement, (ii) the case of
Buyers, their ability to perform their obligations under the Related Documents,
or (iii) in the case of Sellers, on the financial condition or gross revenues of
the Acquired Assets or the Acquired Business, taken as a whole; provided,
however, that adverse effects due to general economic or financial market
conditions and events or occurrences resulting from the
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failure to obtain Consents shall not be deemed to constitute a Material Adverse
Effect for purposes of Section 10.1(c).
"Materials of Environmental Concern" means chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products, other than ordinary and reasonable quantities of such
materials that are permitted to be stored and/or used or are otherwise permitted
under applicable Environmental Laws.
"Material Liability" shall mean with respect to any Person a liability
which involves a significant risk of substantial monetary payments (after taking
into account any indemnification to which such Person is entitled) or sanctions,
as determined by such Person in his or its reasonable discretion.
"Maximum Article VI Liability Cap" shall mean with respect to each
Seller the amounts set forth on Disclosure Schedule 11.1.
"Maximum Non Article VI Liability Cap" shall mean with respect to each
Seller the amounts set forth on Disclosure Schedule 11.1.
"Non-HUD Conditions" shall have the meaning set forth in Section
4.1(b).
"Non-Refundable Payments" shall mean the initial $500,000
non-refundable payment, together with any additional non-refundable payments
made pursuant to Section 4.1(b).
"Notices" shall have the meaning set forth in Section 12.4.
"OAMCO General Partners" means those limited liability companies and
limited partnerships identified on Disclosure Schedule 1.1.
"OEC III" means Oxford Equities Corporation III, a Delaware
corporation.
"Office Lease" shall mean that certain Office Building Lease, dated
October 14, 1993, between Bay Limited Partnership, as lessor, and Oxford Realty
Services Corp., as lessee, with respect to 26,823 square feet of space located
at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, XX, as the same may be amended,
modified or extended pursuant to a right to do so, or a successor lease thereto.
"OHC" shall mean Oxford Holding Corporation, a Maryland corporation.
"OHC Shares" shall mean all of the issued and outstanding stock of OHC
other than the stock owned by ORFG and Buyers.
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"OMEGA" shall mean Oxford Multiple Equities for Growth & Appreciation
Limited Partnership, a Maryland limited partnership.
"Option Sale Agreement" shall mean that certain Option Sale Agreement
in the form attached hereto as Exhibit S.
"OP Units" shall mean partnership common units of AIMCO OP.
"Order" shall mean any order, decree, injunction, judgment, edict,
ruling, assessment, pronouncement, determination, decision, opinion, sentence,
subpoena, writ or award issued, made, entered or rendered by any court,
administrative agency or other Governmental Authority or by any arbitrator.
"ORFG" shall mean Oxford Realty Financial Group, Inc., a Maryland
corporation.
"ORFG Operations L.L.C." shall mean ORFG Operations, L.L.C., a
Delaware limited liability company.
"ORFG Shares" shall mean all of the issued and outstanding stock of
ORFG other than the Class B common stock of ORFG currently held by Buyers or
their Affiliates.
"Organizational Documents" shall mean (i) with respect to a
corporation, its certificate, charter or articles of incorporation and bylaws,
(ii) with respect to any limited liability company, its certificate of
formation, articles of organization, operating agreement and limited liability
company agreement, as applicable, (iii) with respect to any limited partnership,
its certificate of limited partnership and limited partnership agreement, (iv)
with respect to any general partnership, its partnership agreement, and (v) all
amendments to the foregoing and other similar organizational or governing
documents existing on the date hereof or amended, as contemplated by Article IV
of this Agreement.
"ORP" shall mean Oxford Residential Properties I Limited Partnership,
a Maryland limited partnership.
"ORP MGP" shall mean Oxford Residential Properties I Corporation, a
Maryland corporation.
"OTEF" shall mean Oxford Tax Exempt Fund II Limited Partnership, a
Maryland limited partnership.
"OTEF Escrow" shall mean those funds held pursuant to the Excess
Revenue Agreements entered into between OTEF, certain Property-Owning Entities
and ORFG, as servicer, which have an aggregate balance of approximately $4.4
million as of March 31, 2000.
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"OTEF MGP" shall mean Oxford Tax Exempt Fund II Corporation, a
Maryland corporation.
"Oxford Development Loan" shall mean the Third Amended and Restated
Promissory Note (C Note), in the original principal amount of $3,000,000, dated
December 10, 1993, issued by Oxford Development Corporation, Oxford Development
Enterprises, Inc. and Oxford Management Company, Inc. (the "C Note") and the
rights and obligations created pursuant to that certain Second Amended and
Restated Loan Agreement, dated December 10, 1993, by and among ML Oxford Finance
Corp. and the affiliated Oxford Entities identified therein and all of Sellers'
right, title and interest in and to any documents related to the foregoing other
than the Derivative Security.
"Oxford Entities" shall mean the Companies, Property-Owning Entities,
Employee Partnerships, ZIMCO Entities, OTEF, the OTEF MGP, ORP, the ORP MGP, the
Investment Tier Partnerships and OEC III.
"Oxford Entities' Release of Sellers" shall mean a release agreement
in the form of Exhibit T-1.
"Oxford Group Escrow Termination Agreement" shall mean all documents
as may be required to terminate the Cash Escrow Account Agreement and Income Tax
Cash Escrow Agreement, by and between certain of the Oxford Entities and certain
predecessors-in-interest to AIMCO, each dated as of December 10, 1993.
"Oxford/SEC Reports" shall have the meaning set forth in Section 5.18.
"Oxparc Entities" means Oxparc 1994, L.L.C., Oxparc 1995, L.L.C.,
Oxparc 1996, L.L.C., Oxparc 1997, L.L.C., Oxparc 1998, L.L.C., Oxparc 1999,
L.L.C., and Oxparc 2000, L.L.C., each a Maryland limited liability company.
"Partnership Receivables" means any working capital or operating
deficit loans or advances, or deferred or accrued but unpaid development, asset
management, investor services or other fees due and owing by any Property-Owning
Entity to ORFG or OHC, or any of their respective subsidiaries, whether
principal or interest.
"PCB" shall have the meaning set forth in Section 5.16(c).
"Permitted Transfer" shall mean a transfer upon a person's death, or
during his lifetime, by gift or inter vivos trust, to or for the benefit of one
or more members of his immediate family (spouse, adult child or minor child).
"Person" shall mean any natural person, corporation, general
partnership, limited partnership, proprietorship, trust, union, association,
court, tribunal, agency, government,
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department, commission, self-regulatory organization, arbitrator, board, bureau,
instrumentality, or other entity, enterprise, authority, or business
organization.
"Personal Property" shall mean, with respect to any Property, all
tangible personal property, equipment and supplies owned by any Property-Owning
Entity and situated at such Property and used by any Property-Owning Entity in
connection with the ownership, use, operation, maintenance or repair of its
Property.
"PPM" shall mean AIMCO OP's Private Placement Memorandum, dated June
1, 2000, relating to the issuance of Buyers' Securities pursuant to this
Agreement.
"Properties" shall mean the real property and leasehold interests
owned by the Property-Owning Entities.
"Property" shall mean any one of the Properties.
"Property-Owning Entity" or "Property-Owning Entities" shall mean the
Person or Persons, respectively, listed on Disclosure Schedule 5.9(a).
"Purchase Price" shall mean the aggregate consideration to be paid
pursuant to Section 2.2.
"Ratable Percentage" shall mean the percentages set forth on
Disclosure Schedule 11.1.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, substantially in the form of Exhibit U.
"REIT Status" shall mean, with respect to any Person, (a) the
qualification of such Person as a real estate investment trust under Sections
856 through 860 of the Code, (b) the applicability to such Person and its
shareholders of the method of taxation provided for in Sections 857 et seq. of
the Code, and (c) the qualification and taxation of such Person as a real estate
investment trust under analogous provisions of state and local law in each state
and jurisdiction in which such Person owns property, operates or conducts
business.
"Related Documents" shall mean, collectively, all of the documents
identified as Exhibits and Disclosure Schedules to this Agreement, together with
any other document, instrument, certificate or agreement executed or delivered
at a Closing pursuant to this Agreement.
"Representative" shall mean, with respect to any Person, any director,
officer, employee, agent, advisor, counsel, accountant, financing source or
other representative of such Person or of any Affiliate of such Person or any
Representative of any of the foregoing.
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"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller Obligations" shall mean the indebtedness, notes, loan
agreements and other instruments set forth on Disclosure Schedule 5.15 that will
be repaid, released or assumed by Buyers at Closing pursuant to Section 2.2.
"Sellers' Affiliates" shall mean, collectively, immediate family
members of each Seller, trusts for the benefit of the foregoing, ORFG Operations
L.L.C., The Oxford Note Trust, and/or any other Person who or which is required
to deliver an Acquired Asset pursuant to the terms of this Agreement.
"Sellers' Release of Buyers" shall mean a release agreement in the
form attached hereto as Exhibit X.
"Sellers' Release of Oxford Entities" shall mean a release agreement
in the form attached hereto as Exhibit T.
"Sellers' Representatives" shall mean officers, directors and persons
exercising control over the Sellers.
"Sellers' Threshold Amount" shall have the meaning set forth in
Section 11.1(a)(i).
"Sellers' Transaction Costs" shall mean (i) the fees and expenses
payable to Xxxx and Xxxx LLP and any other counsel of Sellers for legal services
rendered to Sellers and the Oxford Entities in connection with the transactions
contemplated hereby, (ii) the fees and expenses payable to Sellers' outside
accountants for accounting services rendered to Sellers and the Oxford Entities
in connection with the transactions contemplated by this Agreement; (iii)
one-half of all transfer and recordation taxes and/or fees due and payable in
connection with the transactions contemplated by this Agreement, (iv) the fees,
costs, expenses and charges incurred in connection with obtaining the Consents
to the extent expressly provided for in this Agreement, including any attorneys'
fees of Lenders' counsel, and (v) all other costs and expenses incurred by
Sellers and/or the Companies in connection with the transactions contemplated by
this Agreement.
"Shares" shall mean, collectively, the OHC Shares and the ORFG Shares.
"SLP Offer Agreement" shall mean an SLP Offer Agreement in the form
attached hereto as Exhibit W.
"SLP Units" shall have the meaning set forth in the SLP Offer
Agreement.
"Subsidiary" shall mean, with respect to any Person, (i) any
corporation with respect to which such Person, directly or indirectly through
one or more subsidiaries, (a) owns more than 50% of the outstanding shares of
capital stock having generally the right to vote in the election of
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directors or (b) has the power, under ordinary circumstances, to elect, or to
direct the election of, a majority of the board of directors of such
corporation, (ii) any partnership with respect to which (a) such Person or a
subsidiary of such Person is a general partner, (b) such Person and its
subsidiaries together own more than 50% of the interests therein, or (c) such
Person and its subsidiaries have the right to appoint or elect or direct the
appointment or election of a majority of the directors or other Person or body
responsible for the governance or management thereof, (iii) any limited
liability company with respect to which (a) such Person or a subsidiary of such
Person is the manager or managing member, or (b) such Person and its
subsidiaries together own more than 50% of the interests therein, or (c) such
Person and its subsidiaries have the right to appoint or elect or direct the
appointment or election of a majority of the directors or other Person or body
responsible for the governance or management thereof, or (iv) any other entity
in which such Person and/or one or more of its subsidiaries, directly or
indirectly, (a) have at least a 50% ownership interest or (b) has the power to
appoint or elect or direct the appointment or election of a majority of the
directors or other Person or body responsible for the governance or management
thereof; provided however, that, notwithstanding any provision to the contrary,
the Property-Owning Entities, ORP, OTEF, the Investment Tier Partnerships and
the Employee Partnerships shall not be deemed to be a subsidiary of any other
Person.
"Tax" or "Taxes" shall mean all Federal, state and local taxes and
other assessments and governmental charges of a similar nature (whether imposed
directly or through withholdings), including any interest, penalties and
additions to Tax applicable thereto.
"Tax Authority" shall mean the Internal Revenue Service and any other
domestic Governmental Authority responsible for the administration of any Taxes.
"Tax Matters Agreement" shall mean that certain Tax Matters Agreement
in the form attached hereto as Exhibit Y.
"Tentative HUD Approval Date" shall mean the 90th day following the
Effective Date, unless Buyers and Sellers have not agreed upon a pre-closing
restructuring relating to the HUD Matters (including related modifications to
Disclosure Schedule 2.1 and Exhibit 2.1, if necessary) within ten days following
the Effective Date, in which event "Tentative HUD Approval Date" shall mean the
100th day following the Effective Date.
"Xxxxxxx Assets" shall mean the Direct General Partnership Interests,
OEC III, the Xxxxxxx Loans, Xxxxxxx Property Loans, Xxxxxxx Subordinated Loan
and the ZIMCO Entities.
"Xxxxxxx Loans" shall mean (i) the NonNegotiable Promissory Note in
the original principal amount of $5,043,471.74, dated March 31, 1986, made by
Oxford Development Corporation to Xxxxxxx, which has an outstanding principal
balance of approximately $4,757,221.73 as of the date hereof, (ii) the
NonNegotiable Promissory Note in the original principal amount of $2,193,378,
dated December 30, 1986, made by Oxford Development Corporation to Xxxxxxx,
which has an outstanding principal balance of approximately $2,193,378 as of the
date hereof, (iii) the
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Master Promissory Note in the original principal amount of $9,000,000, dated May
26, 1988, made by Oxford Development Corporation to Xxxxxxx, which has an
outstanding principal balance of approximately $2,202,898.32 as of the date
hereof, and (iv) the Master Promissory note in the original principal amount of
$8,500,000, dated October 10, 1988, made by Oxford Development Corporation to
Xxxxxxx, which has an outstanding principal balance of approximately $830,173.27
as of the date hereof.
"Xxxxxxx Property Loans" shall mean those loans identified on
Disclosure Schedule Definition 5.
"Xxxxxxx Subordinated Loan" shall mean that certain Promissory Note in
the original principal amount of $5,825,000, dated October 5, 1989, made by
certain OHC subsidiaries to Xxxxxxx, which has an outstanding principal balance
of approximately $4,925,000, as of the date hereof.
"ZIMCO Entities" shall mean those limited liability companies which
are wholly- owned, directly or indirectly, by Xxxxxxx, which companies own
direct or indirect interests in any of the Property-Owning Entities, and which
limited liability companies with the name, "ZIMCO" and a number, and any
Subchapter S corporations that are members of such limited liability companies
are set forth on Exhibit 2.1.
ARTICLE II.
CONTRIBUTION, PURCHASE AND SALE OF ASSETS
2.1. Contribution, Purchase and Sale of Assets. Upon the terms and subject
to the conditions set forth herein, at the Closing, Sellers shall and shall
cause the Sellers' Affiliates to contribute, sell, convey, assign, transfer and
deliver to Buyers, and Buyers shall accept, purchase and acquire from Sellers,
the Acquired Assets as to which all conditions to Closing have been satisfied
(or waived by the party entitled to benefit therefrom), in each case free and
clear of all Liens and encumbrances, other than the Assumed Liabilities, as
follows:
(a) Sellers shall, and shall cause any applicable Sellers' Affiliate
to, sell to Buyers or Buyers' Affiliates or designees all of the Acquired Assets
subject to such Closing that are identified on Exhibit 2.1 as being sold for
cash (provided, however, that at the sole option of Buyers, in their discretion,
by the delivery of written notice at least five (5) business days prior to
Closing, Xxxxxxx shall sell to Buyers a portion of his OHC Shares (as designated
by Buyers in such notice), Buyers shall xxxxx Xxxxxxx a right to sell his
remaining OHC Shares to Buyers on the date that is three years and one day
following the Closing Date, and Xxxxxxx and Buyers shall enter into such other
documents, instruments or agreements as the parties shall reasonably require to
evidence the same);
(b) Sellers shall, and shall cause any applicable Sellers' Affiliate
to, contribute to AIMCO OP all of the Acquired Assets subject to such Closing
that are identified on Exhibit 2.1
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as being contributed for OP Units; provided, however, that at least five (5)
Business Days prior to Closing Sellers may elect to contribute or sell to AIMCO
for AIMCO Stock any of such Acquired Assets;
(c) Any Acquired Assets as to which all conditions to Closing have not
been satisfied (or waived by the party entitled to benefit therefrom) shall be
deposited into escrow in accordance with the terms of the Closing Escrow
described in Section 4.1(c) below.
(d) The actual contributions and sales contemplated hereby shall (and
shall be deemed to) occur in the following order: (i) Buyers will acquire the
stock of OAC Investment, Inc. from OAC Limited Partnership, (ii) Sellers will
sell to Buyers or Buyers' Affiliates all of the Acquired Assets subject to
Closing that are identified on Exhibit 2.1 as being sold for cash; (iii) Sellers
will contribute to AIMCO OP all of the Acquired Assets subject to Closing that
are identified on Exhibit 2.1 as being contributed for OP Units; and (iv)
Sellers will contribute to AIMCO all of the Acquired Assets subject to Closing
that are identified on Exhibit 2.1 as being contributed for AIMCO Stock.
2.2. Consideration; Assumption of Liabilities; Sale and Contributions.
Subject to the adjustments set forth in Section 2.3, the Purchase Price shall be
Three Hundred One Million Two Hundred Twelve Thousand Four Hundred Forty and
No/100 Dollars ($301,212,440), payable at the Closing as follows:
(a) In exchange for the contribution of the Contributed Assets, at the
Closing, Buyers shall issue Buyers' Securities to Sellers, in such type and
quantities to each Seller as is specified by Sellers in writing at least three
Business Days prior to the Closing Date, which are to be allocated to each
Contributed Asset in accordance with Disclosure Schedule 2.1 hereto, in an
aggregate amount equal to (x) Sixty Million and No/100 Dollars ($60,000,000),
divided by (y) the AIMCO Market Price, using a Determination Date as of the date
immediately preceding the Closing Date, allocated for Tax purposes among the
Contributed Assets in accordance with Disclosure Schedule 2.1.
(b) In exchange for the sale, conveyance, assignment and transfer of
the Acquired Assets, other than the Contributed Assets, Buyers shall pay to
Sellers at Closing Two Hundred Forty One Million Two Hundred Twelve Thousand
Four Hundred Forty and No/100 Dollars ($241,212,440.00) cash, payable by wire
transfer of good and immediately available U.S. funds, to such accounts as may
be specified in writing by Sellers, allocated among such assets in accordance
with Disclosure Schedule 2.1.
(c) At Closing, Buyers shall assume the Assumed Liabilities identified
on Section II. of Disclosure Schedule 2.2(c), and use commercially reasonable
efforts to cause the applicable lender to release Sellers from any obligations
identified on Section II.A. of Disclosure Schedule 2.2(c), and the remaining
Acquired Assets shall be transferred to Buyers subject to the remaining
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Assumed Liabilities and Sellers shall be indemnified for such liabilities
pursuant to the Indemnification Agreement.
2.3. Purchase Price Adjustments. The Purchase Price shall be adjusted as
follows:
(a) The Purchase Price shall be adjusted in the manner described below
to reflect any net increase or decrease in the sum of total projected net cash
flows for calendar year 2000 of the Acquired Assets shown on Disclosure Schedule
2.3(a) (except in the case of Xxxxx-Oxford Limited Partnership ("Xxxxx"), in
which case the fiscal year ending May 31, 2001 shall be used in lieu of calendar
year 2000) that results from the occurrence during the period following January
1, 2000 (June 1, 2000, in the case of Xxxxx) through and including the Closing
Date of any of the following events: (i) any equity restructurings, mortgage or
refinancing transaction, or payment or repayment, as the case may be, of any
Partnership Receivables, (ii) if all or any material portion of any of the
Properties is taken by condemnation or eminent domain (or is the subject of a
pending taking which has not been consummated) or if a material portion of any
Property is damaged or destroyed by earthquake, flood, landslide, fire or other
casualty which materially adversely affects the current and future operations of
such Property and for which no proceeds are payable either by the applicable
Governmental Authority or insurer, (iii) to the extent that any Acquired Asset
is not transferred to Buyers at the Closing, or (iv) without duplication and/or
except to the extent otherwise provided herein, to the extent that the Sellers
or Sellers' Affiliates amend, modify, terminate or enter into any agreements or
Organizational Documents which affect the total projected net cash flows for
calendar year 2000 of the Acquired Assets shown on Disclosure Schedule 2.3(a)
(except in the case of Xxxxx, in which case the fiscal year ending May 30, 2001
shall be used in lieu of calendar year 2000). Sellers shall in good faith
propose the amount of the appropriate adjustment to the projected net cash flow
for calendar year 2000 (except in the case of Xxxxx, which shall utilize a
fiscal year ending May 30, 2001) by preparing a pro forma schedule of net cash
flows for calendar year 2000 (except in the case of Xxxxx, which shall utilize a
fiscal year ending June 30) similar to the schedule set forth on Disclosure
Schedule 2.3(a), and using the same methodology and assumptions used to prepare
such schedule, except that the net cash flows shall be adjusted to reflect the
occurrence of any of the events specified in clause (a) above as if they had
occurred on January 1, 2000 (June 1, 2000 in the case of Xxxxx). The aggregate
increase or decrease in the sum of total projected net cash flows for calendar
year 2000 (the fiscal year ending May 31, 2001 in the case of Xxxxx) shall be
multiplied by 8.6 to determine the amount of the adjustment to the Purchase
Price.
(b) At least fifteen (15) days prior to the Closing, Sellers shall
deliver to Buyers proposed adjustments, if any, to the Purchase Price allocable
to each of the Acquired Assets identified on Disclosure Schedule 2.1 that are
required pursuant to this Section 2.3, together with reasonably detailed
supporting documentation for each such adjustment.
(c) The Purchase Price and the cash portion payable pursuant to
Section 2.2(b) shall be increased at Closing by the cash balance of OHC and ORFG
at Closing computed in accordance with the methodology shown on Disclosure
Schedule 2.3(c), as adjusted to the actual date of Closing as follows: (i)
reduced to reflect (aa) payments or reserves for accrued but unpaid
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operating expenses (other than Taxes) through and including the Closing Date,
(bb) all Tax liabilities of such entities attributable to income, gain or loss
recognized through the Closing Date for federal, state and/or local income tax
purposes in excess of available tax attributes (net of any estimated tax
payments by such entities) determined as if the taxable year of such entity
ended on the Closing Date, and (ii) increased by accrued but unpaid revenues and
receipts due Sellers and Sellers' Affiliates through and including the Closing
Date.
(d) The Purchase Price and the cash portion payable pursuant to
Section 2.2(b) shall be increased at Closing by the account balance on the date
hereof of the NHP PMI Inc. for Oxford Group Cash Escrow maintained at Fleet
Bank, Boston, Massachusetts, Account # 936428- 7162, which has a balance of
approximately $515,000 as of the date hereof, increased by any additional
deposits made by any of the Companies after the date hereof and any interest
earned on such amounts, decreased by any Shortfalls for the portion of calendar
year 2000 ending on the closing date, as defined in the Oxford Group Cash Escrow
Account Agreement, and the parties shall execute and deliver any and all
documents as may be required to terminate the Cash Escrow Account Agreement and
Income Tax Cash Escrow Agreement, by and between certain Oxford companies and
certain predecessors-in-interest to AIMCO, each dated as of December 10, 1993
(collectively, the "Oxford Group Escrow Termination Agreement").
(e) The Purchase Price and the cash portion payable pursuant to
Section 2.2(b) shall be increased at Closing by a per diem amount equal to
$36,000 per day for each day that the Closing occurs subsequent to June 30,
2000; provided, however, per diem amounts attributable to those Acquired Assets
that are sold or transferred to persons or which were damaged or condemned in
whole or in part prior to the Closing and/or to those Acquired Assets which will
not be transferred at Closing (e.g., because they are subject to the Closing
Escrow Agreement or will be transferred on a subsequent Closing Date) shall be
deducted on a per Acquired Asset basis as set forth in Disclosure Schedule
2.3(e) from such total per diem purchase price adjustment amount.
(f) Any prorations and payments shall be made on the basis of a
written closing statement approved by Buyers and Sellers. In the event any
prorations or apportionments prove to be incorrect for any reason, then any
party shall be entitled to such adjustments as may be reasonably necessary to
correct the same. Any item which cannot be finally prorated because of the
unavailability of information shall be tentatively prorated on the basis of the
best data then available and re-prorated when the information is available. The
parties hereto agree to furnish each other with such documents and other records
as shall reasonably be requested to confirm all proration calculations and other
payments due under this Section.
(g) Any re-proration made pursuant to Section 2.3(f) shall be made, if
at all, within ninety (90) days after the Closing Date, except with respect to
Taxes which shall be re- prorated within thirty (30) days after the information
necessary to perform such re-proration is available.
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(h) If, on or after the date hereof, a Property-Owning Entity, or one
of the Companies on behalf of a Property-Owning Entity, enters into an agreement
with a third party service provider for cable television, telephone, laundry or
internet services which is not terminable upon not more than 180 days' prior
written notice, then Buyers shall receive a credit at Closing against the cash
portion of the Purchase Price in an amount equal to the Sellers' allocable share
of any up-front payment or other non-monetary consideration (e.g., warrants or
options issued by the vendor) which they receive from third party service
providers.
(i) In the event a Property is sold or refinanced by a Property-Owning
Entity subsequent to the date hereof and prior to Closing, Buyers shall receive
a credit at Closing against the cash portion of the Purchase Price in an amount
equal to any net proceeds received by Sellers, Sellers' Affiliates, ORFG and/or
OHC from such sale or refinancing.
(j) The cash portion of the Purchase Price shall be reduced, without
duplication for any such amounts otherwise adjusted under this Section 2.3, by
the amount of any dividend or distribution paid to or received by a Seller or
Seller's Affiliate attributable to any Acquired Asset and relating to or arising
from recurring operations that occur after January 1, 2000 (or May 30, 2000 in
the case of Xxxxx) provided, however, that such reduction shall not apply to
dividends or distributions of Excluded Assets. Sellers shall, at the Closing,
provide Buyers with a certification of the amount of any such dividends or
distributions.
(k) Sellers shall in good faith determine the amount of the
adjustments set forth above and shall provide Buyers with a written notice of
adjustment, together with a reasonably detailed calculation of such amounts, at
least fifteen (15) days before the Closing Date. Buyers shall, at Buyers'
expense, have the right to audit the adjustments proposed by Sellers and to
inspect the books and records of each of the Oxford Entities relating to the
same. In the event Buyers dispute the amount of the adjustment, Buyers shall,
within five (5) days of receipt of the notice of adjustment, provide to Sellers
a written notice of dispute, together with a reasonably detailed explanation of
the nature of the dispute. If, within three (3) days following Sellers' receipt
of any notice of dispute, the parties are unable to agree upon the amount of any
adjustment required pursuant to this Section, each party shall immediately
select a firm of independent certified public accountants to resolve the
discrepancy, and shall notify the other party in writing as to the identity of
the accounting firm and date of selection. Should the two accounting firms be
unable to reach agreement on the amount of the adjustment within five (5) days
following the date of their selection, they shall immediately jointly designate
a third firm of independent certified public accountants, and the adjustments to
the Purchase Price shall be the mathematical average of the amount of adjustment
determined by each of the three firms so selected. This determination shall be
final and binding upon all the parties hereto, and shall be enforceable in a
court of competent jurisdiction.
(l) Any adjustment to the Purchase Price shall be made pro rata among
the portion of the Purchase Price that will be paid in AIMCO Stock, OP Units,
and cash pursuant to Section 2.2, except to the extent otherwise provided
herein.
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(m) Notwithstanding anything to the contrary contained herein, in the
event the Actual AIMCO Market Price, using a Determination Date as of the date
immediately preceding the Closing Date, is less than $35 per share, the Purchase
Price which Sellers shall be entitled to receive under Section 2.2 shall be
increased by an amount equal to the product of (y) the difference between $35
and the Actual AIMCO Market Price (using a Determination Date as of the date
immediately preceding the Closing Date), multiplied by (x) 1,500,000 (which
number shall be proportionally adjusted in the event that the aggregate
contribution value for the Contributed Assets is other than $60,000,000), which
amount may, at Buyers' election, be paid by wire transfer of good and
immediately available funds pursuant to Section 2.2(a) or the delivery of
additional AIMCO Shares, based upon the Actual AIMCO Market Price, using a
Determination Date as of the date immediately preceding the Closing Date.
(n) The Purchase Price shall be adjusted in accordance with the terms
of Section 4.1(c).
2.4. Warrants. On the Closing Date, the warrants for 500,000 shares of
AIMCO stock currently held by Sellers shall be amended and restated pursuant to
a warrant agreement in the form of the Amended and Restated Warrant Agreement.
2.5. Deposit.
(a) On the date hereof, Buyers shall pay to Sellers the sum of Five
Hundred Thousand and No/100 Dollars ($500,000), representing a nonrefundable
payment which will be retained by Sellers in all events; provided that this
amount will be applied toward the Purchase Price in the event a Closing occurs.
In addition, on the date hereof, Buyers shall either deposit an additional Five
Million Five Hundred Thousand and No/Dollars ($5,500,000) in cash payable by
wire transfer of good and immediately available U.S. funds (which, at Buyers'
option, may be replaced by a Letter of Credit as described in clause (c) below)
or deliver a Letter of Credit as described in clause (c) below (such amount
deposited, together with all interest accrued thereon, or Letter of Credit is
hereinafter referred to and held as the "Deposit") with or to the Escrow Agent
pursuant to the terms of this Agreement.
(b) Escrow Agent shall hold the Deposit and make delivery of the
Deposit to the party entitled thereto under the terms of this Agreement. If the
Deposit is made by Buyers other than by Letter of Credit, Escrow Agent shall
invest the Deposit in an interest-bearing bank account or money market fund or
such other short-term, investment grade securities as Sellers and Buyers shall
jointly agree, in writing, with such agreement being provided to Escrow Agent in
writing. The taxpayer identification number of one of the Buyers shall initially
be utilized for purposes of establishing the interest-bearing escrow account for
the Deposit and such Buyer shall be allocated such interest income for income
tax purposes; provided, however, the interest earned on the Deposit shall
ultimately be reported by the party entitled to receive the Deposit in
accordance with the terms of this Agreement.
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(c) Notwithstanding anything to the contrary contained herein, in the
event that the Deposit is delivered in the form of (or replaced by) a Letter of
Credit:
(i) Escrow Agent shall draw on the Letter of Credit on the
Business Day immediately preceding any date on which Escrow Agent is
required to disburse all or any portion of the Deposit pursuant to the
terms of this Agreement.
(ii) The amount of any Letter of Credit shall equal $5,500,000
plus an amount equal to the interest that would accrue thereon for a
three month period at 5% per annum and, if drawn, shall be held in
escrow pending disbursement by Escrow Agent.
(iii) Escrow Agent shall draw on the entire stated amount of the
Letter of Credit on the third (3rd) Business Day prior to the
expiration date thereof, unless on or before such date, Buyers deliver
to Escrow Agent either (a) an extension of the Letter of Credit or (b)
an amount of cash equal to the entire stated amount of the Letter of
Credit.
(iv) Buyers shall pay all costs and expenses relating to the
Letter of Credit.
(d) On the Closing Date, monies held as the Deposit, together with the
Non- Refundable Payments, together with deemed interest on the Non-Refundable
Payments at the rate of 5% per annum from the date of the Agreement through the
Closing Date, shall be applied to the cash portion of the Purchase Price payable
pursuant to Section 2.2(b).
2.6. Escrow.
(a) The parties agree that the Deposit shall be returned to Buyers or
delivered to Sellers in accordance with the provisions of Article X.
(b) In the event any party notifies the Escrow Agent in writing that a
dispute has arisen with regard to the delivery of the Deposit, the Escrow Agent
shall deliver the Deposit only pursuant to a joint written instruction from all
of the parties. If the Escrow Agent does not receive a joint written instruction
from all of the parties regarding the Deposit within thirty (30) days after
receipt of such notice the Escrow Agent shall have the following rights: (i) the
Escrow Agent may, upon giving written notice to the parties hereto, place the
Deposit with the clerk of the court for the state in which litigation, if any,
between or among the parties hereto in connection with the Deposit is pending in
accordance with the requirements of Section 12.20 of this Agreement; (ii) the
Escrow Agent may, upon giving written notice to the parties hereto, take such
affirmative steps as the Escrow Agent may, at its option, elect in order to
terminate its duties as Escrow Agent, including placing the Deposit with a court
of competent jurisdiction, determined in accordance with Section 12.20, and
commencing an action for interpleader (the parties hereto agreeing that such
commencement of any action for interpleader shall terminate the duties of the
Escrow Agent
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hereunder), the costs thereof (including reasonable attorneys' fees) (to be
borne by whichever of the parties hereto is the losing party. Upon the taking by
the Escrow Agent of either of the actions described in clause (i) or (ii) above,
the Escrow Agent shall be released of and discharged from any further
obligations.
(c) If the Escrow Agent receives written instructions to cancel the
escrow from all of the parties, the instructions set forth above shall be deemed
canceled, the Escrow Agent shall immediately notify the other parties of its
receipt of same and the Escrow Agent shall immediately (i) release the Deposit
to Buyers; and (ii) return each of the documents to party depositing same.
(d) The parties hereto agree that the Escrow Agent is acting solely as
escrow closing agent, and shall be liable solely for its failure to comply with
the terms of this Agreement by reason of its willful misconduct or gross
negligence. The foregoing will not limit the liability of Escrow Agent as title
insurer, if any, under the terms of any owner's or lender's policy of title
insurance which the Escrow Agent or its affiliates may issue (such liability
being in accordance with the terms of such policy).
(e) In all events and notwithstanding anything to the contrary
contained herein, Sellers shall be entitled to retain the Non-Refundable
Payments.
ARTICLE III.
PRE-CLOSING REORGANIZATIONS
3.1. Restructurings. On or before the Closing Date, the reorganizations and
restructurings set forth on Disclosure Schedule 3.1 shall be effected.
ARTICLE IV.
CLOSING
4.1. Closing.
(a) Upon the terms and subject to the satisfaction (or waiver by the
party benefiting from such conditions) of all conditions to Closing set forth in
this Agreement with respect to Acquired Assets representing at least ninety-five
percent (95%) of the aggregate projected net cash flow shown on Disclosure
Schedule 2.3(a), the Closing shall take place at 10:00 a.m., Eastern Daylight
Time, on July 28, 2000, at the offices of Xxxx and Xxxx LLP, 0000 Xxxxxxxxxxxx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000; provided that, except as set forth in
Section 4.1(b), if all such conditions to Closing have not been or cannot be
satisfied or are not waived by such date by the party benefiting from such
conditions, (i) either party shall have the right to extend the Closing Date for
up to six, successive one-month periods by delivery of written notice to the
other party of the exercise of such right at least three business days prior to
July 28, 2000 or the end of any such
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subsequent extension; (ii) the party issuing the extension notice must be
exercising commercially reasonable efforts to satisfy all conditions to Closing
in a timely manner; (iii) in the event of each one-month extension of the
Closing Date, the Closing Date shall occur on the 29th day of the immediately
following month (or the next Business Day following the 29th day of such month),
and (iv) if the Closing has not been completed for any reason whatsoever by
January 29, 2001, this Agreement shall be null and void and of no force or
effect as though it had never been executed and neither party shall have any
liability or obligation to the other party except as otherwise provided herein;
provided, however, if Closing is scheduled to occur in December 2000, Sellers
shall have the right, upon delivery of written notice to Buyers, to postpone the
Closing Date until January 29, 2001.
(b) Notwithstanding anything to the contrary set forth in Section
4.1(a), above, in the event that at any time after the Tentative HUD Approval
Date, all conditions to Closing other than the HUD Condition (the "Non-HUD
Conditions") have been satisfied or waived by the party benefiting from such
condition, but the HUD Condition has not been satisfied, then this Agreement and
each Related Document shall be null and void and of no force or effect as though
it had never been executed, the Deposit shall be returned to Buyers, and neither
party shall have any liability or obligation to the other party except as
otherwise provided herein or in such Related Document; provided, however, in the
event that on the Tentative HUD Approval Date all of the Non-HUD Conditions have
been satisfied or waived by the party benefiting from such condition, Buyers
shall have the right to extend the Closing Date to a date after the Tentative
HUD Approval Date for up to six, successive one-month periods after the the
Tenative HUD Approval Date by delivery of (i) written notice to the Sellers of
the exercise of such right at least three business days prior to the date this
Agreement would otherwise terminate, or the end of any such subsequent
extension, and (ii) a non-refundable payment to Sellers for each such month
equal to $500,000 (each a "Non-Refundable Payment"), payable by wire transfer of
good and immediately available U.S. funds to such account as may be specified
within ten (10) days after the Effective Date by Sellers or if not so specified
by cashier's check, provided, however, that if the Tentative HUD Approval Date
is the 100th day following the Effective Date, the initial one month period
shall be decreased to a twenty (20) day period. In the event Closing shall occur
hereunder, each Non-Refundable Payment shall be applied to the cash portion of
the Purchase Price payable pursuant to Section 2.2(b). In the event Closing
shall not occur hereunder, each Non-Refundable Payment shall be retained by
Sellers. Notwithstanding anything to the contrary contained herein, Buyers shall
only have the right to extend the Closing beyond January 29, 2001 for failure to
satisfy the HUD Condition if the Non- HUD Conditions have been satisfied or
waived, with respect to Acquired Assets representing at least ninety-five
percent (95%) of the aggregate projected net cash flow shown on Disclosure
Schedule 2.3(a), on or before January 29, 2001. Notwithstanding the foregoing
provisions of this Section 4.1(b) and for purposes of this Section 4.1(b) only,
if the Seller Required Consents have been obtained or waived by Sellers, the
Buyer Required Consents shall be deemed to have been obtained or waived.
(c) At Closing, with respect to each of the Acquired Assets for which
all conditions to Closing have not been satisfied, such Acquired Assets and each
of the closing delivery items identified in Section 4.4 and Section 4.5 relating
to such Acquired Assets shall be delivered
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by Buyers and Sellers to Escrow Agent to be held in escrow (the "Closing
Escrow") pending the satisfaction of all remaining conditions to Closing with
respect thereto (provided, however, that Buyers shall be entitled to deposit OP
Units in lieu of AIMCO Stock for AIMCO Stock which would otherwise be issued to
Sellers):
(i) Sellers shall be entitled to continue to receive their
allocable portion of all of the net cash flow and other distributions
attributable to Acquired Assets which are the subject of the Closing
Escrow and which are accrued and/or relate to the period of time such
Acquired Asset(s) are subject to the Closing Escrow;
(ii) Sellers shall retain all voting, control and management
rights relating to any of the Acquired Assets which are the subject of
the Closing Escrow, as provided in Section 4.3, including without
limitation the sole and exclusive right to sell or refinance the
related Properties, and to determine the timing and amount of
distributions to direct or indirect partners of the related
Property-Owning Entities,
(iii) Buyers shall be entitled to receive all of the income
generated by their cash placed in escrow and/or Buyers shall be
entitled to retain all amounts which would otherwise be distributable
with respect to Buyers' Securities that are placed in escrow which
would otherwise be issued to Sellers,
(iv) With respect to any assets or interests subject to the
Closing Agreement, for so long as any such interests or assets remain
subject to the Closing Escrow, Buyers shall not offer to acquire or
make any offer to acquire the interests of any of the limited
partners, special limited partners, holders of assignee units or
beneficial assignee interests of Property-Owning Entities, Employee
Partnerships or the Investment Tier Partnerships, ORP or OTEF, as the
case may be, or otherwise solicit any of the foregoing interest
holders with respect to any transaction or proposed transaction
involving a sale, contribution, exchange, purchase, repurchase or
redemption, tender offer, merger, reorganization, spin-off,
consolidation, business combination or similar type of transaction of
such assets or interests while the same remain subject to the Closing
Escrow,
(v) With respect to Properties relating to any assets or
interests subject to the Closing Escrow, for so long as such interests
or assets remain subject to the Closing Escrow, the operational and
accounting services provided by Manager on the date hereof will
continue to be performed by employees of Manager who are primarily
dedicated to such Properties as a group and, in addition, a
senior-level officer of Manager (or Buyers or Buyers' Affiliates) will
have primary supervisory responsibility with respect to such
Properties,
(vi) With respect to Properties relating to any assets or
interests subject to the Closing Escrow, Buyers shall cause ORFG or
another Buyer Affiliate to continue
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to perform any and all other services required by applicable
partnership and other agreements in exchange for the fees payable
pursuant to such agreements, including without limitation, investor
reporting and related tax services, and
(vii) Prior to the date or dates on which assets or interests are
released from the Closing Escrow (each an "Escrow Release Date"), a
determination shall be made, pursuant to the provisions of Section
2.3, as to any appropriate adjustments to the Purchase Price allocable
to such interests or assets as of the Escrow Release Date as if the
Escrow Release Date were the Closing Date. Subject to the foregoing,
on the Escrow Release Date, among other things, (a) Buyers shall
deliver an amount equal to increase in the Purchase Price (if any) for
the released assets and interests to Sellers (in the same proportions
of cash and Buyers' Securities as the Purchase Price allocable to the
assets being released), and (b) Escrow Agent shall return to Buyers
the decrease (if any) in the Purchase Price for the released assets
and interests (in the same proportions of cash and Buyers' Securities
as the Purchase Price allocable to the assets being released). In
addition, on the Escrow Release Date, all closing delivery items
related to the released assets or interests shall be released from
escrow in the order and pursuant to the terms of this Agreement, but
as if the Escrow Release Date were the Closing Date; provided,
however, Buyers shall substitute AIMCO Stock for OP Units to the
extent Sellers elect to receive AIMCO Stock for the Acquired Asset
being released from escrow.
(viii) In the event all conditions to Closing have not been
satisfied or waived with respect to all escrowed assets and interests
on or before December 31, 2001 or such later date pursuant to the
extensions permitted in Section 4.1, then: (i) all documents,
securities, funds and other items deposited pursuant to the Closing
Escrow shall, without further action of any party, be promptly
returned to the party or parties who deposited such items, (ii) the
escrow shall be deemed to have terminated, and (iii) neither Sellers
nor Buyers shall have any obligation to sell or contribute, acquire or
accept, as the case may be, any or all of the Acquired Assets subject
to the Closing Escrow immediately prior to such termination and (iv)
the parties shall have no further rights, obligations or liabilities
regarding such assets.
4.2. [INTENTIONALLY OMITTED]
4.3. Conventional Portfolio. Disclosure Schedule 4.3 sets forth the list of
Required Consents which shall be required by Sellers and Buyers. In the event a
Required Consent cannot be obtained from a mortgage lender which has loaned
funds with respect to one or more Properties in the Conventional Portfolio, or a
financial institution that has provided credit enhancement for all or a portion
of such debt or tax-exempt bonds relating thereto (such lenders or financial
institutions are referred to as a "Required Consent Lender") (a "Conventional
Property Lacking Consent" or "CPLC"), within 60 days from the Effective Date,
Buyers and Sellers shall use commercially reasonable efforts to develop a
structure which complies with the loan requirements of the Required
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Consent Lenders, but implementing a structure which complies with the loan
requirements of the Required Consent Lenders shall not constitute a condition to
Closing.
4.4. Deliveries by Sellers at the Closing. At the Closing, Sellers shall
deliver, or cause to be delivered, the following to (i) Buyers the following
with respect to all Acquired Assets that are being sold or contributed to Buyers
pursuant to Section 2.1, and (ii) Escrow Agent with respect to all Acquired
Assets that are being submitted to escrow pursuant to Section 4.1(b):
(a) OHC Shares. Xxxxxxx shall deliver to Buyers certificates
representing the OHC Shares, duly endorsed, or accompanied by duly executed
stock powers) with signatures guaranteed by a commercial bank or by a member
firm of the New York Stock Exchange, conveying to Buyers the OHC Shares owned by
him, free and clear of all Liens and encumbrances.
(b) ORFG Shares. Each Seller shall deliver or cause to be delivered to
Buyers, certificates representing the ORFG Shares, duly endorsed, or accompanied
by duly executed stock powers) with signatures guaranteed by a commercial bank
or by a member firm of the New York Stock Exchange, conveying to Buyers the ORFG
Shares owned by him, free and clear of all Liens and encumbrances.
(c) Assignment and Assumption of Partnership Interests, Membership
Interests, Stock Interests and Withdrawal of Partners, Members and Shareholders.
Sellers shall deliver or cause to be delivered to Buyers, with respect to the
applicable Acquired Assets of such Seller, (a) one or more duly executed
counterparts of an Assignment and Assumption of Partnership Interests,
Membership Interests, Stock Interests and Withdrawal of Partners, Members and
Shareholders (or in such other form as Buyers and Sellers may agree), conveying
to Buyers their respective interests described therein, and (b) certificates of
amendment to the partnership agreements or amendments to operating agreements as
may be required to reflect the change of ownership.
(d) Assignment and Assumption of Fee Agreements. ORFG Operations, LLC
shall deliver to Buyers duly executed counterparts of an Assignment and
Assumption of Fee Agreements.
(e) Assignment and Assumption of Corporate Debt. Each Seller shall
deliver to Buyers a duly executed Assignment and Assumption of Corporate Debt,
conveying to Buyers all of such Seller's rights in, to and under the Oxford
Development Loan.
(f) Assignment and Assumption of Xxxxxxx Loans. Xxxxxxx shall deliver
to Buyers a duly executed Assignment and Assumption of Xxxxxxx Loans conveying
to Buyers all of his right, title and interest in and to the Xxxxxxx Loans.
(g) Assignment of Assumption of Xxxxxxx Property Loans and
Subordinated Loan. Xxxxxxx shall deliver to Buyers a duly executed Assignment
and Assumption of Xxxxxxx
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Property Loans and the Xxxxxxx Subordinated Loan, conveying to Buyers all of his
right, title and interest in and to the Xxxxxxx Property Loans and Xxxxxxx
Subordinated Loan.
(h) Assignment and Assumption of Derivative Security. Each Seller
shall deliver to Buyers a duly executed Assignment and Assumption of Derivative
Security, conveying to Buyers all of such Seller's rights in, to and under the
Derivative Security.
(i) Release by Oxford Entities. Sellers shall cause each of the Oxford
Entities to deliver to each Seller an executed counterpart of the Oxford
Entities' Release.
(j) Books and Records. Sellers shall deliver to Buyers all of the
books and records of the Oxford Entities including, without limitation, all
records of all proceedings of and actions taken by, their members, partners,
shareholders and boards of directors, and all records relating to the issuance
and transfer of interests therein or other securities thereof.
(k) FIRPTA Certificates. Each Seller shall deliver to Buyers a
certificate of non-foreign status in the form attached hereto as Exhibit Z.
(l) Sellers' Certificates. Each of Sellers shall have delivered to
Buyers a certificate, dated the Closing Date and certifying as to its compliance
with Sections 9.2(a) and (b).
(m) Acknowledgments. Each Seller that is to receive OP Units pursuant
to Section 2.2 shall deliver to Buyers duly executed counterparts of an
Acknowledgment.
(n) Registration Rights Agreement. Sellers shall deliver to Buyers
duly executed counterparts of the Registration Rights Agreement.
(o) Co-Sale Agreement. Sellers shall deliver to Buyers duly executed
counterparts of the Co-Sale Agreement.
(p) Tax Matters Agreement. Each Seller shall deliver to Buyers duly
executed counterparts of the Tax Matters Agreement.
(q) Sellers' Releases. Each Seller shall deliver to Buyers duly
executed counterparts of a (i) Seller's Release of Buyers, (ii) Sellers' Release
of Oxford Entities, and (iii) Oxford Entities Release of Sellers.
(r) Title Affidavits and Indemnities. Sellers shall deliver to Buyers'
title company all affidavits and indemnities reasonably requested by Buyers'
title company, including, without limitation, affidavits and indemnities
reasonably required by Buyers' title company to issue any non- imputation
endorsements.
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(s) Amended and Restated Warrants. Sellers shall deliver to Buyers (i)
all warrants in AIMCO held by Sellers on the Closing Date, and (ii) duly
executed counterparts of the Amended and Restated Warrant Agreement.
(t) Director and Officer Resignations. Sellers shall deliver to Buyers
resignations in the forms of Exhibit AA executed by each of the directors and
officers of each of the Companies; provided that no such resignations shall be
required with respect to (i) directors who are not Sellers, and/or (ii) entities
subject to the Closing Escrow, unless and until such entities are required to be
sold or contributed to Buyers pursuant to the terms of this Agreement.
(u) Employment Agreements. Sellers shall cause all existing employment
agreements to be terminated.
(v) Organizational Documents. Sellers, at their option, may amend the
organizational documents of the Companies in which the name "Oxford" appears.
(w) Office Sublease. Provided that the consent of the Landlord under
the Office Lease has been obtained or is not required, Sellers (or their
designee) shall execute and deliver a sublease agreement in form and substance
reasonably satisfactory to Buyers and Sellers ("Office Sublease") for
approximately 8,500 net rentable square feet of the office space (located on the
East Wing) covered by the Office Lease and twelve reserved parking spaces, which
sublease agreement shall provide that Sellers shall pay total rent (inclusive of
all charges, parking fees and pass- throughs) of $100 per annum during the
initial two-year period following the Closing Date and, in addition, Buyers
shall xxxxx Xxxxxxx an option, which Sellers may exercise in their sole
discretion by delivery of written notice one hundred eighty (180) days prior to
the expiration of the initial two-year period, to sublet the space then occupied
by Sellers for any period up to the full remaining term of the Office Lease at
the full rent and other charges then required by the Office Lease. In the event
Sellers (or their designee) shall desire to sublease all or any portion of the
space which is subject to the Office Sublease, Buyers' consent shall be required
and, in all events, Buyers shall receive all profits from any such sublease
which Sellers (or their designee) would otherwise be entitled to retain under
the terms of the Office Lease.
(x) Equipment Sublease. Sellers shall execute and deliver a sublease
agreement in form and substance reasonably satisfactory to Buyers and Sellers
("Equipment Sublease") for the office equipment currently in use by Sellers at
the space which is the subject of the Office Sublease, which sublease agreement
shall provide that Sellers shall pay total rent (inclusive of all charges and
pass-throughs) of $100 per annum during the initial two-year period following
the Closing Date and, in addition, Buyers shall xxxxx Xxxxxxx an option, which
Sellers may exercise in their sole discretion by delivery of written notice one
hundred, eighty (180) days prior to the expiration of such two-year period, to
sublease all of such equipment for the remaining term of the existing leases at
the full rent then required under such leases.
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(y) License Agreement (Oxford). Sellers (or the assignee under the
Assignment of Trademarks) shall execute and deliver a License Agreement (Oxford)
entitling Buyers to use the trademark or tradename "Oxford."
(z) License Agreement (FF&E). Sellers shall execute and deliver a
License Agreement (FF&E) entitling Buyers to use the furniture, fixtures and
equipment.
(aa) Resolutions. Sellers shall cause to be delivered written consents
of the Companies in form and content reasonably satisfactory to Buyers.
(bb) SLP Offer Agreement. Sellers shall execute and deliver the SLP
Offer Agreement.
(cc) Oxford Group Escrow Termination Agreement. Sellers shall execute
and deliver the Oxford Group Escrow Termination Agreement.
(dd) Disclosure Certificate. Sellers shall execute and deliver a
Disclosure Certificate.
(ee) ILPI and BAC Agreement. Sellers shall deliver to Buyers a duly
executed ILPI and BAC Agreement.
(ff) Option Sale Agreement. Sellers shall deliver to Buyers a duly
executed Option Sale Agreement.
(gg) Options. Sellers shall deliver to Buyers all of their BAC options
in accordance with the terms of the Option Sale Agreement.
(hh) Consulting Agreements. Each Seller shall deliver to Buyers a duly
executed counterpart of the Consulting Agreement applicable to such Seller.
(ii) Certificates of Dissolution. Sellers shall have filed
certificates of dissolution with respect to the entities identified on
Disclosure Schedule 3.3.
(jj) Holdback Security Agreement. Each Seller shall deliver a duly
executed counterpart of the Holdback Security Agreement.
(kk) Additional Documents. Sellers shall deliver duly executed
counterparts of an agreement terminating the Shareholders' Agreement of OHC and
ORFG, and a Termination of the Agreement Among General Partners relating to the
Property-Owning Entities.
4.5. Deliveries by Buyers at the Closing. At the Closing, Buyers shall
deliver, or cause to be delivered, the following to (i) Sellers the following
with respect to all Acquired Assets that are
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being transferred to Buyers pursuant to Section 2.1(a), and (ii) Escrow Agent
with respect to all Acquired Assets that are being submitted to escrow pursuant
to Section 4.1(c):
(a) OP Units. AIMCO OP shall deliver to each Seller a certificate or
certificates representing the number of OP Units specified pursuant to Section
2.2(a), as adjusted pursuant to Section 2.3.
(b) AIMCO Stock. AIMCO shall deliver to each Seller a certificate or
certificates representing the number of shares of AIMCO Stock specified pursuant
to Section 2.2(a), as adjusted pursuant to Section 2.3.
(c) Cash Consideration. Buyers shall wire transfer good and
immediately available U.S. funds to such account or accounts as may be specified
by Sellers in an aggregate amount equal to the cash consideration to be paid by
Buyers to Sellers pursuant to Section 2.2(b), as adjusted pursuant to Section
2.3.
(d) Assignment and Assumption of Partnership Interests, Membership
Interests, Stock Interests and Withdrawal of Partners, Members and Shareholders.
Buyers shall deliver to Sellers duly executed counterparts of each Assignment
and Assumption of Partnership Interests, Membership Interests, Stock Interests
and Withdrawal of Partners, Members and Shareholders delivered by Sellers.
(e) Acknowledgment. AIMCO OP shall deliver to Sellers duly executed
counterparts of each Acknowledgment.
(f) Assignment and Assumption of Corporate Debt. Buyer shall deliver
to Sellers a duly executed counterpart Assignment and Assumption of Corporate
Debt regarding conveyance to Buyers of Seller's right in, to and under the
Oxford Development Loan.
(g) Assignment and Assumption of Derivative Security. Buyers shall
deliver to Sellers a duly executed Assignment and Assumption of Derivative
Security, assuming all of such Seller's rights in, to and under the Derivative
Security.
(h) Assignment and Assumption of Xxxxxxx Loans. Buyers shall deliver
to Xxxxxxx a duly executed Assignment and Assumption of Xxxxxxx Loans.
(i) Assignment and Assumption of Xxxxxxx Property Loans. Buyers shall
deliver to Xxxxxxx a duly executed Assignment and Assumption of Xxxxxxx Property
Loans and Xxxxxxx Subordinated Note.
(j) Registration Rights Agreement. AIMCO shall deliver to Sellers a
duly executed counterpart of the Registration Rights Agreement.
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(k) Co-Sale Agreements. Buyers shall cause to be delivered to Sellers
a duly executed counterpart of the Co-Sale Agreements.
(l) Tax Matters Agreement. Buyers shall deliver to Sellers duly
executed counterparts of the Tax Matters Agreement.
(m) Buyers Release. Each Buyer shall deliver to Sellers duly executed
counterparts of the Buyers Release of Sellers.
(n) Amended and Restated Warrants. AIMCO shall deliver to each Seller
a duly executed counterpart of the Amended and Restated Warrant Agreement.
(o) Office Sublease. Buyers shall execute and deliver the Office
Sublease.
(p) Equipment Sublease. Buyers shall execute and deliver the Equipment
Sublease.
(q) Lease Estoppel. Buyers shall cause ORFG to execute and deliver to
the lessor under the Office Lease and each of the Equipment Leases such
estoppels or similar documents as may reasonably be required by such lessors.
(r) License Agreement (Oxford). Buyers shall execute and deliver to
Sellers a License Agreement entitling Buyers and the Oxford Entities to use the
trademark or tradename "Oxford."
(s) License Agreement (FF&E). Buyers shall execute and deliver to
Sellers a License Agreement entitling Buyers to use the furniture, fixtures and
equipment.
(t) Resolutions of Buyers. Buyers shall deliver to Sellers, the Escrow
Agent and any lender of any of the Property-Owner Entities who so requests
written consents of Buyers in form and content reasonably satisfactory to
Buyers.
(u) Buyers' Certificates. AIMCO, on behalf of each of the Buyers,
shall have delivered to Sellers a certificate dated the Closing Date and signed
by its President or any Vice President, certifying as to the Buyer's compliance
with Sections 9.3(a) and (b).
(v) SLP Offer Agreement. Buyers shall execute and deliver the SLP
Offer Agreement.
(w) Oxford Group Escrow Termination Agreement. Buyers shall execute
and deliver the Oxford Group Escrow Termination Agreement.
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(x) Assignment and Assumption of Fee Agreements. ORFG Operations, LLC
shall deliver to Buyers duly executed counterparts of an Assignment and
Assumption of Fee Agreements.
(y) ILPI and BAC Agreement. Buyers shall deliver to Sellers a duly
executed ILPI and BAC Agreement and pay to each Seller the purchase price for
his ILPIs set forth on Exhibit A attached thereto by wire transfer of good and
immediately available U.S. funds,
(z) Consulting Agreements. Buyers shall deliver to each Seller a duly
executed counterpart of the Consulting Agreement applicable to each Seller, and
pay the consulting fees required thereunder by wire transfer of good and
immediately available U.S. funds.
(aa) Holdback Security Agreement. Buyers shall deliver to each Seller
an executed counterpart of the Holdback Security Agreement.
(bb) Option Price. Buyers shall deliver to each Seller a cash payment
for his BAC options in accordance with the terms of the Option Sale Agreement.
(cc) Option Sale Agreement. Buyers shall deliver to Sellers a duly
executed Option Sale Agreement.
(dd) Non-Negotiable Contingent Promissory Note. AIMCO shall deliver to
Sellers a duly executed Non-Negotiable Contingent Promissory Note pursuant to
the Indemnification Agreement.
(ee) Additional Documents. Buyers shall deliver duly executed
counterparts of an agreement terminating the Shareholders' Agreement of OHC and
ORFG, and a Termination of the Agreement Among General Partners relating to the
Property-Owning Entities and a release of Xxxxxxx'x indemnity and guarantee
obligations under the Oxford Development Loan and Derivative Security.
4.6. No Duplicative Deliveries. Notwithstanding the foregoing provisions of
Sections 4.4 and 4.5, neither Sellers nor Buyers shall be required to make
deliveries of items with respect to Closings that occur with respect to an
Escrow Release Date to the extent that such delivery was previously made at a
prior Closing and is not relevant for such Escrow Release Date Closing.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF SELLER GROUP
Each of the Sellers hereby makes the following representations and
warranties to Buyers, on a several basis, based solely on his knowledge (as
defined in Section 12.17), each of which shall be true and correct on the date
hereof and shall be true and correct in all material respects
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(modified however to reflect changes in fact required or permitted by this
Agreement or to which Buyers have consented in writing) on the Closing Date:
5.1. Organization and Qualification.
(a) Each of OHC, ORFG and their respective corporate Subsidiaries (i)
is a corporation, duly organized, validly existing and in good standing under
the laws of its respective state of incorporation; (ii) has the requisite power
and authority and all necessary governmental approvals to carry on its business
as it is now being conducted; and (iii) is duly qualified or licensed as a
foreign corporation in each jurisdiction where the character of the nature of
the business conducted by it makes such qualification or licensing necessary.
(b) Each of the General Partners (i) is a corporation, limited
partnership or limited liability company duly incorporated, formed or organized,
validly existing and in good standing under the laws of the state of its
incorporation, formation or organization identified on Disclosure Schedule
5.1(b); (ii) has the requisite power and authority and all necessary
governmental approvals to carry on its business as it is now being conducted;
and (iii) is duly qualified or licensed as a foreign corporation, limited
partnership or limited liability company in each jurisdiction where the nature
of the business conducted by it makes such qualification or licensing necessary.
(c) Each of the Property-Owning Entities, Investment Tier
Partnerships, ORP and OTEF (i) is a limited partnership or limited liability
company duly formed, validly existing and in good standing under the laws of the
state of its formation identified on Disclosure Schedule 5.1(c); (ii) has the
requisite power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now being
conducted; and (iii) is duly qualified or licensed as a foreign limited
partnership in each jurisdiction where the character of the properties owned,
leased or operated or the nature of the business conducted by it makes such
qualification or licensing necessary.
5.2. HUD Properties.
(a) Except for the Properties listed on Disclosure Schedule 5.2(a),
none of the Properties are subject to the regulation or oversight of HUD or any
state housing finance agency.
(b) Other than as set forth on Disclosure Schedule 5.2(a), Xxxxxxx and
each of the General Partners owning an interest in a HUD Partnership (i) has all
necessary approvals and consents of HUD and any applicable state housing
authority to act as a general partner of the applicable HUD Partnership for
which such Person acts as general partner, and (ii) has no "flags" or limited
denials of participation, suspensions or disbarments currently in effect under
HUD 2530 Previous Participation Review and Clearance Procedures.
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5.3. Financial Statements and Cash Flows.
(a) Sellers have previously delivered to Buyers true, accurate and
complete copies of the financial statements of the Companies set forth on
Disclosure Schedule 5.3 (collectively, the "Financial Statements"). Each of the
Financial Statements has been prepared on the basis stated in such Financial
Statements, and each presents fairly the financial position of the Company(ies)
to which it relates as of its date and the results of its operations and changes
in financial position for the period presented therein, as the case may be,
subject, in the case of unaudited interim financial statements included therein,
to normal year-end adjustments.
(b) Subject to the accuracy of the information provided by Buyers to
Sellers, as described in Section 7.12, the projected year 2000 cash flows
identified on Disclosure Schedule 2.3(a) accurately depicts in all material
respects and in the aggregate Sellers' good faith analysis of how cash flows
generated from operations of the Properties would be paid or distributed with
respect to the Acquired Assets, whether as fees, participations, payments or
repayments or Partnership Receivables or distributions to direct or indirect
partners of Property-Owning Entities or others, after giving effect to material
assumptions provided to Buyers, including without limitation, amounts due and
payable with respect to debt service related obligations and Property capital
expenditures.
5.4. Organizational Documents. Sellers have delivered to Buyers true,
correct and complete copies of the Organizational Documents for each Oxford
Entity. Set forth on Disclosure Schedule 5.4 are true, correct and complete
organizational structure charts which show the direct or indirect equity
interests of the Sellers in each of the Oxford Entities, including all
corporations in which any Oxford Entity holds ten percent (10%) or more of the
voting securities.
5.5. Litigation. Except as set forth on Disclosure Schedule 5.5 and for
claims, actions, suits or proceedings which are covered by insurance, relate to
Taxes, or which do not seek specified monetary damages individually in excess of
$250,000 or collectively in excess of $1,000,000, (a) neither Sellers nor any
Oxford Entity has received notice of any action, suit or proceeding before any
judicial or quasi-judicial or administrative body, by any Governmental Authority
or other third party, pending or threatened against or affecting all or any
portion of the Acquired Business or any of the Sellers or Oxford Entities, and
there is no basis for any such action; (b) there are no actions, suits or
proceedings pending or threatened in connection with all or any portion of the
Acquired Business or any of the Sellers or Oxford Entities; and (c) Sellers have
not received notice of any attachments, execution proceedings, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings pending, or, to their respective knowledge, threatened, against any
of the Sellers, Oxford Entities or the Acquired Business. Except as set forth on
Disclosure Schedule 5.5, (a) there is no Order to which any of the Sellers,
Oxford Entities or the Acquired Business is subject; (b) each of the Sellers and
Oxford Entities is, and has been at all times, in material compliance with all
of the terms and requirements of each Order to which it, or any of the assets
owned or used by it, is subject; (c) no event has occurred, and no condition or
circumstance exists, that could reasonably be expected to (with or without
notice of lapse of time) constitute or result directly or indirectly in a
violation of or a failure to comply with any term or requirement of
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any Order to which any of the Sellers, Oxford Entities or the Acquired Business
is subject; and (d) none of the Sellers or Oxford Entities has received any
written notice or other written communication from any Governmental Authority or
any other Person regarding any actual, alleged, possible or potential violation
of, or failure to comply with, any term or requirement of any Order to which any
of the Sellers, Oxford Entities or the Acquired Business is subject. Sellers
have made available to Buyers for their review copies of all pleadings,
correspondence and other documents relating to all actions, suits and
proceedings that involve, affect or relate to any of the Sellers, Oxford
Entities or the Acquired Business and which are in the possession of Sellers.
Sellers have made available to Buyers copies of all material correspondence sent
or received since January 1, 1993, between any of the General Partners, on one
hand, and any limited partner of any of the Property- Owning Entities, on the
other hand.
5.6. Absence of Undisclosed Liabilities. None of the Companies has any
liabilities or obligations of any kind or nature, whether absolute, contingent
or accrued, and whether due or to become due, except (a) those reflected or
disclosed in the Financial Statements or on any of the Disclosure Schedules, (b)
those arising since the dates of the Financial Statements that, in the
aggregate, would not reasonably be expected to have a Material Adverse Effect,
and (c) those reflected on the balance sheet of each Company.
5.7. Absence of Changes. Except as set forth on Disclosure Schedule 5.7 or
in the Financial Statements, since the dates of the Financial Statements, (a)
there has not been, occurred, or arisen any change in, or any event (including
without limitation any damage, destruction, or loss, whether or not covered by
insurance), condition, or state of facts of any character that, individually or
in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect, and (b) the Oxford Entities have operated in the ordinary course
of business consistent with past practice.
5.8. Benefit Plans and Employee Matters.
(a) Except as disclosed in the Financial Statements delivered to
Buyers or on Disclosure Schedule 5.8(a), none of the Companies (i) has any
liability under any past or present Benefit Plan that would not be paid by
Companies or Sellers at Closing, or (ii) has any liability to any current
employees of any Affiliate of any of Sellers that would not be paid by Companies
or Sellers at Closing. Except as expressly provided in any transition plan to
which Buyers and Sellers may hereafter agree (but which transition plan shall
not be a condition to Closing), none of the Companies has made any
representations or commitments to any of their employees concerning terms or
conditions of employment of such Persons by Buyers following the date of
Closing.
(b) Except as set forth on Disclosure Schedule 5.8(b), no Oxford
Entity is a party to a collective bargaining agreement or similar labor
contract, nor have any employees of an Oxford Entity been represented for
purposes of collective bargaining by a labor union or labor organization.
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(c) The number of full-time employees of ORFG Operations, L.L.C. is
less than fifty persons, and none of the Oxford Entities other than ORFG
Operations L.L.C. has had any employees since 1995.
5.9. Properties.
(a) Set forth on Disclosure Schedule 5.9(a) is a true, correct and
complete list of all of the Properties, indicating, in each case, the street
address and owner of such Property, each of which holds marketable fee simple
title or leasehold title (as identified on Disclosure Schedule 5.9(a)) to such
Property; provided, however, the aforesaid titles are subject to and/or
encumbered by Liens and other covenants, conditions, restrictions, easements and
other matters which do not adversely affect in any material respect the current
use of the Property. Except as disclosed in Disclosure Schedule 5.9(a) and in
the Organizational Documents, none of the Companies has granted any options or
rights of first refusal or rights of first offer to third parties to purchase or
otherwise acquire an interest in any of the Properties
(b) Except as disclosed on Disclosure Schedule 5.5 or Disclosure
Schedule 5.9(b), the Companies have not received written notice of any alleged
material violation of applicable Laws with respect to the Property with which it
is affiliated, which violation has not been cured, including, without
limitation, all Laws with respect to zoning, building, fire and health codes,
but excluding the ADA and Environmental Laws.
(c) Except as shown on Disclosure Schedule 5.9(c), none of the
Property-Owning Entities is actively considering or negotiating the sale or
refinancing of any Property. None of the Property-Owning Entities has received
any written offer or proposal at any time during the six (6) month period
preceding the date of this Agreement for the sale or refinancing of any
Property, except as shown on Disclosure Schedule 5.9(c).
(d) Except as shown on Disclosure Schedule 5.9(d), none of the Oxford
Entities has any uncured monetary default as of the date hereof with respect to
any indebtedness of such entity; provided, however, with respect to
Property-Owning Entities, the aforesaid representation shall only apply to
mortgage loan indebtedness.
5.10. Personal Property; Leases. Except as set forth in Disclosure Schedule
5.10 and except for personal property of which a Company is a lessee, all the
personal property included in the Acquired Business is owned by such Company
free and clear of all Liens. Except for the Excluded Assets, immediately after
the Closing, Buyers will, directly or indirectly, have good and marketable title
to all the personal property included in the Acquired Business other than leased
personal property, subject to the liens of the Oxford Development Loan and
Derivative Security that will be held by Buyers.
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5.11. Fee Agreements.
(a) Set forth on Disclosure Schedule 5.11 is a true, correct and
complete list of Fee Agreements between any of the Oxford Entities as obligor
and obligee that are currently in effect.
(b) Sellers have made available to Buyers a true copy of each Fee
Agreement described on Disclosure Schedule 5.11, as presently in effect, and
none of Sellers or the Companies has received any written notice from any party
to any such Fee Agreement of the termination thereof. Each of the Fee Agreements
listed in Disclosure Schedule 5.11 is in full force and effect and constitutes a
legal, valid and binding obligation of the Companies except as enforcement may
be limited by creditors' rights and equitable principles and, upon consummation
of the transactions contemplated by this Agreement, will remain in full force
and effect. None of the Companies or, to Sellers knowledge, any other party to
any Fee Agreements disclosed or required to be disclosed in Disclosure Schedule
5.11 is currently in violation, breach or default under any such Fee Agreement
or, with or without notice or lapse of time or both, would be in violation or
breach of or default under any such Fee Agreement.
5.12. Compliance with Law; Licenses, Permits and Approvals. Except as set
forth on Disclosure Schedule 5.12, the businesses of the Oxford Entities other
than the Property-Owning Entities have been and are currently being conducted in
compliance with all Laws. Disclosure Schedule 5.12 sets forth all licenses,
franchises, permits, orders, approvals, authorizations, variances, exemptions,
classifications, certificates, registrations and similar documents or
instruments issued by any Governmental Authority or otherwise necessary in
connection with the ownership, development, use or maintenance of any of the
Acquired Business and held by the Oxford Entities (other than the
Property-Owning Entities) except those the absence of which would not,
individually or in the aggregate, result in a cost, loss, expense or liability
in excess of $10,000 (collectively, the "Approvals"). All of the Approvals are,
and upon consummation of the transactions contemplated hereby will be, in full
force and effect, and no Seller or any Company is or, upon consummation of the
transactions contemplated hereby, will be in default under, violation of or
noncompliance with the Approvals.
5.13. Insurance.
(a) Set forth on Disclosure Schedule 5.13(a) is a true, correct and
complete list and description of all casualty, liability, property, workers
compensation, directors and officers, crime, employment practices, nurses
professional and pollution liability policies, and other contracts that insure
the business or operations of any of the Companies or affect or relate to the
ownership, use or operations of any of the Acquired Business, and that have been
issued to the Companies (including without limitation the names and addresses of
the insurers and the expiration dates thereof, and coverage thereof). All such
insurance is in full force and effect. All premiums required to be paid
thereunder have been paid and no notice of cancellation or termination has been
received with respect to any such policy. Such policies will remain in full
force and effect through the
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Closing Date, and will not by their terms in any way be affected by, or
terminate or lapse by reason of, the transactions contemplated by this
Agreement. None of the Companies has received written notice from any insurance
company concerning, nor are any of Sellers aware of, any defects or inadequacies
in any of the Properties which, if not corrected, would result in the
termination of insurance coverage.
(b) Set forth on Disclosure Schedule 5.13(b) is a true, correct and
complete summary of all losses incurred and payments made since January 1, 1999,
pursuant to the insurance described in Section 5.13(a).
5.14. No Investment Company. Each of the Oxford Entities is not, and does
not conduct its operations in a manner that could subject it to registration as,
an "investment company" under the U.S. Investment Company Act of 1940, as
amended.
5.15. Intercompany Liabilities. Set forth on Disclosure Schedule 5.15 is
true and complete list and description, including the obligors, principal amount
outstanding as of the date hereof, and accrued but unpaid interest thereon as of
the date hereof, of all indebtedness owed by any of the Companies to any of the
other Companies. Except as disclosed in Disclosure Schedule 5.11 or Disclosure
Schedule 5.15 and except for this Agreement, Related Documents and the
Indemnification Agreement, there are no obligations, liabilities, Contracts or
commitments between or among any of the Companies.
5.16. Environmental.
(a) Except as set forth in Disclosure Schedule 5.16(a) or in the
Environmental Reports, each of the Companies and the Properties is in compliance
in all material respects with all Environmental Laws, which compliance includes,
but is not limited to, the possession by the Companies and the Properties of all
permits and other governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof. Except
as set forth in Disclosure Schedule 5.16(a), none of the Companies has received
any written communication, whether from a Governmental Authority, citizens
group, employee or otherwise, that alleges that any the Companies or Properties
is not in such material compliance.
(b) Except as set forth in Disclosure Schedule 5.16(b), there is no
Environmental Claim pending or, threatened against any of the Companies or
Property-Owning Entities and the Companies have not received written notice of
any Environmental Claim pending or threatened against the Companies or against
any Person for whose liability for any Environmental Claim any of Sellers or the
Companies has retained or assumed either contractually or by operation of law.
Except as set forth in Disclosure Schedule 5.16(b) or in the Environmental
Reports, there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release,
emission, discharge, presence or disposal of any Material of Environmental
Concern, that could form the basis of any Environmental Claim against any of the
Companies or
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Properties or against any Person whose liability for any Environmental Claim any
of the Companies or Property-Owning Entities has retained or assumed either
contractually or by operation of law.
(c) Without in any way limiting the generality of the foregoing, (i)
all on-site locations where any of the Companies or Property-Owning Entities has
stored, disposed or arranged for the disposal of Materials of Environmental
Concern at the Properties are identified in Disclosure Schedule 5.16(c) or in
the Environmental Reports (ii) all underground storage tanks, and the capacity
and contents of such tanks, located at the Properties are identified in
Disclosure Schedule 5.16(c) or in the Environmental Reports (iii) except as set
forth in Disclosure Schedule 5.16(c) or in the Environmental Reports there is no
asbestos contained in or forming part of any building, building component,
structure or office space at the Properties, and (iv) except as set forth in
Disclosure Schedule 5.16(c) or in the Environmental Reports no polychlorinated
biphenyls ("PCB") or PCB- containing items are used or stored at the Properties.
(d) Each of the Companies and Property-Owning Entities has all
permits, licenses, registrations, authorizations and approvals and financial
assurance (including, without limitation, rights under grandfather provisions,
exemptions, waivers and the like) ("Environmental Permits") required to be held
or provided by the Companies and Property-Owning Entities in order to conduct
their respective businesses as currently operated or contemplated under
applicable Environmental Laws each is in compliance with the requirements of all
such Environmental Permits. Set forth on Disclosure Schedule 5.16(d) is a list
of all Environmental Permits, if any, held by the Companies and Property-Owning
Entities, and the Companies have made copies of all such Environmental Permits,
or pending applications for any such Environmental Permits, available for
inspection by Buyers. There are no orders or decrees (including, without
limitation, consent orders or consent decrees), judgments, settlements,
agreements or other binding obligations of any kind relating to Environmental
Claims or Environmental Laws specifically applicable to the Companies or to any
of the Properties.
(e) Sellers have provided to Buyers all assessments, reports, data,
results of investigations, audits and other information that is in the
possession of Sellers located in Sellers' office relating to the environmental
matters or the environmental condition of the Properties. Each of the
representations and warranties set forth in Sections 5.16(a) through (f) are
hereby qualified to the extent of any information and/or disclosures set forth
in the Environmental Reports, and each of the representations and warranties set
forth in Sections 5.16(a) through (f) shall automatically be deemed to be
qualified and modified by such Environmental Reports.
(f) Set forth on Disclosure Schedule 5.16(f) are true, correct and
complete lists of all properties which are or have been owned, leased or
operated by the Oxford Entities since 1990.
5.17. Tax Representations and Warranties as to the Companies. Except as set
forth on Disclosure Schedule 5.17, each of the Sellers hereby makes the
following representations and warranties to Buyers, on a several basis, based
solely on his knowledge (as defined in Section 12.17, below), each of which
shall be true and correct in all material respects on the date hereof, and each
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of which shall apply solely with respect to tax years for which the Companies
filed a tax return within the six-year period prior to the date of this
Agreement:
(a) Each Company has timely filed all Tax Returns required to be filed
by it and all such Tax Returns are true, correct, and complete in all material
respects. Each Company has timely paid all Taxes required to be paid by it.
(b) There are no liens for Taxes filed with respect to the assets of
any Company except for liens for Taxes not yet due or payable.
(c) None of the Companies has (i) requested any extension of time to
file a Tax Return, which Tax Return has not since been filed, (ii) granted any
power of attorney (or similar authority) as to any matter regarding any Taxes,
Audit, or Tax Return, which power of attorney remains in effect or outstanding,
or (iii) entered into any Tax sharing, tax indemnity, or cost sharing agreement
or similar policy or understanding.
(d) None of the Companies (i) has ever been a member of an affiliated
group as defined under Section 1504 of the Code and (ii) has any liability for
Taxes of any other person or entity under Treas. Reg. Section 1.1502-6 (or any
similar provision of state or local law), or as a transferee or successor, by
contract or otherwise;
(e) None of the Companies has any Audits presently pending or has
received any written notice of any upcoming Audit with respect to any Tax
Returns or Taxes. None of the Companies has been subject to any Audit;
(f) None of the Companies has filed any consent to the application of
Section 341(f)(2) of the Code (or any corresponding provision of state or local
law);
(g) None of the Companies has taken any action that would require an
adjustment pursuant to Section 481 of the Code (or any corresponding provision
of state or local law) by reason of a change in accounting method or otherwise;
(h) No Seller is a foreign person within the meaning of Section
1445(f)(3) of the Code;
(i) None of the Companies will have any liability on the Closing Date
with respect to any agreement, contract, or arrangement that would result in any
"excess parachute payments" within the meaning of Section 280G of the Code;
(j) The IRS has not challenged the status of any of the Oxford
Entities (i) on Disclosure Schedule 5.17(j)(i) (all of which are general
partnerships, limited partnerships or limited liability companies) as a
"partnership" for United States Federal income tax purposes (and each such
entity has at all times taken the position on all of its Tax Returns that it is
treated as a "partnership"
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for United States Federal income tax purposes) or (ii) on Disclosure Schedule
5.17(j)(ii) (all of which are corporations that have filed Subchapter S
Elections) as an "S corporation," within the meaning of Section 1361 of the Code
(and each such entity has at all times taken the position on all of its Tax
Returns that it is qualified as an "S corporation" for United States Federal
income tax purposes). Each of the Companies identified on Disclosure Schedule
5.17(j)(iii) is a corporation (without any "S" election) for United States
Federal income tax purposes for any and all periods up to and including the
Closing Date.
(k) No Tax Authority has ever claimed that any of the Companies is
required to file any Tax Return in a jurisdiction in which such Company does not
pay Taxes or file Tax Returns;
(l) None of the Companies has received (or has requested) any Tax
Ruling (as defined below) or entered into any Closing Agreement (as defined
below) with any Tax Authority. The term "Tax Ruling," means any ruling of a Tax
Authority relating to Taxes. The term "Closing Agreement," means a legally
binding agreement with a Tax Authority relating to Taxes;
(m) None of the Oxford Entities has ever owned or operated any
property located outside of the United States; and
(n) The parties hereto agree that the agreed upon fair market value of
each of the Unlimited Tax Lock-Out Properties (as defined in the Tax Matters
Agreement) and Limited Tax Lock-Out Properties (as defined in the Tax Matters
Agreement) is as set forth on Disclosure Schedule 5.17(n). Disclosure Schedule
5.17(n) also set forth the adjusted tax basis of the Unlimited Tax Lock-Out
Properties and Limited Tax Lock-Out Properties as of December 31, 1999. The
parties shall amend Disclosure Schedule 5.17(n) to reflect the adjusted tax
basis of the Unlimited Tax Lock-Out Properties and Limited Tax Lock-Out
Properties as of the Transfer Date (as defined in the Tax Matters Agreement) as
soon as practicable, but in no event later than the due date (including
extensions) of the tax return with respect to such Tax Lock-Out Property.
5.18. Reports and Financial Statements. Each of OTEF and ORP has filed all
reports, forms, statements and other documents required to be filed by it with
the Securities and Exchange Commission (the "SEC") . Since 1998, OTEF has timely
filed all reports, periodic reports on Form 10-K and Form 10-Q and other
documents required to be filed by it with the SEC. All periodic reports on Form
10-K and Form 10-Q required to be filed through the date hereof have been filed
by each of OTEF and ORP with the SEC (collectively, the "Oxford/SEC Reports").
Oxford/SEC Reports were prepared and filed in compliance with the Securities Act
and the Exchange Act and the rules and regulations promulgated by the SEC
thereunder, and did not, as of their respective dates, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements contained therein, in light of the circumstances
under which they were made or will be made, not misleading. The audited
financial statements and the interim audited financial statements of OTEF and
ORP included in Oxford/SEC Reports were prepared in accordance with GAAP (except
as may be indicated in the notes thereto) and fairly presented in all material
respects the consolidated financial condition and results of operations of each
of XXXX,
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ORP and their subsidiaries as at the dates thereof and for the periods then
ended, subject, in the case of the interim consolidated financial statements, to
normal year-end adjustments and any other adjustments described therein.
5.19. Books and Records. Since December 10, 1993, the books of account,
minute books, stock record books, and other records of the Oxford Entities,
other than those held by Buyers or their Affiliates and all of which have been
made available to Buyers, are complete and correct in all material respects and
have been maintained in accordance with sound business practices, including the
maintenance of an adequate system of internal controls. The minute books of the
Companies contain accurate and complete records of substantially all meetings
held of, and corporate action taken by, the stockholders, the boards of
directors, and committees of the boards of directors of the Companies. At the
Closing, all of those books and records will be in the possession of the
Companies.
5.20. Consents and Approvals; No Violation. Except for (i) the HUD
Approvals relating to the HUD Properties and (ii) the filing of amendments to
certificates of limited partnership to reflect changes in general partners of
any of the Oxford Entities which are partnerships, the consummation by each
Seller of the transactions contemplated hereby and compliance by each Seller
with the provisions hereof will not require any consent, approval, authorization
or permit of, or filing with or notification to, any Governmental Authority.
5.21. Brokers and Financial Advisors. Except as disclosed in Disclosure
Schedule 5.21, all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Sellers directly with Buyers,
without the intervention of any Person on behalf of the Seller in such manner as
to give rise to any valid claim by any Person against Buyers or the Companies
for a finder's fee, brokerage commission, or similar payment.
5.22. Transactions with Affiliates. Set forth on Disclosure Schedule 5.22
is a true and complete list and description, including the obligors, principal
amount outstanding as of the date hereof, and accrued but unpaid interest
thereon as of the date hereof, of (a) all indebtedness owed by any of the Oxford
Entities to any of Sellers or Sellers' Affiliates, and (b) all indebtedness owed
by any of Sellers or Sellers' Affiliates to any of the Oxford Entities. Except
as disclosed in Disclosure Schedule 5.22, there are no obligations, liabilities,
Contracts or commitments between or among any of the Oxford Entities, on the one
hand, and any of Sellers or Sellers' Affiliates, on the other hand, that will
not be terminated at Closing. The representation set forth in this Section 5.22
shall not be limited to each Seller's knowledge.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF EACH SELLER
Each Seller hereby makes the following representations and warranties
to Buyers, with respect to himself only and not as to any other Seller, which
representations and warranties shall
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be true and correct on the date hereof and shall be true and correct in all
material respects (modified however to reflect changes in fact required or
permitted by this Agreement or to which each Seller has consented in writing) on
the Closing Date:
6.1. Ownership Interests.
(a) Each Seller or Seller Affiliate has good title to the Acquired
Assets that he is required to sell or contribute, or cause to be sold or
contributed, to Buyers in accordance with the terms of this Agreement.
(b) Except as set forth in the Organizational Documents or on
Disclosure Schedule 6.1(b), (i) the interests of each Seller or Seller Affiliate
in the Acquired Assets are held free and clear of all security interests, liens,
adverse claims, pledges and other encumbrances of any nature whatsoever, and
(ii) there are no (aa) options, warrants, agreements, conversion or exchange
rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any membership interest, partnership interest, or other equity
interest in any of the Acquired Assets, (bb) obligations to invest in any of the
Companies (in the form of a loan, capital contribution or otherwise), or (cc)
restrictions on the voting or transfer of the interests of each Seller in the
Acquired Business. Notwithstanding any provision of this Agreement to the
contrary, Buyers acknowledge that the Properties to which the Acquired Assets
relate are subject to mortgage, trade vendor and other indebtedness and
obligations which include senior secured interests. The UCC financing statements
listed on Disclosure Schedule 6.1(b) relate to indebtedness of the Oxford
Entities disclosed on the applicable Oxford Entity's Financial Statements or
indebtedness that has been paid or satisfied in full.
(c) Each Seller is of legal age and has the requisite mental
competence to execute and deliver this Agreement and each of the Related
Documents to which each such Seller is a party and perform such Seller's
respective obligations hereunder and thereunder. Assuming the due authorization,
execution and delivery of this Agreement and the Related Documents by the other
parties hereto or thereto, this Agreement and each of the Related Documents
constitutes the legal, valid and binding obligation of each Seller, to the
extent each is a party thereto, enforceable against such Seller in accordance
with its terms, except as the foregoing may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights
generally and/or by equitable principles to which the remedies of specific
performance and injunctive and similar forms of relief are subject.
(d) The Acquired Assets to be sold or contributed by each Seller (or
which each Seller shall cause to be sold or contributed) pursuant to this
Agreement represent all of the ownership interests, assets, claims, debts or
rights (other than as provided, retained or preserved in this Agreement and the
Related Documents, including without limitation, any indemnification rights) of
each Seller and Sellers' Affiliates (other than Xxxxxxx Xxxxxxx) with respect to
the Acquired Business and the Properties, except for those interests or assets
specifically set forth in the definition of Excluded Assets. No Person other
than Sellers, Sellers' Affiliates (other than Xxxxxxx Xxxxxxx),
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Buyers or Buyers' Affiliates owns any direct equity interest, option, warrant,
agreement, conversion or exchange right, preemptive right or other rights to
subscribe for, purchase or otherwise acquire any interest in OHC, ORFG, or ORFG
Operations, LLC or any of their respective Subsidiaries.
(e) Xxxxxxx (and only Xxxxxxx) represents and warrants as follows: (i)
the sale of Xxxxxxx'x portion of the Acquired Assets constitutes the sale of at
least 75% of his assets as of the date hereof, and (ii) Xxxxxxx further
represents that the indebtedness referred to in the UCC Financing Statement,
dated May 25, 1988 (as the same may have been continued), filed against certain
of his Direct General Partnership Interests, has been paid or satisfied in full,
notwithstanding the secured party's failure to file UCC-3 termination statements
with respect thereto.
6.2. Investment Representations. Each Seller that will receive AIMCO Stock
and/or OP Units pursuant to Section 2.2 or the ILPI and BAC Agreement:
(a) is an "Accredited Investor," as such term is defined in Regulation
D under the Securities Act;
(b) has received and reviewed the PPM;
(c) has had access to such additional financial and other information,
and has been afforded the opportunity to ask questions of Representatives of
AIMCO OP and AIMCO, and to receive answers to those questions, as it has deemed
necessary in connection with its acquisition of AIMCO Stock, and/or OP Units;
(d) acknowledges that the AIMCO Stock, and/or OP Units that will be
acquired pursuant to this Agreement are being acquired in a transaction not
involving any public offering within the meaning of the Securities Act, and the
AIMCO Stock and OP Units, have not been, and may never be, registered under the
Securities Act;
(e) agrees not to offer, sell, transfer or otherwise dispose of the
AIMCO Stock, OP Units or any AIMCO Stock issued in exchange for OP Units
tendered for redemption, in the absence of registration under the Securities Act
unless (i) it delivers to AIMCO OP and AIMCO an opinion of counsel reasonably
satisfactory to AIMCO OP and AIMCO, in form and substance satisfactory to AIMCO
OP and AIMCO, to the effect that the proposed sale, transfer or other
disposition may be effected without registration under the Securities Act and
under applicable state securities and blue sky laws or (ii) in the case of a
Permitted Transfer, (x) it delivers notice thereof to AIMCO and AIMCO OP, and
(y) (A) AIMCO reasonably determines that the proposed sale, transfer or other
disposition may be effected without registration under the Securities Act and
under applicable state securities and blue sky laws, or (B) Sellers deliver to
Buyers an opinion of counsel that such proposed sale, transfer or other
disposition may be effected without registration under the Securities Act and
under applicable state securities and blue sky laws.
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(f) acknowledges that the OP Units and any AIMCO Stock issued in
exchange for OP Units tendered for redemption, will be in the form of physical
certificates and that, unless and until such OP Units or AIMCO Stock shall have
been registered under the Securities Act, the certificates will bear a legend to
the following effect:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE
PARTNERSHIP/CORPORATION AN OPINION OF COUNSEL SATISFACTORY TO THE
PARTNERSHIP/CORPORATION, IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTNERSHIP/CORPORATION, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR
OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND
UNDER APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS. IN ADDITION, THE
LIMITED PARTNERSHIP INTEREST/SHARES EVIDENCED BY THIS CERTIFICATE MAY BE
SOLD OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON
TRANSFER SET FORTH IN THE AGREEMENT OF LIMITED PARTNERSHIP OF AIMCO
PROPERTIES, L.P., DATED AS OF JULY 29, 1994/THE BY-LAWS OF THE CORPORATION,
AS IT MAY BE AMENDED AND/OR SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH
MAY BE OBTAINED FROM AIMCO-GP, INC, THE GENERAL PARTNER/CORPORATION, AT ITS
PRINCIPAL EXECUTIVE OFFICE.
(g) has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an acquisition
of the AIMCO Stock, and/or OP Units and is able to bear the economic risk of a
loss of an investment in the AIMCO Stock, OP Units and is not acquiring any
AIMCO Stock, and/or OP Units with a view to the distribution thereof or any
present intention of offering or selling any thereof in a transaction that would
violate the Securities Act or the securities laws of any state or any other
applicable jurisdiction; and
(h) has been advised by its own counsel with respect to this Agreement
and the tax implications of the contributions and transactions contemplated
hereby.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each Buyer hereby makes the following representations and warranties
to Sellers, with respect to itself only and not as to any other Buyer, which
representations and warranties shall be true and correct on the date hereof and
shall be true and correct in all material respects (modified
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however to reflect changes in fact required or permitted by this Agreement or to
which each Seller has consented in writing) on the Closing Date:
7.1. Organization and Qualification.
(a) AIMCO is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Maryland. AIMCO has its principal
place of business in the State of Colorado and has the requisite corporate power
and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted. AIMCO
is duly qualified or licensed as a foreign corporation in each jurisdiction
where the character of the properties owned, leased or operated or the nature of
the business conducted by it makes such qualification or licensing necessary.
(b) AIMCO OP is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of Delaware, with its principal
place of business in the State of Colorado, and has the requisite power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted. AIMCO OP
is duly qualified or licensed as a foreign limited partnership in each
jurisdiction where the character of the properties owned, leased or operated or
the nature of the business conducted by AIMCO OP makes such qualification or
licensing necessary.
(c) AIMCO/NHP is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware. AIMCO/NHP has its
principal place of business in the State of Colorado and has the requisite
corporate power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now being
conducted. AIMCO/NHP is duly qualified or licensed as a foreign corporation in
each jurisdiction where the character of the properties owned, leased or
operated or the nature of the business conducted by it makes such qualification
or licensing necessary.
(d) NHP Management Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the District of Columbia. NHP
Management Company has its principal place of business in the State of Colorado
and has the requisite corporate power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted. NHP Management Company is duly
qualified or licensed as a foreign corporation in each jurisdiction where the
character of the properties owned, leased or operated or the nature of the
business conducted by it makes such qualification or licensing necessary.
7.2. Authority Relative to this Agreement. Each Buyer has all necessary
power and authority to execute and deliver this Agreement and each of the
Related Documents to which it is a party, to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution and delivery by each Buyer of this Agreement and each of
the Related Documents to which it is a party, the performance by each Buyer of
its
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obligations under this Agreement and each of the Related Documents to which it
is a party, and the consummation by each Buyer of the transactions contemplated
by this Agreement and each of the Related Documents to which it is a party have
been duly and validly authorized by all necessary action and no other
proceedings are necessary on the part of Buyers to authorize this Agreement or
any of the Related Documents or to consummate the transactions contemplated
hereby or thereby. This Agreement and each of the Related Documents has been
(or, when executed and delivered, will have been) duly and validly executed and
delivered by each Buyer, to the extent each is a party thereto, and, assuming
the due authorization, execution and delivery thereof by the other parties
hereto or thereto, constitutes the legal, valid and binding obligation of each
Buyer, to the extent each is a party thereto, enforceable against such Buyer in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights
generally and by equitable principles to which the remedies of specific
performance and injunctive and similar forms of relief are subject.
7.3. Consents and Approvals; No Violation. Except as set forth on
Disclosure Schedule 7.3, the execution and delivery by Buyers of this Agreement,
the consummation by Buyers of the transactions contemplated hereby and
compliance by Buyers with the provisions hereof will not (a) conflict with,
result in a breach of, or cause a dissolution or require the consent or approval
of any Person under, any provision of the Organizational Documents of Buyers,
(b) require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, or any other third party, (c)
conflict with, or, with or without notice or the passage of time or both, result
in a material breach or violation of any of the terms or provisions of, or
constitute a default under, any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, contract, obligation or agreement of any kind, to
which Buyers are a party, or give to any third party any right of termination,
cancellation, amendment or acceleration under any such contract or result in the
creation of a Lien on any of the assets or properties of Buyers, or (d) violate
or conflict with any Order, Law, rule or regulation applicable to any of Buyers;
provided, however, with respect to (b) and (c) above, this representation does
not apply to property owned by partnerships affiliated with Buyers.
7.4. Litigation. Buyers have not received notice of any material action,
suit or proceeding before any judicial, quasi-judicial or administrative body,
by any Governmental Authority or other third party, pending, or to its
knowledge, threatened, against or affecting Buyers or Buyers' ability to close
the transactions contemplated hereby and, to their knowledge, there is no basis
for any such action, suit or proceeding. Buyers have not received notice of any
attachments, execution proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization or other proceedings that are pending,
or, to its knowledge, threatened, against Buyers.
7.5. Organizational Documents. Buyers have delivered to Sellers a complete
and correct copy of (a) the Charter and Amended and Restated By-laws of AIMCO,
(b) the Certificate and Agreement of Limited Partnership of AIMCO OP, in each
case, as amended.
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7.6. OP Units; Amended and Restated Warrants.
(a) The OP Units, if and when issued to Sellers in accordance with
this Agreement, will be duly authorized and validly issued. Subject to Sellers'
delivery of the acknowledgments described in Section 4.4(n), the Persons
receiving OP Units pursuant to this Agreement will be duly admitted on and as of
the Closing Date as limited partners of AIMCO OP with all the rights of limited
partners of AIMCO OP under the Agreement of Limited Partnership of AIMCO OP or
otherwise.
(b) The AIMCO Stock to be issued to Sellers upon the exercise of the
Amended and Restated Warrants will be fully registered under the Securities Act
and under applicable state securities and blue sky laws, and are freely
transferrable.
7.7. Reports, Financial Statements and Private Placement Memorandum. AIMCO
has filed all reports, forms, statements and other documents required to be
filed by it with the SEC. All periodic reports on Form 10-K and Form 10-Q
required to be filed at any time subsequent to December 31, 1998 through the
date hereof have been filed by AIMCO with the SEC (collectively, the "AIMCO/SEC
Reports"). AIMCO/SEC Reports were prepared and filed in compliance with the
Securities Act and the Exchange Act and the rules and regulations promulgated by
the SEC thereunder, and did not, as of their respective dates, contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements contained therein, in light of the circumstances
under which they were made or will be made, not misleading. The consolidated
financial statements and the interim consolidated financial statements of AIMCO
included in AIMCO/SEC Reports were prepared in accordance with GAAP (except as
may be indicated in the notes thereto) and fairly presented in all material
respects the consolidated financial condition and results of operations of AIMCO
and its subsidiaries as at the dates thereof and for the periods then ended,
subject, in the case of the interim consolidated financial statements, to normal
year-end adjustments and any other adjustments described therein.
7.8. Investment Company Status. Neither AIMCO OP nor AIMCO/NHP is an
"investment company" within the meaning of Section 721(b) of the Code and the
Treasury regulations thereunder.
7.9. Partnership Status. AIMCO OP is treated as a partnership, and not as
an association taxable as a corporation, for Federal income tax purposes.
7.10. Financial Capability. Buyers have the financial resources necessary
to consummate all of the transactions contemplated by this Agreement, including
without limitation, the ability to pay the entire portion of the Purchase Price
which is required to be paid in cash at Closing, and requirement to indemnify
the Sellers under the Indemnification Agreement.
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7.11. Due Diligence. Buyers have been provided access to any and all
materials which they have requested in connection with their Due Diligence
relating to the Acquired Assets and the Properties.
7.12. Property Information. All written or electronic financial and
operating information with respect to the Properties heretofore provided by
Buyers or any Affiliates of Buyers to Sellers or any of the Oxford Entities or
any of their respective agents or representatives within the 12 months preceding
the date of this Agreement was, in the aggregate, true, accurate and complete in
all material respects on the date such information was provided. Buyers
acknowledge that Sellers have relied upon such financial information in
determining the Purchase Price (and adjustments thereto) under the terms of this
Agreement.
7.13. Brokers and Financial Advisors. Except as disclosed in Disclosure
Schedule 7.13, all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Buyers directly with Sellers,
without the intervention of any Person on behalf of the Buyers in such manner as
to give rise to any valid claim by any Person against Sellers or the Companies
for a finder's fee, brokerage commission, or similar payment.
7.14. "Blue Sky" Permits. AIMCO OP shall use commercially reasonable
efforts to obtain all state securities or "blue sky" permits and other
authorizations required to issue the Buyers' Securities pursuant to Section 2.2.
7.15. Net Worth. As of March 31, 2000, AIMCO had a total stockholders'
equity of at least $2.2 billion.
ARTICLE VIII.
COVENANTS
8.1. Notification of Certain Matters. Subject to the terms of the
Confidentiality Agreement executed between Buyers and Sellers and any applicable
Laws, the Sellers shall give prompt notice to the Buyers (but in no event more
than 2 days after receipt) of any written offer to purchase or acquire any of
the Acquired Assets or Acquired Business. Subject to Section 10.1, the delivery
of any notice pursuant to this Section shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
8.2. Consents and Approvals.
(a) Sellers shall (i) use commercially reasonable efforts to obtain
the consents and approvals of Persons who hold mortgage loans secured by any of
the Properties, or a financial institution that has provided credit enhancement
for all or a portion of such debt or tax-exempt bonds relating thereto which
Sellers and Buyers believe may be required in connection with this transaction
(the "Consents"), which shall mean, except in the context of Required Consents,
notifying those
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Persons who or which Sellers and Buyers believe may be required to provide
consent or approval in connection with this transaction, and (ii) take, or cause
to be taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated hereby, including,
without limitation, using commercially reasonable efforts to obtain all
licenses, permits, consents, approvals, authorizations, certificates,
qualifications and orders of, and make all filings and required submissions
with, all Governmental Authorities, and all shareholders, lenders and partners
of, and parties to contracts with, any of Buyers, Sellers or the Companies and
all other Persons, in each case, as are necessary or desirable for the
consummation of the transactions contemplated hereby; provided, however, neither
Sellers nor Sellers' counsel shall be required to deliver legal opinions to such
lenders. Sellers shall, as soon as possible prior to the Closing, deliver to
Buyers copies of all Consents obtained by Sellers. Any and all fees, costs,
expenses, fines, penalties, settlements or other amounts required to be paid in
connection with or incidental to obtaining any of the Consents shall be paid by
Sellers, provided that Sellers shall not be required to expend in excess of
$750,000 in the aggregate in connection therewith; provided further that Sellers
shall not pay any fees, costs, etc. in connection with obtaining the HUD
Approval.
(b) Within five (5) days of the date of this Agreement, Sellers and
Buyers shall submit a written summary to HUD Central Office in Washington, D.C.
describing the transactions provided for in this Agreement. The parties shall
then jointly meet with appropriate officials at HUD Central Office.
(c) Within fifteen (15) days of the date of this Agreement, Buyers
shall prepare and submit to HUD a Form 2530 as necessary in connection with the
transactions contemplated hereby (the "2530 Approval"). Buyers and Sellers shall
cooperate with each other and with HUD and provide to HUD all information
reasonably requested by HUD in connection with its consideration of the Form
2530. Although the parties do not believe an application for either a full or
modified application for transfer of physical assets ("TPA Application") is
required to be filed with respect to any HUD Partnership, in the event that the
HUD central office or any other HUD office requires the submission of a TPA
Application, Buyers and Sellers shall cooperate in the preparation and
submission of the TPA Application. For purposes of this subsection, HUD shall
not include any state finance housing agency. Buyers shall use commercially
reasonable efforts to obtain 2530 Approval and, if necessary, approval of TPA
Applications (as applicable, the "HUD Approvals") and shall pay any and all
fees, costs, expenses or other similar amounts required to be paid in connection
with or incidental to obtaining the HUD Approvals; provided that Buyers shall
not be required to expend in excess of $750,000 in the aggregate in connection
therewith. Buyers shall promptly notify Sellers of any issues or matters raised
in connection with obtaining the HUD Approvals, and Buyers shall provide to
Sellers copies of all correspondence between Buyers or their Representatives and
HUD regarding the HUD Approvals.
8.3. Conduct of Business Pending the Closing. From the date hereof through
the Closing, except as expressly permitted or contemplated by this Agreement,
unless AIMCO shall otherwise agree in writing prior to the taking of any action
prohibited by the terms of this Section, Sellers shall
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cause each of the Oxford Entities to conduct its operations and business in the
ordinary and usual course of business and consistent with past practice.
8.4. Sale of Acquired Assets. From and after the date hereof, Sellers shall
not sell, transfer, hypothecate, pledge or encumber any of the Acquired Assets
or agree to sell, transfer, hypothecate, pledge or encumber any of the Acquired
Assets, other than to Buyers (or their designee), except to the extent required
(in the ordinary course of business consistent with past practices) in
connection with the financing or refinancing of any debt or credit facility
relating to any of the Companies, Property-Owning Entities, OTEF or ORP;
provided, however, that any sale, transfer, pledge, hypothecation or encumbrance
shall not affect the obligation of Sellers to transfer any Acquired Asset which
has changed in legal form from the original Acquired Asset as a result of such
sale, transfer, pledge, hypothecation or encumbrance.
8.5. Access and Investigation.
(a) Prior to the termination of this Agreement, subject to the terms
of the Confidentiality Agreement, Sellers shall, and shall cause the Oxford
Entities and their Representatives to, provide Buyers and their Representatives
with full and free access, during normal business hours and upon reasonable
notice, to the Oxford Entities' personnel, properties, contracts, books and
records and other documents and data, including tax returns, and shall furnish
Buyers with copies of all documents and with such additional financial and
operating data and other information as Buyers shall, from time to time,
reasonably request for the purpose of enabling Buyers to investigate the affairs
of the Oxford Entities and the Acquired Business and the accuracy of the
representations and warranties of Sellers made in this Agreement. During such
investigation, subject to the terms of the Confidentiality Agreement, Buyers and
their Representatives shall have the right to make copies of such contracts,
books and records, tax returns and other documents and data as they may deem
advisable. Buyers shall endeavor not to unreasonably disrupt the business or
operations of Sellers or the Oxford Entities.
(b) Buyers and their Representatives shall be entitled, upon
reasonable notice to Sellers, to cause one or more Phase I environmental site
assessments of the Properties (each, an "Environmental Assessment") to be
performed, at Buyers' expense. Each Environmental Assessment may include any and
all investigations that Buyers deem appropriate for assessing the environmental
condition of and any potential environmental liabilities associated with the
Properties. Sellers shall provide Buyers and their Representatives with full
access to the Properties, during normal business hours and upon reasonable
notice, and shall not interfere with any Environmental Assessment, and shall
provide all necessary information that is in Sellers' possession or control that
may be necessary or desirable for each Environmental Assessment. Buyers shall
indemnify Sellers and the Companies for any Damages to the Properties as a
result of such Environmental Assessments. No Phase II environmental site
assessment shall be undertaken without the prior written approval of Sellers.
8.6. No Negotiations with Third Parties. Sellers shall not, and shall not
permit any of their Representatives or any other Person acting for or on behalf
of any of them to, solicit, entertain offers
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from, negotiate with, or in any manner discuss, encourage, recommend or agree to
any proposal with, to or from a Person not Affiliated with any of Sellers other
than Buyers relating to (a) the sale of all or any part of the Acquired
Business, the Companies or any interest therein, (b) the merger, consolidation
or other combination of the Companies with any Person, or (c) the liquidation,
dissolution or reorganization of the Companies, except (i) with respect to OTEF,
ORP and the Property-Owning Entities, or (ii) to the extent that Sellers'
failure to do so would, in the reasonable opinion of Sellers, constitute a
breach of Sellers' fiduciary duties; provided that this Section is not intended
to prevent, affect or otherwise limit the ability of Sellers to consummate any
transactions involving a financing or refinancing of any debt or credit facility
relating to any of the Oxford Entities, or sale of the Properties owned by the
Property-Owning Entities, provided, further, that any such merger,
consolidation, combination, liquidation, dissolution or reorganization shall not
affect the obligation of Sellers to transfer any Acquired Asset or beneficial
interests represented thereby, including if the same has changed in legal form
from the original Acquired Asset or the Acquired Business as a result of such
merger, consolidation, combination, liquidation, dissolution or reorganization.
8.7. Public Announcements. At all times at or before the Closing, none of
Buyers or Sellers shall issue or make, directly or indirectly, any reports,
statements or releases to the public with respect to this Agreement or the
transactions contemplated hereby without the prior written consent of AIMCO and
ORFG, on behalf of the Sellers; provided, however, that each of Buyers and
Sellers (a) may issue or make, directly or indirectly, any report, statement or
release required by Law, or the rules of the SEC, or in the case of Buyers, the
New York Stock Exchange or, in the case of Sellers, the American Stock Exchange,
if the other parties to this Agreement are so notified as soon as possible in
advance of such report, statement or release, and (b) may issue a press release
in the form of Exhibit BB.
8.8. Insurance. Sellers shall maintain in full force and effect all
insurance policies described on Disclosure Schedule 5.13(a) during the period
prior to the Closing. On and after Closing, Buyers shall maintain in full force
and effect the directors and officers, crime, employment, practices, nurses
professional and pollution liability policies obtained by Sellers through the
end of the period for which premiums for such insurance were prepaid on or
before Closing.
8.9. Employees.
(a) Sellers shall be solely responsible for all matters arising from
or relating to any employee's employment with any of the Oxford Entities
including ORFG Operations L.L.C., or termination of employment by Sellers or any
of the foregoing entities, including without limitation, any liability for
severance, accrued benefits or liabilities under any Benefit Plans, deferred
incentives, termination or similar payments that accrue up to the Closing Date,
but excluding any matters for which indemnification is provided by Buyers
pursuant to item number 7 of Exhibit B to the Indemnification Agreement.
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(b) Buyers shall be solely responsible for all matters described in
item number 7 of Exhibit B to the Indemnification Agreement.
(c) Buyers agree that, for the minimum statutory period commencing on
the Closing Date (18, 29 or 36 months, depending upon the circumstances), either
Buyers or the Companies will make COBRA continuation coverage available to
individuals who are employees of ORFG Operations, L.L.C. as of the Closing Date
and are eligible for COBRA continuation coverage pursuant to the terms of their
employment and applicable law. Buyers shall bear the cost of administering such
COBRA coverage for such minimum statutory period, but shall not bear the cost of
providing health coverage to any such employee, which shall be the
responsibility of such employees.
(d) Sellers have made available to Buyers true, correct and complete
copies of all manuals, statements and documents that set forth Sellers' policies
and procedures with respect to its employees, and Sellers agree that Buyers
shall be entitled to use of such manuals, statements and documents.
8.10. Transaction Costs. On the Closing Date and after the Closing, (i)
Buyers shall pay the Buyers' Transaction Costs, and (ii) Sellers shall pay the
Sellers' Transaction Costs.
8.11. Payments to Financial Advisors. Notwithstanding any provision to the
contrary, all claims and obligations with respect to the items set forth on
Disclosure Schedule 5.21 are the responsibility of and shall be paid by Buyers.
8.12. Correspondence with Limited Partners. Prior to the Closing, Sellers
shall make available to Buyers for their review copies of all prior
correspondence between any of Sellers or the Companies and any limited partners
in any of the Property-Owning Entities, OTEF, ORP or any Investment Tier
Partnership, to the extent copies of such correspondence are currently available
to Sellers or the Companies.
8.13. Post-Closing Access. Following the Closing, during normal business
hours and upon reasonable prior notice, but in no event more than 2 days' prior
notice, Buyers and Buyers' Affiliates will permit Sellers and Sellers'
Affiliates, or Representatives, access to analyze, review and copy at the
reviewer's expense any and all books, records, reports, files and other data of
any kind or nature regarding the pre-closing operation, assets, liabilities or
condition of the Oxford Entities. Following the Closing, during normal business
hours and upon reasonable prior notice, but in no event more than 2 days' prior
notice, Sellers and Sellers' Representatives will permit Buyers and Buyers'
Affiliates or Representatives, access to analyze, review and copy at the
reviewer's expense any and all books, records, reports, files and other data of
any kind or nature regarding the pre-closing operation, assets, liabilities or
condition of the Oxford Entities; provided however the foregoing covenant shall
not affect Sellers' obligation to deliver any and all items that Sellers are
required to deliver to Buyers at Closing.
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8.14. No Endorsements. If, on or after the Closing Date, Buyers offer to
acquire or make any offer to acquire the interests of any of the limited
partners, special limited partners, holders of assignee units or the holders of
beneficial assignee interests of Property-Owning Entities, Employee
Partnerships, Investment Tier Partnerships, ORP or OTEF, as the case may be, or
otherwise solicit any of the foregoing interest holders with respect to any
transaction or proposed transaction involving a contribution, exchange,
purchase, merger, consolidation or other business combination of such interests
or the assets of any of the foregoing entities, with or into Buyers or their
Affiliates (all of the foregoing are collectively referred to as "Acquisition
Proposal"), Buyers shall make no representations or statements of any kind or
nature, whether express or implied, that Sellers or any of them have reviewed or
approved any such offer, solicitation or proposed transaction. Notwithstanding
the foregoing, each of Buyers and Sellers may issue or make, directly or
indirectly, any report, statement or release required by Law, or the rules of
the SEC, or in the case of Buyers, the New York Stock Exchange or, in the case
of Sellers, the American Stock Exchange, if the other parties to this Agreement
are so notified as soon as possible in advance of such report, statement or
release.
8.15. Offer Documents. Buyers agree to provide Sellers promptly with true
and correct copies of any and all documents used by Buyers or their Affiliates
in connection with any Acquisition Proposals.
8.16. Lease Document. Sellers shall deliver to Buyer a true, correct and
complete copy of the Amendment to the Office Lease. Sellers and Buyers agree
that the terms of the Amendment to the Office Lease shall be as set forth in the
term sheet heretofore delivered to Buyers. Sellers agree that there shall not be
any amendment or modification made with respect to the Office Lease except as
set forth in the aforesaid term sheet without Buyers' prior written consent,
which consent shall not unreasonably be withheld.
8.17. Performance of Obligations. Buyers hereby agree for the benefit of
the Sellers that, from and after Closing, Buyers shall, and shall cause Buyers'
Affiliates to (a) perform the obligations of the Oxford Entities with respect to
the indemnification and reimbursement obligations contained in the Indemnity
Agreements listed on Disclosure Schedule Definition 3 and in the Organizational
Documents of the Oxford Entities or as provided by law, and (b) cause each of
the Oxford Entities in which Buyers are hereby acquiring interests and/or rights
to perform all of their respective fiduciary duties and existing contractual
obligations in accordance with their respective terms. Such Oxford Entity duties
and obligations shall include, without limitation, payment of lawful debts in
accordance with their terms (subject to fiduciary duties owed at any time
following the Closing to limited partners, special limited partners, investor
limited partners, holders of assignee units or the holders of beneficial
assignee interests of Property-Owning Entities, Employee Partnerships,
Investment Tier Partnerships, ORP or OTEF and any available defenses,
counterclaims and/or offsets) and satisfaction of all fiduciary and other legal
obligations owed to securityholders (including limited partners, special limited
partners, investor limited partners, holders of assignee units or the holders of
beneficial assignee interests of Property-Owning Entities, Employee
Partnerships, Investment Tier Partnerships, ORP or OTEF). Notwithstanding
anything to the
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contrary set forth in this Section 8.17 or elsewhere in this Agreement or the
Related Documents, nothing herein is intended to constitute a guaranty by Buyers
of any such Oxford Entity's duties or obligations. On the Closing Date, Buyers
shall (i) substitute Buyers or a designee of Buyers in lieu of Xxxxxxx and Xxxxx
for all personal indemnity, guarantee, pledge and other financial obligations of
Xxxxxxx and Xxxxx identified as a liability to be directly assumed by Buyers on
Section II.A of Disclosure Schedule 2.2(c) that relate to financing arrangements
of the Property-Owning Entities, and (ii) use commercially reasonable efforts to
cause the applicable lender to have Xxxxxxx and Xxxxx released from all such
obligations as of the Closing.
8.18. Further Assurances. Each party shall deliver to the other all
documents, instruments and writings reasonably necessary to effectuate the
transfer or contribution of the Acquired Assets which are the subject of the
Closing or the transactions contemplated herein.
ARTICLE IX.
CONDITIONS TO CLOSING
9.1. Conditions to Each Party's Obligation to Effect the Closing. The
respective obligations of each party to this Agreement to effect the Closing
shall be subject to the following conditions having been satisfied with respect
to Acquired Assets representing at least ninety five percent (95%) of the
aggregate projected net cash flow shown on Disclosure Schedule 2.3 relating to
the Acquired Assets, unless waived in writing by all parties, each in their sole
discretion:
(a) No Injunctions. No action shall have been taken, and no statute,
rule, regulation, executive order, decree, order, injunction or judgment (other
than a temporary restraining order) shall have been enacted, entered,
promulgated or enforced (and not repealed, superseded or otherwise made
inapplicable), by any court or Governmental Authority which prohibits the
consummation of the transactions contemplated by this Agreement, which has not
been lifted (each party agreeing to use its reasonable efforts to have any such
injunction, order, judgment or decree lifted).
(b) HUD Approvals. HUD shall have issued to Buyers necessary HUD
Approvals.
(c) Simultaneous Conditions. No party hereto shall be obligated to
consummate any of the transactions contemplated hereby unless all of the events
required to have occurred and documents required to be executed and delivered
prior to or at the Closing shall have in fact occurred or been executed and
delivered, as applicable.
9.2. Conditions to Obligations of Buyers to Effect the Closing. The
obligations of Buyers to effect a Closing with respect to any Acquired Asset are
subject to the satisfaction of the following conditions with respect to such
Acquired Asset, unless waived in writing by Buyers:
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(a) Representations and Warranties. The representations and warranties
of Sellers contained herein shall be true and correct in all material respects
at and as of the Closing Date, except for any representation or warranty that
specifically relates to an earlier date, which shall be true and correct as of
such earlier date.
(b) Covenants. Sellers shall have performed, in all material respects,
all obligations and complied, in all material respects, with all covenants
required by this Agreement to be performed or complied with by them prior to the
Closing.
(c) No Material Litigation. There shall be no:
(i) action, suit or proceeding by any Governmental Authority
filed or commenced after the date hereof and which has not been dismissed
against any of Sellers in his capacity as an officer, employee, director or
control person of any of the Oxford Entities, or against any Buyer or Buyers,
that Buyers reasonably determine is likely to result in Material Liability to
such Buyers or Sellers, as the case may be; or
(ii) civil action, suit or proceeding filed or commenced after
the date hereof and which has not been dismissed against any of the Sellers in
his capacity as an officer, employee, director or control person of any of the
Oxford Entities or against any Buyer that, if adversely determined, would be
reasonably likely to result in Material Liability to such Buyer or Seller.
(d) Buyer Required Consents. Subject to the terms of Section 4.1(b),
consent shall have been given by each lender from which a Buyer Required Consent
is required, as set forth on Disclosure Schedule 4.3.
9.3. Conditions to Obligations of Sellers to Effect the Closing. The
obligations of Sellers to effect a Closing with respect to any Acquired Asset
are subject to the satisfaction of the following conditions with respect to such
Acquired Asset, unless waived in writing by Sellers:
(a) Representations and Warranties. The representations and warranties
of Buyers contained herein shall be true and correct in all material respects at
and as of the Closing Date with the same force and effect as though made at and
as of the Closing Date, except for any representation or warranty that
specifically relates to an earlier date, which shall be true and correct as of
such earlier date.
(b) Covenants. Buyers shall have performed, in all material respects,
all obligations and complied, in all material respects, with all covenants
required by this Agreement to be performed or complied with by them prior to the
Closing.
(c) Change in Control. There has not been a Change in Control of
AIMCO.
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(d) No Material Litigation. There shall be no:
(i) action, suit or proceeding by any Governmental Authority
filed or commenced after the date hereof and which has not been dismissed
against any Seller or Sellers in his or their capacity as an officer, employee,
director or control person of any of the Oxford Entities that such Seller or
Sellers reasonably determine is likely to result in Material Liability to such
Sellers; or
(ii) civil action, suit or proceeding filed or commenced after
the date hereof and which has not been dismissed against any Seller or Sellers
that such Seller or Sellers reasonably determine is likely to result in Material
Liability to such Seller and is not principally based upon facts or events
relating to the transactions contemplated hereby; provided, however that Sellers
shall be deemed to have waived this condition if Buyers notify Sellers in
writing that Buyers agree to indemnify Sellers against all Damages arising out
of such action, suit or proceeding, on the terms and conditions set forth in the
Indemnification Agreement; provided further, however, that Buyers shall only
have the right to send such written notice in the event that AIMCO's net worth
as of the Closing Date is not less than the amount required pursuant to the
covenant set forth in Section 8.20.
(e) Seller Required Consents. Subject to the terms of Section 4.1(b),
consent shall have been given by each lender from which a Seller Required
Consent is required, as set forth on Disclosure Schedule 4.3.
ARTICLE X.
TERMINATION, WAIVER AND AMENDMENT
10.1. Termination. This Agreement may be terminated prior to the Closing as
follows:
(a) by the mutual written consent of Buyers and Sellers;
(b) by Buyers or Sellers if any court of competent jurisdiction shall
have issued an Order (other than a temporary restraining order) restraining,
enjoining or otherwise prohibiting the Closing, and such Order shall have become
final and nonappealable;
(c) by Buyers if (i) there has been a material breach by any of
Sellers of any representation, warranty, covenant or agreement set forth in this
Agreement (other than Sellers' failure to close), which breach has not been
cured within twenty (20) business days following receipt by the breaching party
of written notice of such breach; or (ii) an event has occurred that could
reasonably be expected to have a Material Adverse Effect;
(d) by Sellers if there has been a material breach by any of Buyers of
any representation, warranty, covenant or agreement set forth in this Agreement
(other than Buyers'
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failure to close), which breach has not been cured within twenty (20) business
days following receipt by the breaching party of written notice of such breach;
and
(e) automatically pursuant to Section 4.1(a) or 4.1(b).
10.2. Effect of Termination. In the event of termination of this Agreement
by Buyers or Sellers pursuant to Section 10.1: (a) the Deposit shall be
immediately returned to Buyers, except for a termination by Sellers pursuant to
Section 10.1(d) in which case Sellers shall be entitled to receive and retain
the Deposit, (b) Sellers shall retain the Non-Refundable Payments, and (c) this
Agreement shall be null and void and of no force or effect as though it had
never been executed and neither party shall have any liability or obligation to
the other party, except as otherwise expressly provided herein.
10.3. Failure to Close. In the event either party fails or refuses to close
the transactions contemplated by this Agreement, the sole and exclusive rights
and remedies of the parties shall be as follows:
(a) Buyers' Remedies: If Sellers fail or refuse to close the
transactions contemplated by this Agreement for any reason, except (x) default
by Buyers of any of their material obligations, (y) the termination of this
Agreement pursuant to any applicable provision of this Agreement other than as a
result of a material breach of this Agreement by Sellers, or (z) the failure of
any condition precedent to Sellers' obligation to close set forth in Section 9.1
or 9.3 under this Agreement, then, following written notice by Buyers and a cure
period of twenty (20) business days, which cure is not made, Buyers may, as
their sole and exclusive remedies, hereby waiving all other remedies:
(i) enforce specific performance of this Agreement or other
equitable remedies against Sellers; or
(ii) terminate this Agreement by delivery of written notice to
Sellers, in which event the Deposit immediately shall be returned promptly to
Buyers, and the parties thereafter shall have no further rights, liabilities, or
obligations to one another, except as otherwise provided herein; and
(iii) in either event, in the event that Sellers or any of them
default with respect to their respective obligations to close under this
Agreement, and (x) sell all or substantially all of the Acquired Assets or all
or substantially all of such Seller's interests in the Acquired Assets, or if
they cause to be sold all or substantially all of the Properties, on or before
December 31, 2001, to a Person other than Buyers or their Affiliates, Buyers
shall be entitled to damages equal to the amount that the purchase price paid to
each such Seller for such Seller's interest in the Acquired Assets (or portion
thereof, as applicable) by such third party exceeds the Purchase Price set forth
herein for such Acquired Assets (or portion thereof, as applicable), or (y)
sell, or cause to be sold, one or more of the Acquired Assets or Properties but
not substantially all of the Acquired Assets or
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Properties on or before December 31, 2001, to a Person other than Buyers or
their Affiliates, Buyers shall be entitled (in addition to the remedies set
forth in Section 10.3(a)(i) and (ii), above) to damages equal to the amount, if
any, of each Sellers' allocable share of the total purchase price for such
assets; provided that, in either case, the damages shall be payable by each
Seller to Buyers when, in the same manner (whether cash, securities or notes),
and to the extent the purchase price is paid by the third party purchaser to
each Sellers or Seller's assignee, designee or nominee.
(b) Sellers' Remedies: If Buyers fail or refuse to close the
transactions contemplated by this Agreement for any reason, except (x) default
by Sellers of any of their material obligations, (y) the termination of this
Agreement pursuant to any applicable provision of this Agreement other than as a
result of a material breach of this Agreement by Buyers, or (z) the failure of
any condition precedent to Buyers' obligation to close set forth in Section 9.1
or 9.2 under this Agreement, then, following written notice by Sellers and a
cure period of twenty (20) business days, which cure is not made, Sellers may,
as their sole and exclusive remedies, hereby waiving all other remedies:
(i) enforce specific performance of this Agreement against
Buyers; or
(ii) terminate this Agreement by delivery of written notice to
Sellers and demand and retain, as full and complete liquidated damages, and not
as a penalty, the Deposit, both parties hereto agreeing that it would
speculative or impossible to determine Sellers' actual damages.
(c) Agreement as to Equitable Remedies. The parties hereto agree that
it may be impossible to calculate the amount of monetary damages that would be
incurred by either party due to a failure of the other party to close hereunder
because of, among other things, (i) the adverse impact which Buyers' failure to
close would have on the Acquired Assets and the Acquired Business, (ii) the
unique nature of the Acquired Assets and the Acquired Business, and (iii) the
substance of the transactions contemplated hereby is the acquisition of real
estate and real estate-related interests.
10.4. Extension of Time, Waiver, Etc. At any time prior to the Closing:
(a) AIMCO, on behalf of Buyers, may extend the time for the
performance of any of the obligations or acts of Seller, and Xxxxxxx, on behalf
of Sellers, may extend the time for the performance of any of the obligations or
acts of Buyers;
(b) AIMCO, on behalf of Buyers, may waive any inaccuracies in the
representations and warranties of Sellers contained herein or in any document
delivered pursuant hereto, and Xxxxxxx, on behalf of Sellers may waive any
inaccuracies in the representations and warranties of Buyers contained herein or
in any document delivered pursuant hereto; or
(c) AIMCO, on behalf of Buyers, may waive compliance with any of the
agreements or conditions of Sellers, contained herein, and the Sellers by
unanimous written consent may do the same with respect to Buyers; provided,
however, that no failure or delay by any party
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in exercising any right hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right hereunder.
ARTICLE XI.
SELLER LIABILITY LIMITS
11.1. Limitation on Liability. Notwithstanding any provision of this
Agreement, or any other document, instrument or agreement executed or delivered
pursuant to this Agreement, the liability of each Seller to Buyers for any act
or omission to act, fact, matter, thing, event or occurrence, obligation or
liability whatsoever relating in any way to, or arising from, this Agreement or
consummation of the transactions contemplated hereby, including but not limited
to, the representations and warranties set forth in Articles V and VI or in any
Related Document, covenants set forth in Article VIII or in any Related
Document, and indemnifications set forth in the Indemnification Agreement, shall
be expressly limited as follows:
(a) Article VI Floor and Cap: With respect to any liability or
obligation of any Seller that relates to a breach of the representations and
warranties made by such Seller pursuant to Article VI of this Agreement, the
following provisions apply:
(i) Buyers shall not assert any claim, or file or commence any
action, suit, proceeding or arbitration against any Seller unless and until the
liability or obligation of such Seller equals or exceeds an amount equal to (aa)
Three Million Dollars ($3,000,000) plus the amount of insurance proceeds paid to
Buyers within 120 days from the date the claim is filed (or to which Sellers or
Buyers receive notice within such time period that payment will be made)
("Sellers' Threshold Amount"), multiplied by (bb) his Ratable Percentage set
forth on Disclosure Schedule 11.1; provided that in the event the liability or
obligation exceeds the foregoing floor amount, Buyers may assert the full amount
of the claim (in excess of amounts paid, or to which Sellers or Buyers receive
notice within such period that payment will be made, pursuant to applicable
insurance policies) from the first dollar of such claim; and
(ii) In no event shall any Seller be responsible for paying any
liability, obligation or other amount relating to a breach of representations
and warranties made by such Seller pursuant to Article VI to the extent such
amount exceeds such Seller's Maximum Article VI Liability Cap.
(b) Non-Article VI Floor and Cap:
(i) Buyers shall not assert any claim, or file or otherwise
commence any action, suit, proceeding or arbitration against any Seller with
respect to any matter arising from or relating to this Agreement or any Related
Document or in connection with closing any of the transactions contemplated
hereby, other than a breach of any representation or warranty made
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pursuant to Article VI, unless and until the liability or obligation of such
claim equals or exceeds an amount equal to (aa) Three Million Dollars
($3,000,000) plus the amount of any insurance proceeds paid to Buyers within 120
days from the date the claim is filed (or to which Sellers or Buyers receive
notice within such time frame that payment will be made), multiplied by (bb) his
Ratable Percentage set forth on Disclosure Schedule 11.1; provided that in the
event the liability or obligation exceeds the foregoing floor amount, Buyers may
assert the full amount of the claim (in excess of amounts paid, or to which
Sellers or Buyers receive notice within such time period that payment will be
made pursuant to applicable insurance policies) from the first dollar of such
claim; and
(ii) Each Seller shall only be responsible for paying any
liability, obligation or other amount with respect to any matter arising from or
relating to this Agreement or Related Documents, other than a breach of
representations and warranties made by such Seller pursuant to Article VI for
which the Sellers' Maximum Liability Cap is set forth in (a)(ii) above, in an
amount equal to such Non-Article VI Liability multiplied by his Ratable
Percentage; provided that no Seller shall be liable to the extent such amount
exceeds such Seller's Maximum Non-Article VI Liability Cap.
(c) The Sellers Maximum Article VI Liability Cap and Maximum Non
Article VI Liability Cap are referred to in Section 4 of the Indemnification
Agreement as the "Applicable Sellers' Cap." Where an indemnity is subject to an
Applicable Sellers' Cap, reference shall be made to Section 11(a) or (b) of this
Agreement to determine the specific Applicable Sellers' Cap which shall apply.
(d) Notwithstanding the foregoing limitations on liability or the
Applicable Sellers' Cap, Sellers shall be responsible for paying any and all
liabilities, obligations, and other amounts arising from or relating to (i)
clauses 4 and 5 of Exhibit A of the Indemnification Agreement, (ii) a failure to
close, as specified in Section 10.3(a)(iii), (iii) pursuant to Section 8.10(ii),
and (iv) with respect to matters addressed in the Tax Matters Agreement (which
shall be governed by the limits on liability set forth therein); provided that
any Seller's liability under Sections 11.1(d)(i), (ii) and (iii) shall not
exceed the amount of such liability multiplied by his Ratable Percentage set
forth on Disclosure Schedule 11.1.
(e) Any amounts paid by any Seller as damages or pursuant to an
indemnification, including but not limited to amounts paid for breach of
representations and warranties, shall be counted against the floor amounts set
forth in Sections 11.1(a) or (b), as the case may be.
11.2. As-is Condition.
(a) Except for the Agreed Representations and Warranties (as defined
below), neither Sellers, nor anyone acting for, or on behalf of Sellers, has
made any representations, warranty, promise or statement, express or implied, to
Buyers, or to anyone acting for or on behalf of Buyers, and Buyers shall be
deemed to have agreed, and hereby do agree, to purchase the Acquired Business in
an "as is, where is" condition and "with all faults" in all respects, and
without
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warranty or representation, express or implied, by Sellers. For purposes of this
Agreement, the term "Agreed Representations and Warranties" shall mean those
representations and warranties of Sellers which are specifically set forth in
this Agreement and/or in the documents to be delivered by Sellers at Closing.
Without limiting the foregoing, neither Sellers, nor anyone acting for, or on
behalf of Sellers, has made any representations, warranty, promise or statement,
express or implied, to Buyers, or to anyone acting for or on behalf of Buyers,
and Buyers shall be deemed to have agreed, and do hereby agree, that they are
closing the transactions contemplated by this Agreement without having obtained
all necessary Consents.
(b) Without limiting the generality of the foregoing, except for the
Agreed Representations and Warranties, no representations or warranties have
been made or are made and no responsibility has been or is assumed by Sellers or
by any partner, officer, person, firm, agent or representative acting or
purporting to act on behalf of Sellers as to the condition or repair of the
Acquired Business or any Property or the value, expense of operation, or income
potential thereof or as to any other fact or condition which has or might affect
the Acquired Business or any Property or the condition, repair, value, expense
of operation or income potential of the Acquired Business or any Property or any
portion thereof. Except for the Agreed Representations and Warranties, Sellers
make no representations or warranties, express or implied, as to the suitability
or fitness of the Acquired Business or any Property for Buyer's intended use.
(c) The parties agree that all understandings and agreements
heretofore made between them or their respective agents or representatives are
merged in this Agreement and the Exhibits hereto annexed, which alone fully and
completely express their agreement, and that this Agreement has been entered
into after full investigation, or with the parties satisfied with the
opportunity afforded for investigation, neither party relying upon any statement
or representation by the other unless such statement or representation is
specifically embodied in this Agreement, the Exhibits annexed hereto, or the
documents to be delivered at Closing. Except for the Agreed Representations and
Warranties, Sellers make no representations or warranties as to whether the
Properties contain asbestos or harmful or toxic substances or pertaining to the
extent, location or nature of same. Further, to the extent that Sellers have
provided to Buyers information from any inspection, engineering or environmental
reports concerning asbestos or harmful or toxic substances, Sellers make no
representations or warranties with respect to the accuracy or completeness,
methodology of preparation or otherwise concerning the contents of such reports.
Buyers acknowledge that Sellers have permitted Buyers to inspect fully the
Properties and investigate all matters relating to the physical condition and
operations of the Properties and Buyers will rely solely upon the results of
Buyers' own inspections or other information obtained or otherwise available to
Buyers, rather than any information that may have been provided by Sellers to
Buyers.
(d) Except for the Agreed Representations and Warranties and the
indemnity provided by Sellers under the Indemnification Agreement, Buyers waive
and release Sellers from any present or future claims arising from or relating
to the presence or alleged presence of asbestos or other harmful or toxic
substances in, on, under or about the Properties including, without limitation,
any such claims under or on account of (i) the Comprehensive Environmental
Response,
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Compensation and Liability Act of 1980, as the same may have been or may be
amended from time to time, and similar state statutes, and any regulations
promulgated thereunder, (ii) any other federal, state or local law, ordinance,
rule or regulation, now or hereafter in effect, that deals with or otherwise in
any manner relates to, environmental matters of any kind, or (iii) this
Agreement or the common law.
11.3. No Reliance. Notwithstanding any of the representations or warranties
made by Sellers in this Agreement, or the terms or provisions of any Related
Document, Buyers hereby acknowledge and agree that: (a) an Affiliate of AIMCO is
the property manager for the Properties, and (b) to the extent that AIMCO has or
should have knowledge (whether implied, imputed or constructive) with respect to
any of the matters covered by any of the representations or warranties of
Sellers contained in this Agreement, or the terms or provisions of any Related
Document, then each of such representations and warranties shall automatically
be deemed to be qualified and modified by such knowledge, and Buyers shall be
deemed to have waived their rights to rely upon the applicable representation
and warranty to the extent to which AIMCO had or is deemed to have had knowledge
of inaccuracies with respect to the Properties.
11.4. Survival of Representations and Warranties; Reliance by Buyers.
(a) Buyers and Sellers agree that all of the representations and
warranties of Buyers and Sellers as set forth in Articles V, VI and VII of this
Agreement and those set forth in any Related Document (other than the Tax
Matters Agreement) shall survive for a period of one (1) year following the
Closing, and that any claims, demands, actions or causes of action must be filed
in a court of competent jurisdiction and served on the Sellers or Buyers on or
prior to such date. Notwithstanding the foregoing, Sellers' representations set
forth in Section 5.17 shall not survive the Closing. All material
representations and warranties contained in this Agreement shall be deemed to
have been relied upon subject to any investigation heretofore or prior to
Closing made on behalf of the party so relying. Each party shall promptly notify
the other of any facts or circumstances of which they obtain actual knowledge
prior to the Closing Date which render any of the representations and warranties
made by them inaccurate in any material respect. Notwithstanding anything to the
contrary contained herein, in the event any party obtains actual knowledge prior
to Closing (from whatever source) that contradicts any of the foregoing
representations and warranties, or renders any of the foregoing representations
and warranties untrue or incorrect, and such party nevertheless proceeds to
Closing, such party shall be deemed to have waived its right to rely upon the
applicable representation and warranty to the extent to which it had actual
knowledge of inaccuracies prior to the Closing.
(b) Each party shall have the right, prior to Closing, to give written
notice of any changed facts or circumstances occurring after the Effective Date
with respect to any of the representations and warranties made in this
Agreement, which changed facts or circumstances ("Changed Conditions") would
otherwise prevent them from remaking the representations and warranties as of
the Closing Date. If such Changed Conditions result from circumstances which are
beyond such party's control, then the failure to remake the applicable
representation(s) and
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warranty(ies) shall not be deemed a breach of this Agreement (although it could
nonetheless result in the failure of a condition).
11.5. Attachments; Exhibits; Schedules. To the extent that any schedule,
attachment or exhibit contains information that pertains to a representation or
warranty not referenced in that schedule, attachment or exhibit, Buyers and
Sellers specifically acknowledge and agree that the information contained in
such schedule, attachment or exhibit shall qualify all representations and
warranties of Sellers and Buyers contained in this Agreement and not merely the
representation and warranty referenced therein.
ARTICLE XII.
MISCELLANEOUS PROVISIONS
12.1. Governing Law. This Agreement and the legal relations among the
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Maryland, without regard to its principles of
conflicts of law; provided, however, that any matters relating to the transfer
of interests in any entity shall be governed by the laws of the jurisdiction of
formation of the such entity.
12.2. Entire Agreement. This Agreement, including the exhibits and
Disclosure Schedules attached hereto, and the Related Documents, constitutes the
entire agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, letters of intent, negotiations
and discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements, express or implied, made to
either party by the other party in connection with the subject matter hereof
except as specifically set forth herein or in the documents delivered pursuant
hereto or in connection herewith. Notwithstanding the foregoing, the execution
and delivery of this Agreement and any Related Documents shall not be deemed to
modify, amend or integrate the terms of any existing agreement between Buyers
and Sellers or any of their Affiliates, including without limitation the
shareholders' agreements of OHC and ORFG or any property management agreement to
which a Property-Owning Entity is a party.
12.3. Modification; Waiver. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any provision of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
12.4. Notices. Unless otherwise provided for herein, all notices, claims,
certificates, requests, demands and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been given (i) three
(3) days after the date of mailing, if sent by registered or certified mail,
postage prepaid, with return receipt requested; (ii) when delivered, if
delivered personally; (iii) when transmitted, if sent by facsimile if a
confirmation of transmission is produced
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by the sending machine (and a copy of such facsimile is promptly sent by another
means specified herein); (iv) on the first business day following the date of
sending, if sent by overnight U.S. Postal Service mail or nationally recognized
overnight courier service; in each case to the address set forth below:
if to any of Buyers, to:
Apartment Investment and Management Company
0000 Xxxxx Xxxxxxxx Xxxxxxxxx
Tower Two; Xxxxx 0 - 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000; Fax: (000) 000-0000
And
Apartment Investment and Management Company
00000 Xx. Xxxxxxx Xxx.
Xxxxx 000
Xxxxxxxx Xxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000; Fax (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000; Fax: (000) 000-0000
if to any of Sellers, to:
Oxford Realty Financial Group, Inc.
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xx. Xxx Xxxxxxx, Xx. Xxxxxxx Xxxxx,
Xx. Xxxxxx X. Xxxxxxx, Xx. Xxxx X. Xxxxxxxx,
Xx. Xxxx X. Xxxxxx, and Xx. Xxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000; Fax: (000) 000-0000
with a copy to:
Xxxx and Xxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, Xxxxxxxx xx Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Esq.
Telephone: 0000000000; Fax (000) 000-0000
or to such other address or such other person as the addressee party shall have
last designated by notice to the other party.
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12.5. Expenses. Whether or not the transactions contemplated by this
Agreement shall be consummated, all fees and expenses incurred by any party
hereto in connection with this Agreement shall be borne by such party.
12.6. Assignment. No party hereto shall have the right, power, or authority
to assign or pledge this Agreement or any portion of this Agreement, or to
delegate any duties or obligations arising under this Agreement, voluntarily,
involuntarily, or by operation of law, without the prior written consent of the
other parties hereto, which consent may be granted or withheld in such parties'
sole discretion; provided, however, Buyers may, upon providing not less than two
days' prior written notice to Sellers, assign their rights under this Agreement
to any Oxford Entity or a controlled Affiliate of any Buyer; provided further,
however, no such assignment by any Buyer shall relieve Buyers of any of their
obligations hereunder.
12.7. Survival of Covenants. All covenants and undertakings of the parties
set forth herein which are required to be performed subsequent to the Closing
Date, including but not limited to indemnification obligations, and those
obligations set forth in Sections 2.3, 2.6, 4.1(c), 7.14, 8.10, 8.11, 8.13,
8.17, and 12.20, and in the Indemnification Agreement shall survive the Closing,
subject to the provisions of Section 6 of the Indemnification Agreement.
12.8. Intentionally Omitted.
12.9. Successors and Assigns. Subject to Section 12.6 and the limitations
set forth elsewhere in this Agreement, all of the rights, duties, benefits,
liabilities and obligations of the parties shall inure to the benefit of, and be
binding upon, their respective successors, permitted assigns, heirs and legal
representatives.
12.10. Counterparts. This Agreement may be executed in as many counterparts
as may be deemed necessary and convenient, and by the different parties hereto
on separate counterparts each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute one and the same
instrument.
12.11. Headings. The Section headings of this Agreement are for convenience
of reference only and shall not be deemed to modify, explain, restrict, alter or
affect the meaning or interpretation of any provision hereof.
12.12. Disclosure Memorandum. Any references to a Disclosure Schedule
contained in this Agreement shall be deemed to be a reference to the
corresponding Disclosure Schedule contained in the Disclosure Memorandum.
12.13. Time of Essence. Time shall be of the essence with respect to all
matters contemplated by this Agreement.
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12.14. Construction. This Agreement shall not be construed more strictly
against one party hereto than against any other party hereto merely by virtue of
the fact that it may have been prepared by counsel for one of the parties.
12.15. Exhibits. All exhibits attached hereto are hereby incorporated by
reference as though set out in full herein.
12.16. Attorneys' Fees. In the event Buyers or Sellers file or otherwise
commence any action, suit, proceeding or arbitration against the other for any
claim or matter arising from or relating to this Agreement, or any other
document, instrument or agreement entered into by the parties pursuant to or in
connection with this Agreement, the prevailing party shall be entitled to
recover such sums, in addition to any other damages or compensation received, as
will reimburse the prevailing party for reasonable attorney's fees and costs of
such action, suit, proceeding or arbitration incurred on account thereof.
12.17. Seller's Knowledge. Whenever used herein, knowledge of Seller or the
best knowledge of Seller or words of similar import shall be limited to the
actual (as distinguished from implied, imputed or constructive) specific
knowledge of the individual Seller making the specific representation and
warranty, without duty of inquiry or any independent investigation, whether or
not expressly referred to in this Agreement.
12.18. Jurisdiction and Venue. The parties hereto hereby irrevocably
consent to the non- exclusive jurisdiction of any state or federal court located
within the State of Maryland and consent that all such Service of process be
made by registered mail in accordance with the provisions of Section 12.4. To
the extent permitted by law, the parties hereto waive any objection to venue of
any action instituted hereunder.
12.19. No Third Party Beneficiaries. Nothing in this Agreement is intended
to or shall be construed to create any right in any Person other than a party
hereto to rely upon any of the terms and conditions of this Agreement or to
bring any action to enforce any term or condition of this Agreement.
12.20. Escrow Agent.
(a) Escrow Agent shall act on behalf of Buyers and Sellers with
respect to the Deposit, Closing Escrow and Holdback Agreement in accordance with
the terms of this Agreement and the Holdback Agreement.
(b) The Escrow Agent may rely upon, and shall not be liable for
acting or refraining from acting upon, any written notice, instruction or
request or other paper furnished to it hereunder or under the Holdback Agreement
and reasonably believed by it to be genuine and to have been signed or presented
by the proper party or parties. The Escrow Agent shall be responsible for
holding and disbursing the Deposit, and all accrued interest thereon pursuant to
this Agreement, and
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any funds escrowed pursuant to the Holdback Agreement (collectively the
"Escrowed Funds") but in no event shall it be liable for any exemplary or
consequential damages in excess of the Escrow Agent's fee hereunder. The Escrow
Agent is not responsible or liable in any manner whatever for the sufficiency,
correctness, genuineness or validity of the subject matter of this Agreement or
any part hereof or for the form of execution hereof, or for the identity or
authority of any person executing or depositing the same. The Escrow Agent shall
have no liability for any loss arising from any cause beyond its control,
including, but not limited to, the following: (a) the act, failure or neglect of
any other party hereto or any agent or correspondent prudently selected by the
Escrow Agent for the remittance of funds; (b) any delay, error, omission or
default of any mail, courier, telegraph, cable or wireless agency or operator;
or (c) the acts or edicts of any Governmental Authority or other group
exercising governmental powers.
(c) Should any controversy arise involving the parties hereto or any
of them or any other person, firm or entity with respect to this Agreement or
the Holdback Agreement or the Escrowed Funds, the Escrow Agent shall comply with
the terms of and act pursuant to Section 2.6 and the Holdback Agreement, as
applicable, above.
(d) The Escrow Agent shall be compensated in accordance with the fee
schedule attached hereto as Exhibit CC. The Buyers and the Sellers jointly and
severally hereby agree to pay the fees of and expenses incurred by the Escrow
Agent in performing its obligations or enforcing its rights hereunder and to
reimburse the Escrow Agent for all fees and expenses, including reasonable
attorneys' fees, incurred by the Escrow Agent in connection with the
preparation, operation, administration and enforcement of this Agreement and the
Holdback Agreement and its obligations hereunder. As between the Buyers and the
Sellers, the fees and expenses of the Escrow Agent shall be paid one-half by the
Buyers and one-half by the Sellers.
(e) The Escrow Agent may consult with its counsel or other counsel
satisfactory to it concerning any question relating to its duties or
responsibilities hereunder or otherwise in connection herewith.
(f) The Escrow Agent may resign hereunder upon 30 days' prior notice
to the other parties hereto. Upon the effective date of such resignation, the
Escrow Agent shall deliver the Escrowed Funds and all accrued interest thereon
to any substitute escrow agent designated by the other parties hereto. If the
other parties hereto fail to designate a substitute escrow agent within 30 days
after the giving of such notice, the Escrow Agent may institute a xxxx of
interpleader. The Escrow Agent's sole responsibility after the notice period
expires shall be to keep safely the Escrowed Funds and all accrued interest
thereon and to deliver the same to a designated substitute escrow agent, if any,
or in accordance with the directions of a final order or judgment of a court of
competent jurisdiction, at which time the Escrow Agent's obligations hereunder
shall cease and terminate.
12.21. JURY TRIAL WAIVER. EACH BUYER AND SELLER AND ALL PERSONS CLAIMING
BY, THROUGH OR UNDER EACH BUYER AND SELLER, HEREBY
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EXPRESSLY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION OF
THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT (AS
NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE; AND EACH BUYER AND SELLER HEREBY AGREES AND CONSENTS THAT AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY
JURY. EACH BUYER AND SELLER ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL
COUNSEL REGARDING THE MEANING OF THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER
IS AN ESSENTIAL INDUCEMENT FOR THE OTHER EXECUTING THIS AGREEMENT. THIS WAIVER
SHALL SURVIVE THE TERMINATION OR EXPIRATION OF THIS AGREEMENT.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
BUYERS:
APARTMENT INVESTMENT
AND MANAGEMENT COMPANY,
a Maryland corporation
By:
----------------------------------
Xxxxx X. Xxxxxxxxx
President
AIMCO PROPERTIES, L.P.,
a Delaware limited partnership
By: AIMCO-GP, Inc.
its general partner
By:
-------------------------
Xxxxx X. Xxxxxxxxx
President
NHP MANAGEMENT COMPANY, a District
of Columbia corporation
By:
----------------------------------
Xxxxxxx Xxxx
Vice President
AIMCO/NHP PROPERTIES, INC.,
a Delaware corporation
-
By:
----------------------------------
Xxxxx X. Xxxxxxxxx
President
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SELLERS:
------------------------------------
Xxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxxx
------------------------------------
Xxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxx
ESCROW AGENT:
Chicago Title Insurance Company
By:
---------------------------------
Name: Xxxx Xxxxxx
Title:
---------------------------
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Exhibit 2.1
ACQUIRED ASSETS
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Disclosure Schedule Definition 1
Excluded Oxford Assets
1. That certain Lancaster Heights Note # 6 Non-Negotiable Purchase Money
Promissory Note Personal Property in the original principal amount of
$1,063,195, made by Lancaster Heights Associates, an Illinois limited
partnership, and payable to Oxford Properties Corporation (as assignee of Oxford
Development Corporation), dated September 28, 1984, which has an outstanding
principal balance as of the date hereof of $838,112, and accrued but unpaid
interest thereon of $1,154,314, together with any security therefor.
2. All right, title and interest in and to any license, and any other
privilege or right relating to the use of Suite 340 at the MCI Center,
Washington, DC.
3. Books and publications (but not financial books, records of the Oxford
Entities, and financial models and proprietary materials relating to the
Acquired Business or the Acquired Assets (whether paper or electronic form)),
and subject to the License Agreement (FF&E) the following: computer hardware,
software and peripherals, and telephones, televisions, projectors, VCRs and
other telecommunications devices identified on Exhibit 1 of Disclosure Schedule
Definition 1.
4. The following furniture, fixtures, artwork, office supplies, and postage
machines and any related cash deposits identified on Exhibit 2 of Disclosure
Schedule Definition 1, specifically excluding all such items subject to
equipment leases, etc.
5. Subject to the License Agreement (Oxford), all right, title and interest
of OHC, ORFG and any subsidiary thereof to any trademarks or tradenames which
contain the word, "Oxford."
6. All of Oxford Investment Corporation's direct and indirect interest in
Xxxxxx-Oxford Limited Partnership.
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Disclosure Schedule Definition 2
Excluded Seller Assets
1. All partnership interests in the Employee Partnerships, other than the
general partner interests in such entities owned by OHC, ORFG or any subsidiary
thereof.
2. All interests of Xxxxxxx and Oxford Investment Corporation in Longwood
II-Oxford Associates Limited Partnership.
3. All BAC Options of OTEF owned by any of the current employees of ORFG
Operations, L.L.C., including without limitation, any of the Sellers;
4. All BACs of OTEF and investor limited partnership interests in any of
the Property- Owning Entities;
5. Xxxxxxx'x ownership interest in the American Real Estate Exchange, Inc.
and related computer equipment, and CBI Corporation.
6. All of Xxxxxxx'x direct and indirect ownership interest in Xxxxxx-Oxford
Limited Partnership.
7. All direct ownership interests in, and assets of, Oxford Securities
Corporation.
8. All employee benefits identified on Disclosure Schedule 5-8Ai.
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Disclosure Schedule 3.1
1. Oxparc Entities. On or before the Closing Date, each Oxparc Entity that
receives fees from an OAMCO General Partner that holds a twenty-five percent
interest in the profits, losses and distributions of a Property Owning Entity
may distribute the 25% Fee Agreements to their members in a restructuring agreed
upon by Buyers and Sellers; provided, however, that no party shall be obligated
to agree upon any such restructuring that would result in cost, expense or
liability to any party (including third party partners) and, in the case of
AIMCO, that could adversely affect its REIT Status.
2. Distributions of Excluded Oxford Assets. On or before the Closing Date,
but in any event prior to the Closing, Sellers shall cause the applicable Oxford
Entities to make certain dividends or distributions to Sellers such that title
to each Excluded Oxford Asset shall be held by Sellers (or their designee). Any
costs or expenses relating to such dividends and distributions shall be paid by
the Sellers.
3. Dissolution of Inactive Oxford Entities. On or before the Closing Date,
but in any event prior to Closing, Sellers shall file certificates of
dissolution for the inactive Oxford Entities listed on Disclosure Schedule 3.3
(the "Dissolved Entities"), none of which conducts any current, active business
or has any current contractual obligations or liabilities.
4. Liquidation of Class B Limited Partnership. On or before the Closing
Date, The Class B Limited Partnership shall distribute to Sellers in complete
liquidation all of the Class B common stock of Oxford Realty Financial Group,
Inc. held by The Class B Limited Partnership.
5. Curative Amendments to Property-Owning Entities. On or before the
Closing Date, Sellers shall cause to be filed amendments to those partnership
agreements of Property-Owning Entities that in the opinion of counsel to the
Property-Owning Entities may be filed to cure certain ambiguities relating to
the rights of general partners to withdraw from such Property-Owning Entities.
6. Liquidation of Xxxxx Xxxxxxx Partners I Limited Partnership. On or
before the Closing Date, and except as provided for in the Related Documents,
Xxxxxxx and Xxxxx shall cause the Xxxxx Xxxxxxx Partnership to liquidate and
distribute its assets, as follows: (i) undivided fractional interests in the
Xxxxxxx Subordinated Note shall be distributed approximately 75% to Xxxxxxx and
25% to Xxxxx, and (ii) the general partner interests identified as Xxxxxxx
Interests shall be distributed to Xxxxxxx, and the remaining general partner
interests identified as Xxxxx Interests shall be distributed to Xxxxxxx, as
nominee for Xxxxx pursuant to that certain Nominee Agreement, dated as of the
Closing Date. The parties contemplate that Xxxxxxx, as nominee, shall contribute
the Xxxxx Interests to AIMCO OP in exchange for OP Units that will be issued in
the name of Xxxxxxx X. Xxxxx and distributed to Xxxxx in liquidation of the
Xxxxx Xxxxxxx Partnership.
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7. Termination of Sellers' Obligations. On or before the Closing Date,
Sellers shall cause ORFG and OHC to redeliver to Sellers any and all original
notes executed by Sellers, marked paid and canceled, and a termination agreement
with respect to all security agreements, guaranty agreements and all other
collateral documents relating to said notes. Buyers hereby consent to such
actions.
8. Assignment of Trademarks. On or before the Closing Date, Sellers shall
cause ORFG and OHC to execute and deliver the Assignment of Trademarks pursuant
to which ORFG and OHC shall sell, transfer, assign and convey all of their
respective right, title and interest in and to all trademarks owned by such
entities.
9. REIT Requirements. Sellers shall cooperate with Buyers to effect any
pre-closing restructuring that AIMCO deems necessary to avoid any adverse effect
on AIMCO's REIT status, provided that such cooperation shall be at no cost,
including any out-of-pocket costs and/or tax liability, to Sellers or the Oxford
Entities.
10. ORFG Operations L.L.C. On or before the Closing Date, Sellers may cause
ORFG Operations L.L.C. to distribute certain Acquired Assets owned and held by
ORFG Operations L.L.C. on the date hereof to the members of ORFG Operations
L.L.C.
11. HUD Matters. Buyers and Sellers will cooperate to effect any
pre-Closing restructuring which they agree upon as reasonably necessary to
obtain or facilitate HUD Approvals; provided, however, that no party shall be
obligated to agree upon any restructuring that could result in cost, expense or
liability to any party and, in the case of AIMCO, that could adversely affect
its REIT Status.
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DISCLOSURE SCHEDULE 4.3
REQUIRED CONSENTS OF BUYERS:
General Electric
CNA
REQUIRED CONSENTS OF SELLERS:
General Electric
CNA
FNMA
Banco Santander
Merrill Xxxxx
Conduit loans originally securitized by DLJ, First Union, Nomura and
Xxxxxxx Xxxxx
Northwestern Mutual
CIGNA
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