Exhibit 10.4
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the"Agreement")is made as of April 20,2010 (the"Effective Date"),by and between Real Estate Associates Limited VI, a Californialimited partnership("Assignor"),Brainard Property Management, LLC, a Kentucky limitedliability company("Assignee"),and David Brainard, an individual (the"General Partner"andtogether with Assignor and Assignee, each a"Party"and, as the context requires, any two ormore, collectively,"Parties"),with reference to the following:
A. Kentucky Manor Apartments, Ltd., a Kentucky limited partnership (the"Partnership"),was formed as a limited partnership under the laws of the Commonwealth ofKentucky and is being governed pursuant to an Amended and Restated Agreement andCertificate of Limited Partnership, dated as of November 19, 1982, as amended by a FirstAmendment to Amended and Restated Agreement and Certificate of Limited Partnership, datedas of January 7, 1983, and further amended by a Second Amendment to Amended andRestated Agreement and Certificate of Limited Partnership, dated as of September 22, 1983 (collectively, the"Partnership Agreement")(any capitalized word or phrase used but notdefined herein shall have the meaning set forth in the Partnership A greement).
B. The General Partner is the "Operating General Partner" or the "General Partner"of the Partnership and Assignor the "Limited Partner" of the Partnership.
NOW THEREFORE, in consideration of the mutual promises and for such other goodand valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Assignment and Assumption.
1.1 Effective as of the"Closing"(as hereinafter defined):
(a) Assignor hereby assigns to Assignee 100% of Assignor's interestin the Partnership, including, without limitation, Profits and Losses, Cash from Operations, NetRefinancing Cash, surplus cash from Disposition, all other Partnership assets, and all rights toany fees, loan repayments and reimbursements (the"Interest"),and
(b) Assignee assumes and agrees to perform all of the obligations ofAssignor under the Partnership Agreement.
1.2 In consideration for Assignor's assignment of the Interest, at the Closing
Assignee shall pay to Assignor an amount (the"Payment")equal to $400,000, payable byfederal wire transfer of immediately available funds pursuant to instructions from Assignor. ThePayment shall be treated as a direct acquisition of the Interest. Assignor covenants and agreesthat such sum shall be received in full satisfaction of all obligations and liabilities due Assignor inconnection with or in any manner arising out of the Partnership, the Project or any other assets owned by the Partnership.
2.1 The closing of the transactions contemplated by this Agreement (the
"Closing")shall occur no later than March 31, 2011 (the"Closing Date"). In the eventtheClosing does not occur on or before the Closing Date, this Agreement shall terminateautomatically without the necessity of any further action on the part of any of the Parties unlessthe Parties otherwise agree in writing.
2.2 At the Closing:
(a) As provided in Section 1.2, Assignee shall pay the Payment; and
(b) Assignor, Assignee and the General Partner shall execute andexchange countersigned counterparts of the Third Amendment to Amended and RestatedAgreement and Certificate of Limited Partnership of the Partnership in the form attached heretoas Exhibit A.
3. Representations and Warranties.
3.1 Asa material inducement to Assignee entering into this Agreement,
Assignor represents and warrants to Assignee the following are true and correct as of theEffective Date, shall be true and correct as of the Closing Date, and shall survive the Closingand the withdrawal of Assignor from the Partnership:
(a) Assignor is the owner of the Interest and the Interest is not subjectto any lien, pledge or encumbrance of any nature whatsoever and Assignee shall acquire thesame free of any rights or claims thereto by any other party claiming by, through or underAssignor.
(b) The execution and delivery of this Agreement by Assignor and theperformance of the transactions contemplated herein have been duly authorized by all requisitecorporate and partnership proceedings and, assuming the due and proper execution anddelivery by Assignee and the General Partner, this Assignment is binding upon and enforceableagainst Assignor in accordance with its terms.
3.2 As a material inducement to Assignor entering into this Agreement,
Assignee represents and warrants to Assignor the following are true and correct as of theEffective Date, shall be true and correct as of the Closing Date, and shall survive the Closingand the withdrawal of Assignor from the Partnership:
(a) The execution and delivery of this Agreement by Assignee and theperformance of the transactions contemplated herein have been duly authorized by all requisitecorporate and partnership proceedings.
(c) No proceeding before any federal, state, municipal or othergovernmental department, commission, board or agency is pending against Assignee or, to theknowledge of Assignee, threatened against Assignee pursuant to which an unfavorablejudgment would restrain, prohibit, invalidate, set aside, rescind, prevent or make unlawful this
Agreement or the transactions contemplated hereunder, nor does Assignee know of any reasonto believe any such proceeding will be instituted.
(d) Assignee has incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other similar payment inconnection with this Agreement.
(e) Assignee is aware of the restrictions on transfer or encumbrance
of the Interest under the Partnership Agreement, as well as the transfer restrictions imposed bythe Securities Act of 1933, as amended, and applicable state securities laws (the"SecuritiesLaws").Assignee is able to bear the economic risk of its investment in the Interest, is awarethat it must hold the Interest for an indefinite period and that the Interest has not been registeredunder the applicable Securities Laws and may not be sold or otherwise transferred unlesspermitted by the terms of the Partnership Agreement and the Interest is registered, or anexemption from the registration requirements is available with respect thereto, under theSecurities Laws. Assignee is acquiring the Interest for its own account and not with a view toresell, transfer or otherwise dispose thereof.
(f) Assignee is an Affiliate of a general partner of the Partnership,
and therefore knows at least as much about the Partnership as Assignor. Assignee isexperienced in financial transactions such as ownership of the Interest and understands thebusiness and operations of the Partnership. Assignee has had an opportunity to ask questionsabout and seek information about the Partnership, and has not relied upon any express orImplied representations or warranties from Assignor with regard to the Interest or thePartnership, except as expressly provided herein.
3.3 Except as expressly provided in this Section 3, no Party has made any
other representation or warranty concerning the Interest, the Partnership or any other matter.
3.4 As a material inducement to Assignor entering into this Agreement:
(a) The General Partner represents and warrants to Assignor that
(i) the execution and delivery of this Agreement by the General Partner and its performance ofthe transactions contemplated herein have been duly authorized by all requisite corporateproceedings, and (ii) assuming the due and proper execution and delivery by Assignor, thisAssignment is binding upon and enforceable against the General Partner in accordance with itsterms. The foregoing representations and warranties are true and correct as of the EffectiveDate, shall be true and correct as of the Closing Date, and shall survive the Closing and the withdrawal of Assignor from the Partnership; and
(b) The General Partner covenants to Assignor that on or before
Closing, the Partnership will have obtained all necessary consents and approvals for thetransactions contemplated by this Agreement, including, but not limited to, the consents, to the extent required, of the holders of all Mortgages and all Governmental Agencies.
4. Miscellaneous.All notices, demands, requests and other communications
required pursuant to the provisions of this Agreement("Notice")shall be in writing and shall bedeemed to have been properly given or served for all purposes(i)if sent by Federal Express orany other nationally recognized overnight carrier for next business day delivery, on the firstbusiness day following deposit of such Notice with such carrier, or (ii) if personally delivered, on
do National Partnership Investments Corp.6701 Center Drive, Suite 520
Los Angeles, CA 90045
Attention: Asset Management
with a copy to:
Law Offices of Peter H. Alpert, Inc.601 S. Figueroa Street, Suite 2330Attention: Peter H. Alpert
Los Angeles, CA 90017
4.2 If to Assignee or the General Partner, to the intended r ecipient at:
c/o David Brainard225 Clara Drive
Pembroke, KY 42261
with a copy to:
Daniel Thomas, Esq. P.O. Box 675
Hopkinsville, KY 42240
Any of the Parties may designate a change of address by Notice in writing to the other Parties.Whenever in this Agreement the giving of Notice by mail or otherwise is required, the giving ofsuch Notice may be waived in writing by the person or persons entitled to receive such Notice.
4.3 If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future laws, such provision shall be fully severable. ThisAgreement shall be construed and enforced as if such illegal, invalid, or unenforceable provisionhad never comprised a part of this Agreement, and the remaining provisions of this Agreementshall remain in full force and effect and shall not be affected by the illegal, invalid, orunenforceable provision or by its severance from this Agreement.
4.4 This Agreement may be signed in any number of counterparts, each of
which shall be an original for all purposes, but all of which taken together shall constitute onlyone agreement. The production of any executed counterpart of this Agreement shall besufficient for all purposes without producing or a ccounting for any other counterpart thereof.
4.5 This Agreement shall be binding upon and inure to the benefit of the
heirs, executors, administrators, legal representatives and permitted successors and assigns ofthe Parties hereto. This Agreement shall be interpreted in accordance with the laws of the statein which the Project is located.
4.6 Nothing herein shall be construed to be for the benefit of or enforceable
by any third party including, but not limited to any creditor of Assignor.
4.7 The Parties shall execute and deliver such further instruments and do
such further acts and things as may be required to carry out the intent and purposes of thisAgreement.
4.8 All article and section titles or captions contained in this Agreement are
for convenience only and shall not be deemed part of the text of this Agreement.
4.9 In the event that any court or arbitration proceedings is brought under or
in connection with this Agreement, the prevailing party in such proceeding (whether at trial or onappeal) shall be entitled to recover from the other party all costs, expenses, and reasonableattorneys' fees incident to any such proceeding. The term "prevailing party" as used herein shallmean the party in whose favor the final judgment or award is entered in any such judicial orarbitration proceeding.
4.10 This Agreement constitutes the sole agreement of the Parties withrespect to the matters herein, all prior oral or written agreements being merged herein. ThisAgreement may only be modified by a writing signed by all of the Parties hereto and time is of the essence of this Agreement.
4.11 In interpreting this Agreement it shall be presumed that the Agreement was jointly drafted and no presumption shall arise against any Party in the event of anyambiguity.
IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the date set forth above.
ASSIGNOR: REAL ESTATE ASSOCIATES LIM ITED VI,
a California limited partnership
By National Partnership Investments Corp.,
a California corporation,
General Partner
By /s/Brian Flaherty
Brian Flaherty
Senior Vice President
ASSIGNEE: BRAINARD PROPERTY MANAGEMENT, LLC,
a Kentucky limited liability company
By /s/David Brainard
David Brainard
General Partner
GENERAL PARTNER: /s/David Brainard
David Brainard