-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ONkviCClHo2g/l/cGbOO81ote1kluVJGOVWMlYt2l7WNrp+jcG79RWWZePz0VUKP PtJ9kT6tuwp4HiYPOC5Few== 0000950142-03-000109.txt : 20030117 0000950142-03-000109.hdr.sgml : 20030117 20030117154824 ACCESSION NUMBER: 0000950142-03-000109 CONFORMED SUBMISSION TYPE: SC TO-I/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20030117 GROUP MEMBERS: BERKSHIRE INCOME REALTY, INC. GROUP MEMBERS: DOUGLAS KRUPP GROUP MEMBERS: GEORGE D. KRUPP GROUP MEMBERS: KRF COMPANY, L.L.C. GROUP MEMBERS: KRUPP FAMILY LIMITED PARTNERSHIP - 94 GROUP MEMBERS: THE DOUGLAS KRUPP 1980 FAMILY TRUST GROUP MEMBERS: THE GEORGE KRUPP 1980 FAMILY TRUST FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BERKSHIRE INCOME REALTY INC CENTRAL INDEX KEY: 0001178862 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC TO-I/A BUSINESS ADDRESS: STREET 1: ONE BEACON ST STREET 2: SUITE 1500 CITY: BOSTON STATE: MA ZIP: 02108 MAIL ADDRESS: STREET 1: ONE BEACON ST STREET 2: SUITE 1500 CITY: BOSTON STATE: MA ZIP: 02108 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000832095 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 043021395 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-I/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-78664 FILM NUMBER: 03517907 BUSINESS ADDRESS: STREET 1: ONE BEACON ST CITY: BOSTON STATE: MA ZIP: 02108 BUSINESS PHONE: 6175230066 MAIL ADDRESS: STREET 1: ONE BEACON ST CITY: BOSTON STATE: MA ZIP: 02108 SC TO-I/A 1 kimto-ia2.txt AMENDMENT NO. 2 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________ SCHEDULE TO-I/A TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 2) KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP (Name of Subject Company (Issuer)) BERKSHIRE INCOME REALTY, INC. KRF COMPANY, L.L.C. KRUPP FAMILY LIMITED PARTNERSHIP - 94 THE GEORGE KRUPP 1980 FAMILY TRUST THE DOUGLAS KRUPP 1980 FAMILY TRUST GEORGE D. KRUPP DOUGLAS KRUPP (Names of Filing Persons (Offerors)) __________________ DEPOSITARY RECEIPTS (Title of Class of Securities) __________________ NONE (CUSIP Number of Class of Securities) __________________ SCOTT D. SPELFOGEL, ESQ. GENERAL COUNSEL BERKSHIRE INCOME REALTY, INC. ONE BEACON STREET, SUITE 1500 BOSTON, MASSACHUSETTS 02108 (617) 523-7722 (Name, address and telephone number of person authorized to receive notices and communications on behalf of filing persons) WITH COPIES TO: JAMES M. DUBIN, ESQ. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019-6064 (212) 373-3000 CALCULATION OF FILING FEE: TRANSACTION VALUATION* AMOUNT OF FILING FEE** ---------------------- ---------------------- $8,413,198.13 $1,682.64 * For purposes of calculating the filing fee only. This calculation assumes the exchange of 4,487,039 units of depositary receipts representing units of limited partner interests of Krupp Insured Mortgage Limited Partnership for 336,527.93 shares of Series A Cumulative Redeemable Preferred Stock of Berkshire Income Realty, Inc. valued as of January 10, 2003 at $25.00 per share. ** The amount of the filing fee, calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50 of 1% of the transaction valuation. [X] Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number or the Form or Schedule and the date of its filing. Amount Previously Paid: $9,947.50 Filing Party: Berkshire Income Realty, Inc. Form or Registration No.: Form S-11 (333-98571) Date Filed: August 22, 2002 The filing fee in the amount of $1,682.64 was offset against the above-referenced S-11 fees. [_] Check the box if the filing relates to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [_] THIRD-PARTY TENDER OFFER SUBJECT TO RULE 14D-1. [X] ISSUER TENDER OFFER SUBJECT TO RULE 13E-4. [_] GOING-PRIVATE TRANSACTION SUBJECT TO RULE 13E-3. [_] AMENDMENT TO SCHEDULE 13D UNDER RULE 13D-2. [_] Check the box if the filing is a final amendment reporting the results of the tender offer. 2 This Amendment No. 2 amends and supplements the Tender Offer Statement on Schedule TO filed with the SEC on January 10, 2003 (as amended, the "Schedule TO") by Berkshire Income Realty, Inc., a Maryland corporation ("BIR"), BIR's sole stockholder, KRF Company, L.L.C., a Delaware limited liability company ("KRF"), KRF's sole member, Krupp Family Limited Partnership - 94, a Massachusetts limited partnership ("KFLP"), KFLP's limited partners, The George Krupp 1980 Family Trust, a Massachusetts trust, and The Douglas Krupp 1980 Family Trust, a Massachusetts trust, and KFLP's general partners, George D. Krupp and Douglas Krupp. The Schedule TO relates to the offer by BIR to exchange shares of BIR's 9% Series A Cumulative Redeemable Preferred Stock for up to 4,487,039 units of depositary receipts representing units of limited partner interests of Krupp Insured Mortgage Limited Partnership, a Massachusetts limited partnership (the "Company"), on the terms and conditions contained in BIR's prospectus, dated January 9, 2003, and in the related letter of transmittal, copies of which are incorporated by reference on the Schedule TO filed with the SEC on January 10, 2003 as Exhibits (a)(1) and (a)(2), respectively (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). ITEM 12. EXHIBITS. Item 12 of the Schedule TO is hereby amended and supplemented to add the following exhibits: (g) (1) Transcript of telephone messages to potential investors. (g) (2) Power point presentation to information agents. 3 SIGNATURES After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. BERKSHIRE INCOME REALTY, INC. By: /s/ David C. Quade --------------------------------------- David C. Quade President KRF COMPANY, L.L.C. By: Krupp Family Limited Partnership - 94, its sole member By: /s/ Douglas Krupp --------------------------------------- Douglas Krupp General Partner KRUPP FAMILY LIMITED PARTNERSHIP - 94 By: /s/ Douglas Krupp --------------------------------------- Douglas Krupp General Partner THE GEORGE KRUPP 1980 FAMILY TRUST By: /s/ Lawrence I. Silverstein --------------------------------------- Lawrence I. Silverstein Trustee THE DOUGLAS KRUPP 1980 FAMILY TRUST By: /s/ Lawrence I. Silverstein --------------------------------------- Lawrence I. Silverstein Trustee /s/ George D. Krupp -------------------------------------------- GEORGE D. KRUPP /s/ Douglas Krupp -------------------------------------------- DOUGLAS KRUPP Dated: January 17, 2003 4 INDEX TO EXHIBITS EXHIBIT NUMBER - ------ *(a) (1) Prospectus, dated January 9, 2003 (incorporated by reference from BIR's Registration Statement on Form S-11(Registration No. 333-98571) (the "Form S-11")). *(a) (2) Form of Letter of Transmittal. *(a) (3) Letter to Investors. *(a) (4) Instructions for Completing the Letter of Transmittal. *(a) (5) Brochure. *(a) (6) Press Release, dated January 10, 2003. *(a) (7) Transcripts of telephone messages to potential investors. *(a) (8) Transcript of telephone message to potential investors. (b) Not applicable. (d) Not applicable. (g) (1) Transcript of telephone messages to potential investors. (g) (2) Power point presentation to information agents. *(h) Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP regarding federal income tax considerations (incorporated herein by reference to Exhibit 8.1 of the Form S-11). ================================================================================ * Previously filed. 5 EX-99 3 exhibitg1.txt EXHIBIT (G) (1) EXHIBIT (g)(1) -------------- Transcript of Telephone Messages to Potential Investors NOTE TO EDGAR USERS: THE FOLLOWING DOES NOT CONSTITUTE AN OFFER TO PURCHASE ANY SECURITIES OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES, PURSUANT TO THE EXCHANGE OFFERS OR OTHERWISE. THE OFFERS TO EXCHANGE PREFERRED SHARES FOR INTERESTS ARE MADE SOLELY BY THE PROSPECTUS AND LETTERS OF TRANSMITTAL RELATING TO THE OFFERS, WHICH CONTAIN THE FULL TERMS AND CONDITIONS OF THE OFFERS, INCLUDING DETAILS OF HOW THE OFFERS MAY BE ACCEPTED. BERKSHIRE INCOME REALTY HAS FILED TENDER OFFER STATEMENTS CONTAINING THE PROSPECTUS AND OTHER RELATED DOCUMENTATION. FREE COPIES OF THE TENDER OFFER STATEMENTS ARE AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV. INTEREST HOLDERS ARE ADVISED TO READ THE TENDER OFFER STATEMENTS AND THE PROSPECTUS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. LIVE PERSON ----------- Hello, This is _________________, from Krupp Funds Group. I am calling to see if you have received the package concerning our new 9% preferred stock exchange offer. (WAIT FOR RESPONSE) My main reason for calling today is to see if I may answer any questions you have regarding this offer. Do you have any questions that I can answer for you? (ANSWER ANY QUESTIONS*) To accept the offer all you have to do after reading the prospectus is to sign the Letter of Transmittal and return it in supplied envelope. If you have any later questions please call us at 1-866-33-KRUPP. Thank you and have a nice day. *INFORMATION AGENTS MUST PROVIDE ANSWERS THAT ARE CONSISTENT WITH THE PROSPECTUS, PER THE TRAINING PRESENTATION. INFORMATION AGENTS MUST DECLINE TO ANSWER QUESTIONS THE ANSWERS TO WHICH FALL OUTSIDE THAT INFORMATION. IT IS IMPORTANT THAT NO NEW INFORMATION IS GIVEN TO INTEREST HOLDERS. 1 INFORMATION AGENTS MUST NOT COMMENT ON THE MERITS OF THE OFFERS, MUST NOT ADVISE INTEREST HOLDERS WHETHER TO ACCEPT OR NOT ACCEPT THE OFFERS AND MUST NOT PUT INTEREST HOLDERS UNDER ANY PRESSURE. ALL INTEREST HOLDERS MUST BE ENCOURAGED TO CONSULT THEIR PROFESSIONAL ADVISERS. CALLERS WITH QUESTIONS OUTSIDE OF THE TRAINING PRESENTATION SHOULD BE REFERRED TO PHIL DARBY AT (617) 574-8374. ANSWERING MACHINE VERSION ------------------------- Hello, This is _________________, from Krupp Funds Group. I am calling to see if you have received the package concerning our new 9% preferred stock exchange offer. My main reason for calling today is to see if you have any questions regarding this offer. If you haven't received the package or have any questions please call us at 1-866-33-KRUPP. To accept the offer all you have to do after reading the prospectus is to sign the Letter of Transmittal and return it in supplied envelope. Thank you and have a nice day. 2 EX-99 4 exhibitg2.txt EXHIBIT (G) (2) EXHIBIT (g)(2) -------------- Power Point Presentation NOTE TO EDGAR USERS: THE FOLLOWING DOES NOT CONSTITUTE AN OFFER TO PURCHASE ANY SECURITIES OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES, PURSUANT TO THE EXCHANGE OFFERS OR OTHERWISE. THE OFFERS TO EXCHANGE PREFERRED SHARES FOR INTERESTS ARE MADE SOLELY BY THE PROSPECTUS AND LETTERS OF TRANSMITTAL RELATING TO THE OFFERS, WHICH CONTAIN THE FULL TERMS AND CONDITIONS OF THE OFFERS, INCLUDING DETAILS OF HOW THE OFFERS MAY BE ACCEPTED. BERKSHIRE INCOME REALTY HAS FILED TENDER OFFER STATEMENTS CONTAINING THE PROSPECTUS AND OTHER RELATED DOCUMENTATION. FREE COPIES OF THE TENDER OFFER STATEMENTS ARE AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV. INTEREST HOLDERS ARE ADVISED TO READ THE TENDER OFFER STATEMENTS AND THE PROSPECTUS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Berkshire Income Realty, Inc. 9% Series A Cumulative Redeemable Preferred Stock 1 Berkshire Income Realty, Inc. The Company A newly formed REIT 2 Berkshire Income Realty, Inc. o An affiliate of Krupp Funds Group o Goal to acquire, own and operate multi-family residential properties o A new REIT o Controlled by Douglas Krupp and George Krupp o Contributing 5 multi-residential properties 3 Berkshire Income Realty, Inc. What are we doing? 4 Exchange Offering Highlights o We are offering an opportunity to investors to exchange all or part of their interests in the 6 mortgage funds for shares of a 9% Series A Cumulative Preferred Stock in a new REIT o Higher yield o Greater Liquidity listed on the American Stock Exchange under the symbol BIR o No commission or transaction fees 5 Exchange Offering Highlights o Non callable until February 15, 2010 (provides call protection for 7 years) o Offer expires on February 20, 2003 unless extended o No minimum number of Interests required to exchange o Able to exchange part of Interests o Not able to purchase additional shares for cash at the time of offering. 6 Dividends o Cash Dividends paid at an annual rate of 9% on the $25.00 liquidation preference o $2.25 annualized, $0.5625 payable quarterly o Senior position dividends must be paid to preferred stock before any dividends paid on the Company's common stock o Paid February 15, May 15, August 15, and November 15 of each year. o Cumulative dividends will accrue whether or not they are authorized or declared by us. 7 Berkshire Income Realty, Inc. o Why Preferred Shares? - Predictable, fixed payment of dividends - Fewer risks than common stock and limited partnership interests because the 9% must be paid before any dividends to common stock holders 8 Berkshire Income Realty, Inc. Mortgage Fund Information 9 Names of the Mortgage Funds o 6 Current Krupp Mortgage Funds - Krupp Government Income Trust - Krupp Government Income Trust II - Krupp Insured Plus Limited Partnership - Krupp Insured Mortgage Limited Partnership - Krupp Insured Plus III Limited Partnership - Krupp Insured Plus II Limited Partnership 10 Abbreviations o BIR - Berkshire Income Realty, Inc. o REIT - Real Estate Investment Trust o GIT - Krupp Government Income Trust o GIT2 - Krupp Government Income Trust II o KIP - Krupp Insured Plus Limited Partnership also called K1 o KIM - Krupp Insured Mortgage Limited Partnership o KIP3 - Krupp Insured Plus III Limited Partnership also called K3 o KIP2 - Krupp Insured Plus II Limited Partnership also called K2 11 VALUATIONS o Net Asset Valuations o BIR Purchase Price GIT $3.96 per share GIT $3.71 per share GIT2 $6.86 per share GIT2 $6.25 per share KIM $1.96 per unit KIM $1.88 per unit KIP $3.00 per unit KIP $2.80 per unit KIP3 $1.91 per unit KIP3 $1.79 per unit KIP2 $1.05 per unit KIP2 $1.05 per unit 12 Berkshire Income Realty, Inc. Conversion Rate Calc. Conversion Rate GIT $3.71/$25.00 = 0.1481 GIT2 $6.25/$25.00 = 0.2500 KIM $1.88/$25.00 = 0.0750 KIP $2.80/$25.00 = 0.1120 KIP3 $1.79/$25.00 = 0.0717 KIP2 $1.05/$25.00 = 0.0420 13 Berkshire Income Realty, Inc. What have the current mortgage funds paid? 14 KRUPP GOVERNMENT INCOME TRUST
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE - --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.74 $ 0.57 $ 0.23 $ 5.35 9.54% 3.88% 2001 $ 0.68 $ 0.59 $ 0.09 $ 8.54 6.91% 4.73% 2000 $ 0.68 $ 0.59 $ 0.09 $ 8.94 6.60% 5.89% 1999 $ 1.15 $ 0.68 $ 0.47 $ 9.94 6.79% 5.88% 1998 $ 1.30 $ 0.94 $ 0.37 $ 12.74 7.34% 5.20% AVERAGE 7.44% 5.12%
15 KRUPP GOVERNMENT INCOME TRUST II
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE - --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.76 $ 0.60 $ 0.30 $ 7.31 8.21% 3.88% 2001 $ 0.96 $ 0.81 $ 0.15 $ 10.33 7.84% 4.73% 2000 $ 0.96 $ 0.84 $ 0.12 $ 11.16 7.53% 5.80% 1999 $ 1.25 $ 0.82 $ 0.43 $ 13.42 6.11% 5.88% 1998 $ 1.25 $ 1.00 $ 0.25 $ 14.45 6.92% 5.20% AVERAGE 7.33% 5.12%
16 KRUPP INSURED PLUS
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE - --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.40 $ 0.22 $ 0.18 $ 3.27 6.73% 3.88% 2001 $ 0.40 $ 0.35 $ 0.05 $ 4.87 7.19% 4.73% 2000 $ 0.76 $ 0.41 $ 0.35 $ 5.53 7.41% 5.89% 1999 $ 0.76 $ 0.48 $ 0.28 $ 7.28 6.59% 5.88% 1998 $ 0.76 $ 0.59 $ 0.17 $ 7.89 7.48% 5.20% AVERAGE 7.08% 5.12%
17 KRUPP INSURED MORTGAGE
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE - --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.30 $ 0.18 $ 0.12 $ 2.33 6.02% 3.88% 2001 $ 0.24 $ 0.17 $ 0.07 $ 2.78 6.13% 4.73% 2000 $ 0.39 $ 0.29 $ 0.10 $ 3.34 8.70% 5.80% 1999 $ 0.84 $ 0.57 $ 0.27 $ 7.15 7.97% 5.88% 1998 $ 0.93 $ 0.67 $ 0.26 $ 9.02 7.43% 5.20% AVERAGE 7.25% 5.12%
18 KRUPP INSURED PLUS III
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE - --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.32 $ 0.17 $ 0.15 $ 2.29 7.44% 3.88% 2001 $ 0.32 $ 0.25 $ 0.07 $ 3.49 7.16% 4.73% 2000 $ 0.54 $ 0.27 $ 0.27 $ 3.83 7.05% 5.89% 1999 $ 0.76 $ 0.45 $ 0.31 $ 5.91 7.62% 5.88% 1998 $ 0.87 $ 0.78 $ 0.09 $ 9.30 8.39% 5.20% AVERAGE 7.68% 5.12%
19 KRUPP INSURED PLUS II
YIELD NET INCOME FOR PAST 4 10-YEAR QUARTERLY AVERAGE QUART BASED US DIST PER DISTRIBUTED RETURN OF NAV (PAST ON AVER TREASURY DIST DATE UNIT/SHARE CASH FLOW CAPITAL 4 QUARTERS) NAV NOTE - --------- ---------- ----------- --------- ----------- ----------- -------- 2002 $ 0.20 $ 0.12 $ 0.08 $ 1.69 7.11% 3.88% 2001 $ 0.40 $ 0.17 $ 0.23 $ 2.57 6.63% 4.73% 2000 $ 0.40 $ 0.21 $ 0.19 $ 3.04 6.91% 5.89% 1999 $ 0.76 $ 0.47 $ 0.29 $ 5.15 9.14% 5.88% 1998 $ 1.12 $ 0.87 $ 0.25 $ 10.65 8.17% 5.20% AVERAGE 7.59% 5.12%
20 Berkshire Income Realty, Inc. o 5 Year Average Yield GIT 7.44% GIT2 7.33% KIP 7.08% KIM 7.25% KIP3 7.68% KIP2 7.59% o 10 Year Average Treasury Yield 5.12% 21 Berkshire Income Realty, Inc. Original Investment $20.00 per share/unit Distributions received to date: o GIT $25.00 per share o GIT2 $20.20 per share o KIP $27.66 per unit o KIM $26.57 per unit o KIP3 $27.71 per unit o KIP2 $30.19 per unit This includes all regular and special distributions 22 Berkshire Income Realty, Inc. o Internal Rate of Return - o Internal Rate of Return - All Cash DRP o GIT = 5.42% o GIT = 6.57% o GIT2 = 4.57% o GIT2 = 6.01% o KIM = 5.38% o KIM = 5.38% o KIP = 5.13% o KIP = 5.98% o KIP3 = 5.82% o KIP3 = 6.07% o KIP2 = 5.72% o KIP2 = 6.05% 23 Mortgage Fund Distributions for 2003 o Distributions Annualized as of February 14, 2003 o GIT = $0.24 per share o GIT2 = $0.56 per share o KIP = $0.20 per unit o KIM = $0.24 per unit*will be reduced to $0.16 per unit effective 5/14/03 o KIP3 = $0.16 per unit o KIP2 = $0.20 per unit *fund ending by 3/31/03 24 Berkshire Income Realty, Inc. Why Should I Participate????? 25 Berkshire Income Realty, Inc. o 9% Preferred Return o Greater Liquidity due to AMEX listing. o Current Mortgage Fund is not allowed to reinvest the proceeds from repayments of mortgage loans. o Resulted in ever-decreasing distributions. o Opportunity to exchange interests into a new REIT. o Quarterly cash dividends o Lower asset management fees o No sales commission or transaction fees for the investor o Simplified tax return preparation no K-1 26 Berkshire Income Realty, Inc. o What if I don't participate, what will happen????? NOTHING NOTHING NOTHING 27 Berkshire Income Realty, Inc. o Investors will still own interests in current mortgage fund 28 What the investor needs to do o Read the prospectus carefully o Refer to the Letter of Transmittal o Complete if information has changed since December 31, 2002. o Sign it o Return to us in the envelope provided o No stock certificate needs to be surrendered nor will a stock certificate be issued. 29 Letter of Transmittal- How to fill out form o Box 1- YOUR TENDER - Check one box only. If second box is checked they must insert number of shares to be exchanged. o Box 7-SIGNATURE TO TRANSMITTAL LETTER (INCLUDING INVESTOR CERTIFICATIONS AND SUBSTITUTE FORM W-9 IN SECTION 6). Just sign o All investor information updated as of December 31, 2002 not September 30, 2002 as stated on form o Any question you can't answer have them call us at 1-800-255-7877 30 Phone Scripts o Live contact phone script o Answering machine phone script 31 Phone Script - Live Version Hello, This is ___________, from Krupp Funds Group. I am calling to see if you have received the package concerning our new 9% preferred stock exchange offer. (Wait for Response) My main reason for calling today is to see if I may answer any questions you have regarding this offer. Do you have any questions that I can answer for you? (Answer any Questions) To accept the offer all you have to do after reading the prospectus is to sign the Letter of Transmittal and return it in the supplied envelope. If you have any later questions please call us at 1-866-335-7877. Thank you and have a nice day. 32 Phone Scripts Disclaimer o OPERATORS MUST NOT COMMENT ON THE MERITS OF THE OFFERS, MUST NOT ADVISE INTEREST HOLDERS WHETHER TO ACCEPT OR NOT ACCEPT THE OFFERS AND MUST NOT PUT INTEREST HOLDERS UNDER ANY PRESSURE. ALL INTEREST HOLDERS MUST BE ENCOURAGED TO CONSULT THEIR PROFESSIONAL ADVISORS. 33 Phone Script - Answering Machine Version Hello, This is __________, from Krupp Funds Group. I am calling to see if you have received the package concerning our new 9% preferred stock exchange offer. My main reason for calling today is to see if you have any questions regarding this offer. If you haven't received the package or have any questions please call us at 1-866-335-7877. To accept the offer all you have to do after reading the prospectus is sign the Letter of Transmittal and return it in the supplied envelope. Thank you and have a nice day. 34 Berkshire Income Realty, Inc. Questions o __________________________________ o __________________________________ o __________________________________ o __________________________________ o __________________________________ o __________________________________ 35 Berkshire Income Realty, Inc. o __________________________________ o __________________________________ o __________________________________ o __________________________________ o __________________________________ o __________________________________ 36 Summary o A new investment opportunity o Exchange interests in 6 mortgage funds for a 9% Preferred Stock in a newly formed Real Estate Investment Trust ("REIT") o Higher & more predictable return than current funds o Daily liquidity due to AMEX listing 37 Where to Get More Information o Review package that was mailed to investors Includes: - Prospectus - Brochure - Cover letter - Letter of Transmittal - Letter of Instructions - 14D-9 (Opinion of General Partner/Trustees) - Return postage paid self - addressed envelope o Georgeson employees call us at 1-800-255-7877. o Investors call 1-866-335-7877. o Direct investors to our website for further current fund info o www.kruppfunds.com 38 -----END PRIVACY-ENHANCED MESSAGE-----