SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K / A
AMENDMENT NO. 1
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: December 19, 1997
(Date of Earliest Event Reported)
COMMISSION FILE NO. 0-13693
VININGS INVESTMENT PROPERTIES TRUST
-----------------------------------
A MASSACHUSETTS BUSINESS TRUST
I.R.S. EMPLOYER IDENTIFICATION NO. 13-6850434
3111 PACES MILL ROAD
ATLANTA, GEORGIA 30339
TELEPHONE: (770) 984-9500
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
The financial statements required by Item 7(a) relating to the acquisition
of Windrush Apartments are attached hereto as Exhibit 99.1 and incorporated
herein by this reference.
(b) Pro Forma Financial Information
The unaudited pro forma financial information required by Item 7(b) relating
to the acquisition of Windrush Apartments is attached hereto as Exhibit 99.2
and incorporated herein by this reference.
(c) Exhibits
EXHIBIT
NO. DESCRIPTION
- ----------- --------------------------------------------------------------------
99.1 Statements of Excess Revenues Over Specific Operating Expenses for
Windrush Apartments for the Period from January 1, 1997 to September
30, 1997 (unaudited) and the years ended December 31, 1996, 1995 and
1994.
99.2 Unaudited Pro Forma Consolidated Financial Statements.
10.1 Vinings Communities, L.P. Agreement of Limited Partnership.
10.2 Limited Warranty Deed dated December 19, 1997.
10.3 Assumption Agreement dated December 19, 1997 by Vinings
Communities, L.P. in favor of Reilly Mortgage Group, Inc.
10.4 Agreement to Contribute as amended October 30, 1997. *
* Incorporated by reference to the Registrant's current report on Form 8-K filed
with the Securities and Exchange Commission on December 29, 1997.
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VININGS INVESTMENT PROPERTIES TRUST
Date: March 3, 1998 By: /s/ Stephanie A. Reed
---------------------
Stephanie A. Reed
Vice President and Treasurer
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ----------- ----------------------------------------------------------------
99.1 Statements of Excess Revenues Over Specific Operating Expenses for
Windrush Apartments for the Period from January 1, 1997 to September
30, 1997 (unaudited) and the years ended December 31, 1996, 1995 and
1994.
99.2 Unaudited Pro Forma Consolidated Financial Statements.
10.1 Vinings Communities, L.P. Agreement of Limited Partnership.
10.2 Limited Warranty Deed dated December 19, 1997.
10.3 Assumption Agreement dated December 19, 1997 by Vinings
Communities, L.P. in favor of Reilly Mortgage Group, Inc.
10.4 Agreement to Contribute as amended October 30, 1997. *
* Incorporated by reference to the Registrant's current report on Form 8-K filed
with the Securities and Exchange Commission on December 29, 1997.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Trustees and
Shareholders of Vinings Investment Properties Trust:
We have audited the accompanying statements of excess revenues over
specific operating expenses of Windrush Apartments for the years ended December
31, 1996, 1995 and 1994. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statements of excess revenues over
specific operating expenses are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statements of excess revenues over specific operating expenses. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
As described in Note 2, these financial statements exclude certain expenses
that would not be comparable with those resulting from the operations of
Windrush Apartments after acquisition by the Trust. The accompanying statements
of excess revenues over specific operating expenses were prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission and are not intended to be a complete presentation of
Windrush Apartments' revenues and expenses.
In our opinion, the statements of excess revenues over specific operating
expenses present fairly, in all material respects, the excess of revenues over
specific operating expenses (exclusive of expenses described in Note 2) of
Windrush Apartments for the years ended December 31, 1996, 1995 and 1994 in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
February 26, 1998
<PAGE>
<TABLE>
WINDRUSH APARTMENTS
STATEMENTS OF EXCESS REVENUES OVER
SPECIFIC OPERATING EXPENSES
<CAPTION>
For the Period
From
January 1, 1997 to Year Ended Year Ended Year Ended
September 30, 1997 December 31, December 31, December 31,
(Unaudited) 1996 1995 1994
<S> <C> <C> <C> <C>
REVENUES:
Rental revenues (Note 1) $ 1,048,969 $ 1,384,738 $ 1,332,856 $ 1,283,633
Other property revenues 38,818 45,640 48,372 42,736
---------------------------------------------------------------
Total property revenues 1,087,787 1,430,378 1,381,228 1,326,369
---------------------------------------------------------------
Specific Operating Expenses (Note2):
Property operating and maintenance 460,231 659,507 662,097 580,515
Interest expense 366,729 493,591 499,059 504,133
Mortgage insurance 24,048 32,713 33,092 33,443
---------------------------------------------------------------
Total specific operating expenses 851,008 1,185,811 1,194,248 1,118,091
---------------------------------------------------------------
Excess Revenues Over Specific Operating Expenses $ 236,779 $ 244,567 $ 186,980 $ 208,278
===============================================================
<FN>
See accompanying notes to financial statements
</FN>
</TABLE>
<PAGE>
WINDRUSH APARTMENTS
NOTES TO STATEMENTS OF EXCESS REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE PERIOD FROM JANUARY 1, 1997 TO
SEPTEMBER 30, 1997 (UNAUDITED) AND
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF REAL ESTATE PROPERTY ACQUIRED
--------------------------------------------
On December 19, 1997, Vinings Investment Properties Trust (the "Trust"),
through Vinings Communities, L.P., a Delaware limited partnership and
indirect subsidiary, acquired Windrush Apartments, a 202-unit apartment
community located in Atlanta, Georgia. Windrush was acquired from Windrush
Partners, Ltd. ("Windrush") at a purchase price of $7,555,000, consisting
of the issuance of 224,330 limited partnership units ("Units") in the
Trust's operating partnership and the assumption of an existing mortgage in
the amount of $6,464,897 and notes payable to Hallmark Group Real Estate
Services Corp. ("Hallmark"), the general partner of Windrush, and its
affiliates. Windrush, through Hallmark is an affiliate of the officers and
certain trustees of the Trust. The Units are convertible into shares of the
Trust on a one-for-one basis or, at the option of the Trust, redeemable for
cash. The occupancy rate of Windrush was approximately 95% as of December
19, 1997.
USE OF ESTIMATES
----------------
The preparation of the statements of excess revenues over specific
operating expenses in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
RENTAL REVENUES
---------------
Rents from leases are accounted for ratably over the term of each lease,
which is generally for a period of 12 months or less.
2. BASIS OF ACCOUNTING
The accompanying statements of excess revenues over specific operating
expenses have been prepared in accordance with the applicable rules and
regulations of the Securities and Exchange Commission for real estate
properties acquired. Accordingly, the statements exclude certain historical
expenses not comparable to the operations of Windrush Apartments after
acquisition by the Trust, such as depreciation and amortization.
3. RELATED PARTY TRANSACTIONS
In connection with the acquisition of Windrush Apartments, MFI Realty,
Inc., an affiliate of the officers and certain trustees of the Trust,
received an advisor's fee from Windrush totaling $75,550. Prior to the
acquisition, Windrush Apartments was managed by Vinings Properties, Inc.
("Vinings"), also an affiliate of the officers and certain trustees of the
Trust. Included in the specific operating expenses are management fees
totaling $63,443 for the period from January 1, 1997 to September 30, 1997
(unaudited) and $83,847, $80,582, and $77,962 for the years ended December
31, 1996, 1995 and 1994 respectively. In addition, Windrush reimbursed
Vinings for various expenditures including property payroll expenses,
computer and accounting expenses and miscellaneous office expenses.
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
The unaudited consolidated statements of operations are presented as if the
Trust acquired Windrush Apartments as of the beginning of each period presented.
The unaudited pro forma consolidated statements of operations for Windrush for
the nine months ended September 30, 1997 and for the year ended December 31,
1996 include the historical revenues and specific operating expenses of the
property for each respective period of time. In management's opinion, all
adjustments necessary to present fairly the effects of the acquisition of
Windrush Apartments have been made.
The unaudited consolidated statements of operations of the Trust should be read
in conjunction with the unaudited pro forma consolidated balance sheet of the
Trust included herein, the consolidated financial statements and accompanying
notes thereto of the Trust included in its Annual Report on Form 10-K for the
year ended December 31, 1996, and the unaudited consolidated financial
statements and accompanying notes thereto of the Trust included in its September
30, 1997 Quarterly Report on Form 10-Q.
The unaudited pro forma statements of operations are not necessarily indicative
of what the actual results of operations of the Trust would have been assuming
the Trust had acquired Windrush as of the beginning of each period presented,
nor do they purport to represent the results of operations for future periods.
<PAGE>
<TABLE>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<CAPTION>
Pro Forma
Historical Acquisition
(A) Adjustments Pro Forma
--------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Rental revenues $1,765,491 $1,048,969 (B) $2,814,460
Other property revenues 64,751 38,818 (B) 103,569
Interest income 1,903 1,903
Other income - -
--------------------------------------------------
1,832,145 1,087,787 2,919,932
--------------------------------------------------
EXPENSES
Property operating and maintenance 759,954 460,231 (B) 1,220,185
Depreciation and amortization 323,839 132,999 (C) 456,838
Amortization of deferred financing costs 27,231 27,231
Interest expense 600,196 366,729 (D) 966,925
General and administrative 250,540 24,048 (D) 274,588
Investment advisor's fees - -
--------------------------------------------------
1,961,760 984,007 2,945,767
--------------------------------------------------
Income (loss) before loss on real estate investments (129,615) 103,780 (25,835)
--------------------------------------------------
LOSS ON REAL ESTATE INVESTMENTS
Loss on real estate investments - - -
--------------------------------------------------
Income (loss) before minority interest (129,615) 103,780 (25,835)
Minority interest (4,650) (E) (4,650) (E)
--------------------------------------------------
Net income (loss) $ (129,615) $ 108,430 $ (21,185)
==================================================
EARNINGS PER SHARE $ (0.12) $ (0.02)
=============== ===============
WEIGHTED AVERAGE SHARES OUTSTANDING 1,080,516 1,080,516
=============== ===============
<FN>
See accompanying notes to financial statements
</FN>
</TABLE>
<PAGE>
<TABLE>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Historical Acquisition
(A) Adjustments Pro Forma
--------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Rental revenues $1,482,419 $ 1,384,738 (B) $ 2,867,157
Other property revenues 70,064 45,640 (B) 115,704
Interest income 92,657 92,657
Other income 151,777 151,777
--------------------------------------------------
1,796,917 1,430,378 3,227,295
--------------------------------------------------
EXPENSES
Property operating and maintenance 586,430 659,507 (B) 1,245,937
Depreciation and amortization 244,110 177,332 (C) 421,442
Amortization of deferred financing costs 19,502 19,502
Interest expense 408,719 493,591 (D) 902,310
General and administrative 987,973 32,713 (D) 1,020,686
Investment advisor's fees 333,461 333,461
--------------------------------------------------
2,580,195 1,363,143 3,943,338
--------------------------------------------------
Income (loss) before loss on real estate investments (783,278) 67,235 (716,043)
--------------------------------------------------
LOSS ON REAL ESTATE INVESTMENTS
Loss on real estate investments (26,800) - (26,800)
--------------------------------------------------
Income (loss) before minority interest (810,078) 67,235 (742,843)
Minority interest (133,712)(E) (133,712)
--------------------------------------------------
Net income (loss) $ (810,078) $ 200,947 $ (609,131)
==================================================
EARNINGS PER SHARE $ (0.75) $ (0.56)
=============== ===============
WEIGHTED AVERAGE SHARES OUTSTANDING 1,080,528 1,080,528
=============== ===============
<FN>
See accompanying notes to financial statements
</FN>
</TABLE>
<PAGE>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
NOTES AND ASSUMPTIONS TO UNAUDITED
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(A) Represents the Trust's unaudited consolidated statement of operations
contained in its Quarterly Report on Form 10-Q for the nine months ended
September 30, 1997 and the Trust's consolidated statement of operations
contained in its Annual Report on Form 10-K for the year ended December 31,
1996 as applicable.
(B) Represents the pro forma adjustments necessary to reflect the appropriate
period of historical rental revenues, other property revenues, and property
operating and maintenance expenses for Windrush Apartments for the nine
months ended September 30, 1997 and for the year ended December 31, 1996 as
applicable.
(C) Represents the pro forma adjustments necessary to reflect the appropriate
period of depreciation expense for the nine months ended September 30, 1997
and for the year ended December 31, 1996, based on the costs associated
with the acquisition of Windrush Apartments as applicable.
(D) Represents the pro forma adjustments necessary to reflect the appropriate
period of interest expense and FHA insurance premium associated with the
mortgage which was assumed at closing for the nine months ended September
30 1997, and for the year ended December 31, 1996 as applicable.
(E) Represents the minority Unitholders 18% interest in income before minority
interest.
<PAGE>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
The unaudited pro forma consolidated balance sheet is presented as if the Trust
acquired Windrush Apartments as of September 30, 1997. The unaudited pro forma
consolidated balance sheet is not necessarily indicative of what the actual
financial position of the Trust would have been at September 30, 1997, nor does
it purport to represent the future financial position of the Trust.
The unaudited consolidated balance sheet should be read in conjunction with the
unaudited pro forma consolidated statements of operations of the Trust included
herein, the consolidated financial statements and accompanying notes thereto of
the Trust included in its Annual Report on Form 10-K for the year ended December
31, 1996, and the unaudited consolidated financial statements and accompanying
notes thereto of the Trust included in its September 30, 1997 Quarterly Report
on Form 10-Q.
<PAGE>
<TABLE>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(UNAUDITED)
<CAPTION>
Pro Forma
Historical Acquisition
(A) Adjustments Pro Forma
------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
------------------------------------------------------
Real estate assets:
Land $ 1,470,500 $ 1,414,000 (B) $ 2,884,500
Buildings and improvements 9,302,060 5,939,000 (B) 15,241,060
Furniture, fixtures & equipment 808,036 202,000 (B) 1,010,036
Less: accumulated depreciation (930,713) (930,713)
------------------------------------------------------
Net real estate assets 10,649,883 7,555,000 18,204,883
Cash and cash equivalents 194,971 45,809 (B) 240,780
Cash escrows 256,053 197,818 (B) 453,871
Receivables and other assets 106,542 106,542
Deferred financing costs, less accumulated amortization
of $46,733 at September 30, 1997 177,694 177,694
Deferred leasing costs, less accumulated amortization of
$35,514 at September 30, 1997 32,649 32,649
------------------------------------------------------
Total Assets $ 11,417,792 $ 7,798,627 $19,216,419
======================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage note payable $ 7,333,112 $ 6,464,897 (B) $13,798,009
Line of credit 1,568,104 1,568,104
Accounts payable and accrued liabilities 413,724 121,000 (B) 534,724
------------------------------------------------------
Total Liabilities 9,314,940 6,585,897 15,900,837
------------------------------------------------------
1,212,730 (C)
Minority interests in Operating Partnership (615,925) (D) 596,805
------------------------------------------------------
Shareholders' Equity:
Shares of beneficial interest, without par value,
unlimited shares authorized, 1,080,512 shares
issued and outstanding at September 30, 1997 18,731,682 615,925 (D) 19,347,607
Cumulative earnings 37,749,699 37,749,699
Cumulative distributions (54,378,529) (54,378,529)
------------------------------------------------------
Total Shareholders' Equity 2,102,852 615,925 2,718,777
------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 11,417,792 $ 7,798,627 $19,216,419
======================================================
<FN>
See accompanying notes to financial statements
</FN>
</TABLE>
<PAGE>
VININGS INVESTMENT PROPERTIES TRUST
AND SUBSIDIARIES
NOTES AND ASSUMPTIONS TO UNAUDITED PRO FORMA BALANCE SHEET
(A) Represents the Trust's unaudited consolidated balance sheet contained in
its Quarterly Report on Form 10-Q for the nine months ended September 30,
1997.
(B) Represents the aggregate purchase price of Windrush, including the
assumption of the mortgage indebtedness and related liabilities and the
assumption of the tax, insurance and replacement reserve escrows and
security deposit cash account.
(C) Represents the issuance of 242,546 operating partnership units ("Units") in
Vinings Investment Properties, L.P. (the "Operating Partnership"), of which
224,330 Units were issued in connection with the acquisition. In addition,
18,216 Units were previously issued to the general partner of Windrush.
(D) Represents adjustments to reflect minority Unitholders 18% interest in the
Operating Partnership.
VININGS COMMUNITIES, L.P.
LIMITED PARTNERSHIP AGREEMENT
This Agreement is made as of August 12, 1997 by and among Vinings
Investment Properties Trust, a Massachusetts business trust, as general partner
(the "General Partner") and Vinings Investment Properties, L.P., a Delaware
limited partnership, as limited partner (the "Limited Partner"). The General
Partner and the Limited Partner are hereinafter sometimes referred to
individually as a "Partner" and collectively as the "Partners."
WITNESSETH THAT:
WHEREAS, the Partners desire to form a partnership to conduct certain
business activities;
NOW, THEREFORE, in consideration of the mutual promises made herein and
other good and valuable consideration, the parties hereto agree and declare as
follows:
ARTICLE 1.
FORMATION OF PARTNERSHIP; GENERAL INFORMATION
---------------------------------------------
1.01. There is hereby created a limited partnership pursuant to the Revised
Uniform Limited Partnership Act of Delaware, as amended from time to time (the
"Partnership Act").
1.02. The partnership shall be conducted under the name of Vinings
Communities, L.P. (the "Partnership").
1.03. The purposes of the Partnership shall be (i) to hold interests in
real property and to engage in all activities reasonably related thereto; (ii)
to conduct any business that may be lawfully conducted by a limited partnership
organized pursuant to the Delaware Revised Uniform Limited Partnership Act (the
"Act"); and (iii) in connection with or incidental to the accomplishment of said
purposes, to enter into, perform and carry out contracts and activities of every
nature and description.
1.04. The term of the Partnership shall commence on the date of this
Agreement, and the Partnership shall continue until terminated as hereinafter
provided.
1.05. The fiscal year of the Partnership shall be the calendar year, or
such other year as is required by the Internal Revenue Code of 1986, as amended
(the "Code"), and the Treasury Regulations promulgated thereunder.
ARTICLE 2.
PARTNERSHIP CAPITAL
-------------------
2.01. Each Partner shall be required to make an initial capital
contribution to the Partnership upon its formation in the following amount,
which amount shall constitute the initial capital account of such Partner:
(a) The General Partner shall contribute $1 in cash.
(b) The Limited Partner shall contribute $99 in cash.
2.02. A separate capital account shall be maintained for each Partner in
accordance with the requirements of Treasury Regulations section
1.704-1(b)(2)(iv).
ARTICLE 3.
ALLOCATION OF INCOME, GAIN, LOSS, DEDUCTION AND CREDIT;
NONLIQUIDATING DISTRIBUTIONS
----------------------------
3.01. For federal income tax purposes, all items of income, gain, loss,
deduction and credit of the Partnership shall be allocated in accordance with
the requirements of Code section 704(b) and the Treasury Regulations promulgated
thereunder. Except as otherwise required thereby, all items of income, gain,
loss, deduction and credit shall be allocated as follows: 1% to the General
Partner and 99% to the Limited Partner. Appropriate adjustments shall be made to
each Partner's capital account with respect to such items.
3.02. All nonliquidating distributions shall be made in accordance with the
following percentages: 1% to the General Partner and 99% to the Limited Partner.
ARTICLE 4.
RIGHTS AND POWERS OF GENERAL PARTNER
------------------------------------
4.01. The management and operation of the Partnership and its business and
affairs shall be, and hereby is, vested solely in the General Partner. Except as
otherwise expressly provided herein, the General Partner shall have the power
and authority, in the name and on behalf of the Partnership, to do all things
which, in its sole discretion, it deems necessary, advisable, or appropriate to
carry out and implement all the purposes and powers of the Partnership.
4.02. Notwithstanding any other provision of this Agreement, any contract,
instrument, or act of the General Partner on behalf of the Partnership shall be
conclusive evidence in favor of any third party dealing with the Partnership
that the General Partner has the authority, power and right to execute and
deliver such contract or instrument and to take such act on behalf of the
Partnership. This Section 4.02 shall not be deemed to limit the liabilities and
obligations of the General Partner as set forth in this Agreement.
4.03. Any Partner may engage in or possess any interest in other business
ventures of any kind, nature or description, independently or with others,
whether or not such ventures are competitive with the Partnership. Neither the
Partnership nor any Partners shall have any rights or obligations by virtue of
this Agreement or the partnership relationship created hereby in or to such
independent ventures or the income or profits or losses derived therefrom, and
the pursuit of such ventures, even if competitive with the business of the
Partnership, shall not be deemed wrongful or improper. None of the Partners or
their affiliates shall be obligated to present any particular investment
opportunity to the Partnership even if such opportunity is of a character which,
if presented to the Partnership, could be taken by the Partnership.
ARTICLE 5.
POWERS, DUTIES AND
LIABILITIES OF THE LIMITED PARTNER
----------------------------------
5.01. The Limited Partner shall not have any right to participate in the
management of the business or affairs of the Partnership nor shall the Limited
Partner have any power or authority to act for or bind the Partnership.
5.02. Notwithstanding anything to the contrary contained in this Agreement,
the liability of the Limited Partner for the losses, obligations or debts of the
Partnership shall in no event exceed the amount of its contribution to the
capital of the Partnership.
ARTICLE 6.
TRANSFER OF LIMITED PARTNERSHIP INTEREST;
ADMISSION OF SUBSTITUTED LIMITED PARTNERS
-----------------------------------------
6.01. Subject to the written consent of each of the Partners to the
assignment of the whole or any portion of the Limited Partner's interest in the
Partnership, the granting or denial of which consent shall be within the sole
and absolute discretion of each Partner, an assignee of such interest shall be
entitled to receive distributions of cash or other property from the Partnership
applicable to the interest acquired by reason of such assignment; provided,
however, that a duly executed and acknowledged written instrument of assignment
in a form satisfactory to the General Partner, the terms of which are not in
contravention of any of the provisions of this Agreement, is filed with the
Partnership.
6.02. No assignee of the whole or any portion of a Limited Partner's
interest in the Partnership shall have the right to become a substituted Limited
Partner in place of its assignor unless all of the following conditions are
satisfied:
(a) The duly executed and acknowledged written instrument of
assignment which has been filed with the Partnership sets forth the intention of
the assignor that the assignee become a substituted Limited Partner with respect
to the assigned interest;
(b) The assignor and assignee execute and acknowledge such other
instruments as the General Partner may deem necessary or desirable to effect
such admission, including the written acceptance and adoption by the assignee of
the provisions of this Agreement; and
(c) The written consent of each Partner to such substitution shall
be obtained, the granting or denial of which shall be within the sole and
absolute discretion of each Partner.
6.03. Nothing herein shall preclude the General Partner or the Limited
Partner from acquiring the interest of a transferring Limited Partner pursuant
to the provisions of Sections 6.01 and 6.02 hereof and, as to the acquired
interest, becoming a substituted Limited Partner.
ARTICLE 7.
TRANSFER OF GENERAL PARTNER INTEREST;
ADMISSION OF SUCCESSOR GENERAL PARTNER
--------------------------------------
7.01. The General Partner may not transfer any of its General
Partner's interest in the Partnership, unless (i) each Partner consents to such
transfer in writing, the granting or denial of which consent shall be within the
sole and absolute discretion of each Partner, or (ii) such transfer is to an
entity which is directly or indirectly controlled by the General Partner or any
of its subsidiaries. An assignee of the whole or any portion of the General
Partner's interest in the Partnership shall be entitled to receive distributions
of cash or other property from the Partnership applicable to the interest
acquired by reason of such assignment; provided, however, that a duly executed
and acknowledged written instrument of assignment, the terms of which are not in
contravention of any of the provisions of this Agreement, is filed with the
Partnership.
7.02. A successor to all of the General Partner's interest in the
Partnership pursuant to Section 7.01 hereof who is proposed to be admitted as a
successor General Partner shall be admitted to the Partnership as the General
Partner, effective upon such transfer. Any such transferee shall carry on the
business of the Partnership without dissolution. In each case, the admission
shall be subject to the successor General Partner executing and delivering to
the Partnership an acceptance of all of the terms and conditions of this
Agreement and such other documents or instruments as may be required to effect
the admission.
ARTICLE 8.
ADMISSION OF ADDITIONAL LIMITED PARTNERS
----------------------------------------
Except as otherwise provided in Articles 6 and 7, additional Limited
Partners shall be admitted to the Partnership only with the consent of the
General Partner. Any such new Partners shall fulfill the conditions of Section
6.02(b) hereof and shall receive a capital account and a percentage of
partnership interest as shall be provided in an amendment to this Agreement.
ARTICLE 9.
WITHDRAWALS BY PARTNERS
-----------------------
9.01. No Partner shall have the right to withdraw assets from the
Partnership.
9.02. No Partner shall have the right to demand or receive property other
than cash in connection with a discretionary distribution or the dissolution of
the Partnership, and no Partner shall have priority over any other Partner,
except as its interest may appear in the capital accounts of the Partnership or
in the percentages of partnership interest.
ARTICLE 10.
TERMINATION AND DISSOLUTION
---------------------------
10.01. The Partnership shall terminate and dissolve upon the earlier of (i)
thirty (30) days after the written determination of the General Partner, or (ii)
thirty (30) days after the resignation and/or bankruptcy of the General Partner,
unless in either case within such 30 day period all Limited Partners shall have
agreed to the continuation of the Partnership and shall have appointed a new
General Partner. Notwithstanding anything to the contrary in this agreement, in
no event shall the Partnership be dissolved as long as the Partnership is
subject to a regulatory agreement with HUD relating to any project which the
Partnership may own. The General Partner shall cease to be a General Partner if
it shall be adjudicated as bankrupt. If the General Partner ceases to be a
General Partner for any reason, it shall thereafter be a Limited Partner of the
Partnership.
10.02. Upon the termination and dissolution of the Partnership, its assets
shall be liquidated over such reasonable period as shall be consistent with the
realization of the fair market value of the Partnership's assets and the
proceeds applied in the following order of priority:
(a) to the payment in full of all creditors of the Partnership in
the order of priority by law (exclusive of creditors who are also Partners) and
to the expense of dissolution and liquidation;
<PAGE>
(b) to the funding of any reserves which the General Partner deems
necessary for any contingent liabilities of the Partnership;
(c) to the payment in full with interest of all debts owed to
any of the Partners; and
(d) 1% to the General Partner and 99% to the Limited Partner.
10.03. The liquidation and dissolution of the Partnership shall be
conducted by the General Partner, or if there be no General Partner, by such
person as shall be designated by those Limited Partners having a majority in
interest of the partnership interests of all Limited Partners.
10.04. If, at the termination and dissolution of the Partnership,
either the Limited Partner or the General Partner has a deficit in their
respective capital accounts, then such Partner shall be required to restore such
deficit to zero.
ARTICLE 11.
AMENDMENTS
----------
The terms and provisions of this Agreement may be modified or amended
at any time and from time to time by the General Partner, or if there be no
General Partner, by those Limited Partners having a majority in interest of the
partnership interests of all Limited Partners.
ARTICLE 12.
BOOKS AND RECORDS; INSPECTION; REPORTING
----------------------------------------
12.01. At all times during the existence of the Partnership the General
Partner shall keep or cause to be kept by an agent full and true books of
account, in which shall be entered fully and accurately each transaction of the
Partnership. Such books of account, together with a certified copy of the
Certificate of Limited Partnership and any amendments thereto, shall at all
times be maintained at the principal office of the Partnership and shall be open
to the reasonable inspection and examination of the Partners or their duly
authorized representatives. Any Partner shall have the right to inspect and copy
said books and records provided that it owns an interest in the Partnership at
the time of inspection.
12.02. The accountant selected by the General Partner shall make an
annual computation of the taxable income or loss of the Partnership for federal
and state income tax purposes and shall within sixty (60) days after the end of
each taxable year prepare and mail to each Partner a report setting forth in
sufficient detail the distributive share and other pertinent information with
respect to the business of the Partnership during such taxable year as shall
enable such Partner to prepare its federal and state income tax returns in
accordance with all applicable rules and regulations. The accountant shall also
furnish balance sheets, income statements and the capital account of each
Partner at such time.
ARTICLE 13.
MISCELLANEOUS
-------------
13.01. This Agreement (a) shall be binding on the executors,
administrators, estates, heirs or legal successors of the Partners and (b) shall
be governed by, and construed in accordance with, the laws of the State of
Delaware, without giving effect to the conflicts of laws provisions thereof.
13.02. Any notices required to be given hereunder shall be effective if
mailed, postage prepaid, to the Partners at their last known address appearing
on the records of the Partnership.
13.03. With respect to the terms of this Agreement, the existence and
terms of any amendments hereto, and the identity, decisions and actions of the
Partners, all persons may rely conclusively on the facts stated in a certificate
signed by the General Partner.
13.04. The General Partner shall serve as the initial "Tax Matters
Partner" of the Partnership and shall perform such duties required by the Code
and Treasury Regulations.
13.05. Section headings in this Agreement are for the convenience of
the reader only and shall not be deemed to affect, in any manner, the
construction of the Agreement or to limit, alter or amend the terms or
provisions hereof.
<PAGE>
ARTICLE 14.
HUD REQUIREMENTS
----------------
14.01. So long as the Secretary (the "Secretary") of the Department of
Housing and Urban Development ("HUD") or the Secretary's successors or assigns
is the insurer or holder of any note made by the Partnership or secured by any
project owned by the Partnership, no amendment to this Agreement that results in
any of the following will have any force or effect without the prior written
consent of the Secretary:
(a) Any amendment that modifies the term of the Partnership;
(b) Any amendment that activates the requirement that a
HUD previous participation certification be obtained;
(c) Any amendment that in any way affects any note insured or held
by HUD, security deed or security agreement on any project, or any regulatory
agreement between HUD and the Partnership;
(d) Any amendment that would authorize any partner other that the
General Partner or successor General Partner to bind the Partnership for all
matters concerning any project which require HUD's consent or approval;
(e) A change in the General Partner or preapproved successor
General Partner;
(f) Any change in a guarantor of any obligation to the Secretary.
14.02. The Partnership is authorized to execute any notes, security
deeds, security agreements in order to secure loans insured by the Secretary,
regulatory agreements, documents for the assumption of any existing notes,
security agreements or regulatory agreements and any other documents required by
the Secretary in connection with any HUD-insured loan (collectively, "HUD Loan
Documents").
14.03. Any successor General Partner must, as a condition to being
admitted to the Partnership, agree to be bound by any HUD Loan Documents to the
extent and on the same terms as the previous General Partner.
14.04. Any successor Partner must, as a condition to being admitted to
the Partnership, agree to be bound by paragraph 20 of the regulatory agreement
to the extent and on the same terms as the previous Partner.
14.05. Notwithstanding any other provisions of this Agreement, upon any
dissolution, no title or right of possession and control of any project and no
right to collect any rents from any project securing any HUD-insured loan, shall
pass to any person who is not bound by the regulatory agreement in a manner
satisfactory to the Secretary.
14.06. Notwithstanding any other provisions of this Agreement, in the
event that any provision of this Agreement conflicts with any HUD Loan
Documents, the provision of the HUD Loan Documents shall control.
14.07. So long as the Secretary or the Secretary's successors or
assigns is the insurer or holder of any note on any project owned by the
Partnership, the Partnership may not voluntarily be dissolved without the prior
written approval of the Secretary.
14.08. Any Partner, and any assignee of any Partner, agree to be liable
in their individual capacities to HUD with respect to the following matters:
(a) For funds or property of any project securing a HUD-insured
loan coming into their hands, which by the provisions of the regulatory
agreement, they are not entitled to retain; and
(b) For their own acts and deeds, or acts and deeds of others
which they have authorized, in violation of the provisions of any regulatory
agreement.
<PAGE>
IN WITNESS WHEREOF the parties have hereunto set their hands and seals
as of the date first set forth above.
GENERAL PARTNER:
VININGS INVESTMENT PROPERTIES TRUST
By: /s/ Stephanie A. Reed
-------------------------
Vice President
LIMITED PARTNER:
VININGS INVESTMENT PROPERTIES, L.P.
By: Vinings Investment Properties Trust
General Partner
By: /s/ Stephanie A. Reed
-------------------------
Vice President
LIMITED WARRANTY DEED
THIS INDENTURE, made and entered into as of the 19th day of December,
1997, by and between WINDRUSH PARTNERS, LTD., a Georgia limited partnership
(hereinafter referred to as the "Grantor") and VININGS COMMUNITIES, L.P., a
Delaware limited partnership (hereinafter referred to as "Grantee") (the words
"Grantor" and "Grantee" to include their respective heirs, legal
representatives, successors and assigns where the context requires or permits);
WITNESSETH, THAT:
GRANTOR, for and in consideration of the sum of TEN AND NO/100 DOLLARS
($10.00) and other good and valuable consideration, in hand paid at and before
the sealing and delivery of these presents, the receipt whereof is hereby
acknowledged, has granted, bargained, sold, aliened, conveyed and confirmed, and
by these presents does grant, bargain, sell, alien, convey and confirm unto said
Grantee, all that tract or parcel of land lying and being located in DeKalb
County, Georgia, and being more particularly described on Exhibit "A", attached
hereto and incorporated herein by this reference (hereinafter referred to as the
"Property").
THIS CONVEYANCE and the warranties contained herein are expressly made
subject to those liens, encumbrances, restrictions and other matters set forth
on Exhibit "B" attached hereto and incorporated herein by this reference.
TO HAVE AND TO HOLD the said described Property, with all and singular
the rights, members and appurtenances thereof, to the same being, belonging, or
in anywise appertaining, only to the proper use, benefit and behoof of the said
Grantee forever in FEE SIMPLE.
AND THE SAID GRANTOR will warrant and forever defend the right and
title to the above described Property unto the said Grantee against the claims
of all persons and entities owning, holding or claiming by, through or under
Grantor, but not otherwise.
IN WITNESS WHEREOF, the duly authorized officers of Grantor have signed
and sealed this Deed on the day and year first above written.
Signed, sealed and delivered WINDRUSH PARTNERS, LTD., a
in the presence of: Georgia Limited Partnership
Darla Jaben Mesnick By: Hallmark Group Real Estate
Unofficial Witness Services Corp., a Georgia
corporation, General Partner
/s/ Cynthia D. Ford By: /s/ Peter D. Anzo
Notary Public Title: President
My Commission Expires: [CORPORATE SEAL]
5/2/98
[NOTARIAL SEAL]
PLEASE CROSS-REFERENCE TO:
Security Deed recorded in
Deed Book 4611, Page 581,
Dekalb County, Georgia
records and Regulatory
Agreement recorded in Deed
Book 4611, Page 587
aforesaid records.
ASSUMPTION AGREEMENT
THIS AGREEMENT, entered into this 19th day of December, 1997, by VININGS
COMMUNITIES, L.P., a Delaware limited partnership, (the "Owner") in favor of
REILLY MORTGAGE GROUP, INC., the holder of that certain Security Deed from
Windrush Partners, Ltd. in favor of Trust Company Mortgage, dated May 6, 1982,
recorded in Deed Book 4611, Page 581, Dekalb County, Georgia records, as
modified and assigned (the "Mortgage", and the property conveyed thereby, the
"Property").
WITNESSETH, THAT:
In consideration of the consent of the Secretary of Housing and Urban
Development to the transfer of the Property to the Owner, and in order to comply
with the requirements of the Secretary of Housing and Urban Development, the
National Housing Act, and the Regulations adopted pursuant thereto, the Owner
agrees to assume, except as limited below, and be bound by said Mortgage and
note secured by the Mortgage (the "Note"), and that certain Regulatory Agreement
dated May 6, 1982, recorded in Deed Book 4611, Page 587, Dekalb County, Georgia
records, as modified (the "Regulatory Agreement").
The Owner does not assume personal liability for payments due under
said Note and Mortgage, or for payments to the reserve for replacements under
the Regulatory Agreement, or for matters not under its control, provided that
the Owner shall remain liable under said Regulatory Agreement only with respect
to the matters hereinafter stated, namely:
(a) for funds or property of the project coming into its hands which, by the
provisions thereof, it is not entitled to retain; and
(b) for its own acts and deeds or acts and deeds of others which it has
authorized in violation of the provisions thereof.
The Owner is to be bound by said Mortgage, Note and Regulatory
Agreement, subject to the foregoing limitation of personal liability, from the
date of this agreement to the same extent as if it had been an original party to
said instrument.
The Owner agrees that there shall be full compliance with the
provisions of (1) any laws prohibiting discrimination in housing of the basis of
race, color, creed or national origin; and (2) with the Regulations of the
Federal Housing Administration providing for no discrimination and equal
opportunity in housing. It is understood and agreed that failure or refusal to
comply with any such provisions shall be a proper basis for the Secretary to
take any corrective action he may deem necessary, including, but not limited to,
the rejection of future applications for FHA mortgage insurance and the refusal
to enter into future contracts of any kind with which the Owner is identified.
IN WITNESS WHEREOF, the duly authorized officers of Owner have signed
and sealed this Deed on the day and year first above written.
Signed, sealed and delivered VININGS COMMUNITIES, L.P.,
in the presence of: a Delaware limited partnership
By: Vinings Investment Properties Trust,
/s/ Cynthia Samuels a Massachusettes Business Trust,
- ----------------------- as General Partner
Unofficial Witness
By: /s/ Stephanie A. Reed
/s/ Cynthia S. Ford ------------------------
- ---------------------- Title: Vice President
Notary Public
My Commission Expires:
5/2/98
- --------
[NOTARIAL SEAL]
