EXHIBIT (a)
LIMITED PARTNERSHIP UNIT
CONTRIBUTION AGREEMENT
THIS LIMITED PARTNERSHIP UNIT CONTRIBUTION AGREEMENT (this
"Agreement") is entered into by and between Insignia Financial
Group, a corporation organized under the laws of the State of
Delaware; Market Ventures, L.L.C., a limited liability company
organized under the laws of the State of Delaware; Liquidity
Assistance, L.L.C., a limited liability company organized under
the laws of the State of Delaware; DGP Acquisition, L.L.C., a
limited liability company organized under the laws of the State
of Delaware; LP 6 Acceptance Corporation, a corporation organized
under the laws of the State of Delaware; SP I Acquisition,
L.L.C., a limited liability company organized under the laws of
the State of Delaware; SP II Acquisition, L.L.C., a limited
liability company organized under the laws of the State of
Delaware; SP III Acquisition, L.L.C., a limited liability company
organized under the laws of the State of Delaware; SP V
Acquisition, L.L.C., a limited liability company organized under
the laws of the State of Delaware; SP VI Acquisition, L.L.C., a
limited liability company organized under the laws of the State
of Delaware; (each individually a "Contributing Partner" and
collectively the "Contributing Partners"), and Insignia
Properties, L.P., a limited partnership organized under the laws
of the State of Delaware (the "Partnership"). This Agreement and
the First Amended and Restated Agreement of Limited Partnership
of Insignia Properties, L.P. (the "Partnership Agreement") are
entered into simultaneously with each other as of the 31st day of
December, 1996 and each shall be effective as of the Closing
Date, as defined herein (notwithstanding the foregoing, the
Partnership Agreement may become effective before the date of
this Agreement).
RECITALS
A. Each Contributing Partner owns limited partner
interests in limited partnerships that principally own multi-
family residential housing and, to a lesser extent, commercial
properties. The identity of each such partnership, together with
the number of limited partnership units owned by each
Contributing Partner, is set forth under the name of each
Contributing Partner in Exhibit A hereto (collectively, the
"Limited Partner Interests").
B. Insignia Properties Trust, a Maryland business trust
("IPT"), was formed in May 1996, for the purpose of qualifying to
act as a real estate investment trust under the Internal
Revenue Code of 1986, as amended. IPT is a successor by merger
to Insignia Properties Corporation, a Delaware corporation formed
on January 17, 1996.
C. It is contemplated that substantially all of IPT's
assets will be held in, and substantially all of its investments
will be conducted through the Partnership, which will hold, among
other things, all of the Limited Partner Interests.
D. Accordingly, each Contributing Partner hereby proposes
to contribute the Limited Partner Interests to the Partnership in
exchange for which the Partnership will issue limited partner
units to Insignia Financial Group, Inc., a Delaware corporation
("IFG").
In consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained
herein, the Contributing Partners and the Partnership hereby
agree as follows:
ARTICLE I
CONTRIBUTION OF ASSETS
1.01 Contribution of the Assets. Subject to the terms and
conditions of this Agreement, on January 1, 1997 (the "Closing
Date"), each Contributing Partner shall assign and deliver to the
Partnership as its Capital Contribution (as defined in the
Partnership Agreement) all of its right, title and interest in
and to the Limited Partner Interests in exchange for the issuance
to IFG of the aggregate number of limited partnership units in
the Partnership set forth on Exhibit B hereto (collectively, the
"Partnership Interests") (the number shown on Exhibit B is
subject to adjustment based on those final valuations of the
Partnership Interests as shown in that certain Confidential
Memorandum by which IPT will offer shares of beneficial
interest).
1.02 Assignment of Ownership Interest. Effective as of the
Closing Date, each Contributing Partner shall grant, assign,
transfer, convey and deliver to the Partnership, all of such
Contributing Partner's right, title and interest in and to 100%
of such Contributing Partner's Partnership Interest in the
Partnership(s) free and clear of all liens, encumbrances,
security interests and competing claims.
1.03 Assumption of Obligations. By acceptance of this
Agreement the Partnership hereby agrees from and after the
Closing Date to be bound by all of the terms and provisions of
the Partnership Agreements applicable to each Contributing
Partner and each Contributing Partner Partnership Interest all as
set forth on Exhibit C hereto and assumes and agrees to perform,
pay and discharge in full, when due, all of each Contributing
Partner's liabilities and obligations under the Partnership
Agreements and with respect to each Contributing Partner's
Partnership Interest; provided, however, that this assumption
shall have application only to those liabilities and obligations
of each Contributing Partner first accruing or arising on or
after the Closing Date and shall have no application to any such
liabilities and obligations accruing or arising prior to the
Closing Date.
ARTICLE II
EVENTS OCCURRING ON THE CLOSING DATE
2.01 Deliveries by the Contributing Partners. In addition
to the Limited Partner Interests to be delivered to the
Partnership on the Closing Date, each Contributing Partner shall
deliver the following to the Partnership on the Closing Date,
each in form and substance satisfactory to the Partnership and,
unless otherwise agreed in writing by the Partnership, dated as
of the Closing Date:
(a) A copy of the resolutions of each Contributing
Partner's Board of Directors, certified by a duly authorized
officer of such Contributing Partner, authorizing or
ratifying its execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby and thereby;
(b) A certificate of a duly authorized officer of each
Contributing Partner certifying the names and true
signatures of the officers of such Contributing Partner
authorized to sign this Agreement and the other documents to
be delivered hereunder and thereunder; and
(c) Such other approvals and documents as the
Partnership may reasonably request as to the legality,
validity, binding effect or enforceability of this Agreement
or any other agreement or document delivered pursuant
hereto.
2.02 Effect of Contribution. On the Closing Date, upon the
satisfaction of the condition precedent set forth in Section 4.01
below, in exchange for its Capital Contribution (i) IFG will
receive each Contributing Partner's respective Percentage
Interest and (ii) the Capital Account (as defined in the
Partnership Agreement) of IFG will be credited with the amount
set forth opposite its name on Exhibit A to the Partnership
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF CONTRIBUTING PARTNERS
3.01 Conveyance of Interest. Upon the Closing Date,
assuming the satisfaction of or waiver of all conditions set
forth in Article IV hereof, all of the Contributing Partner's
right, title and interest in and to the Limited Partner Interests
will be transferred to the Partnership.
3.02 Organization. Each Contributing Partner is validly
existing and in good standing under the laws of their respective
states or organization.
3.03 Authority. Each Contributing Partner has the corporate
power and authority to carry on its business as now conducted,
and to execute and deliver this Agreement and to perform its
obligations hereunder and thereunder. The execution, delivery
and performance by each Contributing Partner of this Agreement
have been duly authorized by all necessary corporate action; and
this Agreement has been duly executed and delivered by each
Contributing Partner and is enforceable against each Contributing
Partner in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
receivership, conservatorship, reorganization, liquidation,
moratorium or similar events affecting such Contributing Partner
or its assets, or by general principles of equity.
ARTICLE IV
CONDITIONS TO CLOSING; TERMINATION
4.01 Conditions Precedent to Contributing Partners'
Obligation to Close. The obligation of the Contributing Partners
to consummate the transactions contemplated hereby are subject to
the satisfaction, as of the Closing Date, the following
condition, which may be waived in whole or in part by the
Contributing Partners prior to closing. Each Contributing
Partner in its sole discretion shall be satisfied that all
necessary consents, authorizations and approvals for the
consummation of the transactions contemplated hereby have been
obtained from all applicable governmental authorities and other
third parties.
4.02 Termination. In the event that the condition precedent
to the Contributing Partners' obligation to consummate the
transactions contemplated hereby as set forth above has not been
satisfied on or before the Closing Date, then in such event this
Agreement shall terminate and become null and void and of no
further force and effect and neither party shall have any further
obligation to the other.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.01 Amendment and Modification. This Agreement may be
amended, modified or supplemented only by written agreement of
the parties hereto.
5.02 Waiver of Compliance; Consents. Any failure of a party
to comply with any obligation, covenant, agreement or condition
herein may be waived by the other party; provided, however, that
any such waiver may be made only by a written instrument signed
by the party granting such waiver.
5.03 Assignment. This Agreement and all of its provisions
hereof shall be binding upon the parties hereto and their
respective successors and permitted assigns and shall inure to
the benefit of the parties hereto, their respective successors
and permitted assigns.
5.04 Expenses. Whether or not the transactions contemplated
by this Agreement shall be consummated, all fees and expenses
(including all fees of counsel and accountants) incurred by any
party in connection with the negotiation and execution of this
Agreement shall be borne by such party.
5.05 Further Assurances. From time to time, at the request
of each Contributing Partner or the Partnership and without
further consideration, each party, at its own expense, will
execute and deliver such other documents, and take such other
action, as each Contributing Partner or the Partnership may
reasonably request in order to consummate more effectively the
transactions contemplated hereby and to vest in the Partnership
good and marketable title to the Limited Partner Interests.
5.06 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware
(without regard to its conflicts of law doctrines). The
Contributing Partners and the Partnership each (i) irrevocably
submits to the jurisdiction of any Delaware State court or
Federal court sitting in Delaware in any action arising out of
this Agreement or any instrument or document delivered hereunder,
(ii) agrees that all claims in such action may be decided in such
court, (iii) waives, to the fullest extent it may effectively do
so, the defense of inconvenient forum and (iv) consents to the
service of process by mail. A final judgment in any such action
shall be conclusive and may be enforced in other jurisdictions.
Nothing herein shall affect the right of any party to serve legal
process in any manner permitted by law or affect its right to
bring any action in any other court.
5.07 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument and shall become a binding Agreement when one or more
of the counterparts have been signed by each of the parties and
delivered to the other party.
5.08 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand or mailed by registered or
certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as
shall be specified by like notice):
If to the Contributing Partners:
Insignia Financial Group, Inc.
One Insignia ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Copy to: General Counsel
with a copy to:
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
If to the Partnership:
Insignia Properties, L.P.
One Insignia Financial ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Partner
with a copy to:
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
5.09 Headings. The article and section headings contained
in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement.
5.10 Entire Agreement. This Agreement, including the
exhibits, schedules, other documents and instruments referred to
herein, together with the Partnership Agreement embody the entire
agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes
all prior agreements and understandings between the parties with
respect to such subject matter.
5.11 Severability. If any one or more provisions contained
in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision
had never been contained herein.
5.12 Inconsistency or Conflict. In the event of any
inconsistency or conflict between any provision of this Agreement
and any provision of the Partnership Agreement, the provision of
this Agreement shall govern.
5.13 Exhibits. All Exhibits attached hereto are hereby
incorporated in and made a part as if set forth in full herein.
EXHIBIT (b)
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment")
is made as of this 31 day of December, 1996 by and between
Shelter Realty Corporation, a corporation organized under the
laws of the State of South Carolina, Shelter Realty II
Corporation, a corporation organized under the laws of the State
of Carolina; Shelter Realty III Corporation, a corporation
organized under the laws of the State of South Carolina; Shelter
Realty IV Corporation, a corporation organized under the laws of
the State of South Carolina; Shelter Realty V Corporation, a
corporation organized under the laws of the State of South
Carolina; Shelter Realty VI Corporation, a corporation organized
under the laws of the State of Delaware; Shelter VII Corporation,
a corporation organized under the laws of the State of South
Carolina; Davidson Growth Plus GP Corporation, a corporation
organized under the laws of the State of Delaware; ConCap
Equities, Inc., a corporation organized under the laws of the
State of Delaware; ConCap Holdings, Inc., a corporation organized
under the laws of the State of Texas; NPI Equity Investments,
Inc., a corporation organized under the laws of the State of
Florida; U.S. Realty I Corporation, a corporation organized under
the laws of the State of South Carolina; Fox Capital Management
Corporation, a corporation organized under the laws of the State
of California (each individually an "Assignor" and collectively
the "Assignors") and Insignia Properties, L.P., a Delaware
limited partnership ("Assignee"); and Insignia Properties Trust,
a Maryland business trust (the "Trust").
RECITALS
A. Each Assignor owns limited partner interests and
general partner interests in one or more limited partnerships.
The identity of each partnership in which each Assignor owns a
general partner interest is set forth in Exhibit A hereto.
B. Each Assignor, in addition to its right to receive its
percentage allocation of profits or losses and distributions (the
"P&A Allocations") from the limited partnerships for which it
acts as general partner, receives or may receive fees, income or
other payment from time to time as partnership management fees,
partnership management incentives and non-accountable cost
reimbursements (the "Service Income Rights") to such
partnerships. Several Assignors further own those limited
partnership units set forth under such Assignor's name on Exhibit
B hereto (collectively with each Assignors right, title and
interests as a limited partner under their respective partnership
agreement, the "Units"). In consideration for such assignments
IPLP will deliver to the Trust (the sole shareholder of each
Assignor) 611,586 units of general partnership interest of IPLP
(the "IPLP Units").
C. The Trust was formed in May 1996, for the purpose of
qualifying to act as a real estate investment trust under the
Internal Revenue Code of 1986, as amended.
D. It is contemplated that substantially all of the
Trust's will be held in, and substantially all of its investments
will be conducted through Assignee which will hold, among other
things, all of the Service Income Rights and Units.
E. The Assignors desire to assign to Assignee a portion of
their P&A Allocations and all of their Service Income Rights and
Units relating to the limited partnerships for which they serve
as general partners.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Assignors and Assignee hereby agree as follows:
1. Assignment of Economic Benefits. Each Assignor hereby
grants, assigns, transfers, conveys and delivers to Assignee, all
of the Assignor's right, title and interest in and to (i) all of
such Assignor's Service Income Rights and (ii) the Units.
2. Assignment of P&A Allocations. NPI Equity Investments,
Inc., ConCap Equities, Inc. and Davidson Growth Plus GP
Corporation hereby grant, assign, transfer, convey and deliver to
Assignee all of their right, title and interest to all of their
P&A Allocation in excess of 1% of the total P&A Allocations of
each limited partnership for which they serve as general partner.
3. Assignment of Units. Each Assignor hereby grants,
assigns, transfers, conveys and delivers to Assignee, all of such
Assignor's right, title and interest in and to 100% of such
Assignor's Units in the Partnership(s) free and clear of all
liens, encumbrances, security interests and competing claims.
4. Assumption of Obligations. By acceptance of this
Assignment Assignee hereby agrees to be bound by all of the terms
and provisions of the partnership agreements applicable to each
Assignor and each Assignor's Units all as set forth on Exhibit C
hereto and assumes and agrees to perform, pay and discharge in
full, when due, all of each Assignor's liabilities and
obligations under the partnership agreements and with respect to
each Assignor's Units; provided, however, that this assumption
shall have application only to those liabilities and obligations
of each Assignor first accruing or arising on or after the date
of this Agreement and shall have no application to any such
liabilities and obligations accruing or arising prior to the date
of this Assignment.
5. Delivery of IPLP Units. Assignee hereby agrees to
deliver to the Trust the IPLP Units.
6. Successors and Assigns. This Assignment shall be
binding upon and inure to the benefit of the successors of each
of respective parties hereto.
7. Counterparts. This Assignment may be executed in any
number of counterparts. Signature pages may be detached from the
counterparts and attached to a single copy of this Agreement to
form physically one document. Each counterpart shall be deemed
to be an original for all purposes and all counterparts shall
together constitute but one and the same instrument, binding upon
all parties executing the same.
8. Governing Law. This Assignment shall be governed by,
interpreted under, and construed and enforceable with, the laws
of the State of New York.
