EXHIBIT 10.2
FORM OF CONTRIBUTION AND SALE AGREEMENT
THIS CONTRIBUTION AND SALE AGREEMENT ("AGREEMENT") is made and entered
into as of the _____ day of _______, 2002 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,
INC., 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 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, the KRF3/KR5 Transferor is or will be on the Closing Date (as
hereinafter defined) the sole member of (i) KRF3 Acquisition Company, L.L.C., a
Delaware limited liability company ("KRF3"), and (ii) KR5 Acquisition, L.L.C., a
Delaware limited liability company ("KR5") (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;
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");
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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 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 also owns (or will own on the Closing Date) a 75.82%
interest as managing member in Century LLC, a [Delaware] limited liability
company ("CENTURY LLC"), (ii) the rights and obligations of the members of
Century LLC are governed by that certain [Operating Agreement of even date
herewith] (as the same may be amended prior to the Closing Date, the "CENTURY
OPERATING AGREEMENT"), (iii) Equity Resources Group, Incorporated, or an entity
affiliated with Equity Resources Group, Incorporated, owns (or will own on the
Closing Date) the remaining 24.18% in Century LLC, (iii) Century LLC is the sole
limited partner in Century III Associates Limited Partnership, a Maryland
limited partnership ("CENTURY ASSOCIATES"), (iv) the GP Transferor is the sole
general partner of Century Associates, and (v) 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.
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NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, 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:
"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 LLC" shall have the meaning set forth in the Recitals to this
Agreement.
"CENTURY OPERATING AGREEMENT" 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.
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"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).
"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. Section 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. Section 9601 et seq.), as amended by the Superfund
Amendments and Reauthorization Act of 1986; the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.); the Toxic Substance Control
Act (15 U.S.C. Section 2601 et seq.; the Clean Air Act (42 U.S.C. Section 9402
et seq.); the Clean Water Act (33 U.S.C. Section 1251 et seq.); the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.); the
Occupational Safety and Health Act (29 U.S.C. Section 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 __% 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 ________, 2002.
"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).
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"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.
"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 [INSERT APPLICABLE EXECUTIVES]. 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
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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.
"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").
"NOTICES" shall mean all notices, demands or requests made pursuant
to, under or by virtue of this Agreement.
"OPERATING AGREEMENTS" shall mean the [Operating 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.
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"PARTNERSHIP SUB CLOSING DOCUMENTS" shall have the meaning set forth
in Section 6.4.
"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,
Century LLC and Century Associates (each individually, a "SUBSIDIARY").
"SUBSIDIARY PARTNERSHIP AGREEMENTS" shall mean the [Partnership
Agreements] 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.
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"XXXXXX POND" shall have the meaning set forth in the Recitals to this
Agreement.
"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.
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(B) The Partnership Sub agrees to accept the GP Interests
and the DOH Stock without representation or warranty (including any
representation or 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 subtracting
from $152,470,000 the aggregate amount of indebtedness to which the Properties
are subject as of the Closing Date and dividing the difference 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 and 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
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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."
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 amount thereof (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 paid in cash
to the KRF3/KR5 Transferor or the Partnership, as the case may be, at the
Closing, subject to further adjustments 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;
(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 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
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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.
5.3 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.
5.4 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, as 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, as 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 Century Operating Agreement, 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 amounts otherwise
to be remitted to the KRF3/KR5 Transferor. 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.
5.5 SECURITY DEPOSITS. The Schedule of Leases 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. The KRF3/KR5 Transferor shall
pay to the Partnership in cash at the Closing 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. The Partnership shall pay to
the KRF3/KR5 Transferor in cash at the Closing the KRF3/KR5 Transferor's share
of the aggregate amount of interest accrued prior to the Closing Date
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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.
5.6 RESERVES AND DEPOSITS. 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 shall be paid
to the KRF3/KR5 Transferor at the Closing by the Partnership.
5.7 SETTLEMENT OF ADJUSTMENTS.
(A) On or before the Final Adjustment Date, the adjustments
made as of the Closing Date shall be 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 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.
(B) Any errors or omissions in computing apportionments at
the Closing shall be corrected promptly after their discovery.
(C) Net prorations and adjustments made pursuant to this
Article V as of the Closing Date and from time to time after the Closing shall
be made in cash.
5.8 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.
5.9 [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.]
5.10 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.
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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 stating its U.S.
taxpayer identification number or social security number and that it is a
"UNITED STATES PERSON," as defined by Internal Revenue Code section 1445(f)(3)
and section 7701(b).
(C) A duly executed and acknowledged Secretary's Certificate
certifying that the [managing member] of the KRF3/KR5 Transferor has duly
adopted resolutions authorizing the execution and delivery of this Agreement and
the consummation of the transactions contemplated (a copy of which resolutions
shall be annexed to or incorporated in such certificate).
(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 or social security number and that it is a
"UNITED STATES PERSON," as defined by Internal Revenue Code section 1445(f)(3)
and section 7701(b).
(E) Duly signed resignations, effective immediately after
the Closing, of all officers and directors of DOH, except for such officers and
directors as are designated by the Partnership Sub.
(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.
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(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.
(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 6.4 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
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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 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
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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.
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
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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 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) and 7701(b) 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, the Century Operating Agreement (as it
exists on the date hereof) 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
19
engaged and to enter into and perform its obligations under this Agreement, the
GP Transferor Closing Documents and any other documents contemplated by this
Agreement. The GP Transferor is not a "FOREIGN PERSON" within the meaning of
sections 1445(f) and 7701(b) 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,
XXX0, XX0 or any
20
Subsidiary, (ii) violate or conflict with any judgment, decree or order of any
court 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 Century Operating Agreement), (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, the
Century Operating 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 of KRF3, KR5
and the Subsidiaries], (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.
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(J) TAX FILINGS. To the best of the Transferors' knowledge,
all Federal, state and local tax returns required to be filed by 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 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 XXX0,
XX0 and the Subsidiaries 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 [,all in
accordance with generally accepted accounting principles consistently applied].
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 or any part thereof. The Transferors have no
knowledge of any material breach of or material default under the Management
Agreements.
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(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 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.
24
(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.
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
25
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 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).
26
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 $250,000 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 materially damaged by fire or any other casualty with an estimated
repair or restoration costs in excess of [$2,500,000], 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
27
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.
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
28
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, LP
c/o The Berkshire Group
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy thereof to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: [Xxxxxxxx X. Xxxx, Esq.]
(B) To Partnership Sub:
BIR Sub, L.L.C.
c/o The Berkshire Group
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
29
with a copy thereof to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: [Xxxxxxxx X. Xxxx, Esq.]
(C) To Transferors:
KRF Company, LLC
c/o The Berkshire Group
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
[KRF GP, Inc]
c/o The Berkshire Group
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy thereof to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
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 not 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, the other with respect to
any of the other's agreements or obligations set forth herein.
30
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. Neither 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 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
31
withheld, alter or amend the KRF3 Tenancy-in-Common Agreement or the Century
Operating 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.
32
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:
--------------------------------
Name:
Title:
KRF GP, Inc.
By:
--------------------------------
Name:
Title:
PARTNERSHIP:
Berkshire Income Realty-OP, L.P.
By:
--------------------------------
Name:
Title:
PARTNERSHIP SUB
BIR Sub, L.L.C.
By:
--------------------------------
Name:
Title:
CONTRIBUTION AND SALE AGREEMENT
AMONG
KRF COMPANY, L.L.C.,
a Delaware limited liability company;
KRF GP, INC.,
a Massachusetts corporation;
BERKSHIRE INCOME REALTY-OP, L.P.,
a Delaware limited partnership;
and
BIR SUB, L.L.C.
a ________ 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 ___________, 2002
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 Re-Proration of Impositions..............................10
5.3 Utilities................................................11
5.4 Rent Arrearages..........................................11
5.5 Security Deposits........................................11
5.6 Reserves and Deposits....................................12
5.7 Settlement of Adjustments................................12
5.8 Inspection of Books and Records..........................12
5.9 [Schedule of Rent Arrearages.............................12
5.10 Survival.................................................12
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.................24
i
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......................................................27
9.1 Brokerage Indemnity......................................27
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...................................30
10.6 Third-Party Beneficiaries................................30
10.7 Partial Invalidity.......................................30
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......................................31
ii
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
iii
