Exhibit 10.3
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the"Agreement")is made as of April 4,2011 (the"EffectiveDate"), by and between National Tax Credit Partners, L.P., a Californialimited partnership("NTCP"),and National Tax Credit, Inc., a California corporation("NTC, Inc."and together with NTCP, collectively,"Assignors"and each, an"Assignor");Rolling Hills AGP,LLC, a New Jersey limited liability company("RH AGP"),and RH-Michaels Investors, LLC, aNew Jersey limited liability company("RH Investors"and together with RH AGP, each, an"Assignee"and, collectively, "Assignees"); and Rolling Hills-Michaels, LLC, a New Jerseylimited liability company("RH-Michaels"and together with Assignors and Assignees, each a"Party"and, as the context requires, any two or more, collectively,"Parties"),with reference tothe following:
A. Rolling Hills Apartments Limited Partnership (the"Partnership")was formed as a limited partnership under the laws of the Commonwealth of Pennsylvania and is being governedpursuant to an Amended and Restated Certificate and Agreement of Limited Partnership, dated as of September 15, 1989 (the"Partnership Agreement")(any capitalized word or phrase usedbut not defined herein shall have the meaning set forth in the Partnership Agreement).
B. RH-Michaels has entered into a an agreement with Community RealtyManagement, Inc., a Pennsylvania corporation("CRMI"),to replace CRMI as the operatinggeneral partner of the Partnership.
C. NTC, Inc. is the administrative general partner of the Partnership and NTCP isthe limited partner of the Partnership.
D. Assignors have agreed to assign all of their limited partnership (general andlimited) interests in the Partnership to Assignees and withdraw from the Partnership, Assigneeshave agreed to acquire such interests and RH-Michaels has consented to such assignment andassumption, all pursuant to the terms of this Agreement.
NOW THEREFORE, in consideration of the mutual promises and for such other goodand valuable consideration, the receipt and sufficiency of which are hereby acknowledged, theParties agree as follows:
1. First Amendment to Partnership Agreement.Upon the full execution of thisAgreement, RH-Michaels and Assignors shall execute and exchange countersignedcounterpartsofthe First Amendment to Amended and Restated Certificate and Agreement ofLimited Partnership of the Partnership in the form attached hereto as Exhibit A (the"First Amendment"),pursuant to which CRMI shall withdraw from the Partnership and RH-Michaelsshall be admitted into the Partnership as the "Operating General Partner" in the place and steadof CRMI. RH-Michaels shall cause CRMI to also execute and exchange countersignedcounterpartsofthe First Amendment.
2.1 Effective as of the"Closing"(as hereinafter defined):
(a) NTC, Inc., assigns to RH AGP and NTCP assigns to RH Investors
100% of each such Assignor's interest in the Partnership, including, without limitation, Profitsand Losses, Cash Flow, Sale or Refinancing Transaction Proceeds, all other Partnershipassets, and all rights to any fees, loan repayments and reimbursements (collectively, the"Interest"), and
(b) RH AGP assumes and agrees to perform all of the obligations of
NTC, Inc., under the Partnership Agreement and RH Investors assumes and agrees to perform all of the obligations of NTCP under the Partnership Agreement.
2.2 In consideration of Assignors' assignments of the Interest, at the Closing
Assignees shall pay to Assignors an amount (the"Payment")equal to $300,000.00, payable incash. The Payment shall be treated as a direct acquisition of the Interest. Each Assignorcovenants and agrees that such sum shall be received in full satisfaction of all obligations andliabilities due such Assignors in connection with or in any manner arising out of the Partnership,the Apartment Complex or any other assets owned by the Partnership. The Payment shall bemade by federal funds wired pursuant to instructions from Assignor.
2.3 If at the time of Closing the Partnership has not yet paid the distributions
of Cash Flow for 2010 due Assignors pursuant to Section 9.2A of the Partnership Agreement,the Payment shall increase to $349,445. If the amount of the Payment paid to Assignors hasbeen increased as provided in the preceding sentence, Assignors shall assign to Assignees, inaddition to the Interest, Assignors' rights to the earned by unpaid 2011 Cash Flow distributionsotherwise payable to Assignors.
3. Closing.
3.1 The closing of the transactions contemplated by this Agreement (the
"Closing")shall occur no later than June 30, 2011 (the"Closing Date").In the event theClosing 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.
3.2 At the Closing;
(a) As provided in Sections 2.2 and 2.3, Assignees shall pay the
Payment; and
(b) The Parties shall execute and exchange countersigned
counterparts of the Second Amendment to Amended and Restated Certificate and Agreement of Limited Partnership of the Partnership in the form attached hereto as ExhibitB,subject tosuch modifications that the Authority may require provided such modifications do not have anymaterial adverse effect on Assignors.
4. Conditions to Closing.
4.1 Each of the Parties acknowledges that the consents of the Authority
and HUD to the transfer of the Interest, as contemplated by this Agreement, are required. RHMichaels and Assignees shall each use commercially reasonable efforts to obtain the same,and Assignors, at no cost, expense or liability to them, will cooperate to provide Authority and HUD with such information and executed documents which Authority and HUD may reasonably
require in order to evaluate such transfer and it shall be a condition precedent to Closing thateach of Authority's and HUD's consent is received prior to Closing. RH-Michaels andAssignees, on the one hand, and Assignors, on the other, shall each provide the other withcopies of any correspondence from Authority or HUD that it receivesinconnection withAuthority's or HUD's review of the proposed transfer of the Interest.
4.2 RH-Michaels and each Assignee each further acknowledges that the
consent of the limited partners of NTCP to the transactions contemplated by this Agreement isrequired and the Parties agree that such consent shall be a condition precedent to Closing. NTCP, at its sole cost and expense, shall use commercially reasonable efforts to obtain theconsent of the limited partners of NTCP to the transactions contemplated by this Agreement,including, but not limited to, the admission of Assignees into the Partnership pursuant to all ofthe applicable terms of the Partnership Agreement.
4.3 It shall be a condition precedent to Closing that all representations,
warranties set forth herein shall be true and correct in all material respects, and all covenantsset forth herein shall have been fully complied with in all material respects as of the Closing.
4.4 Notwithstanding anything to the contrary contained or implied in this
Agreement, there are no other conditions to the obligation of the Parties to close the transactioncontemplated by this Agreement except as expressly set forth in this Section 4.
4.5 If on or before Closing any condition set forth in Section 4.1, 4.2 or 4.3
has not been satisfied, this Agreement shall terminate and be of no further force or effect.
5. Representations, Warranties and Covenants.
5.1 As a material inducement to Assignees entering into this Agreement,
each Assignor hereby represents and warrants to Assignees the following are true and correctas of the Effective Date, shall be true and correct as of the Closing Date, and shall survive the Closing and the withdrawal of Assignors from the Partnership:
(a) Assignors are the owners of the Interest and the Interest is not
subject to any lien, pledge or encumbrance of any nature whatsoever and Assignees shallacquire the same free of any rights or claims thereto by any other party claiming by, through orunder Assignors.
(b) The execution and delivery of this Agreement by Assignors and
the performance of the transactions contemplated herein have been duly authorized by allrequisite corporate and partnership proceedings and, assuming the due and proper executionand delivery by Assignees and RH Michaels, this Assignment is binding upon and enforceableagainst Assignors in accordance with its terms.
5.2 As a material inducement to Assignors entering into this Agreement, each
Assignee hereby represents and warrants to Assignors the following are true and correct as ofthe Effective Date, shall be true and correct as of the Closing Date, and shall survive theClosing and the withdrawal of Assignors from the Partnership:
(a) The execution and delivery of this Agreement by Assignee and the
performance of the transactions contemplated herein have been duly authorized by all requisitecorporate and partnership proceedings.
(b) Assuming the due and proper execution and delivery by
Assignors, this Assignment is binding upon and enforceable against Assignee in accordancewith its terms.
(c) No proceeding before any federal, state, municipal or other
governmental 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 thisAgreement 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.
Assignee is an Affiliate of RH Michaels and, knows, therefore, atleast as much about the Partnership as Assignors, Assignee is experienced in financialtransactions such as ownership of the Interest and understands the business and operations ofthePartnership. Assignee has had an opportunity to ask questions about and seek informationabout the Partnership and the Apartment Complex, and has not relied upon any express orimplied representations or warranties from Assignors with regard to the Interest, the Partnershipor the Apartment Complex, except as expressly provided herein.
5.3 As a material inducement to Assignors entering into this Agreement, RH-
Michaels represents and warrants to Assignors that (i) the execution and delivery of thisAgreement by RH-Michaels and its performance of the transactions contemplated herein havebeen duly authorized by all requisite corporate proceedings, and (ii) assuming the due andproper execution and delivery by Assignors, this Assignment is binding upon and enforceableagainst RH-Michaels in accordance with its terms. The foregoing representations andwarranties are true and correct as of the Effective Date, shall be true and correct as of theClosing Date, and shall survive the Closing and the withdrawal of Assignors from thePartnership.
5.4 Except as expressly provided in this Section 5, no Party has made any
other representation or warranty concerning the Interest, the Partnership or any other matter.
6. Miscellaneous.All notices, demands, requests and other communications
required pursuant to the provisions of this Agreement("Notice")shall be in writing and shall be
deemed to have been properly given or served for all purposes (i) if sent by Federal Express or
any other nationally recognized overnight carrier for next business day delivery, on the first
business day following deposit of such Notice with such carrier, or (ii) if personally delivered, onthe actual date of delivery or (iii) if sent by certified mail, return receipt requested postageprepaid, on the fifth (5th) business day following the date of mailing addressed as follows:
6.1 If to Assignors:
AIMCO
639 Granite Street
Suite312
Braintree, MA 02184
Attention: Brian Flaherty
Facsimile: 781-849-7652
and:
AIMCO
4582 South Ulster Street
ParkwaySuite1100
Denver, CO 80237
Attention: John Spiegleman, Esq.
Facsimile: 720-200-6882
with a copy to:
Law Offices of Peter H. Alpert, Inc.
601 S. Figueroa Street, Suite 2330
Los Angeles, CA 90017
Attention: Peter H. Alpert
6.2 If to Assignees or RH-Michaels, to the intended recipient at:
Rolling Hills-Michaels, LLC
3 E. Stow Road, Suite 100
Marlton, NJ 08053
Attention: John O'Donnell
with a copy to:
Levine, Staller, Sklar, Chan, Brown & Donnelly, P.A.
3030 Atlantic Avenue
Atlantic City, NJ 08401
Attention: Paul T. Chan, Esq.
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.
6.3 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. This
Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision
had 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.
6.4 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 accounting for any other counterpart thereof.
6.5 This Agreement shall be binding upon and inure to the benefit of the
heirs, executors, administrators, legal representatives and permitted successors and assigns of the Parties hereto. This Agreement shall be interpreted in accordance with the laws of the statein which the Apartment Complex is located.
6.6 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 either Assignor.
6.7 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, including, but not limited to, the execution and filing of an amendment to theOriginal Certificate to reflect the withdrawal of NTC, Inc., from the Partnership as theAdministrative General Partner.
6.8 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.
6.9 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.
6.10 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 ofthe essence of this Agreement.
6.11 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.
6.12 Whenever herein the singular number is used, the same shall include theplural where appropriate, and words of any gender shall include each other gender whereappropriate.
IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the dateset forth above.
ASSIGNORS: NATIONAL TAX CREDIT PARTNERS, L.P.,
a California limited partnership
By National Partnership Investments Corp.,a California corporation,
General Partner
By/s/Jesse CurIl
Name: Jesse CurlI
Title: Vice President
NATIONAL TAX CREDIT, INC.,a California corporation
By/s/Jesse CurIl
Name: Jesse CurlI
Title: Vice President
ASSIGNEES: ROLLING HILLS AGP, LLC,
a New Jersey limited liability company
By/s/John O'Donnell
Name: John O'Donnell
Title: President
RH-MICHAELS INVESTORS, LLC,
a New Jersey limited liability company
By/s/John O'Donnell
Name: John O'Donnell
Title: President
RH-MICHAELS: ROLLING HILLS-MICHAELS, LLC,
a New Jersey limited liability company
By/s/John O'Donnell
Name: John O'Donnell
Title: President