SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) August 17, 1995
Century Properties Fund XVI
(Exact Name of Registrant as Specified in Its Charter)
California
(State or Other Jurisdiction of Incorporation)
0-10435 94-2704651
(Commission File Number) (I.R.S. Employer Identification No.)
5665 Northside Drive, N.W., Atlanta, Georgia 30328
(Address of Principal Executive Offices) (Zip Code)
(404) 916-9090
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Item 1. Change in Control
On August 17, 1995, the stockholders of National Property
Investors, Inc. ("NPI"), the sole shareholder of NPI Equity
Investments II, Inc. ("NPI Equity"), the entity which controls
Fox Realty Investors and Fox Capital Management Corporation
("FCMC"), the general partners of Registrant, entered into an
agreement to sell to IFGP Corporation, an affiliate of Insignia
Financial Group, Inc. ("Insignia"), all of the issued and
outstanding stock of NPI. The sale of the stock is subject to
the satisfaction of certain conditions (including governmental
and third party consents and other conditions not within the
control of the parties to the agreement) and is scheduled to
close in January 1996. Upon Closing, it is expected that the
current officers and directors of NPI Equity and FCMC will resign
and Insignia will elect new officers and directors.
Item 7. Financial Statements and Schedules
(c) Exhibits
2. NPI, Inc. Stock Purchase Agreement, dated as of
August 17, 1995
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
CENTURY PROPERTIES FUND XVI
By: Fox Capital Management Corporation,
its general partner
Date: August 21, 1995 By: /s/ Michael L. Ashner
Michael L. Ashner,
President
EXHIBIT INDEX
Exhibit Page No.
2. NPI, Inc. Stock Purchase Agreement, 5
dated as of August 17, 1995
NPI INC. STOCK PURCHASE AGREEMENT
Stock Purchase Agreement dated as of August 17, 1995, among Insignia
Financial Group, Inc., a Delaware corporation with offices at One Insignia
Financial Plaza, P.O. Box 1089, Greenville, South Carolina 29602 ("Insignia");
and IFGP Corporation, a Delaware corporation with offices at One Insignia
Financial Plaza, P.O. Box 1089, Greenville, South Carolina 29602; ("IFGP" and,
together with Insignia, the "Buyer");
and
AP-NPI II, L.P., a Delaware limited partnership with offices at 1301 Avenue of
the Americas, New York, New York 10019 ("AP-NPI II"); Michael L. Ashner, with
an address at 17 Buttonwood Drive, Dix Hills, New York 11746; Martin Lifton,
with an address at 101 Wheatley Road, Old Westbury, New York 11568; and Arthur
N. Queler, with an address at 7421 Campo Florido, Boca Raton, Florida 33433
(such individuals being herein collectively called the "NPI Principals"); and
Steven Lifton, with an address at 6 Partridge Drive, Roslyn, New York 11576;
G. Bruce Lifton, with an address at 100 Cameron Glen Drive, Atlanta, Georgia
30328; Judie Lifton, with an address at 118 East 60th Street, Apt. 19C, New
York, New York 10022; Susan Ashner, with an address at 10 Buttonwood Drive,
Dix Hills, New York 11746; Anise Queler, with an address at 7421 Campo
Florido, Boca Raton, Florida 33433; Robert Lifton, Trustee, under the Martin
Lifton 1994 Family Trust, with an address c/o Martin Lifton at 101 Wheatley
Road, Old Westbury, New York 11568; and Robert Lifton, Trustee, under the
Elinor Lifton 1994 Family Trust, with an address c/o Martin Lifton at 101
Wheatley Road, Old Westbury, New York 11568 (such additional individuals and
trusts, together with the NPI Principals, collectively called the "NPI Family
Parties"; and together with AP-NPI II, the "Sellers");
and
National Property Investors, Inc., a Delaware corporation with offices at 5665
Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328 ("NPI Inc."); NPI-AP
Management, L.P., a Delaware limited partnership with offices at 5665
Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328 ("NPI-AP
Management"); NPI Property Management Corporation, a Florida corporation with
offices at 5665 Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328 ("NPI
Property Management"); DeForest Capital I Corporation, a Delaware corporation
with offices at 5665 Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328
("DFC I"); DeForest Ventures II L.P., a Delaware limited partnership with
offices at 5665 Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328
("Ventures II"); DeForest Ventures I L.P., a Delaware limited partnership with
offices at 5665 Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328
("Ventures I"); DeForest Capital II Corporation, a Delaware corporation with
offices at 5665 Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328,
("DFC II"); QAL Associates, a Georgia general partnership with offices at 5665
Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328 ("QAL"); QALA II
Associates, a Georgia general partnership with offices at 5665 Northside
Drive, N.W., Suite 370, Atlanta, Georgia 30328 ("QALA II"); AP-NPI L.P., a
Delaware limited partnership with offices at 1301 Avenue of the Americas, New
York, New York 10019 ("AP-NPI"); AP-NPI X L.L.C., a Delaware limited liability
corporation with offices at 1301 Avenue of the Americas, New York, New York
10019 ("AP-NPIX"); AP-NPI III, L.P., a Delaware limited partnership with
offices at 1301 Avenue of the Americas, New York, New York 10019
("AP-NPI III"); NPI Equity Investments, Inc., a Florida corporation with
offices at 5665 Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328
("NPI Equity"); NPI Equity Investments II, Inc., a Florida corporation with
offices at 5665 Northside Drive, N.W., Suite 370, Atlanta, Georgia 30328 ("NPI
Equity II" and together with NPI Inc., NPI-AP Management, DFC I, QAL, QALA II,
Ventures II, NPI Property Management, Ventures I, DFC II, AP-NPI, AP-NPIX, AP-
NPI III, NPI Equity and NPI Equity II, collectively, the "NPI Parties").
WITNESSETH:
WHEREAS, Sellers wish to sell to Buyer, and Buyer wishes to purchase from
Sellers, all of the issued and outstanding common stock, par value $.01 per
share, of NPI Inc. (the "NPI Shares"), 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; and
WHEREAS, pursuant to a Master Agreement (the "Master Agreement") dated as
of November 21, 1994, as amended, with PaineWebber Real Estate Securities,
Inc. ("PaineWebber") and a related Loan Agreement with Ventures I dated as of
November 30, 1994 and a related Loan Agreement with Ventures II dated as of
November 21, 1994, Ventures I has borrowed and there remains unpaid on the
date hereof an aggregate of $15,159,392.00 and Ventures II has borrowed and
there remains unpaid on the date hereof an aggregate of $18,154,333.71,
respectively (collectively, the "PaineWebber Debt"); and
WHEREAS, the limited partners of Ventures I that are not parties to this
Agreement have consented to this Agreement and the transactions contemplated
hereby in an agreement by and between Ventures I, DFC I and PD Associates,
L.L.C., dated as of the date hereof, a copy of which is attached as
Exhibit A; and in an agreement, dated as of the date hereof, a copy of which
is attached as Exhibit B, by and among Ventures I, DFC I, Emmet J. Cashin,
Jr., Trustee of the Survivors Trust under the Cashin 1990 Trust, Jarold A.
Evans, Trustee of the Jarold A. Evans Revocable Trust, dated April 19, 1989,
J.E. Capital Partners, and W. Patrick McDowell, Trustee of the McDowell
Family Revocable Trust, dated April 28, 1978, as amended; and
WHEREAS, the general partners of Fox Realty Investors, a California
general partnership ("FRI"), have entered into a Second Amended and Restated
Partnership Agreement (the "Fox Amendment"), dated the date hereof, further
amending and restating the Amended and Restated Partnership Agreement entered
into as of December 6, 1993, of FRI, as amended by the First Amendment
thereto entered into as of August 8, 1994 (together with the Fox Amendment,
the "FRI Partnership Agreement"), a copy of which is attached as Exhibit C;
and
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 Sale and Purchase
1.01 Sale and Purchase
(a) At the Closing (defined below), each of Sellers shall
sell to IFGP and IFGP shall purchase from each of Sellers the number of NPI
Shares set forth opposite such Seller's name on Schedule 1.01-C hereto, such
NPI Shares to consist in the aggregate of all of the issued and outstanding
capital stock of NPI Inc., for an aggregate purchase price of $1,000,000.00,
in cash (the "Purchase Price").
(b) Buyer shall not be required to purchase any of the NPI
Shares to be sold hereunder unless all of the NPI Shares are sold to Buyer
hereunder at the Closing.
1.02 Delivery of Stock Certificates and Purchase Price.
(a) The Sellers shall deliver to IFGP at the Closing stock
certificates representing the NPI Shares being sold by them hereunder duly
endorsed in blank or accompanied by stock powers duly endorsed in blank, in
each case in proper form for transfer, with such proof of power and authority
of the Person (defined below) endorsing such stock certificates or stock
powers as shall be requested by IFGP, and with all required documentary
stamps affixed thereto, and to the extent Buyer reasonably requests, all
appropriate estate tax waivers, in form and substance reasonably satisfactory
to Buyer.
(b) At the Closing, IFGP shall pay the Purchase Price by paying
to each Seller entitled to receive a portion of the Purchase Price as set
forth on Schedule 1.01-C, 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 Buyer at least two business days prior to
the Closing Date (defined below).
II. [Intentionally Omitted]
III. Closing
3.01 The Closing
The closing of the transactions contemplated by Section 1.01 (the
"Closing") shall take place at the offices of Proskauer Rose Goetz &
Mendelsohn LLP, 1585 Broadway, New York, New York, at 10:00 A.M., local time,
on the same day as the closing of the transactions under the Partnership
Units Purchase Agreement dated as of the date hereof among the parties named
therein (the "Units Purchase Agreement"), or at such other time and place as
the parties shall hereafter agree (the "Closing Date").
3.02 Transactions at the Closing
The following transactions shall take place at the Closing, all of
which shall be deemed to have occurred simultaneously 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):
(a) Sellers shall deliver to Buyer the following:
(i) The stock certificates representing the NPI Shares
referred to in Section 1.02, duly endorsed in blank or accompanied by stock
powers duly endorsed in blank, in each case in proper form for transfer, with
such proof of power and authority of the person endorsing such stock
certificates or stock powers as shall be requested by Buyer, and with all
required documentary stamps affixed thereto, and to the extent Buyer
reasonably requests, all appropriate estate tax waivers, in form and substance
reasonably satisfactory to Buyer.
(ii) [Intentionally Omitted]
(iii) An opinion of Rosenman & Colin dated the Closing Date in
form and substance satisfactory to Buyer.
(iv) Evidence that all applicable waiting periods (and any
extensions thereof) relating to any transactions to be completed by any of the
Sellers or the NPI Parties under this Agreement under the HSR Act (defined
below) have expired or otherwise been terminated.
(v) Certificates from each of the Sellers (and from each of
the NPI Parties listed on Schedule 3.02(a.1)-C) which is not a natural person
or a trust, signed by its duly authorized general partners, officers,
managers or other legal representatives in form and substance satisfactory to
Buyer certifying its Organizational Documents (defined below), 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 Seller or NPI Party), incumbency of officers or others acting in a
representative capacity, due authorization of the transactions contemplated
hereby, accuracy of Sellers' and the NPI Parties' representations and
warranties, performance and compliance by Sellers and NPI Parties with all of
Sellers' and NPI Parties' covenants and agreements hereunder and satisfaction
of the conditions to Buyer's obligations hereunder to be satisfied by any of
Sellers or the NPI Parties and such other matters as Buyer shall reasonably
request.
(vi) Evidence in form and substance satisfactory to Buyer of
all consents received by Sellers or the NPI Parties pursuant to Section 6.06.
(vii) A certificate of the NPI Principals pursuant to Section
7.06, in form and substance satisfactory to Buyer, with respect to Affiliate
transactions.
(viii) A certificate of Sellers pursuant to Section 8.04 in form
and substance satisfactory to Buyer, with respect to the absence of any
material adverse change.
(ix) A certificate of the NPI Principals pursuant to Section
8.22, in form and substance satisfactory to Buyer, with respect to the
agreements listed on Schedule 3.02(a.2)-C (the "Other Agreements").
(x) Evidence that all directors and officers of the Acquired
Companies (defined below) have submitted their resignations or been removed
effective as of the Closing Date.
(b) Buyer shall deliver to Sellers the following:
(i) The Purchase Price as specified in Section 1.02.
(ii) [Intentionally Omitted]
(iii) An opinion of Proskauer Rose Goetz & Mendelsohn LLP dated
the Closing Date in form and substance satisfactory to Sellers.
(iv) Evidence that all applicable waiting periods (and any
extensions thereof) relating to any transactions to be completed by Buyer
under this Agreement under the HSR Act have expired or otherwise been
terminated.
(v) Certificates from each of Insignia and IFGP, signed by its
duly authorized officers or other legal representatives in form and substance
satisfactory to Sellers certifying its Organizational Documents, valid
existence and good standing (in all jurisdictions where failure to qualify
would have a material adverse effect on the financial condition or operations
of Insignia), incumbency of officers or others acting for such entity in a
representative capacity, due authorization of the transactions contemplated
hereby, accuracy of Buyer's representations and warranties, performance and
compliance by Buyer with all of Buyer's covenants and agreements hereunder and
satisfaction of the conditions to Sellers' obligations hereunder to be
satisfied by Buyer and such other matters as Sellers shall reasonably request.
(vi) A certificate of Buyer pursuant to Section 9.07 in form and
substance satisfactory to Sellers.
(vii) A certificate from Buyer pursuant to Section 9.08 in form
and substance satisfactory to Sellers with respect to no material adverse
change.
(viii) Evidence that the Investment Capital Contribution (defined
below) required to be delivered under Section 9.10 has been made.
IV. Representations and Warranties of Sellers and the NPI Parties
Sellers and the NPI Parties each, jointly and severally, represent and
warrant to Buyer as of the date hereof as follows:
4.01 Relationship of Sellers, the NPI Parties and their Affiliates
Each of Sellers and each of the NPI Parties is an individual or
entity of the type and/or acting in the capacity described in this Agreement.
The Sellers own, directly or indirectly, all of the legal and beneficial
equity interests in NPI Inc. and its direct and indirect subsidiaries as
listed on Schedule 4.01.1-C ("Subsidiaries" and together with NPI Inc., the
"Acquired Companies"). The Acquired Companies (a) own or control, directly or
indirectly, one or more of the general partners in one or more general
partnerships or limited partnerships as set forth on Schedule 4.01.2-C, (each
such general partner hereinafter referred to as a "Controlled GP" and each
such general partnership or limited partnership hereinafter referred to as a
"Controlled Partnership"). None of the Acquired Companies legally or
beneficially, directly or indirectly, has any assets or owns any interest in
any other Person except as listed on Schedules 4.01.1-C and 4.01.2-C. As used
in this Agreement, "Person" means an individual, a corporation, a partnership,
a limited liability company, a joint venture, an association, a joint-stock
company, a trust, a business trust, a government or any agency or political
subdivision thereof, any unincorporated organization or any other entity of
any kind; and an "Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person.
4.02 Organization Chart
The chart set forth on Schedule 4.02.1-C correctly sets forth the
relationships and ownership interests among Sellers, the NPI Parties and the
Acquired Companies. All of the ownership interests in the entities set forth
on that chart correctly reflect the legal and beneficial ownership of such
entities except that no representation is made as to the ownership of the
Apollo Entities (defined below). Sellers are the only owners of record or
beneficial owners of the capital stock of NPI Inc. and the NPI Shares being
sold to Buyer hereunder are free and clear of any Liens other than the Liens
securing the PaineWebber Debt. As used in this Agreement, "Lien" means any
lien, pledge, security interest, claim, charge, mortgage, encumbrance,
restriction, voting trust or any other rights of any other Person other than
(a) any restrictions on the transferability of partnership interests set forth
in the Organizational Documents of a Controlled Partnership, (b) mechanics
liens set forth on Schedule 4.02.2-C 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 $100,000, or (c) the Voting Trust Agreement dated as of
December 6, 1993 among the parties named therein (the "FCMC Voting Trust").
4.03 Organization and Qualification
(a) Schedule 4.03-C correctly sets forth as to each of the Sellers
(which is not an individual), NPI Parties, the Acquired Companies, and the
Controlled Partnerships, its place of incorporation or formation, principal
place of business, and in the case of each Controlled GP of a Controlled
Partnership, jurisdictions in which it is qualified to do business as a
foreign corporation or partnership, as the case may be.
(b) Sellers have made available to Buyer with respect to each of
the Sellers (which is not an individual), NPI Parties, Acquired Companies and
Controlled Partnerships, true, complete and correct copies of each of the
following documents including all amendments and supplements thereto: (i) the
certificate of limited partnership and partnership agreement for each such
Person which is a limited partnership, and partnership agreement (or other
Organizational Document) for each such Person which is a general partnership,
(ii) the certificate of incorporation or articles of incorporation, by-laws,
shareholders' agreements and voting trusts, if any, with respect to each such
Person which is a corporation, (iii) the articles of organization and
operating agreement, or similar documents, with respect to each such Person
which is a limited liability company, (iv) 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 (v) other similar documents
(collectively, such Person's "Organizational Documents"). Each of the
Sellers, NPI Parties and Controlled Partnerships which is identified in this
Agreement as a limited partnership or a general partnership is a partnership
duly organized, validly existing, and in good standing under the laws of its
jurisdiction of organization, 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
Sellers, NPI Parties and Acquired Companies which is identified in this
Agreement as a corporation or limited liability company is a corporation or a
limited liability company, respectively, duly organized, validly existing, and
in good standing under the laws of its jurisdiction of organization, 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 Sellers which is identified in this Agreement as a
trust is duly organized and existing under the laws of its jurisdiction of
organization, 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
its assets.
(c) Each of the Controlled GPs that serves directly or indirectly
as the general partner of one or more Controlled Partnerships is duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of organization, 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.
4.04 Authority
Sellers and the NPI Parties have all requisite power and authority
to execute, deliver, and perform this Agreement. All necessary corporate,
partnership, limited liability company, trust or other proceedings, as the
case may be (including, without limitation, any shareholder, member or limited
partner consents, as the case may be) of or on behalf of any Sellers and NPI
Parties 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 the NPI Parties, and
constitute (or when delivered will constitute) the legal, valid, and binding
obligation of Sellers and the NPI Parties, enforceable as to each of them in
accordance with their terms. Upon the Closing, Sellers shall transfer good
title to Buyer of all of the NPI Shares being sold hereunder, and the Acquired
Companies shall have good title to all of the general partnership interests in
any of the Controlled Partnerships that it owns, directly or indirectly, and
all of such title shall be free and clear of all Liens (assuming payment of
the PaineWebber Debt by Buyer).
4.05 Capitalization
Schedule 4.05.1-C sets forth the authorized capital stock of each of
the Acquired Companies and the total number of issued and outstanding shares
of each of the Acquired Companies' capital stock. All of the issued and
outstanding shares of capital stock of each of the Acquired Companies is duly
authorized, validly issued, fully paid, and fully non-assessable and are owned
by NPI Inc. free and clear of all Liens (other than Liens securing the
PaineWebber Debt). 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 Acquired Companies, except as set forth on
Schedule 4.05.2-C. There are no restrictions of any kind on the transfer of
the outstanding capital stock of any of the Acquired Companies, except as set
forth on Schedule 4.05.3-C and those imposed by applicable federal and state
securities laws. There are no contracts or other understandings (whether
formal or informal, written or oral, firm or contingent) that require or may
require any of the Acquired Companies to repurchase any of its capital stock.
There are no preemptive or similar rights with respect to each of the
Acquired Companies' capital stock. Except for the FCMC Voting Trust, and
except as set forth on Schedule 4.05.4-C, none of the Acquired Companies is a
party to any voting agreements, voting trusts, proxies or any other
agreements, instruments or understandings with respect to the voting of any
capital stock of any of the Acquired Companies 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 Acquired Companies.
4.06 Partnership Interests
(a) Schedule 4.06.1-C sets forth the identity of each entity which
serves as a general partner of one or more of the Controlled Partnerships and,
(i) in those instances where such general partner is itself a partnership, the
identity of each general partner of such partnerships, and (ii) the identity
of the managing general partner or general partners, as the case may be, of
each Controlled Partnership. Each of the general partnership interests in the
Controlled Partnerships which is owned or controlled by the Acquired Companies
is duly authorized, validly issued, fully paid and fully non-assessable
(except to the extent of any liability of the owner of the general partnership
interest in the Controlled Partnerships as a general partner as provided in
their respective partnership agreements), free and clear of all Liens (other
than Liens securing the PaineWebber Debt) or voting trusts (other than the
FCMC Voting Trust) or 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 4.06.2-C, there are no
rights, options, subscriptions or other agreements of any kind to purchase
or acquire any general partnership interest in any of the Controlled GPs.
Except as set forth on Schedule 4.06.3-C, there are no agreements of any kind
limiting or otherwise restricting the authority of any of the Controlled GPs,
acting singly or jointly, to directly or indirectly manage and control in all
respects one or more of the Controlled Partnerships and no other entity is
authorized, singly or jointly, with any other entity, to so manage and control
any Controlled Partnership.
(b) Sellers and the NPI Parties have not breached or permitted any
Controlled GP to breach, or default or violate any of its material
obligations, including but not limited to its fiduciary duty to any Controlled
Partnership or other partners in any Controlled Partnerships, under any
Organizational Documents with respect to such Controlled Partnerships. The
FCMC Voting Trust is in full force and effect, no party is in material default
of any provision thereof and there exist no grounds for removing or replacing
NPI Equity II as the managing partner of FRI. The FRI Partnership Agreement
is in full force and effect and no party is in material default of any
provision thereof. Sellers and the NPI Parties have furnished to Buyer true,
complete and correct copies of information provided by NPI Equity II to
Portfolio Realty Advisers, L.P. ("PRA") pursuant to Section 8 of the FRI
Partnership Agreement since January 1, 1994, including supporting
documentation of NPI Equity II's calculation of such information.
4.07 Business Conducted
Except as set forth on Schedule 4.07.1-C, NPI Inc. conducts no
business and has no assets or Liabilities (defined below) other than the
ownership of shares of capital stock in its Subsidiaries. Except as set forth
on Schedule 4.07.1-C, the Subsidiaries each conducts no business and has no
assets other than the ownership of general partnership interests in the
Controlled Partnerships, which Controlled Partnerships conduct no business
other than the ownership and operation of real properties and the ownership of
general or limited partnership interests. All of the real properties owned or
operated by each of the Controlled Partnerships are listed on Schedule 4.07.2-
C. Except as set forth on Schedule 4.07.3-C, each of the properties is used
solely for residential or commercial purposes and related activities.
4.08 Financial Condition; Assets
(a) On the Closing Date, each of the Acquired Companies shall have
Net Current Assets (defined below) greater than zero. As used in this
Agreement, "Net Current Assets" means cash and cash equivalents less all
Liabilities; and "Liabilities" means any and all obligations and liabilities
of every kind, including, without limitation, contingent liabilities, known
or unknown, obligations to perform services in the future for which fees or
commissions have been prepaid, and contingent or unmatured obligations and
liabilities other than any (i) Acquired Company's potential obligation to
restore the deficit in a general partner's capital account in any Controlled
Partnership, (ii) Acquired Company's potential obligation to return to any
Controlled Partnership a portion of the distributions received by a general
partner on account of its partnership interest in such Controlled Partnership
by reason of the failure of the limited partners in such Controlled
Partnership to receive a specified amount of distributions; (iii) obligations
and liabilities under partnership law of a general partner solely attributable
to its serving as a general partner of a Controlled Partnership; and (iv)
except as set forth on Schedule 4.08(a)-C.
(b) On the Closing Date, each of the Acquired Companies shall have
good and valid title to each of the following assets, free and clear of Liens,
other than the PaineWebber Debt:
(i) the loans and advances set forth on Schedule 4.08(b)-C to
the extent not paid prior to Closing;
(ii) the accounts receivable set forth on Schedule 4.08(b)-C to
the extent not paid prior to Closing;
(iii) all fixed assets currently owned by them, plus any fixed
assets acquired and less any fixed assets disposed of in each case in the
ordinary course of business consistent with past practice between the date
hereof and the Closing Date.
4.09 Insurance
Schedule 4.09-C lists all of the policies of insurance of any kind
covering each of the Acquired Companies 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 the Acquired Companies 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 the Sellers, the NPI Parties or
Acquired Companies has received any notice of cancellation or termination with
respect to any such policy.
4.10 Material Events and Changes
Since April 30, 1995, except as set forth on Schedule 4.10-C, none
of the Acquired Companies:
(a) has 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), except the PaineWebber Debt; and
(b) is in default under any Material Agreement (defined below),
license or permit; or
(c) has 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.
4.11 No Conflicts or Defaults; No Violations
Neither the execution, delivery or performance of this Agreement by
any of the Sellers or the NPI Parties 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-C,
and assuming that each of the consents and approvals set forth on Schedule
4.12-C has been obtained, conflict with or result in any material breach of,
or constitute a material 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 Sellers, the NPI Parties or the Acquired
Companies pursuant to the terms of any note, bond, indenture, mortgage, deed
of trust, loan agreement, credit agreement, lease, franchise, partnership
agreement, voting trust or any other agreement, contract or instrument to
which any of them is a party or to which any of their respective properties or
assets is subject; (c) violate any provision of their respective
Organizational Documents; (d) give any Person or group of Persons the right to
replace any of them as a direct or indirect general partner of any Controlled
Partnership; or (e) (i) except for payment of one-time bonuses in connection
with the consummation of the transactions contemplated hereby, entitle any
current or former employee of any of Sellers, the NPI Party or Acquired
Company to any severance pay, unemployment compensation or any similar
payment, (ii) accelerate the time of payment or vesting or increase the amount
of any compensation payable to any such employee or former employee, or
(iii) directly or indirectly result in any payment made or to be made to or on
behalf of any person to constitute a "parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code").
4.12 Consents
Except the filings under the HSR Act, the consent of the Department
of Housing and Urban Development ("HUD") to the transactions contemplated by
this Agreement and the Other Agreements as described in Section 6.05, the
consent of the Rural Economic Community Development and Housing Agency
("RECDHA"), and as set forth on Schedule 4.12-C, 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.
4.13 Debt
Schedule 4.13-C is a complete list of (a) all Debt for each of the
Acquired Companies (including any intercompany debt or Debt for which the NPI
Shares is security), (b) all Debt of the Controlled Partnerships which is
recourse to the Controlled GP of such Controlled Partnership, and (c) all Debt
in which any Controlled GP is obligated to extend or has extended any lines of
credit, or is committed to make or has made working capital loans, to any
Controlled Partnership. None of the Acquired Companies or Controlled GPs is
the obligor in respect of and no assets of any of the Acquired Companies or
Controlled GPs is security for or otherwise subject to any Debt other than the
Debt described on Schedule 4.13-C. Sellers and the NPI Parties have delivered
to Buyer true, complete and correct copies of all agreements, notes, security
documents and other documents relating to any Debt of the Acquired Companies
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. Each of the Acquired Companies 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 or the NPI
Parties.
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 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 (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 Controlled Partnership and
any general partner obligation to return to any Controlled Partnership a
portion of the distributions received by a general partner on account of its
partnership interest in such Controlled Partnership by reason of the failure
of the limited partners in such Controlled Partnership to receive a specified
amount of distributions.
4.14 Taxes
(a) No Seller is a foreign person within the meaning of Section
1445 of the Code. Schedule 4.14(a)-C sets forth the taxpayer identification
number and office address within the United States for each Seller.
(b) Schedule 4.14(b)-C sets forth the name of each Controlled
Partnership which has made an election under Section 754 of the Code at any
time that any Seller or NPI Party or any Affiliate managed or operated such
Controlled Partnership or owned any general partnership interest therein or,
to the knowledge of Sellers and the NPI Parties (defined below), prior to such
time.
(c) Except as set forth on Schedule 4.14(c)-C, each of the
Controlled Partnerships is and since its formation has been a partnership for
federal income tax purposes qualifying under Section 7701 of the Code and none
of the Controlled Partnerships constitutes a publicly traded partnership
within the meaning of Section 7704 of the Code.
(d) Schedule 4.14(d)-C sets forth the Section 754 amount,
amortization method and accumulated amortization with respect to the basis in
partnership interest which differs from the capital accounts of the tax
returns of any Controlled Partnership for the most recent calendar year.
4.15 Material Agreements
Schedule 4.15-C lists all existing agreements and identifies the
subject matter thereof to which any of the Acquired Companies is a party or is
subject or to which any of their respective properties or assets is subject
which cannot be canceled without penalty within 90 days and which are
material to the financial condition, results of operations, business,
properties, assets or liabilities of any of the Acquired Companies (each a
"Material Agreement"). Sellers have made available to Buyer true, complete
and correct copies of each such Material Agreement. All of such Material
Agreements are in full force and effect and no party is in payment default of
any provision thereof or any other default thereunder except immaterial
defaults.
4.16 Master Indemnity Agreement
Each of Sellers and the NPI Parties represents and warrants that it
has consulted with its advisors and counsel with respect to its obligations
under the Master Indemnity Agreement of even date among the Buying Group,
Riverside and the Selling Group, as such terms are defined therein (the
"Master Indemnity Agreement"), and the adequacy of the consideration that it
has received with respect thereto; and that such consideration is in all
respects adequate and the value thereof is not less than the value of its
obligations under the Master Indemnity Agreement.
4.17 Environmental Matters
(a) Except as disclosed on Schedule 4.17(a.1)-C, and except for the
operating limited partnerships (other than Controlled Partnerships) listed on
Schedule 4.17(a.2)-C (the "March Partnerships"), all of the current and past
use and operations by or of any of Seller or the NPI Parties, or any of their
Affiliates or any of the Controlled Partnerships (at any time that any Seller
or NPI Party or any Affiliate thereof managed or operated such Controlled
Partnership or owned any general partnership interest therein) or, to the
knowledge of Sellers and the NPI Parties, any owner, 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
Controlled Partnerships (at any time that any Seller or NPI Party or any
Affiliate thereof managed or operated such Controlled Partnership or owned any
general partnership interest therein) (the "Real Property"), comply and have
complied with all applicable Environmental Laws (defined below). None of
Sellers or the NPI Parties or any Affiliates thereof and none of the
Controlled Partnerships (at any time that any Seller or NPI Party or any
Affiliate managed or operated such Controlled Partnership or owned any general
partnership interest therein), nor, to the knowledge of Sellers or the NPI
Parties, any Controlled Partnership (at any time that none of Sellers or the
NPI Parties or any Affiliate thereof managed or operated such Controlled
Partnership or owned any general partnership interest therein) or any owner,
tenant, lessee or other Person, 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)-C, and except for the
March Partnerships, (i) none of Sellers or the NPI Parties and none of the
Controlled Partnerships (at any time that any Seller or NPI Party or any
Affiliate thereof managed or operated such Controlled Partnership or owned any
general partnership interest therein) or, to the knowledge of the Sellers and
the NPI Parties, (based on facts known to any of the Sellers of the NPI
Parties), any owner, tenant, lessee or other Person, or any Controlled
Partnership (at any time that none of Sellers or the NPI Parties or any
Affiliate thereof managed or operated such Controlled Partnership or owned any
general partnership interest therein) has been or is involved in activities at
or related to any portion of any Real Property directly or indirectly owned or
managed by any of Sellers, the NPI Parties or the Controlled Partnerships
which activities could reasonably be expected to lead to (A) the imposition of
any liability on any of the Sellers, NPI Parties or the Controlled
Partnerships under any Environmental Law, 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
under any Environmental Law; and (ii) to the knowledge of Sellers and the NPI
Parties, based on facts known to Sellers or the NPI Parties, no activity by
any owner, tenant, lessee or other occupant of any portion of any Real
Property could reasonably be expected to result in a claim or liability under
any Environmental Law on such owner, tenant or occupant, on any of Sellers,
the NPI Parties or the Controlled Partnerships 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)-C, and except for the
March Partnerships, to the knowledge of Sellers and the NPI Parties, 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 and the NPI Parties, 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.
9601 et seq., or any similar inventory of sites requiring investigation or
remediation maintained by any state. None of the Sellers or NPI Parties and
none of the Controlled Partnerships (at any time that any Seller or NPI Party
or any Affiliate managed or operated such Controlled Partnership or owned any
general partnership interest therein) 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 the Sellers, NPI Parties or
Controlled Partnerships.
(d) Except as set forth in Schedule 4.17(d)-C, and except for the
March Partnerships, and except for non-friable asbestos in ceiling and
linoleum tiles, to the knowledge of Sellers and the NPI Parties, 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 business of the Controlled Partnerships) in, on, over, under or
at any presently owned or operated Real Property.
(e) To the knowledge of Sellers and the NPI Parties, 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. Schedule
4.17(e)-C lists all such O&M programs.
(f) Each of Sellers, the NPI Parties and Controlled Partnerships,
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. Schedule 4.17(f)-C contains a list of all such required
permits, authorization and approvals.
(g) Sellers and the NPI Parties have provided to Buyer all
environmental reports, assessments, audits, studies, investigations, data and
other written environmental information in their custody, possession or
control concerning the Real Property.
(h) Except as disclosed on Schedule 4.17(h)-C, and except for the
March Partnerships, none of Sellers or the NPI Parties has any reason to
believe, based on facts known to Sellers or the NPI Parties, that any of
Sellers, the NPI Parties or Controlled Partnerships 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, ground waters, 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, 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 Controlled Partnership,
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, the NPI Parties or Controlled Partnership or any
Affiliates thereof or (B) the offsite transportation, treatment, storage or
disposal of Hazardous Substances generated by any of Sellers, the NPI Parties
or Controlled Partnerships or any third-party customers of any thereof or (C)
the violation of 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 NPI
Parties or Controlled Partnerships 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.
4.18 Investment Company
None of Sellers, the NPI Parties or Acquired Companies is an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
4.19 Employees
(a) All of the executive employees of the Acquired Companies on the
date of this Agreement are listed on Schedule 4.19.1-C (the "Executive
Employees") together with a list of any employment, compensation, severance or
termination agreements or arrangements to which any of Sellers or the Acquired
Companies is a party (the "Employment Agreements"). No other employee of any
of them has any employment agreement, written or oral, and each such other
employee is an employee at will. Other than the Executive Employees and the
employees listed on Schedule 4.19.2-C (collectively, the "Corporate
Employees"), the entire compensation costs of all other employees of the
Acquired Companies (the "Reimbursable Employees") are reimbursable under the
agreements with respect to the properties for which they work or the
partnership agreement of the Controlled Partnership which owns the property at
which they work. Between the date hereof and the Closing Date, the
compensation of the Reimbursable Employees shall be changed only in the
ordinary course of business consistent with past practice, and no change shall
be made in the compensation of Corporate Employees except for the payment of
one-time bonuses or severance payments in connection with the consummation of
the transactions contemplated by this Agreement and the Other Agreements.
Prior to the Closing, Sellers and the NPI Parties (i) shall have terminated
the Employment Agreements, (ii) shall have obtained the resignation of each of
the Executive Employees effective immediately prior to the Closing and (iii)
shall have terminated each of the Corporate Employees. On the Closing Date,
the Acquired Companies shall have no liability under or arising out of any
employment, compensation, severance or termination agreements or arrangements
with any Executive Employee, any Corporate Employee or any other employee of
any of them or the termination thereof as contemplated by this Section. On
the Closing Date, Sellers and the NPI Parties will have paid or provided for,
and no Buyer or Acquired Company shall be liable for, any severance payment
due as of the Closing Date to any employee of the Acquired Companies or the
Controlled Partnerships upon termination of employment, with or without cause.
(b) Except as set forth on Schedule 4.19.3-C, none of the Sellers
or, (at any time since January 1, 1993 or, to the knowledge of Sellers and the
NPI Parties, prior to such date) the Acquired Companies is currently or has
ever been a party to or otherwise bound by and none of its employees is
covered by any collective bargaining agreement or other employment agreement
or arrangement (whether or not legally binding), and none of its employees are
represented by any union. Sellers have given Buyer true, complete and correct
copies of each agreement listed on Schedule 4.19.3-C.
(c) Each of the Sellers and the Acquired Companies have paid in
full to their employees, if any, all wages, salaries, commissions, bonuses and
other direct compensation for all services performed by them, other than
amounts that have not yet become payable in accordance with such employer's
customary practices. Except for payment of one-time bonuses in connection
with the consummation of the transactions contemplated hereby, none of the
Sellers or the Acquired Companies is or will as a result of any transactions
on the Closing Date become liable for any severance pay or other payments on
account of termination of any present or former employee. Except as set forth
on Schedule 4.19.4-C, each of the Sellers and the Acquired Companies (i) is
in compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and is not and has not engaged in any unfair labor practice,
(ii) is not the subject of any pending or threatened unfair labor practice
complaint before the National Labor Relations Board, (iii) is not the subject
of any labor strike, dispute, slowdown or stoppage pending or threatened
against or affecting it, (iv) is not and has not been the subject of any
representation question respecting its employees, (v) has not experienced any
strike, work stoppage or other labor difficulty since its formation, and (vi)
is not currently negotiating any collective bargaining agreement relating to
any of its employees.
4.20 Employee Benefits
(a) Schedule 4.20(a)-C contains a true and complete list of all
"employee benefit plans," within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("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 other plan, agreement, policy, trust fund or
arrangement, maintained, sponsored or contributed to by any of the Acquired
Companies or NPI Parties or any entity that would be deemed a "single
employer" with any of the Acquired Companies or NPI Parties under
Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA (an
"ERISA Affiliate") on behalf of any employee of any of the Acquired Companies
or NPI Parties (whether current, former or retired) or their beneficiaries or
with respect to which any of the Acquired Companies or NPI Parties or any
ERISA Affiliate has or has had any obligation on behalf of any such employee
or beneficiary (each a "Plan" and, collectively, the "Plans") together with a
description of the funding mechanism for each such Plan. With respect to each
Plan, (other than Multiemployer Plans) and, to the extent available to
Sellers, the NPI Parties or the Acquired Companies after using their
reasonable efforts, with respect to each Multiemployer Plan, true and complete
copies of the documents embodying and relating to the Plan have been delivered
to Buyer.
(b) Except as set forth on Schedule 4.20(b)-C, none of the ERISA
Affiliates, nor any of the Acquired Companies or NPI Parties or any of their
respective predecessors has ever contributed to or contributes to, or
otherwise participated in or participates in on behalf of employees of any of
the Acquired Companies or NPI Parties or any ERISA Affiliate any
"multiemployer plan" (within the meaning of Section 4001(a)(3) of ERISA or
Section 414(f) of the Code) ("Multiemployer Plan") or any single employer
pension plan (within the meaning of Section 4001(a)(15) of ERISA) which is
subject to Section 4063 and 4064 of ERISA ("Multiple Employer Plan").
With respect to each Multiemployer Plan and Multiple Employer Plan:
(i) none of the Acquired Companies or NPI Parties or ERISA
Affiliates has incurred (or has any reason to believe it has incurred) any
withdrawal liability; no event has occurred which with the giving of notice
would result in such liability under Section 4201 of ERISA as a result of a
complete withdrawal (within the meaning of Section 4203 of ERISA) or a partial
withdrawal (within the meaning of Section 4205 of ERISA); nor has any of the
Acquired Companies or NPI Parties or ERISA Affiliates received any notice of
any claim or demand for complete withdrawal liability or partial withdrawal
liability;
(ii) none of the Sellers, NPI Parties, the Acquired Companies
or to the knowledge of Sellers and the NPI Parties, ERISA Affiliates has
received any notice that any Multiemployer Plan is in "reorganization" (within
the meaning of Section 4241 of ERISA), that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of an excise
tax, or that the Multiemployer Plan is or may become "insolvent" (within the
meaning of Section 4241 of ERISA);
(iii) each of the Acquired Companies, NPI Parties and ERISA
Affiliates have timely made any required contributions or payments to any
Multiemployer Plan and to any Multiple Employer Plan;
(iv) to the knowledge of Sellers and the NPI Parties, no
Multiemployer Plan is a party to any pending merger or asset or liability
transfer under Part 2 of Subtitle E of Title IV of ERISA;
(v) to the knowledge of Sellers and the NPI Parties, the
Pension Benefit Guaranty Corporation (the "PBGC") has not instituted
proceedings against such Multiemployer Plan or Multiple Employer Plan;
(vi) there is no contingent liability for withdrawal liability
by reason of a sale of assets pursuant to Section 4204 of ERISA;
(vii) except as set forth on Schedule 4.20(b)-C, if any of the
Acquired Companies, NPI Parties or ERISA Affiliates were to have a complete or
partial withdrawal as of the Closing, no obligation to pay withdrawal
liability would exist on the part of any of the Sellers, NPI Parties, the
Acquired Companies or any ERISA Affiliate with respect to any of the
Multiemployer Plans;
(viii) if any of the Acquired Companies, NPI Parties or ERISA
Affiliates were to have a complete or partial withdrawal as of the Closing,
the withdrawal liability of the Acquired Companies, NPI Parties and ERISA
Affiliates would not exceed $100,000 with respect to all Multiemployer Plans
in the aggregate;
(ix) with respect to each Multiple Employer Plan, none of the
Acquired Companies or NPI Parties or ERISA Affiliates has withdrawn during a
plan year in which it was a "substantial employer" (within the meaning of
Section 4001(a)(2) of ERISA); and
(x) none of the Acquired Companies or NPI Parties or ERISA
Affiliates has incurred any liability to the PBGC including, without
limitation, under Section 4063 or 4064 of ERISA.
(c) Each of the Sellers, NPI Parties, the Acquired Companies and
each ERISA Affiliate, each Plan and each "plan sponsor" (within the meaning of
Section 3(16) of ERISA) of each "welfare benefit plan" (within the meaning of
Section 3(1) of ERISA) has complied in all material respects with the
requirements of Section 4980B of the Code and Title I, Subtitle B, Part 6 of
ERISA. None of the ERISA Affiliates, nor any of the Acquired Companies or NPI
Parties (or any of their respective predecessors) has ever contributed to or
contributes to, or has participated in or participates in on behalf of
employees of any of the Acquired Companies or NPI Parties or ERISA Affiliates,
any plan subject to Title IV of ERISA or Section 412 of ERISA, other than the
Multiemployer Plans.
(d) With respect to each of the Plans on Schedule 4.20(a)-C (other
than Multiemployer Plans):
(i) each Plan intended to qualify under Section 401(a) of the
Code has been qualified since its inception and has received a determination
letter from the Internal Revenue Service (the "IRS") (except for the qualified
Plan subject to Section 401(k) of the Code listed on Schedule 4.20(d)-C which
has applied for such a determination letter) to the effect that the Plan is
qualified under Section 401 of the Code and any trust maintained pursuant
thereto is exempt from federal income taxation under Section 501 of the Code
and nothing has occurred or will occur through the date of the Closing that
caused or could cause the loss of such qualification or exemption or the
imposition of any penalty or tax liability; each of Sellers, the NPI Parties
and the Acquired Companies, or ERISA Affiliates, as the case may be, has
applied, or prior to the end of the remedial amendment period, as defined
under Treasury Regulation Section 1.401(b) and as modified by IRS
pronouncements, will apply, for a determination letter from the IRS pursuant
to Revenue Procedure 93-39, for each Plan intended to qualify under Section
401(a) of the Code (including the qualified Plan subject to Section 401(k) of
the Code listed on Schedule 4.20(d)-C);
(ii) all payments required by any Plan, any collective bargaining
agreement or by law (including all contributions, insurance premiums or
intercompany charges) with respect to all periods through the date of the
Closing shall have been made prior to the Closing (on a pro rata basis where
such payments are otherwise discretionary at year end) or provided for by each
of the Acquired Companies and NPI Parties, as applicable, by full accruals as
if all targets required by such Plan had been or will be met at maximum levels
on its financial statements;
(iii) no claim, lawsuit, arbitration or other action (other than
nonmaterial, routine claims for benefits) has been threatened, asserted,
instituted or, to the knowledge of Sellers and the NPI Parties, anticipated
against the Plans, any trustee or fiduciaries thereof, any of the Sellers, NPI
Parties or the Acquired Companies, or any ERISA Affiliate, any director,
officer or employee thereof, or any of the assets of any trust or the Plans;
(iv) each Plan complies in all material respects and has been
maintained and operated in all material respects in accordance with its terms
and the terms and the provisions of applicable law, including, without
limitation, ERISA and the Code;
(v) no "prohibited transaction," within the meaning of Section
4975 of the Code and Section 406 of ERISA, has occurred or is expected to
occur with respect to each Plan, other than with respect to which an
administrative or statutory exemption is available under the Code and ERISA.
(vi) to the knowledge of Sellers and the NPI Parties, no Plan is
under audit or investigation by the IRS or the U.S. Department of Labor or any
other governmental authority; no such completed audit, if any, has resulted in
the imposition of any tax or penalty;
(vii) each Plan intended to qualify for tax-favored treatment under
Sections 79, 106, 117, 120, 125, 127, 129 or 132 of the Code satisfies in all
material respects the applicable requirements under the Code; and
(viii) with respect to each Plan that is funded mostly or partially
through an insurance policy, none of Sellers, the NPI Parties nor the Acquired
Companies nor any ERISA Affiliate has any liability in the nature of
retroactive rate adjustment, loss sharing arrangement or other actual or
contingent liability arising wholly or partially out of events occurring on or
before the Closing.
(e) Except as set forth on Schedule 4.20(e)-C, the consummation of
the transactions contemplated by this Agreement will not give rise to any
liability, including, without limitation, liability for severance pay,
unemployment compensation, termination pay or withdrawal liability, or
accelerate the time of payment or vesting or increase the amount of
compensation or benefits due to any current, former, or retired employee or
their beneficiaries solely by reason of such transactions. No amounts payable
under any Plan will fail to be deductible for federal income tax purposes by
virtue of Section 280G of the Code.
(f) None of the NPI Parties nor the Acquired Companies maintains,
contributes to, or in any way provides for any benefits of any kind whatsoever
(other than as may be required under Section 4980B of the Code, Sections 601
through 608 of ERISA, the Federal Social Security Act or a plan intended to
qualify under Section 401(a) of the Code) to any current or future retiree or
terminee.
(g) Except as expressly required by this Agreement, none of the
Sellers, the NPI Parties nor the Acquired Companies nor any ERISA Affiliate,
or any officer or employee thereof, has made any promises or commitments, to
create any additional plan, agreement or arrangement, or to modify or change
any existing Plan.
4.21 Litigation and Claims
Except as set forth on Schedule 4.21-C, there is no litigation,
arbitration, claim, governmental or other proceeding (formal or informal), or
investigation pending, or to the knowledge of Sellers and the NPI Parties,
threatened, with respect to any of the Acquired Companies or Controlled
Partnerships, 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 Acquired
Companies or Controlled Partnerships 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
Sellers or the Acquired Companies or any of their respective properties,
businesses or assets, or (iii) required to take any action in order to avoid
such violation or default. The litigation listed on Schedule 4.21-C will not
prohibit the consummation of any of the transactions contemplated hereby.
4.22 Intellectual Property
Except as described on Schedule 4.22-C, each of the Acquired
Companies 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 mark,
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 Acquired Companies as presently conducted or as any of
them contemplates conducting, except as set forth on Schedule 4.22-C. None of
the Acquired Companies has infringed, is infringing, or has received notice of
infringement asserted with respect to any Intangibles of others. To the
knowledge of Sellers and the NPI Parties, 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 Acquired
Companies.
4.23 Questionable Payments
None of the Sellers, NPI Parties or Acquired Companies, 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.
4.24 [Intentionally Omitted]
4.25 SEC Reports; Tender Offers
Sellers have previously furnished Buyer (or will simultaneously with
its filing with the Securities and Exchange Commission ("SEC") furnish to
Buyer) true and complete copies of each Schedule 14D-1 and all amendments
thereto and other governmental filings or documents (the "Tender Offer
Documents") relating to each tender offer (the "Tender Offers") for any
limited partnership interests in the Controlled Partnerships filed since
January 1, 1993 by any of Sellers, the NPI Parties or any of their Affiliates
with the SEC or other governmental agency, and the following reports filed by
any of the Controlled Partnerships with the SEC: Annual Reports on Form 10-K
for each of the fiscal years ended December 31, 1994, 1993, 1992, and 1991,
all Quarterly Reports on Form 10-Q and all Current Reports on Form 8-K filed
after December 31, 1994, and all proxy statements distributed subsequent to
December 31, 1991 (collectively, the "SEC Filings"). Each of the Tender Offer
Documents, and 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 litigation arising out of any of the Tender Offer
Documents have been finally settled pursuant to a final court order, dated May
19, 1995, and Schedule 4.25-C contains a true, correct and accurate list of
all settlement agreements ("Settlement Agreements") and court orders entered
into in connection with such final court order (which order is no longer
subject to appeal) (the "Order"), true, correct and complete copies of which
have been delivered to Buyer. All Tender Offers pursuant to the Tender Offer
Documents have been consummated on or prior to the date of this Agreement in
compliance with all applicable laws and other Legal Requirements (defined
below) and Sellers have performed all of their obligations pursuant to the
agreements and Order listed on Schedule 4.25-C. The recent Tender Offers
commenced pursuant to the Order have been conducted strictly in accordance
with the Settlement Agreements and Order and each of the Sellers and the NPI
Parties has performed all of its obligations pursuant to the Settlement
Agreements and complied with the Order relating thereto. All press releases
and other publicly released data issued by any Controlled Partnership since
December 31, 1993 were accurate when released.
4.26 Properties
Each of the Acquired Companies owns no real property and has good
title to all other properties and assets used in its business or owned by it
(except such other properties and assets as are held pursuant to leases or
licenses described on Schedule 4.26-C), free and clear of all Liens (except
for the PaineWebber Debt and as set forth on Schedule 4.26-C). No Person
holds a right of first refusal or option to purchase with respect to any asset
of any of the Acquired Companies.
4.27 Books and Records; Bank Accounts
(a) The books and records of each of the Acquired Companies or
Controlled Partnerships are substantially complete and correct in all material
respects, and the books and records of each of the Controlled GPs contain
substantially accurate and complete records of all material actions taken by
such general partners since the date the NPI Parties first directly or
indirectly acquired a general partnership interest in such Controlled
Partnerships.
(b) Sellers have provided accurate lists all of the bank and
brokerage accounts of each of the Acquired Companies and Controlled
Partnerships and the authorized signatories for such accounts.
4.28 Completeness of Disclosure
No representation or warranty by any of Sellers or the NPI
Parties in this Agreement or any Additional Document (as defined in the Master
Indemnity 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.
4.29 HUD Consents
Sellers and the NPI Parties know of no reason why the approvals of
HUD referred to in Section 6.05 cannot be obtained on or prior to the Closing
Date, 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.
4.30 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 after giving effect to the
transactions contemplated hereby, (i) the amount of the "present fair saleable
value" of the assets of each of Sellers and the NPI Parties 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 and the NPI Parties 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 or the NPI Parties will have, as of such date, an unreasonably
small amount of capital with which to conduct its business, (iv) each of
Sellers and the NPI Parties 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, "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.
4.31 Absence of Inducement
In entering into this Agreement, none of Sellers or the NPI Parties
has been induced by, or relied upon, any representations, warranties or
statements by Buyer not set forth or referred to in this Agreement or the
Additional Documents, whether or not such representations, warranties or
statement have actually been made, in writing or orally, and each of the
Sellers and the NPI Parties acknowledges that, in entering into this
Agreement, Buyer has been induced by and relied upon the representations and
warranties of the Sellers and the NPI Parties herein or therein set forth.
4.32 Master Agreement
All amounts owing and due under the Master Agreement dated as of
November 12, 1993 among the parties named therein have been paid and satisfied
in full. There have been no NPI Receipts (as such term is defined in a
certain Indemnity and Reimbursement Agreement, dated as of December 6, 1993,
by and among NPI Equity II, PRA, the NPI Principals and the other parties
named therein), other than amounts attributable to the general partnership
interest of NPI Equity II in FRI.
4.33 No Knowledge of Breach
None of Sellers or the NPI Parties has any knowledge on the date
hereof of any fact or circumstances which would cause any representation or
warranty of Buyer in this Agreement or the Additional Documents 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 Buyer
Buyer represents and warrants to Sellers as of the date hereof and agrees
with Sellers as follows:
5.01 Organization
Each of Insignia and IFGP is a corporation duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation 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, IFGP is wholly-owned, directly or indirectly, by Insignia; however, no
representation is made as to the ownership of IFGP as of the Closing Date,
except that it will be an Affiliate of Insignia.
5.02 Authority
Insignia and IFGP, each has all requisite power and authority to
execute, deliver, and perform this Agreement. All necessary corporate
proceedings of Insignia and IFGP have been duly taken to authorize the
execution, delivery, and performance of this Agreement. This Agreement has
been and the other documents required to be delivered by Buyer 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 Insignia and IFGP, and is enforceable as to each of them in
accordance with their terms.
5.03 No Conflicts or Defaults; No Violations
Neither the execution, delivery or performance of this Agreement by
the Buyer of 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 5.03-C 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 Insignia or IFGP 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.
5.04 Litigation
There is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending or, to the knowledge
of Buyer, 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.
5.05 Investment Company
Buyer is not an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
5.06 Consents
Except the filings under the HSR Act described in Section 6.05, the
consent HUD to the transactions contemplated by this Agreement and the Other
Agreements, the consent of RECDHA, any filing with respect to any
Organizational Documents of an Person (all of which will be made prior to
Closing), and as may be required by federal or state securities laws, 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 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.
5.07 HUD Consents
Buyer has no knowledge of any reason why the approvals of HUD
referred to in Section 6.05 cannot be obtained on or prior to the Closing
Date, 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.
5.08 Completeness of Disclosure
No representation or warranty by Buyer in this Agreement or any
Additional Document 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.
5.09 Absence of Inducement
In entering into this Agreement, Buyer has not been induced by, or
relied upon, any representations, warranties or statements of any of Sellers
or the NPI Parties concerning any matter not set forth or referred to in this
Agreement or the Additional Documents, whether or not such representations,
warranties or statements have actually been made, in writing or orally, except
that Buyer has relied upon Sellers' and the NPI Parties' having disclosed to
Buyer all information, and provided to Buyer true, complete and correct copies
of all agreements, documents and data, that Buyer or its Affiliates have
requested in connection with its determination whether to enter into this
Agreement and the Other Agreements. Buyer acknowledges that, in entering into
this Agreement, Seller and the NPI Parties have been induced by, and relied
upon, Buyer's representations and warranties herein set forth.
5.10 No Knowledge of Breach
Buyer has no knowledge on the date hereof of any facts or
circumstances which would cause any representation or warranty of any of
Sellers and the NPI Parties in this Agreement or the Additional Documents 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 of Sellers and NPI Parties
6.01 Joint and Several Covenants
(a) Sellers and the NPI Parties each, jointly and severally,
covenants and agrees to perform or cause to be performed the covenants of any
of them under this Agreement.
(b) Insignia and IFGP each, jointly and severally, covenants and
agrees to perform or cause to be performed the covenants of either of them
under this Agreement.
6.02 General
(a) Each of Sellers and the NPI Parties will use all reasonable
efforts and take all reasonable steps, and will cooperate with Buyer, 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 and the Other Agreements that are dependent upon the actions or
inactions of any of Sellers or the NPI Parties, 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 the Other
Agreements and consummate the transactions contemplated hereby and thereby.
(b) Buyer will use all reasonable efforts and take all reasonable
steps, and will cooperate with Sellers and the NPI Parties, 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 and the Other Agreements that are dependent upon the actions or
inactions of Buyer 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 the Other Agreements and consummate the
transactions contemplated hereby and thereby.
6.03 Other Agreements
Until the Closing Date, Sellers and the NPI Parties and their
Affiliates will each use its reasonable efforts to cause all representations
and warranties made by them hereunder or under the Other Agreements to be true
and correct in all material respects as of the Closing Date as if made on the
Closing Date, except for changes in the ordinary course of business of the
Acquired Companies 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 Controlled Partnerships.
6.04 Conduct of Business
Until the Closing Date, each of the Sellers and the NPI Parties
will:
(a) except as otherwise requested by Buyer in writing, use its
reasonable efforts to preserve intact the business organization and operations
of the Acquired Companies and Controlled Partnerships, to keep available the
services of their present officers and employees, if any, 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, if any,
having business relations with any of them;
(b) not permit the Organizational Documents of (i) the Acquired
Companies or (ii) subject to the fiduciary duty obligation owed by a
Controlled GP to a Controlled Partnership, the Controlled Partnership, to be
amended, except for the Fox Amendment; and
(c) cause the business and operations of the Acquired Companies and
Controlled Partnerships 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
partnership agreements of such partnerships.
6.05 Hart-Scott-Rodino, HUD and Other Regulatory Filings
(a) Promptly, but not later than 45 days following the execution of
this Agreement, Buyer and Sellers and the NPI Parties shall each file or cause
to be filed any Notification and Report Forms and related material that it may
be required to file with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), in
connection with the transactions contemplated by this Agreement and the Other
Agreements and shall each make any further filings pursuant thereto that may
be necessary in connection therewith. Sellers and the NPI Parties on the one
hand, and Buyer, on the other, shall each pay one-half of the filing fees
payable in connection with such filings.
(b) Within 15 business days following the date hereof, Buyer shall
apply to HUD for the approvals referred to in Section 8.08. Buyer shall
advise the NPI Principals upon request of the NPI Principals of the status of
the HUD approval process.
(c) Sellers and the NPI Parties shall also promptly file and cause
the partnerships for the properties listed on Schedule 6.05-C to file with
applicable regulatory authorities any other applications, notices or other
documents required to be filed by any of them (and prosecute diligently any
related proceedings) in order to consummate the transactions contemplated by
this Agreement.
6.06 Consents and Filings; Resignations
As soon as practicable after the date hereof and before the Closing,
except as set forth on Schedule 6.06-C, Sellers shall use 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 and the Other Agreements or
(ii) are set forth on Schedule 4.12-C. Prior to the Closing Date, Sellers and
the NPI Parties shall have obtained the resignations of each of the directors
and officers of the Acquired Companies effective immediately prior to the
Closing.
6.07 Delivery of Financial Statements Required for SEC Filings
Commencing on the date hereof, Sellers, with respect to the Acquired
Companies shall, and the NPI Parties shall cause Sellers to, promptly
following any request from Buyer, timely deliver to Buyer such financial
statements and other financial information of such of the NPI Parties and/or
their Affiliates (including, without limitation, the Acquired Companies and
the Controlled GPs) as Insignia and/or its 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. Buyer 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
the NPI Parties. Buyer shall use its reasonable efforts to give Sellers as
much notice as is practicable of the financial statements and other financial
information it will require, and Sellers and the NPI Parties shall use their
best efforts to deliver requested statements and information in the form and
at the time required.
6.08 Confidentiality
(a) Each of Sellers and the NPI Parties shall before and after the
Closing, insure that all confidential information which any of Sellers or the
NPI Parties 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 the Acquired Companies
and Controlled Partnerships, 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
Buyer; 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) 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 and the NPI Parties shall, and shall cause
all other such Persons to, at Buyer's request after the Closing, deliver to
Buyer any documents or other medium containing such confidential information
to which the restrictions of the foregoing sentence apply.
(b) Buyer shall, before the Closing, insure that all confidential
information which Buyer or its 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 or the NPI Parties, shall not be published, disclosed, or made
accessible by Buyer to any other Person at any time or used by Buyer (except
in preparation for the consummation of the transactions contemplated by this
Agreement or the Other Agreements), 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 Buyer or its 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, Buyer 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.
6.09 Public Statements
Between the date of this Agreement and the Closing, Sellers, the NPI
Parties and their Affiliates shall discuss and coordinate with Buyer and Buyer
shall discuss and coordinate with the NPI Principals with respect to any
public filing (other than SEC filings) or announcement required concerning any
of the transactions contemplated by this Agreement. No public filing (other
than SEC filings) 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 Buyer, except as required by law. The parties
agree that a press release in the form attached as Exhibit D may be released
by Buyer or its Affiliates upon execution hereof.
6.10 Voting by Sellers
Except as provided in the Settlement Agreement and subject to its
fiduciary duties when acting as a Controlled GP of a Controlled Partnership,
and as may be required by the provisions of the partnership agreement of any
Controlled Partnership, Sellers and the NPI Parties each agrees that until the
Closing Date under this Agreement and the Other Agreements, it will not vote
and will cause each of the Acquired Companies and Controlled GPs not to vote
any capital stock of any general partnership interest in any Controlled
Partnership in which any of them is entitled to vote in favor of, and shall
not take any action to cause (a) any merger, consolidation, reorganization,
other business combination, or recapitalization involving any of the Acquired
Companies or Controlled Partnerships, (b) any dissolution, liquidation, or
termination of any of the Acquired Companies or Controlled Partnerships, (c)
any sale of any assets of the Acquired Companies or Controlled Partnerships,
(d) the amendment of any Organizational Documents of any of the Acquired
Companies or Controlled Partnerships, (e) any "change in the Controlled GP"
(defined below) of any Controlled Partnership, (f) any termination of,
amendment to or other change in the property management agreements, asset
management agreements or other agreements under which any Person is the
property manager or asset manager of any real property or asset, or which
relates to any Person providing management, administrative or bookkeeping
services, including, but not limited to agreements with Metric Management,
Inc., with respect to any Controlled Partnership, or (g) 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 any
of the Other Agreements or impair the contemplated benefits to Buyer or its
Affiliates of the transactions contemplated by this Agreement and the Other
Agreements. It is understood that at any time Sellers, the NPI Parties or any
of their Affiliates would be permitted under this Section to vote their
general partnership interest in any Controlled Partnership 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 Controlled GP of such Controlled Partnership, the
Affiliate which is the holder of limited partner interests in the same
Controlled Partnership 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 Controlled GP" of a Controlled Partnership
shall include, without limitation, a change in the Person who is 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.
6.11 Access
Between the date of this Agreement and the Closing, Sellers and the
NPI Parties shall (a) give Buyer and its authorized representatives full
access to all offices and other facilities and properties of, or managed,
operated or otherwise controlled by, the Acquired Companies and Controlled
Partnerships and to the books and records of the Acquired Companies and
Controlled Partnerships (and permit Buyer to make copies thereof), (b) permit
Buyer 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 the Acquired Companies or any Controlled
Partnerships and to discuss with Buyer and its authorized representatives the
affairs of the Acquired Companies and any Controlled Partnerships, all as
Buyer may from time to time reasonably request. Statements made by Sellers,
the NPI Parties and their authorized representatives in the course of any such
discussions shall not constitute representations or warranties for purposes
of this Agreement.
6.12 No Transfers or Encumbrances
Sellers and the NPI Parties 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 Acquired Companies or any of
the Controlled Partnerships before the Closing.
6.13 Notice of Certain Events
(a) Until the Closing, each of Sellers and the NPI Parties shall
immediately give Buyer (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 Seller or NPI Party 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 Sellers or NPI Party with
respect to any Debt or Material Agreement; (iv) copies of all reports and
other documents prepared for the stockholders or partners of any of the
Acquired Companies or any Controlled Partnerships and copies of the minutes of
all meetings of, and actions taken (with or without a meeting), by the
stockholders or partners of each of the Acquired Companies or Controlled
Partnerships. No notification under this Section shall affect or modify the
representations, warranties, covenants or agreements of any of Sellers or the
NPI Parties or the conditions to the respective obligations of the parties
hereunder.
(b) Until the Closing, Buyer 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 Buyer 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 Buyer 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 partners of Buyer. No notification under
this Section shall affect or modify the representations, warranties, covenants
or agreements of Buyer or the conditions to the respective obligations of the
parties hereunder.
(c) Until the Closing, each of Sellers and the NPI Parties shall
immediately give Buyer written notice of any event at a Controlled Partnership
which may give rise to a claim against any of the Acquired Companies by reason
of its serving, directly or indirectly, as a general partner of a Controlled
Partnership.
6.14 Other Covenants
Sellers and the NPI Parties, jointly and severally, covenant and
agree to cause the Persons named as Sellers and NPI Parties to perform all of
the covenants and agreements of each of them set forth in the Other
Agreements, and any material breach of any such covenant or agreement shall be
deemed a breach of this Agreement.
6.15 Current Assets
If between the date hereof and the Closing, any distributions are
received by an Acquired Company, either directly or indirectly in its capacity
as a Controlled GP with respect to one or more of the Controlled Partnerships,
and such distributions are not applied before Closing to the reduction of the
outstanding principal amount of the PaineWebber Debt, then such distributions
shall be retained by such Acquired Company.
6.16 Due Diligence Meetings
Between the date hereof and the Closing, at reasonable business
hours selected by Buyer, during the months of September through December, 1995
(and if the Closing is after January 15, 1996, in January and February 1996),
Sellers and the NPI Parties shall make available such officers of the Acquired
Companies with detailed knowledge of the properties and operations of the
Controlled Partnerships as Buyer shall request (at which time at least one of
the NPI Principals, Peter Braverman and William Hamilton shall be present) for
due diligence meetings (at least two of which shall be held, at Buyer's
option, at Insignia's headquarters in Greenville, South Carolina and the
others in Atlanta, Georgia) at which they shall make true, complete and
correct disclosure of all information relating to the properties and the
business of the Acquired Companies as Buyer shall request and shall furnish
monthly all regularly prepared financial statements and reports with respect
to the Acquired Companies, Controlled GPs and Controlled Partnerships.
6.17 ERISA Matters
On and after the Closing, Sellers and the NPI Parties shall be
liable for, and shall promptly and fully reimburse Buyer with respect to, all
claims incurred prior to Closing under any Plan that is a health plan
(including, without limitation, medical, dental and hospitalization plans),
regardless of whether such claim arises before, on or after Closing. Sellers
and the NPI Parties acknowledge that they shall be obligated to pay all such
claims on demand to Buyer.
VII. Covenants of Sellers and NPI Parties
7.01 Ordinary Course
Sellers and the NPI Parties each, jointly and severally, covenants
and agrees that from the date hereof until the Closing, Sellers and the NPI
Parties shall cause the Acquired Companies and the Controlled Partnerships and
their businesses and properties to be operated only in the ordinary course
consistent with past practice and the fiduciary duties of the Controlled GPs,
in accordance with the partnership agreements, utilizing reasonable commercial
standards.
7.02 Liens
None of Sellers or the NPI Parties will, or will permit any of the
Acquired Companies 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 Acquired Companies, 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 Controlled GP),
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, 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) Liens created pursuant to the PaineWebber Debt;
(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
established for such Acquired Company, 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 Acquired Company or any part
thereof arises during the pendency of such contest and (iii) such contest does
not have a materially adverse effect any Acquired Company; or
(c) Liens in respect of property or assets of any Acquired Company
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 Acquired Company's property or assets or materially impair the
use there in the operation of the business of any Acquired Company 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 asset subject to any such Lien.
7.03 Dissolution
No Controlled Partnership shall dissolve, terminate, liquidate,
merge with or consolidate into another Person except as required by the
fiduciary duty of the Controlled GP of such Controlled Partnership.
7.04 New Lines of Business
None of the Acquired Companies or Controlled Partnerships shall
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.
7.05 Forgiveness of Debt
None of the Acquired Companies shall cancel or otherwise forgive,
release or waive any claim or Debt owed to it by any Person or rights of
substantial value, (a) 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 and (b) other than
to the Persons listed on Schedule 7.05-C in connection with the replacement of
the Investment Capital Contribution as described in Section 9.10 below.
7.06 Affiliate Transactions
None of Sellers or the NPI Parties shall enter into, or be a party
to, or cause or suffer any Affiliate to enter into or be a party to any
transaction with any of the Acquired Companies or Controlled Partnerships or
cause any compensation to be payable from any such Person ("Affiliate
Transactions") except transactions required by existing agreements listed on
Schedule 7.06-C, in the ordinary course of business consistent with past
practice and on terms which are no less favorable to such Acquired Company or
Controlled Partnership than would be obtained in a comparable arm's length
transaction with an unrelated third party, and none of Sellers, the NPI
Parties or any of their respective Affiliates shall enter into any new
agreement with or relating to any of the Acquired Companies or Controlled
Partnerships or amend, modify or terminate any agreement listed on Schedule
4.15-C. Any such transactions will be disclosed to Buyer in writing at least
monthly from the date hereof until the Closing and on the Closing Date in an
Officer's Certificate of the relevant Person.
7.07 Assets
None of the Acquired Companies shall acquire or dispose of any
assets (a) except in the ordinary course of business consistent with past
practice and (b) other than to the Persons listed on Schedule 7.05-C in
connection with the replacement of the Investment Capital Contribution as
described in Section 9.10 below.
7.08 Advances, Investments and Loans
None of Sellers or the NPI Parties will permit any of the Acquired
Companies 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, except
that any Acquired Company 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.
7.09 No Contrary Agreements
Prior to the Closing Date, none of Sellers or the NPI Parties shall
agree or otherwise commit, whether or not in writing, or permit any of the
Acquired Companies or any of the Controlled Partnerships to agree or commit,
to do anything which would not be permitted to be done under this Agreement.
7.10 Settlement Agreements and Order
Each of Sellers and the NPI Parties shall perform all of its
obligations pursuant to the Settlement Agreements and shall comply with the
Order relating thereto.
VIII. Conditions to Obligations of Buyer
The obligations of Buyer under this Agreement are subject to the
following conditions (unless waived by Buyer in writing at the Closing):
8.01 Accuracy of Representations and Compliance with Conditions
All representations and warranties of Sellers and/or the NPI Parties
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 and the NPI Parties 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, Buyer shall have received certificates to
the effect of the first two sentences of this Section 8.01 executed by the
chief executive officer and the chief financial officer of each Seller (and
such NPI Parties as Buyer shall request) dated as of the Closing Date in form
and substance satisfactory to Buyer. It is expressly agreed that, for
purposes of the first sentence of this Section 8.01 and Section 12.01(b)(v),
changes in the ordinary course referred to in Section 6.04(c) 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 to Buyer's
obligations under this Agreement.
8.02 Sellers' Deliveries
Sellers shall have delivered to Buyer the documents set forth in
Section 3.02(a).
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:
(i) the consummation of this Agreement or the Other Agreements or the
transactions contemplated by this Agreement or the Other Agreements, or to
obtain substantial damages with respect thereto; or (ii) any matter arising
out of or relating to the Tender Offers made by Ventures I or Ventures II
pursuant to any Tender Offer Documents or Settlement Agreement; or (iii) which
Buyer shall reasonably determine could have a materially adverse effect on the
business, assets, liabilities, condition (financial or otherwise) or prospects
of any of the Acquired Companies, or (b) 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).
8.04 No Material Adverse Change
Since the date hereof, there shall not have been any material
adverse change in the condition (financial or otherwise), results of
operations, business, properties, assets, nature of assets or liabilities of
any of the Acquired Companies, nor shall any of them have suffered any loss,
damage, destruction or other casualty to any of its properties or material
assets (unless completely covered by insurance).
8.05 Operating Results
(a) None of the following shall have occurred unless in any
individual case specifically waived by Buyer in writing:
(i) Except in the ordinary course of business consistent with
past practice, none of the Acquired Companies shall have entered into or be
subject to any Material Agreement not listed on Schedules 4.15-C, or breached
or made a material amendment or modification in any Material Agreement on such
Schedule or terminated any such listed Material Agreement, except terminations
resulting from the sale of any property listed on Schedule 8.05-C.
(ii) None of the Sellers or NPI Parties (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 Acquired
Companies is a party or to which any of their respective properties is
subject.
8.06 No Governmental Action
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 of other tribunal, including the entry of a preliminary or
permanent injunction, which, in the reasonable judgment of the Buyer, (a)
makes any of the transactions contemplated by this Agreement illegal, (b)
results in a delay in the ability of Buyer to consummate any of the
transactions contemplated by this Agreement, (c) requires the divestiture by
Buyer of any of the NPI Shares to be sold pursuant to this Agreement or of any
general partnership interest held by a Controlled GP or of a material portion
of the business of the Acquired Companies, (d) imposes material limitations on
the ability of Buyer effectively to exercise full rights of ownership of such
capital stock or general partnership interest including the right to vote such
interests on all matters properly presented stockholders or partners of the
Acquired Companies or Controlled Partnerships, 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 Buyer of any of the transactions contemplated by this Agreement or
any Other Agreement.
8.07 PaineWebber Debt
The outstanding amount of principal due on the PaineWebber Debt
immediately prior to the Closing shall be not more than the outstanding
principal amount on the date hereof, it being understood and agreed that the
NPI Parties shall not, after the date hereof, borrow any further amounts
thereunder. Ventures I and Ventures II shall pay all interest on the
PaineWebber Debt on a current basis in accordance with its terms. Sellers
shall have delivered an estoppel certificate from PaineWebber dated as of the
Closing certifying to such outstanding amount and, evidence in form and
substance satisfactory to Buyer of the satisfaction of the PaineWebber Debt
and termination of all Liens arising in connection therewith upon payment of
such Debt by Buyer and Ventures I as contemplated by the Units Purchase
Agreement.
8.08 HUD and RECDHA Approvals
Buyer shall have obtained at or prior to the Closing Date the
unconditional written approvals of HUD and RECDHA to this Agreement and the
Other Agreements and to the execution, delivery and performance of this
Agreement and the Other Agreements by the parties thereto.
8.09 Hart-Scott-Rodino 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.
8.10 Consents
Sellers and the NPI Parties shall have complied with Section 6.06 to
the extent required, without any of Sellers, or the NPI Parties having made
any agreement or reached any understanding not approved in writing by Buyer as
a condition for obtaining any such consent, authorization, approval, order,
license, certificate or permit.
8.11 Contractual Consents Needed
(a) Except as set forth on Schedule 4.12-C, Sellers and the NPI
Parties shall have obtained at or prior to the Closing all consents required
for the consummation of the transactions contemplated by this Agreement from
any party to any Material Agreement, property management agreement,
partnership agreement, contract, other agreement or mortgage, instrument,
lease, license, arrangement, or understanding to which any of them is a party,
or to which any of them or any of their respective businesses, properties, or
assets are subject or where the failure to obtain a consent from any such
Person would violate or breach any of the foregoing.
8.12 Tax Allocation Agreement
The Tax Allocation Agreement ("Tax Allocation Agreement") in the
form of Exhibit E shall have been duly authorized, executed, and delivered by
the parties thereto at or prior to the Closing.
8.13 [Intentionally Omitted]
8.14 Other Agreement
The Agreement in the form attached as Exhibit F, shall have been
duly authorized, executed, delivered by the parties thereto, and be effective
at or prior to the Closing.
8.15 FCMC Voting Trust
The FCMC Voting Trust shall be in full force and effect and no party
shall be in material default of any provision thereof.
8.16 Change in Ownership of Controlled Partnerships
From the date hereof until the Closing Date, none of the Controlled
Partnerships has experienced any change in ownership or control of more than
5% of the limited partnership interests of any Controlled Partnership, except
the March Partnerships.
8.17 LPD Agreement
The transactions contemplated by the Sale Agreement, dated the date
hereof, between Insignia Management Group, L.P. and LPD Equities, Inc. in the
form attached as Exhibit G shall have been consummated by the parties thereto
at or prior to the Closing.
8.18 [Intentionally Omitted]
8.19 Insurance
On or prior to the Closing Date, Buyer 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.
8.20 Absence of Certain Events
On the Closing Date, no event shall have occurred which would cause
(a) any merger, consolidation, reorganization, other business combination, or
recapitalization involving any of the Acquired Companies, (b) any dissolution,
liquidation, or termination of any of the Acquired Companies, (c) any sale of
any assets of any of the Acquired Companies, (d) the amendment of the
Organizational Documents of any of the Acquired Companies, or (e) the adoption
by any of the Acquired Companies 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 Buyer or its Affiliates of the transactions contemplated by this
Agreement or the Other Agreements.
8.21 Simultaneous Closing
The Closing of the transactions contemplated by the Units Purchase
Agreement shall have closed simultaneously with the Closing under this
Agreement.
8.22 Conditions Precedent Under Other Agreements
The obligation of Buyer to close the transactions contemplated under
this Agreement is subject to the fulfillment of the following additional
conditions precedent on the Closing Date hereunder:
(a) the representations and warranties of the Sellers and NPI
Parties named therein contained in the Other Agreements shall be true and
correct in all material respects on and as of the Closing Date hereunder with
the same effect as if made on and as of such date, the covenants and
agreements of such Sellers and NPI Parties shall have been performed and
satisfied, all of the conditions to the obligations of the Buyer named therein
shall have been satisfied, subject only to the consummation of the Closing
thereunder by the Buyer and delivery of all required certificates, opinions
and instruments of transfer by the Sellers named therein (the form and
substance of all of which shall have been agreed and all of which shall be
capable of being delivered on the date of the Closing hereunder), and no
default (or event which with notice or the passage of time or both would be a
default) shall then exist under any Other Agreement and the Sellers and the
NPI Parties shall have delivered to Buyer an Officer's Certificate to such
effect in form and substance satisfactory to Buyer;
(b) no event shall have occurred which shall make it probable, in
the reasonable opinion of Buyer, that the conditions to the obligations of the
Buyer or its Affiliates under any or all of the Other Agreements will not be
satisfied by a date which is not more than two days after the Closing Date
hereunder and the NPI Parties shall have delivered to Buyer an certificate of
the NPI Principals as to the absence of any events, or conditions which call
into question whether the conditions to such obligations of Buyer or its
Affiliates will not be satisfied by such date, in form and substance
satisfactory to Buyer; and
(c) no material adverse change shall have occurred since the date
hereof in the business, property, operations, assets, liabilities, condition
(financial or otherwise) or prospects of any entity in which Buyer or any
Affiliates is to acquire an interest pursuant to any Other Agreement and the
Sellers shall have delivered a certificate to such effect, in form and
substance satisfactory to Buyer.
8.23 Other Closing Documents
Sellers and the NPI Parties shall have delivered to Buyer at or
prior to the Closing such other documents as Buyer may reasonably request in
form and substance satisfactory to Buyer.
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 at the Closing):
9.01 Accuracy of Representations and Compliance with Conditions
All representations and warranties of Buyer contained in this
Agreement shall be accurate as of the Closing Date, 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 or the Other Agreements;
as of the Closing, Buyer 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 Buyer 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 Buyer, dated as of
the Closing Date, in form and substance satisfactory to Sellers.
9.02 Buyer's Deliveries
Buyer shall have delivered to Seller the funds and documents set
forth in Section 3.02(b).
9.03 Hart-Scott-Rodino 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.
9.04 Tax Allocation Agreements
The Tax Allocation Agreement in the form of Exhibit E shall have
been duly authorized, executed, and delivered by the parties thereto at or
prior to the Closing.
9.05 [Intentionally Omitted]
9.06 Other Agreement
The Agreement in the form attached as Exhibit F, shall have been
duly authorized, executed, delivered by the parties thereto, and be effective
at or prior to the Closing.
9.07 Closings Under Other Agreements
Insignia shall deliver a certificate (which may be based on the
certificate delivered under Section 8.22) in form and substance satisfactory
to Sellers that it has no knowledge of any events or conditions that call into
question whether the conditions to the obligations of Sellers and/or their
Affiliates under the Other Agreements will be satisfied.
9.08 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 Insignia.
9.09 No Governmental or Legal Action
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 the Seller, (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 any Other Agreement or impairs the
contemplated benefits to Sellers of any of the transactions contemplated by
this Agreement or any Other Agreement.
9.10 Investment Capital Contribution
IFGP or an Affiliate of Buyer shall have been substituted as the
guarantor of NPI Inc.'s funding obligation in connection with the capital
contributions of NPI Equity and NPI Equity II with respect to the Controlled
Partnerships (the "Investment Capital Contribution") pursuant to the terms of
a certain agreement dated as of the date hereof, by and among Insignia, the
NPI Principals, Emmet J. Cashin, Jr., Jarold A. Evans, W. Patrick McDowell and
the other parties named therein.
9.11 Simultaneous Closing
The Closing of the transactions contemplated by the Units Purchase
Agreement shall have closed simultaneously with the Closing under this
Agreement.
9.12 Other Closing Documents
Buyer shall have delivered to Sellers at or prior to the Closing
such other documents of officers of Buyer as Sellers may reasonably request.
X. Post Closing Covenants
10.01 Tax Returns
Buyer shall cause the federal, state and local income tax returns
and information returns (including any related or supporting information and
schedules) for the calendar year 1996 for each of the Controlled Partnerships
to be prepared in accordance with the provisions of the Tax Allocation
Agreement, so as to. among other things, (i) reflect Insignia NPI, L.L.C., in
the case of the limited partnership units owned by the Scheduled LPs (as such
term is defined in the Units Purchase Agreement), and MRI LLC, in the case of
the MRI/CP Units (as such term is defined in the Units Purchase Agreement),
and Riverside Drive L.L.C., in the case of the limited partnership units owned
by the Commercial LPs (as such term is defined in the Units Purchase
Agreement), as the owner(s) of said units as of the Closing Date, and (ii)
close the books of each partnership described in clause (i) as of the close of
the day immediately preceding the Closing Date and by treating each of the
period through the close of such immediately preceding day and the period
beginning on the Closing Date, respectively, as a separate taxable year,
except that income, gain, loss, deductions and credits from ordinary
operations of such partnership (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 shall be apportioned on a per diem
basis. Buyer shall cause the Scheduled LPs, the MRI LPs and the Commercial
LPs to make elections under Section 754 of the Code to the extent required
under the Tax Allocation Agreement.
10.02 MRI Agreements
Buyer and Sellers shall cause the agreements described on Schedule
10.02-C (the "MRI Agreements") among the parties named therein to be executed
and delivered by the parties thereto.
10.03 Century Agreements
Buyer and Sellers shall cause the agreements described on Schedule
10.03-C (the "Century Agreements") among the parties named therein to be
executed and delivered by the parties thereto.
XI. Survival of Representations and Warranties and Covenants
11.01 Survival
All representations, warranties, covenants and agreements contained
in this Agreement or in any Additional Documents shall, in accordance with the
terms of this Agreement and the Master Indemnity Agreement, survive the
Closing under this Agreement and the Other Agreements notwithstanding any
investigation conducted by or on behalf of any party with respect thereto.
11.02 Time Limitations
(a) The representations and warranties set forth in this Agreement
shall terminate on the date which is eighteen months after the Closing Date of
this Agreement, 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; except that no representations or warranties shall terminate with
respect to any claim as to which notice is given in writing prior to such
date. For purposes of this Agreement, violations of a statutory obligation
include violations of applicable rules and regulations.
(b) No claim may be asserted after the Closing against any party to
this Agreement for breach of any representation or warranty set forth in this
Agreement unless the claim is asserted on or before the date which is eighteen
months after the Closing Date of this Agreement, 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.
(c) Except for the obligation of Sellers and the NPI Parties
pursuant to Section 6.17, no claim may be asserted after the Closing 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 unless the claim is asserted on or before the date which is eighteen
months after the Closing Date of this Agreement, 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.
XII. Termination
12.01 Termination
This Agreement and the transactions contemplated hereby may be
terminated at any time on or prior to the Closing Date:
(a) by the mutual written consent of the parties hereto;
(b) by Buyer:
(i) if any material representation or warranty of Sellers or the
NPI Parties made in this Agreement or in any Additional Document was untrue in
any material respect when made, and such breach is not cured within 20 days of
Sellers' receipt of written notice from Buyer that such breach exists or has
occurred; or
(ii) if Sellers or the NPI Parties 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 Buyer that such default exists or has
occurred; or
(iii) if there shall occur an Event of Bankruptcy (defined below)
with respect to any of Sellers or the NPI Parties; or
(iv) if termination by Buyer is permitted under Section 4.30(e)
or Section 8.05 or Article X of the Units Purchase Agreement; or
(v) if the conditions to Buyer's obligations hereunder cannot be
satisfied by the Closing Date for any reason other than a breach by Buyer.
(c) by Sellers:
(i) if any material representation or warranty of Buyer made in
this Agreement or any Additional Document was untrue in any material respect
when made, and such breach is not cured within 20 days of Buyer's receipt of
written notice from Seller that such breach exists or has occurred; or
(ii) if Buyer 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 Buyer's receipt of
written notice from Sellers that such default exists or has occurred; or
(iii) if there shall occur an Event of Bankruptcy with respect to
Buyer; or
(iv) 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 or the NPI Parties.
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.
12.02 Manner of Exercise
In the event of the termination of this Agreement pursuant to
Section 12.01 hereof, written notice thereof shall forthwith be given to the
non-terminating parties, and this Agreement shall terminate and the
transactions contemplated hereunder shall be abandoned without further action
by any party hereto; provided, however, no such notice of termination shall be
effective unless the terminating party shall give or cause to be given a
contemporaneous notice of termination under each of the Other Agreements which
contains provision for termination.
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
and Article XIII, if applicable.
12.04 Intentionally Omitted]
XIII. Miscellaneous
13.01 Covenants Not to Sue
(a) After the Closing, Buyer shall not sue any of Sellers or the
NPI Parties for any acts as a direct or indirect general partner of the
Controlled Partnerships or for causing any other NPI Party to act as a direct
or indirect general partner of the Controlled Partnerships prior to the
Closing except for suits based on any rights arising under or in connection
with this Agreement or the Additional Documents (or as otherwise provided in
the Master Indemnity Agreement).
(b) After the Closing, neither any of Sellers nor the NPI Parties
shall sue Buyer or any Affiliate of Buyer for any acts as a direct or indirect
general partner of the Controlled Partnerships after the Closing except for
suits based on any rights arising under or in connection with this Agreement
or the Additional Documents (or as otherwise provided in the Master Indemnity
Agreement).
(c) If Buyer sells, conveys, transfers or otherwise disposes of any
of the Acquired Companies to any Person, Buyer shall, and shall cause its
Affiliates to, cause such Person to make adequate provisions such that upon
consummation of any such transaction Sellers and the NPI Parties shall be
entitled to receive from such Person the benefits of the provisions of Section
13.01(a).
13.02 Joint and Several Liability; Indemnification
(a) With respect to any matter for which Sellers and the NPI
Parties would have joint and several liability to Buyer under this Agreement,
the relative liability of the Apollo Entities on the one hand and Sellers and
the NPI Parties on the other hand shall be governed by Section 4.07 of the
Master Indemnity Agreement.
(b) After the Closing under this Agreement, all rights of any
parties hereto to sue any other parties for indemnification or otherwise under
this Agreement shall be asserted only under the Master Indemnity Agreement.
13.03 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.
13.04 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.
13.05 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.
13.06 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 13.06). Any notice addressed to Buyer shall be addressed to the
attention of: General Counsel, with a copy to Proskauer Rose Goetz &
Mendelsohn LLP, 1585 Broadway, New York, New York 10036, Attention: Arnold S.
Jacobs, Esq. Any notice to Sellers or the NPI Parties shall be addressed c/o
and sent only to the NPI Principals and AP-NPI with a copy to Rosenman &
Colin, 575 Madison Avenue, New York, New York 10022-2585, Attention: Joseph
L. Getraer, Esq., and a copy to Battle Fowler LLP, 75 East 55th Street, New
York, New York 10022, Attention: Steven L. Lichtenfeld, Esq. 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 13.06 shall be
deemed given at the time of receipt thereof.
13.07 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.
13.08 Binding Effect
The provisions of this Agreement shall be binding upon and inure to
the benefit of Sellers, the NPI Parties, Buyer, and their respective
successors and assigns.
13.09 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.
13.10 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.
13.11 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.
13.12 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.
13.13 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).
13.14 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.
13.15 No Joint Venture or Partnership
Sellers, the NPI Parties and Buyer intend that the relationships
created hereunder be solely that of buyer and seller. Nothing herein is
intended to create a joint venture, partnership, tenancy-in-common, or joint
tenancy relationship between any of the parties.
13.16 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.
13.17 Whole Agreement; Exhibits and Schedules; Amendments
This Agreement and the Other Agreements 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. 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.
13.18 Knowledge
For purposes of this Agreement, the term "to the knowledge of
Sellers and NPI Parties" or any similar term shall mean the actual knowledge
of any of Michael L. Ashner, Martin Lifton, Arthur N. Queler, Peter Braverman,
William Hamilton and Steven Lifton.
13.19 Expenses
Each of the parties hereto shall bear its own expenses in connection
with (i) the preparation and negotiation of this Agreement and the Other
Agreements and (ii) the transactions contemplated by this Agreement and the
Other Agreements, and all such expenses of Sellers and the NPI Parties shall
be paid by Persons other than those to be acquired by Buyer and its Affiliates
under this Agreement and the Other Agreements.
13.20 Definitions
The following terms are defined in the following Sections:
Defined Term Section
Acquired Companies 4.01
Additional Documents 4.28
Affiliate 4.01
Affiliate Transactions 7.06
Buyer Recitals
Buying Group 4.16
Purchase Price 1.01(a)
Closing 3.01
Closing Date 3.01
Code 4.11
Controlled Partnership 4.01
Controlled GP 4.01
Corporate Employees 4.19(a)
Debt 4.13
Environment 4.17(i)
Environmental Laws 4.17(i)
Environmental Liabilities 4.17(i)
ERISA Affiliate 4.20(a)
ERISA 4.20(a)
Event of Bankruptcy 12.01
Executive Employees 4.19(a)
FCMC Voting Trust 4.02
Fox Amendment Recitals
FRI Recitals
FRI Partnership Agreement Recitals
Hazardous Substances 4.17(i)
HSR Act 6.05(a)
HUD 4.12
Investment Capital Contribution 9.10
IRS 4.20(d)(i)
Liabilities 4.08(a)
Lien 4.02
March Partnerships 4.17(a)
Master Agreement Recitals
Master Indemnity Agreement 4.16
Material Agreement 4.15
Multiemployer Plan 4.20(b)
Multiple Employer Plan 4.20(b)
Net Current Assets 4.08(a)
NPI Family Parties Parties
NPI Parties Parties
NPI Principals Parties
NPI Shares Recitals
Order 4.25
Organizational Documents 4.03(b)(v)
Other Agreements 3.02(a)(ix)
PaineWebber Debt Recitals
PaineWebber Recitals
PBGC 4.20(b)(v)
Person 4.01
Plan 4.20(a)
PRA 4.06(b)
Real Property 4.17(a)
Reimbursable Employees 4.19(a)
SEC 4.25
SEC Filings 4.25
Securities Act 1.02(c)
Sellers Parties
Selling Group 4.16
Settlement Agreements 4.25
Shareholders 4.24
Subsidiaries 4.01
Tender Offer Documents 4.25
Tender Offers 4.25
to the knowledge of Sellers
and NPI Parties 13.18
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
BUYER:
INSIGNIA FINANCIAL GROUP, INC.
By: _______________________
Name:
Title:
IFGP CORPORATION
By: _______________________
Name:
Title:
Sellers:
AP-NPI II, L.P.
By: AP-NPI Operating Corporation II, its general partner
By: ________________________
Name:
Title:
____________________________
MICHAEL L. ASHNER
____________________________
MARTIN LIFTON
____________________________
ARTHUR N. QUELER
____________________________
SUSAN ASHNER
____________________________
JUDIE LIFTON
____________________________
ANISE QUELER
____________________________
STEVEN LIFTON
____________________________
G. BRUCE LIFTON
THE MARTIN LIFTON 1994 FAMILY TRUST
By: ____________________________
Robert Lifton, Trustee
THE ELINOR LIFTON 1994 FAMILY TRUST
By: ____________________________
Robert Lifton, Trustee
NPI PARTIES:
NATIONAL PROPERTY INVESTORS, INC.
By: ____________________________
Name: Michael L. Ashner
Title: President
NPI-AP MANAGEMENT L.P.
By: NPI Property Management Corporation, its general partner
By: ____________________________
Name: Michael L. Ashner
Title: President
NPI PROPERTY MANAGEMENT
CORPORATION
By: ____________________________
Name: Michael L. Ashner
Title: President
DEFOREST VENTURES I, L.P.
By: DeForest Capital I Corporation, its general partner
By: ____________________________
Name: Michael L. Ashner
Title: President
DEFOREST VENTURES II, L.P.
By: DeForest Capital II Corporation, its general partner
By: ____________________________
Name: Michael L. Ashner
Title: President
DEFOREST CAPITAL I CORPORATION
By: ____________________________
Name: Michael L. Ashner
Title: President
DEFOREST CAPITAL II CORPORATION
By: ____________________________
Name: Michael L. Ashner
Title: President
QAL ASSOCIATES
By: ____________________________
Name: Michael L. Ashner
Title: President
QALA II ASSOCIATES
By: ____________________________
Name: Michael L. Ashner
Title: President
AP-NPI L.P.
By: AP-NPI Operating Corporation, its general partner
By: ____________________________
Name:
Title:
AP-NPI X L.L.C.
By: ____________________________
its managing member
AP-NPI III, L.P.
By: ________________________, its general partner
By: ____________________________
Name:
Title:
NPI EQUITY INVESTMENTS, INC.
By: ____________________________
Name: Michael L. Ashner
Title: President
NPI EQUITY INVESTMENTS II, INC.
By: ____________________________
Name: Michael L. Ashner
Title: President
