EXHIBIT 10.1
CONTRIBUTION AND SALE AGREEMENT
THIS CONTRIBUTION AND SALE AGREEMENT ("Agreement") is made and entered into
as of the 9th day of January, 2003 among KRF COMPANY, L.L.C., a Delaware limited
liability company having an address at c/o The Berkshire Group, Xxx Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "KRF3/KR5 Transferor"), KRF GP
Corporation, a Massachusetts corporation having an address at c/o The Berkshire
Group, Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "GP Transferor" and
together with the KRF3/KR5 Transferor, the "Transferors"), BERKSHIRE INCOME
REALTY-OP, L.P., a Delaware limited partnership having an address at c/o The
Berkshire Group, Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the
"Partnership") and BIR-OP SUB, L.L.C., a Delaware limited liability company
having an address at c/o The Berkshire Group, Xxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (the "Partnership Sub"). Capitalized terms used herein but
not otherwise defined shall have the meanings given to them in Section 1.1.
W I T N E S S E T H:
WHEREAS, on July 22, 2002, Berkshire Income Realty, Inc., a Maryland
corporation ("BIR"), as special limited partner, and BIR GP, L.L.C. (the
"General Partner"), a Maryland limited liability company and a wholly-owned
subsidiary of BIR, as general partner, formed the Partnership;
WHEREAS, the Partnership Sub is a wholly-owned subsidiary of the
Partnership;
WHEREAS, (i) the KRF3/KR5 Transferor is the sole member of KRF3 Acquisition
Company, L.L.C., a Delaware limited liability company ("KRF3"), (ii) the
KRF3/KR5 Transferor owns a 75.82% membership interest in KR5 Acquisition,
L.L.C., a Delaware limited liability company ("KR5") relating solely to KR5's
indirect ownership of the Century Property (as defined below), (iii) Equity
Resources Group, Incorporated, or an entity affiliated with Equity Resources
Group, Incorporated, owns the remaining 24.18% interest in KR5 relating solely
to KR5's indirect ownership of the Century Property and (iv) the KRF3/KR5
Transferor owns a 100% membership interest in KR5 relating solely to KR5's
indirect ownership of the Xxxxxx Pond Property and the Seasons Property (each as
defined below) (the KRF3/KR5 Transferor's membership interests in KRF3 and KR5,
the "Membership Interests");
WHEREAS, KRF3 owns a 91.382% interest as tenant in common (the
"Tenant-in-Common Interest") in the beneficial ownership of certain real
property located in Columbia, Maryland (the "Xxxxxx Real Property") and certain
real property located in Columbia, Maryland (the "Hannibal Real Property"; and
together with the Xxxxxx Real Property and the personal property associated with
the Hannibal Real Property and the Xxxxxx Real Property, the "KRF3 Properties").
The Xxxxxx Real Property and the Hannibal Real Property are more particularly
described in Exhibit A and Exhibit B annexed hereto and hereby made a part
hereof;
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WHEREAS, the rights and obligations of KRF3, as owner of the
Tenant-in-Common Interest, are governed by that certain Tenancy In Common
Agreement (the "KRF3 Tenancy-in-Common Agreement") dated March 1, 2002 between
KRF3 and ERG/DFHG, LLC (the "KRF3 Co-Tenant");
WHEREAS, record title to the KRF3 Properties is owned by DOH, Inc., a
Maryland corporation ("DOH"), as nominee for KRF3 and the KRF3 Co-Tenant;
WHEREAS, all of the issued and outstanding stock of DOH (the "DOH Stock")
is owned by the GP Transferor;
WHEREAS, (i) KR5 is the sole limited partner of WPT Limited Partnership, a
Delaware limited partnership ("WPT"), (ii) the GP Transferor is the sole general
partner (but without an economic interest) of WPT, (iii) WPT is the sole member
of Seasons of Laurel, LLC, a Delaware limited liability company ("Seasons"),
(iv) Seasons owns certain real property located at 0000 Xxx Xxxxxxx Xxx, Xxxxxx,
Xxxxxxxx and more particularly described in Exhibit C annexed hereto and hereby
made a part hereof (such real property, together with the associated personal
property, the "Seasons Property"); (v) WPT also owns the sole limited
partnership interest in Xxxxxx Pond Limited Partnership, a Delaware limited
partnership ("Xxxxxx Pond"), and is the sole member of Xxxxxx Pond Texas, L.L.C.
("Xxxxxx LLC"), a Delaware limited liability company and the sole general
partner of Xxxxxx Pond and (vi) Xxxxxx Pond owns certain real property located
at 00000 Xxxxxxxxxxx, Xxxxxxx, Xxxxx and more particularly described in Exhibit
D annexed hereto and hereby made a part hereof (together with the associated
personal property, the "Xxxxxx Pond Property");
WHEREAS, (i) KR5 is the sole limited partner of Century III Associates
Limited Partnership, a Maryland limited partnership ("Century Associates"), (ii)
the GP Transferor is the sole general partner (but without an economic interest)
of Century Associates, (iii) Century Associates owns certain real property
located at 000 Xxx Xxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx and more particularly
described in Exhibit E annexed hereto and hereby made a part hereof (together
with the associated personal property the "Century Property," the Century
Property, together with the KRF3 Properties, the Xxxxxx Pond Property and the
Seasons Property, the "Properties");
WHEREAS, the ownership structure of the Properties, as hereinabove
described and after giving effect to the transactions provided for or described
in this Agreement, is depicted on Exhibit F annexed hereto and hereby made a
part hereof;
WHEREAS, in furtherance of the purposes for which the Partnership was
established, (i) the KRF3/KR5 Transferor desires to contribute the Membership
Interests to the Partnership in exchange for Partnership Units, (ii) the GP
Transferor desires to sell the GP Interests and the DOH Stock to the Partnership
Sub, all on the terms and conditions hereinafter set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt,
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adequacy and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows:
ARTICLE I
Definitions 1.1 Definitions. Except as otherwise herein expressly provided,
and in addition to any other definitions herein contained, the following terms
and phrases shall have the meanings set forth below:
"Apportionment Amount" shall have the meaning set forth in Section 5.1.
"BIR" shall have the meaning set forth in the Recitals to this Agreement.
"Century Associates" shall have the meaning set forth in the Recitals to
this Agreement.
"Century Property" shall have the meaning set forth in the Recitals to this
Agreement.
"Closing" and "Closing Date" shall have the meanings set forth in Article
IV.
"Closing Documents" shall mean either the "KRF3/KR5 Transferor Closing
Documents" as defined in Section 6.1, the "GP Transferor Closing Documents" as
defined in Section 6.2 or the "Partnership Closing Documents" as defined in
Section 6.3, without distinction between them.
"Consideration" shall have the meaning set forth in Section 3.1.
"Contracts" shall mean those service, maintenance and other contracts
relating to the use, maintenance and operation of the Properties or any portion
thereof (including, without limitation, leases or installment sale agreements
for certain items of personal property, but excluding Leases), which are listed
and described on the schedule of Contracts attached as Exhibit G hereto (the
"Schedule of Contracts"), together with any additions thereto, modifications
thereof or substitutions therefor hereafter entered into in the ordinary course
of business and consistent with past practices of the Owner Entities.
"Cutoff Date" shall mean 11:59 p.m. on the day preceding the Closing Date.
"DOH" shall have the meaning set forth in the Recitals to this Agreement.
"DOH Consideration" shall have the meaning set forth in Section 3.1(A).
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"DOH Stock" shall have the meaning set forth in the Recitals to this
Agreement.
"Xxxxxx Real Property" shall have the meaning set forth in the Recitals to
this Agreement.
"Environmental Laws" shall mean the Resource Conservation and Recovery Act
(42 U.S.C. ss. 6901 et seq.), as amended by the Hazardous and Solid Waste
Amendments of 1984; the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. ss. 9601 et seq.), as amended by the Superfund
Amendments and Reauthorization Act of 1986; the Hazardous Materials
Transportation Act (49 U.S.C. ss. 1801 et seq.); the Toxic Substance Control Act
(15 U.S.C. ss. 2601 et seq.; the Clean Air Act (42 U.S.C. ss. 9402 et seq.); the
Clean Water Act (33 U.S.C. ss. 1251 et seq.); the Federal Insecticide, Fungicide
and Rodenticide Act (7 U.S.C. ss. 136 et seq.); the Occupational Safety and
Health Act (29 U.S.C. ss. 651 et seq.); and all other applicable federal, state
and local environmental laws, (including, without limitation, obligations under
the common law), ordinances, orders, rules and regulations, as any of the
foregoing may have been amended, supplemented or supplanted prior to the Closing
Date, relating to regulation or control of hazardous, toxic or dangerous
substances, materials or wastes (collectively "Hazardous Materials") or their
handling, storage or disposal or to environmental health and safety.
"Environmental Reports" shall have the meaning set forth in Section 7.4(U).
"Exchange Offer" shall mean that certain exchange offer described in the
prospectus relating to BIR's 9% Series A Cumulative Redeemable Preferred Stock
for Interests In Xxxxx Government Income Trust, Xxxxx Government Income Trust
II, Xxxxx Insured Mortgage Limited Partnership, Xxxxx Insured Plus Limited
Partnership, Xxxxx Insured Plus II Limited Partnership, and Xxxxx Insured Plus
III Limited Partnership dated as of January 9, 2003.
"Final Adjustment Date" shall have the meaning set forth in Section 5.1.
"General Partner" shall have the meaning set forth in the Recitals to this
Agreement.
"GP Assignment" shall have the meaning set forth in Section 6.2(B).
"GP Interests" shall mean the GP Transferor's general partnership interests
in WPT and Century Associates.
"GP Transferor" shall have the meaning set forth in the Recitals to this
Agreement.
"GP Transferor Closing Documents" shall have the meaning set forth in
Section 6.2.
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"Hannibal Real Property" shall have the meaning set forth in the Recitals
to this Agreement.
"knowledge" or "known" or grammatical variations thereof, when used in
reference to the Transferors, shall mean the actual knowledge (as opposed to
constructive, deemed or imputed knowledge), acquired without independent
investigation, of any of Xxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxxxx, Xxxxx
Xxxxx. Whenever reference is herein made to the receipt of notice (written or
oral) by the Transferors, XXX0, XX0 or any Subsidiary, as the case may be, the
same shall mean only a notice "known" to the Transferor as such term is defined
above.
"KR5" shall have the meaning set forth in the Recitals to this Agreement.
"KRF3" shall have the meaning set forth in the Recitals to this Agreement.
"KRF3 Co-Tenant" shall have the meaning set forth in the Recitals to this
Agreement.
"KRF3/KR5 Assignment" shall have the meaning set forth in Section 6.1(A).
"KRF3/KR5 Transferor" shall have the meaning set forth in the Recitals to
this Agreement.
"KRF3/KR5 Transferor Closing Documents" shall have the meaning set forth in
Section 6.1.
"KRF3 Properties" shall have the meaning set forth in the Recitals to this
Agreement.
"KRF3 Tenancy-in-Common Agreement" shall have the meaning set forth in the
Recitals to this Agreement.
"KRF GP" shall have the meaning set forth in the Recitals to this
Agreement.
"Leases" shall mean those existing leases, tenancies, concessions, licenses
and occupancies affecting or relating to the Properties which are listed and
described on the schedule of Leases attached as Exhibit H hereto (the "Schedule
of Leases"), together with any additions thereto, modifications thereof or
substitutions therefor hereafter entered into in the ordinary course of business
and consistent with past practices of the Owner Entities.
"Liens" shall mean mortgages, deeds of trust, liens, encumbrances, security
interests, leases, easements, encroachments, covenants, restrictions, leases and
other title and survey defects.
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"Limited Partnership Agreement" shall mean the Agreement of Limited
Partnership of the Partnership dated as of July 22,2002 as the same may be
amended or restated from time to time.
"Losses" shall have the meaning set forth in Section 7.8(A).
"Management Agreements" shall mean those certain management agreements, and
all amendments thereto, dated April 27, 2000, November 14, 2001, April 27, 2002,
April 27, 2000, January 1, 2002, between the Manager and the Owner Entities with
respect to the Properties.
"Manager" shall mean BRI OP Limited Partnership a Delaware limited
partnership.
"Membership Interests" shall have the meaning set forth in the Recitals
hereto.
"MI Consideration" shall have the meaning set forth in Section 3.1(A).
"Mortgages" shall mean the fee mortgages or deeds of trust encumbering the
Properties, which Mortgages and security interests are more particularly
described in the schedule of Mortgages attached as Exhibit I hereto (the
"Schedule of Mortgages").
"Net Contribution Amount" shall mean the dollar amount determined by
subtracting from $141,786,569 the sum of the KRF3/KR5 Transferor's percentage
share of indebtedness to which the Properties are subject as of the Closing
Date.
"Notices" shall mean all notices, demands or requests made pursuant to,
under or by virtue of this Agreement.
"Operating Agreements" shall mean the Limited Liability Company Agreements
of KRF3 and KR5, as the same may be amended or restated from time to time.
"Owner Entity" shall mean each of Xxxxxx Pond, Seasons, Century Associates,
DOH and, as to the beneficial interests in the KRF3 Properties, KRF3 and the
KRF3 Co-Tenant.
"Partnership Closing Documents" shall have the meaning set forth in Section
6.3.
"Partnership Sub" shall have the meaning set forth in the Recitals to this
Agreement.
"Partnership Sub Closing Documents" shall have the meaning set forth in
Section 6.4.
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"Partnership Unit" shall mean a common limited partnership unit in the
Partnership.
"Permitted Exceptions" shall mean all encumbrances on title (not including
mortgages, deeds of trusts, mechanics' liens, judgment liens and other monetary
liens) which would not have a material adverse effect on the business, operation
or current use of any of the Properties. Without limiting the foregoing,
Permitted Exceptions shall include all Leases.
"Properties" shall have the meaning set forth in the Recitals hereto.
"Rent Arrearages" shall mean Rents due and payable prior to but unpaid as
of the Cutoff Date, but shall not include additional amounts due after the
Closing Date by reason of year-end or other adjustments provided for in Leases.
"Rents" shall mean fixed, additional and other amounts payable to an Owner
Entity by the tenant under a Lease.
"Schedule of Leases" shall have the meaning set forth in Section 7.6(B).
"Schedule of Arrearages" shall have the meaning set forth in Section 5.1.
"Seasons" shall have the meaning set forth in the Recitals to this
Agreement.
"Seasons Property" shall have the meaning set forth in the Recitals to this
Agreement.
"Service Contracts" shall have the meaning set forth in Section 7.5(M).
"Subsidiaries" shall mean WPT, Seasons, Xxxxxx Pond, Xxxxxx LLC, and
Century Associates (each individually, a "Subsidiary").
"Subsidiary Partnership Agreements" shall mean the Agreement of Limited
Partnership of WPT and Century Associates, as the same may be amended or
restated from time to time.
"Tenant in Common Interest" shall have the meaning set forth in the
Recitals to this Agreement.
"Tenants" shall mean tenants, subtenants and/or occupants under the Leases.
"Transferors" shall have the meaning set forth in the Recitals to this
Agreement.
"Xxxxxx Pond" shall have the meaning set forth in the Recitals to this
Agreement.
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"Xxxxxx Pond Property" shall have the meaning set forth in the Recitals to
this Agreement.
"WPT" shall have the meaning set forth in the Recitals to this Agreement.
"WPT GP Interests" shall have the meaning set forth in the Recitals to this
Agreement.
1.2 References. All references in this Agreement to particular Sections or
Articles shall, unless expressly otherwise provided, or unless the context
otherwise requires, be deemed to refer to the specific Sections or Articles in
this Agreement, and any references to "Exhibit" shall, unless otherwise
specified, refer to one of the Exhibits annexed hereto and, by such reference,
made a part hereof. The words "herein," "hereof," "hereunder," "hereinafter,"
"hereinabove" and other words of similar import refer to this Agreement as a
whole and not to any particular section, subsection or article hereof.
1.3 Gender and Number. Words of any gender shall include the other gender
and the neuter. Whenever the singular is used, the same shall include the plural
wherever appropriate, and whenever the plural is used, the same shall also
include the singular wherever appropriate.
ARTICLE II
Contribution and Purchase and Sale
2.1 Covenant. In consideration of the mutual covenants and agreements
hereinafter set forth and subject to and in accordance with the terms,
provisions, covenants and conditions more particularly set forth in this
Agreement, (i) the KRF3/KR5 Transferor agrees to contribute all of the
Membership Interests to the Partnership on the Closing Date, and the Partnership
agrees to accept such Membership Interests from the KRF3/KR5 Transferor, and to
assume all obligations of the KRF3/KR5 Transferor under the Operating Agreements
and (ii) the GP Transferor agrees to sell to the Partnership Sub, and the
Partnership Sub agrees to purchase from the GP Transferor, the DOH Stock and the
GP Interests on the Closing Date, and the Partnership Sub agrees to assume all
of the obligations of the GP Transferor under the Subsidiary Partnership
Agreements.
2.2 "As Is".
(A) The Partnership agrees to accept the Membership Interests without
representation or warranty (including any representation or warranty
relating to the Properties or the condition thereof) from the KRF3/KR5
Transferors or any other person or entity, except as may be expressly set
forth in this Agreement.
(B) The Partnership Sub agrees to accept the GP Interests and the DOH
Stock without representation or warranty (including any representation or
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warranty relating to the Properties or the condition thereof) from the GP
Transferor or any other person or entity, except as may be expressly set
forth in this Agreement.
ARTICLE III
Consideration
3.1 Consideration.
(A) The KRF3/KR5 Transferor and the Partnership agree that the
consideration for the Membership Interests (the "MI Consideration") to be
contributed by the KRF3/KR5 Transferor to the Partnership pursuant to this
Agreement shall be that number of Partnership Units determined by dividing
the Net Contribution Amount by $10 (it being agreed that the number of
Partnership Units to be issued as so determined shall be rounded to the
nearest whole number).
(B) The GP Transferor and the Partnership Sub agree that (i) the
consideration for the GP Interests (the "GP Consideration") shall be ten
(10) Dollars and (ii) the consideration for the DOH Stock (the "DOH
Consideration" and, together with the MI Consideration and the GP
Consideration, the "Consideration") shall be ten (10) dollars.
3.2 Assumption of Obligations.
(A) Effective as of the Closing Date, the Partnership will assume all
of the obligations of the KFR3/KR5 Transferor under the Operating
Agreements, to the extent accruing after the Closing.
(B) Effective as of the Closing Date, the Partnership Sub will assume
all of the obligations of GP Transferor under the Subsidiary Partnership
Agreements, to the extent accruing after the Closing.
ARTICLE IV
Closing Date
The Closing shall take place either (i) on the closing date of the Exchange
Offer (provided that if the Exchange Offer shall expire without being extended
or shall otherwise terminate, then this Agreement shall automatically terminate
simultaneously with such expiration or termination and, except with respect to
rights and obligations which expressly survive the termination of this
Agreement, neither party shall have any further rights or obligations hereunder)
or (ii) on such other date as shall be agreed to by the parties hereto, at such
location as the Partnership shall designate. The consummation of the
transactions contemplated hereby shall be referred to herein as the "Closing"
and the date on which the Closing occurs shall be herein referred to as the
"Closing Date."
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ARTICLE V
Apportionments and Payments
5.1 Items to Be Apportioned. The following items with respect to the
Properties shall be apportioned between the KRF3/KR5 Transferor and the
Partnership at the Closing as of the Cutoff Date, and the KRF3/KR5 Transferor's
share of the net positive or negative amount thereof (the "Apportionment
Amount") (i.e., 91.382% in the case of the KRF3 Properties, 100% in the case of
the Xxxxxx Pond Property and the Seasons Property and 75.82% in the case of the
Century Property) shall be reflected by increasing or decreasing, as applicable,
the Net Contribution Amount by the Apportionment Amount, subject to further
adjustments (to be computed based on the value of the Partnership Units at such
time and paid by the KRF3/KR5 Transferor or the Partnership, as applicable, to
the other of them in the form of additional Partnership Units (rounded upward to
the nearest whole Partnership Unit)), if required, up to six (6) months
thereafter (the "Final Adjustment Date") as hereinafter provided:
(A) real property taxes and assessments (or installments thereof) on
the basis of the fiscal year for which payable;
(B) water rates and charges;
(C) sewer taxes and rents;
(D) interest payable under the Mortgages;
(E) annual permit, license and inspection fees, if any, on the basis
of the fiscal year for which levied;
(F) fuel oil and liquid propane gas, if any, at the cost per gallon or
cubic foot most recently charged to the Owner Entities with respect to the
Properties, based on the supplier's measurements thereof, plus sales taxes
thereon;
(G) Rents as and when collected;
(H) amounts payable by the Owner Entities under the Contracts and the
Management Agreements including, without limitation, reimbursements due to,
or accrued as of, the Cutoff Date for salaries, wages and other employee
benefits and charges (including accrued vacation pay, pension contributions
and other similar benefits) payable or accrued to on-site employees of the
Properties; and
(I) except as may be set forth below, all other items customarily
apportioned in connection with the transfer of similar properties similarly
located.
5.2 Credits. There shall be a credit against the MI Consideration in an
amount equal to the sum of the KRF3/KR5 Transferor's percentage share of any
cash held by the Owner Entities.
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5.3 Re-Proration of Impositions. If the real property taxes, water rates
and charges and sewer taxes and rents relating to the Properties are not finally
fixed before the Cutoff Date, the apportionments thereof made at the Closing
shall be based upon the real property taxes, water rates and charges and sewer
taxes and rents assessed for the preceding fiscal year or applicable billing
period and, after the real property taxes, water rates and charges and sewer
taxes and rents are finally fixed, the KRF3/KR5 Transferor and the Partnership
shall make a recalculation of the apportionment of the same, and the KRF3/KR5
Transferor or the Partnership, as the case may be, shall promptly make an
appropriate settlement with the other based upon such recalculation.
5.4 Utilities. Water rates and charges, sewer taxes and rents and gas and
electricity charges for the Properties shall be prorated pursuant to Section
5.1, based upon the per diem charges obtained by using the most recent period
for which such readings shall then be available. On the subsequent taking of
actual readings, the apportionment of such charges shall be recalculated and the
apportionment between the KRF3/KR5 Transferor and the Partnership readjusted and
settled based upon such readings.
5.5 Rent Arrearages. Rents collected or received from a Tenant which, as of
the Closing Date, was in arrears in the payment of Rents, shall be applied as
follows: (i) in the case of Rents received from a Tenant which, at the Cutoff
Date, was not more than two (2) months in arrears in the payment of Rents, the
Rents so collected shall be applied first to such arrears and then to any other
amounts which may then be due after the Cutoff Date; and (ii) in the case of
Rents received from a Tenant which, at the Cutoff Date, was more than two (2)
months in arrears in the payment of Rents, the Rents so collected shall first be
applied to any amounts due after the Cutoff Date and any balance remaining shall
be applied to the arrears. All costs and expenses incurred by the Owner Entities
in bringing any action or proceeding to collect Rent Arrearages from any Tenant
who is delinquent on the Closing Date shall, to the extent of the Partnership's
(or the applicable Subsidiary's) share thereof under the KRF3 Tenancy-in-Common
Agreement and the Operating Agreements, be borne by the Partnership and the
KRF3/KR5 Transferor in proportion to the collected amounts (or the share
thereof) to which each may be entitled hereunder and the KRF3/KR5 Transferor's
portion may be deducted from the Apportionment Amount. The KRF3/KR5 Transferor
shall have no right with respect to Rent Arrearages collected after the Final
Adjustment Date; provided, however, if an Owner Entity shall institute a legal
action or litigation to collect any portion of such Rent Arrearages after the
Closing Date and prior to the Final Adjustment Date, the KRF3/KR5 Transferor
shall retain the right to receive its share of such Rent Arrearages, net of
litigation costs and expenses, if collected.
5.6 Security Deposits. The Schedule of Leases, attached hereto as Exhibit
H, includes a schedule setting forth the unapplied portion of any security
deposits which have been deposited with the Owner Entities or their agents (or
with any predecessors in interest to the Owner Entities with respect to the
Properties to the extent said predecessors have turned over security deposits to
an Owner Entity or given an Owner Entity a credit therefor) by any Tenants. At
the Closing, the Net Contribution
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Amount shall be reduced by the KRF3/KR5 Transferor's share of the aggregate
amount of the security deposits set forth on such schedule which are no longer
on deposit with the Owner Entities. At the Closing, the Net Contribution Amount
shall be increased by the KRF3/KR5 Transferor's share of the aggregate amount of
interest accrued prior to the Closing Date on any security deposits held by the
Owner Entities except to the extent such interest is required to be paid to any
Tenants pursuant to their respective Leases.
5.7 Reserves and Deposits. At the Closing, the Net Contribution Amount
shall be increased by the KRF3/KR5 Transferor's share of the amount of any
reserves, escrow deposits or accruals made with, or held by, the holders of any
Mortgages or any insurance carriers, together with all interest earned thereon,
if any, which is payable to the Owner Entities, for real property taxes and
assessments, insurance premiums or other items.
5.8 Settlement of Adjustments.
(A) On or before the Final Adjustment Date, the adjustments made as of
the Closing Date shall be further adjusted for any differences between the
actual apportionment or adjustment based on calculations as of the Cutoff
Date and the amount thereof estimated on the Closing Date and the net
amount of any such adjustments shall be paid in the form of Partnership
Units as provided in the introductory paragraph of Section 5.1 shall be
paid to the Partnership or to the KRF3/KR5 Transferor. Any payments which
are due on or after the Final Adjustment Date and are attributable to
periods on or before the Cutoff Date will be apportioned within ninety (90)
days of receipt of such payment and the net amount of any such adjustments
shall be paid to the Partnership or to the KRF3/KR5 Transferor in the form
of Partnership Units.
(B) Any errors or omissions in computing apportionments at the Closing
shall be corrected promptly after their discovery.
5.9 Inspection of Books and Records. Prior to Closing and upon request of
the Partnership, the KRF3/KR5 Transferor shall from time to time make available
for inspection by the Partnership or its designee, at the place or places where
they are regularly kept and maintained, during reasonable business hours, the
records and books of account relating to the Properties and, during such
inspection, shall permit extracts and copies to be made from said records and
books of account, at the Partnership's expense. The KRF3/KR5 Transferor shall
have the right from time to time subsequent to the Closing to examine and audit
the records and books of account relating to the Properties.
5.10 Schedule of Rent Arrearages. Attached as Exhibit J hereto is a
schedule of Rent Arrearages (the "Schedule of Rent Arrearages"), which schedule
sets forth each Tenant which is in arrears under a Lease and the items of Rents
with respect to which such Tenant is in arrears as of the Cutoff Date, the
amount of each item and the period of such arrearage.
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5.11 Survival. Unless otherwise provided in this Article V, the provisions
of this Article V shall survive until thirty days after the Final Adjustment
Date except with respect to claims made prior to the end of such thirty-day
period.
ARTICLE VI
Closing Documents
6.1 KRF3/KR5 Transferor Closing Documents. At the Closing (or subsequent
thereto with respect to documents contemplated by subsection (E) below), and
simultaneously with the issuance to the KRF3/KR5 Transferor of the Partnership
Units by the Partnership (plus payment of any sums which the Partnership has
agreed herein to pay to the KRF3/KR5 Transferor at the Closing, but less any
credits to which the Partnership may be entitled hereunder), and simultaneously
with the Partnership's delivery of all of the Partnership Closing Documents, the
KRF3/KR5 Transferor shall deliver, or cause to be delivered, the following
documents (herein referred to collectively as the "KRF3/KR5 Transferor Closing
Documents"):
(A) An instrument ("KRF3/KR5 Assignment") in form reasonably
satisfactory to the KRF3/KR5 Transferor and the Partnership, assigning the
Membership Interests to the Partnership (but without warranty or
representation, it being agreed that all representations and warranties
with respect to the Membership Interests are set forth in this Agreement).
(B) An affidavit of the KRF3/KR5 Transferor and the sole member of the
KRF3/KR5 Transferor, in each case stating its U.S. taxpayer identification
number and that it is not a "foreign person" as defined by Internal Revenue
Code section 1445(f)(3).
(C) Intentionally Omitted.
(D) An updated set of Schedules G, H, J and L to this Agreement.
(E) Such other documents, instruments or agreements which the KRF3/KR5
Transferor is required to deliver to the Partnership pursuant to the
provisions of this Agreement or which the Partnership may, either at or
subsequent to the Closing, reasonably deem necessary in order to consummate
the transactions contemplated by this Agreement.
6.2 GP Transferor Closing Documents. At the Closing (or subsequent thereto
with respect to documents contemplated by subsection (G) below), and
simultaneously with the payment to the GP Transferor of the DOH Consideration
and the GP Consideration by the Partnership Sub, and simultaneously with the
Partnership Sub's delivery of all of the Partnership Sub Closing Documents, the
GP Transferor shall deliver, or cause to be delivered, the following documents
to the relevant parties (herein referred to collectively as the "GP Transferor
Closing Documents"):
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(A) Stock certificates representing the DOH Stock, duly endorsed in
blank or accompanied by stock powers duly executed in blank, in proper form
for transfer.
(B) An instrument ("GP Assignment") in form reasonably satisfactory to
the GP Transferor and the Partnership Sub, assigning the GP Interests to
the Partnership Sub (but without warranty or representation, it being
agreed that all representations and warranties with respect to the GP
Interests are set forth in this Agreement).
(C) An amendment to the limited partnership certificate of each of WPT
and Century Associates, evidencing the withdrawal of the GP Transferor, and
the admission of the Partnership Sub, as the sole general partner of such
partnership.
(D) An affidavit of the GP Transferor stating its U.S. taxpayer
identification number and that it is not a "foreign person" as defined by
Internal Revenue Code section 1445(f)(3).
(E) Intentionally Omitted.
(F) Copies of the certificate of incorporation and by-laws, or
comparable instruments, the minute books and stock transfer records, or
comparable records, of DOH as in effect on the Closing Date.
(G) Such other documents, instruments or agreements which the GP
Transferor is required to deliver to the Partnership Sub pursuant to the
provisions of this Agreement or which the Partnership or Partnership Sub
may, either at or subsequent to the Closing, reasonably deem necessary in
order to consummate the transactions contemplated by this Agreement.
6.3 Partnership Closing Documents. At the Closing (or subsequent thereto
with respect to documents contemplated by subsection (C) below), simultaneously
with the KRF3/KR5 Transferor's delivery of the KRF3/KR5 Transferor Closing
Documents, the Partnership shall deliver to the KRF3/KR5 Transferor the
following documents (herein referred to collectively as the "Partnership Closing
Documents"):
(A) An Amended and Restated Agreement of Limited Partnership of the
Partnership, in the form previously provided to the KRF3/KR5 Transferor,
executed by BIR and the General Partner, to be executed by the KRF3/KR5
Transferor and providing for, among other things, the issuance to the
KRF3/KR5 Transferor of the Partnership Units which the KRF3/KR5 Transferor
is to receive pursuant to the terms of this Agreement.
(B) An executed counterpart of the instrument referred to in Section
6.1(A) above, evidencing the Partnership's assumption of the obligations of
the KRF3/KR5 Transferor under the Operating Agreements.
15
(C) Such other documents, instruments or agreements, if any, which the
Partnership may be required to deliver to the KRF3/KR5 Transferor pursuant
to the provisions of this Agreement or which the KRF3/KR5 Transferor may,
either at or subsequent to the Closing reasonably deem necessary to
consummate the transactions contemplated by this Agreement.
6.4 Partnership Sub Closing Documents. At the Closing (or subsequent
thereto with respect to the documents contemplated by subsection (C) below),
simultaneously with the GP Transferor's delivery of the GP Transferor Closing
Documents, Partnership Sub shall deliver to the GP Transferor the following
documents (the "Partnership Sub Transferor Closing Documents"):
(A) An executed counterpart of the GP Assignment, evidencing
Partnership Sub's assumption of the obligations of the GP Transferor under
the Subsidiary Partnership Agreements;
(B) An executed counterpart of the instrument referred to in Section
6.2(C); and
(C) Such other documents, instruments or agreements which Partnership
Sub is required to deliver to the GP Transferor pursuant to the provisions
of this Agreement or which the Transferors may, either at or subsequent to
the Closing, reasonably deem necessary in order to consummate the
transactions contemplated by this Agreement.
6.5 Further Assurances. The Transferors, the Partnership and the
Partnership Sub agree, at any time and from time to time after the Closing, to
execute, acknowledge where appropriate and deliver such further instruments and
documents and to take such other action as the other of them may reasonably
request in order to carry out the intent and purpose of this Agreement. The
provisions of this Section 6.5 shall survive the Closing.
ARTICLE VII
Representations and Warranties
7.1 Investment Representations. The KRF3/KR5 Transferor, for itself and for
each direct or indirect partner in the KRF3/KR5 Transferor, hereby acknowledges
that it (i) has been given full and complete access to the Partnership and its
management in connection with this Agreement and the transactions contemplated
hereby, (ii) has had the opportunity to review all documents relevant to its
decision to enter into this Agreement, and (iii) has had the opportunity to ask
questions of the Partnership and its management concerning its investment in the
Partnership and the transactions contemplated hereby. The KRF3/KR5 Transferor
acknowledges that it understands that the Partnership Units to be acquired by it
hereunder will not be registered under the Securities Act of 1933, as amended,
in reliance upon the exemption afforded by Section 4(2) thereof for transactions
by an issuer not involving any public
16
offering, and will not be registered or qualified under any applicable state
securities laws. The KRF3/KR5 Transferor represents that (i) it is acquiring
such Partnership Units for investment only and not with any view toward
distribution thereof in violation of any applicable securities laws, and it will
not sell or otherwise dispose of such Partnership Units except in compliance
with the registration requirements or exemption provisions of any applicable
securities laws and in accordance with the terms of the Limited Partnership
Agreement, (ii) its economic circumstances are such that it is able to bear all
risks of the investment in the Partnership Units for an indefinite period of
time, including the risk of a complete loss of its investment in the Partnership
Units, (iii) it has knowledge and experience in financial and business matters
sufficient to evaluate the risks of investment in the Partnership Units, and
(iv) it has consulted with its own counsel and tax advisors, to the extent
deemed necessary by it, as to all legal and taxation matters covered by this
Agreement and has not relied upon the Partnership for any explanation of the
application of the various United States or state securities laws or tax laws
with regard to its acquisition of the Partnership Units. The KRF3/KR5 Transferor
further acknowledges and represents that it has made its own independent
investigation of the Partnership and the business proposed to be conducted by
the Partnership. Such investigation does not affect the KRF3/KR5 Transferor's
right to rely on the representations and warranties of the Partnership contained
in this Agreement and the Limited Partnership Agreement. The representations and
warranties contained in this Section shall survive the Closing without
limitation of time.
7.2 Partnership and Partnership Sub Acknowledgments. The Partnership and
the Partnership Sub represent, warrant, acknowledge and agree that (a) they have
made an independent investigation and examination of the Properties (and all
matters related thereto), is familiar with the physical condition of the
Properties, and have reviewed (i) the Leases, (ii) the Mortgages, (iii) the
Contracts and (iv) the Environmental Reports and (b) except as, and solely to
the extent, expressly set forth in this Agreement, neither the Transferors nor
any officer, employee, partner, agent or attorney of either of the Transferors
has made any oral or written representations, warranties or statements of any
nature or kind whatsoever to the Partnership or Partnership Sub, or its
officers, employees, partners, agents or attorneys, whether express or implied,
with respect to the Properties, XXX0, XX0, DOH or the Subsidiaries, except as,
and solely to the extent, expressly set forth in this Agreement. Such
examination does not affect the Partnership's right to rely on the
representations and warranties contained in this Agreement. The Partnership and
Partnership Sub further agree that the Transferors shall not be bound in any
manner whatsoever by any guarantees, promises, projections, operating
statements, set-ups or other information pertaining to the Properties, XXX0,
XX0, DOH or the Subsidiaries made, furnished or claimed to have been made or
furnished by the Transferors or the Subsidiaries or any other person or entity,
including, without limitation, any officer, trustee, partner, employee, agent,
attorney or other person representing or purporting to represent the Transferors
or the Subsidiaries or any other person or entity, whether orally or in writing,
except as, and solely to the extent, expressly set forth in this Agreement. The
representations and warranties contained in this Section shall survive the
Closing without limitation of time.
17
7.3 Partnership and Partnership Sub Representations and Warranties. In
addition to any other representations and warranties of the Partnership herein
contained, the Partnership and Partnership Sub further represent and warrant to
the Transferors as follows:
(A) The Partnership is a limited partnership and Partnership Sub is a
limited liability company, in each case duly organized under the laws of
the State of Delaware with full right, power and authority to fulfill all
of its obligations hereunder or as herein contemplated.
(B) The execution and delivery by the Partnership of this Agreement
and the Partnership Closing Documents and the consummation by the
Partnership of the transactions contemplated by this Agreement have been
duly authorized by all requisite action of the Partnership and no other
action or approval is required to enable the Partnership to consummate the
transactions contemplated by this Agreement and the Partnership Closing
Documents in accordance with the terms hereof and thereof. This Agreement
and the Partnership Closing Documents have been duly executed and delivered
by the Partnership, or an authorized representative of the Partnership, and
constitute a legal, valid and binding obligation of the Partnership,
enforceable against the Partnership in accordance with the terms hereof and
thereof, except as the enforceability hereof and thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally or by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(C) No consent, waiver, approval or authorization of, or filing,
registration or qualification with, or notice to, any governmental unit or
authority or any other person or entity (in each case, a "consent") is
required to be made, obtained or given by the Partnership in connection
with the execution, delivery and performance of this Agreement by the
Partnership.
(D) Assuming compliance with the terms of this Agreement and the
Limited Partnership Agreement by the parties thereto other than the
Partnership, none of the execution, delivery or performance of this
Agreement by the Partnership does or will, with or without the giving of
notice, lapse of time or both, violate, conflict with or constitute a
default under any term or condition of (i) the Limited Partnership
Agreement or any agreement to which the Partnership is a party or by which
the Partnership is bound whether or not such agreement relates specifically
to the Properties, or (ii) any terms or provisions of any judgment, decree,
order, statute, injunction, rule or regulation of a governmental unit
applicable to the Partnership.
(E) The representations and warranties made with respect to the
Partnership in Section 7.3(B), (C) and (D) are true and correct with
respect to Partnership Sub, except that for purposes of said Section (B),
the term "Partnership", as used in such section, shall be deemed to refer
to Partnership Sub, the term "Partnership Closing Documents" as used in
such section, shall be deemed to refer to the Partnership Sub
18
Closing Documents and references in such section to the Limited Partnership
Agreement shall be deemed references to the organizational documents of the
Partnership Sub.
7.4 KRF3/KR5 Transferor Representations and Warranties. In addition to any
other representations and warranties of the KRF3/KR5 Transferor herein
contained, the KRF3/KR5 Transferor represents and warrants to the Partnership as
follows:
(A) Authority. The KRF3/KR5 Transferor has been duly organized and is
validly existing as a limited liability company with all requisite power
and authority to own the Membership Interests, to conduct the business in
which it is engaged and to enter into and perform its obligations under
this Agreement, the KRF3/KR5 Transferor Closing Documents and any other
documents contemplated by this Agreement. The KRF3/KR5 Transferor is not a
"foreign person" within the meaning of sections 1445(f) of the Internal
Revenue Code.
(B) Delivery. The KRF3/KR5 Transferor has furnished the Partnership
with true, correct and complete copies of the Operating Agreements, the
Subsidiary Partnership Agreements and the KRF3 Tenancy-in-Common Agreement,
which agreements are in full force and effect, and no party to such
agreements is in default in any material respect thereunder.
(C) Membership Interests. KRF3/KR5 Transferor owns the Membership
Interests free and clear of all Liens.
(D) Enforceability. The execution, delivery and performance of this
Agreement and the KRF3/KR5 Transferor Closing Documents by the KRF3/KR5
Transferor have been duly and validly authorized by all necessary actions
of the KRF3/KR5 Transferor. This Agreement and the KRF3/KR5 Transferor
Closing Documents have been duly and validly executed and delivered by the
KRF3/KR5 Transferor. This Agreement and the KRF3/KR5 Transferor Closing
Documents are valid and binding upon, and enforceable against, the KRF3/KR5
Transferor in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting
creditors' rights generally, or by general principles of equity (regardless
of whether such enforceability is considered in a proceeding at law or in
equity).
7.5 GP Transferor Representations and Warranties. In addition to any other
representations and warranties of the GP Transferor herein contained, the GP
Transferor represents and warrants to the Partnership Sub as follows:
(A) Authority. The GP Transferor has been duly organized and is
validly existing as a Massachusetts corporation with all requisite power
and authority to own the GP Interests and the DOH Stock and to conduct the
business in which it is engaged and to enter into and perform its
obligations under this Agreement, the GP Transferor Closing Documents and
any other documents contemplated by this
19
Agreement. The GP Transferor is not a "foreign person" within the meaning
of sections 1445(f) of the Internal Revenue Code.
(B) Delivery.
(a) The GP Transferor has furnished or made available to the
Partnership Sub (i) true and complete copies of the certificate of
incorporation and by-laws, or comparable instruments, of DOH as in
effect on the date thereof, (ii) true and complete records in all
material respects of the minute books of DOH as in effect on the date
thereof an (iii) true and complete copies of the stock transfer
records of DOH as in effect as of the date thereof.
(C) Ownership of GP Interest and DOH Stock. The GP Transferor owns the
GP Interests and the DOH Stock free and clear of all Liens.
(D) DOH Stock. Except for the DOH Stock being transferred hereunder,
there are no shares of capital stock of DOH issued, reserved for issuance
or outstanding. All of the DOH Stock is duly authorized and validly issued,
fully paid and non-assessable.
(E) DOH Outstanding Rights. There is no outstanding right,
subscription, warrant, call, unsatisfied preemptive right, option or other
agreement of any kind to purchase or otherwise to receive from DOH any of
the capital stock or any other security of DOH, and there is no outstanding
security of any kind of DOH convertible into any such capital stock or
security.
(F) Enforceability. The execution, delivery and performance of this
Agreement and the GP Transferor Closing Documents by the GP Transferor have
been duly and validly authorized by all necessary actions of the GP
Transferor. This Agreement and the GP Transferor Closing Documents have
been duly and validly executed and delivered by the GP Transferor. This
Agreement and the GP Transferor Closing Documents are valid and binding
upon, and enforceable against, the GP Transferor in accordance with their
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium
or similar laws affecting creditors' rights generally, or by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
7.6 Transferors' Joint Representations and Warranties. In addition to any
other representations and warranties of the Transferors herein contained, the
Transferors represent and warrant to the Partnership and Partnership Sub as
follows:
(A) Conflicts. The execution and delivery of the Agreement and the
consummation of the transactions contemplated hereby by the Transferors
does not and will not (i) violate or conflict with the operating agreement
of the KRF3/KR5 Transferor or the organizational documents of the GP
Transferor, KRF3, KR5 or any Subsidiary, (ii) violate or conflict with any
judgment, decree or order of any court
20
applicable to or affecting either of the Transferors, KRF3, KR5 or any
Subsidiary, (iii) assuming all required consents of third parties are
obtained, breach the provisions of, or constitute a default under, any
contract, mortgage, loan agreement, note, lease, joint venture or
partnership agreement or other instrument or agreement obligation to which
either of the Transferors, XXX0, XX0 or any Subsidiary is a party or by
which the Transferors, XXX0, XX0 or any Subsidiary is bound (including
without limitation the KRF3 Tenancy-in-Common Agreement or the Operating
Agreements), (iv) violate or conflict with any law or governmental
regulation or permit applicable to Transferors, XXX0, XX0 or any
Subsidiary, or (v) require any authorization, approval, consent, license,
exemption of or filing or registration (in each case, a "consent") with any
court or governmental department, commission, board, bureau, agency or
instrumentality, foreign or domestic or any other person or entity (except
for those consents listed in Schedule 7.6 (A) hereto), which consents have
been obtained and true and correct copies of which consents have been made
available to the Partnership.
(B) Leases. The Schedule of Leases (the "Schedule of Leases") sets
forth with respect to each Lease (whether or not the terms of each Lease
has commenced as of the date of such Schedule) (i) the name of the Tenant
under each Lease, (ii) the commencement date of such Lease, (iii) the term
of such Lease and (iv) the annual rent payable by such Tenant. This
Schedule of Leases is complete and accurate in all material respects, and
originals and/or true and complete copies of each such Lease, each
modification, amendment, extension and assignment thereof, have heretofore
either been furnished to the Partnership or been made available to the
Partnership for inspection. To the Transferors' knowledge, there are no
other leases affecting any portion of the Properties except as set forth on
the Schedule of Leases and except for those, if any, entered into after the
date of such Schedule in the ordinary course of business consistent with
past practices of the Owner Entities. No Tenant has paid more than one
month's rent or other charges in advance, except for security deposits.
(C) Modification of Leases. The Leases are unmodified and in full
force and effect as of the date of the Schedules of Leases (except for
those designated on the Schedule of Leases as "out for signature"), and
constitute the sole agreements and understandings (written or oral) between
the Owner Entities and the parties thereto. There have been no changes in
the Leases since the date of such Schedules except for those made in the
ordinary course of business.
(D) Lease Defaults. Except as set forth in the Schedule of Rent
Arrearages and the schedule of litigation attached as Exhibit K hereto (the
"Schedule of Litigation"), no action, proceeding or arbitration is pending
in respect of any Lease, the resolution of which would have a material
adverse effect on any of the Properties, and except as set forth in the
Schedule of Rent Arrearages, (i) the Transferors have no actual knowledge
of any breaches of or defaults under any Lease by the Tenant or landlord
thereunder which, in the aggregate for any Property, would have a material
adverse effect on such Property, and (ii) all payments payable by or due to
the Owner Entities under any Lease to the date of such Schedule have been
made and received without any material default thereunder or, to the
Transferors' knowledge, without any defenses,
21
counterclaims, offsets, concessions, rebates, credits or allowances having
been claimed or given.
(E) Security Deposits. All security deposits that have been paid to
the Owner Entities by or on behalf of any of the Tenants are as set forth
in Exhibit L.
(F) Violations. None of the Transferors, KRF3, KR5 and any Subsidiary
has received written notice from any governmental authority claiming or
noting with respect to any Property any violation of any federal or local
law, regulation, requirement or ordinance, which violation remains uncured,
except as set forth in Exhibit M.
(G) Liabilities. Except for (i) obligations and liabilities referred
to, or contained in or arising under agreements referred to, in this
Agreement (including without limitation the Leases, the Mortgages, the
Service Contracts, the Operating Agreements, the KRF3 Tenant-in-Common
Agreement and the other organizational documents of XXX0, XX0 and the
Subsidiaries), including obligations and liabilities for which adjustments
are being made under Article V, (ii) matters affecting title to the
Properties (including real estate taxes and water and sewer rents not yet
due and payable), (iii) requirements of law generally applicable to the
Properties and/or XXX0, XX0 and the Subsidiaries (including laws imposing
taxes, assessments or other charges or the submission of reports or returns
with respect thereto), (iv) items set forth in the financial statements
described in Section 7.6(K) hereof, (v) matters which are the subject of
the litigations listed (or not required to be listed) in Exhibit K, (vi)
other liabilities and obligations arising in the ordinary course of
business and (vii) items set forth on Exhibit N, to the best of the
Transferors' knowledge, none of XXX0, XX0, DOH or any Subsidiary has any
liabilities or obligations.
(H) Business Purpose. XXX0, XX0, DOH and the Subsidiaries have not
engaged in any activity or business other than the ownership of interests
in Subsidiaries (in the case of KRF3 and KR5) or other Subsidiaries (in the
case of the Subsidiaries other than the Owner Entities) or the acquisition,
ownership, development, financing, leasing and management of the Properties
or interests therein and actions incidental thereto (in the case of the
Owner Entities).
(I) Employees. XXX0, XX0 and the Subsidiaries have no employees other
than those set forth on Exhibit O, for whom all applicable governmental
filings and tax payments have been made. There are no employment, union,
collective bargaining, or similar agreements or arrangements between XXX0,
XX0 or any of the Subsidiaries and any employees; and, to the Transferors'
knowledge and, except as set forth on Exhibit P, there are no pending
claims which have been asserted in writing or any threatened claim against
XXX0, XX0 or any of the Subsidiaries by or on behalf of any employees whose
employment relates to the Properties. DOH does not have, nor has it ever
had, any employees.
22
(J) Tax Filings. To the best of the Transferors' knowledge, all
Federal, state and local tax returns required to be filed by or on behalf
of the Transferors, XXX0, XX0, DOH and the Subsidiaries have been timely,
duly and accurately completed and filed, and all Federal, state and local
taxes due and payable by any of such entities have been paid in full,
except as set forth on Exhibit R. No tax certiorari or audit proceedings
are currently pending or in progress with respect to the Properties except
as set forth on Exhibit S. The Transferors have delivered or made available
to the Partnership true, correct and complete copies of each such tax
return in Transferors' possession, if any, filed prior to the date hereof.
(K) Financial Statements. The financial statements of KRF3, KR5 and
the Subsidiaries (to the extent each of the Subsidiaries have separate
financial statements) for the most recent fiscal year fairly present, in
all material respects, their respective financial positions, their
respective operations and their respective cash flows for the periods
indicated. Such financial statements have been, in all material respects,
accurately derived from the books and records of such entities.
(L) Insurance. There is in full force and effect with reputable
insurance companies casualty and liability insurance with respect to the
Properties in compliance with the requirements contained in all applicable
Leases and Mortgages. No written notice of cancellation has been received
by the Xxxxxxxxxxx, XXX, XXX0, XX0 or any Subsidiary with respect to any
insurance policy maintained by any of such entities and, to the
Transferors' knowledge, none is threatened; and none of the Xxxxxxxxxxx,
XXX, XXX0, XX0 and any Subsidiary has received any written notice that any
act is required to maintain any such insurance policy which has not
heretofore been accomplished.
(M) Service Contracts. The Schedule of Contracts lists all service
contracts in effect with respect to the Properties (the "Service
Contracts"), if any, and except as set forth in the Schedule of Contracts,
all such Service Contracts are in full force and effect in accordance with
their respective terms as of the date of such Schedule and, together with
the Management Agreements, constitute the sole agreements and
understandings (written or oral) of the Xxxxxxxxxxx, XXX, XXX0, XX0 and any
Subsidiary with respect to the operation and maintenance of the Properties
or any part thereof, and to the Transferors' knowledge, such entities have
not given and have not received any written notice of default which remains
outstanding with respect thereto. The Transferors have no knowledge of any
breaches of or defaults under any service contracts by any party thereunder
which would have a material adverse effect on any of the Properties.
(N) Management Agreement. The Transferors have heretofore delivered or
made available to the Partnership true, correct and complete copies of the
Management Agreements. The Management Agreements have not been further
modified and are in full force and effect in accordance with their terms as
of the date hereof and constitute the sole agreements and understandings
(written or oral) of the Xxxxxxxxxxx, XXX, XXX0, XX0 and any Subsidiary
with respect to the management of the Properties
23
or any part thereof. The Transferors have no knowledge of any material
breach of or material default under the Management Agreements.
(O) Leasing or Brokerage Commissions. There are no leasing or
brokerage commissions which will be due after the Cutoff Date in respect of
any Leases.
(P) Licenses and Permits. To the Transferors' knowledge, the Owner
Entities hold all licenses, permits and authorizations with respect to the
use, operation and occupancy of each Property the failure of which to hold
would have a materially adverse effect on the current ownership and
operation of such Property.
(Q) Environmental Compliance. The Transferors have heretofore either
furnished to the Partnership or made available to the Partnership for
inspection complete and accurate copies of all reports, studies, analyses,
Phase I reports, notices from any governmental authority, correspondence or
agreements with any person or governmental authority and similar documents
relating to environmental matters on, in or under the Properties
(collectively, the "Environmental Reports"). Except as disclosed in the
Environmental Reports, none of the Xxxxxxxxxxx, XXX, XXX0, XX0 and any
Subsidiary has received any written notice from any governmental entity or
other person that the Properties, or current or former operations on the
Properties, are not or has not been in compliance with any Environmental
Laws or that any such entity has any material liability with respect
thereto. To the Transferors' knowledge, except as set forth in the
Environmental Reports, there are no underground tanks for Hazardous
Materials, active or abandoned, at the Properties and no Hazardous
Materials have been released in a reportable quantity (where such a
quantity has been established by statute, ordinance, rule, regulation or
order) at, on or under the Properties.
(R) Condemnation. (i) No condemnation proceeding in which the
Transferors, DOH, KRF3, KR5 or any Subsidiary has been served with process
is pending with respect to all or any part of any Property, (ii) to the
Transferors' knowledge, no condemnation proceeding in which no such process
has been served is pending with respect to all or any part of any Property
and (iii) to the Transferors' knowledge, no taking in condemnation or by
eminent domain is threatened with respect to all or any part of any
Property.
(S) Litigation. Except as set forth on the Schedule of Litigation,
there is no litigation, action or suit which is not fully covered by
insurance, excluding deductible or retained amounts, and there is no
governmental, administrative or arbitration proceeding or investigation
before any court or governmental agency or body, domestic or foreign
pending or, to the Transferors' knowledge, threatened, before any court or
governmental agency or body, domestic or foreign, or any unsatisfied
arbitration awards or judicial orders against or affecting the Xxxxxxxxxxx,
XXX, XXX0, XX0 or any of the Subsidiaries or the Properties.
(T) Bankruptcy. No attachments, execution proceedings, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization or other
24
similar proceedings are pending or, to the Transferors' knowledge,
threatened against the Xxxxxxxxxxx, XXX, XXX0, XX0 or any of the
Subsidiaries, nor are any of such proceedings anticipated or contemplated
by the Transferors or any of such entities.
(U) Mortgages. The Schedule of Mortgages sets forth with respect to
each Mortgage (i) the name of the holders thereof, (ii) the unpaid
principal balances as of the date hereof, (iii) the annual debt service
thereunder, (iv) the maturity date thereof, (v) the estimated balloon
payment due thereunder on maturity and (vi) the earliest date of which all
notes secured thereby can be prepaid. The Mortgages are in full force and
effect, none of the Xxxxxxxxxxx, XXX, XXX0, XX0 and any of the Subsidiaries
has received any written notice of default under any Mortgage, and, to the
Transferors' knowledge, no material default on the part of any Owner Entity
or any other party thereto, exists under any Mortgage and no event has
occurred which with the giving of notice or passage of time, or both, would
constitute a material default under any Mortgage. Originals and/or true and
complete copies of each Mortgage, all loan documents relating thereto, and
each modification and amendment thereof have heretofore either been
furnished to the Partnership or been made available to the Partnership for
inspection.
(V) Title.
(a) Exhibit F accurately depicts (i) the ownership interests of
the KRF3/KR5 Transferor in KRF3 and KR5, (ii) the ownership interests
of the GP Transferor in WPT, Century Associates and DOH, (iii) the
ownership interests of XXX0, XX0 and the Subsidiaries (other than the
Owner Entities) in the Subsidiaries shown as being owned by such
entities in such Exhibits and (iv) to the best of Transferors'
knowledge, the ownership interests of third parties in the
Subsidiaries or the Properties. All of such ownership interests (other
than those owned by third parties, as to which no representation is
made under this sentence) are held free and clear of all Liens. Each
of KRF3, KR5 and each Subsidiary is duly formed, validly existing and
in good standing under the laws of its state of formation and is in
good standing and duly qualified to conduct business in any state in
which such qualification is necessary. None of KRF3, KR5 or any
Subsidiary has any subsidiaries except as shown in Exhibit F.
(b) Each Owner Entity holds a valid title insurance policy
ensuring its fee title to its Property (or, in the case of KRF3, its
interest as a 91.382% tenant-in-common in fee title to the KRF3
Properties), free and clear of all Liens other than Permitted
Exceptions and Liens which have been discharged or otherwise
terminated, and no Owner Entity has, since its acquisition of its
respective Property, done anything (other than the creation of
Permitted Exceptions and Liens which have been discharged or
terminated in full) to encumber its title to such Property.
(W) Employee Benefit Plans. None of KRF3, KR5 and any of the
Subsidiaries maintains or has any liability under any employee benefit
plan.
25
7.7 Regarding Representations and Warranties. At the Closing, the
acknowledgments, representations and warranties in Sections 7.1, 7.2, 7.3, 7.4,
7.5 and 7.6 shall be deemed to have been remade on and as of the Closing Date,
provided that each party hereto shall, in the case of the representations and
warranties set forth in Sections 7.3, 7.4, 7.5 and 7.6, have the option to
update the same so that they reflect facts and circumstances on a current basis.
7.8 Failure to Satisfy Conditions Precedent to Closing.
(A) If any representation or warranty made by the Transferors, as
updated, shall be untrue in any material respect on the Closing Date (or if
any update shall disclose changed facts or circumstances which alter the
representations and warranties previously made by the Transferors in any
material respect and which are not the result of actions permitted to be
taken by the Transferors under this Agreement and are not reasonably
satisfactory to the Partnership) or if any other condition precedent to the
obligation of the Partnership to consummate the transactions herein
contemplated is unsatisfied as of the Closing Date (including, the delivery
of any KRF3/KR5 Transferor Closing Documents or GP Transferor Closing
Documents), the Partnership and Partnership Sub shall have the right to
terminate this Agreement by Notice in writing delivered to the Transferors
on or prior to the Closing Date, in which event this Agreement, and the
rights and obligations of the parties hereto (other than rights and
obligations which are expressly stated herein to survive the termination of
this Agreement), shall terminate upon delivery of such Notice without
liability on the part of any party hereto.
(B) If any representation or warranty made by the Partnership in
Section 7.3, as updated, shall be untrue in any material respect on the
Closing Date (or if any update shall disclose facts or circumstances which
alter the representations and warranties previously made by the Partnership
in any material respect and which are not the result of actions permitted
to be taken by the Partnership under this Agreement and are not reasonably
satisfactory to the Transferors) or if the Partnership Closing Documents or
Partnership Sub Closing Documents identified in Section 6.3 or 6.4 have not
been delivered on the Closing Date, the Transferors shall have the right to
elect to terminate this Agreement by Notice in writing delivered to the
Partnership on or prior to the Closing Date, in which event this Agreement,
and the rights and obligations of the parties hereto (other than rights and
obligations which are expressly stated herein to survive the termination of
this Agreement), shall terminate upon delivery of such Notice without
liability on the part of any party hereto.
7.9 Survival of Representations and Warranties. The representations and
warranties made by the Partnership and Partnership Sub in Section 7.3 and by the
Transferors in Sections 7.4. 7.5 and 7.6, as updated as of the Closing Date,
shall survive for one year after the Closing Date; provided, however that no
claim for breach of any representation or warranty in Sections 7.3, 7.4, 7.5 or
7.6 or for indemnification under Section 7.10 may be maintained by the
Partnership, Partnership Sub, or the Transferors unless the Partnership,
Partnership Sub, or the Transferors, as the case may be, shall have delivered a
written Notice specifying in reasonable detail such
26
claim to the Partnership, Partnership Sub, or the Transferors, as applicable,
which Notice shall be delivered for any representation or warranty in Sections
7.3, 7.4, 7.5 or 7.6 on or before the first anniversary of the Closing Date
(and, if such Notice is so delivered, such claim shall survive until the
expiration of the statute of limitations applicable thereto).
7.10 Indemnification.
(A) Subject to the limitations set forth in Section 7.11 and the
provisions of Section 7.9, the Partnership shall indemnify and hold the
Transferors and each member or shareholder thereof (and their respective
officers, directors and employees) harmless from and against any claim,
loss, damage, expense, cost (including reasonable attorney's fees and
disbursements) or liability (including liabilities arising by reason of
damages incurred by a Party or other person) (collectively, "Losses")
resulting from a breach by the Partnership of any representation, warranty
or covenant contained in this Agreement; provided, however, that this
indemnity shall not apply to the KRF3/KR5 Transferor in its capacity as a
limited partner of the Partnership, with respect to which the provisions of
the Limited Partnership Agreement shall control.
(B) Subject to the limitations set forth in Section 7.11 and the
provisions of Section 7.9, the Transferors shall indemnify and hold the
Partnership, Partnership Sub, BIR and the General Partner, and their
respective members, officers, directors and employees, harmless from and
against any Losses resulting from a breach by the Transferors, or either of
them, of any representation, warranty or covenant contained in this
Agreement.
7.11 Limitations on Indemnification. The indemnification provided for in
Section 7.10 shall be subject to the following limitations:
(A) The Partnership may only seek recourse in respect of the
Transferors' indemnification obligation in Section 7.10(B) against the
Partnership Units issued to the KRF3/KR5 Transferor pursuant to this
Agreement, and the Partnership may not seek recourse against the direct or
indirect members of the Transferors or any of their assets or any of the
other assets of the Transferors for satisfaction of any liability of the
Transferors under Section 7.10(B).
(B) Notwithstanding anything to the contrary in this Agreement, the
Transferors shall not be liable for any Losses based on a breach or alleged
breach of the representations and warranties contained in Sections 7.4, 7.5
and 7.6 unless all Losses arising out of such breaches or alleged breaches
shall exceed $100,000 in the aggregate, and then only to the extent of such
excess.
ARTICLE VIII
Casualty and Condemnation
8.1 Casualty. If, prior to the Closing Date, any of the Properties shall be
damaged by fire or any other casualty with an estimated repair or restoration
costs in
27
excess of $500,000, the Partnership may by written Notice delivered to the
Transferors on or before the Closing Date, elect either (i) to cause the
transactions contemplated hereby to be restructured such that the Partnership
receives the Transferors' interest in only the remaining Properties (or in
entities which own only the remaining Properties) together with, in lieu of the
Transferors' interest in the Property which was affected by the casualty, cash
and/or other assets acceptable to the Partnership having a value equivalent to
that of such interest in exchange for receipt by the KRF3/KR5 Transferor of
Partnership Units having an equivalent value (subject, however, to any consents
of mortgagees or other third parties necessitated by such restructuring); (ii)
to continue this Agreement in effect without abatement of the Consideration on
account thereof; or (iii) to terminate this Agreement (in which event the
Partnership shall have no further rights and obligations under this Agreement
except for those which expressly survive such termination).
8.2 Condemnation.
(A) If, prior to the Closing, condemnation proceedings are threatened
in writing by an authorized governmental agency or commenced with respect
to (i) five percent (5%) or more of the rentable area of any Property, (ii)
so much of the parking facilities included in such Property that the
remaining parking facilities are legally inadequate to serve such Property
or (iii) so much of the Property that access to the remaining portion of
the Property is materially adversely affected, the Partnership may by
written Notice delivered to the Transferors on or before the Closing Date,
elect either (i) to cause the transactions contemplated hereby to be
restructured such that the Partnership receives the Transferors' interest
in only the remaining Properties (or in entities which own only the
remaining Properties) together with, in lieu of the Transferors' interest
in the Property which was affected by the condemnation, cash and/or other
assets acceptable to the Partnership having a value equivalent to that of
such interest in exchange for receipt by the KRF3/KR5 Transferor of
Partnership Units having an equivalent value (subject, however, to any
consents of mortgagees or other third parties necessitated by such
restructuring); (ii) to continue this Agreement in effect without abatement
of the Consideration on account thereof; or (iii) to terminate this
Agreement (in which event the Partnership shall have no further rights and
obligations under this Agreement except for those which expressly survive
such termination)..
(B) If a condemnation proceeding regarding any portion of the Property
is threatened or commenced prior to the Closing Date, the Transferors shall
promptly advise the Partnership of such event and shall keep the
Partnership reasonably informed as to any such proceeding. Between the date
hereof and the Closing Date, the Transferors shall not (i) agree to make
any conveyance in lieu of any such condemnation or (ii) make any conveyance
in lieu of any such condemnation without the Partnership's prior written
consent.
28
ARTICLE IX
Broker
9.1 Brokerage Indemnity. The Transferors represent and warrant to the
Partnership that the Transferors have not dealt, and the Partnership represents
and warrants to the Transferors that neither it nor the Partnership Sub has
dealt, with any real estate broker, firm, salesperson or other similar person or
entity in connection with the transactions contemplated by this Agreement. The
Partnership shall indemnify and hold the Transferors harmless from and against
any and all claims, liabilities, costs and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, incurred in connection
with any claims made against the Transferors for brokerage commissions, and
other fees or compensation made by any broker, firm, salesperson or other entity
with whom the Partnership may have dealt in connection with this transaction.
The Transferors shall indemnify and hold the Partnership harmless from and
against any and all claims, liabilities, costs and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, incurred in connection
with any claims made against the Partnership for brokerage commissions, and
other fees or compensation, made by any consultant, broker, firm, salesperson or
other person or entity with whom the Transferors may have dealt in connection
with this transaction. The provisions of this Article IX shall survive the
Closing or the termination of this Agreement.
ARTICLE X
Miscellaneous
10.1 Notices. Notices must be in writing and sent to the party to whom or
to which such Notice is being sent, by certified or registered mail, return
receipt requested with postage prepaid, or commercial overnight delivery service
or delivered by hand with receipt acknowledged in writing, as follows:
(A) To the Partnership:
Berkshire Income Realty-OP, L.P.
c/o The Berkshire Group
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
(B) To Partnership Sub:
BIR-OP SUB, L.L.C.
c/o The Berkshire Group
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
29
(C) To Transferors:
KRF Company, L.L.C.
c/o The Berkshire Group
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
KRF GP Corporation
c/o The Berkshire Group
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
All Notices (i) shall be deemed given when received, and (ii) may be given
either by a party or by such party's attorneys. The cost of delivery shall be
borne by the party delivering the Notice.
10.2 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute a single instrument.
10.3 Amendments. Except as otherwise provided herein, this Agreement may
not be changed, modified, supplemented or terminated, except by an instrument
executed by the party hereto which is or will be affected by the terms of such
change, modification, supplement or termination.
10.4 Waiver. No waiver by any party hereto of any failure or refusal by any
other party hereto to comply with its obligations hereunder shall be deemed a
waiver of any other or subsequent failure or refusal to so comply. Any party
hereto may waive compliance by any other party with respect to any of the
other's agreements or obligations set forth herein.
10.5 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and permitted
assigns. No party may assign its interest under this Agreement without the prior
written consent of all the other parties, and any purported assignment in
violation hereof shall be null and void.
10.6 Third-Party Beneficiaries. The provisions of this Agreement are made
for the benefit of the parties hereto, and their respective successors in
interest and permitted assigns, and are not intended for, and may not be
enforced by, any other person or entity.
10.7 Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or
30
provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby and each term and
provision of this Agreement shall be valid and enforced to the fullest extent
permitted by law.
10.8 Governing Law. This Agreement has been made pursuant to and shall be
governed by the laws of the State of New York.
10.9 Headings; Exhibits. The headings of the various Articles and Sections
of this Agreement have been inserted solely for purposes of convenience, are not
part of this Agreement and shall not be deemed in any manner to modify, explain,
expand or restrict any of the provisions of this Agreement. All references to
Articles, Sections or paragraphs herein shall be to the specified Article,
Section or paragraph of this Agreement, unless stated to the contrary, and all
references to Exhibits shall be to the specified Exhibit annexed hereto. All
Exhibits annexed hereto are made a part hereof. All terms defined herein shall
have the same meanings in the Exhibits, except as otherwise provided therein.
All references in this Agreement shall be deemed to include the Exhibits.
10.10 Binding Effect. This document does not constitute an offer to sell
and shall not bind the Transferors unless and until the Transferors, in the
Transferors' sole discretion, elects to be bound hereby by executing and
unconditionally delivering to the Partnership and Partnership Sub an executed
original counterpart hereof.
10.11 Casualty Insurance Coverage. The Transferors shall cause to be kept
in full force and effect all casualty insurance coverage currently in effect
with respect to the Properties until the Closing.
10.12 Mortgages. The Transferors shall not, without the Partnership's prior
written consent, alter or amend any of the Mortgages, or seek or accept any
waivers or extensions of time for payment or performance thereunder.
10.13 Other Agreements. The KRF3/KR5 Transferor shall not, without the
Partnership's prior written consent, which consent shall not be unreasonably
withheld, alter or amend the KRF3 Tenancy-in-Common Agreement
10.14 Conduct of Business. From the date hereof through the Closing Date,
the Transferors shall cause the Properties to be maintained in the ordinary
course of business consistent with past practices; provided, however, that
nothing contained in this Section shall be construed as requiring the
Transferors to undertake or cause to be undertaken major repair or improvement
in respect of the Properties.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
TRANSFERORS:
KRF COMPANY, L.L.C.
By: Xxxxx Family Limited Partnership
- 94, its sole member
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
Title: General Partner
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: General Partner
KRF GP CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
and Treasurer
PARTNERSHIP:
BERKSHIRE INCOME REALTY-OP, L.P.
By: BIR GP, L.L.C., its general partner
By: Berkshire Income Realty, Inc.,
its sole member
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Name: Xxxxx X. Xxxxx
Title: President
PARTNERSHIP SUB
BIR-OP SUB, L.L.C.
By: Berkshire Income Realty-OP, L.P.,
its sole member
By:BIR GP, L.L.C., its general partner
By: Berkshire Income Realty, Inc.,
its sole member
By: /s/ Xxxxx X. Xxxxx
-------------------------
Name: Xxxxx X. Xxxxx
Title: President
CONTRIBUTION AND SALE AGREEMENT
AMONG
KRF COMPANY, L.L.C.,
a Delaware limited liability company;
KRF GP CORPORATION,
a Massachusetts corporation;
BERKSHIRE INCOME REALTY-OP, L.P.,
a Delaware limited partnership;
and
BIR-OP SUB, L.L.C.
a Delaware limited liability company
For Transfer of the Membership Interests in:
KRF3 Acquisition Company, L.L.C.
KR5 Acquisition Company, L.L.C.
For the Transfer of General Partnership Interests in:
WPT Limited Partnership
Century III Associates Limited Partnership
For the Transfer of the Stock in:
DOH, Inc.
As of January 9, 2003
TABLE OF CONTENTS
Page
ARTICLE I Definitions........................................................3
1.1 Definitions..............................................3
1.2 References...............................................8
1.3 Gender and Number........................................8
ARTICLE II Contribution and Purchase and Sale................................8
2.1 Covenant.................................................8
2.2 "As Is"..................................................8
ARTICLE III Consideration....................................................9
3.1 Consideration............................................9
3.2 Assumption of Obligations................................9
ARTICLE IV Closing Date......................................................9
ARTICLE V Apportionments and Payments.......................................10
5.1 Items to Be Apportioned.................................10
5.2 Credits.................................................10
5.3 Re-Proration of Impositions.............................11
5.4 Utilities...............................................11
5.5 Rent Arrearages.........................................11
5.6 Security Deposits.......................................11
5.7 Reserves and Deposits...................................12
5.8 Settlement of Adjustments...............................12
5.9 Inspection of Books and Records.........................12
5.10 Schedule of Rent Arrearages.............................12
5.11 Survival................................................13
ARTICLE VI Closing Documents................................................13
6.1 KRF3/KR5 Transferor Closing Documents...................13
6.2 GP Transferor Closing Documents.........................13
6.3 Partnership Closing Documents...........................14
6.4 Partnership Sub Closing Documents.......................15
6.5 Further Assurances......................................15
ARTICLE VII Representations and Warranties..................................15
7.1 Investment Representations..............................15
7.2 Partnership and Partnership Sub Acknowledgments.........16
7.3 Partnership and Partnership Sub Representations and
Warranties..............................................17
7.4 KRF3/KR5 Transferor Representations and Warranties......18
7.5 GP Transferor Representations and Warranties............18
7.6 Transferors' Joint Representations and Warranties.......19
7.7 Regarding Representations and Warranties................25
7.8 Failure to Satisfy Conditions Precedent to Closing......25
7.9 Survival of Representations and Warranties..............25
7.10 Indemnification.........................................26
7.11 Limitations on Indemnification..........................26
ARTICLE VIII Casualty and Condemnation......................................26
8.1 Casualty................................................26
8.2 Condemnation............................................27
ARTICLE IX Broker ..........................................................28
9.1 Brokerage Indemnity.....................................28
ARTICLE X Miscellaneous.....................................................28
10.1 Notices.................................................28
10.2 Counterparts............................................29
10.3 Amendments..............................................29
10.4 Waiver..................................................29
10.5 Successors and Assigns..................................29
10.6 Third-Party Beneficiaries...............................29
10.7 Partial Invalidity......................................29
10.8 Governing Law...........................................30
10.9 Headings; Exhibits......................................30
10.10 Binding Effect..........................................30
10.11 Casualty Insurance Coverage.............................30
10.12 Mortgages...............................................30
10.13 Other Agreements........................................30
10.14 Conduct of Business.....................................30
EXHIBITS
A - Description of Xxxxxx Property
B - Description of Hannibal Property
C - Description of Seasons Property
D - Description of Xxxxxx Pond Property
E - Description of Century Property
F - Description of the Ownership Structure of the Properties
G - Schedule of Contracts
H - Schedule of Leases
I - Schedule of Mortgages
J - Schedule of Rent Arrearages
K - Schedule of Litigation
L - Security Deposits
M - Violations
N - Liabilities and Obligations
O - Employees
P - Claims by Employees (threatened or asserted in writing)
Q - [Intentionally Omitted]
R - Federal, State and Local Taxes Due
S - Tax Certiorari or Audit Proceedings
