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Exhibit 10.49
PURCHASE AGREEMENT
This Agreement is effective as of this 4th day of October, 2000, between
ARV INVESTMENT GROUP, INC., a California corporation of 245 Fischer Avenue, D-1,
Costa Mesa, California 92626 (the "Seller"), and EENHOORN DEVELOPMENT, L.L.C.,
of 2620 Horizon Drive, S.E., Suite C, Grand Rapids, Michigan 49546 (the
"Buyer"), upon the terms and conditions set forth below.
1. BACKGROUND RECITALS
(a) Seller owns all of the general partner interest
(collectively, the "General Partner Interests: and each a "General Partner
Interest") in five (5) limited partnerships identified respectively as Franklin
Commons LP, an Indiana limited partnership ("Franklin"), Grand Rapids Housing
Partners Limited Dividend Housing Association Limited Partnership, a California
limited partnership ("Grand Rapids"), Lansing Housing Partners Limited Dividend
Housing Association Limited Partnership, a California limited partnership
("Lansing"), Rosewood Villas, a California limited partnership ("Rosewood"), and
ARV San Marcos, a California limited partnership ("San Marcos") (referred to
individually as a "Partnership" and collectively the "Partnerships"). Each
Partnership was formed in accordance with the terms and provisions of an
agreement of limited partnership (referred to individually as a "Partnership
Agreement" and collectively as the "Partnership Agreements", more particularly
described on the attached Exhibit A. Each of the Partnerships owns a separate
apartment complex, as more particularly described on the attached Exhibit B
(referred to individually as an "Apartment Complex" and collectively as the
"Apartment Complexes").
(b) In connection with the development of, and construction of
the improvements at, the Apartment Complexes, the Partnerships entered into
financing arrangements with General Electric Capital Corporation, a New York
corporation ("Lender") whereby Lender made five (5) separate construction loans
to the Partnerships (referred to individually as a "Construction Loan" and
collectively as the "Construction Loans") secured by first lien mortgages
encumbering the Apartment Complexes, and simultaneously issued forward
commitments to fund permanent take-out loans (referred to individually as a
"Permanent Loan" and collectively as the "Permanent Loans") upon the
satisfaction of certain conditions precedent. Each Construction Loan was
evidenced by a promissory note, mortgage, a forward commitment, and other
documents intended to secure the Construction Loan indebtedness (collectively,
the "Construction Loan Documents"), which documents are more particularly
described on the attached Exhibit C.
(c) As of the date of this Agreement, Lender has funded Permanent
Loans on the Rosewood and San Marcos Apartment Complexes. Each of said Permanent
Loans is evidenced by a promissory note, mortgage or deed of trust and other
documents intended to secure the Permanent Loan indebtedness against the
particular Apartment Complex (collectively, the "Permanent Loan Documents"),
which documents are more particularly described on the attached Exhibit D. With
respect to the Franklin, Grand Rapids, and Lansing Apartment Complexes, the
Construction Loans funded by Lender remain in place and certain conditions
precedent to Lender's funding of a Permanent Loan therefor remain to be
satisfied.
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(d) In connection with the development of, and construction of
the improvements at, the Apartment Complexes, the Partnerships entered into
separate development management agreements (referred to individually as a
"Development Agreement" and collectively as the "Development Agreements") with
certain entities affiliated with Seller (the "Developers"), as more particularly
described on the attached Exhibit E, providing for development fees
("Development Fees") to be paid to the Developers in consideration of services
rendered to develop and construct the Apartment Complexes. In connection with
the further development of the Apartment Complexes, the Partnerships entered
into separate property management agreements (referred to individually as a
"Management Agreement" and collectively as the "Management Agreements"), as more
particularly described on the attached Exhibit F with ARV Assisted Living, Inc.
("ARV"), an entity affiliated with Seller, providing for property management
fees and incentive management fees (collectively, the "Management Fees") to be
paid to ARV in consideration of property management services rendered in
connection with the operation of the Apartment Complexes. In connection with the
operation and development of the Apartment Complexes the manager for the
Partnerships have entered into agreements with the Housing Regulatory Authority
for each of their respective states as described on the attached Exhibit F,
affecting certain aspects of the operation and leasing of the Apartment Complex
in that state (the "Regulatory Agreements").
(e) Seller now desires to sell, transfer and assign all of its
General Partner Interest, its right and interest and the interest of any
affiliates under the Partnership Agreements, the Construction Loan Documents,
the Permanent Loan Documents, the Development Agreements, including, but not
limited to, the right to receive all accrued but unpaid Development Fees,
Management Fees, distributable cash flow, revenues, and tax credits generated
thereby or due thereunder (collectively referred to as the "Seller Portfolio
Interest") to Buyer, and Buyer desires to purchase the Seller Portfolio Interest
and accept all assignments related thereto, subject to the terms and conditions
contained herein below.
(f) This Purchase Agreement has been entered into between the
Buyer and the Seller to reflect the terms of their agreement upon which the
Seller shall sell and the Buyer shall purchase the Seller Portfolio Interest.
2. PURCHASE PRICE. At closing, Buyer will pay to Seller $3,050,000 in
certified funds, immediately available (the "Purchase Price"). Upon completion
of the Inspection Period, provided for below, the parties shall mutually agree
to allocate the Purchase Price between the respective components of the Seller
Portfolio Interest or to rearrange or recharacterize the payment of the Purchase
Price as a contribution to the capital of one or more of the Partnerships.
3. CONVEYANCE OF SELLER PORTFOLIO INTEREST. Upon the fulfillment of the
closing terms and conditions the Seller shall assign and convey all of its
right, title and interest in the Seller Portfolio Interest to Buyer, free and
clear of all liens and encumbrances, except those permitted by this Agreement.
At closing the Seller shall sign and deliver to Buyer the assignment and
conveyance documents, warranting Seller"s title to the Seller Portfolio
Interest, unencumbered except as allowed by this Agreement, required to assign
and convey the following:
(a) All of the General Partner Interests in the Partnerships
shown on the attached Exhibit A, in the form and manner and with all approvals
required by the respective Partnership
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agreements. To the extent Seller does not hold the full title and interest to
all of the General Partner Interests or other Seller Portfolio Interests it
shall acquire those and be able to convey them at closing to the Buyer, free and
clear of all rights, liens and encumbrances of any other party. Seller shall
resign as general partner of the Partnerships and shall cause Buyer or an
affiliate or assignee of Buyer to be admitted as the new sole general partner of
the Partnerships.
(b) Any and all of Seller"s right, title and interest as a
limited partner in the Partnerships, or any other ownership interest Seller
holds in any of the Partnerships, in addition to those already stated in a)
above, in the form and manner and with all approvals required by the Partnership
agreements, which right, title and interest of Seller are listed on Exhibit G;
(c) Any right, title and interest Seller may own in any of the
Apartment Complexes in addition to the Seller Portfolio Interest, or in any real
property adjacent to the Apartment Complexes, which right, title and interest of
Seller are listed on Exhibit H;
(d) All of the tangible and intangible personal property assets
of Seller held or used in conjunction with the operation, maintenance,
management and administration of the Apartment Complexes and the Partnerships,
including but not limited to: all motor vehicles, repair and maintenance
materials, consumables, parts and inventory of any nature, landscaping or
sidewalk maintenance and repair equipment and machinery, apartment and building
maintenance and repair machinery and equipment, the books and records of the
Apartment Complexes, records of the accrued fees, contract rights and tax
credits, trade marks, trade names, telephone numbers, good will, computer
programs and computers, software licenses, all leases, Regulatory Agreements and
other contracts which have been entered into with regard to the Apartment
Complexes or Partnerships, all receivables, bank accounts, cash on hand,
investments, or other amounts, entitlements or claims owing, excepting the
Seller's corporate office furniture and equipment as listed on Exhibit I
(cumulatively these assets to be transferred are referred to as the "Personal
Property"). A schedule of the Personal Property to be transferred to Buyer at
closing shall be delivered to Buyer within 15 days of the effective date of this
Agreement. To the extent the Seller, or the Partnerships, do not hold title to
the Personal Property listed above which is used in conjunction with the
operation, maintenance, management and administration of the Apartment Complexes
and the Partnerships, Seller shall acquire that title to the Personal Property
to be able to convey it to Buyer by warranty bill of sale at closing.
(e) All of Seller"s right, title and interest, in the
Construction Loan Documents and the Permanent Loan Documents, including any
rights to Cash Flow.
(f) All of the Partnership books, records and files.
(g) All of the plans and specifications for the Apartment
Complexes.
The assets to be transferred to Buyer as listed in this Section 3 are
hereafter referred to cumulatively as the "Assets".
4. CLOSING.
(a) The closing shall occur concurrently with the closing of the
Permanent Loans
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issued by the Lender to the Partnerships. Buyer, with Seller's assistance, shall
prepare the documents for the closing of the transaction including the
assignment of the Partnership and loan interests, the conveyance of any real and
Personal Property, a closing statement memorializing the transaction, all
documents required for the amendment of the Partnership agreements, including
the notices of meetings and documentation of the actions to approve the
amendments, and appointment of new general partners, and such other documents as
may be necessary or customary to complete the closing called for by this
Agreement. For purposes of complying with this Agreement, the Seller shall be
able to convey at closing all of the Assets in the manner provided for in this
Agreement. However, the actual documents delivered at closing and the
transactions completed shall vary with the elections allowed to be made by the
Buyer and Seller as permitted under this Agreement to achieve the desired
transfer of the Assets, compliance with securities laws, and the tax
requirements of this transaction. The Seller shall assist and cooperate in the
preparation of the closing documents. The parties shall mutually exchange
information and documents for review and approval in preparation for the
closing. At closing Seller shall pay the cost of any title insurance premium
update or fairway endorsement ordered by Buyer for the transaction. The Buyer
shall pay for any new or recertified surveys for the Apartment Complexes
obtained by Buyer as part of its due diligence review. Seller shall also pay any
transfer tax which is due and owing as a result of the transactions provided for
under this Agreement. To the extent there are any charges by any closing agent,
title insurance company agent or escrow agent for their services under this
Agreement, those fees shall be paid 1/2 by each party. The Seller shall be
responsible for paying the recording costs of all documents to remove any liens
or encumbrances from the Apartment Complexes and Personal Property and the cost
of providing certificates of good standing on each of the Partnerships and the
Seller. The Buyer shall pay for the cost of any UCC search on each of the
Partnerships, the Seller and the Apartment Complexes for both the states in
which those Apartment Complexes and Partnerships are located and the counties in
which they are located. The parties shall each pay their own attorneys and other
advisors with regard to charges for the closing and any other closing costs
shall be split equally between the parties.
(b) The Seller shall receive all rental and other income of the
Apartment Complexes and the Partnerships and use such income in the ordinary
course of business from the date of this Agreement to the date of closing. At
closing all such amounts received which have not been expended in the ordinary
course of business shall be delivered to and retained by Buyer. All prepaid
rental or other income for the Apartments held by Seller for periods which have
not yet occurred shall be delivered to and retained by Buyer at closing.
(c) At or prior to closing the Seller shall pay all outstanding
taxes and assessments of the Partnerships and Apartment Complexes. Outstanding
taxes and assessments shall include all of those which have become a lien and
been billed to date. Seller shall pay all outstanding expenses including trade
payables and other obligations of the Partnerships and Apartment Complexes in
the ordinary course of business from the date of this Agreement up to the date
of closing from the funds on hand and available to the Partnerships excluding
prepaid rental or other income for the Apartments held by the Seller for periods
which have not yet occurred. In addition, all reserves, escrows or other amounts
required to be deposited or held under the Construction Loan Documents or the
Permanent Loan Documents shall be so deposited by the Seller and in place as of
the date of closing. To the extent Partnership funds are not available to pay
outstanding taxes and trade payables owed by the Partnerships which are older
than 30 days prior
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to the date of closing, the Seller shall provide funds at closing to pay those
amounts which are older than 30 days prior to the day of closing.
(d) Property management fees and expense reimbursements for the
month in which the transaction is closed shall be prorated to the day of closing
with the Seller receiving credit for the day of closing. At closing Seller shall
assign to Buyer any claim for any accrued but unpaid management fees, payroll
fees and intercompany fees for the management of the Apartment Complexes and the
Partnerships in amounts not less than those shown in Section 13(l).
5. DELIVERY OF DOCUMENTS AND INFORMATION. Seller has delivered or within
10 days following the signing of this Agreement shall deliver to Buyer copies
of:
(a) The most recent title insurance policies or commitments and
surveys and all environmental reports on the Apartment Complexes;
(b) all local government building code compliance, inspection and
repair reports, engineering, structural, safety or insurance company inspections
for the last 3 years;
(c) any and all HUD agreements and communications covering all
obligations and agreements for the Apartment Complexes;
(d) a report showing the Tax Credits received for the Apartment
Complexes upon their construction and the subsequent use and status of the Tax
Credits through the current date;
(e) an accounting for each of the Partnerships listing the
Accrued Fees (development fees, incentive management fees and property/asset
management fees) for each of the Partnerships showing the amount of the fees
incurred by the Seller, any payments made on those fees to date and the amount
currently owing for each of the fees;
(f) copies of all the Partnership Agreements for the Partnerships
and full and complete copies of the records and correspondence of each of the
Partnerships from their creation to the date of this Agreement;
(g) a specimen copy of each lease used for the Apartment
Complexes, the existing rent rolls, and laundry leases (if any);
(h) any notices or other documentation from any governmental body
or agency with regard to: taxes, (including the Grand Rapids Pilot program)
compliance violations or required corrective actions, utility bills and property
tax bills for the last 12 months;
(i) reports of maintenance and repairs for the last 12 months;
(j) make available any other records for the calendar years 1998,
1999 and 2000 through the date of closing used in conjunction with the operation
of the Apartments;
(k) provide access to the plans and specifications for each of
the Apartment
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Complexes and assist in any information needed for the inspection of those
Apartment Complexes;
(l) all audited financial reports and tax returns for the
Apartment Complexes and Partnerships for the last 3 years, a current certified
accounts payable and receivable list for the Apartment Complexes and the
Partnerships;
(m) bank statements showing deposits for past 12 months, the most
recent 3 months of Lender invoices showing the outstanding principal balance,
interest rate, and restricted cash on hand with the Lender for the Apartment
Complexes; and copies of all loan documents and any proposed commitments or
other proposed loan documents or loan terms for the structuring of the permanent
loans for the Partnerships;
(n) a copy of all of the agreements with the Lender which relate
to the Cash Flow Agreements between the Lender and the Seller with regard to the
Apartment Complexes and the Partnerships;
(o) copies of all equipment, leases or other personal property
leases being used in conjunction with the management and operation of the
Apartment Complexes and Partnerships; and
(p) copies of all service and maintenance contracts that are in
effect with regard to the Apartment Complexes and the Partnerships. Within 30
days following the signing of this Agreement:
(q) a resolution of Seller's Board of Directors approving the
transaction provided for in this Agreement and authorizing its closing;
(r) Certificates of Good Standing from each state in which the
general partner and each of the Partnerships are qualified to do and are doing
business showing them to be in good standing in those jurisdictions;
(s) a list of (i) all existing litigation in which the Seller or
the Partnerships are involved together with copies of the pleadings on file in
those cases, (ii) all claims pending by any parties against the Seller or the
Partnerships, including any notices or letters which have been received by the
Seller or the Partnerships with regard to any claims or potential claims or
liability which the Seller or Partnerships may have from third parties other
than tenants, including employee claims; (iii) all claims pending by tenants
including any notices or letters which have been received by Seller or the
Partnerships from a tenant stating a claim or potential claim for liability
against the Seller or the Partnerships under a lease in one of the Apartment
Complexes; and (iv) or any claims pending made by Partners within the
Partnerships against the Partnerships or the Seller as the general partner; and
(t) copies of all occupancy certificates and compliance
certificates for each of the Apartment Complexes.
6. REAL AND PERSONAL PROPERTY TAXES AND ASSESSMENTS. Any real and
personal
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property taxes levied against the Apartment Complexes and Personal Property will
be paid by the Partnerships in the normal course of operations. There shall be
no tax proration of tax billings. All taxes and special assessments levied
against the Apartment Complexes prior to closing shall be paid in full at or
before closing.
7. DUE DILIGENCE.
(a) Buyer shall have until 30 days following the Buyer's receipt
of written notice of approval for the transaction from GE Capital and Seller's
board of directors or such extended date as may arise under Section 10 below
(the "Inspection Period"), in which to inspect all of the Apartment Complexes
and Personal Property, and to review, inspect and verify all of the mortgage
loans and other loans, accounts and balances owed by the Partnerships, the
leases, rent rolls, business documents and records of the operation of the
Apartment Complexes and the Partnerships, all information listed on the
Exhibits, the effects on and implications for the Buyer and its related parties
of the Tax Credit Reduction and Recapture Guaranty Agreement dated November 15,
1994 and any other information pertinent to this transaction. To the extent
Buyer is dissatisfied, in its sole discretion, with any portion of the Seller
Portfolio Interest or its analysis of the Tax Credit Reduction and Recapture
Guaranty Agreement as a result of its due diligence it may terminate this
Agreement during the Inspection Period and receive a prompt refund of the
Deposit delivered to the Escrow Agent as provided below in this Agreement.
(b) Buyer and its agents shall be given reasonable access to all
of the records of the Seller, the Partnerships, the Apartment Complexes,
Personal Property and Partnership loans, and access to the Apartment Complexes
and Personal Property for such inspections as it may wish to undertake. Buyer
shall be solely responsible for all of the costs of its due diligence efforts
except that at closing Seller shall pay the cost of any title insurance premium
update or fairway endorsement ordered by Buyer for the transaction. Seller shall
cooperate in providing the access and information to the Buyer, and offer such
reasonable assistance as Buyer may need to inspect the Real Property and
Personal Property, review the information provided, receive approvals for the
transaction from the Partnerships, and receive estoppel letters from commercial
tenants or holders of service contracts and payoff amounts from lenders as
required by Buyer. Promptly following the signing of this Agreement Seller and
Buyer shall mutually seek approval of GE Capital for the transactions required
by this Agreement. To the extent there is a charge by GE Capital for its
approval of this transaction, that cost shall be paid equally by the two
parties.
Buyer agrees to indemnify the Seller and the Partnership from and
against any and all claims, liens, actions, costs or damages arising out of or
relating to Buyer's inspections and due diligence efforts under this Purchase
Agreement. Except as otherwise stated under this Agreement all costs of Buyer's
due diligence shall be paid by Buyer, and the Seller and the Partnerships shall
not pay any such costs nor incur any liability as a result of Buyer's due
diligence efforts.
Buyer acknowledges that Seller has made no representations or warranties
regarding the condition of the Apartment Complexes aside from what is contained
in this Agreement and that Buyer is making and relying upon its own
investigation on the physical, environmental, economic and legal conditions of
the Apartment Complexes, and Buyer shall acquire the Seller Portfolio Interest
in its "AS IS" condition on the closing date; provided, however, that Seller
does represent
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and warrant that to the best of its knowledge the documents and information
delivered by it to Buyer are true and complete documents with regard to the
Apartment Complexes and Seller Portfolio Interest except where otherwise
explicitly stated by Seller.
8. MANAGEMENT OF PARTNERSHIP ASSETS UNTIL CLOSING.
(a) During the interim period of time from the Effective Date of
this Agreement until closing, Seller shall continue to receive income, pay
expenses and manage the day-to-day operations of the Apartment Complexes and the
Partnerships" affairs and administration, in the ordinary and customary course
of business as they have been managed for the prior year. The Apartment
Complexes and Personal Property shall be in the same condition as of the date of
closing as it is in as of the date of this Agreement, subject to ordinary wear
and tear and changes caused by Buyer, and there shall be no new or increased
liens or indebtedness upon the Apartment Complexes or Personal Property unless
specifically approved by the Buyer. To the extent that any repairs are ordered,
or required by governmental authority or Lender prior to the time of closing
this Agreement they shall be performed by Seller and completed prior to the date
of closing. From the effective date of this Agreement to the date of closing,
Seller shall not undertake any actions or fail to take any actions which will
cause any liens or encumbrances to arise against the Apartment Complexes, the
Personal Property or any of the Assets or the Partnership interests themselves,
and Seller shall not make a conveyance of any interest in any of the Partnership
interests which are subject to this Agreement to any third party, or engage in
any activity which will give rise to a lien, encumbrance or claim, which will
knowingly devalue any of the assets in the Seller Portfolio Interest to be
transferred under this Agreement, or which will accelerate the payment of any
loan owed by the Partnerships.
(b) Following the payment of taxes, trade payables and other
business expenses, Seller may pay in the ordinary course of business any current
payroll fees or current management fees for the Apartment Complexes and current
incentive management fees owed to it for the San Marcos Apartment Complex from
the funds on hand of the respective Partnerships. However, Seller shall not pay
itself any accrued or past-due management fees or incentive management fees from
any of the Partnerships or Apartment Complexes.
9. CONFIDENTIALITY. The parties agree that all of the information which
they exchange with each other concerning the Portfolio, adjacent or related
properties, their companies, their methods of doing business and operations and
any other matters exchanged as part of negotiating the letter of intent or this
Agreement shall be kept and remain confidential and shall not be used for any
other purpose or given to any other parties or individuals except those related
to Buyer and/or Seller and their associated consultants and representatives as
necessary for the purpose of participating in the conveyance of the Assets from
Seller to Buyer. In the event this Agreement is terminated, each party shall
return to the other all originals and any copies which have been made of the
written information or disks provided by the other party and the obligation not
to disclose any information received under the letter of intent or this
Agreement shall survive the termination of this Agreement. The parties agree
that the information which they are exchanging is and shall be treated as trade
secrets and either party shall be entitled to enforce the confidentiality
provision of this Agreement before any court of competent jurisdiction and
obtain specific performance, injunctive and other appropriate equitable relief
to enforce the provisions of this Section.
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10. APPROVALS AND AMENDMENTS TO PARTNERSHIP AGREEMENTS. Promptly
following the Effective Date of this Agreement Seller shall obtain any approvals
and amendments and resolutions required under each of the Partnership agreements
of the Partnerships as necessary to allow for the transfer of Partnership
interests and the completion of the transactions called for by this Agreement to
occur as of the closing including those provisions stated on Exhibit J. No other
amendments to the Partnership agreements of the Partnerships shall occur from
the Effective Date of this Agreement to the date of closing. The time period
allowed for the Inspection Period under Section 7 above shall, if necessary, be
extended until 15 days after the delivery to the Buyer by the Seller of all of
the amendments, approvals and resolutions called for by the Partnership
agreements to permit the transfer at closing of the General Partnership
Interests and the completions of the transactions called for by this Agreement.
11. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents,
warrants and covenants to Buyer that as of the date of this Agreement:
(a) Seller is a validly existing corporation, duly organized and
in good standing in the state of California, with full corporate power and
authority to conduct its businesses and operations, as is now being conducted,
and to enter into this Agreement, is duly qualified to do business in every
jurisdiction in which the Partnerships are doing business.
(b) The execution, delivery and performance by Seller of this
Agreement and the agreements, exhibits and other documents to be signed and
delivered by Seller pursuant to this Agreement have been duly and validly
authorized and upon their signing and delivery by Seller will constitute valid
and binding agreements upon Seller enforceable in accordance with their terms,
and that the individuals signing on behalf of the Seller have the legal power,
authority and capacity to bind the Seller.
(c) The signing, delivery and performance of this Agreement and
any other documents to be signed in connection with this Agreement and the
consummation of the transaction contemplated by this Agreement, in compliance
with the provisions of this Agreement by the Seller, upon approval of Seller's
Board of Directors will not violate any provisions of the Articles of
Incorporation or Bylaws of the Seller, or violate or result in the breach of or
conflict with any laws, regulations, orders, writs, ordinances, injunctions,
decrees, rules or judgments applicable to the Seller or any of their assets.
(d) Each of the Partnerships is a validly existing partnership,
duly organized and in good standing with full power and authority to conduct its
business and operations as it is now being conducted in every jurisdiction in
which each Partnership is doing business.
(e) The signing, delivery and performance of this Agreement and
any other documents to be signed in connection with this Agreement and the
consummation of the transaction contemplated by this Agreement, in compliance
with the provisions of this Agreement by the Seller, upon the approval of all
regular, special and investor limited partners as required by the Partnership
Agreements, will not violate any of the Partnership Agreements.
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(f) To the best of Seller's knowledge all of the documents and
information delivered to the Buyer concerning the Apartment Complexes and the
Seller Portfolio Interest are true and complete sets of documents and
information unless otherwise explicitly disclosed by the Seller.
12. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents, warrants
and covenants to Seller that as of the date of this Agreement:
(a) Buyer is a validly existing limited liability company duly
organized and in good standing in the state of Michigan, with full power and
authority to conduct its businesses and operations, as is now being conducted,
and to enter into this Agreement, is duly qualified to do business in every
jurisdiction in which it does business.
(b) The execution, delivery and performance by Buyer of this
Agreement and the agreements, exhibits and other documents to be signed and
delivered by Buyer pursuant to this Agreement have been duly and validly
authorized and upon their signing and delivery by Buyer will constitute valid
and binding agreements upon Buyer enforceable in accordance with their terms,
and that the individuals signing on behalf of the Buyer have the legal power,
authority and capacity to bind the Buyer.
(c) The signing, delivery and performance of this Agreement and
any other documents to be signed in connection with this Agreement and the
consummation of the transaction contemplated by this Agreement, in compliance
with the provisions of this Agreement by the Buyer do not and will not violate
any provisions of the Articles of Organization of the Buyer, or violate or
result in the breach of or conflict with any laws, regulations, orders, writs,
ordinances, injunctions, decrees, rules or judgments applicable to the Buyer or
any of its assets.
13. CONDITIONS PRECEDENT TO PURCHASE BY BUYER. The obligations of Buyer
to close under this Agreement are subject to the following conditions precedent:
(a) All representations, warranties and covenants of the Seller
contained in this Agreement, including the exhibits, shall be true and correct
in all material respects when made and again at and as of the closing date as
though made at and as of the time of closing.
(b) The Seller shall perform and comply in all material respects
with all covenants, agreements and conditions required by this Agreement to be
performed and complied with by it prior to the closing date.
(c) The transactions proposed under this Agreement shall have
received any and all consents, waivers, authorizations, approvals required by
any governmental authority necessary to allow the execution, delivery and
performance of any part of the transaction contemplated by this Agreement.
(d) The Partnerships shall have good and marketable fee title to
all of the Apartment Complexes and Personal Property covered by this Agreement,
subject to permitted liens and exceptions.
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(e) Seller shall have or be able to deliver good and marketable
fee title to all of the General Partner Interests to be transferred to Buyer
under this Agreement.
(f) The Seller Portfolio Interest to be conveyed or assigned
under this Agreement shall be in as good or better condition and of equal or
greater value, respectively, as they were in at the end of the Inspection Period
allowed for in Section 7 above and to the extent any approvals or consents are
required for the assignment of any of the assets or liabilities, they shall have
been received by Buyer at least 10 days prior to the date of closing.
(g) Except for Lender's rights under the Management Agreements by
virtue of the collateral assignments taken by Lender and the personal property
leased in the operation of the Apartment Complexes pursuant to longer leases as
disclosed under this Agreement, all of the contracts governing the management of
any of the Seller Portfolio Interest or liabilities to be transferred under this
Agreement including the management agreement(s) for the Apartment Complexes,
Personal Property, the Partnerships, and all assets and liabilities to be
transferred to Buyer shall be terminable by Buyer as of the date of closing.
(h) There shall be no obligation by the Buyer to assume any of
the employment contracts, compensation, benefits or liabilities for any of the
employees of the Seller. The Buyer expects to employ the existing employees of
the Seller for a period of 60 days or longer following closing as Buyer shall
elect at a compensation level it will disclose to those employees prior to the
completion of Buyer's due diligence, (if Buyer does not elect to terminate this
Agreement during the Inspection Period), and the employment and Buyer"s
liability for any amounts or obligations owed to those individuals shall begin
as of the day after closing.
(i) The balances owing and annual loan payments required (subject
to changes imposed by Lender which should not exceed 3% of the amount stated) as
of the date of this Agreement are as follows:
Not more than
Franklin balance $2,498,102 annual payment $240,183
---------- --------
Grand Rapids balance $4,310,255 annual payment $493,787
---------- --------
Lansing balance $4,160,986 annual payment $463,718
---------- --------
Rosewood balance $5,468,450 annual payment $515,287
---------- --------
San Marcos balance $5,400,000 annual payment $512,593
---------- --------
At closing, the combined balances of the outstanding loans owed by the
Partnerships to Lender shall not exceed $____________. This amount shall reflect
the paydown of the principal balance of the Lender's loans by the Seller at or
prior to closing in an amount of $2,250,000 or more. The Buyer shall have
received all consents and approvals required by the Lender for the transactions
anticipated by this Agreement. All of the mortgage debt on the Apartment
Complexes in favor of Lender shall be fixed, permanent and nonrecourse to the
General Partner of the Partnerships (other than standard carve-outs in the
permanent loans and the Operating Deficit Guarantees). No other debt shall be
owed by the Partnerships or be a lien against the Apartment Complexes.
(k) The Partnership agreements shall have been amended as
required by Exhibit J and any of the provisions of this Agreement and all
Partnership approvals and resolutions required
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by the Partnership Agreements shall be delivered at closing.
(l) The Accrued Fees owing by the Partnerships to the Seller have
balances owing as of the date of this Agreement, which balances shall continue
to be due and owing as of the day of closing, as follows:
Franklin
Development Fees $780,000.00
Incentive Fees $ 0
Property Management Fees $157,921.97
Subtotal $937,921.97
Grand Rapids
Development Fees $1, 682,000.00
Incentive Fees $ 0
Property Management Fees $ 310, 236.71
Architectural Supervision Fees $ 285,000.00
Subtotal $2,277,237.71
Lansing
Development Fees $1,332,000.00
Incentive Fees $ 0
Property Management Fees $ 267,418.50
Architectural Supervision Fees $ 240,000.00
Subtotal $1,839,418.50
Rosewood
Development Fees $1,056,000.00
Incentive Fees $ 0
Property Management Fees $ 124,803.44
Subtotal $1,180,803.44
San Marcos
Development Fees $ 0
Incentive Fees $ 0
Property Management Fees $ 0
Subtotal $ 0
Total $6,235,381.62
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(m) Unless approved by Buyer, there shall be no material change
and condition in any of the Apartment Complexes, Personal Property, Partnership
interests, Assets or loan interests to be conveyed to or assigned to Buyer under
this Agreement, and all of the Apartment Complexes, Personal Property,
Partnership interests, Assets and loans owed by the Partnerships shall have been
managed, handled and paid in the ordinary course of business from the day of
this Agreement to closing.
(n) There shall be no liens against any of the interests to be
transferred under this Agreement except as allowed by this Agreement.
(o) All of the accounts established with the Lender for taxes,
insurance, replacement, security deposits or other operating reserves shall be
funded as of the closing in the amounts required by the Lender.
(p) intentionally left blank;
(q) All outstanding expenses, including taxes and assessments,
trade payables and other obligations of the Partnerships and Apartment Complexes
shall be paid in the normal course of business, except as provided in this
Agreement, and Seller shall pay at closing, to the extent that Partnership funds
are not available, any third-party trade payables owed by the Partnerships older
than 30 days prior to the date of closing
(r) Partnership liabilities and expenses owed to parties other
than Seller shall be paid in the normal course of business. Seller may also pay,
itself or affiliates current management fees earned by Seller after June 1,
2000, and any outstanding payroll reimbursements. Seller shall make no other
distributions from the funds or assets of the Partnerships or the Apartment
Complexes to Seller and/or its assignees or affiliates.
(s) The assets shall be in the same condition they were in upon
the signing of the Agreement, ordinary operations and wear and tear excepting
and any repairs required by any local governments or the Lender as stated in
Section 8 shall have been completed by the Seller.
14. CONDITIONS PRECEDING TO SALE BY SELLER. The obligations of Seller to
close under this Agreement are subject to the following conditions preceding:
(a) The Board of Directors of Seller shall approve all of its
obligations under this Agreement prior to the end of the Inspection Period;
(b) Seller shall have obtained the approval of the Lender for the
proposed transactions; and
(c) Prior to the close of the Inspection Period Seller shall have
obtained the approval of all limited partners and all special limited partners
for the proposed transaction.
15. DEFECTS TO ANY TRANSFER AND CURE. On or before the close of the
Inspection Period
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to the extent that Buyer has not received any required approvals or conveyances
from the Partnerships or if there are any known or potential encumbrances, liens
or flaws in title to any of the Assets or liabilities to be received by Buyer;
Buyer shall give notice to Seller of the missing approvals and defects. Seller
shall have 30 days to cure those defects and thereafter, if the defects still
exist, and are not waived by Buyer, Buyer may terminate this Agreement and the
Deposit shall be returned to Buyer.
16. PAYMENT OF CREDITORS. From the effective date of this Agreement
until closing, there shall be no acceleration in payment of any payables to
creditors. Only payments which are regularly scheduled payments shall be made.
17. EARNEST MONEY DEPOSIT. Upon the signing of this Agreement, the Buyer
will deposit $100,000 (the "Deposit") with a title insurance company selected by
the parties for this transaction, which Deposit shall be held in an interest
bearing account for the benefit of the Buyer and the interest shall be treated
as part of the Deposit. The Deposit shall be refundable to Buyer in the event of
default by Seller or in the event Buyer elects to terminate the transaction
during the Inspection Period defined in Section 7.
18. TERMS OF ESCROW.
(a) The Escrow Agent shall hold the Deposit until there is a
termination of this Agreement by Buyer as provided in Section 7, until closing
or until it receives a notice from one of the parties of a default by the other
party under this Agreement. In the event of a termination by Buyer under Section
7 the Escrow Agent shall promptly refund the Deposit to the Buyer. In the event
of receiving a notice of the schedule of the closing from either of the parties,
the Escrow Agent shall tender the earnest money at the closing pursuant to a
closing agreement or statement approved by both parties. In the event of receipt
of a copy of a notice of default from one of the parties to this Agreement the
Escrow Agent shall send a copy of that notice to the other party. If an
objection is received from the other party within 10 days from the delivery of
the notice to that party, then the Escrow Agent shall hold the Deposit until it
receives approval from both parties to dispose of the Deposit in a stated
manner. If no objection is received within the 10 day period of time the Escrow
Agent shall forward the Deposit to the party which has given notice of a
default.
(b) The Seller and the Buyer agree that the Escrow Agent assumes
no liability under this Agreement except that of the holder of the Deposit. In
the event of any dispute as to whether the Escrow Agent is obligated to deliver
the Deposit, or whether any given disbursement shall be made to the Seller or
the Buyer, the Escrow Agent shall not be obligated to make any disbursements,
but in such event may hold the Deposit until receipt by the Escrow Agent of
authorization in writing, signed by both the Seller and the Buyer, directing the
disposition of the Deposit. In the absence of any such authorization, the Escrow
Agent may hold the Deposit until the final determination of the rights of the
Seller and the Buyer in an appropriate proceeding. If written authorization is
not given, or proceedings for determination are not begun and diligently
continued, the Escrow Agent shall have no obligation to bring an appropriate
action or proceeding for leave to deposit the Deposit with a court of competent
jurisdiction.
(c) The Seller and the Buyer hereby agree to jointly and
severally indemnify,
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save and hold the Escrow Agent harmless from any liability resulting from the
Escrow Agent"s duties, absent any commission or omission by the Escrow Agent
amounting to wilful misconduct or gross negligence. The Seller and the Buyer
agree to each pay one-half of any fee charged by the Escrow Agent for its duties
under this Agreement.
(d) Upon disbursement of the Deposit in accordance with the
Agreement, the Escrow Agent shall be released and acquitted from any further
liability under this Agreement, it being expressly understood that the liability
of the Escrow Agent is limited by the terms and conditions set forth above.
19. SELLER'S DEFAULT. In the event of any default by the Seller which
continues without cure for a period of 10 days after delivery by the Buyer of
notice to the Seller, the Buyer shall have the right (but not the obligation) to
terminate this Agreement by notice to the Seller and the Escrow Agent within 15
days after the occurrence of the default, and the Buyer shall have any and all
rights and remedies available to the Buyer in law and at equity arising out of
the default, including, without limitation, specific performance. In the event
of such termination, the Escrow Agent shall promptly return the Deposit it holds
to the Buyer.
Seller's Initials __________ Buyer's Initials __________
20. BUYER'S DEFAULT. In the event of any default by the Buyer which
continues without cure for a period of 10 days after the delivery by the Seller
of notice to the Buyer, the Seller shall have the right (but not the obligation)
to terminate this Agreement by notice to the Buyer and the Escrow Agent, within
15 days after the occurrence of the default. In the event of such termination
the Escrow Agent shall promptly deliver the Deposit it holds to the Seller as
liquidated damages and the Seller's sole remedy available to it under this
Agreement.
Seller's Initials __________ Buyer's Initials __________
21. INDEMNITY AND GUARANTY. Buyer shall indemnify the Seller from and
against any and all obligations and claims that arise against any of the
Partnerships during the term of Buyer"s tenure as general partner from and after
the closing, except any claims that may be caused directly or indirectly by the
actions of the Seller. Seller shall indemnify Buyer from any and all claims that
arise against any of the Partnerships for any and all actions and occurrences up
to the closing, including any tax liability of the Partnerships for time periods
prior to closing, but excepting any loan indebtedness permitted to remain in
place under this Agreement. An indemnification agreement shall be signed at
closing to cover these indemnifications so that they shall survive the closing.
Seller's guaranty, as the General Partner of the Partnerships, to Lender with
regard to the tax credits received and/or taken by the Partnerships up to the
date of closing including any claims by the Lender for such tax credits, and any
claims for subsequent loss of or adjustment to such tax credits after closing
shall be unaffected by the closing. Seller agrees to indemnify Buyer from any
and all claims by Lender or any oversight, regulatory authority or taxing
authority with regard to those tax credits including any and all accounting
fees, audit fees and attorneys fees which may be incurred by Buyer or Lender
with regard to after arising claims or issues concerning such tax credits taken
prior to the date of closing.
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22. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, heirs,
executors, administrators and personal representatives. Buyer may assign Buyer"s
interest under this Agreement to an affiliated company. Upon that assignment,
the Seller shall be given notice and the original Buyer shall be released of all
liability under this Agreement.
23. WHOLE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the terms and conditions listed and
supersedes all other prior and contemporaneous negotiations and writings. This
Agreement may be changed only in writing signed by all parties.
24. NOTICES. Any notice given pursuant to this Agreement shall be in
writing by (a) personal delivery, (b) expedited delivery service with proof of
delivery, (c) United States registered or certified mail, return receipt
requested, postage prepaid, or (d) prepaid telegram or facsimile transmission
(provided that the receipt of such telegram or facsimile transmission is
confirmed, sent to the intended addressee at the address set forth below, or to
such other address or to the attention of such other person as the addressee
shall have designated by written notice sent in accordance herewith, and shall
be deemed to have been given either at the time of personal delivery, or, in the
case of expedited delivery service or mail, as of the date of the first
attempted delivery at the address and in the manner provided herein, or, in the
case of telegram or facsimile transmission, upon receipt. Unless changed in
accordance with the preceding sentence, the address for notices given pursuant
to this Agreement shall be as follows:
If to Seller: ARV Investment Group, Inc.
245 Fischer Avenue, D-1
Costa Mesa, California 92628
Attn: Legal Department
Fax: (714) 435-7110
If to Buyer: Eenhoorn Development L.L.C.
Attn: Paulus C. Heule
2620 Horizon Drive, S.E., Suite C
Grand Rapids, Michigan 49546
With a copy to: Varnum Riddering Schmidt & Howlett LLP
Attn: Nyal Deems
PO Box 352
Grand Rapids, Michigan 49501-0352
25. GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Michigan. In the event any provision
of this Agreement is in conflict with any statute or rule of any law in the
State of Michigan or is otherwise unenforceable for any reason, then that
provision shall be deemed severable from or enforceable to the maximum extent
permitted by law, as the case may be, and that provision shall not invalidate
any other provision of this Agreement. Venue for any action brought under this
Agreement shall lie in Kent County,
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Michigan.
26. COSTS AND ATTORNEY FEES. In the event of any dispute over the
obligations under this Agreement between the parties that results in litigation,
the prevailing party shall have its legal fees paid by the other party.
27. COUNTERPARTS. This Agreement may be signed by the parties separately
on like copies, and when signed and delivered by each party, the two
counterparts shall together constitute a binding agreement of the parties.
28. CALCULATION OF TIME PERIODS. Unless otherwise specified, in
computing any period of time described in this Agreement, the day of the act or
event after which the designated period of time begins to run is not to be
included and the last day of the period so computed is to be included, unless
such last day is a Saturday, Sunday or legal holiday, in which event the period
shall run until the end of the next day which is neither a Saturday, Sunday nor
legal holiday.
29. TIME IS OF THE ESSENCE. Seller and Buyer agree that time is of the
essence of this Agreement.
30. FURTHER ASSURANCES. Each party agrees that it will, without further
consideration, executed and deliver such other documents and take such other
actions, whether prior or subsequent to any Closing, as may be reasonably
requested by any other party to consummate more effectively the purposes or
subject matter of this Agreement.
31. SEVERABILITY. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable, the remaining of
this Agreement shall nonetheless remain in full force and effect.
32. NO THIRD PARTY BENEFICIARY. The provisions of this Agreement and the
documents to be executed and delivered at the Closing are and will be for the
benefit of Seller and Buyer only and are not for the benefit of any third party.
Accordingly, no third party shall have the right to enforce the provisions of
this Agreement or of the documents to be executed and delivered at the Closing.
33. CAPTIONS. The section headings appearing in this Agreement are for
convenience of reference only and are not intended, to any extent or for any
purpose, to limit or define the text of any section or any subsection.
34. CONSTRUCTION. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any exhibits or amendments.
35. EFFECTIVE DATE. This Agreement shall be effective as of the date
when the last of each of the parties listed below shall sign this Agreement.
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BUYER
EENHOORN DEVELOPMENT, L.L.C.
Date:
--------------------
By:
-------------------------------------
Cornucopia Family Partnership, L.P.,
a member PCH-A Limited, its General Partner
Paulus C. Heule, President
SELLER
ARV INVESTMENT GROUP, INC.
Date:
--------------------
By:
--------------------------------------
Abdo H. Khoury, Senior Vice President
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EXHIBIT A
PARTNERSHIP AGREEMENTS
Apartment Complex Partnership Agreement
----------------- ---------------------
1. River Oaks Villas Amended and Restated Agreement of Limited
San Marcos, TX Partnership of ARV San Marcos, a California
limited partnership, dated October 9, 1995
2. Traditions Apartments Amended and Restated Agreement of Limited
Franklin, IN Partnership of Franklin Commons L.P., an Indiana
limited partnership, dated August 8, 1995
3. Lansing Villas Amended and Restated Agreement of Limited
Lansing, MI Partnership of Lansing Housing Partners Limited
Dividend Housing Association Limited
Partnership, a California limited partnership,
dated September 29, 1994
4. Traditions Apartments Amended and Restated Agreement of Limited
Grand Rapids, MI Partnership of Grand Rapids Housing Partners
Limited Dividend Housing Association Limited
Partnership, a California limited partnership,
dated November 15, 1994
5. Rosewood Villas Amended and Restated Agreement of Limited
Madison, WI Partnership of Rosewood Villas, a California
limited partnership, dated November 1, 1995
1
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EXHIBIT B
APARTMENT COMPLEXES
Property Legal Description
-------- -----------------
1. River Oaks Villas B-1
1900 Aquarena Springs Drive
San Marcos, TX 78666
2. Traditions Apartments B-2
1600 Traditions Court
Franklin, IN 46131
3. Lansing Villas B-3
900 W. Edgewood Blvd.
Lansing, MI 48910
4. Traditions Apartments B-4
2230 Eastcastle Drive, S.E.
Grand Rapids, MI 49508
5. Rosewood Villas B-5
902 North High Point Road
Madison, WI 53717
1
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LEGAL DESCRIPTION
TRACT I: FEE
Lot 1, RIVER OAKS VILLAS, a subdivision in Hays County, Texas, according to the
map or plat recorded in Volume 6, Page 306 of the Plat Records of Hays County,
Texas.
TRACT II: EASEMENT
An easement for drainage and other purposes as described in that certain
Easement Agreement between Colatex Land Co. and ARV San Marcos, dated October
23, 1995, and recorded in Volume 1184, Page 281 of the Official Records of Hays
County, Texas.
EASEMENT
An easement for drainage pipes and related improvements as described in that
certain Easement Agreement between Colatex Land Co., a Texas partnership and ARV
San Marcos, a California limited partnership, dated March 18, 1996, and recorded
in Volume 1378, Page 831, Official Public Records, Hays County, Texas.
2
22
LEGAL DESCRIPTION OF FRANKLIN COMMONS
Part of the East Half of Section 13, Township 12 North, Range 4 East of the
Second Principal Meridian, Franklin City, Needham Township, Johnson County,
Indiana, more particularly described as follows:
Commencing at the Southeast corner of the said half section; thence North 87
degrees 37 minutes 30 seconds West along the South line thereof 1068.78 feet;
thence North 0 degrees 06 minutes 15 seconds West 2045.12 feet to the Northeast
corner of Carriage Estates as recorded in Plat Cabinet "C", page 607A and 607B
in the Office of the Recorder of Johnson County, said point being the Point of
Beginning of this described tract; thence North 88 degrees 33 minutes 00 seconds
West along the North line thereof 150.00 feet to the Northwest corner of said
subdivision; thence South 0 degrees 06 minutes 15 seconds East along the West
line thereof 27.41 feet; thence North 88 degrees 33 minutes 00 seconds West
502.79 feet to the East right-of-way line of Eastview Drive as recorded in Deed
Record 243, page 978 in the said Recorder's Office; thence North 0 degrees 16
minutes 00 seconds East along the East line thereof 1071.98 feet; thence South
86 degrees 12 minutes 10 seconds East 647.10 feet; thence South 0 degrees 06
minutes 15 seconds East 1018.22 feet to the Point of Beginning.
3
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LEGAL DESCRIPTION
A parcel of land in the Northeast 1/4 of Section 8, T3N, R2W, Delhi Township
(now city of Lansing,) Ingham County, Michigan described as: Commencing at the
Northeast corner of said Section 8, thence S00 degrees19'06"W along the East
line of said Section 8, a distance of 2062.73 feet to the centerline of
Washington Avenue; thence 17 degrees01'34"W along said centerline 53.20 feet to
the point of beginning; thence continuing S17 degrees01'34"W 62.78 feet; thence
N89 degrees55'12"W 224.42 feet; thence S00 degrees19'06"W 135 feet; thence N89
degrees55'12"E 183.81 feet to said centerline of Washington Avenue; thence S17
degrees01'34"W 88.90 feet along said centerline to the North line of Edgewood
Boulevard; thence N73 degrees53'35"W 484.19 feet along said North line; thence
Northwesterly continuing along said North line 671.38 feet along a curve to the
left said curve having a delta angle of 19 degrees36'09", a radius of 1962.36
feet, a chord of 668.11 feet bearing N83 degrees41'39"W; thence N00
degrees10'36"E 865.65 feet to the South line of the Plat of Southfield, recorded
in Liber 8 of Plats, Page 47, Ingham County Records. Thence N89 degrees56'27"E
243.37 feet along said South line to the Southeast corner of said plat; thence
N89 degrees58'09"E 328.67 feet to the Southwest corner of the plat of Marywood
recorded in Liber 9 of Plats, Page 15, Ingham County Records; thence S00
degrees19'06"W 165.00 feet; thence N89 degrees58'09E 477.02 feet to the
Northwest corner of Edgewood Commons, a subdivision recorded on Liber 38 of
Plats, Page 29, Ingham County Records; thence S00 degrees19'06"W 494.50 feet
along the Wesy line of said Edgewood Commons; thence N89 degrees51'26"W 74.98
feet; thence S00 degrees19'06"W 135.00 feet; thence N89 degrees55'12"E 242.68
feet to the point of beginning; said parcel containing 20.34 acres more or less
and is subject to all easements and restrictions, if any.
4
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LEGAL DESCRIPTION
That part of the East 1/2, SE 1/4, Section 21, T6N, R11W, City of Grand Rapids,
Kent County, Michigan, described as: Commencing at the SE corner of said SE 1/4;
thence N 01 degree 58 minutes W 1040.61 feet along the East line of said SE 1/4
and the centerline of Breton Avenue (100 feet wide); thence S 88 degrees 02
minutes W 394.01 feet to the point of beginning; thence S 88 degrees 02 minutes
W 167.92 feet; thence Southwesterly 284.86 feet along a 533 foot radius curve to
the left, the chord of which bears S 72 degrees 43 minutes 21 seconds W 281.48
feet; thence S 57 degrees 24 minutes 42 seconds W 318.34 feet; thence Westerly
212.39 feet along a 267 foot radius curve to the right, the chord of which bears
S 80 degrees 12 minutes W 206.83 feet (the previous five courses being along the
North right-of-way line of 43rd Street); thence N 02 degrees 01 minute 56
seconds W 1910.37 feet along the West line of said East 1/2, SE 1/4 and the East
line of Oxford Place Apartments to the NW corner of said East 1/2, SE 1/4;
thence S 48 degrees 24 minutes E 52.90 feet; thence S 28 degrees 45 minutes 44
seconds E 246.00 feet; thence S 46 degrees 01 minute 09 seconds E 219.77 feet;
thence S 36 degrees 04 minutes 15 seconds E 172.41 feet; thence S 57 degrees 21
minutes 49 seconds E 309.37 feet; thence S 45 degrees 09 minutes 32 seconds E
149.25 feet; thence S 80 degrees 51 minutes 55 seconds E 204.31 feet; thence S
59 degrees 53 minutes 41 seconds E 363.32 feet; thence S 01 degree 58 minutes E
176.0 feet along the West right-of-way line of Breton Avenue; thence
Northwesterly 109.80 feet along a 233 foot radius curve to the right, the chord
of which bears N 78 degrees 28 minutes W 108.79 feet; thence N 64 degrees 58
minutes W 205.75 feet (the previous two courses being along the South
right-of-way line of East Castle Drive (66 feet wide); thence S 15 degrees 00
minutes W 240.0 feet; thence S 05 degrees 00 minutes E 286.04 feet to the point
of beginning, except that part described as: Commencing at the Southeast corner
of said SE 1/4; thence N 1 degree 58 minutes W 1437.00 feet along the East line
of said SE 1/4; thence S 88 degrees 02 minutes W 50.00 feet to the point of
beginning; thence Northwesterly 109.80 feet along a 233.00 foot radius curve to
the right, the long chord bearing N 78 degrees 28 minutes W 108.79 feet; thence
N 64 degrees 58 minutes W 205.75 feet; thence N 25 degrees 02 minutes E 66.00
feet; thence S 64 degrees 58 minutes E 205.75 feet; thence Southeasterly 78.70
feet along a 167.00 foot radius curve to the left, the long chord bearing S 78
degrees 28 minutes E 77.97 feet; thence S 1 degree 58 minutes E 66.00 feet to
the point of beginning.
5
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LEGAL DESCRIPTION
Lot 626, Greenway Addition to Wexford Village, in the City of Madison, Dane
County, Wisconsin.
6
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EXHIBIT C
CONSTRUCTION LOAN DOCUMENTS
Borrower Loan Documents
1. Franklin Commons, L.P. 1.1 Contribution Agreement dated August 8,
1995
1.2 Development Deficit Guaranty Agreement
dated August 8, 1995
1.3 Operating Deficit Guaranty Agreement
dated August 8, 1995
1.4 Tax Credit Reduction and Recapture
Guaranty Agreement dated August 8, 1995
1.5 Construction Loan Agreement dated August
8, 1995
1.6 Collateral Assignment of Contracts and
Development Rights dated August 8, 1995
1.7 Payment Guarantees dated August 8, 1995
1.8 Completion Guarantees dated August 8,
1995
1.9 First Mortgage and Security Instrument
dated August 8, 1995
1.10 Promissory Note dated August 8, 1995
1.11 Loan Disbursing Agreement dated October
9, 1995
1.12 Construction Services Agreement dated
August 8, 1995
1.13 UCC- 1 Financing Statements
1.14 Permanent Loan Commitment Letter dated
August 8, 1995
1
27
Borrower Loan Documents
2. Lansing Housing Partners 2.1 Contribution Agreement dated September
29, 1994
2.2 Development Deficit Guaranty Agreement
dated September 29, 1994
2.3 Operating Deficit Guaranty Agreement
dated September 29, 1994
2.4 Tax Credit Reduction and Recapture
Guaranty Agreement dated September 29,
1994
2.5 Construction Loan Agreement dated
September 29, 1994
2.6 Promissory Note dated September 29, 1994
2.7 Mortgage and Security Agreement and
Fixture Financing Statement dated
September 29, 1994
2.8 Assignment of Rents, Leases and Profits
dated September 29, 1994
2.9 Collateral Assignment of Contracts and
Development Rights dated September 29,
1994
2.10 UCC-1 Financing Statements
2.11 Payment Guarantees dated September 29,
1994
2.12 Completion Guarantees dated September
29, 1994
2.13 Loan Disbursing Agreement dated
September 29, 1994
2.14 Hazardous Substances Indemnity Agreement
dated September 29, 1994
2.15 Supervision Services Agreement dated
January 17, 1994
2.16 Permanent Loan Commitment Letter dated
October 6, 1994
28
Borrower Loan Documents
3. Grand Rapids Housing 3.1 Contribution Agreement dated November
Partners 15, 1994
3.2 Development Deficit Guaranty Agreement
dated November 15, 1994
3.3 Operating Deficit Guaranty Agreement
dated November 15, 1994
3.4 Tax Credit Reduction and Recapture
Guaranty Agreement dated November 15,
1994
3.5 Construction Loan Agreement dated
November 15, 1994
3.6 Promissory Note dated November 15, 1994
3.7 Mortgage and Security Agreement and
Fixture Financing Statement dated
November 15, 1994
3.8 Assignment of Rents, Leases and Profits
dated November 15, 1994
3.9 Collateral Assignment of Contracts and
Development Rights dated November 15,
1994
3.10 UCC- 1 Financing Statements
3.11 Payment Guarantees dated November 15,
1994
3.12 Completion Guarantees dated November 15,
1994
3.13 Loan Disbursing Agreement dated November
15, 1994
3.14 Hazardous Substances Indemnity Agreement
dated November 15, 1994
3.15 Supervision Services Agreement dated
November 15, 1994
3.16 Permanent Loan Commitment Letter dated
October 27, 1994
29
EXHIBIT D
PERMANENT LOAN DOCUMENTS
Borrower Loan Documents
-------- --------------
1. ARV San Marcos 1.1 Contribution Agreement dated October 9,
1995
1.2 Tax Credit Reduction and Recapture
Guaranty Agreement dated October 9, 1995
1.3 Management Agent's Certificate dated
August 6, 1998
1.4 Low-Income Housing Credit Certificate
dated August 6, 1998
1.5 Final Payment Date Certificate dated
August 6, 1998
1.6 Permanent Loan Commitment Letter dated
October 9, 1995
1.7 Amended and Restated Promissory Note
dated August 6, 1998
1.8 Amended and Restated Deed of Trust with
Assignments of Rents, Security Agreement
and Fixture Filing dated August 6, 1998
1.9 Amended and Restated Assignment of Rents
and Leases dated August 6, 1998
1.10 Hazardous Substances Indemnity Agreement
dated August 6, 1998
1.11 Guaranty Agreements dated August 6, 1998
1.12 Collateral Assignment o f Contracts and
Development Rights dated August 6, 1998
1.13 Loan Certification dated August 6, 1998
1.14 December 18, 1997 Letter Agreement Re:
No Waiver of Remedies
1.15 August 6, 1998 Letter Agreement Re:
Waiver of Technical Defaults
30
Borrower Loan Documents
-------- --------------
2. Rosewood Villas 2.1 Contribution Agreement dated November 1,
1995
2.2 Tax Credit Reduction and Recapture
Guaranty Agreement dated November 1,
1995
2.3 Management Agent's Certificate dated
February 14, 2000
2.4 Low-Income Housing Credit Certificate
dated February 14, 2000
2.5 Final Payment Date Certificate dated
February 14, 2000
2.6 Permanent Loan Commitment Letter dated
November 1, 1995
2.7 Amended and Restated Promissory Note
dated February 29, 2000
2.8 Amended and Restated First Mortgage,
Security Agreement and Fixture Filing
dated February 29, 2000
2.9 Amended and Restated Assignment of Rents
dated February 29, 2000
2.10 Hazardous Substances Indemnity Agreement
dated February 29, 2000
2.11 Payment Guarantees dated February 29,
2000
2.12 Collateral Assignment of Contracts and
Development Rights dated February 29,
2000
2.13 UCC-1 Financing Statements
2.14 Loan Certification dated February 29,
2000
31
EXHIBIT E
DEVELOPMENT AGREEMENTS
Apartment Complex Development Agreement
----------------- ---------------------
1. River Oaks Villas Amended and Restated Development Management
San Marcos, TX Agreement dated October 9, 1995 between ARV San
Marcos, as owner, and Pacific Demographics
Corporation, as developer
2. Traditions Apartments Amended and Restated Development Management
Franklin, IN Agreement dated August 8, 1995 between Franklin
Commons L.P., as owner, and Pacific Demographics
Corporation, as developer
3. Lansing Villas Restated Development Management Agreement dated
Lansing, MI September 29, 1994 between Lansing Housing
Partners, as owner, and ARVTC, Inc., as
developer
4. Traditions Apartments Amended and Restated Development Management
Grand Rapids, MI Agreement dated August 28, 1994 between Grand
Rapids Housing Partners, as owner, and ARVTC,
Inc., as developer
5. Rosewood Villas Amended and Restated Development Management
Madison, WI Agreement dated November 1, 1995 between
Rosewood Villas, as owner, and Pacific
Demographics Corporation, as developer
32
EXHIBIT F
PROPERTY MANAGEMENT AGREEMENTS AND REGULATORY AGREEMENTS
Apartment Complex Management and Regulatory Agreements
1. River Oaks Villas Property Management Agreement dated October 9,
San Marcos, TX 1995 between ARV San Marcos, as owner, and ARV
Assisted Living, Inc., as manager
The Agreement between ARV Assisted Living, Inc.
and the Texas Housing Regulatory Authority
covering the River Oaks Villas
2. Traditions Apartments Property Management Agreement dated August 8,
Franklin, IN 1995 between Franklin Commons L.P., as owner,
and ARV Assisted Living, Inc., as manager
The Declaration of Extended Low-Income Housing
Commitment made to the Indiana Housing Finance
Authority by ARV Assisted Living, Inc.
3. Lansing Villas Property Management Agreement dated September
Lansing, MI 29, 1994 between Lansing Housing Partners, as
owner, and ARV Assisted Living, Inc., as manager
The Agreement made with the Michigan State
Housing Authority by ARV Assisted Living, Inc.
for Lansing Villas
4. Traditions Apartments Property Management Agreement dated November 15,
Grand Rapids, MI 1994 between Grand Rapids Housing Partners, as
owner, and ARV Assisted Living, Inc., as manager
The Agreement made with the Michigan State
Housing Authority by ARV Assisted Living, Inc.
for Traditions Apartments
5. Rosewood Villas Property Management Agreement dated November 1,
Madison, WI 1995 between Rosewood Villas, as owner, and ARV
Assisted Living,
33
EXHIBIT F
PROPERTY MANAGEMENT AGREEMENTS (CON'T)
Inc., as manager
The Agreement made with the Wisconsin Regulatory
Authority by ARV Assisted Living, Inc. for
Rosewood Villas
34
EXHIBIT G
ANY INTEREST OF SELLER IN THE PARTNERSHIPS
(EXCEPT THE GENERAL PARTNER INTERESTS)
1. Franklin Commons LP, an Indiana limited partnership ("Franklin") - None
2. Grand Rapids Housing Partners Limited Dividend Housing Association
Limited Partnership, a California limited partnership ("Grand Rapids") -
None
3. Lansing Housing Partners Limited Dividend Housing Association Limited
Partnership, a California limited partnership ("Lansing") - None
4. Rosewood Villas, a California limited partnership ("Rosewood") - None
5. ARV San Marcos, a California limited partnership ("San Marcos") - None
35
EXHIBIT H
INTEREST OF SELLER IN APARTMENT COMPLEXES
OR REAL PROPERTY ADJACENT TO THE
APARTMENT COMPLEXES
(EXCEPT FOR THE SELLER PORTFOLIO INTEREST)
1. River Oaks Villas - None