VOTING AGREEMENT
VOTING AGREEMENT, dated as of January 6, 2000 (this
"AGREEMENT"), by and among KRF Company, L.L.C., a Delaware limited liability
company ("BERKSHIRE"), KRF3 Acquisition Company, L.L.C., a Delaware limited
liability company (the "COMPANY"), and certain investment funds affiliated with
Equity Resources Group Incorporated (collectively referred to as "EQUITY
RESOURCES"), listed on Schedule I hereto (each, a "UNITHOLDER" and,
collectively, the "UNITHOLDERS").
WHEREAS, the Company, Berkshire and Equity Resources propose
to enter into an Investment Agreement, dated as of the date hereof (the
"INVESTMENT AGREEMENT") which contemplates, among other things, (i) the
investment by each of Berkshire and Equity Resources in the Company; and (ii)
the merger of the Company with Krupp Realty Fund Ltd.-III with and into the
Company, a Massachusetts limited partnership (the "PARTNERSHIP") (the "MERGER")
pursuant to a Merger Agreement (the "MERGER AGREEMENT") substantially in the
form attached as Exhibit C to the Investment Agreement; and (iii) the amendment
of the Amended Agreement of Limited Partnership of the Partnership, dated as of
June 1, 1982, as amended from time to time (the "FUND III AGREEMENT") to permit
the Company to enter into the Merger Agreement and consummate the transactions
contemplated thereby (the "AMENDMENT").
WHEREAS, as of the date hereof, the Unitholders are holders of
record or Beneficially Own (as defined herein) an aggregate amount of 1,524
limited partnership units of the Partnership listed opposite the name of each
such Unitholder on Schedule I hereto; and
WHEREAS, in order to induce Berkshire and the Company to enter
into the Investment Agreement, each Unitholder has agreed to enter into this
Agreement with respect to all of the investor limited partnership interests of
the Partnership now held of record or Beneficially Owned and which may hereafter
be acquired by such Unitholders (the "UNITS").
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, the parties hereto hereby agree as follows:
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ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 GENERAL. Capitalized terms used and not defined
herein have the respective meanings ascribed to them in the Investment
Agreement.
Section 1.2 BENEFICIAL OWNERSHIP. For purposes of this
Agreement, "BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" with respect to any
securities shall mean "beneficial ownership" of such securities (as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT")), including pursuant to any agreement, arrangement or
understanding, whether or not in writing.
ARTICLE II
Section 2.1 VOTING AGREEMENT. Each of the Unitholders hereby
agrees as follows:
(a) to appear, or cause the holder of record on any
applicable record date with respect to any Units owned by such
Unitholder to appear, in person or by proxy, for the purpose of
obtaining a quorum at any annual or special meeting of the partners of
the Partnership and at any adjournment thereof, at which matters
relating to the Merger, the Amendment or any transaction contemplated
thereby are considered; and
(b) at any meeting of the partners of the
Partnership, however called, and in any action by consent of the
limited partners of the Partnership, to vote, or cause to be voted by
the Unitholders, in person or by proxy, the Units held of record or
Beneficially Owned by such Unitholder in favor of the Merger, the
Merger Agreement (as amended from time to time), the Amendment and the
transactions contemplated by the Merger Agreement; and
(c) at any meeting of the Partners of the
Partnership, however called, and in any action by consent of the
limited partners of the Partnership, to vote, or cause to be voted by
the Unitholders, in person or by proxy, the Units held of record or
Beneficially Owned by such Unitholder against approval of any proposal
made in opposition to or in competition with the Merger or any of the
other transactions contemplated by the Merger Agreement, and any other
action that may reasonably be expected to impede, interfere with,
delay, postpone or attempt to discourage the Merger or the other
transactions contemplated by the Merger Agreement which would
materially and adversely affect the Partnership or its ability to
consummate the transactions contemplated by the Merger Agreement.
Section 2.2 NO OWNERSHIP INTEREST. Nothing contained in this
Voting Agreement shall be deemed to vest in the Company or Berkshire any direct
or indirect ownership or incidence of ownership of or with respect to any Units.
All rights, ownership and economic benefits of and relating to the Units shall
remain and belong to the Unitholders.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE UNITHOLDERS
Each of the Unitholders hereby represents and warrants,
severally and not jointly, to the Company and Berkshire as follows:
Section 3.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Such
Unitholder has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. Where such Unitholder is a corporation,
partnership or other entity, the execution and delivery of this Agreement by
such Unitholder and the consummation by such Unitholder of the transactions
contemplated hereby have been duly and validly authorized by the board of
directors or other governing body of such Unitholder, and no other proceedings
on the part of such Unitholder are necessary to authorize this Agreement or to
consummate such transactions. This Agreement has been duly and validly executed
and delivered by such Unitholder and constitutes a legal, valid and binding
obligation of such Unitholder, enforceable against such Unitholder in accordance
with its terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights generally or by general principles governing the availability of
equitable remedies.
Section 3.2 NO CONFLICT. (a) The execution and delivery of
this Agreement by such Unitholder does not, and the performance of this
Agreement by such Unitholder shall not, (i) where such Unitholder is a
corporation, partnership or other entity, conflict with or violate the
organizational documents of such Unitholder, (ii) conflict with or violate any
agreement, arrangement, law, rule, regulation, order, judgment or decree to
which such Unitholder is a party or by which such Unitholder (or the Units held
of record or Beneficially Owned by such Unitholder) is bound or affected or
(iii) result in any breach of or constitute a default (or an event that with
notice or lapse or time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the Units held of record or
Beneficially Owned by such Unitholder pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Unitholder is a party or by which such
Unitholder (or the Units held of record or Beneficially Owned by such
Unitholder) is bound or affected, except, in the case of clauses (ii) and (iii)
of this Section 3.2, for any such conflicts, violations, breaches, defaults or
other occurrences which would not prevent the performance by such Unitholder of
its material obligations under this Agreement.
(b) The execution and delivery of this Agreement
by such Unitholder does not, and the performance of this Agreement by such
Unitholder shall
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not, require any consent, approval, authorization or permit of, or filing with
or notification to, any governmental entity except for applicable requirements,
if any, of federal or state securities and antitrust laws and except where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent the performance by such
Unitholder of its material obligations under this Agreement.
Section 3.3 TITLE TO THE UNITS. As of the date hereof, such
Unitholder is the record or Beneficial Owner of the Units listed opposite the
name of such Unitholder on Schedule I hereto. The Units listed opposite the name
of such Unitholder on Schedule I hereto are all the securities of the
Partnership either held of record or Beneficially Owned by such Unitholder. Such
Unitholder has not appointed or granted any proxy, which appointment or grant is
still effective, with respect to the Units held of record or Beneficially Owned
by such Unitholder. The Units listed opposite the name of such Unitholder on
Schedule I hereto are owned free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, limitations on such
Unitholder's voting rights, charges and other encumbrances of any nature
whatsoever other than liens under applicable law.
ARTICLE IV
COVENANTS OF THE UNITHOLDER
Section 4.1 NO INCONSISTENT AGREEMENTS. Each Unitholder hereby
represents, warrants, covenants and agrees that, except as contemplated by this
Agreement and the Investment Agreement, such Unitholder has not and shall not,
and will use its reasonable best efforts to not permit any Person under such
Unitholder's control to, enter into any voting agreement or grant a proxy or
power of attorney with respect to the Units held of record or Beneficially Owned
by such Unitholder which, in either case, is inconsistent with this Agreement.
Section 4.2 TRANSFER OF TITLE. Each Unitholder hereby
covenants and agrees that such Unitholder will not, prior to the termination of
this Agreement, either directly or indirectly, offer or otherwise agree to sell,
assign, pledge, hypothecate, transfer, exchange, or dispose of any Units or
options, warrants or other convertible securities to acquire or purchase units
of the Partnership or any other securities or rights convertible into or
exchangeable for units of the Partnership, owned either directly or indirectly
by such Unitholder or with respect to which such Unitholder has the power of
disposition, whether now or hereafter acquired, without the prior written
consent of the Company and Berkshire. Each Unitholder hereby agrees and consents
to the entry of stop transfer instructions by the Partnership against the
transfer of any Units inconsistent with the terms of this Section 4.2.
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ARTICLE V
MISCELLANEOUS
Section 5.1 TERMINATION. This Agreement shall terminate unless
extended by agreement of each of the parties hereto on August 1, 2000. Upon such
termination, no party shall have any further obligations or liabilities
hereunder; PROVIDED, HOWEVER, that nothing in this Agreement shall relieve any
party from liability for the breach of any of its representations, warranties,
covenants and agreements set forth in this Agreement prior to such termination.
Section 5.2 ADDITIONAL UNITS. If, after the date hereof, a
Unitholder acquires the right to vote any additional partnership interests of
the Partnership (any such partnership interests shall be referred to herein as
"ADDITIONAL UNITS"), the provisions of this Agreement applicable to the Units
shall be applicable to such Additional Units as if such Additional Units had
been Units held by the Unitholders as of the date hereof. The provisions of the
immediately preceding sentence shall be effective with respect to Additional
Units without action by any Person immediately upon the acquisition by a
Unitholder of the right to vote such Additional Units.
Section 5.3 SPECIFIC PERFORMANCE. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
Section 5.4 ENTIRE AGREEMENT. This Agreement and the
Investment Agreement constitute the entire agreement between Berkshire, the
Company and the Unitholders with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between Berkshire, the Company and the Unitholders with respect to the subject
matter hereof; PROVIDED that, to the extent not inconsistent with the terms
hereof, the Settlement Agreement and Release, dated as of July 17, 1995, among
Equity Resources and the parties named therein shall continue in full force and
effect.
Section 5.5 AMENDMENT. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
Section 5.6 SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule or
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless
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remain in full force and effect so long as the economic or legal substance of
this Agreement is not affected in any manner materially adverse to any party.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereby shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible to the fullest extent permitted by applicable law in a
mutually acceptable manner in order that the terms of this Agreement remain as
originally contemplated.
Section 5.7 NOTICES. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed to have
been duly given or made and shall be effective upon receipt, if delivered
personally, upon receipt of a transmission confirmation if sent by facsimile
(with a confirming copy sent by overnight courier) and on the next business day
if sent by Federal Express, United Parcel Service, Express Mail or other
reputable overnight courier to the parties at the following addresses (or at
such other address for a party as shall be specified by notice):
If to a Unitholder:
c/o Equity Resources Group, Inc.
14 Story Street
Cambridge, Massachusetts 02138
Attention: Mr. Eggert Dagbjartsson
with a copy to:
Holland & Knight, LLP
One Beacon Street
Boston, Massachusetts 02108
If to the Company or Berkshire, to:
c/o The Berkshire Group
One Beacon Street, Suite 1500
Boston, Massachusetts 02108
Attention: David Quade
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with copies to:
The Berkshire Group
One Beacon Street, Suite 1500
Boston, Massachusetts 02108
Attention: Scott Spelfogel, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Attention: James M. Dubin
Section 5.8 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed entirely within such state without giving
effect to the provisions thereof relating to conflicts of law.
Section 5.9 OBLIGATIONS OF UNITHOLDERS. The obligations of
the Unitholders hereunder shall be "joint and several."
Section 5.10 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be an original and all of which,
when taken together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their respective duly authorized
persons on the date first above written.
KRF3 ACQUISITION COMPANY, L.L.C.
By: KRF Company, L.L.C.,
its sole member
By: The Krupp Family Limited Partnership-94,
its sole member
By: /s/ Douglas Krupp
-------------------------------------------------------
Douglas Krupp
General Partner
KRF COMPANY, L.L.C.
By: The Krupp Family Limited Partnership-94,
its sole member
By: /s/ Douglas Krupp
-------------------------------------------------------
Douglas Krupp
General Partner
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EQUITY RESOURCE BRATTLE FUND LIMITED PARTNERSHIP,
EQUITY RESOURCE CAMBRIDGE FUND LIMITED
PARTNERSHIP
EQUITY RESOURCE GENERAL FUND LIMITED PARTNERSHIP,
EQUITY RESOURCE FUND XVI LIMITED PARTNERSHIP,
EQUITY RESOURCE FUND XIX LIMITED PARTNERSHIP,
EQUITY RESOURCE BRIDGE FUND LIMITED PARTNERSHIP
By: EQUITY RESOURCES GROUP, INCORPORATED,
as general partner of each of the foregoing
/s/ Eggert Dagbjartsson
--------------------------------------------------
By: Eggert Dagbjartsson
Executive Vice President
SCHEDULE I
Unitholder: Number of Units: Address:
---------- --------------- -------
Equity Resource Fund 916.00 c/o Equity Resources Group, Inc.
XVI Limited Partnership 14 Story Street
Cambridge, Massachusetts 02138
Attention: Mr. Eggert Dagbjartsson
Equity Resource Fund 413.00 c/o Equity Resources Group, Inc.
XIX Limited Partnership 14 Story Street
Cambridge, Massachusetts 02138
Attention: Mr. Eggert Dagbjartsson
Equity Resource General 40.00 c/o Equity Resources Group, Inc.
Fund Limited Partnership 14 Story Street
Cambridge, Massachusetts 02138
Attention: Mr. Eggert Dagbjartsson
Equity Resource 95.00 c/o Equity Resources Group, Inc.
Cambridge Fund Limited 14 Story Street
Partnership Cambridge, Massachusetts 02138
Attention: Mr. Eggert Dagbjartsson
Equity Resource Brattle 30.00 c/o Equity Resources Group, Inc.
Fund Limited Partnership 14 Story Street
Cambridge, Massachusetts 02138
Attention: Mr. Eggert Dagbjartsson
Equity Resource Bridge 30.00 c/o Equity Resources Group, Inc.
Fund Limited Partnership 14 Story Street
Cambridge, Massachusetts 02138
Attention: Mr. Eggert Dagbjartsson
[EXECUTION COPY]
VOTING AGREEMENT
among
EQUITY RESOURCE BRATTLE FUND LIMITED PARTNERSHIP,
EQUITY RESOURCE CAMBRIDGE FUND LIMITED PARTNERSHIP,
EQUITY RESOURCE GENERAL FUND LIMITED PARTNERSHIP,
EQUITY RESOURCE FUND XVI LIMITED PARTNERSHIP,
EQUITY RESOURCE FUND XIX LIMITED PARTNERSHIP
EQUITY RESOURCE BRIDGE FUND LIMITED PARTNERSHIP
KRF COMPANY, L.L.C.,
and
KRF3 ACQUISITION COMPANY, L.L.C.
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Dated as of January 6, 2000
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