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ASSET CONTRIBUTION AND REORGANIZATION AGREEMENT
THIS ASSET CONTRIBUTION AND REORGANIZATION AGREEMENT (this
"Agreement") is made and entered into June __, 1997, by and among XXXXXX
INCORPORATED, a Nevada corporation (the "Company"), and the persons listed on
Exhibit A attached hereto (such persons shall be referred to herein
collectively as "Sellers" and each such person shall be referred to herein
individually as a "Seller").
RECITALS
A. The Company has filed a registration statement on Form S-1
under the Securities Act of 1933, as amended, for the purpose of making an
initial public offering of its common stock.
B. The Company and its underwriters believe that it is in the
best interests of the Company to expand the business of the Company by having
such business include various properties developed by the Company and currently
controlled or owned, directly or indirectly, by the principal stockholders of
the Company.
X. Xxxxxxx are the principal stockholders of the Company and
desire to facilitate the Company consummating its initial public offering on
the most favorable basis.
X. Xxxxxxx own the interests in the partnerships described in
Exhibit A attached hereto (each such partnership is sometimes referred to
hereinafter as a "Partnership" and collectively as the "Partnerships"), which
Partnerships collectively in turn own, directly or indirectly, the operating
properties, properties under development and land listed on Exhibit A attached
hereto (collectively, the "Properties") and more particularly described in
Exhibits B-1 and B-2 attached hereto.
E. Xxxxx X. Xxxxxx ("JCS"), one of the Sellers, transferred to
the Company its member interest in Nevada Housing Opportunities, LLC ("NHO"), a
Nevada limited liability company which is a general partner in the partnerships
identified in Exhibit C attached hereto as of June __, 1997. In addition JCS
owns a general partner interest in East Freemont Group Limited Partnership, a
Nevada limited partnership ("East Freemont"). The partnerships identified in
Exhibit C and East Freemont are each sometimes referred to herein as a "TCP"
and collectively as the "TCPs." The TCPs collectively in turn own the
apartment projects listed on Exhibit D attached hereto (collectively, the "Tax
Credit Projects"). (The member interest of Company in NHO is referred to
herein as the "NHO Interest" and the general partner interest of JCS in East
Freemont is referred to herein as the "East Freemont Interest.")
F. Each Seller desires to, and the Company desires each Seller
to, transfer and assign to the Company, all of such Seller's right, title and
interest, as general or limited partner, as the case may be, in and to such
Partnerships, and all of JCS's right, title and interest in the NHO Interest
and the East Freemont Interest, on the terms and subject to the conditions set
forth herein.
G. The Sellers are indebted to the Company and the Company is
indebted to such Sellers in the amounts set forth on Exhibit E hereto.
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H. Each Seller and the Company desire to satisfy their respective
indebtedness to each other on the terms and subject to the conditions set forth
herein.
TERMS OF AGREEMENT
SECTION 1
DEFINITIONS
The following capitalized terms not otherwise defined herein shall
have the following meanings herein:
Assignment. "Assignment" shall mean the Assignment and Assumption
Agreements for the transfer of Seller's right, title, and interest, as general
or limited partner, as the case may be, in the Partnership Interests, and in
the NHO Interest and the East Freemont Interest and the Company's assumption of
the obligations in connection with such transfers, in the forms of Exhibits
F-1, F-2 and F-3, respectively, and attached hereto.
Closing. "Closing" shall mean the date and time at which (i) all the
conditions to (a) the assignment of the Partnership Interests, the NHO Interest
and the East Freemont Interest, and (b) the satisfaction of the indebtedness
between the Sellers and the Company have been fully performed and satisfied or
waived pursuant to this Agreement and (ii) the Title Company is committed to
issue the Title Policies.
Closing Date. "Closing Date" shall mean the date on which the Closing
occurs.
Common Stock. "Common Stock" shall mean the common stock, $.001 par
value per share, of the Company.
Company. "Company" shall have the meaning set forth in the first
paragraph of this Agreement.
Company Loans. "Company Loans" shall mean the indebtedness of the
Company to the Sellers as set forth in Exhibit E attached hereto.
Development Properties. "Development Properties" shall mean the
Properties listed on Exhibit B-2 attached hereto.
DJS. "DJS" shall mean Xxxxxxx X. Xxxxxx.
East Freemont Interest. "East Freemont Interest" shall have the
meaning ascribed to it in the Recitals.
Governmental Authority. "Governmental Authority" shall mean any
nation or government, any state or other political subdivision thereof and any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of government, including without limitation, any
government and any authority, agency, department, board, commission or
instrumentality thereof, and any tribunal or arbitrator of competent
jurisdiction.
JCS. "JCS" shall have the meaning ascribed to it in the Recitals.
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JCS II. "JCS II" shall mean Xxxxx X. Xxxxxx XX.
JCS Partnership. "JCS Partnership" shall mean a Partnership of which
JCS is, directly or indirectly, a general partner and of which the Company is
not a general partner. For purposes of this Agreement, and in accordance with
the foregoing definition, the JCS Partnerships are R&D Properties and SNIC II.
JCS Property. "JCS Property" shall mean a Property owned by a JCS
Partnership.
LAS. "LAS" shall mean Xxx-Xxx Xxxxxx.
Land. "Land" shall mean the Properties listed on Exhibit B-3 attached
hereto.
MSP. "MSP" shall mean Xxxxxxx Xxxxxx-Pori.
NHO. "NHO" shall have the meaning ascribed to it in the Recitals.
NHO Interest. "NHO Interest" shall have the meaning ascribed to it in
the Recitals.
Operating Properties. "Operating Properties" shall mean those
properties described on Exhibit B -1 attached hereto.
Outside Closing Date. "Outside Closing Date" shall mean September
30,1997, unless extended by agreement of all parties hereto.
Partnership and Partnerships. "Partnership" and "Partnerships" shall
have the meanings ascribed to them in the Recitals.
Partnership Interests. "Partnership Interests" shall mean the limited
or general partner interest, as the case may be, of each Seller in each
Partnership, including without limitation all of such Seller's interest in the
capital, profits and losses of the Partnership or any cash or property
distributable therefrom.
Property and Properties. "Property" and "Properties" shall have the
meanings ascribed to them in the Recitals.
Public Offering. "Public Offering" shall mean the registered public
offering of the Company's Common Stock pursuant to Registration Statement in
the form in which it is declared effective.
Registration Statement. "Registration Statement" shall mean the
Company's Registration Statement on Form S-1 filed with the Securities and
Exchange Commission, Registration No. 333-23927, as amended from time to time.
Scrip. "Scrip" shall mean bearer scrip certificates representing
fractional shares of Common Stock and exchangeable into shares of Common Stock
as provided therein.
Securities Act. "Securities Act" shall mean the Securities Act of
1933, as amended.
Seller. "Seller" shall have the meaning set forth in the first
paragraph of this Agreement.
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Stockholder Loans. "Stockholder Loans" shall mean the indebtedness of
Sellers to the Company as set forth on Exhibit E hereto.
Subordinated Dividend Notes. "Subordinated Dividend Notes" shall mean
the noninterest bearing notes of the Company issued to the Sellers and more
fully described in Note 12 to the Company's Combined Financial Statements at
December 31, 1996 and March 31, 1997 and for the periods then ended.
Tax Credit Projects. "Tax Credit Projects" shall have the meaning
ascribed to it in the Recitals.
TCP and TCPs. "TCP" and "TCPs" shall have the meanings ascribed to
them in the Recitals.
Third Party Interests. "Third Party Interests" shall mean the
interests in the Partnerships owned by persons or entities other than the
Sellers as listed on Exhibit G hereto.
Title Company. "Title Company" shall mean United Title of Nevada.
Title Escrow. "Title Escrow" shall have the meaning set forth in
Section 7.2 hereof.
Title Policies. "Title Policies" shall have the meaning set forth in
Section 5.5 hereof.
Warrant. "Warrant" shall mean the right to purchase shares of Common
Stock pursuant to the terms of a Warrant agreement in substantially the form of
Exhibit H attached hereto.
SECTION 2
DESCRIPTION OF TRANSACTIONS
2 .1 CONTRIBUTION OF INTERESTS IN PARTNERSHIPS AND NHO AND EAST
FREEMONT INTERESTS. At the closing of the transactions contemplated by this
Agreement, subject to the terms and conditions of this Agreement, (i) the
Company shall accept from each Seller, and each Seller shall assign, transfer,
convey and deliver to the Company, absolutely and unconditionally, the
Partnership Interests owned by each such Seller, and (ii) the Company shall
accept from JCS, the NHO Interest as provided by the Assignment and Assumption
attached hereto as Exhibit F-2. In addition, if the Company receives the SPE
Consent as provided by Section 2.1.1. below, then subject to the terms and
conditions of this Agreement the Company shall accept from JCS and JCS shall
assign, transfer, convey and deliver to the Company, absolutely and
unconditionally, the East Freemont Interests. Each conveyance to the Company
contemplated by this Agreement shall constitute a capital contribution by the
respective Seller to the Company and the Sellers shall receive no additional
consideration therefor.
2.1.1 SPE CONSENT. The contribution of JCS's general partner
interest in the TCP which owns Saratoga Palms East I is subject to the receipt
of the consent of the mortgage lender (the "SPE Consent") on that Tax Credit
Project. Until the SPE Consent is received, JCS will contribute to the Company
an amount equal to all distributions he receives in respect of his general
partner interest.
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2.2 SATISFACTION OF ALL OUTSTANDING INDEBTEDNESS BETWEEN THE
COMPANY AND THE SELLERS. At the closing of the transactions contemplated by
this Agreement, subject to the terms and conditions of this Agreement, all
Company Loans all Stockholder Loans, all outstanding Subordinated Dividend
Notes and all other indebtedness from the Company to JCS, shall be satisfied in
full as more fully described below:
2.2.1 JCS. At the Closing, the Company will satisfy its
obligations to JCS under the Subordinated Dividend Notes and JCS will satisfy
its obligations to the Company with respect to his Stockholder Loans as
follows: (i) JCS will offset $267,934.76 of principal amount of Subordinated
Dividend Notes against the $267,934.76 outstanding balance of his Stockholder
Loans; (ii) the Company will issue to JCS an aggregate of 134,489 shares of
Common Stock and Scrip for 0.6 share of Common Stock in satisfaction of
$1,277,651.20 of principal amount of Subordinated Dividend Notes; (iii) the
Company will issue to JCS Warrants to purchase an aggregate of 140,000 shares
of Common Stock in satisfaction of $350,000 of principal amount of Subordinated
Dividend Notes; and (iv) the Company will repay in cash to JCS the $931,308.74
principal balance of Subordinated Dividend Notes.
2.2.2 DJS. At the Closing, the Company will satisfy its
obligations to DJS under the Subordinated Dividend Notes as follows: (i) The
Company will issue to DJS an aggregate of 134,489 shares of Common Stock and
Scrip for 0.6 share of Common Stock in satisfaction of $1,277,651.20 of
principal amount of Subordinated Dividend Notes; (ii) the Company will issue
to DJS Warrants to purchase an aggregate of 140,000 shares of Common Stock in
satisfaction of $350,000 of principal amount of Subordinated Dividend Notes;
(iii) the Company will repay in cash to DJS the $1,199,243.50 principal
balance of Subordinated Dividend Notes.
2.2.3 MSP. At the Closing, the Company will satisfy its
obligations to MSP under the Subordinated Dividend Notes and MSP will satisfy
its obligations to the Company with respect to her Stockholder Loans as
follows: (i) MSP will offset $162,202.92 of principal amount of Subordinated
Dividend Notes against the $162,202.92 outstanding balance of her Stockholder
Loans; (ii) the Company will issue to MSP an aggregate of 38,426 shares of
Common Stock in satisfaction of $365,043.20 of principal amount of Subordinated
Dividend Notes; (iii) the Company will issue to MSP Warrants to purchase an
aggregate of 40,000 shares of Common Stock in satisfaction of $100,000 of
principal amount of Subordinated Dividend Notes; and (iv) the Company will
repay in cash to MSP the $180,458.08 principal balance of Subordinated Dividend
Notes.
2.2.4 LAS. At the Closing, the Company will satisfy its
obligations to LAS under the Subordinated Dividend Notes and LAS will satisfy
its obligations to the Company with respect to her Stockholder Loans as
follows: (i) LAS will offset $159,179.60 of principal amount of Subordinated
Dividend Notes against the $159,179.60 outstanding balance of her Stockholder
Loans; (ii) the Company will issue to LAS an aggregate of 38,426 shares of
Common Stock in satisfaction of $365,043.20 of principal amount of Subordinated
Dividend Notes; (iii) the Company will issue to LAS Warrants to purchase an
aggregate of 40,000 shares of Common Stock in satisfaction of $100,000 of
principal amount of Subordinated Dividend Notes; and (iv) the Company will
repay in cash to LAS the $183,461.40 principal balance of Subordinated Dividend
Notes.
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2.2.5 JCSII. At the Closing, the Company will satisfy its
obligations to JCSII under the Subordinated Dividend Notes and JCSII will
satisfy its obligations to the Company with respect to his Stockholder Loans as
follows: (i) JCSII will offset $137,903.30 of principal amount of
Subordinated Dividend Notes against the $137,903.30 outstanding balance of his
Stockholder Loans; (ii) the Company will issue to JCSII an aggregate of 38,426
shares of Common Stock in satisfaction of $365,043.20 of principal amount of
Subordinated Dividend Notes; (iii) the Company will issue to JCSII Warrants to
purchase an aggregate of 40,000 shares of Common Stock in satisfaction of
$100,000 of principal amount of Subordinated Dividend Notes; and(iv) the
Company will repay in cash to JCSII the $204,737.80 principal balance of
Subordinated Dividend Notes.
2.2.6 OTHER INDEBTEDNESS. At the Closing, the Company
shall pay to JCS $695,443.00, representing the full principal balance of the
loan in like amount which he made to the Company. Notwithstanding the
foregoing, the Company shall assume all outstanding indebtedness of the Sellers
to any third party lender with respect to the Properties and the tax credit
projects.
2.2.7 ASSUMPTION OF INDEBTEDNESS. The Company agrees to
assume as of the Closing all outstanding indebtedness of the Seller to any
lender which is secured by any of the Properties.
SECTION 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY TO EACH SELLER.
The Company hereby represents and warrants to and covenants with each Seller as
follows:
3.1.1 DUE ORGANIZATION. The Company is duly organized and
validly existing as a corporation in good standing under the laws of the state
of Nevada and has the power to own all of its properties and assets and to
carry on its business as presently conducted.
3.1.2 AUTHORITY. The execution, delivery and performance
of this Agreement and all agreements contemplated hereby have been duly and
validly authorized by all necessary action of the Company and this Agreement
and all agreements contemplated hereby are valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms.
3.2 REPRESENTATIONS AND WARRANTIES OF EACH SELLER. Each Seller,
severally and not jointly, represents and warrants to and covenants with the
Company as set forth in this Section 3.2 below. Notwithstanding any other
provision of this Agreement to the contrary, each Seller makes representations
and warranties only with respect to such Seller and its Partnership Interests
and, in addition, in the case of JCS, with respect to the NHO Interest and the
East Freemont Interest.
3.2.1 AUTHORITY. Seller has the necessary power and
authority to execute, deliver and perform its obligations under this Agreement
and this Agreement is a valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms.
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3.2.2 OWNERSHIP AND TITLE. Seller has good and marketable
title to its Partnership Interests, Subordinated Dividend Notes and, in the
case of JCS, the NHO Interest and the East Freemont Interest, free and clear of
all liens, encumbrances, security interests, charges, options, rights and
claims.
3.2.3 NON-FOREIGN PERSON. Seller is not a "foreign person"
as such term is defined in Section 1445(f) of the Internal Revenue Code of
1986, as amended.
3.2.4 INVESTMENT INTENT. Seller is acquiring the shares of
Common Stock and Warrants to be issued to such Seller pursuant to this
Agreement for its own account for investment purposes only and not with a view
to or for sale in connection with a distribution of such Common Stock or
Warrants.
3.2.5 NEVADA RESIDENT. Seller is a bonafide resident of
the State of Nevada and is not a temporary or transient resident of such State.
3.3 ADDITIONAL REPRESENTATIONS OF JCS. In addition to his
representations and warranties pursuant to Section 3.2 of this Agreement, JCS
represents and warrants to and covenants with the Company as follows:
3.3.1 ABSENCE OF UNDISCLOSED LIABILITIES. Except for the
liabilities set forth on Exhibit E and liabilities pertaining to environmental
matters (which are subject to Section 3.6 below), no JCS Partnership has
liabilities of any nature, whether matured or unmatured, fixed or contingent,
regardless of whether disclosure thereof would otherwise be required by
generally accepted accounting principles, which liabilities will remain
liabilities after the Closing and which would have a material adverse effect on
the business of the Company or the value of the JCS Property.
3.3.2 PARTNERSHIP INTERESTS. The partnership interests of
the Sellers in the JCS Partnerships are validly issued and were not issued in
violation of any pre-emptive rights. The partnership interests in the JCS
Partnerships have been issued in compliance with applicable law and the
applicable partnership agreement. There are no rights, subscriptions,
warrants, options, conversion rights, pre-emptive rights or agreements of any
kind outstanding to purchase or otherwise acquire the partnership interests of
the Sellers in the JCS Partnerships.
3.3.3 PARTNERS. Exhibit J sets forth the names and
partnership interests of all of the partners in each JCS Partnerships.
3.3.4 ACQUISITION AND TRANSFER OF ALL RIGHTS. Upon (i)
consummation of the transactions contemplated by this Agreement, (ii) the
acquisition of the Third Party Interests and (iii) the assignment of the
Partnership Interests and in the case of JCS, the NHO Interest and the East
Freemont Interest, to the Company, the Company shall own all right, title and
interest in and to each Seller's interest, as general or limited partner, in
and to the Partnerships, JCS's right, title and interest in the NHO Interest
and the East Freemont Interest, and any and all right, title and interest in
the Properties, the Tax Credit Projects and the JCS Property transferred in
connection therewith.
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3.3.5 TITLE. Each JCS Partnership has, and as of the
Closing Date will have, good and insurable title in fee simple to the JCS
Properties set forth on Exhibit J owned by it and good and valid title to all
personal property owned by it which is material to the operation of such
property. Each JCS Property and Tax Credit Project is free and clear of all
liens, encumbrances, security interests, charges, adverse claims and other
exceptions to title, except for leases and matters of record set forth on
Exhibit K attached hereto.
3.3.6 ENVIRONMENT. There is no claim pending or threatened
or, to the best knowledge of JCS, contemplated under any Environmental Law (as
defined below) against any JCS Partnership which, if adversely determined,
might be reasonably likely to have a material adverse effect on the condition
(financial or otherwise), business, properties, net worth or results of
operations of the Company and its subsidiaries taken as a whole; there are no
past or present actions or conditions, including without limitation the release
of any Hazardous Material (as defined below) regulated under any Environmental
Law, that are likely to form the basis of any such claim under existing law
against any JCS Partnership which, if adversely determined, might be reasonably
likely to have a material adverse effect on the condition (financial or
otherwise), business, properties, net worth or results of operations of the
Company and its subsidiaries taken as a whole; there are no costs or
liabilities associated with Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) that would be reasonably likely, singly or in the
aggregate, to have a material adverse effect on the condition (financial or
otherwise), business, properties, net worth or results of operations of the
Company and its subsidiaries taken as a whole; and there are no events,
conditions, contingencies or occurrences of environmental nature that have
resulted or would reasonably be expected to result in any material expenditure,
impairment to development, operation or use of any JCS Property or to otherwise
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
JCS has provided copies to the Company or its counsel of all
written reports of environmental studies, assessments, audits, tests or other
investigations of the JCS Property in his or the JCS Partnership's possession,
custody or control.
As used herein, "Hazardous Material" shall include, without
limitation, any and all flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related
materials, asbestos, polychlorinated biphenyls ("PCBs"), petroleum products and
by-products and substances defined or listed as "hazardous substances," "toxic
substances," "hazardous waste," or "hazardous materials" in any federal, state
or local Environmental Law. As used herein, "Environmental Law" shall mean all
laws, regulations or ordinances of any federal, state or local Governmental
Authority having or claiming jurisdiction over the Company, its subsidiaries or
any of the real property referred to in the Prospectus that are designed to
protect public health and the environment or regulate the handling of Hazardous
Materials, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Section 9601 et seq.) ("CERCLA"), the Hazardous Material Transportation Act,
as amended (49 U.S.C. Section 1801 et seq.), the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Section 6901 et seq.), the Federal Water
Pollution Control Act, as amended (33 U.S.C. Section 1251 et seq.), and the
Clear Air Act, as amended (42 U.S.C. Section 7401 et seq.), and any and all
analogous federal, state or local laws.
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3.3.7 CONSENT; APPROVAL. No consent, approval,
authorization or order of any court or governmental agency or body or any other
person or entity is required for the consummation by the Sellers of the
transactions contemplated by this Agreement with respect to the JCS
Partnerships or the TCP's except such consents, approvals, authorizations and
orders as have, or at the Closing will have, been obtained.
3.3.8 NO BREACH, VIOLATION OR DEFAULT. The execution,
delivery and performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a material breach or
violation of any of the terms or provisions of or constitute a default under
any material indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which any JCS Partnership is a party or by which any
of them or any of their properties is or may be bound, the partnership
agreement or other organizational documents of the JCS Partnerships, or any
law, order, rule or regulation of any court or governmental agency or body
having jurisdiction over any of the JCS Partnerships or any of their properties
or will result in the creation of a lien on any of their properties.
SECTION 4
COVENANTS AND AGREEMENTS
4.1 COVENANTS AND AGREEMENTS OF JCS. JCS covenants and agrees
with and for the benefit of the Company as follows with respect to each JCS
Property and Tax Credit Projects:
4.1.1 CONDUCT OF BUSINESS. From and after the date hereof,
JCS shall conduct the business (including without limitation the maintenance
and incurrence of capital expenditures) of the JCS Properties and Tax Credit
Projects in the ordinary course, consistent with past practice and shall not:
(a) Sell, transfer or encumber a JCS Property or
a Tax Credit Project or any portion of a JCS Property or a Tax Credit Project
or an NHO or East Freemont Interest except (i) pursuant to a contract existing
on the date hereof or (ii) with the prior written consent of the Company; or
(b) Without the Company's prior written consent,
and except in the ordinary course of business, amend, modify or terminate or
enter into any material agreements or other material instruments relating to a
JCS Property or Tax Credit Project which agreements or instruments will remain
an obligation with respect to such Property on or after Closing.
4.1.2 CONSENTS. JCS shall use its good faith, diligent
efforts to obtain any approvals, waivers or other consents of third parties
required to consummate the transactions contemplated by this Agreement with
respect to a JCS Property, a JCS Partnership or a Tax Credit Partnership. At
Closing, the Company will own all Properties and all partnership, membership or
other interests in all entities that own Properties or Tax Credit Projects, in
each case, as described in the section entitled "The Reorganization" in the
Prospectus that is part of the Registration Statement declared effective on
June __, 1997 which Properties and interests will be in the condition described
in such Registration Statement.
4.1.3 COMPLETION OF CONSTRUCTION. If a JCS Property is not
fully constructed on the date hereof, JCS shall pursue diligently the lien free
completion of construction of such
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Property in substantial accordance with its plans and specifications, shall
comply in all material respects with all ordinances, regulations and
governmental requirements in connection therewith, and shall satisfy all
governmental proffers made by it or any predecessor.
4.1.4 LIENS. Except with respect to JCS Properties which
are Development Properties, JCS shall keep the Property free and clear of all
liens, claims or demands, including, but not limited to, mechanics' liens, in
connection with work performed and materials provided before the Closing, and
if any such lien is filed or levied, JCS shall secure its release on or prior
to Closing. Except with respect to JCS Properties which are Development
Properties, JCS shall not cause or allow any encumbrance, lien, deed of trust
or similar financial lien to be placed against the Property, whether or not
recorded, without the prior written consent of the Company.
4.1.5 INSURANCE. The JCS Partnerships and TCP's shall
maintain all insurance with respect to the JCS Properties and Tax Credit
Projects in effect on the date hereof.
4.1.6 FURTHER ASSURANCES. JCS, at the request of the
Company, shall furnish, execute, and deliver such documents, instruments,
certificates, notices, or other further assurances as the Company shall
reasonably request as necessary to effect complete consummation of this
Agreement and the transactions contemplated by this Agreement.
4.2 COVENANTS AND AGREEMENTS OF THE COMPANY. The Company
covenants and agrees with and for the benefit of the Sellers as follows:
4.2.1 CONSENTS. The Company shall use its good faith,
diligent efforts to obtain any approvals, waivers or other consents of third
parties required to consummate the transactions contemplated by this Agreement
with respect to all Properties and Partnerships other than the JCS Properties
and JCS Partnerships.
4.2.2 RELEASE OF SELLERS; INDEMNIFICATION. The Company
shall use its good faith, diligent efforts to obtain the release of Sellers
from any and all liability they may have as borrower, guarantor or otherwise
under any loan or other agreement relating to any Partnership, Property, TCP or
Tax Credit Project. In the event that the Company does not obtain the release
of Sellers from all such liabilities, at the Closing, the Company shall enter
into an indemnification agreement with the Sellers with respect to such
liabilities in the form of Exhibit I attached hereto. Notwithstanding the
foregoing, Sellers shall remain liable with respect to environmental matters
arising prior to the date of Closing.
4 .3 SURVIVAL. The foregoing covenants, representations and
warranties shall survive the Closing without limitation.
SECTION 5
CONDITIONS TO THE COMPANY'S OBLIGATION TO CLOSE
The obligation of the Company to close hereunder shall be
subject to the timely satisfaction of the following conditions unless waived by
the Company in its sole and absolute discretion:
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5.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
representations and warranties made by each Seller in this Agreement (including
the additional representations and warranties of JCS in Section 4.1 of this
Agreement) shall be true in all material respects as of the Closing with the
same effect as though such representations and warranties had been made of
given at the Closing.
5.2 COMPLIANCE WITH AGREEMENT. Each Seller shall have performed
and complied in all respects with its respective obligations under this
Agreement which are to be performed or complied with by it prior to or at the
Closing. At Closing, the Company will own all Properties and all partnership,
membership or other interests in all entities that own Properties or Tax Credit
Projects, in each case as described in the section entitled "The
Reorganization" in the Prospectus that is part of the Registration Statement
declared effective on June __, 1997 which Properties and interests will be in
the condition described in such Registration Statement.
5.3 PHYSICAL CONDITION. The physical condition of each Property
and Tax Credit Projects, including without limitation, the HVAC, plumbing and
electrical systems, shall be in the same condition as on the date of this
Agreement, ordinary wear and tear and non-material changes excepted, and with
respect to the Development Properties, except for such additions to the
Improvements as may be contemplated on the date hereof pursuant to the budget
and plans and specification previously delivered by Seller to the Company, and
there shall be no Hazardous Material existing on, under or about such Property,
other than such Hazardous Materials as may be disclosed in the Environmental
Reports.
5.4 TITLE. Title to the Properties shall be good and marketable,
subject only to the permitted exceptions set forth in the Title Policies
(defined herein). The Partnership Interests and member interests shall be free
and clear of all security interests, mortgages, pledges, liens, claims, rights,
options, encumbrances, and equities.
5.5 TITLE POLICY. The Company shall have received from the Title
Company, at the Company's expense, an unconditional commitment to issue to the
Company at Closing, an owner's title policy on standard ALTA Form B (1970), in
form and substance acceptable to the Company with respect to each Property, and
subject only to the permitted exceptions (each such title policy shall be
referred to herein as a "Title Policy" and collectively, such title policies
shall be referred to herein as the "Title Policies").
5.6 RECEIPT OF OFFERING PROCEEDS. The Registration Statement
shall have been declared effective and the Company shall have received the
proceeds from the Public Offering.
5.7 NO CONDEMNATION. There shall be no pending or threatened
condemnation or taking of any part of any of the Properties (other than a minor
street widening, or other immaterial taking, which, in the Company's reasonable
judgment, does not materially adversely affect such Property) or any parking
therefor.
5.8 CONSENTS RECEIVED. The Sellers shall have obtained and
furnished to the Company all third party consents and approvals, including all
third party partner and lender consents and governmental approvals, if any,
necessary to consummate the transactions described herein.
-11-
12
5.9 STATUS OF PROPERTIES. There shall have occurred no material
adverse change in the Properties, including without limitation the level of
occupancy of the Properties as of the Closing Date.
5.10 NO CHANGE IN LAW. No order, statute, rule, regulation,
executive order, injunction, stay, decree or restraining order shall have been
enacted, entered, promulgated or enforced by any Governmental Authority that
(i) prohibits the consummation of the transactions contemplated hereby or (ii)
has a material adverse impact on the Properties or Tax Credit Projects,
including without limitation the level of occupancy of the Properties or Tax
Credit Projects or the income therefrom, and no litigation or governmental
proceeding seeking such an order shall be pending or threatened.
5.11 FURTHER ASSURANCES. Each Seller, at the request of the
Company, shall have furnished, executed and delivered such documents,
instruments, certificates, notices or other further assurances as the Company
shall reasonably request as necessary to effect complete consummation of this
Agreement and the transactions contemplated by this Agreement.
5.12 LICENSES, PERMITS, CO'S, ZONING, ETC. All building permits,
certificates of occupancy, business licenses and all other notices, licenses,
permits, certificates and authority required as of the Closing Date in
connection with the construction, use or occupancy of the JCS Property (other
than Development Properties) (i) shall have been obtained and (ii) shall be in
full force and effect and in good standing. With respect to each Development
Property, there shall be no impediment to the issuance of a certificate of
occupancy by the appropriate Governmental Authority upon the completion of the
improvements thereon in material compliance with the plans and specifications
therefor.
5.13 ACQUISITION OF INTERESTS OF THIRD PARTIES. As of or
concurrently with the Closing, the Company shall have acquired all Third Party
Interests. Each Seller will comply with all federal, state and local tax
reporting requirements.
SECTION 6
CONDITIONS TO EACH SELLER'S OBLIGATION TO CLOSE
The obligation of each Seller to close hereunder shall be
subject to the timely satisfaction of the following conditions in favor of all
Sellers unless waived by such Seller in its sole and absolute discretion:
6.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
representations and warranties made by the Company in this Agreement shall be
true in all material respects as of the Closing with the same effect as though
such representations and warranties had been made of given at the Closing.
6.2 COMPLIANCE WITH AGREEMENT. The Company shall have performed
and complied in all respects with its obligations under this Agreement which
are to be performed or complied with by it prior to or at the Closing.
6.3 CONSENTS RECEIVED. Such Seller shall have received all
required material third party consents and approvals, including all third party
partner and lender consents, required in connection with the transfer of such
Seller's Partnership Interests.
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13
6.4 NO CHANGE IN LAW. No order, statute, rule, regulation,
executive order, injunction, stay, decree or restraining order shall have been
enacted , promulgated or enforced by any Governmental Authority that prohibits
the consummation of the transactions contemplated hereby, and no litigation or
governmental proceeding seeking such an order shall be pending or threatened.
6.5 FURTHER ASSURANCES. The Company, at the request of any
Seller, shall have furnished, executed and delivered such documents,
instruments, certificates, notices or other further assurances as such Seller
shall reasonably request as necessary to effect the complete consummation of
this Agreement and the transactions contemplated by this Agreement.
SECTION 7
CLOSING
7.1 TIME AND PLACE. The Closing shall take place simultaneously
and in conjunction with the closing of the Public Offering and the receipt by
the Company of the proceeds of the Public Offering, or, in the case of any
contributions of interests in partnerships as described in Section 2.1 of this
Agreement, on such earlier date as may be agreed upon by the parties.
7.2 DEPOSIT OF DOCUMENTS IN ESCROW PRIOR TO CLOSING. Prior to or
at the Closing, (i) each Seller shall deposit in escrow with the Title Company
(the "Title Escrow") all documents or instruments to be delivered by or on
behalf of such Seller at Closing pursuant to Section 7.3 hereof, together with
mutually agreeable, executed irrevocable escrow instructions (not inconsistent
with the terms of this Agreement) as may be necessary or appropriate to
consummate the transactions contemplated by this Agreement (the "Irrevocable
Instructions"); and (ii) the Company shall deposit in the Title Escrow the
instruments and documents required by Section 7.5 hereof, together with the
Irrevocable Instructions executed by the Company.
7.3 SELLER'S DELIVERIES TO THE TITLE ESCROW. Pursuant to the
terms hereof, each Seller shall deposit or shall cause to be deposited in the
Title Escrow:
7.3.1 Two undated counterparts of the Assignment
with respect to each Partnership Interest, the NHO interest and the East
Freemont Interest, duly executed by such Seller;
7.3.2 Grant, Bargain, Sale Deeds into the Company
for each of the Properties being transferred pursuant to the terms hereof
("Deed");
7.3.3 Bills of Sale for the transfer of the personal
property and intangibles being transferred to the Company in connection with
each Property;
7.3.4 A Declaration of Value to be recorded with
each Deed; and
7.3.5 Any other documents, transfer taxes,
instruments or agreements and terms which may be required by the terms of the
Irrevocable Instructions.
Title Company hereby is authorized to use the foregoing documents and
instruments to close the Title Escrow only in compliance with the Irrevocable
Instructions and otherwise only if and when Title Company holds documents to be
delivered by the Company through the Title
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Escrow pursuant to Section 7.5 hereof if Title Company has not received any
notice delivered pursuant to Section 7.8 hereof.
7.4 SELLERS' DELIVERY OUTSIDE THE TITLE ESCROW AT
CLOSING. At the Closing, each Seller shall deliver or shall cause to be
delivered the following to the Company or its designee outside of the Title
Escrow:
7.4.1 The consents of any third parties with respect
to a JCS Property or a JCS Partnership;
7.4.2 Any consents of lender obtained by Seller in
connection with the transactions contemplated hereby;
7.4.3 All original Subordinated Dividend Notes
issued to such Seller, which shall for each Seller be in the aggregate amount
set forth in Exhibit E hereto; and
7.4.4 Any other documents, transfer taxes,
instruments or agreements and items which the Company may reasonably request to
carry out the intent of this Agreement.
7.5 COMPANY'S DELIVERIES TO THE TITLE ESCROW. Pursuant to the
terms hereof, the Company shall deposit in the Title Escrow two undated
counterparts of the Assignment with respect to each Partnership Interest, duly
executed by the Company, and such documents and instruments as may be necessary
to place title to any Property in the Company and to allow the Title Company to
issue the Title Policy, if any, required by the Company with respect to any
Property requiring same. The Title Company hereby is authorized to use said
instruments and documents to close the Title Escrow only if and when: (i)
Title Company holds for the Company the items required by Section 7.3 hereof
from each Seller, (ii) Title Company can and will issue the Title Policies
concurrently with the Closing, and (iii) Title Company has not received any
notice delivered pursuant to Section 7.8 hereof.
7.6 THE COMPANY'S DELIVERY OUTSIDE THE TITLE ESCROW AT CLOSING.
At the Closing, the Company shall deliver or shall cause to be delivered to
each Seller or its designee outside of the Title Escrow (i) the certificates
representing the number of shares of Common Stock, Scrip and Warrants such
Seller is entitled to receive as set forth in Section 2.2 hereof, (ii) the
amount of cash such Seller entitled to receive as set forth in Section 2.2
hereof, and (iii) all other instruments required of the Company hereunder.
7.7 EXPENSES. At the Closing, all revenues and charges relating
to a Property and/or the transfer of such Property and including any recording
charges, current installments of real and personal property taxes or utility,
license, permit, service, contractual or other amounts payable or receivable
generally as a customary proration in transfers of real property shall be paid
by the Company.
7.8 CLOSE OF ESCROW. Provided that Title Company shall have
notified the Company and each Seller of its intention to proceed with the
Closing and thereafter the Title Company shall have received no written notice
prior to the Closing from the Company or any Seller of the failure of any
condition to the Closing running in favor of the Company or such Seller, as the
case may be, or of the termination of the Title Escrow, the Title Company shall
proceed with the
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15
Closing if and when the Company and each Seller have deposited into the Title
Escrow the items required by this Agreement and Title Company can and will
issue the Title Policies concurrently with the Closing and can and will comply
with the Irrevocable Instructions. Upon the Closing, Title Company shall date,
as of the Closing, all undated documents deposited in the Title Escrow and
shall:
7.8.1 On behalf of each Seller, deliver to the Company a
fully executed original of each of the items set forth in Section 7.2 hereof.
7.8.2 On behalf of the Company, deliver to each Seller a
fully executed original of the Assignment with respect to each Partnership
Interest.
7.8.3 Deliver the Title Policies to the Company.
7.9 POST-CLOSING COVENANTS.
(a) After the Closing, each Seller, at the request of the
Company, shall furnish, execute and deliver such documents, instruments,
certificates, notices or other further assurances as the Company shall
reasonably request as necessary to effect complete consummation of this
Agreement.
SECTION 8
FAILURE OF ANY PARTY TO PERFORM; TERMINATION
8.1 COMPANY'S REMEDIES. If any Seller shall default in the
performance of its obligation under this Agreement to contribute its
Partnership Interest, NHO Interest or East Freemont Interest to the Company,
then the Company shall have the right to either (i) institute an action against
such Seller for all damages suffered by the Company, including without
limitation, the loss of its bargain, or (ii) institute an action for specific
performance to enforce such Seller's obligation under this Agreement to convey
title to such Seller's Partnership Interest, NHO Interest or East Freemont
Interest, as the case may be, and for incidental damages.
8.2 TERMINATION. If the Closing has not occurred on or prior to
the Outside Closing Date, any party not in default with respect to its
obligations hereunder may terminate this Agreement as it affects such party,
and such terminating party shall no longer have any obligation to any other
party to this Agreement, under this Agreement or any document or instrument
executed or delivered in connection herewith, except for those obligations
expressly stated herein to survive termination.
SECTION 9
NO BROKERS
Each Seller represents and warrants to the Company that no
broker has acted for it in connection with this Agreement or the transactions
contemplated by this Agreement. Each Seller will indemnify, defend and holder
the Company harmless from any claim by any broker, agent or finder purporting
to have acted on behalf of such Seller. The Company represents and warrants to
each Seller that no broker has acted for it in connection with this
-15-
16
Agreement or the transactions contemplated by this Agreement. The Company will
indemnify, defend and holder each Seller harmless from any claim by any broker,
agent or finder purporting to have acted on behalf of the Company. The
foregoing indemnification shall survive that termination of this Agreement.
SECTION 10
GENERAL PROVISIONS
10.1 NOTICES. All notices and other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be personally delivered (by commercial courier or otherwise) or sent by
telecopy receipt of which is confirmed or sent first class mail, registered or
certified, return receipt requested, postage prepaid, addressed as follows:
If to the Company:
Xxxxxx Incorporated
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx, President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
If to a Seller:
Addressed to such Seller
c/x Xxxxxx Incorporated
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx, President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Notices and other communications shall be deemed delivered, (i) in the
case of personal delivery, on the date of their receipt at the address(es)
specified above for delivery, (ii) in the case of a telecopy, upon confirmation
of its receipt, and (iii) in the case of mail, at the earlier of the time of
receipt or five (5) days after the mailing thereof. Any payments required to
be made pursuant to this Agreement shall be made and delivered in person or by
mail in the same manner as provided above for notices and other communications.
Any party may change its
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17
address for the giving of notices, other communications and payments by notice
given in accordance with this Section.
10.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective permitted
successors, legal representatives and assigns. No party to this Agreement
shall have the right to assign any of its benefits hereunder without the
written consent of the other parties, which consent may be granted or withheld
in such party's sole discretion.
10.3 SEVERABILITY. The provisions of this Agreement shall be
deemed severable. If any provision hereof shall be found invalid, illegal,
void or unenforceable, in whole or in part, the remaining provisions or
portions thereof shall remain in full force and effect to the maximum extent
permissible. To the maximum extent permitted by applicable law, each party
hereby waives any provision of law which renders any provision of this
Agreement invalid, illegal, void or unenforceable.
10.4 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS OR CHOICE OF LAW RULES OR LAWS OF SUCH JURISDICTION.
10.5 FORUM SELECTION. THE PARTIES AGREE THAT ANY LEGAL SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE
COMMENCED IN A STATE OR FEDERAL COURT OF OR IN XXXXX COUNTY, NEVADA, WHICH THE
PARTIES AGREE IS THE SOLE AND EXCLUSIVE VENUE FOR THE CONVENIENCE OF THE
PARTIES FOR PURPOSES OF THIS AGREEMENT, AND EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION AND VENUE OF SUCH COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING AND WAIVES ANY RIGHT THAT IT MAY NOW OR HEREAFTER HAVE TO TRANSFER
OR CHANGE THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, EXCEPT THAT EACH
PARTY RETAINS WHATEVER RIGHT IT MAY HAVE TO REMOVE SUCH SUIT, ACTION OR
PROCEEDING TO THE FEDERAL COURT SITTING IN XXXXX COUNTY, NEVADA.
10.6 ATTORNEYS' FEES AND COSTS. If any litigation or other
proceeding between or among the parties is commenced in connection with or
related to this Agreement, the losing party shall pay the reasonable attorneys'
fees and costs and expenses of the prevailing party or parties incurred in
connection therewith.
10.7 ENTIRE AGREEMENT; MODIFICATION. This Agreement, including the
exhibits and schedules hereto, constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes all
prior negotiations and agreements with respect to the subject matter hereof.
This Agreement may be modified only by an instrument in writing duly executed
by the party sought to be bound by such modification.
10.8 WAIVERS. No breach of any covenant, condition, agreement,
warranty or representation made herein shall be deemed waived unless expressly
waived in writing by the party who might assert such breach. Any such waiver
may be made in advance or after the right waived has arisen or the breach or
default waived has occurred. Any such waiver may be
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conditional. No such waiver shall be deemed to be a waiver of any other
matter, whenever occurring and whether identical, similar or dissimilar to the
matter waived.
10.9 FURTHER ASSURANCES. Each party agrees promptly to execute and
deliver such documents and to do such other acts as may be requested by any
other party and are in the reasonable judgment of the requesting party
necessary or appropriate to effectuate the purposes of this Agreement.
10.10 HEADINGS; GENDER; NUMBER. The headings of the sections and
subsections herein are inserted for convenience of reference only and are not
intended to be a part of, or to affect the meaning or interpretation of, this
Agreement. As used herein and as the context requires, a reference to the
male, female or neutral gender includes a reference to each other gender, and a
reference to the singular or plural number includes a reference to the other
number.
10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed to constitute an original.
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19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXX INCORPORATED
By:
----------------------------------------
Xxxxx X. Xxxxxx, President
"SELLERS"
-------------------------------------------
Xxxxx X. Xxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxx
-------------------------------------------
Xxxxxxx Xxxxxx-Pori
-------------------------------------------
Xxx-Xxx Xxxxxx
-------------------------------------------
Xxxxx X. Xxxxxx XX
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20
EXHIBIT A
To Asset Contribution and Reorganization Agreement
Description of Common Name
Name of Seller Contributed Property of Real Property
----------------------------- ---------------------------- ------------------------
Xxxxx X. Xxxxxx (JCS) 35% GP Interest in SNIC II GSA Office Building
Sahara Vista I
Sahara Decatur Retail
Sahara Vista II Land
Xxxxxxx Land
10% LP Interest in Novex Flamingo Pt
Xxxxxx Express
Xxxxxx and Xxxxxxx
0000 X Xxxxxxxx Xxxx
Regency Plaza Land
Regency Land
10.5 % LP Interest in LRC(1)
Xxxxxx Furniture
Furniture Exp
Woody's
Xxxxxx III Land
50% GP Interest in R&D Properties Arcata
50% GP Interest in Xxxxxxxxx & Xxxxxx
Arbor Court
Taco Xxxx
Xxxxxxx X. Xxxxxx (DJS) 35% GP Interest in SNIC II GSA Office Building
Sahara Vista I
Sahara Decatur Retail
Sahara Vista II Land
Xxxxxxx Land
10% LP Interest in Novex Flamingo Pt
Xxxxxx Express
Xxxxxx and Xxxxxxx
0000 X Xxxxxxxx Xxxx
Regency Plaza Land
-------------
(1) LRC holds a 66% general partner interest Xxxxxx Plaza Limited
Partnership which in turn owns the real property indicated.
21
Description of Common Name
Name of Seller Contributed Property of Real Property
----------------------------- ---------------------------- ------------------------
Regency Land
10.5% LP Interest in LRC Xxxxxx Furniture
Furniture Exp
Woody's
Xxxxxx III Land
Xxxxxxxx Xxxxxx-Pori (MSP) 10% LP Interest in SNIC II GSA Office Building
Sahara Vista I
Sahara Decatur Retail
Sahara Vista II Land
Xxxxxxx Land
3% LP Interest in LRC Xxxxxx Furniture
Furniture Exp
Woody's
Xxxxxx III Land
Xxx-Xxx Xxxxxx (LAS) 10% LP Interest in SNIC II GSA Office Building
Sahara Vista I
Sahara Decatur Retail
Sahara Vista II Land
Xxxxxxx Land
3% LP Interest in LRC Xxxxxx Furniture
Furniture Exp
Woody's
Xxxxxx III Land
Xxxxx X. Xxxxxx XX (JCSII) 10% LP Interest in SNIC II GSA Office Building
Sahara Vista I
Sahara Decatur Retail
Sahara Vista II Land
Xxxxxxx Land
3% LP Interest in LRC Xxxxxx Furniture
Furniture Exp
Woody's
Xxxxxx III Land
22
EXHIBIT B-1
OPERATING PROPERTIES
(LEGAL DESCRIPTIONS)
23
EXHIBIT B-2
DEVELOPMENT PROPERTIES
(LEGAL DESCRIPTIONS)
24
EXHIBIT C
To Asset Contribution and Reorganization Agreement
East Freemont II Limited Partnership, a Nevada limited partnership
Paseo del Xxxxx Limited Partnership, a Nevada limited partnership
Saratoga Palms North II Limited Partnership, a Nevada limited partnership
25
EXHIBIT D
To Asset Contribution and Reorganization Agreement
Tax Credit Partnership Tax Credit Project
---------------------------- -------------------------------
East Freemont Group Limited Partnership Saratoga Palms East I Apartments
East Freemont II Limited Partnership Saratoga Palms East II Apartments
Paseo del Xxxxx Limited Partnership Paseo del Xxxxx Apartments
Saratoga Palms North II Limited Partnership Saratoga Palms North II Apartments
26
EXHIBIT E
To Asset Contribution and Reorganization Agreement
Amount Owed by
Company to Seller
-------------------------------------
Amount Owed by Amount Represented
Seller to Company by
("Stockholder Subordinated
Seller Loans") Dividend Notes Other
------ ----------------- ------------------ -----
Xxxxx X. Xxxxxx $267,934.76 $2,826,894.70 $695,443.00
Xxxxxxx X. Xxxxxx -0- 2,826,894.70 -0-
Xxxxxxx Xxxxxx-Pori 162,202.92 807,684.20 -0-
Xxx-Xxx Xxxxxx 159,179.60 807,684.20 -0-
Xxxxx X. Xxxxxx XX 137,903.30 807,684.20 -0-
----------- ------------- -----------
$727,220.58 $8,076,842.00 $695,443.00
27
EXHIBIT F-1
To Asset Contribution and Reorganization Agreement
Assignment and Assumption of Partnership Interests
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are
hereby acknowledged, the undersigned _________ [the applicable persons or
entities, owning the individual partnerships (collectively, "Assignor") hereby
transfers, conveys and assigns to XXXXXX INCORPORATED, a Nevada corporation
("Assignee"), all right, title and interest in and to Assignors' [applicable,
general or limited] partnership interest in ______________, a Nevada
([applicable limited or general] partnership (the "Partnership"), including,
without limitation, all of Assignors' rights to any share of the profits, rights
to receive distributions or other compensation or the return of Assignor's
contributions (the "Partnership Interest").
TO HAVE AND TO HOLD THE SAME FOREVER,
Assignor hereby represents and warrants to Assignee that (a) Assignor is
the sole legal and equitable owner of the Partnership Interest, (b) the
Partnership Interest has not been previously conveyed, assigned, pledged,
encumbered or otherwise hypothecated in any manner, (c) the Partnership Interest
is not subject to any charging order or similar attachment, and (d) neither
Assignor nor the Partnership Interest are the subject of any bankruptcy,
reorganization or receivership proceeding.
By acceptance hereof, Assignee hereby expressly assumes and shall pay or
cause to be paid or otherwise discharged all liabilities and obligations for
which Assignor is liable or obligated with respect to such Partnership Interest
being transferred to Assignee hereof and agrees as to such obligations so
arising to indemnify and hold Assignor harmless from and against all loss, cost,
damage, expense or liability, including attorneys fees, arising therefrom and
from any act, obligation or omission of Assignee in connection therewith
The Assignor is hereby withdrawing as partner of the Partnership and the
Assignee is hereby substituted as a substitute partner thereof for all purposes.
This Assignment and Assumption of Partnership Interests and the
obligations of the parties hereunder, shall be binding upon and inure to the
benefit of Assignor and Assignee, and their respective successors and assigns.
28
IN WITNESS WHEREOF, Assignor and Assignee have executed this instrument
effective this ___ day of __________, 1997.
ASSIGNOR ASSIGNEE:
XXXXXX INCORPORATED
______________________________ By:____________________________
Xxxxx X. Xxxxxx
President
______________________________
______________________________
29
EXHIBIT F-3
To Asset Contribution and Reorganization Agreement
Assignment and Assumption of the East Freemont Interest
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are
hereby acknowledged, the undersigned Xxxxx X. Xxxxxx ("Assignor") hereby
transfers, conveys and assigns to XXXXXX INCORPORATED, a Nevada corporation
("Assignee"), all right, title, and interest in and to Assignor's general
partner interest in East Freemont Group Limited Partnership, a Nevada limited
partnership ("East Freemont") including, without limitation, all of Assignor's'
rights to any share of the profits, rights to receive distributions or other
compensation or the return of Assignor's contributions (the "East Freemont").
TO HAVE AND TO HOLD THE SAME FOREVER,
Assignor hereby represents and warrants to Assignee that (a) Assignor is
the sole legal and equitable owner of the East Freemont Interest, (b) the East
Freemont nterest has not been previously conveyed, assigned, pledged, encumbered
or otherwise hypothecated in any manner, (c) the East Freemont Interest is not
subject to any charging order or similar attachment, and (d) neither Assignor,
nor to the best of Assignor's knowledge, the East Freemont Interest are the
subject of any bankruptcy, reorganization or receivership proceeding.
By acceptance hereof, Assignee hereby expressly assumes and shall pay or
cause to be paid or otherwise discharged all liabilities and obligations for
which Assignor is liable or obligated with respect to such member Interest being
transferred to Assignee hereof and agrees as to such obligations so arising to
indemnify and hold Assignor harmless from and against all loss, cost, damage,
expense or liability, including attorneys fees, arising therefrom and from any
act, obligation or omission of Assignee in connection therewith
The Assignor is hereby withdrawing as a member of the East Freemont
Interest and the Assignee is hereby substituted as a substitute member thereof
for all purposes.
This Assignment and Assumption of the East Freemont Interest and the
obligations of the parties hereunder, shall be binding upon and inure to the
benefit of Assignor and Assignee and their respective successors and assigns.
30
IN WITNESS WHEREOF, Assignor and Assignee have executed this instrument
effective this ___ day of __________, 1997.
ASSIGNOR: ASSIGNEE:
XXXXXX INCORPORATED
________________________ By:_________________________
Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx, President
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31
EXHIBIT G
To Asset Contribution and Reorganization Agreement
Partnership Third Party Partner Description of Interest Held
----------- ------------------- ----------------------------
Xxxxxx Plaza Limited Xxxxxx Xxxxxxxxxx 20% limited partner
Partnership interest
Xxxx Xxxxxxxxx
14% limited partner
interest
R&D Partners Las Vegas Paving Co., 50% general partner
Inc. interest
Sahara West Americana One 50% general partner
interest
Xxxxxx Properties Limited Xxxxxx Xxxxxx 1% limited partner
Partnership interest
32
EXHIBIT H
To Asset Contribution and Reorganization Agreement
[Previously filed on June 9, 1997 as Exhibit 4.3 to
Amendment No. 1 to Registration Statement]
33
EXHIBIT I
To Asset Contribution and Reorganization Agreement
INDEMNIFICATION AGREEMENT
This Indemnification Agreement is made as of June _____, 1997 by and
between XXXXXX INCORPORATED., a Nevada corporation (the "Company"), and those
persons and entities listed on Exhibit "A" attached hereto (such persons and
entities shall be referred to herein collectively as the "Indemnitee").
WHEREAS, Section 4.2. of the Asset Contribution and Reorganization
Agreement (the "Agreement") provides that the Company shall indemnify the
Indemnitee from any and all liability that Indemnitee may have as a borrower,
guarantor or otherwise under any loan or other agreement relating to any
Partnership, Property, TCP, or Tax Credit Project (as such terms are defined in
the Agreement) in the event the Company does not obtain a release of Indemnitee
from such liabilities; and
WHEREAS, in view of the foregoing and in recognition of the
Indemnitee's need for protection against such liability, the Company wishes to
provide in this Agreement for the indemnification of Indemnitee as set forth in
this Agreement.
NOW, THEREFORE, for good and valuable consideration, receipt and
sufficiency of which are hereby acknowledged, the Company hereby agrees as
follows:
SECTION 1. GENERAL RIGHT TO INDEMNIFICATION. The Company shall indemnify
the Indemnitee in the event that the Indemnitee is a party or is involved (as a
witness or otherwise) in or otherwise requires representation by counsel in
connection with any claim, action, suit, proceeding or inquiry (collectively,
"Claims") by reason of the fact that Indemnitee is or may at any time sustain or
incur by reason of or in consequence of any liability that the Indemnitee may
have as a borrower, guarantor or otherwise under any loan or other agreement or
relating to any of the Indemnitee's right, title or interest, as a general or
limited partner, as the case may be, in and to the Partnerships (described in
the Agreement) or any of the Properties (described in the Agreement); and
Indemnitee shall be indemnified and held harmless by the Company against all
costs, charges, expenses, liabilities and losses (including attorneys' fees,
judgments, fines, taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by any Indemnitee in connection therewith. In addition, the
Company shall pay, reimburse or make good on any liabilities that any Indemnitee
may have or any Claim brought or instituted in connection with any Tax Credit
Partnership or any Tax Credit Project (as such terms
34
are defined in the Agreement). The Company hereby waives all claims in respect
hereof and as a result of any of the foregoing against the Indemnitees and/or
Xxxxx X. Xxxxxx.
SECTION 2. NO INDEMNIFICATION RIGHTS. The Company shall indemnify
Indemnitee unless it is established that; the act or omission of Indemnitee was
material to the matter giving rise to the proceeding; and was committed in bad
faith; or was the result of active and deliberate dishonesty; or the Indemnitee
actually received an improper personal benefit in money, property, or services;
or in the case of any criminal proceeding, the Indemnitee had reasonable cause
to believe that the act or omission was unlawful.
SECTION 3. INDEMNIFICATION FOR COSTS, CHARGES AND EXPENSES OF SUCCESSFUL
PARTY. To the extent that the Indemnitee has been successful on the merits or
otherwise, including, without limitation, the dismissal of an action without
prejudice, in defense of any Claim covered by this Agreement, or in defense of
any claim, issue or matter therein, the Indemnitee shall be indemnified against
all costs, charges and expenses, including attorneys' fees, actually and
reasonably incurred by the Indemnitee or on Indemnitee's behalf in connection
therewith.
SECTION 4. NOTICE TO COMPANY. The Indemnitee must provide prompt written
notice to the Company of any Claim in connection with which the Indemnitee may
assert a right to be indemnified hereunder.
SECTION 5. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights.
SECTION 6. NO DUPLICATION OF PAYMENTS. The Company shall not be liable
under this Agreement to make any payment in connection with any claim made
against the Indemnitee to the extent the Indemnitee has otherwise actually
received payment (under any insurance policy or otherwise) of the amounts
otherwise indemnifiable hereunder.
SECTION 7. AMENDMENTS. This Agreement may not be amended without
the agreement in writing of the Company and the Indemnitee.
SECTION 8. SAVINGS CLAUSE. If this Agreement or any portion hereof shall
be deemed invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
-2-
35
SECTION 9. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective estate, heirs, executors, administrators, successors and assigns.
SECTION 10. GOVERNING LAW. This Agreement shall be governed in all
respects, including validity, interpretation and effect, by the laws of
the State of Nevada.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
thereto, and in the case of the Company, by a duly authorized officer thereof on
its behalf.
XXXXXX INCORPORATED
By:______________________________
Xxxxx X. Xxxxxx, President
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36
EXHIBIT J
To Asset Contribution and Reorganization Agreement
Partnership Name Description of Interest Held
----------- ---- ----------------------------
SNIC II Xxxxx X. Xxxxxx 35%
Xxxxxxx X. Xxxxxx 35%
Xxxxxxx X. Pori 10%
Xxx-Xxx Xxxxxx 10%
Xxxxx X. Xxxxxx III 10%
R&D Properties Xxxxx X. Xxxxxx 50%
Las Vegas Paving 50%
37
EXHIBIT K
To Asset Contribution and Reorganization Agreement
