SUBSCRIPTION AND PURCHASE AGREEMENT
TABLE OF CONTENTS
Page
I. The Subscription, Sale and Purchase..................................................................2
1.01 Subscription, Sale and Purchase.........................................................2
1.02 Delivery of Units, Shares, Interests, WFA Interest, Other Units
and Purchase Price......................................................................3
II. Purchase Price and Adjustments.......................................................................4
2.01 Intentionally Omitted...................................................................4
2.02 Purchase Price Adjustment...............................................................4
III. Closings.............................................................................................5
3.01 The Closing, the HUD Closings and the Subsequent Closings...............................5
3.02 Transactions at the Closing, the HUD Closings and the
Subsequent Closings.....................................................................6
IV. Representations and Warranties of Sellers...........................................................10
4.01 Relationship of Sellers and their Affiliates...........................................10
4.02 Organization Charts....................................................................12
4.03 Organization and Qualification.........................................................12
4.04 Authority..............................................................................13
4.05 Capitalization; Partnership Interests; Substitution of Partners........................14
4.06 Business Conducted.....................................................................16
4.07 Financial Condition....................................................................16
4.08 Liabilities............................................................................17
4.09 Insurance..............................................................................17
4.10 Material Events and Changes............................................................18
4.11 No Conflicts or Defaults; No Violations................................................19
4.12 Consents...............................................................................19
4.13 Debt...................................................................................20
4.14 Taxes..................................................................................21
4.15 Material Agreements; Management Agreements.............................................23
4.16 Employees..............................................................................24
4.17 Environmental Matters..................................................................24
4.18 Investment Company.....................................................................27
4.19 [Omitted]..............................................................................27
4.20 [Omitted]..............................................................................27
4.21 Litigation and Claims..................................................................27
4.22 Intellectual Property..................................................................27
4.23 Questionable Payments..................................................................28
4.24 [Omitted]..............................................................................28
4.25 SEC Reports............................................................................28
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4.26 Transfers of Units in the Subject LPs..................................................29
4.27 Books and Records; Bank Accounts.......................................................29
4.28 Fees and Reimbursements................................................................29
4.29 Completeness of Disclosure.............................................................30
4.30 Representations Regarding Real Estate..................................................30
4.31 HUD....................................................................................35
4.32 Solvency...............................................................................35
4.33 Absence of Inducement..................................................................36
4.34 No Knowledge of Breach.................................................................36
V. Representations and Warranties of Buyers............................................................36
5.01 Organization...........................................................................36
5.02 Authority..............................................................................37
5.03 No Conflicts or Defaults; No Violations................................................37
5.04 Litigation.............................................................................37
5.05 Investment Company.....................................................................37
5.06 Consents...............................................................................37
5.07 HUD Consents...........................................................................38
5.08 Completeness of Disclosure.............................................................38
5.09 Absence of Inducement..................................................................38
5.10 No Knowledge of Breach.................................................................38
VI. Additional Agreements...............................................................................39
6.01 Performance of Covenants...............................................................39
6.02 General................................................................................39
6.03 Other Agreements; Conduct of Business..................................................39
6.04 Xxxx-Xxxxx-Xxxxxx Filings..............................................................41
6.05 Consents and Filings...................................................................41
6.06 Delivery of Financial Statements Required for SEC Filings;
Statements of Operations...............................................................41
6.07 [Omitted]..............................................................................41
6.08 Confidentiality........................................................................42
6.09 Public Statements......................................................................42
6.10 Limited Release........................................................................43
6.11 Voting by Sellers......................................................................43
6.12 Access.................................................................................44
6.13 No Transfers or Encumbrances...........................................................44
6.14 Notice of Certain Events; SEC Reports..................................................45
6.15 [Omitted]..............................................................................46
6.16 Realization of Interests...............................................................46
6.17 Other Proposals........................................................................46
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6.18 Partnership Records....................................................................47
6.19 Preservation of Existence..............................................................47
6.20 Tax Reporting; Taxes...................................................................48
6.21 Price Adjustment.......................................................................49
VII. Covenants of Sellers................................................................................49
7.01 Ordinary Course........................................................................49
7.02 Liens..................................................................................49
7.03 Dissolution............................................................................50
7.04 New Lines of Business..................................................................51
7.05 Forgiveness of Debt....................................................................51
7.06 Affiliate Transactions.................................................................51
7.07 Assets.................................................................................51
7.08 Advances, Investments and Loans........................................................52
7.09 No Contrary Agreements.................................................................52
VIII. Conditions to Obligations of Buyers.................................................................52
8.01 Accuracy of Representations and Compliance with Conditions.............................52
8.02 Sellers' Deliveries....................................................................53
8.03 Legal Action...........................................................................53
8.04 No Material Adverse Change.............................................................54
8.05 Property Events........................................................................54
8.06 No Governmental Action.................................................................56
8.07 Operating Result.......................................................................56
8.08 HUD Approval...........................................................................57
8.09 Xxxx-Xxxxx-Xxxxxx Waiting Period.......................................................57
8.10 Consents...............................................................................57
8.11 FIRPTA Certificate.....................................................................57
8.12 Insurance..............................................................................57
8.13 Absence of Certain Events..............................................................57
8.14 Prior Closings.........................................................................58
8.15 [Omitted]..............................................................................58
8.16 Buyers' Elections......................................................................58
8.17 Other Closing Documents................................................................58
8.18 Change in Ownership of Partnerships....................................................58
IX. Conditions to the Obligations of Sellers............................................................58
9.01 Accuracy of Representations and Compliance with Conditions.............................58
9.02 Buyers' Deliveries.....................................................................59
9.03 Xxxx-Xxxxx-Xxxxxx Waiting Period.......................................................59
9.04 Prior Closings.........................................................................59
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9.05 No Material Adverse Change.............................................................59
9.06 No Governmental or Legal Action........................................................59
9.07 Other Closing Documents................................................................60
X. Indemnification; Contribution.......................................................................60
10.01 Indemnification by Sellers.............................................................60
10.02 Indemnification by Buyers..............................................................62
10.03 Rules Regarding Indemnification........................................................63
10.04 Limitations on Indemnification.........................................................65
10.05 Contribution...........................................................................69
XI. Survival of Representations and Warranties and Covenants............................................69
11.01 Survival...............................................................................69
11.02 [Omitted]..............................................................................70
XII. Termination.........................................................................................70
12.01 Termination............................................................................70
12.02 Manner of Exercise.....................................................................74
12.03 Effect of Termination..................................................................74
XIII. Liquidated Damages..................................................................................74
13.01 General................................................................................74
13.02 Certain Terminations...................................................................75
XIV. Miscellaneous.......................................................................................75
14.01 Assignment.............................................................................75
14.02 Certain Provisions.....................................................................76
14.03 Brokerage Fees.........................................................................76
14.04 Further Actions........................................................................76
14.05 Availability of Equitable Remedies.....................................................76
14.06 Notices................................................................................76
14.07 Waiver.................................................................................77
14.08 Binding Effect.........................................................................77
14.09 No Third-Party Beneficiaries...........................................................77
14.10 Severability...........................................................................77
14.11 Headings...............................................................................78
14.12 Counterparts; Governing Law............................................................78
14.13 Attorneys' Fees........................................................................78
14.14 Waiver of Trial by Jury................................................................78
14.15 [Omitted]..............................................................................79
14.16 Construction of Documents..............................................................79
Page
14.17 Whole Agreement; Annexes, Exhibits and Schedules;
Amendments.............................................................................79
14.18 Knowledge..............................................................................79
14.19 Expenses...............................................................................79
14.20 Definitions............................................................................80
List of Exhibits.................................................................................................91
Annex A ....................................................................................................92
SUBSCRIPTION AND PURCHASE AGREEMENT
Subscription and Purchase Agreement, dated as of October __, 1997, among
Insignia Financial Group, Inc., a Delaware corporation with offices at One
Insignia Xxxxxxxxx Xxxxx, X.X. Xxx 0000, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
("IFG"); and IPT I LLC, a Delaware limited liability company with offices at One
Insignia Xxxxxxxxx Xxxxx, X.X. Xxx 0000, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 ("LLC"
and, together with IFG, "Buyers");
and
Winthrop Financial Associates, A Limited Partnership, a Maryland limited
partnership with offices at 0 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000
("WFA"), First Winthrop Corporation, a Delaware corporation with offices at 0
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 ("FWC"), the entities
identified on Annex A hereto, each a Delaware limited liability company or
limited partnership (as indicated on Annex A) with offices at 0 Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 ("Other Sellers" and, together with WFA
and FWC,"Sellers");
WITNESSETH:
WHEREAS, Sellers wish to sell to Buyers, and Buyers wish to subscribe for
and purchase from Sellers, (i) all of the units of limited partnership interest
in the 13 limited partnerships listed under the caption "Subject LPs" on
Schedule 1.01(a) (the "Subject LPs") owned, directly or indirectly, by Sellers
(collectively, the "Units"), (ii) all of the authorized shares of Class B Common
Stock, par value $.10 per share, of FWC (the "Shares"), (iii) the assets listed
on Schedule 1.01(b) hereto (the "Interests"), (iv) an associate general partner
interest in WFA (the "WFA Interest") and (v) units of limited partnership
interest in the limited partnerships (the "Other LPs") listed under the caption
"Other Units" on Schedule 1.01(c) hereto (the "Other Units"), subject to the
terms and conditions set forth herein; and
WHEREAS, the parties wish to make certain other agreements in connection
with such sale and purchase;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the covenants, agreements, representations
and warranties herein contained, the parties hereto hereby agree as follows:
I. The Subscription, Sale and Purchase
Section 1.01 Subscription, Sale and Purchase
(a) At the Closing (defined below):
(i) Other Sellers listed on Schedule 1.01(a) under the heading "Unit
Holder" shall sell to IFG or its designee, and IFG or its designee shall buy,
all of the Units listed opposite such Other Sellers' respective names on
Schedule 1.01(a) which are marked "Units Sold at the Closing" for an aggregate
purchase price (subject to adjustment as provided in Section 2.02) of
$28,196,540, in cash. Such aggregate purchase price shall be allocated (subject
to adjustment) among the Units and among the Persons (defined below) selling the
Units as set forth on Schedule 1.01(a);
(ii) FWC shall issue to IFG, and IFG shall acquire, all of the Shares for
an aggregate subscription price of $25,500,000, in cash;
(iii) the Persons listed on Schedule 1.01(b) shall sell to IFG or its
designee, and IFG or its designee shall buy, all of the Interests listed
opposite such Sellers' respective names on Schedule 1.01(b) which are marked
"Interests Sold at the Closing" for an aggregate purchase price of $2,910,000,
in cash;
(iv) WFA shall admit LLC as an associate general partner of WFA and LLC
shall contribute to the capital of WFA $3,500,000, in cash;
(v) the Other Sellers listed on Schedule 1.01(c) shall sell to IFG or its
designee, and IFG or its designee shall buy, all of the Other Units listed
opposite such Other Sellers' respective names on Schedule 1.01(c) which are
marked "Other Units Sold at the Closing" for an aggregate purchase price of
$100,000, in cash; and
(vi) Buyers shall not be required to purchase any of the Units, the Other
Units or the Interests or acquire the Shares or the WFA Interest to be
transferred hereunder unless all of the Units to be transferred at the Closing,
the Other Units, the Shares, the Interests and the WFA Interest are sold to
Buyers at the Closing.
(b) At each HUD Closing (defined below), all documents required to be
delivered pursuant to Section 3.02(b) shall be delivered.
(c) At each Subsequent Closing (defined below):
(i) Other Sellers listed on Schedule 1.01(a) shall sell to IFG or its
designee, and IFG or its designee shall buy, all of the Units listed opposite
such Other Sellers' respective names on Schedule 1.01(a) which are marked "Units
Sold at [date] Subsequent Closing" as set forth on Schedule 1.01(a) (including
the Units of Westbury Investors Limited Partnership (the "HUD Units")) for an
aggregate purchase price (subject to adjustment through the Closing Date or, in
the case of the HUD Units, the HUD Closing Date, as provided in Section 2.02) of
$11,881,950, in cash. Such aggregate purchase price shall be allocated (subject
to adjustment) among the Units and among the Persons selling the Units as set
forth on Schedule 1.01(a).
(ii) IFG or its designee shall not be required to purchase any of the Units
to be sold hereunder at a Subsequent Closing unless all of the Units to be
transferred at such Subsequent Closing are sold to IFG or its designee at such
Subsequent Closing.
Section 1.02 Delivery of Units, Shares, Interests, WFA Interest, Other
Units and Purchase Price
(a) At the Closing:
(i) Each Seller of Units to be sold at the Closing shall deliver to IFG or
its designee an Assignment in the form annexed hereto as Exhibit A of such Units
duly executed, together with such proof of power and authority of the Person
executing such Assignment as shall be requested by Buyers, in each case together
with customary documentary proof, in form and substance reasonably satisfactory
to Buyers, of IFG's or its designee's admission, effective at the Closing, as a
substitute limited partner of each partnership included in the Subject LPs for
which Units are acquired at the Closing, in accordance with the provisions of
the respective partnership agreements.
(ii) FWC shall deliver to IFG a stock certificate representing the Shares
registered in the name of IFG, in form and substance reasonably satisfactory to
Buyers, and WFA shall deliver the Stockholders' Agreement in the form annexed
hereto as Exhibit B (the "Stockholders' Agreement") duly executed by all
stockholders of FWC.
(iii) Each Seller of an Interest shall deliver to IFG or its designee at
the Closing an Assignment in the form annexed hereto as Exhibit C (or such other
form as Buyers may approve) of the Interest to be sold by it hereunder duly
executed, together with such proof of power and authority of the Person
executing such Assignment as shall be requested by Buyers, in each case together
with customary documentary proof, in form and substance reasonably satisfactory
to Buyers, of the effective assignment to IFG or its designee of such Interest.
(iv) WFA shall cause LLC to be admitted as an associate general partner of
WFA by causing to be duly executed by all partners of WFA and delivered to LLC
at the Closing the Second Amended and Restated Agreement of Limited Partnership
of Winthrop Financial Associates, A Limited Partnership, in the form annexed
hereto as Exhibit D (the "Winthrop Amendment") and a Certificate of Amendment to
the Certificate of Limited Partnership of Winthrop Financial Associates, A
Limited Partnership in the form annexed hereto as Exhibit E (the "Amended
Certificate").
(v) Each Seller of Other Units shall deliver to IFG or its designee an
Assignment in the form annexed hereto as Exhibit A of such Other Units duly
executed, together with such proof of power and authority of the Person
executing such Assignment as shall be requested by Buyers, in each case together
with customary documentary proof, in form and substance reasonably satisfactory
to Buyers, of IFG's or its designee's admission, effective at the Closing, as a
substitute limited partner of each partnership included in the Other LPs, in
accordance with the provisions of the respective partnership agreements.
(b) At each HUD Closing, all documents required to be delivered pursuant to
Section 3.02(b) shall be delivered.
(c) At each Subsequent Closing, each Seller of Units to be sold at such
Subsequent Closing shall deliver to IFG or its designee an Assignment in the
form annexed hereto as Exhibit A of such Units duly executed, together with such
proof of power and authority of the Person executing such Assignment as shall be
requested by Buyers, in each case together with customary documentary proof, in
form and substance reasonably satisfactory to Buyers, of IFG's or its designee's
admission, effective at each Subsequent Closing, as a substitute limited partner
of each partnership included in the Subject LPs for which Units are acquired at
such Subsequent Closing, in accordance with the provisions of the respective
partnership agreements.
(d) At the Closing and each Subsequent Closing, as the case may be, Buyers
shall pay the portion of the purchase price payable to each Seller hereunder, at
the Closing or Subsequent Closing, as the case may be, as adjusted as provided
in this Agreement, by certified or official bank check payable to such Seller or
by wire transfer to such Seller at the account and in accordance with wire
instructions delivered to Buyers in writing at least two business days prior to
the date of the Closing or Subsequent Closing, as the case may be.
II. Purchase Price and Adjustments
Section 2.01 Intentionally Omitted
Section 2.02 Purchase Price Adjustment
(a) The aggregate purchase price for the Units payable by Buyers under this
Agreement: (i) shall be reduced dollar for dollar to the extent that any
distributions from the Subject LPs are received by Sellers from and after the
date hereof and through the Closing Date from or with respect to any of the
Units (other than the HUD Units) in the Subject LPs being sold on the Closing
Date and on each Subsequent Closing Date, (ii) shall be reduced dollar for
dollar to the extent that any distributions from Westbury Investors Limited
Partnership are received by any of Sellers from and after the date hereof and
through the HUD Closing Date with respect to Westbury Investors Limited
Partnership, from and with respect to any of the HUD Units being sold on a
Subsequent Closing Date, and (iii) shall be further adjusted as provided in
Section 8.05.
(b) Any purchase price adjustment shall be made by reducing the amount of
cash otherwise payable to each Seller in such proportion as shall be set forth
in the draft Adjusted Purchase Price Schedule (defined below) delivered under
Section 2.02(c).
(c) On or prior to the Closing Date and, with respect to the Units to be
sold at a Subsequent Closing, on or prior to such Subsequent Closing Date,
Sellers shall prepare and deliver to Buyers a draft Schedule signed by Sellers
setting forth the proposed allocation among Sellers of any purchase price
adjustments required to be made for the approval of Buyers, which approval shall
not be unreasonably withheld. The draft Schedule shall allocate the adjusted
purchase price among the Sellers in accordance with this Agreement based on the
economic reality causing the adjustment, and shall be accompanied by a worksheet
showing the basis for such allocation which shall be certified in such Schedule
as true, complete and correct. Upon approval by Buyers (or as modified to
include any agreed changes), the Schedule shall become the "Adjusted Purchase
Price Schedule" hereunder, and Buyers shall pay the purchase price due hereunder
as adjusted on such Adjusted Purchase Price Schedule at the Closing or a
Subsequent Closing, as the case may be. All of the parties to this Agreement
agree that none of Buyers shall have any liability to any Person, whether or not
a party to this Agreement, arising out of or relating to any allocation of
purchase price adjustment pursuant to such Adjusted Purchase Price Schedule or
for paying, at the instruction of WFA or FWA, the entire purchase price, as
adjusted, payable at Closing or any Subsequent Closing to a single bank account,
all of which shall be the sole responsibility of Sellers.
III. Closings
Section 3.01 The Closing, the HUD Closings and the Subsequent Closings
The closings of the transactions contemplated by Section 1.01(a) (the
"Closing"), by Section 1.01(b) (the "HUD Closings") and by Section 1.01(c) (the
"Subsequent Closings") shall take place at the offices of Xxxxxxxxx Xxxx XXX,
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, effective as of the close of business, (i) on
the second business day next following the satisfaction of the conditions to
Closing, in the case of the Closing, or at such other time and place as the
parties shall hereafter agree (the "Closing Date"), (ii) on the second business
day next following the satisfaction of the conditions to a HUD Closing, in the
case of the HUD Closings, or at such other time and place as the parties shall
hereafter agree (the "HUD Closing Dates"), and (iii) provided that the
conditions to a Subsequent Closing are satisfied, on the dates set forth on
Schedule 1.01(a), in the case of the Subsequent Closings, or at such other time
and place as the parties shall hereafter agree (the "Subsequent Closing Dates").
Section 3.02 Transactions at the Closing, the HUD Closings and the
Subsequent Closings
(a) The following transactions shall take place at the Closing, all of
which shall be deemed to have occurred simultaneously as of the close of
business on the Closing Date and none of which shall be deemed completed unless
and until all of them shall have been completed (or waived in writing by the
parties entitled to performance):
(i) Sellers shall deliver to Buyers the following:
(A) The Assignments of all of the Units and the Other Units being sold on
the Closing Date to IFG or its designee hereunder together with the evidence of
IFG's or its designee's admission into the respective Subject LPs and Other LPs.
(B) The stock certificate representing the Shares registered in the name of
IFG, in form and substance reasonably satisfactory to Buyers, together with the
Stockholders' Agreement duly executed by all stockholders of FWC other than IFG.
(C) The Assignments of all of the Interests being sold to IFG or its
designee hereunder together with the evidence of the effective assignment to IFG
or its designee of such Interests.
(D) The Winthrop Amendment duly executed by all partners of WFA other than
LLC and the Amended Certificate duly executed by WFA.
(E) An opinion of Rosenman & Colin LLP dated the Closing Date in form and
substance satisfactory to Buyers.
(F) Evidence that all applicable waiting periods (and any extensions
thereof) relating to any transactions to be completed by any of Sellers under
this Agreement under the HSR Act (defined below) have expired or otherwise been
terminated.
(G) Certificates dated the Closing Date from each of Sellers, the
Subsidiaries (defined below), and the Partnerships signed by its duly authorized
general partners, officers, managers or other legal representatives in form and
substance satisfactory to Buyers certifying a list of its (other than the Other
Sellers) Organizational Documents (defined below), its valid existence and good
standing (in all jurisdictions where the failure to qualify would have a
material adverse effect on the financial condition or operations of such
Person), incumbency of its officers or others acting in a representative
capacity, Sellers' due authorization of the transactions contemplated hereby,
accuracy of Sellers' representations and warranties, performance and compliance
by Sellers with all of Sellers' covenants and agreements hereunder and
satisfaction of the conditions to Buyers' obligations hereunder to be satisfied
by any of Sellers and such other matters as Buyers shall reasonably request.
(H) A certificate from Sellers pursuant to Section 8.04 in form and
substance satisfactory to Buyers with respect to the absence of any material
adverse change.
(I) A certificate from Sellers pursuant to Section 7.06 in form and
substance satisfactory to Buyers with respect to Affiliate Transactions.
(J) The limited releases from each of Other Sellers selling Units and Other
Units on the Closing Date in the form of Exhibit G, as described in
Section 6.10.
(K) Evidence in form and substance satisfactory to Buyers of receipt of all
consents to be received by Sellers pursuant to Section 6.05.
(L) An Adjusted Purchase Price Schedule, if required, pursuant to
Section 2.02(c).
(M) The FIRPTA Certificates described in Section 8.11.
(N) The Schedule required to be delivered under Section 4.26 with respect
to transfers of units of limited partnership interest.
(O) The Non-Competition Agreement in the form annexed hereto as Exhibit H
duly executed by WFA and Apollo Real Estate Management Corp.
(P) The Guaranty in the form annexed hereto as Exhibit I duly executed by
Apollo Real Estate Fund L.P. and Apollo Real Estate Fund II L.P.
(ii) Buyers shall deliver to Sellers the following:
(A) The adjusted purchase price for the Shares, the Interests, the WFA
Interest, the Units being acquired on the Closing Date and the Other Units as
specified in Section 1.02 and Section 2.02.
(B) An opinion of Proskauer Rose LLP dated the Closing Date in form and
substance satisfactory to Sellers.
(C) Evidence that all applicable waiting periods (and any extensions
thereof) relating to any transactions to be completed by Buyers under this
Agreement under the HSR Act have expired or otherwise been terminated.
(D) Certificates from each of Buyers signed by its duly authorized general
partners, officers, managers or other legal representatives in form and
substance satisfactory to Sellers certifying its Organizational Documents, valid
existence and good standing (in all jurisdictions where the failure to qualify
would have a material adverse effect on the financial condition or operations of
IFG), incumbency of officers or others acting for such entity in a
representative capacity, due authorization of the transactions contemplated
hereby, accuracy of Buyers' representations and warranties, performance and
compliance by Buyers with all of Buyers' covenants and agreements and
satisfaction of the conditions to Sellers' obligations hereunder to be satisfied
by Buyers and such other matters as Sellers shall reasonably request.
(E) The Stockholders' Agreement duly executed by IFG.
(F) The Winthrop Amendment and the Amended Certificate, each duly executed
by LLC.
(b) The following transactions shall take place at each HUD Closing, all of
which shall be deemed to have occurred simultaneously as of the close of
business on such HUD Closing Date and none of which shall be deemed completed
unless and until all of them shall have been completed (or waived in writing by
the parties entitled to performance):
(i) Sellers shall deliver to Buyers the following:
(A) An opinion of Rosenman & Colin LLP dated such HUD Closing Date in form
and substance satisfactory to Buyers.
(B) A certificate dated such HUD Closing Date from WFA and each HUD Entity
with respect to which such HUD Closing relates signed by its duly authorized
general partners, officers, managers or other legal representatives in form and
substance satisfactory to Buyers certifying a list of its Organizational
Documents, its valid existence and good standing (in all jurisdictions where the
failure to qualify would have a material adverse effect on the financial
condition or operations of such Person), incumbency of its officers or others
acting in a representative capacity, WFA's due authorization of the transactions
contemplated hereby, accuracy of WFA's representations and warranties,
performance and compliance by WFA with all of WFA's covenants and agreements
hereunder and satisfaction of the conditions to Buyers' obligations hereunder to
be satisfied by WFA and such other matters as Buyers shall reasonably request.
(C) A certificate from WFA pursuant to Section 8.04 in form and substance
satisfactory to Buyers with respect to the absence of any material adverse
change.
(D) A certificate from WFA pursuant to Sectio 7.06 in form and substance
satisfactory to Buyers with respect to Affiliate Transactions.
(E) The limited releases from each of Other Sellers selling HUD Units on
such HUD Closing Date.
(ii) Buyers shall deliver to Sellers the following:
(A) An opinion of Proskauer Rose LLP dated such HUD Closing Date in form
and substance satisfactory to Sellers.
(B) A certificate dated such HUD Closing Date from LLC signed by its duly
authorized general partners, officers, managers or other legal representatives
in form and substance satisfactory to Sellers certifying its Organizational
Documents, its valid existence and good standing (in all jurisdictions where the
failure to qualify would have a material adverse effect on the financial
conditions or operations of IFG), incumbency of its officers or others acting
for such entity in a representative capacity, LLC's due authorization of the
transactions contemplated hereby, accuracy of LLC's representations and
warranties, performance and compliance by LLC with LLC's covenants and
agreements and satisfaction of the conditions to Sellers' obligations hereunder
to be satisfied by LLC and such other matters as Sellers shall reasonably
request.
(c) The following transactions shall take place at each Subsequent Closing,
all of which shall be deemed to have occurred simultaneously as of the close of
business on such Subsequent Closing Date and none of which shall be deemed
completed unless and until all of them shall have been completed (or waived in
writing by the parties entitled to performance):
(i) Sellers shall deliver to Buyers the following:
(A) The Assignments of all of the Units being sold at such Subsequent
Closing to IFG or its designee hereunder together with the evidence of IFG's or
its designee's admission into the respective Subject LPs.
(B) An opinion of Rosenman & Colin LLP dated such Subsequent Closing Date
in form and substance satisfactory to Buyers.
(C) Certificates dated such Subsequent Closing Date from each Seller of
Units to be transferred at such Subsequent Closing signed by its duly authorized
general partners, officers, managers or other legal representatives in form and
substance satisfactory to Buyers certifying a list of its Organizational
Documents, its valid existence and good standing in the jurisdiction of its
organization, incumbency of its officers or others acting in a representative
capacity, such Sellers' due authorization of the transactions contemplated
hereby, accuracy of such Sellers' representations and warranties, performance
and compliance by such Sellers with all of such Sellers' covenants and
agreements hereunder and satisfaction of the conditions to Buyers' obligations
hereunder to be satisfied by any of such Sellers and such other matters as
Buyers shall reasonably request.
(D) An Adjusted Purchase Price Schedule, if required, pursuant to
Section 2.02(c).
(E) The FIRPTA Certificates described in Section 8.11.
(F) The Schedule required to be delivered under Section 4.26 with respect
to transfers of units of limited partnership.
(G) The limited releases from each of Other Sellers selling Units on such
Subsequent Closing Date.
(ii) Buyers shall deliver to Sellers the following:
(A) The purchase price for the Units being acquired on such Subsequent
Closing Date as specified in Section 1.02 and Section 2.02.
(B) An opinion of Proskauer Rose LLP dated such Subsequent Closing Date in
form and substance satisfactory to Sellers.
IV. Representations and Warranties of Sellers
WFA and FWC each, jointly and severally, represent and warrant to Buyers as
of the date hereof and agree with Buyers as follows, and the Other Sellers each,
severally and not jointly, represent and warrant to Buyers as of the date hereof
and agree with Buyers as set forth in Sections 4.01, 4.02, 4.03, 4.04, 4.05,
4.11, 4.12, 4.14, 4.18, 4.29, 4.32, 4.33 and 4.34 below:
Section 4.01 Relationship of Sellers and their Affiliates
(a) (i) Each of Sellers is an entity of the type and/or acting in the
capacity described in the "WHEREAS" clauses of this Agreement. WFA owns all of
the legal and beneficial equity interests in FWC and the directly and indirectly
wholly owned corporate subsidiaries of FWC as listed on Schedule 4.01(a.1)
(together with the Intermediate Entities (defined below), the "Subsidiaries")
and the Intermediate Entities. WFA, FWC and the Subsidiaries are directly or
indirectly the general partners in one or more limited partnerships as set forth
on Schedule 4.01(a.3) (each such limited partnership hereinafter referred to as
a "Partnership"). The Partnerships on Schedule 4.01(a.3) under the heading
"Managed Partnerships" are hereinafter referred to as the "Managed LPs." The
Persons listed on Schedule 4.01(a.3) under the heading "Corporate Intermediate
Entities" are hereinafter referred to as "Corporate Intermediate Entities," the
Persons listed on Schedule 4.01(a.3) under the heading "Partnership Intermediate
Entities" are hereinafter referred to as the "Partnership Intermediate
Entities," and together the Corporate Intermediate Entities and the Partnership
Intermediate Entities are referred to as the "Intermediate Entities."
(ii) Except as set forth on Schedule 4.01(a.4), WFA, FWC, the Subsidiaries
and the Partnerships own collectively all of the legal and beneficial interests
in the directly and indirectly held entities in the chain of ownership between
the Partnerships, on the one hand, and the Properties (defined below)
beneficially owned by the Partnerships, on the other hand (together, the "Lower
Tier Entities"), each of which is listed on Schedule 4.01(a.5). For purposes of
this Agreement, from and after the Closing, the term "Lower Tier Entities" shall
also include any entities wholly owned, directly or indirectly, by the Lower
Tier Entities. The entities in the chain of ownership between the Subject LPs,
on the one hand, and the Properties beneficially owned by the Subject LPs, on
the other hand, are hereinafter referred to as the "Subject Lower Tier
Entities." The entities in the chain of ownership between the Managed LPs, on
the one hand, and the Properties beneficially owned by the Managed LPs, on the
other hand, are hereinafter referred to as the "Managed Lower Tier Entities."
(iii) Except as set forth on Schedule 4.01(a.6) or under the partnership
agreement of each Partnership and Lower Tier Entity, one of WFA, FWC or the
Subsidiaries is or owns or controls, directly or indirectly, without the
requirement for consent of any other Person as to any matter, (A) the general
partner of each Partnership and Lower Tier Entity, with the right to manage the
operations of such entity, (B) the right to liquidate and dissolve (and the
liquidation and dissolution of) each Partnership and Lower Tier Entity, subject
to the fiduciary duty of the general partner of such Partnership and Lower Tier
Entity, and (C) the sale, financing and management of each Property (defined
below) owned, directly or indirectly, by each Partnership, subject to the
fiduciary duty of the general partner of such Partnership, in each case except
with respect to the matters set forth in Schedule 4.01(a.7). Schedule 4.01(a.7)
lists all agreements (other than Organizational Documents) which provide for, or
limit or in any manner affect, the rights and ability of WFA, FWC, or the
Subsidiaries to control any Partnership or Lower Tier Entity, and none of such
ownership interests, voting trusts or other agreements or arrangements relating
to or affecting such control shall change in any manner prior to the Closing or,
in the case of Westbury Investors Limited Partnership, Westbury Limited
Partnership and Cold Harbor Partnership, a Virginia Limited Partnership
(together, the "HUD Entities"), the applicable HUD Closing.
(b) [Omitted]
(c) Schedule 4.01(c.1) lists the total number of issued and outstanding
units of limited partnership interest in each Subject LP. Except as listed on
Schedule 4.01(c.2), no Subject LP or Subject Lower Tier Entity directly or
indirectly owns, or has any agreement or commitment to acquire, any unit of
limited partnership interest, any stock of any corporation or other equity
interest in any Person. Schedule 4.01(c.3) lists the general partner of each of
the Subject LPs and Subject Lower Tier Entities, and each other Person, if any,
which has a right or obligation to manage such Subject LP, Subject Lower Tier
Entity or any of the Subject Properties (defined below), whether by reason of a
Management Agreement (defined below) or through ownership of a general
partnership interest in such Subject LP or Subject Lower Tier Entity, or a
general partnership interest, capital stock or other equity interest in an
entity which is a general partner of such Subject LP or Subject Lower Tier
Entity. No general partner of any Subject LP or Subject Lower Tier Entity is
subject to removal for cause as such under the partnership agreement of such
Subject LP or Subject Lower Tier Entity as a result of existing facts or
circumstances known to Sellers, and the execution of this Agreement does not,
and the consummation of the transactions contemplated by this Agreement will
not, give rise to cause for such removal. Such Schedule also correctly indicates
the managing general partner where not all of the general partners are managing
general partners. Each of the Subject LPs and Subject Lower Tier Entities has
been managed by the Person indicated as its managing general partner in
accordance with its partnership agreement and all applicable fiduciary duties
since July 18, 1995. Except as set forth on such Schedule, the Person listed on
each such Schedule as the owner of any interest in any Subject LP or Subject
Lower Tier Entity is the legal and beneficial owner of such interest free and
clear of all Liens (defined below). Except as set forth on Schedule 4.01(c.4),
no Seller or any of its Affiliates (defined below) owns any other units of
limited partnership interest or other equity interests in any Partnership or has
any agreement or commitment to acquire any such units or other equity interests.
As used in this Agreement: (i) "Person" means an individual, corporation,
partnership, limited liability company, joint venture, association, joint-stock
company, trust, business trust, government or any agency or political
subdivision thereof, unincorporated organization or any other entity of any
kind, (ii) "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person, and (iii) "Lien" means any lien, pledge, security interest, claim,
charge, mortgage, encumbrance, restriction, voting trust, or any other rights of
any other Person other than any restrictions on the transferability of limited
partnership interests set forth in the Organizational Documents of the Subject
LPs and Subject Lower Tier Entities and, with respect to any Subject Property,
other than mechanics liens arising from liabilities included on the Most Current
Balance Sheet of a Subject LP or set forth on Schedule 4.01(c.5) or other
mechanics liens not so set forth but as to which the cost to discharge them as
of the Closing Date does not, in the aggregate, exceed $65,000.
Section 4.02 Organization Charts
The charts set forth on Schedule 4.02 correctly set forth the relationships
and ownership interests among Sellers, the Subsidiaries, the Partnerships and
the Lower Tier Entities. All of the ownership interests in such entities set
forth on that chart correctly reflect the legal and beneficial ownership of such
entities. Sellers own legally and beneficially the respective Units, Other Units
and Interests being sold to Buyers hereunder free and clear of any Liens.
Section 4.03 Organization and Qualification
(a) Schedule 4.03 correctly sets forth as to each of WFA, FWC, the
Subsidiaries, the Partnerships and the Lower Tier Entities its place of
incorporation or formation and principal place of business.
(b) Sellers have delivered to Buyers with respect to each of WFA, FWC, the
Subsidiaries, the Partnerships and the Lower Tier Entities, true, complete and
correct copies of each of the following documents, including all amendments and
supplements thereto (other than amendments which do no more than admit
additional or substitute limited partners): (i) the partnership agreement for
each such Person which is a limited partnership, (ii) the partnership agreement
for each such Person which is a general partnership, (iii) the certificate of
incorporation, by-laws, shareholders' agreements and voting trusts, if any, with
respect to each such Person which is a corporation, (iv) the articles of
organization and operating agreement, or similar documents, with respect to each
such Person which is a limited liability company, (v) the trust instruments or
an opinion of counsel from attorneys and in form and substance acceptable to
Buyer with respect to formation, powers, authority and other related matters
with respect to each such Person which is a trust, and (vi) other similar
documents (collectively, such Person's "Organizational Documents").
(c) WFA, each of the Lower Tier Entities which is identified in this
Agreement or the annexes or schedules hereto as a limited partnership (the
"Partnership Lower Tier Entities"), the Partnership Intermediate Entities and
each of the Partnerships is a limited partnership duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
organization, each of Sellers and the Lower Tier Entities which is identified in
this Agreement as a limited liability company is a limited liability company
validly existing under the laws of its jurisdiction of organization, and each of
the Subsidiaries (other than the Partnership Intermediate Entities) and the
Lower Tier Entities which is identified in this Agreement or the annexes or
schedules hereto as a corporation (such Lower Tier Entities, the "Corporate
Lower Tier Entities") is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, in each
case with all requisite power and authority, and all necessary consents,
authorizations, approvals, orders, licenses, certificates, and permits of and
from, and declarations and filings with, all federal, state, local, and other
governmental authorities and all courts and tribunals, to own, lease, license,
and use its properties and assets and to carry on the business in which it is
now engaged. Each of the Subsidiaries (other than the Partnership Intermediate
Entities) and the Corporate Lower Tier Entities is duly qualified to transact
the business in which it is engaged and is in good standing as a foreign
corporation, and each of the Partnerships, the Partnership Intermediate Entities
and the Partnership Lower Tier Entities is duly qualified to transact the
business in which it is engaged and is in good standing as a foreign limited
partnership, in every jurisdiction in which its ownership, leasing, licensing,
or use of its property or assets or the conduct of its business makes such
qualification necessary except for qualification in any jurisdiction in which
the failure to so qualify is not material to the business or financial condition
of such Subsidiary, Partnership or Lower Tier Entity as the case may be.
Section 4.04 Authority
Sellers have all requisite power and authority to execute, deliver, and
perform this Agreement. All necessary corporate, partnership, limited liability
company, trust or other proceedings (including, without limitation, any
shareholder or limited partner consents) of or on behalf of any of Sellers have
been duly taken to authorize their execution, delivery, and performance of this
Agreement. This Agreement and the other documents required to be delivered
hereby have been (or when delivered will be) duly authorized, executed, and
delivered by Sellers, and constitute (or when delivered will constitute) the
legal, valid, and binding obligation of Sellers, enforceable as to each of them
in accordance with their terms. Upon the Closing and each Subsequent Closing, as
the case may be, Sellers shall (i) transfer to IFG or its designee good title to
the Units and Other Units being sold hereunder, free and clear of all Liens,
(ii) cause IFG or its designee to be duly admitted as a substitute limited
partner in each of the Subject LPs in which it is buying Units and in each of
the partnerships in which it is buying Other Units, (iii) convey to IFG good
title to the Shares being sold hereunder, and each of FWC and the Subsidiaries
shall have good title to all of the general partnership interests in any of the
Partnerships that it owns, directly or indirectly, which title shall be free and
clear of all Liens, (iv) cause LLC to be admitted as an associate general
partner of WFA, and WFA shall have good title to all of the general partnership
interests in any of the Partnerships that it owns, directly or indirectly, which
title shall be free and clear of Liens, and (v) convey to IFG or its designee
good title to the Interests being sold hereunder, free and clear of all Liens.
Section 4.05 Capitalization; Partnership Interests; Substitution of
Partners
(a) Except as set forth on Schedule 4.05(a.1), all of the issued and
outstanding shares of capital stock of each of the Subsidiaries and the
Corporate Lower Tier Entities are duly authorized, validly issued, fully paid,
and fully nonassessable and are owned beneficially by WFA free and clear of all
Liens. There is no agreement, commitment (whether or not legally binding), plan,
or arrangement to issue, and no outstanding option, warrant, security or other
instrument or other right to obtain, convert into or exchange for or call for
the issuance of any capital stock or security or other instrument convertible
into, exercisable for, or exchangeable for any capital stock in any of the
Subsidiaries or the Corporate Lower Tier Entities, except as set forth on
Schedule 4.05(a.2). Except as set forth on Schedule 4.05(a.4), none of the
Subsidiaries or the Corporate Lower Tier Entities is a party to any voting
agreement, voting trust, proxy or any other agreement, instrument or
understanding with respect to the voting of any capital stock of any of the
Subsidiaries or the Corporate Lower Tier Entities which shall be in effect at
the Closing Date, or any agreement with respect to the transferability, purchase
or redemption of any capital stock of any of the Subsidiaries or the Corporate
Lower Tier Entities.
(b) Schedule 4.05(b.1) sets forth the identity of each entity which serves
as a general partner of one or more of the Partnerships and the Lower Tier
Entities and (i) in those instances where such general partner is itself a
partnership, the identity of each general partner of such partnerships, (ii) the
identity of the geneal partner or general partners, as the case may be, with the
right to manage the operations of each Partnership and the Lower Tier Entities,
and (iii) the identity of the general partner or general partners with the right
to manage the operations of each general partner referred to in (ii) above of
each Partnership and Lower Tier Entity. Except as set forth on Schedule
4.05(b.2), each of the general partnership interests in the Partnerships and
Partnership Lower Tier Entities which is owned or controlled by any of WFA, FWC
or the Subsidiaries is duly authorized, validly issued, fully paid and fully
nonassessable (except to the extent of any liability of the owner of the general
partnership interest in the Partnerships and Partnership Lower Tier Entities as
a general partner as provided in their respective partnership agreements), free
and clear of all Liens, voting trusts and other rights of third parties and has
not been issued and is not owned or held in violation of the partnership
agreement covering such partnership. Except as set forth on Schedule 4.05(b.3),
there are no rights, options, subscriptions or other agreements of any kind to
purchase or acquire any general partnership interest in any of the Partnerships
or Lower Tier Entities from any of Sellers, the Partnerships or the Lower Tier
Entities. Except as set forth on Schedule 4.05(b.4) or the partnership
agreements of the Partnerships or the Lower Tier Entities, there are no
agreements of any kind limiting or otherwise restricting the authority of any of
WFA, FWC or the Subsidiaries, acting singly or jointly, to directly or
indirectly manage and control in all respects (including but not limited to the
selection of property managers and other service providers) one or more of the
Partnerships and the Lower Tier Entities and no other entity is authorized,
singly or jointly, with any other entity, to so manage and control any
Partnership or Lower Tier Entity. There are no agreements to which any of
Sellers, their Affiliates, the Subsidiaries, the Partnership and the Lower Tier
Entities is a party to amend or modify the partnership agreement of any of the
Partnerships or the Lower Tier Entities.
(c) Sellers have not breached, defaulted or violated, or permitted any
Subsidiary to breach, default or violate, any of its material obligations,
including but not limited to its fiduciary duty to any Partnership or Lower Tier
Entity or other partners in any Partnership or Lower Tier Entity, under any
Organizational Documents with respect to any Partnership or Lower Tier Entity.
(d) Each of the Units is a limited partnership interest in the respective
Subject LP set forth on Schedule 1.01(a), is duly authorized, validly issued,
fully paid, and fully non-assessable (except that there are statutory rights to
recover certain kinds of distributions provided for under the laws of the
jurisdiction of organization of the Subject LP, none of which recoverable
distributions have been made or will be made prior to the Closing or, in the
case of the HUD Entities, each HUD Closing to any of Sellers), free and clear of
all Liens and has not been issued and is not owned or held in violation of the
partnership agreement covering such Subject LP. Except as set forth on Schedule
4.05(d), to the knowledge of Sellers, there is no Person (other than Sellers and
their Affiliates) who, alone or together with its Affiliates, owns five percent
or more of the outstanding units of limited partnership interest in any Subject
LP. There is no agreement, commitment (whether or not legally binding), plan, or
arrangement to issue, and no outstanding option, warrant, security or other
instrument convertible into or exchangeable for or calling for the issuance of,
or other right to obtain, any limited or general partnership interest or
security or other instrument convertible into, exercisable for, or exchangeable
for any limited or general partnership or other equity interest in any Subject
LP. On or before the Closing Date and each Subsequent Closing Date, as the case
may be, Sellers shall have caused each of the Subject LPs to take all action
required under their respective Organizational Documents and the law to
authorize, approve and effect the substitution and admission, simultaneously
with the Closing or Subsequent Closing, as the case may be, of IFG or its
designee as a limited partner of each Subject LP and Other LP.
Section 4.06 Business Conducted
None of the Subject LPs conducts any business other than the direct or
indirect ownership and operation of real properties. All of the real properties
directly or indirectly owned or operated by each of the Partnerships (other than
Standpoint Vista Limited Partnership) are listed on Schedule 4.06 (individually,
a "Property" and collectively, the "Properties"). Except as set forth on
Schedule 4.06, each of such Properties is used primarily for residential
purposes. Each Property beneficially owned, directly or indirectly, by a Subject
LP is hereinafter referred to as a "Subject Property" and each Property
beneficially owned, directly or indirectly, by a Managed LP is hereinafter
referred to as a "Managed Property."
Section 4.07 Financial Condition
(a) Sellers have delivered to Buyers with respect to each of the Subject
LPs copies of (i) its audited balance sheet, income statement and statement of
cash flows as of and for the year ended December 31, 1996 and (ii) its unaudited
internally generated balance sheet and income statement as of and for the nine
months ended September 30, 1997, and will, as soon as available, deliver its
unaudited internally generated balance sheet and income statement as of and for
each subsequent monthly period ending prior to the Closing Date or, in the case
of Westbury Investors Limited Partnership, the applicable HUD Closing Date, as
the case may be (all of such financial statements collectively called the
"Financial Statements," and the balance sheets included in the Financial
Statements as of September 30, 1997 being herein called with respect to each
such Subject LP the "Most Current Balance Sheet"). Each of the audited Financial
Statements and any audited financial statements to be delivered pursuant to
Section 6.06 has been (or when so delivered will have been) prepared in
accordance with the method of accounting set forth in the accountant's report
thereon consistently applied, in each case based on the books and records of the
respective entities named therein, and fairly presents on the basis of the
method of accounting set forth in the accountant's report thereon (or when
delivered will fairly present on the basis of the method of accounting set forth
in the accountant's report thereon) the financial condition, results of
operations, assets, liabilities and partners' equity of such entities for the
period covered thereby and as of its date. Each of the unaudited Financial
Statements and any unaudited financial statements to be delivered pursuant to
Section 6.06 has been (or when so delivered will have been) prepared in
accordance with the same method of accounting previously used for unaudited
financial statements of the respective entities named therein consistently
applied, in each case based on the books and records of the respective entities
named therein and is (or when delivered will be) correct in all material
respects. The Financial Statements and the financial statements to be delivered
pursuant to this Section 4.07(a) do not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary, in light of the circumstances in which such statements are
made, to make the statements made therein not misleading.
(b) Except as set forth on Schedule 4.07(b), since December 31, 1996, none
of the Subject LPs has made or declared any distribution to any of its partners.
(c) Since December 31, 1996, all Partnerships and Lower Tier Entities and
their Properties have been operated in the ordinary course and on a basis
consistent with operations prior to December 31, 1996 and in general accord with
their respective budgets, and all amounts paid or payable by the Partnerships
and Lower Tier Entities and their Properties to Sellers and their Affiliates
since December 31, 1996 have been comparable in nature and amount to those paid
or payable for comparable periods in the year ended December 31, 1996.
(d) On the Closing Date and, in the case of the HUD Entities, the
applicable HUD Closing Date, each of the Partnerships and Lower Tier Entities
shall have good and valid title to all fixed assets owned as of December 31,
1996 by them, plus any fixed assets acquired and less any fixed assets disposed
of, in each case in the ordinary course of business as unusable or in connection
with the replacement by a newly purchased asset consistent with past practice
between December 31, 1996 and the Closing Date or such HUD Closing Date, as the
case may be, free and clear of all Liens.
Section 4.08 Liabilities
Other than Environmental Liabilities (defined below), there are no
liabilities (contingent or otherwise) of any of the Subject LPs or the Subject
Lower Tier Entities, known or unknown, which are not set forth in the Financial
Statements or disclosed in this Agreement or in Schedule 4.08 hereto, except for
unknown liabilities the Deemed Amount (defined below) of which does not exceed
$325,000 in the aggregate for all Subject LPs and Subject Lower Tier Entities.
Solely for purposes of the previous sentence, a liability is "unknown" if it is
not known to the knowledge of Sellers as defined in Section 14.18. For purposes
of this Agreement, the "Deemed Amount" of a liability means with respect to any
Subject LP, the product of (i) the amount of such liability of or affecting such
Subject LP or Subject Lower Tier Entity multiplied by (ii) the percentage set
forth opposite the name of the relevant Subject LP on Schedule 1.01(a) (the
"Scheduled Ownership Percentage").
Section 4.09 Insurance
Schedule 4.09 lists all of the policies of insurance of any kind (other
than title insurance) covering each of WFA, FWC, the Subsidiaries, the Subject
LPs, the Subject Lower Tier Entities and their respective assets and businesses,
setting forth the nature of the insurance, the insurance carrier, the amount of
coverage, and the owner of and expiration date of such policies. Each of WFA,
FWC, the Subsidiaries, the Subject LPs and the Subject Lower Tier Entities has
such insurance in such amounts and covering such risks as well-run businesses in
the same industry customarily carry. All such policies of insurance are in full
force and effect and all premiums due thereon for all periods through the
Closing Date are or will be on the Closing Date fully paid. None of Sellers, the
Subsidiaries, the Subject LPs or the Subject Lower Tier Entities has received
any notice of cancellation or termination with respect to any such policy.
Section 4.10 Material Events and Changes
Since December 31, 1996:
(a) Except as set forth on Schedule 4.10(a), there has not been a material
adverse change in the condition (financial or otherwise), results of operations,
business, Properties, assets, nature of assets, or liabilities of any of the
Subject LPs or the Subject Lower Tier Entities.
(b) Except as set forth on Schedule 4.10(b), the operations and business of
the Partnerships and the Lower Tier Entities have been conducted in all respects
only in the ordinary course and consistent with past practice and the fiduciary
duty of the general partner of such Partnership or Lower Tier Entity, in
accordance with its partnership agreement.
(c) Except as set forth on Schedule 4.10(c), none of the Subject LPs or the
Subject Lower Tier Entities has:
(i) suffered any loss, damage, destruction or other casualty to any of its
Properties or material assets (unless completely covered by insurance);
(ii) mortgaged, pledged, subjected to or suffered any Lien, or granted any
Lien, in respect of any of its Properties, or incurred any Debt (defined below);
(iii) amended its Organizational Documents;
(iv) defaulted under any Material Agreement (defined below), license or
permit;
(v) experienced any change in control which is prohibited by the terms of
any note, bond, mortgage, indenture, lease, license, franchise, agreement or
other instrument or obligation by which it or any of its Properties or assets is
affected or bound;
(vi) entered into or amended any Material Agreement that relates to
Property operations, including but not limited to cable television and laundry
contracts; or
(vii) experienced any event that can be reasonably expected to result in
the forfeiture or loss of a Property.
(d) Except as set forth on Schedule 4.10(d), none of the Managed LPs or the
Managed Lower Tier Entities has:
(i) amended its Organizational Documents; or
(ii) experienced any event that can be reasonably expected to result in the
forfeiture or loss of a Property.
Section 4.11 No Conflicts or Defaults; No Violations
Neither the execution, delivery or performance of this Agreement by any of
Sellers nor the consummation of the transactions contemplated hereby will (with
or without the giving of notice, lapse of time or both): (a) contravene any
provisions of any law, statute, rule or regulation or any order, writ, judgment,
injunction or decree of any court or governmental instrumentality; or (b) except
as set forth on Schedule 4.11 and except for the consent of mortgagees holding
mortgages on the Properties, and assuming that each of the consents and
approvals set forth on Schedule 4.12 have been obtained, conflict with or result
in any breach of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose), any Lien upon any of the
property or assets of any of the Partnerships and the Lower Tier Entities,
pursuant to the terms of any note, bond, indenture, loan agreement, credit
agreement, lease, franchise, partnership agreement, voting trust or any other
agreement, contract or instrument (other than any of the foregoing in the nature
of a mortgage or deed of trust) to which any of the Partnerships and the Lower
Tier Entities is a party or to which any of their respective properties or
assets is subject (collectively, the "Existing Agreements"); (c) violate any
provision of their respective Organizational Documents; or (d) give any Person
or group of Persons the right to replace any of them as a direct or indirect
general partner of any of the Partnerships and the Lower Tier Entities or any
other limited partnership.
Section 4.12 Consents
Except the filings under the HSR Act described in Section 6.04, the consent
of the Department of Housing and Urban Development ("HUD"), the consent of
mortgagees holding mortgages on the Properties and as set forth on Schedule
4.12, no approval or consent of, notice to, or filing or registration with, or
authorization, order, license, certificate, or permit of or from, any
governmental authority or any other notice to or consent of any third party is
required in connection with (a) the execution, delivery and performance of, (b)
the legality, validity, binding effect or enforceability of, or (c) the
consummation of, the transactions contemplated by this Agreement.
Section 4.13 Debt
(a) Schedule 4.13(a) is a complete list of all Debt of each of the Subject
LPs and Subject Lower Tier Entities or to which any Subject Property is subject.
On the Closing Date, no Subject LP or Subject Lower Tier Entity will have
incurred any other Debt for which any of its assets is security. Each of the
Subject LPs and Subject Lower Tier Entities is in substantial compliance with
the terms of any Debt for which it is liable or to which any of its assets is
subject, no payment defaults exist thereunder and no notice of default with
respect thereto has been received by any of Sellers, the Subsidiaries, the
Subject LPs or the Subject Lower Tier Entities. As used in this Agreement,
"Debt" means, with respect to any Person, all indebtedness of any kind for which
such Person is or could become liable for repayment or to which any Property or
other assets of such Person is subject, including, without limitation, (A) all
indebtedness for borrowed money, (B) all indebtedness for the deferred purchase
price of property or services, (C) all obligations evidenced by notes, bonds,
debentures or other similar instruments (other than performance, surety and
appeal bonds arising in the ordinary course of such Person's business), and all
indebtedness secured by mortgage or other Liens against any of such Person's
property or other assets, (D) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person, (E) all obligations under capital leases (as such term
is defined by generally accepted accounting principles ("GAAP")), (F) all
reimbursement, payment or similar obligations, contingent or otherwise, under
acceptance, letter of credit or similar facilities, (G) any obligations of any
of the foregoing kinds of any other Person which is guaranteed directly or
indirectly by such Person or in effect guaranteed directly or indirectly by such
Person, including, without limitation, through an agreement (i) to pay or
purchase such Debt or to advance or supply funds for the payment or purchase
thereof, (ii) to purchase, sell or lease property or services primarily for the
purpose of enabling the debtor to make payment of such Debt, (iii) to supply
funds to or in any other manner invest in the debtor (including any obligation
to pay for goods or services whether or not received), or (iv) otherwise to
insure a creditor against loss in respect of such Debt, and (H) any Debt of any
type of any other Person secured by any Lien on any property or assets of such
Person, but excluding any withdrawal liability with respect to any multiemployer
plan (within the meaning of Section 4001(a)(3) of the Employee Retirement Income
and Security Act of 1974, as amended ("ERISA"), or Section 414(f) of the Code
(defined below)). As used in this Agreement, "Debt" does not include any general
partner obligation to restore the deficit in its capital account in any
Partnership and any general partner obligation to return to any Partnership a
portion of the distributions received by a general partner on account of its
partnership interest in such Partnership by reason of the failure of the limited
partners in such Partnership to receive a specified amount of distributions.
(b) Sellers have made available to Buyers true, complete and correct copies
of all agreements, notes, security documents and other documents relating to any
Debt of the Subject LPs and the Subject Lower Tier Entities in effect on the
date hereof, and each such document is in full force and effect and has not been
further modified, amended or terminated and no party is in payment default
thereunder or any other default thereunder other than immaterial defaults.
Section 4.14 Taxes
(a) No Seller is a foreign person within the meaning of Section 1445 of the
Internal Revenue Code of 1986, as amended (the "Code"). Schedule 4.14(a) sets
forth the tax identification number and office address within the United States
for each Seller.
(b) Schedule 4.14(b) sets forth the name of each of the Subject LPs and the
Subject Lower Tier Entities which has made an election under Section 754 of the
Code at any time since July 18, 1995 or, to the knowledge of Sellers, prior to
such time.
(c) Each of the Subject LPs and the Subject Lower Tier Entities (other than
Stratford Village Operating Trust) is, since its formation has been, and at the
Closing and, in the case of the HUD Entities, at the applicable HUD Closing will
be a partnership for federal income tax purposes qualifying under Section 7701
of the Code and does not constitute a publicly traded partnership within the
meaning of Section 7704 of the Code.
(d) To the knowledge of Sellers, all federal, state and local income and
franchise Tax Returns (defined below) required to be filed by, or with respect
to, the Subject LPs and the Subject Lower Tier Entities have been filed when due
in timely fashion, all such Returns were true and accurate in all material
respects, and all Taxes owed by the Subject LPs and the Subject Lower Tier
Entities have been paid. Sellers have made available to Buyer copies of (i) all
income and franchise Tax Returns filed by the Subject LPs and the Subject Lower
Tier Entities for the last three taxable years, and (ii) all examination reports
and statements of deficiencies assessed with respect to the Subject LPs and the
Subject Lower Tier Entities for the last five taxable years.
(e) To the knowledge of Sellers, no Tax Proceeding (defined below) is
currently being conducted with respect to any of the Subject LPs and the Subject
Lower Tier Entities, no issues that had been raised by a Tax Authority (defined
below) with respect to any of the Subject LPs and the Subject Lower Tier
Entities are pending and none of the Subject LPs and the Subject Lower Tier
Entities has received a written tax assessment or a written notification from
any Tax Authority that it intends to commence a Tax Proceeding with respect to
any Return of any of the Subject LPs and the Subject Lower Tier Entities.
(f) To the knowledge of Sellers, there are no agreements for the extension
of the time for assessment of any Taxes relating to any of the Subject LPs and
the Subject Lower Tier Entities. To the knowledge of Sellers, there are no liens
for any Tax (other than Taxes not yet due and payable) on the assets of any of
the Subject LPs and the Subject Lower Tier Entities.
(g) To the knowledge of Sellers, no claim has been made by any Tax
Authority in a jurisdiction where any of the Subject LPs and the Subject Lower
Tier Entities does not file Returns that such Subject LP or Subject Lower Tier
Entity is or may be subject to taxation by that jurisdiction.
(h) To the knowledge of Sellers, none of the assets of any of the Subject
LPs and the Subject Lower Tier Entities constitutes tax-exempt bond financed
property or tax- exempt use property within the meaning of Section 168 of the
Code, and none of such assets is subject to a lease, safe-harbor lease, or other
arrangement as a result of which such Subject LP or Subject Lower Tier Entity is
not treated as the owner for Federal income tax purposes.
(i) To the knowledge of Sellers, none of the Subject LPs and the Subject
Lower Tier Entities is a party to any tax sharing or tax indemnification
agreement or arrangement, whether formal or informal, and from and after the
Closing Date or, in the case of the HUD Entities, each HUD Closing, the Subject
LPs shall not have any rights, obligations or liabilities under any such
agreement or arrangement in existence prior to the Closing or, in the case of
the HUD Entities, each HUD Closing.
(j) None of the Subject LPs and the Subject Lower Tier Entities has, at any
time since July 18, 1995 or, to the knowledge of Sellers, at any time on or
prior to July 18, 1985 undergone a change in accounting method that currently
requires, or will require, an adjustment to taxable income under Section 481 of
the Code in a post-closing tax period.
(k) To the knowledge of Sellers, all Taxes that any of the Subject LPs and
the Subject Lower Tier Entities is or was obligated to withhold from amounts
paid prior to Closing or, in the case of the HUD Entities, each HUD Closing to
any employee, creditors or third parties, have been fully paid or collected and
set aside for payment.
(l) None of the Subject LPs and the Subject Lower Tier Entities has engaged
in activities outside the U.S. that have caused, or would cause, it to be
subject to taxation by a foreign jurisdiction.
For the purposes of this Agreement, the terms "Taxes," "Tax Proceeding,"
"Tax Authority" and "Returns" shall have the meanings set forth below.
"Returns" means all returns, reports, estimates, information returns and
statements (including any related or supporting information) filed or to be
filed with any Tax Authority in connection with the determination, assessment,
collection or administration of any Taxes.
"Tax" or "Taxes" means all U.S. federal, state and local taxes, including,
but not limited to, income (whether net or gross), excise, property, sales,
transfer, gains, gross receipts, occupation, privilege, payroll, wage,
unemployment, workers' compensation, social security, occupation, use, value
added, capital, gross receipts, franchise, license, severance, stamp, premium,
windfall profits, environmental (including taxes under Code Sec. 59A), capital
stock, profits, withholding, disability, real property, personal property,
registration, customs duties, alternative or add-on minimum, estimated or other
tax of any kind whatsoever (whether disputed or not) imposed by any Tax
Authority, including any related charges, fees, interest, penalties, additions
to tax or other assessments.
"Tax Authority" means any federal, national, state, municipal or other
local government, any subdivision, agency, commission or authority thereof, or
any quasi- governmental body or other authority exercising any taxing or tax
regulatory authority.
"Tax Proceeding" or "Tax Proceedings" means any audit, other administrative
proceeding or judicial proceeding involving Taxes or any claim for a refund of
Taxes.
Section 4.15 Material Agreements; Management Agreements
(a) Schedule 4.15(a) lists all agreements to which any of the Partnerships
and the Lower Tier Entities are parties or the Properties are subject (other
than the agreements listed on Schedule 4.15(b.1)) that cannot be cancelled
without penalty within 90 days and that are material to the financial condition,
results of operations, business, properties, assets or liabilities of any of the
Partnerships, the Lower Tier Entities or the Properties (collectively the
"Material Agreements"). Sellers have made available to Buyers true, complete and
correct copies of each Material Agreement. All Material Agreements are in full
force and effect and no party is in payment default or any other default
thereunder except for immaterial defaults.
(b) Schedule 4.15(b.1) is a list of all property management agreements,
investor service agreements, asset management agreements and other arrangements
of every kind under which any of the Partnerships and the Lower Tier Entities
pays any property management fee, investor service fee, asset management fee,
administrative, bookkeeping or other service fee or commission to any of Sellers
or their Affiliates (together with the partnership agreements of the
Partnerships and the Lower Tier Entities, the "Management Agreements") and
identifies the Property subject to such agreement, the parties thereto and the
terms thereof. Sellers have made available true and complete copies of all
Management Agreements to Buyers. On the date hereof, each Management Agreement
is in full force and effect and no default has occurred thereunder except for
immaterial defaults. Schedule 4.15(b.1) also sets forth the amount of such fees
and commissions received by Sellers and their Affiliates with respect to the
Partnerships, the Lower Tier Entities and the Properties during the 12 months
ended December 31, 1996 and the nine months ended September 30, 1997. Except as
set forth on Schedule 4.15(b.1) since December 31, 1996, none of Sellers or
their Affiliates has received from any of the Subject LPs or the Subject Lower
Tier Entities any extraordinary payment in the nature of a refinancing fee as a
result of the refinancing of any Debt relating to any Property or in the nature
of a property disposition fee relating to any Property or any real property
previously owned by any of the Subject LPs or the Subject Lower Tier Entities.
Except as set forth on Schedule 4.15(b.2), neither the execution and delivery of
this Agreement nor compliance with or fulfillment of the terms, conditions and
provisions hereof, nor the consummation of any of the transactions contemplated
hereunder will (i) violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both) entitle any party
to terminate or call a default under any Management Agreement, entitle any party
to rights and privileges that such party was not entitled to receive immediately
before this Agreement was executed under any Management Agreement, or create any
obligation on the part of any of the Partnerships and the Lower Tier Entities
that it was not obligated to pay immediately before this Agreement was executed
under any Management Agreement; or (ii) require approval, consent, authorization
or other action of any party (other than any mortgagee holding a mortgage on any
Property or HUD) to any Management Agreement. Each Management Agreement (other
than a partnership agreement) is terminable, by the Partnership or the Lower
Tier Entity to which it relates upon not more than 60 days' notice and without
the payment of any penalty, and the general partner of such Partnership or Lower
Tier Entity has, and will have immediately following the Closing or, in the case
of the HUD Entities, the HUD Closing, full authority (subject to its fiduciary
obligations) to terminate such Management Agreement (other than a partnership
agreement) and to cause such Partnership or Lower Tier Entity to enter into a
new management agreement on comparable terms without the consent of any Person
other than lenders to such Partnership or Lower Tier Entity or HUD.
Section 4.16 Employees
None of the Subject LPs or the Subject Lower Tier Entities, now has, has
had at any time since July 18, 1995 or to the knowledge of Sellers, had at any
time prior to July 18, 1995, any employees.
Section 4.17 Environmental Matters
(a) Except as disclosed on Schedule 4.17(a), all of the current and past
use and operations by or of any of the Partnerships and the Lower Tier Entities
(at all times on or after July 18, 1995) or, to the knowledge of Sellers, any
tenant, lessee or other Person at or from any real property presently or
formerly directly or indirectly owned, used, leased, occupied, managed or
operated by any of the Partnerships and the Lower Tier Entities (the "Real
Property") comply and have complied (at all times on and after July 18, 1995)
with all applicable Environmental Laws (defined below). None of the Partnerships
and the Lower Tier Entities (at any time on or after July 18, 1995), and, to the
knowledge of any of Sellers, none of the Subsidiaries, Partnerships and the
Lower Tier Entities or any tenant, lessee or other Person (at any time prior to
July 18, 1995) , has engaged in, authorized, allowed or permitted any operations
or activities upon any of the Real Property for the purpose of or in any way
involving the handling, manufacture, treatment, processing, storage, use,
generation, release, discharge, emission, dumping or disposal of any Hazardous
Substances (defined below) at, on or under the Real Property, except in
compliance with all applicable Environmental Laws.
(b) Except as disclosed on Schedule 4.17(b), (i) none of the Partnerships
and the Lower Tier Entities (at any time on or after July 18, 1995) and, to the
knowledge of Sellers, none of the Subsidiaries, the Partnerships and the Lower
Tier Entities, or any tenant, lessee or other Person (at any time prior to July
18, 1995), has been or is involved in activities at or related to any portion of
any Real Property which activities could reasonably be expected to lead to (A)
the imposition of any Environmental Liabilities on any of the Partnerships or
the Lower Tier Entities, or on any subsequent or former owner or operator of any
portion of any such Real Property, or (B) the creation of a Lien with respect to
any liability on any portion of any such Real Property that is imposed under any
Environmental Law; and (ii) to the knowledge of Sellers, no activity by any
tenant, lessee or other occupant of any portion of any Real Property could
reasonably be expected to result in the imposition of Environmental Liabilities
on such tenant or occupant, on any of the Partnerships or the Lower Tier
Entities or on any other subsequent or former owner or operator of any portion
of such Real Property.
(c) Except as disclosed on Schedule 4.17(c), to the knowledge of Sellers,
the Real Property does not contain any Hazardous Substances in, on, over, under
or at the Real Property in concentrations which would presently violate
Environmental Laws or impose liability or obligations on the present or former
owner or operator of the Real Property under the Environmental Laws for any
investigation, corrective action, remediation or monitoring of Hazardous
Substances in, on, over, under or at the Real Property. To the knowledge of
Sellers, none of the Real Property is listed or proposed for listing on the
National Priorities List pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Section 9601 et seq., or
any similar inventory of sites requiring investigation or remediation maintained
by any state. None of Sellers, the Subsidiaries, the Partnerships or the Lower
Tier Entities (at any time on or after July 18, 1995) has received any notice,
whether oral or written, from any governmental entity or third party of any
actual or threatened Environmental Liabilities (defined below) with respect to
the Real Property or the conduct of the business of any of Sellers, the
Subsidiaries, the Partnerships or the Lower Tier Entities.
(d) Except as set forth in Schedule 4.17(d) and except for non-friable
asbestos in ceiling and linoleum tiles, to the knowledge of Sellers, there are
no underground storage tanks, asbestos or asbestos containing materials,
polychlorinated biphenyls, urea formaldehyde, or other Hazardous Substances
(other than small quantities of Hazardous Substances stored and maintained in
accordance with all applicable Environmental Laws for use in the ordinary course
of the maintenance of the Real Property) in, on, over, under or at any presently
owned or operated Real Property.
(e) To the knowledge of Sellers, there are no conditions existing at any
Real Property that require, or which with the giving of notice or the passage of
time or both may require remedial or corrective action, removal or closure
pursuant to the Environmental Laws, other than the implementation of customary
operation and maintenance programs with respect to asbestos of the type commonly
known as "O&M" programs.
(f) Each of WFA, FWC, the Partnerships and the Lower Tier Entities has all
the material permits, authorizations and approvals necessary for the conduct of
its business and for the operations on, in or at the Real Property which are
required under applicable Environmental Laws and is in material compliance with
the terms and conditions of all such permits, authorizations and approvals, and
is capable of continued operation in compliance with Environmental Laws.
(g) Sellers have provided to Buyers all environmental reports, assessments,
audits, studies, investigations, data and other written environmental
information in the custody, possession or control of any of Sellers, the
Subsidiaries, the Partnerships or the Lower Tier Entities concerning the Real
Property.
(h) Except as disclosed on Schedule 4.17(h), to the knowledge of Sellers,
none of WFA, FWC, the Subsidiaries, the Partnerships or the Lower Tier Entities
are or may become subject to any Environmental Liabilities.
(i) As used in this Agreement, the term "Environment" means any surface or
subsurface physical medium or natural resource, including, air, land, soil,
surface waters, groundwaters, stream and river sediments, and biota; the term
"Environmental Laws" means any federal, state, local or common law, rule,
regulation, ordinance, code, order or judgment (including the common law and any
judicial or administrative interpretations, guidances, directives, policy
statements or opinions) relating to the injury to, or the pollution or
protection of human health and safety or the Environment; the term
"Environmental Liabilities" means any claims, judgments, damages (including
punitive damages), losses, penalties, fines, fees, liabilities, encumbrances,
liens, violations, costs and expenses (including attorneys and consultants fees)
of investigation, remediation or defense of any matter relating to human health,
safety or the Environment of whatever kind or nature by any party hereto or any
of its Affiliates, any Partnership, any Lower Tier Entity, any governmental
regulatory authority or any other Person (i) which are incurred as a result of
(A) the existence of Hazardous Substances in, on, under, at or emanating from
any real property presently or formerly owned or operated by any of Sellers or
the Partnerships or the Lower Tier Entities or any Affiliates thereof or (B) the
offsite transportation, treatment, storage or disposal of Hazardous Substances
generated by any of Sellers or the Partnerships or the Lower Tier Entities or
any Affiliates thereof or any third-party customers of any thereof or (C) the
violation of or noncompliance with any Environmental Laws or (ii) which arise
under the Environmental Laws; the term "Hazardous Substances" means petroleum,
petroleum products, petroleum-derived substances, radioactive materials,
hazardous wastes, polychlorinated biphenyls, lead based paint, urea
formaldehyde, asbestos or any materials containing asbestos, and any materials
or substances regulated or defined as or included in the definition of
"hazardous substances," "hazardous materials," "hazardous constituents," "toxic
substances," "pollutants," "pollutants," "contaminants" or any similar
denomination intended to classify substances by reason of toxicity,
carcinogenicity, ignitability, corrosivity or reactivity under any Environmental
Law. All references in this Section to any of Sellers, the Partnerships or the
Lower Tier Entities or any Affiliates thereof shall include all predecessors
thereto and any Person the liabilities of which pursuant to the Environmental
Laws, contractually, by common law or by operation of law, any of them may have
succeeded to.
Section 4.18 Investment Company
None of Sellers, the Subsidiaries, the Partnerships or the Lower Tier
Entities is an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
Section 4.19 [Omitted]
Section 4.20 [Omitted]
Section 4.21 Litigation and Claims
Except as set forth on Schedule 4.21, there is no litigation, arbitration,
claim, governmental or other proceeding (formal or informal), or investigation
pending, or, to the knowledge of Sellers, threatened, with respect to any of the
Partnerships or the Lower Tier Entities, or any of their respective businesses,
properties, or assets, other than relating to routine landlord-tenant matters,
or negligence lawsuits covered by insurance or vendor claims under $10,000. None
of the Partnerships or the Lower Tier Entities is: (i) in violation of or in
default under any order, judgment or decree, (ii) in violation of any law, rule,
or regulation, which violation would have a material adverse effect upon any of
the Partnerships or the Lower Tier Entities or any of their respective
businesses, properties or assets, or (iii) required to take any action in order
to avoid such violation or default. The litigation listed on Schedule 4.21 will
not prohibit the consummation of any of the transactions contemplated hereby.
Section 4.22 Intellectual Property
Except as described on Schedule 4.22, each of the Partnerships and the
Lower Tier Entities owns, or has the contractual right to use, and will after
the Closing own or have the contractual right to use data processing and
management information systems adequate to conduct all aspects of their
respective businesses. There is no right under any patent, patent application,
trademark, trademark application, trade name, service xxxx, copyright,
franchise, or other intangible property or asset (all of the foregoing being
hereinafter referred to as "Intangibles") necessary to or used in the business
of the Partnerships or the Lower Tier Entities as presently conducted or as any
of them contemplates conducting, except as set forth on Schedule 4.22. None of
the Partnerships or the Lower Tier Entities has infringed, is infringing, or has
received notice of infringement asserted with respect to any Intangibles of
others. To the knowledge of Sellers, there are no Intangibles of others which
may materially adversely affect the financial condition, results of operations,
business, properties, assets or liabilities of any of the Partnerships and the
Lower Tier Entities.
Section 4.23 Questionable Payments
None of the Partnerships or the Lower Tier Entities nor any director,
officer, partner, agent, employee, or other Person associated with or acting on
behalf of any of them has, directly or indirectly: used any corporate or
partnership funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended; established or maintained
any unlawful or unrecorded fund of corporate monies or other assets; made any
false or fictitious entry on its books or records; made any bribe, rebate,
payoff, influence payment, kickback, or other unlawful payment; given any favor
or gift which is not deductible for federal income tax purposes; or made any
bribe, kickback, or other payment of a similar or comparable nature, whether
lawful or not, to any Person regardless of form, whether in money, property, or
services, to obtain favorable treatment in securing business or to obtain
special concessions, or to pay for favorable treatment for business secured or
for special concessions already obtained.
Section 4.24 [Omitted]
Section 4.25 SEC Reports
Sellers have previously furnished Buyers (or will simultaneously with its
filing with the Securities and Exchange Commission ("SEC") furnish to Buyers)
true and complete copies of the following reports filed by any of the Subject
LPs with the SEC: Annual Reports on Form 10-K for each of the fiscal years ended
December 31, 1996 and 1995 all Quarterly Reports on Form 10-Q and all Current
Reports on Form 8-K filed after December 31, 1996, and all proxy statements
distributed subsequent to December 31, 1995 (collectively, the "SEC Filings").
Each of the SEC Filings did not (and will not), on the date of filing, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. All press
releases and other publicly released data issued by any Subject LP since
December 31, 1995 were accurate when released.
Section 4.26 Transfers of Units in the Subject LPs
During the period commencing on the date which is one year prior to the
Closing Date and each Subsequent Closing Date, as the case may be, and ending on
the Closing Date or such Subsequent Closing Date, as the case may be (after
giving effect to the Closing or such Subsequent Closing, as the case may be,
under this Agreement), no Subject LP has transferred limited partnership
interests representing more than 49.9% of the outstanding limited partnership
interests of such Subject LP counting, for purposes of this Section 4.26, only
transfers which would be taken into consideration in determining whether there
has been a termination of the partnership under Section 708(b) of the Code. On
the Closing Date and each Subsequent Closing Date, as the case may be, Sellers
shall deliver to Buyers a Schedule setting forth the aggregate number of units
of limited partnership interest so transferred during such one-year period for
each Subject LP in which Units are being purchased on such date.
Section 4.27 Books and Records; Bank Accounts
(a) The books and records of each of the Partnerships and the Lower Tier
Entities are substantially complete and correct in all material respects, and
the books and records of the Partnerships and the Lower Tier Entities contain
substantially accurate and complete records of all material actions taken as
general partners of each of the Partnerships and the Lower Tier Entities since
July 18, 1995.
(b) Sellers have provided to Buyers accurate lists of all of the bank and
brokerage accounts of each of the Partnerships and the Lower Tier Entities and
the authorized signatories for such accounts.
Section 4.28 Fees and Reimbursements
Except as set forth on Schedule 4.28, since September 30, 1997 none of the
Partnerships or the Lower Tier Entities has paid or accrued any management fee,
investor service fee, asset management fee, administrative, bookkeeping or other
service fee or commission, or Extraordinary Payment or any reimbursement of
expenses which it had not been paying or accruing during the nine months ended
September 30, 1997, and the terms under which such fees, commissions and
reimbursements have been calculated since September 30, 1997 are not materially
changed from those in effect throughout the nine months ended September 30,
1997. Except as set forth on Schedule 4.28, since September 30, 1997 none of the
Partnerships or the Lower Tier Entities has made or received any loan or advance
to or from any Person, and all such loans and advances in existence on September
30, 1997 are correctly reflected on the Most Recent Balance Sheets. As of
September 30, 1997, none of the Partnerships or the Lower Tier Entities owed any
amount to any of Sellers or their Affiliates which is not included in the Most
Current Balance Sheets or included on Schedule 4.28.
Section 4.29 Completeness of Disclosure
No representation or warranty by any of Sellers in this Agreement contains,
or when delivered will contain, an untrue statement of a material fact or omits,
or when delivered will omit, to state a material fact required to be stated
therein or necessary, in light of the circumstances in which such statements are
made, to make the statements made therein not misleading.
Section 4.30 Representations Regarding Real Estate
(a) As used in this Agreement, the following terms have the following
meanings:
"Existing Documents" means all of the Leases (defined below), all brokerage
agreements relating to payment of Leasing Commissions (defined below), the
Service Contracts (defined below), the Permitted Exceptions (defined below) and
the Loan Documents (defined below).
"Improvements" means, collectively, all buildings, structures, structural
appurtenances, fixtures, parking areas, and other improvements of any kind
located or to be located on the Subject Properties.
"Legal Requirements" means all applicable local, state, or federal laws,
municipal ordinances and regulations, orders, rules and requirements of any
federal, state, municipal department and other governmental authority having
jurisdiction against or affecting the Subject Properties or the construction,
management, ownership, maintenance, operation, use, improvement, acquisition or
sale thereof (including, without limitation, applicable zoning, building, health
and environmental laws, ordinances, regulations, orders, rules or requirements).
"Permitted Exceptions" means the defects in, exceptions to, and conditions,
Liens, encumbrances and other matters of record affecting title to the Subject
Properties which are listed in current Title Reports (defined below) or Title
Policies (defined below), including, without limitation, the Loan Documents. For
purpose of this Section 4.30, "current" Title Reports and/or Title Policies
shall be deemed to mean and refer to Title Reports and Title Policies, as the
case may be, which are dated September 1, 1997 or later.
"Leasing Commissions" means all commissions, fees and other compensation
payable to any real estate broker, salesperson, finder or any other Person in
connection with the leasing of space at the Improvements.
"Loan Documents" means the mortgages, deeds of trust, promissory notes,
assignments of leases and other documents executed and delivered in connection
with the Existing Indebtedness (defined below).
"Existing Indebtedness" means Debt which is secured by mortgage liens or
deeds of trust against any of the Subject Properties.
"Service Contracts" means all management, utility and cable agreements with
respect to each of the Subject Properties or any portion thereof which on the
Closing Date or the HUD Closing Date will have a remaining term in excess of one
year.
"Leases" means all leases affecting the Subject Properties on the date
hereof, and all amendments, guaranties and other documents relating thereto.
"Sellers' Knowledge" means with respect to any representation relating to
or affecting the Subject Properties, the actual knowledge after reasonable
inquiry of any of Xxxxxxx X. Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx X. XxXxxxxx, Xxx
Xxxxxxx, Xxxxx Xxxxx and Xxxxxxx Xxxxxxx.
(b) The Subject LPs and the Subject Lower Tier Entities have good and
marketable fee title to the Subject Properties, free and clear of all Liens,
except for the Permitted Exceptions; provided, however, that to the extent that
there is not a current Title Report or Title Policy with respect to a Subject
Property, the Subject LPs and the Subject Lower Tier Entities have good and
marketable fee title to such Subject Property, free and clear of all Liens,
except as reflected in the most recent Title Policy for such Subject Property
set forth on Schedule 4.30(b.2); provided, further, however, that to the extent
not so reflected in the most recent Title Policy for such Subject Property set
forth on said Schedule, to Sellers' Knowledge, the Subject LPs and the Subject
Lower Tier Entities have good and marketable fee title to the Subject Property,
free and clear of all defects in, exceptions to, and conditions, Liens,
encumbrances and other matters of record affecting title to the Subject
Properties. The Subject Properties listed on Schedule 4.30(a) constitute all of
the real property owned by the Subject LPs and the Subject Lower Tier Entities.
Set forth on Schedule 4.30(b.1) is a true, complete and correct list of the most
recent title abstract or report (whether or not included in a title policy) and
survey obtained by Sellers or any of the Subject LPs or the Subject Lower Tier
Entities for each of the Subject Properties (collectively, the "Title Reports").
Set forth on Schedule 4.30(b.2) is a true, complete and correct list of the
title policies for each of the Subject Properties (collectively, the "Title
Policies"), which Title Policies were validly issued and are in full force and
effect. True, complete and correct copies of the Title Policies and the Title
Reports have been made available to Buyers. The title premiums payable in
connection with issuance of the Title Policies listed on Schedule 4.30(b.2) have
been paid. No monetary default on the part of any of the Subject LPs or the
Subject Lower Tier Entities exists under any of the Loan Documents, nor has any
notice thereof been received, and no event has occurred or condition exists
which with the giving of notice, the passage of time, or both would result in
the existence of a monetary default on the part of any of them under any of the
Loan Documents.
(c) Set forth on Schedule 4.30(c.1) is a true, complete and correct list of
the Existing Indebtedness. Except for the Existing Indebtedness, no Subject LP
or Subject Lower Tier Entity has any Debt. Schedule 4.30(c.1) accurately sets
forth (i) the name of the current holder or servicer of each portion of the
Existing Indebtedness, and (ii) the unpaid principal balance of each portion of
the Existing Indebtedness as of the date hereof. There are no payment defaults
under any of the Loan Documents nor, except as set forth on Schedule 4.30(c.2),
any other defaults thereunder except immaterial defaults. Sellers have made
available to Buyers true, accurate and complete copies of all of the Loan
Documents.
(d) Between the date hereof and the Closing and, in the case of the HUD
Entities, the HUD Closing, Sellers agree not to permit any Subject LP or Subject
Lower Tier Entity to enter into any Service Contract without Buyer's consent,
which consent shall not be unreasonably withheld, unless the failure to enter
into such agreement would be a breach of such parties' fiduciary obligations to
the Subject LPs or the Subject Lower Tier Entities.
(e) (i) The rent rolls for the Subject Properties which have been made
available to Buyers are true, complete and correct as of the date of such rent
roll, and accurately reflect the (A) identity of the tenant, (B) unit leased,
(C) monthly rent, (D) term of the lease, (E) security deposit, if any, and (F)
rental concessions, if any.
(ii) Each of the Subject LPs and the Subject Lower Tier Entities is
currently performing all of its material obligations under the Leases; the rents
and additional rents reserved under each of the Leases are legal rents and no
claim to the contrary has been asserted by any of the lessees thereunder;
Sellers have made available to Buyer true, accurate and complete delinquency
reports as of June 30, 1997 setting forth all amounts which are past due by
thirty (30) days or more by any tenant of the Subject Properties; none of
Sellers, the Subject LPs or the Subject Lower Tier Entities have assigned any of
their rights under the Leases except to the holders of the Existing
Indebtedness; no representation or covenant has been made by any of Sellers, the
Subject LPs or the Subject Lower Tier Entities to any of the lessees under the
Leases except as incorporated in their respective leases; all representations
made by the lessors under the Leases are true and correct in all material
respects. To Sellers' Knowledge, there are no rent strikes being asserted by
tenants of any of the Subject Properties.
(f) (i) Except as set forth on Schedule 4.30(f.1), except as set forth on
the current Title Reports, except as set forth on the most recent Title Policy
set forth on Schedule 4.30(b.2), and except pursuant to the Leases, to Seller's
Knowledge no Person has any possessory interest in any portion of the Subject
Properties or any other rights with regard to the use thereof or any rights to
acquire or to lease the Subject Properties, including, without limitation, any
renewals or extension options, or any part thereof, or otherwise obtain any
interest therein and there are no outstanding rights of first refusal, rights of
reverter or rights of first offer relating to the Subject Properties or any
interest therein.
(ii) There are no Leasing Commissions which are or will be payable to any
Person with respect to, or on account of the Leases, except those which are
disclosed in the SEC Filings for the Subject LPs or the operating statements of
the Subject LPs which have been made available to Buyers or due upon exercise of
options in or renewals of existing leases for periods beyond the minimum term of
the lease; true, complete and correct copies of any brokerage agreements
evidencing an obligation to pay any Leasing Commissions have been made available
to Buyers.
(iii) Except as provided in the Organizational Documents of the Subject
LPs, no Person has any right to participate in any rents or profits of the
Subject Properties.
(g) Until the Closing or, in the case of the Subject Properties owned
directly or indirectly by any of the HUD Entities, the applicable HUD Closing,
Sellers shall cause the Subject Properties to be kept in good repair and
condition (ordinary wear and tear excepted), and use all reasonable efforts (i)
to preserve the good will of Persons having associations, dealings or relations
with the Subject Properties, (ii) to comply in all material respects with all
Legal Requirements and with all terms, conditions and provisions of all Existing
Documents, (iii) to suffer no payment default thereunder or other default except
immaterial defaults and to promptly notify Buyers of the receipt or delivery of
any written notice from any party to an Existing Document (other than Leases)
alleging a breach or default thereunder, and (iv) to operate, manage and
maintain the Subject Properties in the same manner as they have been operated
prior to the date hereof. None of Sellers shall permit the removal from any of
the Subject Properties of any personal property, fixtures or equipment, except
in the ordinary course of business.
(h) To Sellers' Knowledge (i) the Subject Properties and the present use
and condition thereof do not violate any applicable deed restriction or other
covenants, restrictions or agreements, site plan approvals, zoning or
subdivision regulations or urban redevelopment plans applicable to the Subject
Properties and (ii) each of the Subject Properties has the right of ingress to
and egress from a public street.
(i) All water, sewer, gas, electricity, telephone and other utilities
serving the Subject Properties are supplied directly to the Subject Properties
by facilities of public and private utilities.
(j) To Sellers' Knowledge, no federal, state or local governmental
authority has plans to change the highway or road system in the vicinity of any
of the Subject Properties or to restrict or change access from any such highway
or road to the Subject Properties.
(k) To Sellers Knowledge, all certificates of occupancy, permits and other
certificates (the "Improvement Certificates") affecting the Improvements have
been properly issued, are in full force and effect and are not required to be
amended or changed as a result of any changes in the Improvements.
(l) True, complete and correct copies of all existing insurance policies
covering the Subject Properties have been made available to Buyers. The hazard
insurance policies with respect to each of the Subject Properties are in amounts
not less than the full replacement value of the Improvements. All such policies
are in material compliance with, and fulfill all of the insurance obligations
under, the Existing Documents. Sellers shall cause to be maintained in full
force and effect all insurance policies relating to the Subject Properties
between the date hereof and the Closing or, in the case of the Subject
Properties owned by any of the HUD Entities, the HUD Closing. No default exists
under any such insurance policy and no circumstances or state of affairs exists
which with notice, lapse of time, or both would result in the existence of a
default under any such insurance policy. None of Sellers, the Subject LPs or the
Subject Lower Tier Entities has received any notice of cancellation of any such
policy.
(m) Except as set forth on Schedule 4.30(m), none of Sellers, the Subject
LPs or the Subject Lower Tier Entities has received any written notice or, to
Sellers' Knowledge, is aware of (i) any violation of any applicable Legal
Requirements whether or not officially noted or issued, or (ii) any condition
relating to the Subject Properties which, to Sellers' Knowledge, would
constitute a violation.
(n) To Sellers' Knowledge, there is no (i) pending or contemplated
annexation or condemnation proceeding affecting or which may affect all or any
portion of any of the Subject Properties, (ii) proposed or pending proceeding to
change or redefine the zoning classification of all or any portion of any of the
Subject Properties, or (iii) proposed change in road patterns or grades which
may adversely affect access to any roads providing a means of ingress to or
egress from the Subject Properties. No written notice has been issued with
respect to any, and to Sellers' Knowledge there is no pending or contemplated
change in any Legal Requirement which may adversely affect the use, ownership,
management or operation of any of the Subject Properties.
(o) Except as set forth on Schedule 4.30(o.1), and for any matters covered
by insurance which are not material in nature, routine landlord-tenant matters
or vendor claims under $10,000, there is no action, suit, proceeding, written
claim, order, decree or judgment against any of Sellers, the Subject LPs, the
Subject Lower Tier Entities or the Subject Properties, or any portion thereof,
or relating to or arising out of the ownership, management, operation, use or
occupancy of the Subject Properties, pending or being prosecuted in any court or
by or before any federal, state, county or municipal department, commission,
board, bureau or agency or other governmental instrumentality nor is any such
action, suit, proceeding, written claim, order, decree or judgment, to Sellers'
Knowledge threatened or actually being asserted. Except as set forth on Schedule
4.30(o.2), none of Sellers, the Subject LPs or the Subject Lower Tier Entities
is a party to or subject to any judgment, writ, decree, injunction or order
enjoining or restraining it from conducting any business in respect of the
Subject Properties.
(p) There have not been any fires or other casualties since December 31,
1996 for which there does not exist sufficient insurance proceeds to repair the
damage caused by such fire or other casualty to substantially the same condition
as existed prior to such casualty.
Section 4.31 HUD
(a) To the knowledge of Sellers, none of the Partnerships or the Lower Tier
Entities has violated, or is in violation of, in any material respect any rule
or regulation promulgated by HUD. Except as set forth on Schedule 4.31, to the
knowledge of Sellers, each of the Partnerships and the Lower Tier Entities has
all required HUD consents and approvals to own and operate its Properties as
currently owned and operated, all of its required filings with HUD are current,
there is no "hold" on its Form 2530, and all fees paid by the Partnerships and
the Lower Tier Entities have been in accordance with the rules and regulations
promulgated by HUD.
(b) Sellers know of no reason why the approvals of HUD referred to in
Section 6.04 cannot be obtained on or prior to May 30, 1998, except for
administrative delays occasioned by HUD and the fact that HUD is currently
giving close reviews to companies which have purchased other companies with
interests in HUD subsidized housing using deferred purchase price payments.
Section 4.32 Solvency
For purposes of applicable federal and state laws governing determinations
of the insolvency of debtors, or relating to fraudulent conveyance, or otherwise
with respect to creditors' rights, or similar judicial doctrines: on the Closing
Date, each HUD Closing Date and each Subsequent Closing Date after giving effect
to the transactions contemplated hereby, (i) the amount of the "present fair
saleable value" of the assets of each of Sellers then transferring assets under
this Agreement will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise," as of such date, as such quoted terms are
determined in accordance with such laws and doctrines, (ii) the present fair
saleable value of the assets of each of Sellers then transferring assets under
this Agreement will, as of such date, be greater than the amount that will be
required to pay such Person's liability on its debts (defined below) as such
debts become absolute and matured, (iii) none of Sellers then transferring
assets under this Agreement will have, as of such date, an unreasonably small
amount of capital with which to conduct its business, (iv) each of Sellers then
transferring assets under this Agreement will be able to pay its debts as they
mature, and (v) the consideration to be received by each Seller hereunder for
the assets to be sold by such Seller hereunder is not less than the "present
fair saleable value" of such assets. For purposes of this Section 4.32, "debt"
means "liability on a claim," "claim" means any (x) right to payment, whether or
not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured, and (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed or undisputed, secured or unsecured.
Section 4.33 Absence of Inducement
In entering into this Agreement, none of Sellers has been induced by, or
relied upon, any representations, warranties or statements by any of Buyers not
set forth or referred to in this Agreement, whether or not such representations,
warranties or statements have actually been made, in writing or orally, and each
of Sellers acknowledges that, in entering into this Agreement, Buyers have been
induced by and relied upon the representations and warranties of Sellers herein
set forth.
Section 4.34 No Knowledge of Breach
None of Sellers has any knowledge on the date hereof of any fact or
circumstances which would cause any representation or warranty of Buyer in this
Agreement to be misleading or incorrect in any respect or is aware of any
statement which was omitted from any such representation or warranty which is
necessary to make the statements made in any such representation or warranty not
misleading.
V. Representations and Warranties of Buyers
Buyers each, jointly and severally, represent and warrant to Sellers as of
the date hereof and agree with Sellers as follows:
Section 5.01 Organization
IFG is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware; and LLC is a limited liability company
duly organized, validly existing, and in good standing under the laws of the
State of Delaware; each with all requisite power and authority to own, lease,
license, and use its properties and assets and to carry on the business in which
it is now engaged and the business in which it contemplates engaging. On the
date hereof, LLC is majority owned, directly or indirectly, by IFG.
Section 5.02 Authority
Each of Buyers has all requisite power and authority to execute, deliver,
and perform this Agreement. All necessary corporate and limited liability
company proceedings of Buyers have been duly taken to authorize the execution,
delivery, and performance of this Agreement by Buyers. This Agreement has been
and the other documents required to be delivered by Buyers hereby have been (or
when delivered will be) duly authorized, executed, and delivered by Buyer, and
constitute or will constitute the legal, valid, and binding obligation of
Buyers, enforceable as to each of them in accordance with their terms.
Section 5.03 No Conflicts or Defaults; No Violations
Neither the execution, delivery or performance of this Agreement by Buyers
nor the consummation of the transactions contemplated hereby will (with or
without the giving of notice, lapse of time or both): (a) contravene any
provisions of any law, statute, rule or regulation or any order, writ, judgment,
injunction or decree of any court or governmental instrumentality; or
(b) conflict with or result in any breach of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of any of Buyers pursuant to the
terms of any note, bond, indenture, mortgage, deed of trust, loan agreement,
credit agreement, lease, franchise, or any other agreement, contract or
instrument to which either of them is a party or to which any of their
respective properties or assets is subject; or (c) violate any provision of
their respective Organizational Documents.
Section 5.04 Litigation
There is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending, or to the knowledge
of Buyers, threatened, relating to, or seeking to prohibit or otherwise
challenge the consummation of this Agreement or the transactions contemplated by
this Agreement or to obtain substantial damages with respect thereto.
Section 5.05 Investment Company
None of Buyers is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
Section 5.06 Consents
Except the filings under the HSR Act described in Section 6.04, the consent
of HUD to the transactions contemplated by this Agreement, the consent of
mortgagees holding mortgages on the Properties, and as set forth in Schedule
5.06, no approval or consent of, notice to, or filing or registration with, or
authorization, order, license, certificate, or permit of or from, any
governmental authority or any other notice to or consent of any third party is
required to be made by Buyers in connection with (a) the execution, delivery and
performance of, (b) the legality, validity, binding effect or enforceability of,
or (c) the consummation of the transactions contemplated by this Agreement.
Section 5.07 HUD Consents
Buyers have no knowledge of any reason why the approvals of HUD referred to
in Section 6.05 cannot be obtained on or prior to May 30, 1998, except for
administrative delays by HUD and the fact that HUD is currently giving close
reviews to companies which have purchased other companies with interests in HUD
subsidized housing using deferred purchase price payments.
Section 5.08 Completeness of Disclosure
No representation or warranty by Buyers in this Agreement contains, or when
delivered will contain, an untrue statement of a material fact or omits, or when
delivered will omit, to state a material fact required to be stated therein or
necessary, in light of the circumstances in which such statements are made, to
make the statements made therein not misleading.
Section 5.09 Absence of Inducement
In entering into this Agreement, Buyers have not been induced by, or relied
upon, any representations, warranties or statements of any of Sellers concerning
any matter not set forth or referred to in this Agreement, whether or not such
representations, warranties or statements have actually been made, in writing or
orally, except that Buyers have relied upon Sellers' having disclosed to Buyers
all information, and provided to Buyers true, complete and correct copies of all
agreements, documents and data, that Buyers or their Affiliates have requested
in connection with its determination whether to enter into this Agreement. Each
of Buyers acknowledges that, in entering into this Agreement, Sellers have been
induced by and relied upon the representations and warranties of Buyers herein
set forth.
Section 5.10 No Knowledge of Breach
None of Buyers has any knowledge on the date hereof of any facts or
circumstances which would cause any representation or warranty of any of Sellers
in this Agreement to be misleading or incorrect in any respect or is aware of
any statement which was omitted from any such representation or warranty which
is necessary to make the statements made in any such representation or warranty
not misleading.
VI. Additional Agreements
Section 6.01 Performance of Covenants
(a) Each of Sellers, jointly and severally, covenants and agrees to perform
or cause to be performed the covenants of any of them under this Agreement.
(b) Each of Buyers, jointly and severally, covenants and agrees to perform
or cause to be performed the covenants of any of them under this Agreement.
Section 6.02 General
(a) Each of Sellers will use all reasonable efforts and take all reasonable
steps, and will cooperate with Buyers, to cause to be fulfilled those of the
conditions set forth in this Agreement to the parties' respective obligations to
consummate the transactions contemplated by this Agreement that are dependent
upon the actions or inactions of any of Sellers, and to execute and deliver such
instruments and take such other reasonable actions as may be necessary or
appropriate in order to carry out the intent of this Agreement and consummate
the transactions contemplated hereby.
(b) Each of Buyers will use all reasonable efforts and take all reasonable
steps, and will cooperate with Sellers, to cause to be fulfilled those of the
conditions set forth in this Agreement to the parties' respective obligations to
consummate the transactions contemplated by this Agreement that are dependent
upon the actions or inactions of Buyers, and to execute and deliver such
instruments and take such other reasonable actions as may be necessary or
appropriate in order to carry out the intent of this Agreement and consummate
the transactions contemplated hereby.
Section 6.03 Other Agreements; Conduct of Business
(a) From the date hereof until the Closing, Sellers and their Affiliates
will each:
(i) use its reasonable efforts to cause all representations and warranties
made by them hereunder to be true and correct in all material respects as of the
Closing as if made on the Closing Date, except for changes in the ordinary
course of business of WFA, FWC, the Subsidiaries, the Partnerships and the Lower
Tier Entities consistent with past practice; provided, however, that nothing
herein shall require any of such Persons to violate any fiduciary duty
obligation owed to any of the Partnerships or the Lower Tier Entities;
(ii) use its reasonable efforts to preserve intact the business
organization and operations of WFA, FWC, the Subsidiaries, the Partnerships and
the Lower Tier Entities, to keep available the services of its present officers
and employees, to preserve in full force and effect their contracts, agreements,
instruments, leases, licenses, arrangements, and understandings, and to preserve
the present business relationships and good will of their suppliers, customers,
and others having business relations with any of them;
(iii) not permit the amendment of any of the Organizational Documents of
(A) any of Sellers or the Subsidiaries or (B) subject to the fiduciary duty
obligation owed by a Seller or Subsidiary to a Partnership or Lower Tier Entity,
any of the Partnerships or Lower Tier Entities; and
(iv) cause the business and operations of the Subsidiaries, the
Partnerships or Lower Tier Entities to be conducted in all respects only in the
ordinary course consistent with past practices utilizing the highest commercial
standards and in accordance with the terms of the provisions of the
Organizational Documents of such Persons.
(b) From the date hereof until each HUD Closing, Sellers and their
Affiliates will each:
(i) use its reasonable efforts to cause all representations and warranties
to be made by them hereunder on such HUD Closing Date to be true and correct in
all material respects as of such HUD Closing as if made on such HUD Closing
Date, except for changes in the ordinary course of business of the HUD Entities
consistent with past practice; provided, however, that nothing herein shall
require any of such Persons to violate any fiduciary duty obligation owed to any
of the HUD Entities;
(ii) use its reasonable efforts to preserve intact the business
organization and operations of the HUD Entities, to keep available the services
of their present officers and employees, to preserve in full force and effect
their contracts, agreements, instruments, leases, licenses, arrangements, and
understandings, and to preserve the present business relationships and good will
of their suppliers, customers, and others having business relations with any of
them;
(iii) subject to the fiduciary duty obligation owed by a Seller or
Subsidiary to an HUD Entity, not permit any of the Organizational Documents of
any of the HUD Entities to be amended; and
(iv) cause the business and operations of the HUD Entities to be conducted
in all respects only in the ordinary course consistent with past practices
utilizing the highest commercial standards and in accordance with the terms of
the provisions of the Organizational Documents of such Persons.
Section 6.04 Xxxx-Xxxxx-Xxxxxx Filings
Buyers, on the one hand, and Sellers, on the other hand, each represent to
the other that they have filed all Notification and Report Forms and related
material that they are required to file with the Federal Trade Commission and
the Antitrust Division of the United States Department of Justice under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), in connection with the transactions contemplated by this Agreement and
each covenants to the other that they shall make any further filings pursuant
thereto that may be necessary in connection therewith.
Section 6.05 Consents and Filings
As soon as practicable after the date hereof and before the Closing, except
as set forth on Schedule 6.05 and except for the consents of mortgagees which
hold mortgages on any of the Properties, Sellers and Buyers each shall cooperate
with each other and shall use all reasonable efforts to obtain all consents,
approvals, waivers, or other documents from any third parties, including any
governmental authorities, and make all filings, registrations and other
notifications, as (i) may be required to consummate the transactions
contemplated by this Agreement or (ii) are set forth on Schedule 4.12.
Section 6.06 Delivery of Financial Statements Required for SEC Filings;
Statements of Operations
Following the Closing Date, Sellers shall, promptly following any request
from Buyers, timely deliver to Buyer such financial statements and other
financial information, with respect to such accounting periods, of such of
Sellers and/or their Affiliates (including, without limitation, the
Subsidiaries, the Subject LPs and the Subject Lower Tier Entities), and such
Subject Property descriptions, as IFG, Insignia Properties Trust and/or their
Affiliates shall require in connection with any filings with the SEC or any
other regulatory authority. Such financial statements shall contain such
information, and be in such form, and shall be delivered with such reports of
certified public accountants thereon and such consents of such certified public
accountants, if any, as shall be required by the SEC or other regulatory
authority. Buyers shall reimburse Sellers for the incremental accounting fees of
their certified public accountants for preparing any such information or
statements which would not otherwise have been required to be prepared at any
time for any of Sellers, the Subsidiaries, the Subject LPs or the Subject Lower
Tier Entities. Buyers shall use their reasonable efforts to give Sellers as much
notice as is practicable of the financial statements and other financial
information it will require and Sellers shall use their best efforts to deliver
requested statements and information in the form and at the time required.
Section 6.07 [Omitted]
Section 6.08 Confidentiality
(a) Each of Sellers shall, before and after the Closing, insure that all
confidential information which any of Sellers or their Affiliates, or any of
their respective officers, directors, partners, employees, counsel, agents,
investment bankers, or accountants, may now possess or may hereafter create or
obtain relating to the condition (financial or otherwise), results of
operations, business, properties, assets, liabilities, or future prospects of
any of the Subsidiaries, the Partnerships, and the Lower Tier Entities, any
Properties, Buyers or their Affiliates, shall not be published, disclosed, or
made accessible by any of them to any other Person at any time or used by any of
them after the Closing, in each case without the prior written consent of
Buyers; provided, however, that the restrictions of this sentence shall not
apply (i) to the extent any such disclosure may otherwise be required by law,
(ii) to the extent any such disclosure may be necessary in connection with the
enforcement of this Agreement, or (iii) to the extent such information shall
have otherwise become publicly available without any breach of this Agreement or
any other confidentiality obligations of any Person. Sellers shall, and shall
cause the Subsidiaries, the Partnerships and the Lower Tier Entities, and all
other such Persons to, at Buyers' request after the Closing, deliver to Buyers
any documents or other medium containing such confidential information to which
the restrictions of the foregoing sentence apply.
(b) Buyers shall, before the Closing, insure that all confidential
information which Buyers or their Affiliates, or any of their respective
officers, directors, partners, employees, counsel, agents, potential sources of
financing, investments bankers or accountants, may possess or may hereafter
create or obtain relating to the condition (financial or otherwise), results of
operations, business, properties, assets, liabilities, or future prospects of
Sellers, any of the Subsidiaries, the Partnerships and the Lower Tier Entities
or any Properties shall not be published, disclosed, or made accessible by
Buyers to any other Person at any time or used by Buyers (except in preparation
for the consummation of the transactions contemplated by this Agreement), in
each case without the prior written consent of Sellers; provided, however, that
the restrictions of this sentence shall not apply (i) to the extent any such
disclosure that may be required in connection with any SEC filings by Buyers or
their Affiliates, or otherwise be required by law, (ii) may be necessary in
connection with the enforcement of this Agreement, or (iii) to the extent such
information shall have otherwise become publicly available without any breach of
this Agreement or any other confidentiality obligations of any Person. If the
Closing shall not occur for any reason, Buyers shall, and shall cause all other
such Persons to, at Sellers' request, deliver to Sellers any documents or other
materials containing such confidential information to which the restrictions of
the foregoing sentence apply.
Section 6.09 Public Statements
(a) From the date hereof until the Closing, Sellers and their Affiliates
shall discuss and coordinate with Buyers and Buyers shall discuss and coordinate
with Sellers with respect to any public filing or announcement required
concerning any of the transactions contemplated by this Agreement. No public
filing or announcement concerning any of the transactions contemplated by this
Agreement shall be made by any of them, without the consent of both Sellers and
Buyers, except as required by law. The parties agree that a press release in the
form attached as Exhibit F may be released by Buyers or their Affiliates upon
execution hereof.
(b) Following the Closing, other than the press release referred to in
Section 6.09(a), none of Sellers nor any principals or executives of, or
Affiliates of, Sellers (including Xxxxxxx Xxxxxx and Xxxxx Xxxxxxxxx) shall make
any public or private statements whatsoever concerning the transactions
contemplated by this Agreement in addition to or inconsistent with public
disclosures of Buyers or their Affiliates, except to the extent required (i) by
law (including the federal securities laws), (ii) by the partnership agreement
of any of the Partnerships or WFA, (iii) by any contractual obligations of
Sellers or the Partnerships to lenders or other third parties or (iv) in
connection with the enforcement of Sellers' or their Affiliates' rights under
the Purchase Agreement or the Additional Document.
Section 6.10 Limited Release
At the Closing, Sellers of Units and Other Units shall deliver a release
from each of them in the form of Exhibit G with respect to certain claims of any
of them or their successors or assigns against any of the Subsidiaries, the
Partnerships and the Lower Tier Entities, or their respective partners,
directors, officers, employees, agents, and Affiliates, and any other control
person under Section 15 of the Securities Act of 1933, as amended (the
"Securities Act"), or Section 20(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
Section 6.11 Voting by Sellers
Subject to its fiduciary duties when acting as general partner of a
Partnership and as may be required by the provisions of the partnership
agreement of any Partnership, Sellers each agree that until (i) each Subsequent
Closing Date, as to Units to be transferred at such Subsequent Closing Date and
(ii) the Closing Date with respect to all other Units and the Other Units, it
will vote, and will cause its Affiliates to vote, any Units and Other Units
which any of them is entitled to vote, directly or indirectly, against, and
shall not take any action to cause, (a) any merger, consolidation,
reorganization, other business combination, or recapitalization involving any of
the Partnerships or the Lower Tier Entities, (b) any dissolution, liquidation,
or termination of any of the Partnerships or the Lower Tier Entities, (c) any
sale of any assets of any of the Partnerships or the Lower Tier Entities,
(d) the amendment of the limited partnership agreement or any other
Organizational Document of any of the Partnerships or the Lower Tier Entities,
(e) any change in the general partner (defined below) of any Partnership or
Lower Tier Entity, or (f) any proposition the effect of which may be to inhibit,
prohibit, restrict, or delay the consummation of any of the transactions
contemplated by this Agreement or impair the contemplated benefits to Buyers and
their Affiliates of the transactions contemplated by this Agreement. It is
understood that at any time Sellers or any of their Affiliates would be
permitted under this Section to vote their general partnership interest in any
Partnership or Lower Tier Entity in favor of or take any action set forth above
because to fail to do so would be a breach of the fiduciary duty of the general
partner of such Partnership or Lower Tier Entity, the Seller or its Affiliate
which is the holder of limited partner interests in the same Partnership or
Lower Tier Entity shall also be permitted under this Section to vote such
limited partnership interests in favor of such action. For purposes of this
Agreement, the term "change in the general partner" of a Partnership or Lower
Tier Entity shall include, without limitation, a change in the Person who is the
general partner, a change in the powers or authority of such Person or a change
legally or beneficially in the Person or Persons with the power to direct the
general partner. After the Closing and until the Units are transferred to IFG or
its designee, Sellers will vote, and will cause their Affiliates to vote, any
Units on any matter on which they are entitled to vote in the manner directed by
the managing general partner of the Partnership which issued such Units.
Section 6.12 Access
From the date hereof until the Closing and, with respect to the HUD
Entities, the HUD Closing, Sellers shall (a) give Buyers and their authorized
representatives full access to all offices and other facilities and properties
of Sellers, the Subsidiaries, the Partnerships and the Lower Tier Entities and
to the books and records of Sellers, the Subsidiaries, the Partnerships and the
Lower Tier Entities (and permit Buyers to make copies thereof), (b) permit
Buyers to make inspections thereof, and (c) cause their respective officers and
advisers (including, without limitation, their auditors, attorneys, financial
advisors and other consultants, agents and advisors) to furnish Buyer with such
financial and operating data and other information with respect to the business
and properties of Sellers, the Subsidiaries, the Partnerships and the Lower Tier
Entities, and to discuss with Buyers and their authorized representatives the
affairs of Sellers, the Subsidiaries, the Partnerships and the Lower Tier
Entities, all as Buyers may from time to time reasonably request. Statements
made by Sellers and their authorized representatives in the course of any such
discussions shall not constitute representations or warranties for purposes of
this Agreement.
Section 6.13 No Transfers or Encumbrances
Sellers shall not, directly or indirectly, sell, assign, gift, pledge, or
otherwise transfer or encumber any capital stock or the general partnership
interests in any of the Subsidiaries, the Partnerships or the Lower Tier
Entities or any Interests, Units or Other Units on or before the Closing or, in
the case of the HUD Entities, the applicable HUD Closing at which the Interests,
Units or Other Units are to be transferred to Buyers. None of Sellers or their
Affiliates shall commence at any time after the date hereof any tender offer
for, or otherwise purchase or acquire or offer to purchase or acquire, any units
of limited partnership interest in any Partnership.
Section 6.14 Notice of Certain Events; SEC Reports
(a) From the date hereof until the Closing or, with respect to the HUD
Entities, the HUD Closing, each of Sellers shall immediately give Buyers (i)
written notice of the occurrence, or failure to occur, of any event or state of
facts that would cause any representation or warranty contained in this
Agreement to be untrue or inaccurate or any covenant, condition or agreement
which is to be performed or satisfied by it impossible to be so complied with or
satisfied or make such performance or satisfaction materially more difficult
than in the absence of such fact or occurrence or which (if existing and known
at the date of the execution of this Agreement) would have been required to be
set forth or disclosed in or pursuant to this Agreement or a Schedule or Exhibit
hereto; (ii) a copy of each registration statement, annual, quarterly or current
report, proxy or information statement, or other document (including exhibits
and all material incorporated by reference) filed by any Subject LP with the SEC
or any other governmental authority (other than filings under the HSR Act);
(iii) copies of all notices of default given to any of Sellers, their
Affiliates, the Subject LPs or the Subject Lower Tier Entities with respect to
any Debt, Management Agreement or Material Agreement; and (iv) copies of all
reports and other documents prepared for the stockholders or the limited
partners or general partners of any of WFA, FWC, the Subsidiaries, the
Partnerships or the Lower Tier Entities and copies of the minutes of all
meetings of, and actions taken (with or without a meeting), by the stockholders
or the limited partners or any general partner of any of WFA, FWC, the
Subsidiaries, the Partnerships or the Lower Tier Entities. No notification under
this Section 6.14(a) shall affect or modify the representations, warranties,
covenants or agreements of any of Sellers or the conditions to the respective
obligations of the parties hereunder.
(b) From the date hereof until the Closing, each HUD Closing and each
Subsequent Closing, as the case may be, Buyers shall immediately give Sellers
(i) written notice of the occurrence, or failure to occur, of any event or state
of facts that would cause any representation or warranty contained in this
Agreement to be untrue or inaccurate or any covenant, condition or agreement
which is to be performed or satisfied by Buyers impossible to be so complied
with or satisfied or make such performance or satisfaction materially more
difficult than in the absence of such fact or occurrence or which (if existing
and known at the date of the execution of this Agreement) would have been
required to be set forth or disclosed in or pursuant to this Agreement or a
Schedule or Exhibit hereto; (ii) a copy of each registration statement, annual,
quarterly or current report, proxy or information statement, or other document
(including exhibits and all material incorporated by reference) filed by Buyers
with the SEC or any other governmental authority (other than filings under the
HSR Act); and (iii) copies of all reports and other documents prepared for the
stockholders or members of Buyers. No notification under this Section 6.14(b)
shall affect or modify the representations, warranties, covenants or agreements
of Buyers or the conditions to the respective obligations of the parties
hereunder.
(c) From the date hereof until the Closing or, in the case of the HUD
Entities, each HUD Closing, each of Sellers shall immediately give Buyers
written notice of any event at a Partnership or Lower Tier Entity which may give
rise to a claim against any of WFA, FWC or the Subsidiaries by reason of its
serving, directly or indirectly, as a general partner of a Partnership or Lower
Tier Entity. No notification under this Section 6.14(c) shall affect or modify
the representations, warranties, covenants or agreements of Sellers or the
conditions to the respective obligations of the parties hereunder.
Section 6.15 [Omitted]
Section 6.16 Realization of Interests
Sellers shall not, and shall not permit their Affiliates to, reduce, modify
or compromise the terms or amount of any of the Interests without the prior
written consent of IFG. From and after the Closing, Sellers shall, and shall
cause their Affiliates to, use their commercially reasonable efforts to collect,
as soon as practicable, all amounts due and which become due upon each of the
Interests, and immediately upon receipt of any portion thereof shall remit such
proceeds to IFG or its designee.
Section 6.17 Other Proposals
From the date hereof until the earlier of the Closing or the termination of
this Agreement in accordance with its terms, Sellers and their Affiliates shall
not, and shall neither authorize nor permit any officer, director, employee,
counsel, agent, investment banker, accountant, or other representative of any of
them or of any Subsidiary, Partnership or Lower Tier Entity, directly or
indirectly, to: (i) initiate contact with any Person in an effort to solicit a
Takeover Proposal (defined below); (ii) cooperate with, or furnish or cause to
be furnished any nonpublic information concerning the residential business,
properties, or assets of any of WFA, FWC, the Subsidiaries, the Partnerships or
the Lower Tier Entities to any Person in connection with any Takeover Proposal;
(iii) negotiate with any Person with respect to any Takeover Proposal; or (iv)
enter into any agreement or understanding with the intent to effect a Takeover
Proposal; provided, however, that nothing herein shall require any Seller or its
Affiliates to breach any fiduciary duty as general partner of a Partnership.
Sellers will immediately give written notice to the Purchaser of the details of
any Takeover Proposal of which any of them becomes aware. As used in this
Section 6.17, "Takeover Proposal" means any proposal, other than as contemplated
by this Agreement: (i) for a merger, consolidation, reorganization, other
business combination, or recapitalization involving any of FWC, the
Subsidiaries, the Partnerships or the Lower Tier Entities, for the acquisition
of a 5% or greater interest in the equity of any of FWC, the Subsidiaries, the
Partnerships or the Lower Tier Entities, for the acquisition of the right to
cast 5% or more of the votes on any matter with respect to any of FWC, the
Subsidiaries, the Partnerships or the Lower Tier Entities, or for the
acquisition of a substantial portion of any of their respective residential
assets other than in the ordinary course of their respective businesses or (ii)
the effect of which may be to prohibit, restrict, or delay the consummation of
any of the transactions contemplated by this Agreement or to impair the
contemplated benefits to Buyers of any of the transactions contemplated by this
Agreement.
Section 6.18 Partnership Records
(a) Sellers shall cooperate with Buyers to provide Buyers with full access
to, and copies of, all books, records and other materials relating to the
Partnerships and the Lower Tier Entities as Buyers shall reasonably request,
whether any of the foregoing are maintained by any of Sellers, the Subsidiaries,
the Partnerships, the Lower Tier Entities or their agents or advisors. Sellers
shall provide, and shall cause each of their Affiliates, the Subsidiaries, the
Partnerships and the Lower Tier Entities to provide, at their own expense, such
time and assistance of their financial, accounting and data processing staffs as
reasonably required to provide Buyers with the foregoing access and materials.
(b) From the date hereof until the Closing and, with respect to the HUD
Entities, each HUD Closing, Sellers shall promptly deliver to Buyers copies of
such information maintained on and reports generated by computer systems of
Sellers and their Affiliates as Buyers shall reasonably request.
(c) If this Agreement is terminated prior to the Closing, Buyers shall,
promptly upon request of Sellers, return or destroy all confidential information
obtained under this Section 6.18 to Sellers.
Section 6.19 Preservation of Existence
(a) From the Closing and until the date ten years after the Closing, WFA
and FWC shall preserve and maintain their respective limited partnership and
corporate existence, rights, franchises and privileges in their respective
jurisdictions of organization and qualify and remain qualified as a foreign
limited partnership and corporation, respectively, and authorized to do business
in each jurisdiction in which the character of its properties or the nature of
its business requires such qualification or authorization; provided, however,
the foregoing obligation shall terminate as to WFA or FWC on such earlier date
on which it no longer directly or indirectly beneficially owns any interest in a
Property.
(b) From the Closing and until the date ten years after the Closing, WFA
and FWC shall cause to be preserved and maintained the limited partnership or
corporate, as the case may be, existence, rights, franchises and privileges of
the Subsidiaries, the Partnerships, the Lower Tier Entities in their respective
jurisdictions of organization and to qualify and remain qualified as a foreign
limited partnership or corporation, as the case may be, and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization; provided,
however, that the foregoing obligation shall terminate as to any Subsidiary,
Partnership, Lower Tier Entity or other entity on such earlier date that it no
longer directly or indirectly beneficially owns any interest in a Property.
Section 6.20 Tax Reporting; Taxes
(a) Sellers and their Affiliates, on the one hand, and Buyers and their
Affiliates, on the other hand, intend and agree that the assets being acquired
by Buyers and the consideration being paid by Buyers therefor pursuant to this
Agreement are as set forth in Section 1.01 hereof. Except as otherwise required
by law, Sellers and their Affiliates, on the one hand, and Buyers and their
Affiliates, on the other hand, shall not permit an election to be made, an
accounting method for tax purposes to be adopted or a position to be taken on
any tax return or in any audit, other administrative proceeding or judicial
proceeding involving taxes that is inconsistent with the provisions of this
Agreement, the Winthrop Amendment or the Stockholders' Agreement.
Notwithstanding anything herein to the contrary, this covenant shall survive for
the applicable tax statute of limitations plus 60 days; provided, however, that
any claims hereunder that have been made before such date shall survive until
the final resolution thereof.
(b) Sellers shall promptly deliver to Buyers, and Buyers shall promptly
deliver to Sellers, a copy of any written notice received from a Tax Authority
subsequent to the Closing Date regarding Taxes or a Tax Proceeding (i) with
respect to any of WFA, FWC, the Subsidiaries, the Partnerships or the Lower Tier
Entities for any period prior to the Closing Date or, with respect to the HUD
Entities, each HUD Closing Date, (ii) for which Sellers or Buyers could have an
indemnification obligation under Article X, or (iii) which involves issues that
could affect the tax treatment as to Sellers, Buyers or their Affiliates with
respect to the transactions contemplated by this Agreement.
(c) The federal, state and local income tax returns and information returns
(including any related or supporting information and schedules) for each of the
Subject LPs shall be prepared so as to, among other things, (i) reflect IFG as
the owner of said Units as of the day immediately following the Closing Date or
Subsequent Closing Date, as applicable, and (ii) close the books of the
applicable Subject LP as of the Closing Date or Subsequent Closing Date, as
applicable, and treat each of the portion of the applicable calendar year ending
with the Closing Date or Subsequent Closing Date, as applicable, and the balance
of the calendar year, respectively, as a separate taxable year, except that
income, gain, loss, deductions and credits from ordinary operations of such
Subject LP (but not from any sale or other disposition of any Properties or
other assets owned by such partnership) for the calendar month which includes
the Closing Date or Subsequent Closing Date, as applicable, shall be apportioned
on a per diem basis.
(d) In the event any Subject LP (or Subject Lower Tier Entity owned by it)
is required to pay any income Taxes with respect to the income allocable to the
Units or Other Units which were required to be withheld for any period prior to
Closing or, in the case of Westbury Investors Limited Partnership, the
applicable HUD Closing, and any of Sellers obtains a tax benefit from such
payment, Sellers will pay to Buyers an amount equal to such tax benefit
multiplied by the Scheduled Ownership Percentage for such Subject LP within ten
business days of the filing of the tax return on which any of Sellers recognized
such tax benefit.
Section 6.21 Price Adjustment
Sellers shall use their reasonable efforts to minimize any price adjustment
pursuant to Section 8.05.
VII. Covenants of Sellers
Section 7.01 Ordinary Course
Each of Sellers, jointly and severally, covenants and agrees that from the
date hereof until the Closing or, in the case of the HUD Entities, the
applicable HUD Closing, Sellers shall cause the Subsidiaries, the Partnerships
and the Lower Tier Entities and their businesses and Properties to be operated
only in the ordinary course consistent with past practice and the fiduciary
duties of the general partners, in accordance with the partnership agreements,
utilizing reasonable commercial standards.
Section 7.02 Liens
From the date hereof until the Closing or, in the case of the HUD Entities,
the applicable HUD Closing, none of Sellers will, or will permit any of the
Subsidiaries, the Subject LPs or the Subject Lower Tier Entities to, create,
incur, assume or suffer to exist any Lien upon or with respect to any property
or assets (real or personal, tangible or intangible) of any of the Subsidiaries,
the Subject LPs or the Subject Lower Tier Entities, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to any of the
Subsidiaries, the Subject LPs or the Subject Lower Tier Entities), or assign any
right to receive income or permit the filing of any financing statement under
the Uniform Commercial Code or any other similar notice of Lien under any
similar recording or notice statute, or grant rights with respect to, or
otherwise encumber or create a security interest in, such property or assets or
any portion thereof or any other revenues therefrom or the proceeds payable upon
the sale, transfer or other disposition of such property or asset or any portion
thereof, or permit or suffer any such action to be taken, except the following:
(a) [Omitted]
(b) Liens for taxes, assessments or other governmental charges not yet
delinquent or which are being diligently contested in good faith and by
appropriate proceedings, if (i) reasonable reserves in an amount not less than
the tax, assessment or governmental charge being so contested shall have been
included in the Most Current Balance Sheet for such Subject LP, or such
contested amount shall have been duly bonded in accordance with applicable law,
(ii) no risk of sale, forfeiture or loss of any real property of any Subject LP
or Subject Lower Tier Entity or any part thereof arises during the pendency of
such contest, and (iii) such contest does not have a materially adverse effect
on any Subject LP or Subject Lower Tier Entity;
(c) Liens in respect of property or assets of any of the Subsidiaries, the
Subject LPs or the Subject Lower Tier Entities imposed by law, which were
incurred in the ordinary course of business and do not secure any Debt, such as
carriers', warehousemen's, materialmen's, and mechanics' liens and other similar
Liens arising in the ordinary course of business, and (i) which do not in the
aggregate materially detract from the value of any Subsidiary's, Subject LP's or
Subject Lower Tier Entity's property or assets or materially impair the use
thereof in the operation of the business of any Subsidiary, Subject LP or
Subject Lower Tier Entity or (ii) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to any such Lien; and
(d) Liens on property or assets securing Permitted Refinancing Debt
(defined below) provided that such property or assets were subject to the Liens
securing the Debt so refinanced. For purposes of this Agreement, "Permitted
Refinancing Debt" is Debt that replaces or refinances Debt of any Subject LP or
Subject Lower Tier Entity existing on the date hereof provided that: (i) the
aggregate principal amount of such Debt does not exceed 105% of the sum of
(x) the outstanding principal amount of, and accrued interest on, the Debt so
replaced or refinanced, (y) any closing costs incurred in connection with such
replacement or refinancing, and (z) any reserves required by the lender under
the terms of the loan and (ii) the incurrence of such Debt and the grant of such
Liens do not cause any representation or warranty herein by any of Sellers to be
incorrect in any material respect or constitute a breach of any covenant or
agreement of any of Sellers herein or therein, except to the extent such new
Debt is not reflected in the representation as to Existing Indebtedness and such
omission of such new Debt shall not violate Sellers' covenant to use reasonable
efforts to cause the representations to be true at the Closing Date, or, in the
case of the HUD Entities, the applicable HUD Closing Date.
Section 7.03 Dissolution
From the date hereof until the Closing, Sellers shall not cause or permit
any Partnership or Lower Tier Entity to dissolve, terminate, liquidate, merge
with or consolidate into another Person except as required by the fiduciary duty
of the general partner of such Partnership or Lower Tier Entity.
Section 7.04 New Lines of Business
From the date hereof until the Closing or, in the case of the HUD Entities,
the applicable HUD Closing, Sellers shall not cause or permit the Subsidiaries,
the Partnerships or the Lower Tier Entities to enter into any line of business
other than its business on the date hereof, or make any material change in the
scope or nature of its business, purposes or operations, or undertake or
participate in activities other than the continuance of its present business.
Section 7.05 Forgiveness of Debt
From the date hereof until the Closing or, in the case of the HUD Entities,
the applicable HUD Closing, Sellers shall not cause or permit the Subsidiaries
or the Lower Tier Entities to cancel or otherwise forgive, release or waive any
claim or Debt owed to it by any Person or rights of substantial value, except in
the case of any claim or Debt not material individually or in the aggregate, for
adequate consideration and in the ordinary course of business consistent with
past practice.
Section 7.06 Affiliate Transactions
From the date hereof until the Closing or, in the case of the HUD Entities,
the applicable HUD Closing, none of Sellers shall enter into, or be a party to,
or cause or suffer any of its Affiliates to enter into or be a party to, any
transaction with any of the Partnerships or Lower Tier Entities or cause any
compensation to be payable from any such Person except transactions required by
Existing Agreements in the ordinary course of business consistent with past
practice and on terms which are no less favorable to such of the Partnerships or
Lower Tier Entities than would be obtained in a comparable arm's length
transaction with an unrelated third party, and none of Sellers or any of their
respective Affiliates shall enter into any new agreement with or relating to any
of the Partnerships or Lower Tier Entities or the Properties, or amend, modify
or terminate any agreement listed on Schedule 4.15(a) or 4.15(b.1). Any such
transactions will be disclosed to Buyers in writing on the Closing Date or such
HUD Closing Date, as the case may be, in an officer's certificate of the
relevant Person.
Section 7.07 Assets
From the date hereof until the Closing or, in the case of the HUD Entities,
the HUD Closing, Sellers shall not cause or permit any of the Partnerships or
Lower Tier Entities to acquire or dispose, or agree to acquire or dispose, of
any assets, except in the ordinary course of business consistent with past
practice and on commercially reasonable terms or except where a failure to do so
would be a breach of fiduciary duty; provided, however, that in the event of any
disposition or dissolution of a Partnership or Lower Tier Entity or any real
property owned directly or indirectly by any of them, Buyers may elect not to
close without liability to Sellers.
Section 7.08 Advances, Investments and Loans
From the date hereof until the Closing or, in the case of the HUD Entities,
the applicable HUD Closing, none of Sellers will cause or permit any of the
Subsidiaries, the Partnerships or the Lower Tier Entities, directly or
indirectly, to lend money or credit or make advances to any Person, or purchase
or acquire any stock, obligations or securities of, or any limited or general
partnership interests or any other interest in, or make any capital contribution
to, any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract or to agree to do any of the foregoing,
except that any of the Subsidiaries, the Partnerships and the Lower Tier
Entities may acquire and hold accounts receivables owing to any of them, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary terms.
Section 7.09 No Contrary Agreements
From the date hereof until the Closing or, in the case of the HUD Entities,
the applicable HUD Closing, none of Sellers shall agree or otherwise commit,
whether or not in writing, or permit any of the Subsidiaries, the Partnerships
or the Lower Tier Entities to agree or commit, to do anything which would not be
permitted to be done under this Agreement.
VIII. Conditions to Obligations of Buyers
The obligations of Buyers under this Agreement are subject to the following
conditions (unless waived by Buyers in writing):
Section 8.01 Accuracy of Representations and Compliance with Conditions
(a) All representations and warranties of Sellers contained in this
Agreement shall be accurate as of the Closing, in all material respects with the
same effect as if made on and as of such date, except for changes expressly
permitted or required by this Agreement. As of the Closing, Sellers shall have
performed and complied in all material respects with all covenants and
agreements and satisfied all conditions required to be performed and complied
with by any of them at or before such time. At the Closing, Buyers shall have
received certificates to the effect of the first two sentences of this
Section 8.01(a) executed by the chief executive officer and the chief financial
officer of each Seller dated as of the Closing Date, in form and substance
satisfactory to Buyers. It is expressly agreed that, for purposes of the first
sentence of this Section 8.01(a) and Section 12.01(a)(ii)(E), changes in the
ordinary course referred to in Section 6.03(a) shall not be deemed to be changes
permitted or required by this Agreement and may result in a failure of the
condition set forth in this Section 8.01(a) to Buyers' obligations under this
Agreement.
(b) All representations and warranties of Sellers contained in this
Agreement insofar as they relate to the HUD Entities, the Properties owned by
any of them and the transactions to be consummated at the applicable HUD Closing
shall be accurate as of such HUD Closing, in all material respects with the same
effect as if made on and as of such date, except for changes expressly permitted
or required by this Agreement. As of each HUD Closing, Sellers shall have
performed and complied in all material respects with all covenants and
agreements and satisfied all conditions required to be performed and complied
with by any of them at or before such time. At each HUD Closing, Buyers shall
have received certificates to the effect of the first two sentences of this
Section 8.01(b) executed by the chief executive officer and the chief financial
officer of each Seller dated as of such HUD Closing Date, in form and substance
satisfactory to Buyers. It is expressly agreed that, for purposes of the first
sentence of this Section 8.01(b) and Section 12.01(b)(ii)(E), changes in the
ordinary course referred to in Section 6.03(a) shall not be deemed to be changes
permitted or required by this Agreement and may result in a failure of the
condition set forth in this Section 8.01(b) to Buyers' obligations under this
Agreement.
(c) All representations and warranties of Sellers contained in Sections
4.01, 4.02, 4.03, 4.04, 4.05, 4.26, 4.32, 4.33 and 4.34 of this Agreement shall
be accurate as of each Subsequent Closing, in all material respects with the
same effect as if made on and as of such date, except for changes expressly
permitted or required by this Agreement. As of each Subsequent Closing, Sellers
shall have performed and complied in all material respects with all covenants
and agreements and satisfied all conditions required to be performed and
complied with by any of them at or before such time. At each Subsequent Closing,
Buyers shall have received certificates to the effect of the first two sentences
of this Section 8.01(c) executed by the chief executive officer and the chief
financial officer of each Seller dated as of such Subsequent Closing Date, in
form and substance satisfactory to Buyers. It is expressly agreed that, for
purposes of the first sentence of this Section 8.01(c) and
Section 12.01(c)(ii)(D), changes in the ordinary course referred to in
Section 6.03(a) shall not be deemed to be changes permitted or required by this
Agreement and may result in a failure of the condition set forth in this
Section 8.01(c) to Buyers' obligations under this Agreement.
Section 8.02 Sellers' Deliveries
Sellers shall have delivered to Buyers (a) at the Closing, the documents
set forth in Section 3.02(a)(i), (b) at each HUD Closing, the documents set
forth in Section 3.02(b)(i), and (c) at each Subsequent Closing, the documents
set forth in Section 3.02(c)(i).
Section 8.03 Legal Action
There shall not have been instituted or threatened any legal proceeding (a)
relating to, or seeking to prohibit or otherwise challenge, the consummation of
this Agreement or the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto; or (b) which Buyers shall reasonably
determine could have a materially adverse effect on the business, assets,
liabilities, condition (financial or otherwise) or prospects of any of the
Subsidiaries, the Subject LPs or the Subject Lower Tier Entities or (c) alleging
any violation of any provision of any federal or state securities law or seeking
to obtain any payment or damages pursuant thereto (in each case, whether or not
such allegation shall have any merit).
Section 8.04 No Material Adverse Change
As of the Closing or, with respect to the HUD Entities and the Subject
Properties owned by any of them, the applicable HUD Closing there shall not have
been any material adverse change since the date hereof or, in the case of the
Subject LPs, the date of their respective Most Current Balance Sheets, in the
condition (financial or otherwise), results of operations, business, Subject
Properties, assets, nature of assets or liabilities of any of WFA, FWC, the
Subsidiaries, the Subject LPs, or the Subject Lower Tier Entities.
Section 8.05 Property Events
(a) If, between the date hereof and the Closing Date or, in the case of the
HUD Entities and the Subject Properties owned by any of them, the applicable HUD
Closing Date, any of the Subject LPs or the Subject Lower Tier Entities incur or
become liable for (primarily or otherwise) any actual or threatened
Environmental Liabilities (exclusive of liabilities associated with non-friable
asbestos) with respect to any of the Subject Properties or the conduct of the
business of any of the Subject LPs or the Subject Lower Tier Entities or, in the
course of its due diligence, Buyers learn of existing environmental conditions
or activities based upon which it is reasonably likely that any of the Subject
LPs, the Subject Lower Tier Entities, Buyers, or any of their Affiliates may
incur or become liable for Environmental Liabilities (exclusive of liabilities
associated with non-friable asbestos), in each case not disclosed to Buyers on a
Schedule or Exhibit hereto, which aggregate Environmental Liabilities (exclusive
of liabilities associated with non-friable asbestos) (calculated by multiplying
the Environmental Liability (exclusive of liabilities associated with
non-friable asbestos) of each Subject LP by its Scheduled Ownership Percentage
and totaling such amounts for all Subject LPs) (the "Environmental Losses")
exceed $325,000, Buyers may elect not to close any or all of the transactions
contemplated by this Agreement (which have not yet closed) which are affected by
such Environmental Liabilities (an "Affected Transaction") based on such
Environmental Losses without liability to Sellers; unless, either Buyers or
Sellers shall elect to require that the purchase price be reduced by the amount
that the Environmental Losses exceeds $325,000 up to a maximum purchase price
reduction of $1,625,000, in which case the purchase price shall be so reduced
and neither Buyers nor Sellers may then rightfully refuse to close based on such
Environmental Losses; provided, however, that if the Environmental Losses exceed
$1,950,000, Buyers shall have the sole right to require a purchase price
reduction of $1,625,000 or may, at their sole option, refuse to close any or all
of the transactions contemplated by this Agreement (which have not yet closed)
which involve an Affected Transaction by reason of such Environmental
Liabilities without liability to the Sellers and, if Buyers shall so elect to
refuse to close any or all of the transactions contemplated by this Agreement
(which have not yet closed), which involve an Affected Transaction neither
Buyers nor Sellers shall have the right to elect a purchase price reduction in
respect thereof.
(b) If the amount of aggregate Environmental Losses with respect to
Environmental Liabilities disclosed to Buyers on a Schedule or Exhibit hereto
shall exceed $500,000, Buyers shall have the right to refuse to close any or all
transactions contemplated by this Agreement (which have not yet closed) which
involve an Affected Transaction based on such Environmental Losses without
liability to Seller; provided, however, that if such aggregate Environmental
Losses shall be less than $1,950,000, Sellers may elect to require that the
purchase price be reduced by the amount that the Environmental Losses exceed
$325,000 up to a maximum purchase price reduction of $1,625,000, in which case
the purchase price shall be so reduced and neither Buyers nor Sellers may then
rightfully refuse to close based on such Environmental Losses.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b) if, in
the course of their due diligence, Buyers learn that the sum of Environmental
Losses referred to in Section 8.05(a) and not disclosed to Buyers on a Schedule
or Exhibit hereto, plus Environmental Losses with respect to Environmental
Liabilities disclosed on a Schedule or Exhibit hereto, exceed $1,950,000, Buyers
may elect not to close any or all transactions contemplated by this Agreement
(which have not yet closed) which involve the transfer of an Affected Interest
based on such Environmental Losses without liability to Sellers.
(d) In the event of any purchase price reduction pursuant to subsection
(a) or (b) above, Buyers shall use their reasonable efforts after the Closing
or, in the case of the HUD Entities, the applicable HUD Closing to cause the
affected Subject LP or Subject Lower Tier Entity to recover from third parties
(assuming Buyers reasonably believe that a meritorious cause of action exists
against a third party) any amount for which they are liable to such Subject LP
or Subject Lower Tier Entity because of the event which resulted in such
purchase price reduction. If and when the Subject LP or Subject Lower Tier
Entity shall receive any such amounts, Buyers shall compute a number which is
the amount of each such recovery (net of Buyers' costs and expenses associated
with securing such recovery) multiplied by the Scheduled Ownership Percentage in
such affected Subject LP or Subject Lower Tier Entity ("Buyers' Deemed
Recovery"). Buyers shall pay Sellers that portion of Buyers' Deemed Recovery
arising from any events giving rise to such Environmental Losses equal to the
amount of Environmental Losses which exceeds the sum of (i) $325,000 plus
(ii) the aggregate amount of such Environmental Losses in excess of $1,625,000,
but in no event more than the actual purchase price reduction to Sellers in
respect of such Environmental Losses under Section 8.05(a) or (b).
Section 8.06 No Governmental Action
From the date hereof until the Closing, the applicable HUD Closing or the
applicable Subsequent Closing, as the case may be, there shall not have been any
action taken, or any law, rule, regulation, order, judgment, or decree proposed,
promulgated, enacted, entered, enforced, or deemed applicable to the
transactions contemplated by this Agreement by any federal, state, local, or
other governmental authority or by any court or other tribunal, including the
entry of a preliminary or permanent injunction, which, in the reasonable
judgment of Buyers, (a) makes any of the transactions contemplated by this
Agreement illegal, (b) results in a delay in the ability of the Buyer to
consummate any of the transactions contemplated by this Agreement, (c) requires
the divestiture by Buyers of any of the Shares, the Interests, the WFA Interest,
the Units or the Other Units to be sold pursuant to this Agreement or of a
material portion of the business of any of the Subsidiaries, the Subject LPs or
the Subject Lower Tier Entities, (d) imposes material limitations on the ability
of Buyers effectively to exercise full rights of ownership of the Shares, the
Interests, the WFA Interest, the Units or the Other Units, including the right
to vote such interests on all matters properly presented to the limited partners
of the respective Subject LP, as the case may be, or (e) otherwise prohibits,
restricts, or delays consummation of any of the transactions contemplated by
this Agreement or impairs the contemplated benefits to Buyers or their
Affiliates of any of the transactions contemplated by this Agreement.
Section 8.07 Operating Result
(a) From the date hereof until the Closing or, with respect to the HUD
Entities, the applicable HUD Closing, none of the following shall have occurred
unless in any individual case specifically waived by Buyers in writing:
(i) except in the ordinary course consistent with past practice, without
the prior written consent of Buyers, none of the Subsidiaries, the Partnerships
or the Lower Tier Entities shall have entered into or be subject to any Material
Agreement or Management Agreement not listed on Schedule 4.15(a) or Schedule
4.15(b.1), respectively, or breached or made a material amendment or
modification in any such Material Agreement or Management Agreement or
terminated any such Material Agreement or Management Agreement, except for cause
under such Material Agreement or Management Agreement; and
(ii) none of the Sellers (A) shall have incurred or refinanced any Debt or
entered into, amended, modified or terminated, or suffered any amendment,
modification or termination of, any agreements, instruments or other documents
relating to any Debt or Lien, or voluntarily prepaid any portion of any Debt, in
each case to which any of the Subsidiaries, the Subject LPs or the Subject Lower
Tier Entities is a party or to which any of their respective Subject Properties
is subject.
(b) [Omitted]
Section 8.08 HUD Approval
Buyers shall have obtained at or prior to each HUD Closing Date the
unconditional written approval of HUD to the transactions contemplated by this
Agreement to be consummated on such HUD Closing Date.
Section 8.09 Xxxx-Xxxxx-Xxxxxx Waiting Period
All applicable waiting periods (and any extensions thereof) in respect of
the transactions contemplated by this Agreement under the HSR Act shall have
expired at or prior to the Closing.
Section 8.10 Consents
Sellers shall have complied with Section 6.05 to the extent required
without any of Sellers, the Subsidiaries, the Subject LPs or the Subject Lower
Tier Entities having made any agreement or reached any understanding not
approved in writing by Buyers as a condition for obtaining any such consent,
authorization, approval, order, license, certificate or permit.
Section 8.11 FIRPTA Certificate
Each Seller of Units and Other Units shall deliver to Buyers on the Closing
Date and each Subsequent Closing Date, as the case may be, a certificate which
states, under penalty of perjury, such Seller's taxpayer identification number
and office address and that such Seller is not a foreign person for federal
income tax purposes under Section 1445 of the Code.
Section 8.12 Insurance
On or prior to the Closing Date or, with respect to the HUD Entities, the
applicable HUD Closing Date, Buyers shall have received evidence of the
existence of valid policies of insurance which comport with the representations
of Sellers set forth in Section 4.09 hereof, together with evidence of the
payment of all premiums therefor.
Section 8.13 Absence of Certain Events
From the date hereof until the Closing or, with respect to the HUD
Entities, the applicable HUD Closing, no event shall have occurred which would
cause (a) any merger, consolidation, reorganization, other business combination,
or recapitalization involving any Seller, Subsidiary, Partnership or Lower Tier
Entity, (b) any dissolution, liquidation, or termination of any Seller,
Subsidiary, Partnership or Lower Tier Entity, (c) any sale of any assets of any
Seller, (d) the amendment of the limited partnership agreement or any other
Organizational Document of any Seller, Subsidiary, Partnership or Lower Tier
Entity, (e) any change in the general partner of any Partnership or Lower Tier
Entity, or (f) the adoption by any Seller, Subsidiary, Partnership or Lower Tier
Entity of any proposition the effect of which may be to inhibit, prohibit,
restrict, or delay the consummation of any of the transactions contemplated by
this Agreement or impair the contemplated benefits to Buyers or their Affiliates
of the transactions contemplated by this Agreement.
Section 8.14 Prior Closings
On or before each HUD Closing, the Closing shall have occurred. On or
before any Subsequent Closing, the Closing and, in the case of the Subsequent
Closing at which HUD Units are to be sold, the HUD Closing with respect to
Westbury Investors Limited Partnership shall have occurred.
Section 8.15 [Omitted]
Section 8.16 Buyers' Elections
Buyers shall not have rightfully elected not to close pursuant to
Section 7.07 or Section 8.05.
Section 8.17 Other Closing Documents
Sellers shall have delivered to Buyers at or prior to the Closing, each HUD
Closing and each Subsequent Closing, as the case may be, such other documents as
Buyers may reasonably request in form and substance satisfactory to Buyer.
Section 8.18 Change in Ownership of Partnerships
From the date hereof until the Closing, each HUD Closing and each
Subsequent Closing, as the case may be, none of the Partnerships shall have
experienced any change in ownership or control of more than 5% of the limited
partnership interests of any Partnership.
IX. Conditions to the Obligations of Sellers
The obligations of Sellers under this Agreement are subject to the
following conditions (unless waived by Sellers in writing):
Section 9.01 Accuracy of Representations and Compliance with Conditions
All representations and warranties of Buyers contained in this Agreement
shall be accurate as of the Closing, any HUD Closing or any Subsequent Closing,
as the case may be, in all material respects with the same effect as if made on
and as of such date except for changes expressly permitted or required under
this Agreement; as of the Closing, any HUD Closing or any Subsequent Closing, as
the case may be, Buyers shall have performed and complied in all material
respects with all covenants and agreements and satisfied all conditions required
to be performed and complied with by Buyers at or before such time; and Sellers
shall have received certificates to that effect executed by the chief executive
officer and the chief financial officer of each of Buyers, dated as of the
Closing Date, any HUD Closing Date or any Subsequent Closing Date, as the case
may be, in form and substance satisfactory to Sellers.
Section 9.02 Buyers' Deliveries
Buyers shall have delivered to Seller (a) at the Closing, the funds and the
documents set forth in Section 3.02(a)(ii), (b) at each HUD Closing, the
documents set forth in Section 3.02 (b)(ii), and (c) at each Subsequent Closing,
the funds and the documents set forth in Section 3.02(c)(ii).
Section 9.03 Xxxx-Xxxxx-Xxxxxx Waiting Period
All applicable waiting periods (and any extensions thereof) in respect of
the transactions contemplated by this Agreement under the HSR Act shall have
expired at or prior to the Closing.
Section 9.04 Prior Closings
On or before the HUD Closing, the Closing shall have occurred. On or before
any Subsequent Closing, the Closing and, in the case of the Subsequent Closing
at which HUD Units are to be sold, the HUD Closing with respect to Westbury
Investors Limited Partnership shall have occurred.
Section 9.05 No Material Adverse Change
No material adverse change shall have occurred since the date hereof in the
condition (financial or otherwise), business, property, operations, assets or
liabilities of IFG and its subsidiaries on a consolidated basis.
Section 9.06 No Governmental or Legal Action
From the date hereof until the Closing, any HUD Closing or any Subsequent
Closing, as the case may be, there shall not have been any action taken, or any
law, rule, regulation, order, judgment, or decree proposed, promulgated,
enacted, entered, enforced, or deemed applicable to the transactions
contemplated by this Agreement by any federal, state, local, or other
governmental authority or by any court or other tribunal, including the entry of
a preliminary or permanent injunction, which, in the reasonable judgment of
Sellers, (a) makes any of the transactions contemplated by this Agreement
illegal or (b) otherwise prohibits, restricts, or delays consummation of the
transactions contemplated by this Agreement or impairs the contemplated benefits
to Sellers of any of the transactions contemplated by this Agreement.
Section 9.07 Other Closing Documents
Buyers shall have delivered to Sellers at or prior to the Closing, any HUD
Closing and each Subsequent Closing, as the case may be, such other documents of
officers of Buyers as Sellers may reasonably request.
X. Indemnification; Contribution
Section 10.01 Indemnification by Sellers
Subject to the limitations hereinafter set forth, each of WFA and FWC
shall, jointly and severally, indemnify, defend and save each of Buyers and
their respective Affiliates (other than the Subsidiaries, the Partnerships and
the Lower Tier Entities), any of their respective officers, directors, agents,
employees, counsel, partners (limited or general), members, managers,
accountants, consultants, lenders and controlling persons (if any), and the
personal representatives or successors and assigns of any of the foregoing (the
"Buyer Indemnitees"), harmless from, against, for and in respect of any and all
damages, losses (including Environmental Losses, losses of direct or indirect
income or revenues of any nature from the Partnerships and the Lower Tier
Entities now or at any time hereafter payable and the diminution in value of any
of the Units or the Other Units), settlement payments, obligations, liabilities,
claims, actions or causes of action, encumbrances and costs and expenses,
whether or not involving a third party (including, without limitation,
reasonable attorneys' and accounting fees and, as to matters involving a third
party, costs of any necessary investigation) (but not including maintenance and
repair expenses normally incurred in the operation of real properties)
(collectively, "Losses"), as and when suffered, sustained, incurred or required
to be paid by any of the Buyer Indemnitees arising from, as a result of or in
connection with:
(a) any breach of any of the representations and warranties made by any of
Sellers in this Agreement;
(b) any failure by any of Sellers to perform or comply with any covenant or
agreement contained in or made in connection with this Agreement;
(c) any third-party claim (i) asserted against any Subject LP or Subject
Lower Tier Entity which accrued at, or as a result of, or prior to the
consummation of the transactions contemplated by this Agreement, which
third-party claim affects such Subject LP or Subject Lower Tier Entity, (ii)
asserted against or affecting, directly or indirectly, any of the Buyer
Indemnitees arising from, as a result of, or in connection with the ownership,
management or operation of any of WFA, FWC, the Subsidiaries, the Partnerships
or the Lower Tier Entities or any entity that would be deemed a "single
employer" with any of them under Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA (an "ERISA Affiliate") at or prior to the consummation of
the transactions contemplated by this Agreement, or (iii) which is (A) based on
derivative liability of any of Sellers or their Affiliates or any of their
respective officers, directors, managers, or general partners and (B) asserted
against any of Buyers or their Affiliates arising from, as a result of, or in
connection with the execution or delivery of this Agreement or any document
listed on Schedule 10.01(c) (an "Additional Document") by any of Sellers or the
consummation by any of Sellers of the transactions contemplated hereby or
thereby;
(d) any third-party claim asserted against or affecting, directly or
indirectly, any of the Buyer Indemnitees arising from, as a result of, or in
connection with the ownership, management or operation (including, without
limitation, claims alleging breach of fiduciary duty or violation of the federal
securities laws) of any of the partnerships or properties (other than any
Partnership or Property with respect to which any nominee of the Associate
General Partner, the Class B Directors or the Residential Committee of FWC or a
Subsidiary (as such terms are defined in the Stockholders' Agreement) was
serving as an officer or director of the general partner of the Partnership at
the time that any such claim accrued) after the consummation of the transactions
contemplated by this Agreement directly or indirectly owned or controlled in
whole or in part by WFA, FWC, the Subsidiaries, or any entities directly or
indirectly controlled by any of the foregoing or any ERISA Affiliate of any of
them;
(e) except as disclosed on the Schedules hereto or the Financial Statements
of the Subject LPs and except for sick pay and sick leave accrued through the
date hereof, any and all liabilities or obligations whether arising before, on
or after the Closing relating to or arising out of any "employee benefit plan"
within the meaning of Section 3(3) of ERISA, and any other bonus, profit
sharing, compensation, pension, severance, deferred compensation, fringe
benefit, insurance, welfare, medical, post-retirement health or welfare benefit,
medical reimbursement, health, life, stock option, stock purchase, tuition
refund, service award, company car, scholarship, relocation, disability,
accident, sick pay, sick leave, vacation, termination, individual employment,
executive compensation, incentive, bonus, commission, payroll practices,
retention or any other type of plan, agreement, policy, trust fund or
arrangement, maintained, sponsored or contributed to by any of Sellers, their
Affiliates, or any ERISA Affiliate, except for any and all liabilities or
obligations arising after the Closing with respect to any such plan, agreement,
policy, trust fund or arrangement maintained, sponsored or contributed to by any
of the Partnerships or the Lower Tier Entities that relate to or arise out of
events occurring after the Closing.
(f) the failure at any time on or prior to the Closing or, with respect to
the HUD Entities, any HUD Closing of any of the Partnerships or the Lower Tier
Entities to comply in all material respects with any rule or regulation
promulgated by HUD and, to the extent such noncompliance continues after the
Closing or the applicable HUD Closing, as the case may be, until such time as
the noncomplying Partnership or Lower Tier Entity can reasonably achieve
compliance;
(g) any prepayment penalty or similar expense incurred by any Subject LP or
Subject Lower Tier Entity upon acceleration by a mortgagee of a mortgage loan
secured by a mortgage on a Subject Property for failure to obtain the consent of
the mortgagee to the transactions contemplated by this Agreement (an
"Acceleration Event") together with the costs and expenses of refinancing such
mortgage loan (determined as provided below), net of any Interest Savings
(defined below) resulting from such refinancing. For purposes of this Agreement,
"Interest Savings" shall mean the present value (discounted at a rate of 10% per
annum) as of the date of refinancing of future interest payments remaining on
the mortgage loan being refinanced less the present value of future interest
payments together with any "points" paid on the new mortgage loan, but in no
event shall Interest Savings be less than zero. For purposes of the foregoing,
the costs and expenses of refinancing a mortgage loan shall be the present value
detriment (discounted at a rate of 10% per annum) to the applicable Subject LP
or Subject Lower Tier Entity as a result of incurring costs and expenses of
refinancing prior to the maturity date of the mortgage loan; and
(h) any third-party claim asserted against any of the Buyer Indemnitees
relating to or arising out of any Acceleration Event.
Section 10.02 Indemnification by Buyers
Subject to the limitations hereinafter set forth, each of Buyers shall,
jointly and severally, indemnify, defend and save each of Sellers and their
respective Affiliates (other than the Subsidiaries, the Partnerships and the
Lower Tier Entities), any of their respective officers, directors, agents,
employees, counsel, partners (limited or general), members, managers,
accountants, consultants, lenders and controlling persons (if any), and the
personal representatives or successors and assigns of any of the foregoing (the
"Seller Indemnitees"), harmless from, against, for and in respect of any and all
Losses, whether or not involving a third party, as and when suffered, sustained,
incurred or required to be paid by any of Sellers or any other party indemnified
pursuant to this Section 10.02 arising from, as a result of or in connection
with:
(a) any breach of any of the representations and warranties made by any of
Buyers in this Agreement;
(b) any failure by any of Buyers to perform or comply with any covenant or
agreement contained in or made in connection with this Agreement;
(c) any third-party claim which is (A) based on derivative liability of any
of Buyers or their Affiliates or any of their respective officers, directors,
managers, or general partners and (B) asserted against any of Sellers or their
Affiliates arising from, as a result of, or in connection with the execution or
delivery of this Agreement or any of the Additional Documents by any of Buyers
or the consummation by any of Buyers of the transactions contemplated hereby or
thereby;
(d) any third-party claim asserted against or affecting, directly or
indirectly, any of the Seller Indemnitees arising from, as a result of, or in
connection with the ownership, management or operation of (including, without
limitation claims alleging breach of fiduciary duty or violation of the federal
securities laws) any Partnership or Property with respect to which any nominee
of the Associate General Partner, the Class B Directors or the Residential
Committee of FWC or a Subsidiary was serving as an officer or director of the
general partner of the Partnership at the time such claim accrued; provided,
however, that if any third-party claim shall be asserted against either WFA or
FWC in their respective capacities as a general partner of a Partnership,
Buyers' indemnification obligations hereunder shall be governed by
Section 10.03(d); and
(e) except as disclosed on the Schedules hereto and except for sick pay and
sick leave accrued through the date hereof, any and all liabilities or
obligations whether arising before, on or after the Closing relating to or
arising out of any "employee benefit plan" within the meaning of Section 3(3) of
ERISA, and any other bonus, profit sharing, compensation, pension, severance,
deferred compensation, fringe benefit, insurance, welfare, medical, post-
retirement health or welfare benefit, medical reimbursement, health, life, stock
option, stock purchase, tuition refund, service award, company car, scholarship,
relocation, disability, accident, sick pay, sick leave, vacation, termination,
individual employment, executive compensation, incentive, bonus, commission,
payroll practices, retention or any other type of plan, agreement, policy, trust
fund or arrangement, maintained, sponsored or contributed to by any of Buyers,
their Affiliates, or any ERISA Affiliate.
Section 10.03 Rules Regarding Indemnification
(a) The rights and obligations of each party claiming a right to
indemnification hereunder (an "indemnified party") from any other party (an
"indemnifying party") shall be governed by the following rules:
(i) The indemnified party or parties shall give prompt written notice to
the indemnifying parties of any state of facts which the indemnified party or
parties determine is likely to give rise to a claim by the indemnified party or
parties against the indemnifying parties based on the indemnity agreements
contained in Section 10.01 or 10.02, as the case may be, stating the nature and
basis of said claim and the amount thereof, to the extent known. No failure to
give such notice to any or all of the indemnifying parties shall affect the
indemnification obligations of any indemnifying party hereunder, except to the
extent such failure materially prejudiced such indemnifying party's ability to
successfully defend the matter giving rise to the indemnification claim.
(ii) Without limiting the other rights of the indemnified parties, the
indemnifying parties shall, at the indemnifying parties' expense, make available
to the indemnified party or parties and its or their attorneys and accountants
all books and records of the indemnifying parties relating to such action, suit
or proceeding, and the parties hereto agree to render to each other such
assistance as they may reasonably require of each other in order to ensure the
proper and adequate defense of any such action, suit or proceeding.
(iii) In the event any action, suit or proceeding is brought against any
indemnified party with respect to which any indemnifying party may have
liability under the indemnity agreements contained in Section 10.01 or 10.02,
then upon the written acknowledgment by the indemnifying parties that they are
undertaking and will prosecute the defense of the claim under such indemnity
agreements and confirming (and providing evidence reasonably satisfactory to the
indemnified parties) that the claim is one with respect to which the
indemnifying parties are obligated to indemnify and that they will be able to
pay the full amount of the cost of the defense of any such action, suit or
proceeding, such defense shall be in the sole control of the indemnifying
parties. The indemnified party shall have the right to employ its own counsel in
any such case, but the fees and expenses of such counsel shall be at the
indemnified party's own expense unless the employment of such counsel and the
payment of such fees and expenses both shall have been specifically authorized
in writing by the indemnifying parties in connection with the defense of such
action, suit or proceeding. Notwithstanding the first sentence of this
Section 10.03(a)(iii), in the event any action, suit or proceeding is brought
against any party hereto alleging a violation of the federal or state securities
laws or seeking monetary recovery under the federal or state securities laws,
regardless of the merits thereof, and the claim is one with respect to which
this Agreement expressly provides for indemnification or contribution in
Section 10.01, Section 10.02 or Section 10.05 (whether or not such
indemnification or contribution is enforceable) (a "Securities Claim"), (A) the
defense of any such action, suit or proceeding (including all proceedings on
appeal or for review which counsel for either the indemnifying parties or
counsel for the indemnified party shall deem appropriate) shall be under joint
control of counsel for the indemnifying parties and counsel for the indemnified
party, (B) all Losses (other than attorneys' fees of the indemnified parties)
shall be paid by the indemnifying party and (C) there shall be no settlement of
any such action, suit or proceeding without the prior written consent of all
indemnified parties and all indemnifying parties. Notwithstanding the first
sentence of this Section 10.03(a)(iii), in the event any action, suit or
proceeding is brought against a Partnership, the defense of such action, suit or
proceeding shall be in the sole control of the Partnership.
(b) The indemnifying parties shall make no settlement of any claims as to
which the indemnifying parties are responsible for indemnity hereunder without
the prior written consent of the indemnified party or parties, unless the
indemnifying parties fully indemnify the indemnified party or parties for all
Losses in connection therewith, there is no finding or admission of violation of
law or breach of fiduciary duty by, or effect on any other claims that may be
made against, the indemnified party or parties, and the relief granted in
connection therewith requires no action on the part of, and has no effect on,
the indemnified party or parties. The indemnified parties shall make no
settlement of any claims as to which the indemnifying parties are responsible
for indemnity hereunder without the prior written consent of the indemnifying
parties, unless the indemnifying parties shall have failed to undertake the
defense of such claims.
(c) Seller Indemnitees shall not be deemed to have waived any right to
indemnification under Section 10.02 solely by reason of the board of directors
of FWC, any Subsidiary or any Lower Tier Entity having approved the action upon
which a claim against any of Seller Indemnitees is based, if such approval was
granted at the request of the FWC Residential Committee or any Subsidiary
Residential Committee (as such terms are defined in the Stockholders'
Agreement).
(d) In measuring the Loss incurred by a Seller Indemnitee pursuant to
Section 10.02(d), if a claim shall be asserted against either WFA or FWC in its
capacity as a general partner of a Partnership, all Affiliates of WFA or FWC
which own or control WFA and FWC, respectively, together shall be deemed to be
the Seller Indemnitee against which such claim was made, whether or not such
claim is asserted against any of such Affiliates and (i) if such claim shall be
paid, such Affiliate shall be indemnified by Buyers in an amount equal to the
lesser of (x) the amount paid in satisfaction of such claim and (y) the fair
market value in the aggregate of WFA and/or FWC, as the case may be, on the date
such claim was satisfied (without giving effect to any capital contributions
thereto on or after the date such claim was asserted and on or prior to the date
such claim was paid) and (ii) if such claim shall not be so paid or otherwise
satisfied, such Affiliate shall be indemnified by Buyer in an amount equal to
the fair market value of WFA or FWC, as the case may be, on the date such claim
accrued; provided, however, that in determining the fair market value of WFA or
FWC, as the case may be, the value of any general partner interest in a
Partnership or Lower Tier Entity directly or indirectly beneficially owned by
WFA or FWC, as the case may be, shall be determined pursuant to the Approved
Transaction Formula set forth in Article I of the Winthrop Amendment.
(e) For purposes of Sections 10.01(c), 10.01(d) and 10.02(d), an indemnitee
shall not be deemed to be affected, directly or indirectly, by any liability or
obligation included in the Most Current Balance Sheet of any Subject LP or
disclosed in the Schedules hereto.
Section 10.04 Limitations on Indemnification
Notwithstanding any other provision of this Agreement to the contrary:
(a) No person shall be entitled to indemnification or to assert a claim
under Section 10.01 or Section 10.02 with respect to any Loss based upon the
breach of any representation or warranty contained in this Agreement more than
18 months after the Closing Date or, with respect to any such Loss relating to
the HUD Entities, the appropriate HUD Closing Date or, in the case of any breach
based on an alleged violation of a statutory obligation, more than 60 days after
the expiration of the applicable statute of limitations, if longer, unless in
each case the claim is asserted on or before the expiration of such period.
Furthermore, no person shall be entitled to indemnification or to assert a claim
under Section 10.01 or Section 10.02 with respect to any Loss (other than a
claim under Sections 10.01(c), 10.01(d), 10.01(h), 10.02(c) or 10.02(d)) more
than six years and 60 days after the Closing Date, any HUD Closing Date or any
Subsequent Closing Date, respectively. Notwithstanding the foregoing provisions
of this Section 10.04(a), there shall be no time limitation with respect to the
assertion of any claim made under Section 10.01(d) or Section 10.02(d). For the
purposes of this Agreement, violations of statutory obligations include
violations of applicable rules and regulations.
(b) No claim may be asserted after the Closing, any HUD Closing or any
Subsequent Closing, as the case may be, against any party to this Agreement for
breach of any covenant or agreement set forth in this Agreement of any party
required to be performed at or before the Closing, such HUD Closing or such
Subsequent Closing, respectively, unless the claim is asserted on or before the
date which is eighteen months after the Closing Date, such HUD Closing Date or
such Subsequent Closing Date, respectively, or, in the case of any breach based
on an alleged violation of a statutory obligation, the applicable statute of
limitations plus 60 days, if longer, but in no event later than six years and 60
days after the Closing Date, such HUD Closing Date or such Subsequent Closing
Date, respectively.
(c) [Omitted]
(d) Except as otherwise provided in Sections 10.04(e) and 10.04(f), the
Sellers in the aggregate, on the one hand, and the Buyers in the aggregate, on
the other, shall have no liability under Section 10.01 or Section 10.02,
respectively, unless and until the aggregate amount of Losses incurred or
suffered by all parties which they are obligated to indemnify hereunder exceeds
$500,000; provided, however, that once such $500,000 threshold has been reached,
the Sellers or the Buyers, as the case may be, shall be responsible for every
dollar of covered Losses. The $500,000 threshold provided for in this
Section 10.04(d) shall not apply to any Loss (i) for which indemnification is
provided pursuant to Sections 10.01(c), 10.01(d), 10.01(e), 10.01(f), 10.01(g),
10.01(h), 10.02(c), 10.02(d) or 10.02(e) of this Agreement, (ii) that relates to
or arises in connection with any breach of representation or warranty under
Section 4.08, or (iii) occasioned by an Environmental Loss.
(e) Except as set forth in Section 10.04(f) with respect to any claim for
Losses occasioned by an Environmental Loss and with respect to a claim under
Section 10.01(a) arising from a breach of Section 4.08, no Losses relating to
unknown liabilities shall be deemed to be incurred or suffered unless and only
to the extent that the aggregate of the Deemed Amount shall exceed $325,000. For
purposes of this Section 10.04(e), there shall be included in the Deemed Amount
the amount of any such Losses incurred prior to, on or subsequent to Closing and
the amount of any Losses relating to unknown liabilities for which
indemnification is sought under Section 10.01(c), it being understood and agreed
that no claim for indemnification for such Losses may be made under
Section 10.01(c) unless and only to the extent that such Losses arising under
Section 10.01(c) in the aggregate, together with any such Losses arising from a
breach of Section 4.08 in the aggregate, shall together exceed $325,000. Any
claim for Environmental Losses under Section 10.01(a) arising from a breach of
Section 4.08 or arising under Section 10.01(c) from a third party claim shall be
subject to the limitations set forth in Section 10.04(f). No other claim under
Section 10.01(a), and no claim under any other provision of Section 10.01, shall
be entitled to receive the benefits contemplated by this Section 10.04(e).
(f) With respect to a claim for Losses occasioned by an Environmental Loss
under Section 10.01(a) arising from a breach of Section 4.17 or under
Section 10.01(c) arising from a third-party claim, no such Losses shall be
deemed to be incurred or suffered unless and only to the extent that such Losses
shall exceed $325,000 in the aggregate. In no event shall any of Buyers be
entitled to indemnification or to assert a claim under Section 10.01(a) or
10.01(c) for Losses occasioned by Environment Losses in excess of $1,950,000 in
the aggregate. For the purposes of this Section 10.04(f), (i) there shall be
included in the amount of Losses occasioned by an Environmental Loss the amount
of any such Losses incurred prior to, on or subsequent to Closing and (ii) there
shall be deducted from the aforesaid $1,950,000 the amount of any purchase price
adjustment granted pursuant to Section 8.05. No claim for Environmental Losses
shall be entitled to receive the benefits contemplated by Section 10.04(e) with
respect to Losses relating to unknown liabilities.
(g) In determining the amount of any Losses which relate to any Subject LP
(or any Subject Lower Tier Entity or Subject Property owned or controlled by it)
for which indemnification may be sought pursuant to Section 10.01 or
Section 10.02, such Losses shall be equal to the product of (i) the aggregate
percentage of limited partnership interest held by all of Buyers and their
respective Affiliates or all of Sellers and their respective Affiliates, as the
case may be, in such Subject LP as of the date such indemnification is paid and
(ii) the amount of such Losses.
(h) Nothing in this Agreement shall be deemed to prohibit any of Sellers
from seeking any indemnification, reimbursement or other amount to which it may
be entitled under the terms of the partnership agreement of any Partnership. If
any of Sellers or their Affiliates receives any indemnification, reimbursement
or other amounts from any Subject LP, Sellers, jointly and severally, agree to
pay to IFG promptly an amount equal to the product of the amount of
indemnification, reimbursement or other amounts so received and the aggregate
percentage of limited partnership interest in said Subject LP owned by IFG and
its Affiliates as of the date such indemnification, reimbursement or other
payment is paid.
(i) In measuring the Loss incurred by a Seller Indemnitee pursuant to
Section 10.02(d), if a claim shall be asserted against any of the Subsidiaries
or Lower Tier Entities in its capacity as a general partner of a Partnership or
Lower Tier Entity, either WFA or FWC (whichever most directly owns or controls
the Person against which such claim is made) shall be deemed to be the Seller
Indemnitee against which such claim was made, whether or not such claim is
asserted against WFA or FWC and (i) if such claim shall be paid, WFA or FWC, as
the case may be, shall be indemnified by Buyers in an amount equal to the lesser
of (x) the amount paid in satisfaction of such claim and (y) the fair market
value of the general partner Subsidiary or Lower Tier Entity, as the case may
be, on the date such claim was satisfied (without giving effect to any capital
contributions thereto on or after the date such claim was asserted and on or
prior to the date such claim was paid) and (ii) if such claim shall not be so
paid or otherwise satisfied, WFA or FWC, as the case may be, shall be
indemnified by Buyer in an amount equal to the fair market value of the general
partner Subsidiary or Lower Tier Entity, as the case may be, on the date such
claim accrued; provided, however, that in determining the fair market value of
the general partner Subsidiary or Lower Tier Entity, as the case may be, the
value of any general partner interest in a Partnership or Lower Tier entity
directly or indirectly beneficially owned by such general partner Subsidiary or
Lower Tier Entity, as the case may be, shall be determined pursuant to the
Approved Transaction Formula set forth in Article I of the Winthrop Amendment.
(j) If this Agreement expressly provides for indemnification (whether or
not such indemnification is enforceable) with respect to a Securities Claim and
if any party shall not perform its indemnification obligation under any
provision of this Agreement with respect to such Securities Claim or assert that
such indemnification claim is not valid or is not fully enforceable, the
breaching or asserting party no longer shall be entitled to any rights under
this Agreement (including under this Article X), and any amounts theretofore
received pursuant to any provision of this Agreement by such breaching or
asserting party and all other Buyers (in the case such breaching or asserting
party shall be any of Buyers) or all other Sellers (in the case such breaching
or asserting party shall be any of Sellers) shall promptly after such breach or
assertion be repaid to the party making the payment under this Agreement
together with interest thereon at the rate of 14 percent per annum.
(k) If a payment (a "Securities Claim Payment") is made to a Subject LP
with respect to a Securities Claim by (i) any of Sellers, Buyers, jointly and
severally, shall promptly (but in any case within ten days after receiving
actual notice of the Securities Claim Payment) after the Securities Claim
Payment is made, pay to Sellers an amount equal to the product of the Securities
Claim Payment and the percentage of the recipient Subject LP held by Buyers and
their Affiliates on the date the Securities Claim Payment is made or (ii) any of
Buyers, Sellers, jointly and severally, shall promptly (but in any case in
within ten days after receiving actual notice of the Securities Claim Payment)
after the Securities Claim Payment is made, pay to IFG an amount equal to the
Securities Claim Payment minus the product of the Securities Claim Payment and
the percentage of the recipient Subject LP held by Buyers and their Affiliates
on the date the Securities Claim Payment is made, in each case plus interest
thereon at the rate of 14 percent per annum. If any party breaches this Section
10.04(k) or asserts that any provision of this Section 10.04(k) is not valid or
is not fully enforceable, the breaching or asserting party no longer shall be
entitled to any rights under this Agreement (including under this Article X),
and any amounts theretofore received pursuant to any provision of this Agreement
by such breaching or asserting party and all other Buyers (in the case such
breaching or asserting party shall be any of Buyers) or all other Sellers (in
the case such breaching or asserting party shall be any of Sellers) shall
promptly after such breach or assertion be repaid to the party making the
payment under this Agreement.
(l) The amount of Losses for which Buyers or Sellers, respectively, shall
be required to provide indemnity hereunder shall not exceed in the aggregate the
adjusted aggregate purchase price hereunder.
(m) For the purposes of Sections 10.01(d) and 10.02(d), a nominee shall be
deemed to be serving as an officer or director of the general partner of a
Partnership at such times after the date hereof when either (i) such nominee
shall then be so serving or (ii) if not then so serving, an "Insignia Trigger
Event" (as such term is defined in the Stockholders' Agreement) shall not have
occurred.
Section 10.05 Contribution
To provide for just and equitable contribution, if (a) an indemnified party
makes a claim for indemnification pursuant to Section 10.01 or 10.02 (subject to
the limitations thereof) but it is found in a final judicial determination, not
subject to further appeal, that such indemnification may not be enforced in such
case, even though this Agreement expressly provides for indemnification in such
case or (b) any indemnified or indemnifying party seeks contribution under the
federal or state securities laws, then Buyers, jointly and severally, and
Sellers, jointly and severally, shall contribute to the Losses described in
Section 10.01 or 10.02 based on equitable considerations such as the relative
fault of Buyers in the aggregate and Sellers in the aggregate in connection with
the facts which resulted in such Losses. Buyers and Sellers agree that it would
be unjust and inequitable if the respective obligations of Buyers, on the one
hand, and Sellers on the other hand for contribution were determined by pro rata
or per capita allocation of the aggregate Losses. The parties entitled to be
indemnified pursuant to Section 10.01 or 10.02 in addition to Sellers and Buyers
also shall be entitled to contribution under this Section 10.05. Section 10.05
is intended to supersede any right to contribution under the federal or state
securities laws. The limitations contained in Section 10.04 also shall apply to
this Section 10.05.
XI. Survival of Representations and Warranties and Covenants
Section 11.01 Survival
(a) Subject to Section 10.04 and Section 11.01(b), all representations,
warranties, covenants and agreements contained in this Agreement shall, in
accordance with the terms of this Agreement, survive the Closing, each HUD
Closing and each Subsequent Closing under this Agreement notwithstanding any
investigation conducted by or on behalf of any party with respect thereto.
(b) Notwithstanding any other provision of this Agreement to the contrary,
including but not limited to Section 4.08, other than with respect to the
representations and warranties set forth in Section 4.17, no representation or
warranty of any kind with respect to the physical condition and state of repair
of any Property shall survive the applicable HUD Closing with respect to
Properties owned directly or indirectly by the HUD Entities, or the Closing with
respect to the Properties owned by the other Subject LPs and Subject Lower Tier
Entities.
Section 11.02 [Omitted]
XII. Termination
Section 12.01 Termination
(a) This Agreement and the transactions contemplated hereby may be
terminated at any time on or prior to the Closing Date:
(i) by the mutual written consent of the parties hereto;
(ii) by Buyers:
(A) if any material representation or warranty of Sellers made in this
Agreement was untrue in any material respect when made, and such breach is not
cured within 20 days of Sellers' receipt of written notice from Buyers that such
default exists or has occurred; or
(B) if Sellers shall have defaulted in any material respect in the
performance of any covenant, agreement or obligation under this Agreement, and
such default is not cured within 20 days of Sellers' receipt of written notice
from Buyers that such default exists or has occurred; or
(C) if there shall occur an Event of Bankruptcy (defined below) with
respect to any of Sellers; or
(D) if termination by Buyers is permitted under Section 8.05 or
Section 7.07; or
(E) if the conditions to Buyers' obligations hereunder cannot be satisfied
by the Closing Date for any reason other than a breach by Buyers;
(iii) by Sellers:
(A) if any material representation or warranty of Buyers made in this
Agreement was untrue in any material respect when made, and such breach is not
cured within 20 days of Buyers' receipt of written notice from Sellers that such
breach exists or has occurred; or
(B) if Buyers shall have defaulted in the performance in any material
respect of any covenant, agreement or obligation under this Agreement, and such
default is not cured within 20 days of Buyers' receipt of written notice from
Sellers that such default exists or has occurred; or
(C) if there shall occur an Event of Bankruptcy with respect to Buyers; or
(D) if the conditions to Sellers' obligations hereunder cannot be satisfied
by the Closing Date for any reason other than a breach by any of Sellers.
As used herein, an "Event of Bankruptcy" shall be deemed to have occurred
with respect to a Person if: (a) such Person makes an assignment for the benefit
of creditors; (b) such Person files a voluntary petition in bankruptcy; (c) such
Person is adjudged a bankrupt or insolvent, or there is entered against such
Person any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law, rule or regulation; or (d)
such Person seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator of such Person or of all or any substantial part of such
Person's properties.
(iv) By either Buyers or Sellers if the Closing has not occurred by
November 1, 1997.
(b) This Agreement and the transactions contemplated hereby insofar as they
relate to the transactions to be consummated at each HUD Closing may be
terminated at any time on or prior to such HUD Closing Date:
(i) by the mutual written consent of the parties hereto;
(ii) by Buyers:
(A) if any material representation or warranty of Sellers made in this
Agreement in so far as it relates to the HUD Entities or the Properties owned by
any of them was untrue in any material respect when made, and such breach is not
cured within 20 days of Sellers' receipt of written notice from Buyers that such
default exists or has occurred; or
(B) if Sellers shall have defaulted in any material respect in the
performance of any covenant, agreement or obligation under this Agreement, and
such default is not cured within 20 days of Sellers' receipt of written notice
from Buyers that such default exists or has occurred; or
(C) if there shall occur an Event of Bankruptcy (defined below) with
respect to any of Sellers; or
(D) if termination is permitted under Section 8.05 or Section 7.07 as the
result of the disposition of a HUD Entity or real property owned directly or
indirectly by any HUD Entity;
(E) if the conditions to Buyers' obligations hereunder with respect to such
HUD Closing cannot be satisfied by such HUD Closing Date for any reason other
than a breach by Buyers; or
(F) if IFG or its permitted transferee has elected to exercise the option
provided under Section 2.1 of the Stockholders' Agreement;
(iii) by Sellers:
(A) if any material representation or warranty of Buyers made in this
Agreement was untrue in any material respect when made, and such breach is not
cured within 20 days of Buyers' receipt of written notice from Sellers that such
breach exists or has occurred; or
(B) if Buyers shall have defaulted in the performance in any material
respect of any covenant, agreement or obligation under this Agreement, and such
default is not cured within 20 days of Buyers' receipt of written notice from
Sellers that such default exists or has occurred; or
(C) if there shall occur an Event of Bankruptcy with respect to Buyers; or
(D) if the conditions to Sellers' obligations hereunder with respect to
such HUD Closing cannot be satisfied by such HUD Closing Date for any reason
other than a breach by any of Sellers; or
(E) if WFA or its permitted transferees have elected to exercise the option
provided under Section 2.2 of the Stockholders' Agreement;
(iv) by either Buyers or Sellers if any HUD Closing has not occurred by May
30, 1998.
(c) This Agreement and the transactions contemplated hereby insofar as they
relate to the transactions to be consummated at any Subsequent Closing Date may
be terminated at any time on or prior to such Subsequent Closing Date (provided
that if the sole reason for such termination right is the failure of the
applicable HUD Closing to occur, such termination shall relate only to the sale
of the HUD Units):
(i) by the mutual written consent of the parties hereto;
(ii) by Buyers:
(A) if any material representation or warranty of Sellers made in Sections
4.01, 4.02, 4.03, 4.04, 4.05, 4.26, 4.32, 4.33 and 4.34 of this Agreement was
untrue in any material respect when made, and such breach is not cured within 20
days of Sellers' receipt of written notice from Buyers that such default exists
or has occurred; or
(B) if Sellers shall have defaulted in any material respect in the
performance of any covenant, agreement or obligation under this Agreement, and
such default is not cured within 20 days of Sellers' receipt of written notice
from Buyers that such default exists or has occurred; or
(C) if there shall occur an Event of Bankruptcy (defined below) with
respect to any of Sellers;
(D) if the conditions to Buyers' obligations hereunder with respect to such
Subsequent Closing cannot be satisfied by such Subsequent Closing Date for any
reason other than a breach by Buyers; or
(E) if IFG or its permitted transferee has elected to exercise the option
provided under Section 2.1 of the Stockholders' Agreement;
(iii) by Sellers:
(A) if any material representation or warranty of Buyers made in this
Agreement was untrue in any material respect when made, and such breach is not
cured within 20 days of Buyers' receipt of written notice from Sellers that such
breach exists or has occurred; or
(B) if Buyers shall have defaulted in the performance in any material
respect of any covenant, agreement or obligation under this Agreement, and such
default is not cured within 20 days of Buyers' receipt of written notice from
Sellers that such default exists or has occurred; or
(C) if there shall occur an Event of Bankruptcy with respect to Buyers; or
(D) if the conditions to Sellers' obligations hereunder with respect to
such Subsequent Closing cannot be satisfied by such Subsequent Closing Date for
any reason other than a breach by any of Sellers; or
(E) if WFA or its permitted transferees have elected to exercise the option
provided under Section 2.2 of the Stockholders' Agreement;
(iv) by either Buyers or Sellers if such Subsequent Closing has not
occurred by the date which is set forth on Schedule 1.01(a).
Section 12.02 Manner of Exercise
In the event of the termination of this Agreement pursuant to
Section 12.01, written notice thereof shall forthwith be given to the
nonterminating parties, and this Agreement shall terminate and the transactions
contemplated hereunder shall be abandoned without further action by any party
hereto.
Section 12.03 Effect of Termination
In the event of the termination of this Agreement pursuant to
Section 12.01, all obligations of the parties hereunder shall terminate, except
for the respective obligations of any of the parties under Section 6.08, Article
XIII and Article XIV, if applicable.
XIII. Liquidated Damages
Section 13.01 General
No termination of this Agreement pursuant to Section 12.01(c)(ii) or
Section 12.01(c)(iii) shall relieve a defaulting or breaching party from any
liability to the other parties hereto for or in respect of such default or
breach, unless (i) Sellers shall have requested that Buyers pay, and Buyers
shall have paid or caused to be paid, liquidated damages as provided in
Section 13.02(a), in which case Buyers shall have no further liability of any
kind whatsoever, or (ii) Buyers shall have requested that Sellers pay, and
Sellers shall have paid, liquidated damages as provided in Section 13.02(b), in
which case Sellers shall have no further liability of any kind whatsoever.
Section 13.02 Certain Terminations
(a) If Sellers properly terminate this Agreement and the transactions
contemplated hereby to be consummated on any Subsequent Closing Date pursuant to
Sections 12.01(c)(iii) (A) through (C), then, as liquidated damages and not as a
penalty, Buyers shall pay Sellers an aggregate amount in cash equal to 25% of
the purchase price to be paid for Units to be sold at such Subsequent Closing.
(b) If Buyers properly terminates this Agreement and the transactions
contemplated hereby insofar as they relate to transactions to be consummated on
any Subsequent Closing Date pursuant to Sections 12.01(c)(ii) (A) through
(C), then as liquidated damages and not as a penalty, Sellers shall pay Buyers
an aggregate amount in cash equal to 50% of the purchase price to be paid for
Units to be sold at such Subsequent Closing.
(c) Any amount payable pursuant to Section 13.02(a) or Section 13.02(b)
shall be due and payable immediately upon receipt by any of Sellers or any of
Buyers of such termination notice by the non-terminating party, together with
interest thereon at the rate of 14 per cent per annum from such date until the
date of payment.
(d) If facts or circumstances exist which would give rise to a right of
termination by Buyer under Section 12.01(c)(ii)(A) or Section 12.01(c)(ii)(B),
and Buyer gives the notice provided for therein and a cure is not effected
within 20 days of Sellers' receipt of such notice, then Buyer may, in its sole
discretion, both require (subject to the price adjustments provided for under
Section 8.05 and Section 2.02) such Subsequent Closing to occur and, subsequent
thereto, recover from Sellers any damages and any other relief available at law
or equity under this Agreement or applicable law.
(e) It is the express agreement and understanding of the parties that
Buyers' election to waive its right to terminate this Agreement and to elect to
close the transactions contemplated by this Agreement in accordance with
Section 13.02(d) shall not constitute a waiver of Buyers' otherwise applicable
rights under this Agreement and applicable law with respect to such facts and
circumstances even though the Buyer is fully aware of the default or breach at
the time of a Subsequent Closing under this Agreement.
XIV. Miscellaneous
Section 14.01 Assignment
Except as otherwise provided herein, this Agreement may not be assigned by
any of the parties hereto without the written consent of the other parties
hereto.
Section 14.02 Certain Provisions
(a) Insofar as any representation, warranty, covenant or agreement set
forth in this Agreement is intended to apply to a HUD Entity for purposes of
satisfying closing conditions, any reference in such representation, warranty,
covenant or agreement to any Partnership, Lower Tier Entity or Property shall be
deemed a reference solely to such HUD Entity or a Property owned by such HUD
Entity.
(b) Insofar as any representation, warranty, covenant or agreement set
forth in this Agreement is intended to apply to an Other Seller, any reference
in such representation, warranty, covenant or agreement to Sellers, Units, or
Other Units shall be deemed a reference solely to such Other Seller and to the
Units or Other Units owned by such Other Seller.
Section 14.03 Brokerage Fees
Each party hereto represents and warrants to the other parties that it has
not engaged a broker or finder in connection with or as a result of any of the
transactions contemplated by this Agreement.
Section 14.04 Further Actions
At any time and from time to time before and after the Closing, each party
agrees, at its expense, to take such actions and to execute and deliver such
documents as may be reasonably requested by any other party to effectuate the
purposes of this Agreement.
Section 14.05 Availability of Equitable Remedies
Since a breach of the provisions of this Agreement could not adequately be
compensated by money damages, any party shall be entitled, after the Closing, in
addition to any other right or remedy available to it, to an injunction
restraining such breach or a threatened breach and to specific performance of
any such provision of this Agreement, and in either case no bond or other
security shall be required in connection therewith, and the parties hereby
consent to the issuance of such an injunction and to the ordering of specific
performance.
Section 14.06 Notices
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, by Federal Express, Express Mail, or similar overnight
delivery or courier service, or delivered (in person or by telecopy, telex, or
similar telecommunications equipment) against receipt to the party to whom it is
to be given at the address of such party set forth in the preamble to this
Agreement (or to such other address as the party shall hereafter furnish to the
other parties hereto in writing in accordance with the provisions of this
Section 14.06). Any notice addressed to Buyers shall be addressed to the
attention of: General Counsel, with a copy to Proskauer Rose LLP, 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esq. Any notice to
Sellers shall be addressed to the attention of: General Counsel with a copy to
Rosenman & Colin LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000- 2585,
Attention: Xxxxxx X. Xxxxxxx, Esq. and a further copy to Apollo Real Estate
Advisors L.P., 1999 Avenue of the Stars, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxxxxx X. Xxxxxx. Any notice or other communication given by
certified mail shall be deemed given three days after the time of certification
thereof, except for a notice changing a party's address which will be deemed
given at the time of receipt thereof. Any notice given by other means permitted
by this Section 14.06 shall be deemed given at the time of receipt thereof.
Section 14.07 Waiver
Any waiver by any party of a breach of any term of this Agreement shall not
operate as or be construed to be a waiver of any other breach of that term or of
any breach of any other term of this Agreement. The failure of a party to insist
upon strict adherence to any term of this Agreement on one or more occasions
will not be considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
Any waiver must be in writing.
Section 14.08 Binding Effect
The provisions of this Agreement shall be binding upon and inure to the
benefit of Sellers, Buyers and their respective successors and permitted
assigns.
Section 14.09 No Third-Party Beneficiaries
This Agreement does not create, and shall not be construed as creating, any
rights enforceable by any Person not a party to this Agreement, except for the
additional persons (other than any limited partner of any Partnership in such
capacity) that may be entitled to indemnification or contribution pursuant to
Section 10.01, 10.02 or 10.05, it being understood and agreed that no such
limited partner in such capacity shall be entitled to indemnification or
contribution hereunder.
Section 14.10 Severability
If any provision of this Agreement is invalid, illegal, or unenforceable,
the balance of this Agreement shall remain in effect, and if any provision is
inapplicable to any Person or circumstance, it shall nevertheless remain
applicable to all other Persons and circumstances.
Section 14.11 Headings
The headings in this Agreement are solely for convenience of reference and
shall not be deemed a part of or given effect in the construction or
interpretation of this Agreement.
Section 14.12 Counterparts; Governing Law
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. It shall be governed by and construed in accordance with
the laws of New York, without giving effect to conflict of laws rules. The
parties agree that any action, suit, or proceeding arising out of, based on, or
in connection with this Agreement or the transactions contemplated hereby may be
brought only in the United States District Court for the Southern District of
New York or the Supreme Court of New York, New York County, and each party
covenants and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such action, suit, or proceeding, any claim that it is not
subject personally to the jurisdiction of such court, that its property is
exempt or immune from attachment or execution, that the action, suit, or
proceeding is brought in an inconvenient forum, that the venue of the action,
suit, or proceeding is improper, or that this Agreement or the subject matter
hereof may not be enforced in or by such court.
Section 14.13 Attorneys' Fees
In any action or proceeding brought by a party to enforce any provision of
this Agreement, the prevailing party shall be entitled to recover the reasonable
costs and expenses incurred by it in connection with that action or proceeding
(including, but not limited to, attorneys' fees).
Section 14.14 Waiver of Trial by Jury
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
DEALINGS BETWEEN OR AMONG THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION AND THE RELATIONSHIPS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS
INTENDED TO ENCOMPASS ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO THIS AGREEMENT, AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY
HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
Section 14.15 [Omitted]
Section 14.16 Construction of Documents
The parties hereto acknowledge that they were represented by counsel in
connection with the negotiation and drafting of this Agreement and the documents
to be delivered pursuant hereto, none of which shall be subject to the principle
of construing their meaning against the party which drafted the document.
Section 14.17 Whole Agreement; Annexes, Exhibits and Schedules; Amendments
This Agreement and the Additional Documents contain the entire agreement of
the parties hereto and thereto in respect of the transactions contemplated
hereby and thereby, and all prior agreements among or between such parties,
whether oral or written, with respect to such transactions are superseded by the
terms of this Agreement and the Additional Documents. Annexes, Exhibits and
Schedules attached hereto or referred to herein, shall be deemed as fully a part
of this Agreement as if set forth herein in full. This Agreement may be amended
only in a writing signed by the party to be bound thereby.
Section 14.18 Knowledge
For purposes of this Agreement (other than Section 4.30), the term "to the
knowledge of Sellers" or any similar term shall mean the actual knowledge after
reasonable inquiry of any of Xxxxxxx X. Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx X.
XxXxxxxx, Xxx Xxxxxxx, Xxxxx Xxxxx and Xxxxxxx Xxxxxxx.
Section 14.19 Expenses
Each of the parties hereto shall bear its own expenses in connection with
(i) the preparation and negotiation of this Agreement and (ii) the transactions
contemplated by this Agreement, and all such expenses of Sellers shall be paid
by Persons other than those to be acquired by Buyers and their Affiliates under
this Agreement.
Section 14.20 Definitions
The following terms are defined in the following Sections:
Defined Term Section
Acceleration Event 10.01(g)
Additional Document 10.01(c)
Adjusted Purchase Price Schedule 2.02(c)
Affected Transaction 8.05(a)
Affiliate 4.01(c)
Amended Certificate 1.02(a)(iv)
Buyer Indemnitees 10.01
Buyers Recitals
Change in the general partner 6.11
Closing 3.01
Closing Date 3.01
Code 4.14(a)
Corporate Intermediate Entities 4.01(a)(i)
Corporate Lower Tier Entities 4.03(c)
Debt 4.13(a)
Deemed Amount 4.08
Environment 4.17(i)
Environmental Laws 4.17(i)
Environmental Liabilities 4.17(i)
Environmental Losses 8.05(a)
ERISA 4.13(a)
ERISA Affiliate 10.01(c)
Event of Bankruptcy 12.01(a)(iii)
Exchange Act 6.10
Existing Agreements 4.11
Defined Term Section
Existing Documents 4.30(a)
Existing Indebtedness 4.30(a)
Financial Statements 4.07(a)
FWC Recitals
GAAP 4.13(a)
Hazardous Substances 4.17(i)
HSR Act 6.04
HUD 4.12
HUD Closings 3.01
HUD Closing Dates 3.01
HUD Entities 4.01(a)(iii)
HUD Units 1.01(c)(i)
IFG Recitals
Improvement Certificates 4.30(k)
Improvements 4.30(a)
Intangibles 4.22
Interest Savings 10.01(g)
Interests Recitals
Intermediate Entities 4.01(a)(i)
Leases 4.30(a)
Leasing Commissions 4.30(a)
Legal Requirements 4.30(a)
Lien 4.01(c)
LLC Recitals
Loan Documents 4.30(a)
Losses 10.01
Lower Tier Entities 4.01(a)(ii)
Defined Term Section
Managed Lower Tier Entities 4.01(a)(ii)
Managed LPs 4.01(a)(i)
Managed Property 4.06
Management Agreements 4.15(b)
Material Agreements 4.15(a)
Most Current Balance Sheet 4.07(a)
Organizational Documents 4.03(b)
Other LPs Recitals
Other Sellers Recitals
Other Units Recitals
Partnership 4.01(a)(i)
Partnership Intermediate Entities 4.01(a)(i)
Partnership Lower Tier Entities 4.03(c)
Permitted Exceptions 4.30(a)
Permitted Refinancing Debt 7.02(d)
Person 4.01(c)
Property or Properties 4.06
Real Property 4.17(a)
Returns 4.14
Scheduled Ownership Percentage 4.08
SEC 4.25
SEC Filings 4.25
Securities Act 6.10
Securities Claim 10.03(a)(iii)
Sellers Recitals
Sellers' Knowledge 4.30(a)
Service Contracts 4.30(a)
Defined Term Section
Shares Recitals
Stockholders' Agreement 1.02(a)(ii)
Subject Lower Tier Entities 4.01(a)(ii)
Subject LPs Recitals
Subject Property 4.06
Subsequent Closing 3.01
Subsequent Closing Date 3.01
Takeover Proposal 6.17
Tax 4.14
Tax Authority 4.14
Tax Proceeding 4.14
Title Policies 4.30(b)
Title Reports 4.30(b)
to the knowledge of Sellers 14.18
Units Recitals
WFA Recitals
WFA Interest Recitals
Winthrop Amendment 1.02(a)(iv)
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
BUYERS:
INSIGNIA FINANCIAL GROUP, INC.
By:
Name:
Title:
IPT I LLC
By: ____________________, the Managing
Member
By:________________________________
Name:
Title:
SELLERS:
WINTHROP FINANCIAL ASSOCIATES
By: Linnaeus Associates Limited Partnership,
its general partner
By: X.X. Realty, L.P.,
its general partner
By: Londonderry Acquisition II Limited
Partnership, its general partner
By: LDY-GP Partners II, L.P.,
its general partner
By: Londonderry Acquisition
Corporation II, Inc.,
its general partner
By: __________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
FIRST WINTHROP CORPORATION
By:___________________________________
Name:
Title:
LON-Chestnut Hill Associates L.L.C.
By: AP GP WIN MASTER, L.P.,
its managing member
By: AP GP Win Master, Inc.,
its general partner
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
LON-DFW Apartment Associates, L.L.C.
By: AP GP WIN MASTER, L.P.,
its managing member
By: AP GP Win Master, Inc.
its general partner
By_______________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
LON-DFW Residential Associates L.L.C.
By: AP GP WIN MASTER, L.P.,
its managing member
By: AP GP Win Master, Inc.,
its general partner
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
LON-Olde Mill Associates L.L.C.
By: AP GP WIN MASTER, L.P.,
its managing member
By: AP GP Win Master, Inc.,
its general partner
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
LON-Venture III Associates L.L.C.
By: AP GP WIN MASTER, L.P.,
its managing member
By: AP GP Win Master, Inc.,
its general partner
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
Riverside Acquisition L.P.
By: WFA Acquisition Corp.,
its general partner
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
Acquarius Acquisition L.P.
By: Londonderry Acquisition II Limited
Partnership, its general partner
By: LDY-GP Partners II, L.P.,
its general partner
By: Londonderry Acquisition
Corporation II, Inc.,
its general partner
By: __________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
LON-Texas Associates L.L.C.
By: AP GP WIN MASTER, L.P.,
its managing member
By: AP GP Win Master, Inc.,
its general partner
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
LON-Westbury Associates L.L.C.
By: AP GP WIN MASTER, L.P.,
its managing member
By: AP GP Win Master, Inc.,
its general partner
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
Londonderry Acquisition IV Limited
Partnership
By: LDY-GP Partners IV, L.P.,
its general partner
By: Londonderry Acquisition
Corporation IV, Inc.,
its general partner
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
XXX-XXX Associates L.L.C.
By: AP GP WIN MASTER, L.P.,
its managing member
By: AP GP Win Master, Inc.,
its general partner
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
LON-WGT Associates L.L.C.
By: AP GP WIN MASTER, L.P.,
its managing member
By: AP GP Win Master, Inc.,
its general partner
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
Londonderry Acquisition III
Limited Partnership
By: LDY-GP Partners III, L.P.,
its general partner
By: Londonderry Acquisition
Corporation III, Inc.,
its general partner
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Three Winthrop Properties, Inc.
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
WFC Realty Co., Inc.
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
Winthrop Financial Co., Inc.
By:______________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
List of Exhibits
A. Assignment of Units
B. Assignment of Interests
C. Stockholders' Agreement
D. Second Amended and Restated Agreement of Limited Partnership of
Winthrop
Financial Associates, A Limited Partnership
E. Amendment to the Certificate of Limited Partnership of Winthrop
Financial
Associates, A Limited Partnership
F. Press Release
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G. Release And Covenant Not to Xxx by Other Sellers
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H. Non-Competition Agreement
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I. Guaranty of Apollo Entities
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Annex A
Other Sellers
Name Form of Organization
LON-DFW Apartment Associates L.L.C. Limited Liability Company
LON-DFW Residential Associates L.L.C. Limited Liability Company
LON-Texas Associates L.L.C. Limited Liability Company
LON-Westbury Associates L.L.C. Limited Liability Company
LON-Venture III Associates L.L.C. Limited Liability Company
LON-Chestnut Hill Associates L.L.C. Limited Liability Company
XXX-XXX Associates L.L.C. Limited Liability Company
LON-WGI Associates L.L.C. Limited Liability Company
LON-Olde Mill Associates L.L.C. Limited Liability Company
Aquarius Acquisition, L.P. Limited Partnership
Londonderry Acquisition IV Limited Partnership Limited Partnership
Londonderry Acquisition III Limited Partnership Limited Partnership
Riverside Acquisition, L.P. Limited Partnership
WFC Realty Co., Inc. Corporation
Winthrop Financial Associates, A Limited Limited Partnership
Partnership
One Winthrop Properties, Inc. Corporation
Barrington Parc Corporation Corporation
Crestmont Marietta Corporation Corporation
Real Estate Venture Fund II Limited Partnership
Schedule 10.01(c)
Additional Documents
- Each Assignment of Units or Other Units Under this Agreement
- Each Assignment of Interests Under this Agreement
- The Winthrop Amendment
- The Amended Certificate
- The Stockholders' Agreement
- The Non-Competition Agreement
- The Guaranty
- The amendments to the Organizational Documents of FWC and the
Subsidiaries
- The Core Representation Letter, dated the Closing Date, from
WFA and FWC to Buyers
- Addendum to Article X of this Agreement, dated the Closing
Date, among
Sellers and Buyers
