FORM 8-K - CURRENT REPORT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 24, 1997
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II
(Exact name of registrant as specified in its charter)
New York 2-85829 13-3202289
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File Number) Identification
organization) Number)
One Insignia Financial Plaza
Post Office Box 1089
Greenville, South Carolina 29602
(Address of Principal Executive Office)
Registrant's telephone number, including area code (864) 239-1000
850 Third Avenue, Nineteenth Floor
New York, New York 10022
(Former address, if changed since last report)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On June 24, 1997, Insignia Financial Group, Inc., a Delaware corporation
("Insignia"), and IFGP Corporation, a Delaware corporation ("IFGP")
(collectively, the "Buyer"), entered into a Stock Purchase Agreement (the
"Agreement") with The Wynnewood Company, Inc., a New York corporation
("Seller"), DBL Properties Corporation, a New York corporation ("DBL"), and
William Clements, an individual and the owner of 100% of the capital stock of
Seller ("Clements"). The closing of the transactions contemplated by the
Agreement occurred on June 24, 1997 (the "Closing"). At the Closing, pursuant
to the terms and conditions of the Agreement, the Buyer acquired all of the
issued and outstanding stock of DBL ("DBL Shares"), which is the general partner
of the Registrant. The aggregate purchase price for the DBL Shares will be
$1,270,000, payable in various installments through June 24, 2000.
Upon the Closing, the officers and directors of DBL resigned and Insignia caused
new officers and directors of this entity to be elected.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
2.1 Stock Purchase Agreement by and among The Wynnewood Company, Inc., William
Clements, and DBL Properties Corporation (the "Seller Parties") and
Insignia Financial Group, Inc., and IFGP Corporation (the "Buyer Parties")
dated June 24, 1997.
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 thereunto duly authorized.
DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II
By: DBL PROPERTIES CORPORATION
Its General Partner
By: /s/William H. Jarrard, Jr.
President and Director
Date: July 9, 1997
STOCK PURCHASE AGREEMENT
BY AND AMONG
"SELLER PARTIES"
THE WYNNEWOOD COMPANY, INC.,
WILLIAM CLEMENTS, AND
DBL PROPERTIES CORPORATION
AND
"BUYER PARTIES"
INSIGNIA FINANCIAL GROUP, INC., AND
IFGP CORPORATION
JUNE 24, 1997
DBL PROPERTIES CORPORATION
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of June 24, 1997, by and among THE WYNNEWOOD COMPANY, INC., a New York
corporation having its principal office located at 850 Third Avenue, 19th Floor,
New York, New York 10022 ("Seller"); DBL PROPERTIES CORPORATION, a New York
corporation which is a wholly-owned subsidiary of Seller having its principal
office located at 850 Third Avenue, 19th Floor, New York, New York 10022
("DBL"); WILLIAM CLEMENTS, an individual and the owner of 100% of the capital
stock of Seller ("Clements"), INSIGNIA FINANCIAL GROUP, INC., a Delaware
corporation having its principal office located at One Insignia Financial Plaza,
Greenville, South Carolina 29601 ("Insignia") and IFGP CORPORATION, a Delaware
corporation having its principal office located at One Insignia Financial Plaza,
Greenville, South Carolina 29601 ("IFGP"). Each of Seller, DBL and Clements is
sometimes referred to herein as a "Seller Party" and, together, Seller, DBL and
Clements are collectively referred to herein as the "the Seller Parties."
Insignia and IFGP are collectively referred to herein as the "Buyer Parties."
PREAMBLE
A. DBL is the sole general partner of various limited partnerships that
own certain real estate holdings.
B. Seller owns 100% of the issued and outstanding capital stock and all
other securities of any other kind of DBL. Clements owns 100% of the issued and
outstanding capital stock and all other securities of any kind of Seller.
C. Seller and Clements wish to sell to the Buyer Parties, and the Buyer
Parties wish to purchase, all of the issued and outstanding securities of DBL,
subject to the terms and conditions set forth herein.
D. The parties wish to make certain other agreements in connection with
such sale and purchase.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the covenants, agreements, representations
and warranties herein contained, the parties hereto agree as follows:
ARTICLE I. The Sale and Purchase
1.01 Sale and Purchase
(a) Subject to the terms and conditions of this Agreement, at the
Closing (defined below), Seller shall sell and transfer to IFGP, and IFGP shall
purchase from Seller, 100% of the issued and outstanding shares of the no par
value common stock of DBL (the "DBL Shares"). DBL shall, as a result of such
purchase and sale transaction, become a wholly-owned subsidiary of IFGP.
(b) IFGP shall not be required to purchase any of the DBL Shares to
be sold hereunder unless all of the DBL Shares are sold to IFGP at the Closing
pursuant to the terms of this Agreement.
1.02 Delivery of Stock Certificates and Purchase Price.
(a) Seller shall deliver to the Buyer Parties at the Closing stock
certificates representing all of the DBL Shares and any other issued and
outstanding securities of DBL 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 reasonably requested by the Buyer
Parties, and with all required documentary stamps affixed thereto.
(b) The aggregate purchase price ("Purchase Price") for the DBL
Shares will be $1,270,000 (One Million One Hundred Thousand Dollars), payable in
five installments (each an "Installment") as follows: (1) the first Installment
shall be in the amount of $291,000 and shall be paid on the Closing Date, (2)
the second Installment shall be in the amount of $26,500 and shall be paid
ninety (90) days after the Closing, (3) the third Installment shall be in the
amount of $317,500 and shall be paid on March 1, 1998, (4) the fourth
Installment shall be in the amount of $317,500 and shall be paid on June 24,
1999, and (5) the fifth Installment shall be in the amount of $317,500 and shall
be paid on June 24, 2000. Each such payment will be made either by certified or
official bank check made payable to such Person as Seller shall designate in
writing or by wire transfer to such account and in accordance with such wiring
instructions as Seller shall provide to Insignia in writing at least three (3)
business days prior to the applicable payment date.
ARTICLE II. Closing
2.01 The Closing
The closing of the transactions contemplated by Section 1.01 (the
"Closing") shall take place at the New York office of Insignia located at 375
Park Avenue, 34th Floor, New York, New York, at 10:00 A.M., local time, on the
date this Agreement is executed by all parties hereto (the "Closing Date").
2.02 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) the Seller Parties shall deliver to the Buyer Parties the
following:
(i) The stock certificates representing the DBL Shares and
certificates representing any other securities of DBL as provided in Section
1.02(a).
(ii) Fully executed Non-Compete Agreements by Clements and
Seller in the form attached hereto as Exhibit A.
(iii) Certificates from each of the Seller Parties which is not
a natural person and each of the Controlled Partnerships (as defined below)
signed by its duly authorized general partners, officers, managers or other
legal representatives, in form and substance satisfactory to the Buyer Parties,
certifying its Certificate of Incorporation with all amendments and supplements
thereto and Bylaws (in the case of Seller and DBL) and Certificate and Agreement
of Limited Partnership with all amendments and supplements thereto (in the case
of the Controlled Partnerships), valid existence and good standing (in all
jurisdictions where such Seller Parties are doing business), incumbency of
officers or others acting in a representative capacity.
(iv) (1) A certificate, dated as of the Closing Date and signed
by Clements in his individual capacity and on behalf of Seller in his capacity
as an authorized officer thereof, to the effect that the conditions set forth in
Article VII have been satisfied, and (2) Certified copies of resolutions duly
adopted by DBL's Board of Directors and sole shareholder evidencing the taking
of all corporate action necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Insignia and IFGP and
their counsel shall request.
(v) Evidence in form and substance satisfactory to the Buyer
Parties of all consents received by the Seller Parties pursuant to Section 4.08.
(vi) Evidence that all directors and officers of DBL have
submitted their resignations or been removed effective as of the Closing Date.
(vii) An assignment from Seller to Insignia pursuant to Section
6.03(a) in form and substance reasonably satisfactory to Insignia.
(b) the Buyer Parties shall deliver to the Seller Parties the
following:
(i) Certificates from each of Insignia and IFGP, signed by its
duly authorized officers or other legal representatives in form and substance
satisfactory to the Seller Parties certifying its Certificate of Incorporation
with all amendments and supplements thereto and Bylaws, 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.
(ii) A certificate, dated as of the Closing Date and signed by
authorized officers of Insignia and IFGP, to the effect that the conditions set
forth in Article VIII have been satisfied, and that all corporate action
necessary to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been taken,
all in such reasonable detail as Seller and its counsel shall request.
(iii) An assignment from Insignia to Seller pursuant to Section
6.03(b) in form and substance reasonably satisfactory to Seller.
ARTICLE III. Representations and Warranties of Seller and Clements
Seller and Clements, jointly and severally, represent and warrant to
the Buyer Parties as of the date hereof as follows:
3.01 Organization and Qualification
Seller and DBL are each corporations duly organized, validly existing
and in good standing under the laws of the State of New York and Seller is not,
nor to the knowledge of Seller and Clements is it required to be, qualified to
transact business as a foreign corporation in any jurisdiction. DBL is
qualified as a foreign corporation to do business and is in good standing in
those jurisdictions in which the character of the property owned, or the nature
of the business transacted by it makes such qualification necessary (all of
which are listed in Schedule 3.01), except where failure to so qualify would not
have a material adverse effect on the business of DBL. The principal place of
business of Seller and DBL is located at 850 Third Avenue, 19th Floor, New York,
New York 10022. The copies of the Certificates of Incorporation and any
amendments thereto and the By-laws of Seller and DBL delivered to the Buyer
Parties are true and complete and in effect on the date hereof.
3.02 Capitalization
(a) Seller is authorized to issue 200 shares of no par value common
stock and there are presently 100 shares of no par value common stock of Seller
issued and outstanding and registered in the name of Clements on the books and
records of Seller. DBL is authorized to issue 200 shares of no par value common
stock and there are presently 100 shares of no par value common stock of DBL
issued and outstanding.
(b) Seller is the owner, beneficially and of record, of all of the DBL
Shares, constituting all of the legal and beneficial equity interests or other
securities of any kind of DBL, free and clear of all Liens of any nature
whatsoever. Clements is an individual resident of the State of New York and is
the owner, beneficially and of record, of 100 shares of the no par value common
stock of Seller, constituting all of the legal and beneficial equity interests
of Seller (the "Seller Shares"), free and clear of all Liens of any nature
whatsoever. 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.
(c) All of the DBL Shares are duly authorized, validly issued, fully
paid, and fully non-assessable and are owned by Seller free and clear of all
Liens. There is no agreement, commitment (whether or not legally binding),
plan, or arrangement to issue, and no outstanding option, warrant, security or
other instrument or other right to obtain, convert into or exchange for or call
for the issuance of any capital stock or security or other instrument
convertible into, exercisable for, or exchangeable for any capital stock or
other security of DBL. There are no restrictions of any kind on the authority
of Seller to transfer title to the DBL Shares, free and clear of all Liens.
There are no contracts or other understandings (whether formal or informal,
written or oral, firm or contingent) that require or may require DBL or any
Seller Party to repurchase any of the DBL Shares. There are no preemptive or
similar rights with respect to the DBL Shares. None of the Seller Parties is a
party to any voting agreements, voting trusts, proxies or any other agreements,
instruments or understandings whatsoever with respect to the DBL Shares, or any
agreement with respect to the transferability, purchase or redemption of the DBL
Shares.
3.03 Subsidiaries
Seller has no subsidiaries other than DBL and DBL has no subsidiaries.
3.04 Authority
(a) Seller has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors and sole shareholder of Seller. No other corporate acts or
proceedings are necessary to authorize the performance of this Agreement or the
transactions contemplated hereby. This Agreement constitutes a valid and
binding agreement of the Seller and Clements, enforceable against each of them
in accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to creditors' rights or by the application of principles of equity. At
the Closing, Seller shall transfer good title to IFGP of all of the DBL Shares,
and DBL shall have good and marketable title to all of the partner 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.
(b) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby, will:
(i) violate, conflict with or result in a breach of Seller's
Certificate of Incorporation or By-laws;
(ii) violate, conflict with or result in a breach of any
provisions of, or constitute a default (or an event which, with the giving of
notice or lapse of time or both would constitute a default under, or result in
the termination of, or accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of Seller or upon any of the Seller Shares or DBL Shares
under the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, contract, permit, license, agreement, lease or other
instrument or obligation to which Seller or Clements is a party, or by which
Seller or Clements or any of their respective properties or assets may be bound
or affected, or
(iii) to the knowledge of Seller and Clements, violate any order,
judgment, writ, injunction decree or any law, statute, rule, ordinance or
regulation applicable to Seller or Clements or any of their respective
properties or assets.
3.05 Absence of Inducement
In entering into this Agreement, none of the Seller Parties has been
induced by, or relied upon, any representations, warranties or statements by the
Buyer Parties not set forth or referred to in this Agreement or any document
delivered at the Closing, whether or not such representations, warranties or
statement have actually been made, in writing or orally, and each of the Seller
Parties acknowledges that, in entering into this Agreement, the Buyer Parties
has been induced by and relied upon the representations and warranties of the
Seller Parties herein or therein set forth.
3.06 No Knowledge of Breach
None of Seller or Clements has any knowledge on the date hereof of any
fact or circumstances which would cause any representation or warranty of the
Buyer Parties in this Agreement or any document delivered at the Closing to be
misleading or incorrect in any material 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.
ARTICLE IV Representations and Warranties of Seller and DBL
Seller and DBL jointly and severally represent and warrant to the
Buyer Parties as of the date hereof as follows:
4.01 The Controlled Partnerships
(a) DBL is the sole general partner of each of the limited
partnerships listed on Schedule 4.01(a) (each of such limited partnerships is
hereinafter referred to as a "Controlled Partnership" and are collectively
referred to as the "Controlled Partnerships"). DBL does not, legally or
beneficially, directly or indirectly, have any assets or own any interest in any
other Person other than the Controlled Partnerships. 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.
(b) The Controlled Partnerships are each duly organized, validly
existing and in good standing under the laws of their respective jurisdictions
of organization and each of the Controlled Partnerships is qualified as a
limited partnership to do business and is in good standing in those
jurisdictions in which the character of the property owned, or the nature of the
business transacted by it, makes such qualification necessary (all of which are
listed in Schedule 4.01(b)), except where failure to so qualify would not have a
material adverse effect on its business. DBL and each of the Controlled
Partnerships has all requisite power and authority and, all material consents,
authorizations, approvals, orders, licenses, certificates and permits from and
has made such declarations and things with all federal, state, local and other
governmental authorities and all courts and tribunals (collectively,
"Governmental Consents"), necessary to own, lease, license and use its
properties and assets and to carry on the business in which it is now engages,
except where failure to obtain any Governmental Consents would not materially
adversely affect its business.
(c) The copies of the Certificates of Limited Partnership and
partnership agreements for each Controlled Partnership and any amendments or
supplements thereto, delivered to the Buyer Parties are true and complete and in
effect on the date hereof.
(d) Each of the general partner interests in the Controlled
Partnerships is duly authorized by and issued in accordance with the applicable
agreement of limited partnership (except to the extent of any liability of DBL
as a general partner specifically provided in the respective partnership
agreements of the Controlled Partnerships), free and clear of all Liens or
voting trusts 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. There are no rights, options, subscriptions or other agreements of
any kind to purchase or acquire any general partner interest in any of the
Controlled Partnerships. There are no agreements of any kind limiting or
otherwise restricting the authority of DBL to directly or indirectly manage and
control in all respects each 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.
(e) DBL has not breached, or permitted any Controlled Partnership to
breach, or default on or violate any of its material obligations or duties,
including but not limited to DBL's fiduciary duty to any Controlled Partnership
or other partners in any Controlled Partnership, under any Certificate and
Agreement of Limited Partnership with all amendments and supplements thereto
with respect to such Controlled Partnerships.
4.02 Authority
(a) DBL has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors and sole shareholder of DBL. No other corporate acts or
proceedings are necessary to authorize the performance of this Agreement or the
transactions contemplated hereby. This Agreement constitutes a valid and
binding agreement of DBL, enforceable against it in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application relating to creditors rights or
by the application of principles of equity.
(b) Neither the execution and delivery of this Agreement nor the
consummation of transactions contemplated hereby, will:
(i) violate, conflict with or result in a breach of DBL's
Certificate of Incorporation or By-laws or any provision of the Certificates of
Limited Partnership or partnership agreements of any of the Controlled
Partnerships;
(ii) conflict with or result in a breach of any provisions of, or
constitute a default (or an event which, with the giving of notice or lapse of
time or both would constitute a default under, or result in the termination of,
or accelerate the performance required by, or result in the creation of any Lien
upon any of the properties or assets of DBL or, to the knowledge of Seller, upon
any of the Controlled Partnerships under the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust, contract, permit, license,
agreement, lease or other instrument or obligation to which DBL or any of the
Controlled Partnerships is a party, or by which DBL or any Controlled
Partnership or any of their respective properties or assets may be bound or
affected, or
(iii) to the knowledge of DBL, violate any order, judgment, writ,
injunction decree or any law, statute, rule, ordinance or regulation applicable
to DBL or any Controlled Partnership or any of their respective properties or
assets.
4.03 Business Conducted/Assets/Property/Use of Properties
(a) Except as set forth on Schedule 4.03(a), Seller conducts no
business and has no assets or Liabilities (defined below) other than the
ownership of shares of capital stock in DBL.
(b) Except as set forth on Schedule 4.03(b), DBL conducts no business
and has no assets other than the ownership of general partner 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 partner interests.
(c) All of the real properties owned or operated by each of the
Controlled Partnerships are listed on Schedule 4.03(c). The properties listed on
Schedule 4.03(c) are collectively referred to herein as the "Properties" and
each of the Properties is individually referred to as a "Property."
(d) Except as set forth on Schedule 4.03(d), each of the Properties
is used solely for residential or commercial purposes and related activities.
4.04 Financial Condition; Assets
(a) On the Closing Date, DBL's Current Assets (defined below) shall
be greater than DBL's Liabilities. As used in this Agreement, " Current Assets"
means cash, cash equivalents and accounts receivable; 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.
(b) On the Closing Date, DBL shall have good and valid title to each
of the following assets, free and clear of Liens:
(i) the loans and advances set forth on Schedule 4.04(b)(i) to
the extent not paid prior to Closing;
(ii) the accounts receivable set forth on Schedule 4.04(b)(ii)
to the extent not paid prior to Closing;
(iii) all fixed assets currently owned by it, 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.
4.05 Insurance
Schedule 4.05 lists all of the policies of insurance of any kind
covering each of Seller, DBL and the Controlled Partnerships 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 Seller, DBL and the Controlled Partnerships 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 Seller
Parties or the Controlled Partnerships has received any notice of cancellation
or termination with respect to any such policy.
4.06 Material Events and Changes
Since December 31, 1996, except as set forth on Schedule 4.06, none of
Seller, DBL, or any of the Controlled Partnerships:
(a) has mortgaged, pledged, subjected to or suffered any Lien, or
granted any Lien, in respect of any of its properties or other assets, or
incurred any Debt (defined below);
(b) is in default under any Material Agreement (defined below),
license or permit;
(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;
(d) has experienced any reduction of five percent (5%) or more in
operating cash flow with respect to any of the Properties through April 30,
1997, as compared to actual fiscal year 1996 results or projected 1997 results
through April 30, 1997 as set forth in the 1997 Operating Budget for each
Property;
(e) has experienced any reduction of five percent (5%) or more in
operating cash flow with respect to all of the Properties in the aggregate, as
compared to actual fiscal year 1996 results or year-to-date projected 1997
results as set forth in the 1997 Operating Budget for the Properties; or
(f) has sought, directly or indirectly, in any manner, to effect a
change in control of any Controlled Partnership.
4.07 No Conflicts or Defaults; No Violations
Neither the execution, delivery or performance of this Agreement by
any of Seller or DBL 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) assuming that each of the consents and approvals set
forth on Schedule 4.07 has been obtained, conflict with or result in any breach
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the properties or
assets of any of the Seller, DBL or the Controlled Partnerships 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 or otherwise; (c)
violate any provision of their respective Certificate of Incorporation or Bylaws
or any duty arising or existing in connection therewith; (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) entitle any current or
former employee of any of Seller or DBL 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").
4.08 Consents
Except as set forth on Schedule 4.08, 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.
4.09 Debt
Schedule 4.09 is a complete list of (a) all Debt of DBL (including any
intercompany debt or Debt for which the DBL Shares is security), (b) all Debt of
the Controlled Partnerships, and (c) all Debt in which any Seller Party 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. No Seller
Party is the obligor in respect of and no assets of any of DBL or the Controlled
Partnerships is security for or otherwise subject to any Debt other than the
Debt described on Schedule 4.09. The Seller Parties have delivered to the Buyer
Parties true, complete and correct copies of all agreements, notes, security
documents and other documents relating to any Debt of DBL or the Controlled
Partnerships 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. Each of
DBL, Seller and, to the knowledge of Seller, the Controlled Partnerships is in
full compliance with the terms of any Debt for which it is liable or to which
any of its assets is subject, and no defaults exist thereunder.
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).
4.10 Taxes
(a) Neither Seller, DBL nor any of the Controlled Partnerships is a
foreign person within the meaning of Section 1445 of the Code. Schedule 4.10(a)
sets forth the taxpayer identification number and office address within the
United States for each Seller Party.
(b) None of the Controlled Partnerships has made an election under
Section 754 of the Code at any time that Seller or any Affiliate owned the DBL
Shares or managed or operated such Controlled Partnership or owned any general
partner interest therein or, to the knowledge of Seller, prior to such time.
(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) Intentionally Omitted
(e) All tax returns required to be filed by or on behalf of any of
Seller, DBL or the Controlled Partnerships have been timely filed or requests
for extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1996, and all tax returns filed are complete and
accurate in all material respects. All taxes shown on filed tax returns have
been paid. There is no audit examination, deficiency, or refund litigation with
respect to any taxes. There are no Liens with respect to taxes upon any of the
Assets of DBL or the Controlled Partnerships.
(f) None of Seller, DBL or the Controlled Partnerships has executed
an extension or waiver of any statute of limitations on the assessment or
collection of any tax due (excluding such statutes that relate to years
currently under examination by the IRS or other applicable taxing authorities)
that is currently in effect.
(g) Deferred taxes of DBL and the Controlled Partnerships have been
provided for in accordance with GAAP.
(h) None of DBL or the Controlled Partnerships is a party to any tax
allocation or sharing agreement and none of DBL or the Controlled Partnerships
has been a member of an affiliated group filing a consolidated federal income
tax return, or has any liability for taxes of any Person under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
law) as a transferee or successor or by contract or otherwise.
(i) Each of DBL and the Controlled Partnerships is in compliance
with, and its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all applicable information
reporting and tax withholding requirements under federal, state, and local tax
laws, and such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Code.
(j) Except as disclosed in Schedule 4.10(k), none of DBL or the
Controlled Partnerships has made any payments, is obligated to make any
payments, or is a party to any contract that could obligate it to make any
payments that would be disallowed as a deduction under Section 280G or 162(m) of
the Code.
(k) There has not been an ownership change, as defined in Code
Section 382(g), of DBL or the Controlled Partnerships that occurred during or
after any taxable period in which DBL or any Controlled Partnership incurred a
net operating loss that carries over to any taxable period ending after December
31, 1997.
(l) None of DBL or the Controlled Partnerships has or has had in any
foreign country a permanent establishment, as defined in any applicable tax
treaty or convention between the United States and such foreign country.
4.11 Material Agreements
Schedule 4.11(a) lists all existing agreements and identifies the
subject matter thereof to which any of DBL or the Controlled Partnerships is a
party or is subject or to which any of their respective properties or assets is
subject and which are material either individually or in combination with other
agreements to the financial condition, results of operations, business,
properties, assets or liabilities of any of DBL and the Controlled Partnerships
including any property management agreement relating to any of the Properties
(each a "Material Agreement"). Seller has delivered to the Buyer Parties 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 default of
any material provision thereof. Each such Material Agreement may be canceled
upon ninety (90) days or less prior written notice, except as listed on Schedule
4.11(b).
4.12 Environmental Matters
(a) Except as disclosed on Schedule 4.12(a.), to the Knowledge of
Seller, all of the current and past use and operations by any of the Controlled
Partnerships (at any time that Seller or any Affiliate thereof owned the DBL
Shares or managed or operated such Controlled Partnership or owned any general
partner interest therein) or any owner, tenant, lessee or other Person at or
from any Property comply and have complied with all applicable Environmental
Laws (defined below). None of Seller or any Affiliates thereof and, to the
knowledge of Seller, none of the Controlled Partnerships (at any time that
Seller or any Affiliate owned the DBL Shares or managed or operated such
Controlled Partnership or owned any general partner interest therein), nor any
Controlled Partnership (at any time that any of Seller or any Affiliate thereof
owned the DBL Shares or managed or operated such Controlled Partnership or owned
any general partner interest therein) or any owner, tenant, lessee or other
Person, has engaged in, authorized, allowed or permitted any operations or
activities upon any 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 any Property, except in compliance with all applicable
Environmental Laws.
(b) (i) To the knowledge of Seller, no owner, tenant, lessee or other
Person, or any Controlled Partnership has been or is involved in activities at
or related to any portion of any Property directly or indirectly owned or
managed by any of DBL or the Controlled Partnerships which activities could
reasonably be expected to lead to (A) the imposition of any liability on any of
the DBL or the Controlled Partnerships under any Environmental Law, or on any
subsequent or former owner or operator of any portion of any such Property, or
(B) the creation of a Lien with respect to any liability on any portion of any
such Property under any Environmental Law; and (ii) to the knowledge of the
Seller Parties, no activity by any owner, tenant, lessee or other occupant of
any portion of any 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 the DBL or the Controlled Partnerships or on any other subsequent or former
owner or operator of any portion of such Property.
(c) Except as disclosed on Schedule 4.12(c), the Property does not
contain any Hazardous Substances in, on, over, under or at the Property in
concentrations which would presently violate Environmental Laws or impose
liability or obligations on the present or former owner or operator of the
Property under the Environmental Laws for any investigation, corrective action,
remediation or monitoring of Hazardous Substances in, on, over, under or at the
Property. None of the 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 Seller Parties and none of the Controlled Partnerships
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 Property, or the conduct of the business of any of
DBL or the Controlled Partnerships.
(d) Except as set forth in Schedule 4.12(d), and except for non-
friable asbestos in ceiling and linoleum tiles, there are no underground storage
tanks, asbestos or asbestos containing materials, polychlorinated biphenyls,
urea formaldehyde, or other Hazardous Substances in, on, over, under or at any
presently owned or operated Property.
(e) To the knowledge of Seller, there are no conditions existing at
any 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 4.12(e) lists all such O&M programs.
(f) Each of DBL and the 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 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 4.12(f)
contains a list of all such required permits, authorization and approvals.
(g) Seller has provided to the Buyer Parties all environmental
reports, assessments, audits, studies, investigations, data and other written
environmental information in their custody, possession or control concerning the
Property.
(h) Except as disclosed on Schedule 4.12(h), none of Seller or DBL
has any reason to believe that any of DBL or the 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 of 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 DBL or the
Controlled Partnerships or any Affiliates thereof or (B) the off-site
transportation, treatment, storage or disposal of Hazardous Substances generated
by any of DBL or the Controlled Partnerships or any third-party customers
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," "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 the Seller 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.
4.13 Investment Company
None of DBL or the Controlled Partnerships is an "investment company"
or a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
4.14 Employees
None of DBL or the Controlled Partnerships has any employees other
than as listed on Schedule 4.14.
4.15 Employee Benefits
None of DBL or any of the Controlled Partnerships maintains, sponsors
or contributes to any "employee benefit plans," within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or 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, nor is DBL or any Controlled Partnership an entity that would be
deemed a "single employer" under Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA.
4.16 Litigation and Claims
Except as set forth on Schedule 4.16, there is no litigation,
arbitration, claim, governmental or other proceeding (formal or informal), or
investigation pending or threatened, with respect to any of Seller, DBL or any
of the Controlled Partnerships, or any of their respective businesses,
properties, or assets, other than those which are covered by insurance or vendor
claims under $1,000. None of Seller, DBL or any of the Controlled Partnerships
is: (i) in violation of or in default under any order, judgment or decree, (ii)
to the knowledge of Seller, in violation of any law, rule or regulation, or
(iii) to the knowledge of Seller, required to take any action in order to avoid
such violation or default. The litigation listed on Schedule 4.16 will not
prohibit the consummation of any of the transactions contemplated hereby.
4.17 Intellectual Property
Except as described on Schedule 4.17, each of DBL or the Controlled
Partnerships 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 DBL or the Controlled
Partnerships as presently conducted or as any of them contemplates conducting.
None of DBL or the Controlled Partnerships has infringed, is infringing, or has
received notice of infringement asserted with respect to any Intangibles of
others. There are no Intangibles of others which may adversely affect the
financial condition, results of operations, business, properties, assets or
liabilities of any of DBL or the Controlled Partnerships.
4.18 Questionable Payments
None of Seller, DBL or any of the Controlled Partnerships, nor any
director, officer, general partner, or, to the knowledge of Seller, 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.
4.19 [Intentionally Omitted]
4.20 SEC Reports; Tender Offers
Seller has previously furnished the Buyer Parties with true and
complete copies of each of the following reports filed by any of the Controlled
Partnerships which are required to file such reports with the SEC: Annual
Reports on Form 10-K for each of the fiscal years ended December 31, 1996, 1995,
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 SEC Filings did 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.
4.21 Properties
Each of DBL and the Controlled Partnerships has good and marketable
title to all properties, including the 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 4.21), free and clear of
all Liens, except for the mortgages disclosed in the Annual Reports on Form 10-K
for each of the Controlled Partnerships and the mortgage on the Orlando asset.
Except as set forth in Schedule 4.21, no Person holds a right of first refusal
or option to purchase with respect to any asset of any of DBL or the Controlled
Partnerships.
4.22 Books and Records; Bank Accounts
(a) The books and records of each of DBL and the Controlled
Partnerships are complete and correct in all material respects, and the books
and records of each of DBL and the Controlled Partnerships contain accurate and
complete records of all material actions taken by them since the date Seller
acquired the DBL Shares.
(b) Seller has provided accurate lists of all of the bank and
brokerage accounts of each of DBL and the Controlled Partnerships and the
authorized signatories for such accounts.
4.23 Completeness of Disclosure
No representation or warranty by any of the Seller Parties in this
Agreement or any document delivered at the Closing 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.
4.24 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 salable value" of the
assets of each of Seller and DBL 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 salable value of the assets of each of Seller and DBL 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 Seller, DBL and the Controlled Partnerships will have, as
of such date, an unreasonably small amount of capital with which to conduct its
business, (iv) each of Seller, DBL and the Controlled Partnerships will be able
to pay its debts as they mature and (v) the consideration to be received by
Seller hereunder for the assets to be sold by Seller hereunder is not less than
the "present fair salable 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.
4.25 Absence of Inducement
In entering into this Agreement, none of the Seller Parties has been
induced by, or relied upon, any representations, warranties or statements by the
Buyer Parties not set forth or referred to in this Agreement or any document
delivered at the Closing, whether or not such representations, warranties or
statement have actually been made, in writing or orally, and each of the Seller
Parties acknowledges that, in entering into this Agreement, the Buyer Parties
has been induced by and relied upon the representations and warranties of the
Seller Parties herein or therein set forth.
4.26 No Knowledge of Breach
None of Seller or DBL has any knowledge on the date hereof of any fact
or circumstances which would cause any representation or warranty of the Buyer
Parties in this Agreement or any document delivered at the Closing 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.
ARTICLE V Representations and Warranties of the Buyer Parties
The Buyer Parties represent and warrant to the Seller Parties as of
the date hereof and agree with the Seller Parties 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 the Buyer Parties hereby
have been (or when delivered will be) duly authorized, executed, and delivered
by the Buyer Parties, 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 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) materially conflict with or result in any material
breach of, or constitute a material default under or, except as set forth on
Schedule 5.03, 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 Certificates of Incorporation or Bylaws.
5.04 Completeness of Disclosure
No representation or warranty by the Buyer Parties in this Agreement
or any document delivered at the Closing 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.
5.05 Administration of Controlled Partnerships
(a) The Buyer Parties or certain of their Affiliates have prior to
the Closing provided certain administrative services to the Controlled
Partnerships and management services with respect to certain of the Properties.
In their role as administrator of the Controlled Partnerships and manager of
certain of the Properties, Insignia's Affiliates have obtained certain knowledge
and information with respect to the financial condition and operations of the
Controlled Partnerships.
(b) To the actual knowledge, without any independent investigation or
inquiry, of Frank Garrison and Scott Kester, there are no facts which would
cause any representation or warranty of Seller or DBL, with respect to the
Controlled Partnerships and the Properties, to be untrue or misleading in any
material respect.
ARTICLE VI. Additional Agreements of the Seller Parties and Buyer Parties
6.01 Joint and Several Covenants
(a) The Seller Parties, jointly and severally, covenant and agree to
perform or cause to be performed the covenants and agreements 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 and agreements of
either of them under this Agreement.
(c) The Buyer Parties jointly and severally covenant and agree that,
to the extent Frank Garrison or Scott Kester has actual knowledge, without any
independent investigation or inquiry, of any facts which would cause any
representation or warranty of Seller DBL, with respect to the Controlled
Partnerships for which Affiliates of Insignia provide administration services
and the Properties for which Affiliates of Insignia provide management services,
to be untrue or misleading in any material respect, Seller and DBL shall not be
deemed to have breached any such representation or warranty, and the Buyer
Parties jointly and severally further covenant and agree that they will not
assert any claim against any of the Seller Parties, either directly or by way of
indemnification, which is based on, arises out of or in connection with any
representation or warranty of Seller or DBL as to which Frank Garrison or Scott
Kester has actual knowledge, without any independent investigation or inquiry,
of any facts which would cause such representation or warranty to be untrue or
misleading in any material respect.
6.02 Notices of Termination
The Seller Parties will provide to the property managers of each of
the Properties, except for the property known as Table Mesa and any Property
currently managed by an Affiliate of Insignia, notices of termination of any and
all property management agreements relating to such Properties, such
terminations to be effective no later than the date ninety (90) days following
the Closing Date.
6.03 Other Agreements
(a) The parties agree that, with respect to the real property known
as Table Mesa, the current joint venture partner will continue to manage this
property and Seller will assign to Insignia at the Closing Seller's right to
receive a portion of the management fee revenue derived from such property, at
dollar levels not less than the portion of such management revenue generated as
of December 31, 1996.
(b) Insignia will cause DBL to assign to Clements at the Closing two-
thirds (2/3) of all compensation and proceeds of a sale due DBL in connection
with DBL's general partner interest in Drexel Chandler Land, L.P. and Drexel
Orlando Land, L.P. upon the sale of the Chandler and Orlando assets.
6.04 Confidentiality
(a) Each of the Seller Parties shall before and after the Closing,
insure that all confidential information which any of the Seller 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 DBL and the 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 the Buyer Parties; 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. The Seller Parties shall, and shall
cause all other such Persons to, at the Buyer Parties' request after the
Closing, deliver to the Buyer Parties any documents or other medium containing
such confidential information to which the restrictions of the foregoing
sentence apply.
(b) The Buyer Parties shall, before the Closing, insure that all
confidential information which the Buyer Parties 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 the Seller Parties, shall not be published, disclosed, or
made accessible by the Buyer Parties to any other Person at any time or used by
the Buyer Parties (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 the Seller Parties; provided, however,
that the restrictions of this sentence shall not apply to the extent any such
disclosure (i) may 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, the Buyer Parties shall, and shall cause all other such
Persons to, at the Seller Parties' request, deliver to the Seller Parties any
documents or other materials containing such confidential information to which
the restrictions of the foregoing sentence apply.
(c) Clements agrees that he will not, and will cause his affiliates
and his and their Representatives not to, initiate contact with, encourage any
inquiries or proposals by, solicit, or enter into any negotiations or
discussions with, or provide any information or assistance of any kind, or
afford any access to his or their properties, books and records, to any person,
corporation or other entity or group (as used with reference to Section 13(d)(3)
under the Securities Exchange Act of 1934, as amended), in connection with any
possible proposal, offer or transaction relating to the acquisition, directly or
indirectly, by any person who is not an affiliate of Insignia of any of the
assets, securities, any interest in any debt obligation of or any claims or
causes of action against DBL or the Controlled Partnerships, including but not
limited to general or limited partnership interests in any of the Controlled
Partnerships or any of Insignia's affiliates or the asset or property management
of any of the properties managed by Insignia or any of its affiliates without
the prior written consent of Insignia, which consent may be granted or withheld
by Insignia in its sole discretion. Clements agrees to notify Insignia
immediately if any such inquiry is made, or any such negotiations or discussions
are sought or initiated, or any such information, assistance, or access is
requested, or if any such proposal is known by Clements to be forthcoming. Such
notice shall include the identity of the entity or individual making such
inquiry or proposal, seeking such negotiations or discussions, or requesting
such information, assistance or access. Insignia agrees to use its reasonable
best efforts, acting in good faith, to keep confidential the fact that Clements
was the source of such information.
6.05 Public Statements
No public filing or announcement concerning any of the transactions
contemplated by this Agreement shall be made by any of the Seller Parties,
without the prior written consent of the Buyer Parties, except as may be
required by law.
6.06 ERISA Matters
On and after the Closing, the Seller Parties shall be liable for, and
shall promptly and fully reimburse the Buyer Parties 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. The Seller Parties
acknowledge that they shall be obligated to pay all such claims on demand to the
Buyer Parties.
ARTICLE VII Conditions to Obligations of the Buyer Parties
The obligations of the Buyer Parties under this Agreement are subject
to the following conditions (unless waived by the Buyer Parties in writing at
the Closing):
(a) The Seller Parties shall have delivered to the Buyer Parties the
documents set forth in Section 2.02(a).
(b) There shall have been no sales or refinancings consummated or
negotiated with respect to any of the Properties prior to the Closing without
prior consultation with Insignia.
(c) Notice shall have been given to current management of Properties
not already managed by Insignia or any of its Affiliates in order to effectuate
the assumption of management of such Properties by Insignia or its designated
Affiliate no later than the date ninety (90) days following the Closing Date.
ARTICLE VIII. Conditions to the Obligations of the Seller Parties
The obligations of the Seller Parties under this Agreement are subject
to the following conditions (unless waived by the Seller Parties in writing at
the Closing):
(a) The Buyer Parties shall have delivered to Seller the funds and
documents set forth in Section 2.02(b).
ARTICLE IX Post Closing Covenants
9.01 Tax Returns
The Buyer Parties shall cause the federal, state and local income tax
returns and information returns (including any related or supporting information
and schedules) for all periods after the Closing for each of DBL and the
Controlled Partnerships to be prepared and filed. Clements shall cause the
federal, state and local income tax returns and information returns (including
any related or supporting information and schedules) for all periods prior to
and including the Closing for each of DBL and the Controlled Partnerships to be
prepared and filed.
9.02 Section 338(h)(10) Elections/Negative Capital Accounts
Clements and Seller covenant and agree that they will, at the
direction of Insignia, make elections under Section 338(h)(10) of the Code with
respect to DBL and its assets. Clements and Seller shall be responsible for any
liability for any taxes associated the negative capital accounts of the
Controlled Partnerships with respect to the general partner interests thereof
arising out of the consummation of the transactions contemplated by this
Agreement.
ARTICLE X. Survival of Representations and Warranties and Covenants
All representations, warranties, covenants and agreements contained in
this Agreement or in any document delivered at the Closings shall, in accordance
with the terms of this Agreement survive the Closing for a period of three (3)
years following the Closing notwithstanding any investigation conducted by or on
behalf of any party with respect thereto; provided; however, that the
representations and warranties of Clements and Seller provided in Sections
3.02(b), 3.02(c) and 3.04, the representations and warranties of Seller and DBL
provided in Sections 4.01(a), 4.01(d), 4.04(b) and 4.21 shall survive the
Closing indefinitely and the indemnification obligations of the Seller Parties
provided in Article XI shall survive the Closing for a period of ten years
following the Closing.
ARTICLE XI. Indemnification.
11.01 Indemnification by Seller and Clements. From and after the
Closing, Seller and Clements will remain jointly and severally responsible for,
and shall jointly and severally indemnify, defend (using counsel acceptable to
Insignia), and hold harmless the Buyer Parties and each of their respective
Affiliates, and all of their respective shareholders, partners, officers,
directors, employees, agents, and other representatives or consultants (each
such person, and its successors and assigns, is referred to in this Article XI
as a "Buyer Indemnified Party"), from and against, any and all liabilities,
obligations, claims, losses, causes of action, suits, proceedings, awards,
judgments, settlements, demands, damages, costs, expenses, fines, penalties,
deficiencies, taxes and fees (including, without limitation, the reasonable
fees, expenses, disbursements and investigation costs of attorneys and
consultants) ("Losses") incurred or suffered by any Buyer Indemnified Party that
result from, relate to, or otherwise arise out of:
(a) the operation and ownership of the business and assets of DBL and
the Controlled Partnerships prior to and including the Closing;
(b) any action, inaction, failure to act, occurrence, event or
transaction committed by or associated with the Seller Parties or their
Affiliates, the business or affairs of DBL and the Controlled Partnerships and
their Affiliates, concerning or relating to the business, assets and affairs of
DBL and the Controlled Partnerships through and including the Closing Date; and
(c) any misrepresentation, breach of warranty, or nonfulfillment of
any agreement, covenant, or other obligation on the part of Clements and Seller
under this Agreement or from any misrepresentation in or omission from any
certificate, schedule, statement, or other document furnished to the Buyer
Parties pursuant to this Agreement or in connection with the negotiation,
execution, or performance of this Agreement.
The foregoing indemnification obligations of Seller and Clements shall
arise if and only if the aggregate Losses suffered or incurred by the Buyer
Parties exceed $10,000, provided that such obligations shall cover all Losses
suffered or incurred by the Buyer Parties, including the first $10,000 of
Losses, once the indemnification obligations arise. Notwithstanding the
foregoing, the maximum amount that the Buyer Parties shall have the right to
recover against Seller and Clements shall be limited to the Purchase Price.
11.02 Indemnification by Buyer Parties. From and after the Closing,
the Buyer Parties will be responsible for, and shall indemnify, defend, and hold
harmless Seller and Clements and each of their respective Affiliates, and all of
their respective shareholders, partners, officers, directors, employees, agents,
and other representatives or consultants (each such person, and its successors
and assigns, is referred to herein as a "Seller Indemnified Party"), from and
against, any and all liabilities, obligations, claims, losses, causes of action,
suits, proceedings, awards, judgments, settlements, demands, damages, costs,
expenses, fines, penalties, deficiencies, taxes and fees, (including, without
limitation, the reasonable fees, expenses, disbursements and investigation costs
of attorneys and consultants) incurred or suffered by any Seller Indemnified
Party that result from, relate to, or arise out of:
(a) the operation and ownership of the business and assets of DBL and
the Controlled Partnerships after the Closing;
(b) any action, inaction, failure to act, occurrence, event or
transaction committed by or associated with the Buyer Parties or their
Affiliates, the business or affairs of DBL and the Controlled Partnerships and
their Affiliates, concerning or relating to the business, assets and affairs of
DBL and the Controlled Partnerships after the Closing Date; and
(c) any misrepresentation, breach of warranty, or nonfulfillment of
any agreement, covenant, or other obligation on the part of the Buyer Parties
under this Agreement or from any misrepresentation in or omission from any
certificate, schedule, statement, or other document furnished to the Seller
Parties pursuant to this Agreement or in connection with the negotiation,
execution, or performance of this Agreement.
11.03 Procedure. (a) Notices of Claims. The Seller Indemnified
Parties, the Buyer Indemnified Parties, or any other person entitled to
indemnification under this article (each an "Indemnified Person") must give
notice must be given within a reasonable time after discovery of any fact or
circumstance on which an Indemnified Person could claim indemnification ("Claim"
or "Claims") against the party obligated to indemnify (the "Indemnifying
Party"); provided, however, that the failure to provide such prompt notice shall
in no event impair the rights of the Indemnified Person hereunder except to the
extent that such failure has a material adverse effect on the ability of the
Indemnifying Party adequately to defend such Claim. The notice shall describe
the nature of the Claim, if the Claim is determinable, the amount of the Claim,
or if not determinable, an estimate of the amount of the Claim.
(b) Mitigation. Each party or other Indemnified Person shall use
commercially reasonable efforts to minimize the amount of the loss or injury for
which it is entitled to indemnification.
(c) Assumption of Claims. (1) If the indemnification obligation
arises out of the Claim of a third party, not an Affiliate of either the Seller
Parties or the Buyer Parties (a "Third-Party Claim"), then within ten (10) days
after notice of the Third-Party Claim, the Indemnifying Party shall notify the
Indemnified Person, in writing, whether or not it assumes the defense of the
Third-Party Claim, at the Indemnifying Party's expense, and if so, its
willingness and ability (with reasonable evidence of same) to satisfy any such
Third-Party Claim. If the Indemnifying Party assumes the defense of the Third-
Party Claim, then the Indemnifying Party shall defend the Third-Party Claim
using reputable counsel selected by the Indemnifying Party and reasonably
satisfactory to the Indemnified Person. The Indemnified Person shall, at the
Indemnifying Party's expense, make available to the Indemnifying Party and its
attorneys, accountants, or other duly designated agents, all books and records
of the Indemnified Person relating to any such Third-Party Claim, and the
parties shall to render to each other assistance (at the expense of the
Indemnifying Party) as they may reasonably require of each other in order to
ensure the proper and adequate defense of any such Third-Party Claim.
(2) The Indemnified Person shall be entitled, with counsel
selected by the Indemnified Person, to participate in (but not control), at its
own expense, the defense of any Claim that the Indemnifying Party has, in
accordance with the provisions hereof, elected to defend, and to be kept fully
informed of the status thereof at all stages, including the right to receive, at
the Indemnifying Party's expense, copies of all pleadings and other material
papers in connection with such Claim; provided, however, that the Indemnifying
Party shall bear the reasonable fees, costs and expenses of such separate
counsel if (A) the use of counsel chosen by the Indemnifying Party to represent
the Indemnified Person would present such counsel with a conflict of interest
that would preclude such counsel from representing the Indemnified Person
pursuant to legal canons of ethics or other applicable law, (B) the Indemnifying
Party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent it within thirty (30) days after notice to the indemnifying
party of the institution of the Third-Party Claim, or (C) the Indemnifying Party
shall authorize the Indemnified Person to employ separate counsel at the
Indemnifying Party's expense. The Indemnifying Party shall not settle any
Third-Party Claim without the consent of the Indemnified Person, such consent
not to be unreasonably withheld or delayed, unless (i) the Indemnifying Party
fully indemnifies the Indemnified Person for all damages, losses, deficiencies,
liabilities, costs, and expenses in connection with such settlement of such
Claim, (ii) there is no finding or admission of any violation of law by, or
affect on any other Claims that may be made against the Indemnified Person, and
(iii) the relief granted in connection therewith requires no action on the part
of, and has no economic or other effect on, the Indemnified Person.
(3) Notwithstanding anything to the contrary set forth above, in
the event an Indemnified Person reasonably believes and so notifies the
Indemnifying Party in writing that the applicable Claim, even if fully
indemnified for, is reasonably likely to have a material adverse effect on the
Indemnified Person's business, financial condition, or results of operations,
then the Indemnifying Party shall not have the right to assume the defense of
such Claim but shall have the right to employ separate counsel and to
participate in the defense of such action at its own expense. In such an event,
the Indemnified Person and its counsel shall consult, whenever reasonably
practicable, with the Indemnifying Party and its counsel with respect to the
status of the Claim and any related litigation or other proceedings.
(d) No Assumption of Defense. (1) If the defense of a Third-Party
Claim is not timely assumed and diligently continued by the Indemnifying Party
as provided above, then the Indemnified Person may (to the extent that the
Indemnified Person determines to do so in its sole discretion) conduct any such
proceeding as it may deem appropriate, may take whatever action it deems
necessary or appropriate to resolve or settle such claim or dispute, but shall
in no event have any obligation to defend any such claim or proceeding or to
appeal any adverse finding or determination or defend the appeal by any other
party to a favorable determination; any actions taken or omitted with respect to
the foregoing shall not avoid, reduce or mitigate the Indemnifying Party's
liability hereunder.
(2) The Indemnified Person shall not settle any Third-Party Claim
without first giving notice of the proposed settlement to the Indemnifying Party
(the "Settlement Notice"). The Indemnifying Party shall have the right,
exercisable within five (5) business days following receipt of the Settlement
Notice, to instruct the Indemnified Person not to so settle such Third Party
Claim; provided that, in such event, the Indemnifying Party shall be required to
assume the defense of any such Third- Party Claim subject to and in accordance
with the provisions of set forth above.
11.04 Payment of Indemnification Obligation. Seller or Clements shall
pay promptly to any Buyer Indemnified Party, and the Buyer Parties shall pay
promptly to any Seller Indemnified Party, the amount of all damages, losses,
deficiencies, liabilities, costs, expenses, claims, and other obligations to
which the foregoing indemnities relate.
11.05 Other Rights and Remedies Not Affected. The indemnification
rights of the parties under this article are independent of and in addition to
such rights and remedies as the parties may have at law or in equity or
otherwise for any misrepresentation, breach of warranty, or failure to fulfill
any agreement, covenant, or other obligation under this Agreement, including
without limitation the right to seek specific performance, rescission, or
restitution, none of which rights or remedies shall be affected or diminished
hereby.
ARTICLE XII. Miscellaneous
12.01 Covenants Not to Sue
After the Closing, none of the Seller Parties shall have any claim and
shall not assert any claim, by filing a law suit or otherwise, against any Buyer
Party or any Affiliate of the Buyer Parties 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 document delivered at the Closings.
12.02 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.
12.03 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.
12.04 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.
12.05 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 12.05).
Any notice addressed to the Buyer Parties shall be addressed as
follows:
Insignia Financial Group, Inc.
One Insignia Financial Plaza
16th Floor
Greenville, SC 29601
Attention: Scott Kester
Facsimile No.: (864) 239-1096
Confirmation No.: (864) 239-1632
With a copy to:
Insignia Financial Group, Inc.
One Insignia Financial Plaza
16th Floor
Greenville, SC 29601
Attention: General Counsel
Facsimile No.: (864) 239-1096
Confirmation No.: (864) 239-1000
Any notice to the Seller Parties shall be addressed as follows:
850 Third Avenue
19th Floor
New York, NY 10022
Attention: Bill Clements
Facsimile No.: (212) 752-5617
Confirmation No.: (212) 822-2246
With a copy to:
Graubard, Mollen & Miller
600 Third Avenue
New York, NY 10016-1903
Attention: Michael A. Salberg, Esq.
Facsimile No.: (212) 818-8881
Confirmation No.: (212) 818-8800
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
12.05 shall be deemed given at the time of receipt thereof.
12.06 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.
12.07 Binding Effect
The provisions of this Agreement shall be binding upon and inure to
the benefit of the Seller Parties, the Buyer Parties, and their respective
successors and assigns.
12.08 No Third-Party Beneficiaries
This Agreement does not create, and shall not be construed as
creating, any rights enforceable by any Person not a party to this Agreement,
except as expressly provided herein.
12.09 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.
12.10 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.
12.11 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.
12.12 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).
12.13 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.
12.14 No Joint Venture or Partnership
The Seller Parties and the Buyer Parties 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.
12.15 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.
12.16 Whole Agreement; Exhibits and Schedules; Amendments
This Agreement contains 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
any document delivered at the Closing. 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.
12.17 Knowledge
For purposes of this Agreement, the term "to the knowledge of the
Seller Parties" or any similar term shall mean the actual knowledge of any of
Clements, or any officer, director or employee of Seller or DBL.
12.18 Expenses
Each of the parties hereto shall bear its own expenses in connection
with (i) the preparation and negotiation of this Agreement and (ii) the
transactions contemplated by this Agreement, and all such expenses of the Seller
Parties shall be paid by Persons other than those to be acquired by the Buyer
Parties and its Affiliates under this Agreement.
12.19 Limited Partner Interests
Nothing contained herein shall restrict Clements and Seller from
selling, assigning or transferring any of their respective limited partner
interests in any of the Controlled Partnerships in accordance with the
provisions of the partnership agreements for such Controlled Partnerships.
12.20 Definitions
The following terms are defined in the following Sections:
DEFINED TERM SECTION
Affiliate 4.01(a)
Agreement Introduction
Buyer Indemnified Party 11.01
Buyer Party(ies) Introduction
Claim(s) 11.03(a)
Clements Introduction
Closing 2.01
Closing Date 2.01
Code 4.07
Controlled Partnership(s) 4.01(a)
DBL Introduction
DBL Shares 1.01(a)
Debt 4.09
Employee Benefits Plans 4.15
Environment 4.12(i)
Environmental Laws 4.12(i)
Environmental Liabilities 4.12(i)
ERISA 4.15
Hazardous Substances 4.12(i)
IFGP Introduction
Indemnified Person 11.03(a)
Indemnifying Part(ies) 11.03(a)
Insignia Introduction
Installment 1.02(b)
Intangibles 4.17
Liabilities 4.04(a)
Lien 3.02(b)
Material Agreement 4.11
Net Current Assets 4.04(a)
Property(ies) 4.03(c)
Purchase Price 1.02(b)
SEC Filings 4.20
Seller Introduction
Seller Indemnified Party 11.02
Seller Party(ies) Introduction
Seller Shares 3.02(b)
Single Employer 4.15
Third Party Claim 11.03(a)
to the knowledge of Seller 12.17
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
BUYER PARTIES:
IFGP CORPORATION
By: /s/ Frank M. Garrison
Name: Frank M. Garrison
Title: Vice President
INSIGNIA FINANCIAL GROUP, INC.
By: /s/ Frank M. Garrison
Name: Frank M. Garrison
Title: Vice President
SELLER PARTIES:
THE WYNNEWOOD COMPANY
By: /s/ William D. Clements
Name: William D. Clements
Title: President
DBL PROPERTIES CORPORATION
By: /s/ William D. Clements
Name: William D. Clements
Title: President
WILLIAM CLEMENTS
/s/ William D. Clements
individually
