UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): October 30, 1997
ASSET INVESTORS CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 1-9360 84-1038736
(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) Number) Identification No.)
3410 South Galena Street, Suite 210 80231
Denver, Colorado (Zip Code)
(Address of principal executive offices)
(303) 614-9400
(Registrant's telephone number, including area code)
3600 South Yosemite Street, Suite 350
Denver, Colorado 80237
(Former name or former address,
if changed since last report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 30, 1997, Asset Investors Corporation (the "Company")
acquired two manufactured housing communities and 50% joint venture interests in
another three manufactured housing communities. The remaining 50% joint venture
interests are owned by Community Acquisition and Development Corporation. The
interests in the five communities were acquired from the Wilder Corporation of
Delaware for total consideration of $20,935,000 including $4,524,000 of cash,
the assumption of $5,911,000 of existing debt, and the issuance of 3,000,000
operating partnership units of Asset Investors Operating Partnership, L.P. ("OP
Units"). The consideration was determined through arms length negotiations with
the Wilder Corporation of Delaware.
The five manufactured housing communities are located in the Tampa and
Orlando, Florida metropolitan areas and cater to senior residents. The
communities consist of 858 developed homesites, 400 homesites in development,
and 215 homesites available for future development. The Company also entered
into an earn-out agreement on 142 of the 400 homesites in development whereby
the Company will acquire such homesites as they are developed and leased at a
cost of $16,550 each. The five manufactured housing communities will be managed
by AIC Community Management Partnership, a partnership between AIC Manufactured
Housing Corp. and Community Management Investors Corporation. Community
Acquisition and Development Corporation and Community Management Investors
Corporation are affiliates of Brandywine Communities.
The Company generally intends to continue to utilize the assets
acquired in the transaction as rental properties which is the same manner as
they were employed prior to the acquisition. Due to the Company's intent to
acquire additional manufactured housing communities, the Company's future
dividends and the taxable portion thereof cannot be estimated at this time.
The statements contained in this Form 8-K Current Report that are not
historical facts are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. These forward-looking statements are based on current expectations,
estimates and projections about the industry and markets in which the Company
operates, management's beliefs and assumptions made by management. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions, which are
difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such forward-looking
statements. Operating results will depend primarily on income from manufactured
housing communities and other real estate assets held by the Company through its
ownership of Commercial Assets Inc. ("Commercial Assets"), which, in turn, are
substantially influenced by the risks inherent on owning real estate or debt
secured by real estate including, among other things: (i) the demand for and
supply of manufactured housing properties in the Company's primary target
markets and submarkets, (ii) operating expense levels, (iii) the effectiveness
of property-level operations, (iv) interest rate levels, and (v) the pace and
price at which the Company and Commercial Assets can acquire and develop
additional manufactured housing properties or other real estate. Capital and
credit market conditions, which affect the Company's cost of capital, also
influence operating results.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(A) Financial Statements
Combined Statements of Excess of Revenues Over Specific
Operating Expenses of The Wilder Manufactured Home
Communities for the Year Ended December 31, 1996 (audited)
and the Period from January 1, 1997 to September 30, 1997
(unaudited)
(B) Pro Forma Financial Information
ProForma Condensed Consolidated Balance Sheet of Asset
Investors Corporation and Subsidiaries as of September 30,
1997
ProForma Condensed Consolidated Statement of Income of Asset
Investors Corporation and Subsidiaries for the Nine Months
Ended September 30, 1997
ProForma Condensed Consolidated Statement of Income of Asset
Investors Corporation and Subsidiaries for the Year Ended
December 31, 1996
(C) Exhibits
Exhibit No. Description
2.3 Form of Joint Venture Agreement dated as
of September 30, 1997, between Asset
Investors Operating Partnership, L.P. and
Community Acquisition and Development
Corporation.
2.3(a) Earn-Out Agreement dated October 30, 1997
1997, between Community Casa del Mar Joint
Venture, Wilder Corporation of Delaware
and AIC Community Management Partnership.
2.3(b) Form of Agreement of Sale dated as of
August 22, 1997, between Community
Acquisition and Development Partnership
and Wilder Corporation of Delaware.
23 Consent of Independent Auditors - Ernst &
Young LLP
SIGNATURES
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.
ASSET INVESTORS CORPORATION
Date: November 13, 1997
By: /s/ Diane Schott Armstrong
------------------------------
Diane Schott Armstrong
Controller
<PAGE>
ITEM 7(A).
The Wilder Manufactured Home Communities
Combined Statements of Excess of Revenues
Over Specific Operating Expenses
Year ended December 31, 1996
Contents
Report of Independent Auditors.................................................1
Combined Statements of Excess of Revenues Over Specific
Operating Expenses..........................................................2
Notes to Combined Statements of Excess of Revenues Over
Specific Operating Expenses.................................................3
<PAGE>
Report of Independent Auditors
Board of Directors and Stockholders
Asset Investors Corporation
We have audited the accompanying combined statement of excess of revenues over
specific operating expenses of The Wilder Manufactured Home Communities (Note 1)
for the year ended December 31, 1996. This combined statement is the
responsibility of the management of The Wilder Manufactured Home Communities.
Our responsibility is to express an opinion on this combined statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the combined statement of excess of revenues over
specific operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the combined statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall combined statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
As described in Note 1, the combined statement of excess of revenues over
specific operating expenses excludes certain expenses that would not be
comparable to the operations of the communities after acquisition by Asset
Investors Corporation. The accompanying combined statement was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission and is not intended to be a complete presentation of the
communities' revenues and expenses.
In our opinion, the combined statement referred to above presents fairly, in all
material respects, the excess of revenues over specific operating expenses
(exclusive of expenses described in Note 1) of The Wilder Manufactured Home
Communities for the year ended December 31, 1996 in conformity with generally
accepted accounting principles.
September 12, 1997 ERNST & YOUNG LLP
1
<PAGE>
2
The Wilder Manufactured Home Communities
Combined Statements of Excess of Revenues
Over Specific Operating Expenses
<TABLE>
<CAPTION>
Period from
January 1,
Year ended 1997 to
December 31, September 30,
1996 1997
---------------------------------
(Unaudited)
Revenues
<S> <C> <C>
Rental $ 2,312,721 $ 1,808,614
Other 31,376 24,580
---------------------------------
2,344,097 1,833,194
Specific operating expenses
Property operations and maintenance 716,198 539,970
Real estate taxes 270,941 199,549
---------------------------------
987,139 739,519
---------------------------------
Excess of revenues over specific operating expenses $ 1,356,958 $ 1,093,675
=================================
</TABLE>
See accompanying notes. 2
<PAGE>
3
The Wilder Manufactured Home Communities
Notes to Combined Statements of Excess of Revenues
Over Specific Operating Expenses
1. Organization and Significant Accounting Policies
Description of Properties
The Wilder Manufactured Home Communities includes five manufactured home
communities (the Communities) owned and operated by The Wilder Corporation (the
Company). The Communities, which are under common management and control, are
summarized as follows:
Number of Lots
Community Location
- ---------------------------------- ---------------------------- ----------------
Pleasant Living Gibsonton, Florida 247
Pinewood St. Petersburg, Florida 222
Brentwood Estates Hudson, Florida 147
Sunlake Estates Leesburg, Florida 402
Casa del Mar Punta Gorda, Florida 455
In August 1997, the Company entered into agreements with Asset Investors
Operating Partnership L.P. (AIOP) whereby AIOP would acquire 100% of two of the
Communities and 50% joint venture interests in the three remaining Communities
for an aggregate purchase price of $20.9 million.
Basis of Accounting
The accompanying combined statements of revenues over specific operating
expenses are presented on the accrual basis. These combined statements have been
prepared in accordance with the applicable rules and regulations of the
Securities and Exchange Commission for real estate properties. Accordingly, the
combined statements exclude certain historical expenses not comparable to the
operations of the property after acquisition, such as professional fees,
depreciation, amortization and interest.
Revenue Recognition
Rental income attributable to manufactured home lots is recorded when due from
residents.
Use of Estimates
The preparation of the combined statements of excess of revenues over specific
operating expenses in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts
reported in the combined statements and accompanying notes. Actual results could
differ from those estimates.
3
<PAGE>
ITEM 7(B).
<TABLE>
<CAPTION>
ASSET INVESTORS CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
(Amounts in thousands)
(Unaudited)
Pro Forma Pro Forma
As Before Adjustments
Previously Pro Forma Acquisition Acquisition Pro Forma
Reported Adjustments of Manager of Manager Results
-------------- --------------- --------------- --------------- ---------------
Assets
<S> <C> <C> <C> <C> <C>
Investment in rental properties, net $ 26,239 $ 11,060 (a) $ 37,299 $ -- $ 37,299
Investment in rental property joint
ventures 13,985 9,875 (a) 23,860 -- 23,860
Cash and cash equivalents 28,957 (4,524) (b) 24,433 (800) (c) 23,633
Investment in Commercial Assets 21,806 -- 21,806 -- 21,806
Goodwill -- -- -- 12,492 (c) 12,492
Other assets, net 4,793 -- 4,793 -- 4,793
-------- --------- --------- -------- ---------
Total Assets $ 95,780 $ 16,411 $ 112,191 $ 11,692 $ 123,883
======== ========= ========= ======== =========
Liabilities
Mortgage notes payable $ 4,873 $ 5,911 (b) $ 10,784 $ -- $ 10,784
Accounts payable and accrued
liabilities 1,341 -- 1,341 -- 1,341
Management fees payable 196 -- 196 -- 196
-------- --------- --------- -------- ---------
Total Liabilities 6,410 5,911 12,321 -- 12,321
-------- --------- --------- -------- ---------
Minority interest in operating
partnership 412 10,500 (b) 10,912 11,692 (c) 22,604
-------- --------- --------- -------- ---------
Stockholders' Equity
Common Stock 252 -- 252 -- 252
Additional paid-in capital 230,112 -- 230,112 -- 230,112
Cumulative dividends (243,882) -- (243,882) -- (243,882)
Cumulative net income 101,141 -- 101,141 -- 101,141
-------- --------- -------- -------- ---------
Dividends in excess of net income
(142,741) -- (142,741) -- (142,741)
Unrealized holding gains on debt
securities 1,335 -- 1,335 -- 1,335
-------- --------- -------- -------- ---------
Total Stockholders' Equity 88,958 -- 88,958 -- 88,958
-------- --------- -------- -------- ---------
Total Liabilities and
Stockholders' Equity $ 95,780 $ 16,411 $ 112,191 $ 11,692 $ 123,883
======== ========= ========= ======== =========
</TABLE>
See Notes to Pro Forma Condensed Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
ASSET INVESTORS CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(In thousands, except per share data)
(Unaudited)
Pro Forma Adjustments
--------------------------------
Interests in Pro Forma Pro Forma
As Resecuritization Manufactured Before Adjustments
Previously of Non-agency Housing Acquisition Acquisition Pro Forma
Reported MBS Bonds Communities of Manager of Manager Results
Revenues -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Rental income $ 1,652 $ -- $ 2,793 (g) $ 4,445 $ -- $ 4,445
Equity in earnings of rental property
joint ventures 145 -- 1,022 (h) 1,167 -- 1,167
Property management income 93 -- 90 (i) 183 -- 183
REIT management income -- -- -- -- 2,444 (o) 2,444
Non-agency MBS bonds 2,726 (2,000) (d) -- 726 -- 726
Equity in earnings of Commercial Assets 1,612 -- -- 1,612 -- 1,612
Other income and expenses, net 1,476 830 (e) (1,049) (j) 1,257 -- 1,257
---------- --------- ---------- ---------- ---------- ---------
Total revenues 7,704 (1,170) 2,856 9,390 2,444 11,834
---------- --------- ---------- ---------- ---------- ---------
Expenses
Property operations and maintenance 536 -- 800 (g) 1,336 -- 1,336
Real estate taxes 154 -- 289 (g) 443 -- 443
Property management expenses 89 -- 90 (i) 179 -- 179
REIT management expenses -- -- -- -- 887 (o) 887
Management fees 485 (248) (f) 556 (k) 793 (793)(p) --
General and administrative 614 (42) (d) -- 572 558 (o) 1,130
Depreciation and amortization 428 -- 712 (l) 1,140 937 (q) 2,077
Interest expense 182 (26) (e) 485 (m) 641 -- 641
---------- --------- ---------- ---------- ---------- ---------
Total expenses 2,488 (316) 2,932 5,104 1,589 6,693
---------- --------- ---------- ---------- ---------- ---------
Income before minority interest in
operating partnership and gain
on resecuritization of non-agency
MBS bonds 5,216 (854) (76) 4,286 855 5,141
Minority interest in operating
partnership -- -- 1,069 (n) 1,069 1,274 (r) 2,343
---------- --------- ---------- ---------- ---------- ---------
Income before gain on resecuritization
of non-agency MBS bonds 5,216 (854) (1,145) 3,217 (419) 2,798
Gain on resecuritization of non-agency
MBS bonds 7,359 -- -- 7,359 -- 7,359
Management fees on resecuritization of
non-agency MBS bonds (2,072) 145 (f) -- (1,927) 1,927 (p) --
---------- --------- ---------- ---------- ---------- ---------
Net income $ 10,503 $ (709) $ (1,145) $ 8,649 $ 1,508 $ 10,157
========== ========= ========== ========== ========== =========
Net income per share $ .42 $ (.03) $ (.05) $ .34 $ .06 $ .40
========== ======== ========== ========== ========== =========
Weighted-average shares outstanding 25,025 25,025 25,161 25,161 25,161 25,161
</TABLE>
See Notes to Pro Forma Condensed Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
ASSET INVESTORS CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands, except per share data)
Pro Forma Adjustments
------------------------------------
Acquisition of
Interests in Pro Forma Pro Forma
As Resecuritization Manufactured Before Adjustments
Previously of Non-agency Housing Acquisition Acquisition Pro Forma
Reported MBS Bonds Communities of Manager of Manager Results
Revenues ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Rental income $ -- $ -- $ 5,769 (g) $ 5,769 $ -- $ 5,769
Equity in earnings of rental property
joint ventures -- -- 1,362 (h) 1,362 -- 1,362
Property management income -- -- 216 (i) 216 -- 216
REIT management income -- -- -- -- 2,692 (o) 2,692
Non-agency MBS bonds 11,513 (11,513)(d) -- -- -- --
Equity in earnings of Commercial Assets 1,875 -- -- 1,875 -- 1,875
Other income and expenses, net 136 3,329 (e) (2,067)(j) 1,398 -- 1,398
---------- --------- -------- ---------- ---------- --------
Total revenues 13,524 (8,184) 5,280 10,620 2,692 13,312
---------- --------- -------- ---------- ---------- --------
Expenses
Property operations and maintenance -- -- 1,811 (g) 1,811 -- 1,811
Real estate taxes -- -- 604 (g) 604 -- 604
Property management expenses -- -- 240 (i) 240 -- 240
REIT management expenses -- -- -- -- 1,182 (o) 1,182
Management fees 1,793 (1,664)(f) 932 (k) 1,061 (1,061)(p) --
General and administrative 1,145 (82)(d) -- 1,063 744 (o) 1,807
Elimination of DERs 825 -- -- 825 -- 825
Depreciation and amortization -- -- 1,412 (l) 1,412 1,249 (q) 2,661
Interest expense 88 (88)(e) 851 (m) 851 -- 851
---------- --------- --------- --------- ---------- --------
Total expenses 3,851 (1,834) 5,850 7,867 2,114 9,981
---------- --------- --------- --------- ---------- --------
Income before minority interest in
operating partnership and gain
on resecuritization of non-agency
MBS bonds 9,673 (6,350) (570) 2,753 578 3,331
Minority interest in operating partnership -- -- 959 (n) 959 1,051 (r) 2,010
---------- --------- -------- --------- ---------- --------
Income before gain on resecuritization
of non-agency MBS bonds 9,673 (6,350) (1,529) 1,794 (473) 1,321
Gain on resecuritization of non-agency
MBS bonds -- 7,359 -- 7,359 -- 7,359
Management fees on resecuritization of
non-agency MBS bonds -- (1,466)(f) -- (1,466) 1,466 (p) --
---------- --------- -------- --------- ---------- --------
Net income $ 9,673 $ (457) $ (1,529) $ 7,687 $ 993 $ 8,680
========== ========= ======== ========= ========== ========
Net income per share $ .39 $ (.02) $ (.06) $ .31 $ .04 $ .35
========== ========= ======== ========= ========= ========
Weighted-average shares outstanding 24,595 24,595 24,958 24,958 24,958 24,958
</TABLE>
See Notes to Pro Forma Condensed Consolidated Financial Statements
<PAGE>
ASSET INVESTORS CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On September 9, 1997, the Company announced that it has agreed to
acquire the assets and operations of Financial Asset Management LLC (the
"Manager") who has performed the Company's day-to-day operations pursuant to a
management agreement (the "Management Agreement"). The acquisition is described
in the Company's proxy statement dated October 22, 1997, and is subject to,
among other things, a vote of the Company's stockholders at its annual meeting
scheduled on November 21, 1997. If the acquisition were approved, the Company
would also provide management services to Commercial Assets through an agreement
similar to the Management Agreement (the "CAX Management Agreement").
The Pro Forma condensed consolidated balance sheet of the Company as of
September 30, 1997, is presented as if the October 30, 1997, acquisition of
interests in manufactured housing communities and the proposed acquisition of
the Manager had occurred on September 30, 1997. The Pro Forma condensed
consolidated statements of income are presented as if the March 27, 1997
resecuritization of the non-agency MBS bonds and the 1997 acquisitions of
interests in manufactured housing communities and the proposed acquisition of
the Manager had occurred: (i) on January 1, 1997, for the statement of income
for the nine months ended September 30, 1997; and (ii) on January 1, 1996, for
the statement of income for the year ended December 31, 1996. In management's
opinion, all adjustments necessary to reflect the resecuritization of the
Company's non-agency MBS bond portfolio, the acquisitions of interests in
manufactured housing communities and related management contracts, and the
proposed acquisition of the Manager have been made. The unaudited Pro Forma
condensed consolidated financial statements should be read in conjunction with
the Company's Annual Report on Form 10-K for the year ended December 31, 1996,
the Quarterly Report on Form 10-Q for the quarterly period ended September 30,
1997, and the Current Reports on Form 8-K dated May 14, 1997, and July 30, 1997.
The unaudited Pro Forma condensed consolidated financial statements are
not necessarily indicative of what the actual financial position or results of
operations would have been assuming the transactions had been completed as of
the dates indicated, nor does it purport to represent the future financial
position or results of operations of the Company.
(a) Reflects the purchase of two manufactured housing communities for
$11,060,000 and the purchase of 50% joint venture interests in three
additional communities for $9,875,000.
(b) Reflects consideration for the interests in manufactured housing
communities of: $4,524,000 of cash, 3,000,000 OP Units at $3.50 each, and
the assumption of $5,911,000 of existing debt.
(c) Reflects consideration for the acquisition of the Manager of $11,692,000 in
OP Units and the cash payment of $800,000 of related transaction costs.
(d) Eliminates income from and expenses directly attributable to the non-agency
MBS bonds as a result of the resecuritization.
(e) Reflects the assumption that a portion of the proceeds from the
resecuritization of the non-agency MBS bonds is used to repay outstanding
debt and the remaining proceeds are invested in short-term investments
earning 5% per annum.
<PAGE>
(f) Eliminates base fees and administrative fees on the non-agency MBS bonds
and adjusts incentive fees based upon adjusted net income and Cash Earned
for Stockholders.
(g) Reflects adjustment for the rental income and property expenses of nine
acquired communities.
(h) Reflects the equity in the earnings from the joint venture interests in
manufactured housing communities.
(i) Reflects expenses of the manufactured housing community management business
and income earned from the five managed communities not owned by the
Company.
(j) Eliminates the short-term investment income at 5% per annum on the cash
used to acquire the interests in manufactured housing communities and
management operations.
(k) Reflects base fees on assets acquired and additional incentive fees on
improved earnings as a result of the acquisition of the manufactured
housing communities and management operations (in thousands):
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
------------------ -----------------
Base fees $ 364 $ 660
Incentive fees 192 272
------- ---------
Total Adjustment $ 556 $ 932
======= =========
(l) Reflects depreciation and amortization of acquired assets on the
straight-line basis over the estimated useful lives of the assets. The
estimated useful lives are 25 years for land improvements and buildings and
10 years for the cost of management contracts on communities not owned by
the Company.
(m) Reflects interest expense on $4,962,000 assumed debt at 8.25% per annum and
$5,911,000 of assumed debt at 7.5% per annum.
(n) Reflects minority interest in net income allocated to holders of OP Units.
(o) Reflects the costs assumed for the administration of the Company plus fees
earned from the CAX Management Agreement and other assets and the related
costs of providing these services.
(p) Eliminates fees from the Management Agreement paid to the Manager.
(q) Reflects amortization of the cost of the assets acquired from the Manager
on a straight-line basis over estimated life of 10 years.
(r) Reflects adjustment to minority interest based upon adjusted net income and
OP Units issued to current owners of the Manager.
SCHEDULE OF OMITTED
JOINT VENTURE AGREEMENTS
The Company has also entered into two additional Joint Venture Agreements which
are substantially identical to the following Joint Venture Agreement in all
material respects except as to the Name of Venture. The Name of Venture in the
two additional agreements is Community Brentwood Joint Venture and Community
Casa del Mar Joint Venture.
<PAGE>
COMMUNITY SUNLAKE
JOINT VENTURE AGREEMENT
THIS COMMUNITY SUNLAKE JOINT VENTURE AGREEMENT, dated effective this
30th day of September, 1997, is made and entered into by and between Community
Acquisition and Development Corporation, a Delaware corporation (hereinafter
referred to as "CADC") and Asset Investors Operating Partnership, LP, a Delaware
limited partnership (hereinafter referred to as "AIOP") (CADC and AIOP are
hereinafter sometimes referred to singularly as "Venturer" and collectively as
the "Venturers"), joined by AIC Community Management Partnership, a Delaware
general partnership (hereinafter referred to as "AIC Management").
W I T N E S S E T H :
In consideration of the mutual covenants set forth herein, the parties
hereto hereby agree as follows:
ARTICLE I.
Definitions
I.01 "Affiliate" means any entity in which a Venturer, or a
shareholder, partner or member of a Venturer owns, directly or indirectly, ten
(10%) percent or more of the capital interests or voting power thereof, or any
individual or entity which owns, directly or indirectly, ten (10%) percent or
more of the capital interests or voting power of any Venturer or shareholders,
partners or members thereof.
I.02 "Agreement" means this Community Sunlake Joint Venture Agreement
as it may be modified from time to time in accordance with the provisions hereof
or by agreement of the Venturers, as provided herein.
I.03 "Construction Improvements" means those facilities including but
not limited to manufactured housing pads, driveways, set-ups, infrastructure,
utilities, irrigation and landscaping to be constructed on the Property by the
Venture (defined below).
I.04 "Conversion" means the process whereby the Project is conveyed,
sold, transferred or otherwise converted into a resident owned community through
the use of a cooperative, condominium or other homeowners' association regime,
limited partnership or other entity, which are developer sponsored or third
party initiated programs.
I.05 "Project" means Sunlake Estates, located on the Property and
having a street address of 1045 Great Lakes Boulevard, Grand Island, Lake
County, Florida 32735, together with the Construction Improvements to be
constructed thereon, if any.
I.06 "Property" means the real property described on Exhibit A attached
hereto and incorporated herein by reference.
<PAGE>
I.07 "Set-ups" means the amenities attached or related to a
manufactured home which may include but are not limited to skirting, pilings, if
any, carports or garages, storage sheds and/or screened porches.
ARTICLE II.
Formation of Joint Venture
II.01 Formation of Venture. The Venturers hereby join in and form a
joint venture (herein referred to as the "Venture") to operate and develop the
Project.
II.02 Name of Venture. The business and affairs of the Venture shall be
conducted solely under the name of "Community Sunlake Joint Venture" or such
other name as shall be approved by the Venturers and such name shall be used at
all times in connection with the Venture's business and affairs.
II.03 Principal Place of Business. The principal place of business of
the Venture shall be 2637 McCormick Drive, Clearwater, Florida 34759, or such
other address as may be agreed to by the Venturers.
II.04 Form of Ownership and Title. The title to the Property shall be
held in the name of the Venture. Each of the Venturers irrevocably waives during
the term of the Venture any right to maintain any action for partition with
respect to the Property. Any personal property acquired by the Venture shall be
held in the name of the Venture.
ARTICLE III.
III.01 Purposes, Powers and Development Functions. The purposes of the
Venture shall be strictly limited to the acquisition, ownership, operation, and
development of the Project, the construction of the Construction Improvements
(if any), the sale or Conversion of the Project, and such other activities as
shall be directly related and incidental thereto.
ARTICLE IV.
Management of Venture
IV.01 Business Decisions. No act shall be taken, sum expended, decision
made or obligation incurred by the Venture or any Venturer with respect to a
matter which is within the scope of this Agreement without the unanimous vote of
the Venturers (or their Affiliates if applicable).
IV.02 Approval by Venturers. In the event either Venturer desires
approval of a course of action, such approval shall be obtained in one or more
of the following ways:
2
<PAGE>
(a) Meeting. Either Venturer shall have the right to
call a meeting of the Venturers at any time to discuss and act upon a proposed
decision. The actions approved at any such meeting shall be evidenced by minutes
of such meeting, which minutes shall be signed by a duly authorized
representative of each Venturer.
(b) Written Consent. In lieu of a meeting of the
Venturers, any decision may be made by the written consent of both of the
Venturers. Such written consent may be established by the signature of both
Venturers on the document or other instrument which implements or otherwise
evidences the decision.
(c) Voting. Each Venturer shall be entitled to one
vote on any matter for which a vote is permitted or required by this Agreement.
IV.03 Delegation Pursuant to Management Agreement. Notwithstanding the
above, the Venturers acknowledge that the powers and duties with respect to the
management of the Project shall be delegated to AIC Community Management
Partnership, a Delaware general partnership ("AIC Management") pursuant to a
management agreement, the form of which is attached hereto as Exhibit B.
IV.04 Venturer Responsibilities.
(a) Management. AIC Management shall be responsible
for the management of the Project under separate management agreement.
(b) Conversions. If the Project is to be subject to
Conversion, the Venturers, or their Affiliates, will create a new entity, which
new entity will serve as the developer sponsor and be responsible for directing
and overseeing all aspects of the Conversion. Prior to the Commencement of any
Conversion, CADC shall prepare for the Venturer's approval a Conversion Budget
and Proforma (the "Conversion Budget").
(c) Development and Construction. CADC shall be
responsible for overseeing the development of the Property and construction of
the Construction Improvements, if any. CADC shall prepare, for approval by the
Venture, a Development and Construction Budget prior to implementing any such
activity (the "D&C Budget").
(d) Manufactured Home Sales. The Venture shall retain
AIC Management to be a licensed manufactured home dealer, to handle the sales
and resales of manufactured homes within the Project. CADC shall prepare for
approval by the Venture a Manufactured Home Marketing Budget for each Project
(the "MHM Budget").
(e) Floor Planning. If required by the MHM Budget for
the Project, CADC will arrange for the benefit of the Venture a floor plan loan
for the Project and AIOP shall guaranty such floor plan loan if so required by
the financial institution making such loan. Neither Venturer shall accept or
receive any fees or other consideration for the establishment of such floor plan
loans. The terms and conditions of each loan must be acceptable to AIOP. If AIOP
desires to advance all or a portion of the funds needed to adequately market and
serve the Project, or AIOP does not approve the terms of the floor plan
financing, then AIOP shall make a loan to the Venture in accordance with Article
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V below. CADC shall prepare, for the approval by the Venture a Floor Plan Budget
for each Project (the "FP Budget").
IV.05 Tax Matters Partner. CADC shall be designated as the Tax
Matters Partner of the Venture under Subsection C of Chapter 63 as contained in
Subtitle F of the Code.
ARTICLE V.
Capital Contributions, Accounting and Distribution
V.01 Initial Capital Contributions. The Venturers have each contributed
the sum of One Hundred Dollars ($100.00) (the "Initial Capital Contribution"),
and each Venturer has the following capital interest in the Venture:
CADC 50%
AIOP 50%
The foregoing percentages are herein referred to as the "Capital Interests."
V.02 Required Capital. Required Capital, as needed, shall be
contributed by AIOP in the form of a loan to the Venture in accordance with
Section 5.06. Notwithstanding the foregoing, to the extent Required Capital is
needed to pay for the expenses described in Section 7.01(b), such funds shall be
contributed by the Venturers in accordance with their Capital Interests in the
form of additional capital contributions, not as loans.
V.03 Capital Accounts. The Venture shall establish for each Venturer a
capital account (the "Capital Account"), which shall be credited with the amount
of its Initial Capital Contributions, increased by: (i) the amount of money and
the fair market value of any property (other than money) comprising any
additional capital contributions made by the Venturer pursuant to this Agreement
or otherwise, (ii) any amounts credited to the Capital Account of each Venturer
as a result of any Venture income, profits or gains allocated to the Venturer
(and as adjusted pursuant to Section 1.704-1(b)(2)(iv) of the Treasury
Regulations), and (iii) the amount of any Venture liabilities assumed by the
Venturer or that are secured by any Venture property distributed to that
Venturer, and decreased by: (iv) the amount of money and the fair market value
of any property (other than money) comprising any distributions to the Venturer,
(v) any amount debited to the Capital Account of a Venturer as a result of any
Venture expenses, deductions, losses and credits allocated to the Venturer (and
as adjusted pursuant to Section 1.704-1(b)(2)(iv) of the Treasury Regulations),
and (vi) the amount of any liabilities of such Venturer that are assumed by the
Venture or that are secured by any property contributed by that Venturer to the
Venture. The Capital Account of a Venturer shall not be increased or decreased,
as the case may be, with regard to any built-in gain or loss allocated to the
Venturer pursuant to paragraph 7.01(e) hereof. In the event of a transfer of any
Venture interest, the transferee shall assume the Capital Account balance of the
transferor. No interest shall be paid on any present or future capital account
balance. The provisions of this Paragraph 5.03 are intended to comply with
Treasury Regulation Section 1.704-1(b) regarding the maintenance of the Capital
Accounts of the Venturers and this Paragraph 5.03 shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
Venturers shall determine that it is prudent to modify the manner in which the
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Capital Accounts, or any debits or credits thereto, are computed in order to
comply with such Regulations, the Venturers may make such modifications,
provided that it is not likely to have a material affect on any amounts
distributable to any Venturer upon the dissolution of the Venture. The Venturers
shall also make any appropriate modifications in the event unanticipated events
might otherwise cause this Agreement not to comply with Treasury Regulation
Section 1.704-1(b).
V.04 Withdrawal of Capital. No Venturer shall have the right to demand
the withdrawal of all or any portion of the Venturer's capital contribution. In
the event that withdrawal of a capital contribution is permitted pursuant to the
provisions hereof, such contribution shall be returned to the Venturer in cash
unless otherwise approved by the Venturers.
V.05 Allocations on Transfer of Interests. In the case of a permitted
transfer of any interest in the Venture at any time other than the close of the
Venture's Fiscal Year, the allocable shares of the various items of income, gain
deduction, loss, credit, and allowance, as computed for United States federal
income tax purposes, shall be allocated between the transferor and the
transferee by closing the Venture's books with respect to said transfer. In the
event any transfer not permitted under the terms of this Agreement is attempted,
no allocations shall be made and all distributions shall continue to be made to
the purported transferor.
V.06 Return on Capital. Loans from AIOP to the Venture shall accrue
interest at the rate of ten percent (10%) per annum, compounded quarterly. Loans
shall be interest only; provided, however, if the Venture has cash available for
distribution to the Venturers after paying all accrued interest due and payable
to AIOP, fifty percent (50%) of the remaining available cash shall be paid to
AIOP to reduce the principal balance due on such loan(s) (the "Principal
Reduction Payment"). After the interest on the loan(s) is(are) paid, and the
Principal Reduction Payment is paid, then the net cash flow from the Project
would be divided pari passu on a 50/50 basis between AIOP and CADC. In the event
of any sales of any Project or interests in the Venture or loan restructurings,
all net proceeds from each event would be paid to reduce loans (with respect to
each Project) until such time as AIOP is fully repaid (with respect to each
Project). Thereafter, any proceeds from such sales or loan restructurings shall
be divided pari passu on a 50/50 basis to the Venturers.
ARTICLE VI.
Special Obligations of the Venturers
VI.01 Construction Compensation. If Construction Improvements are to be
made to the Project, CADC shall be entitled to receive from the Venture a
development fee in a sum equal to seven and one-half percent (7.5%) of hard
costs up to One Million Dollars ($1,000,000.00), and five percent (5%)
thereafter to be paid in accordance with the terms and provisions of the D&C
Budget. Except as provided in the previous sentence or as may be otherwise
approved by the Venturers, no fees or other compensation will be paid by the
Venture to either Venturer for the services of such Venturer; provided, however,
that the Venturers shall each be entitled to reimbursement in full for all
reasonable out-of-pocket costs and expenses incurred relative to the business of
the Venture; and provided further, that the Venturers' managerial salaries,
benefits, general office overhead and similar expenses shall not be deemed
expenses of the Venture.
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VI.02 Banking. The Venture shall open in the name of the Venture, and
will thereafter maintain in a bank selected by it, a separate bank account. All
checks in excess of $25,000 shall require the signature of a designated
representative from both Venturers. All Required Capital and proceeds of loans
made to the Venture shall be deposited in, and all disbursements of such
proceeds shall be made from, such account. All receipts of the Venture shall be
deposited to each such account. The funds in said account shall be used solely
for the business of the respective Venture.
ARTICLE VII.
Profits, Losses and Accounting
VII.01 Allocations of Taxable Profits and Losses
(a) Determination of Profit or Loss. The items of income,
gains, expenses, deductions, losses and credits generated by the Venture for
federal income tax purposes shall be determined in accordance with a generally
accepted method of accounting as soon as practicable after the close of the
fiscal year of the Venture.
(b) Costs and Expenses. The Venture shall pay all
expenses, (which expenses shall be billed directly to the Venture) of the
Venture which may include but are not limited to: (i) legal, audit, accounting,
and other fees; (ii) expenses and taxes incurred in connection with the
issuance, distribution and transfer of documents evidencing ownership of an
interest in the Venture or in connection with the business of the Venture; (iii)
expenses of organizing, revising, amending, converting, modifying or terminating
the Venture; (iv) expenses in connection with distributions made by the Venture
to, and communications and bookkeeping work necessary in maintaining relations
with, the Venturers; (v) costs of any accounting, statistical or bookkeeping
equipment necessary for the maintenance of the books and records of the Venture;
and (vi) the cost of preparation and dissemination of the informational material
and documentation relating to potential sale, refinancing or other disposition
of the Projects.
(c) Allocation. Except as otherwise provided in this
Article VII, the net profits, net gains and net losses generated by the Venture
for federal income tax purposes for a year shall be allocated among the
Venturers as follows:
(i) Net Income and Losses from Operations. All
net taxable income and net taxable losses and deductions generated from the
day-to-day operations of the Venture shall be allocated among the Venturers
according to their Capital Interests in the Venture, as such interests are
reflected in Section 5.01 hereinabove and as may be amended from time to time
(hereinafter called "Percentage Interests").
(ii) Income and Loss from Capital Transactions.
Net taxable income and gain and net taxable losses of the Venture attributable
to capital transactions (e.g., sales and refinancings) (hereinafter called
"Capital Transactions") shall be allocated among the Venturers as follows. For
purposes of determining the Capital Account balances of the Venturers, income
shall be allocated prior to reducing Capital Accounts by the distribution of
proceeds from the Capital Transactions:
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(A) Income From Capital Transactions.
All net taxable income realized by the Venture which is attributable to Capital
Transactions shall be allocated among the Venturers in the following order of
priority:
(1) First, an amount of such
taxable income equal to the sum of the negative Capital Account
balances of the Venturers having negative Capital Account balances
shall be allocated to such Venturers pro rata in proportion to their
respective negative Capital Account balances; and
(2) Then, such taxable income
remaining, if any, shall be allocated among the Venturers pro rata in
proportion to the balances of their respective Net Capital Investments
(defined below) as necessary to cause the Capital Account of each
Venturer to at least equal the balance of its respective Net Capital
Investment; and
(3) Such taxable income
remaining, if any, shall be allocated among the Venturers so as to
cause their Capital Accounts to be in the ratio of their respective
Percentage Interests with respect to the portion of their Capital
Accounts exceeding the amounts required in subsections (1) and (2)
above, with any remaining taxable income being allocated pro rata in
proportion to their respective Percentage Interests in the Venture.
(B) Loss from Capital Transaction. A
taxable loss of the Venture from a Capital Transaction shall be allocated so as
to cause the Capital Accounts of the Venturers to equal the amounts set forth in
subsections 7.01(c)(ii)(A)(1) through (3), but in inverse order of priority,
with any excess taxable loss being allocated among the Venturers in proportion
to their respective Percentage Interests in the Venture.
(d) Definitions. For purposes of this Section 7.01, the
following definitions apply:
(i) "Net Capital Investment" shall mean the net
amount of (i) the total amount of capital contributed by a Venturer to the
Venture, less (ii) the total amount of cash distributed from the Venture to the
Venturer pursuant to this Agreement.
(e) Income Characterization. For purposes of determining
the character (as ordinary income or capital gain) of any taxable income of the
Venture allocated to the Venturers pursuant to this Article VII, such portion of
the taxable income of the Venture allocated pursuant to this Article VII which
is treated as ordinary income attributable to the recapture of depreciation
shall, to the extent possible, be allocated among the Venturers in the
proportion which (i) the amount of depreciation previously allocated to each
Venturer bears to (ii) the total of such depreciation allocated to all
Venturers. This paragraph 7.01(e) shall not alter the amount of allocations
among the Venturers pursuant to this Article VII, but merely the character of
income so allocated.
VII.02 Credits. Tax credits shall be allocated among the Venturers in
accordance with paragraph 7.01(c)(i) hereof.
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VII.03 Changes in Interests. Notwithstanding the foregoing, in the
event of a change in the Venturers' Percentage Interests in the Venture during a
year, whether occasioned by admission of a new Venturer, additional
contributions, assignments of interests or otherwise, the allocation of items of
income and expense shall be made so as to reflect the Venturers' varying
Percentage Interests in the Venture during the year. Profits and losses for the
year shall be prorated on a daily basis and allocated among the Venturers based
upon the period of time during which they held their respective Percentage
Interests.
VII.04 Crediting Accounts. Items of income, gains, expenses,
deductions, losses and credits shall be credited or debited, as the case may be,
to each Venturer's Capital Account.
VII.05 Distribution of Cash and Profits. All distributions to the
Venturers of cash and profits available from Venture operations, after deduction
of Venture expenses, shall be made as and when approved by the Venturers. All
such distributions shall be made in accordance with the Capital Interests.
VII.06 Fiscal Year. The fiscal year of the Venture shall be the
calendar year.
VII.07 Tax Elections. The Venturers agree that the Venture will be
subject to all provisions of Subchapter K of Chapter 1 of Subtitle A of the
Internal Revenue Code of 1986, as amended (hereinafter referred to as the
"Code"); provided, however, with respect to the Venture that the filing of
United States partnership returns of income shall not be construed to extend the
purposes of the Venture or to expand the obligations or liabilities of either or
both of the Venturers. The Venturers shall make elections pursuant to the Code
and any Treasury Regulations promulgated thereunder which the Venturers deem to
be in the best interest of the Venture.
VII.08 Books of Account and Records. The books of account and other
records of the Venture shall be kept and maintained at the expense of the
Venture at all times at 2 Ponds Edge Drive, Chadds Ford, PA 19317 or at any
other place or places agreed upon by the Venturers. The books of account shall
be maintained on a cash receipts and expenditures basis in accordance with
generally accepted accounting principles, consistently applied, and shall show
all items of income, expense, assets, liabilities, costs, receipts, profits and
losses of the Venture, the Capital Accounts of the Venturers, and such other
matters as the Venture's accountants or any Venturer shall deem reasonably
necessary or appropriate. Each Venturer shall have the right during usual
business hours to audit, examine, and make copies of or extracts from said books
of account or records. Such right may be exercised by an independent certified
public accountant designated by such Venturer. Such Venturer shall bear all
expenses incurred in any such examination made at its request.
ARTICLE VIII.
Term and Termination
VIII.01 Term. The Venture shall commence on the date hereof and shall
continue until December 31, 2050, when it shall be terminated and liquidated in
accordance with applicable law unless said termination and liquidation occurs
prior thereto pursuant to this Article VIII or is mutually extended by the
Venturers.
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VIII.02 Dissolution By Agreement, Extraordinary Events, Etc.
(a) The Venture shall forthwith be dissolved and
terminated in accordance with the provisions of this Section upon the occurrence
of any of the following:
(i) If any Venturer shall make an assignment for
the benefit of creditors or file a voluntary petition in bankruptcy or shall be
adjudicated a bankrupt or insolvent, or shall file any petition or answer
seeking any reorganization, composition, liquidation, dissolution or similar
relief for itself under the present or future applicable federal or state law
relative to bankruptcy, insolvency, or other relief for debtors, or shall seek
or consent to or acquiesce in the appointment of any trustee, receiver,
conservator or liquidator of said Venturer or of any or all of its properties or
its interest in the Venture (the term "acquiesce" includes but is not limited to
the failure to file a petition or motion to vacate or discharge any order,
judgment or decree providing for such appointment within ten (10) days after the
appointment);
(ii) If a court of competent jurisdiction shall
enter an order, judgment or decree approving a petition filed against any
Venturer seeking any reorganization, composition, liquidation, dissolution or
similar relief under the present or any future federal bankruptcy laws, or any
present or future applicable federal or state laws relating to bankruptcy,
insolvency, or other relief for debtors, and said Venturer shall acquiesce in
the entry of such order, judgment or decree (the term "acquiesce" includes but
is not limited to, the failure to file a petition or motion to vacate or
discharge such order, judgment or decree with ten (10) days after the entry of
the order, judgment or decree), or such order, judgment or decree shall remain
unvacated and unstayed for an aggregate of sixty (60) days (whether or not
consecutive) from the date of entry thereof, or any trustee, receiver,
conservator or liquidator of said Venturer or of all or any substantial part of
its property or its interest in the Venture shall be appointed without the
consent or acquiescence of such Venturer and such appointment shall remain
unvacated and unstayed for an aggregate of sixty (60) days (whether or not
consecutive);
(iii) If any Venturer defaults in the
performance of any covenants, condition, agreement, or obligation imposed upon
said Venturer by this Agreement or the governing documents for a Venture other
than as set forth above and said defaulting Venturer does not commence a cure
within thirty (30) days after written notice thereof has been sent by the
non-defaulting Venturer and received by the defaulting Venturer and said
defaulting Venturer fails to cure the default within ninety (90) days
thereafter; or
(iv) The Venturers agree in writing that
dissolution and termination should occur.
(b) In order to effectuate the termination and dissolution
of the Venture or any Venture, the Venturers shall wind up and liquidate the
Venture or any Venture by filing any certificates or notices required by
applicable law to be filed, securing independent appraisals of the fair market
value of the assets of the Venture or Venture and selling all remaining assets
of the Venture or Venture (except cash) at such prices and on such terms as the
Venturers in the exercise of their best business judgment under the
circumstances then presented, deem to be in the best interests of all of the
Venturers. The proceeds from such sales, together with the cash assets of the
Venture or Venture, shall thereupon be distributed in the following order of
priority:
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(i) To the payment and discharge of all of the
Venture's debts and liabilities to persons other than Venturers or Affiliates;
(ii) To the payment of all principal and
interest due under any promissory notes to Affiliates which are secured by
mortgages or deeds to secure debt on any affected Property;
(iii) To the payment and discharge of all of the
Venture's debts and liabilities first to Venturers and then to Affiliates (other
than as provided in (ii) above);
(iv) To the setting up of such reserves as the
Venturers determine are necessary for any contingent or unforeseen liabilities
or obligations of the Venture arising out of or in connection with the Venture;
provided, however, that any such reserves shall be paid over to an escrow agent
(not a Venturer or any Affiliate) to be held by such agent for a reasonable
period and for the purpose of disbursing such reserves in payment of any of the
aforesaid contingencies and at the expiration of such period to distribute the
balance thereafter remaining in the manner hereinafter provided; and
(v) To the Venturers pursuant to their Capital
Interests.
VIII.03 Tax Consequences. It is the intention of the Venturers that all
amounts payable by the Venture under this Article VIII and Article IX to a
Venturer in exchange for its interest shall constitute payment for such
Venturer's interest in the Venture. The payments shall be considered a sale or
exchange of an interest in the Venture under Section 736(b) of the Code, and not
a payment of income under Section 736(a) or any other Section of the Code.
VIII.04 Survival. In the event of a termination of the Venture, the
applicable management and/or sales agreement shall remain in full force and
effect in accordance with the terms of said management agreement.
ARTICLE IX.
Sale, Assignment, Transfer, or Other Disposition
IX.01 Prohibited Transfer. No Venturer may sell, transfer, assign or
otherwise dispose of or mortgage, hypothecate or otherwise encumber or permit or
suffer any encumbrance of all or any part of its interest in the Venture;
provided, however, AIOP and its Affiliates may pledge their interest as security
for any financing obtained by AIOP in the ordinary course of their business. Any
attempt to so transfer or encumber any Venture interest not expressly permitted
pursuant to this Paragraph 9.01 shall be void and neither the Venture nor the
Venturers shall be bound by any such transfer or encumbrance of a Venture
interest until a counterpart of the instrument of transfer or encumbrance is
executed and acknowledged by both of the Venturers. No shareholder of any
Venturer may sell, transfer, assign or otherwise dispose of its interest in the
Venturer unless such transaction is first approved by the Venturers.
Notwithstanding the foregoing, AIOP shall have the right to assign its interest
in the Venture to an Affiliate upon the prior written notice to CADC which
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assignment shall be conditioned upon the assignee executing an assignment and
assumption agreement, the form of which is attached hereto as Exhibit C.
IX.02 (a) Buy-Sell Offer. At any time during the term of this Agreement
either Venturer (the "Offeror") shall have the right to offer to sell all (but
not a portion of) its interest in the Venture (the "Offer") to the other
Venturer (the "Offeree") at a price equal to the amount stated in the Offer (the
"Proposed Purchase Price"). Any election by a Venturer under this paragraph
9.02(a) must be evidenced in writing by notice delivered to the Offeree.
(b) Acceptance or Reversal of Offer by Offeree. The
Offeree will have thirty (30) days after the receipt of the notice of the Offer
from the Offeror to accept the Offer. If the Offeree agrees to purchase the
Offeror's interest in the Venture, then the Offeree shall give written notice
thereof to the Offeror within the thirty (30) day period described above. If the
Offeree does not agree to purchase the Offeror's interest in the Venture, then
the Offeree shall be deemed to have elected to reverse the Offer. In the event
the Offeree elects to reverse the Offer, then the Offeror (or a designated third
party assignee of the Offeror's right to purchase) will be required to purchase
and the Offeree will be required to sell, the Offeree's interest in the Venture
at a price equal to the Proposed Purchase Price (adjusted to take into account
any difference between the Percentage Interests of the Offeror and the Offeree).
(c) Closing. Any purchase and sale of any interest in the
Venture pursuant to this paragraph 9.02 will be consummated at a closing to be
held at the principal place of business of the Venture at a date and place to be
determined by the purchasing Venturer (the "Closing"), unless otherwise agreed
in writing by the Venturers, not more than ninety (90) days after the date of
the notice of the Offer by the Offeror. At the Closing, the purchasing Venturer
will pay the purchase price in cash and the selling Venturer will convey all its
right, title and interest in the Venture and all of its property to the
purchasing Venturer or its assignee. If CADC is the purchasing Venturer, at the
Closing, CADC shall also cause the Venture to repay to AIOP all loans made by
AIOP to such entity.
(d) Release of Liability and Repayment of Debt. The
purchasing Venturer shall use its best efforts to obtain the release of the
selling Venturer from any liability for any third party debt of the Venture,
whether as a guarantor or otherwise, on or before the date of closing, whether
such debt is secured by a mortgage on the Projects or otherwise. At the Closing,
the purchasing Venturer shall also either purchase any outstanding loans owed by
the Venture to the selling Venturer or shall cause the Venture to satisfy such
loans in full at that time.
IX.03 Earnest Money. The purchasing Venturer shall, at the commencement
of said 90-day period, place the sum of $50,000.00 in non-refundable earnest
money, within a mutually agreeable escrow agent.
IX.04 Prohibition Against Withdrawal. Upon receipt by the Offeree of an
Offer from the Offeror, neither Venturer shall take any action to bring about a
sale of its Venture interest to terminate unless both Venturers have complied
with all the requirements of this Section 9.
IX.05 Enforceability. The terms and provisions of this Section 9 shall
be enforceable by either Venturer by action or specific performance, action for
monetary damages, and such other rights and remedies provided by law and in
equity.
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ARTICLE X.
General
X.01 Notices.
(a) All notices, offers, demands or requests provided for
or permitted to be given to any Venturer or any permitted transferee of the
interest of said Venturer pursuant to this Agreement, must be in writing and
shall be deemed to have been properly given or served when personally delivered
to the Venturer entitled thereto or by depositing the same in the United States
mail, addressed to said Venturer, postpaid and registered with return receipt
requested at the address set forth on the signature page of this Agreement.
(b) All notices, offers, demands, and requests shall be
effective upon personal delivery or upon being deposited in the United States
mail in accordance with the provisions of subparagraph (a) above. However, the
time period in which a response to any such notice, offer, demand or request
must be given shall commence to run fifteen (15) days after mailing or actual
delivery, whichever occurs first. Rejection or other refusal to accept or the
inability to deliver because of changed address shall be deemed to be receipt of
the notice, demand, or request sent.
(c) By giving to the other party at least fifteen (15)
days written notice thereof, the parties hereto and their respective successors
and assigns shall have the right from time to time and at any time during the
term of this Agreement to change their respective addresses and each shall have
the right to specify as his address any other address within the United States
of America.
X.02 Governing Law. This Agreement and the obligations of the Venturer
hereunder shall be interpreted, construed, and enforced in accordance with the
laws of the State of Delaware.
X.03 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto relative to the transactions contemplated hereunder
and supersedes any and all prior negotiations, understandings, or agreements in
regard thereto. No variations, modifications, or changes herein or hereof shall
be binding upon either Venturer unless and until set forth in a document duly
executed by or on behalf of each such Venturer as an amendment to this
Agreement. The governing documents for each Venture contemplated by this
Agreement shall contain the terms and conditions of this Agreement modified only
to comply with any statutory requirements governing that form of ownership.
X.04 Waiver. None of the terms of this Agreement may be waived except
by an instrument in writing signed by each of the parties hereto. No consent or
waiver, express or implied, by any Venturer to or of any breach or default in
the performance by another Venturer of its obligations hereunder shall be deemed
or construed to be a consent or waiver to or of any other breach or default in
the performance by such other Venturer of the same or any other obligations of
such Venturer hereunder. Failure on the part of any Venturer to complain of any
act or failure to act of the other Venturer or to declare the other Venturer in
default, irrespective of how long such failure continues, shall not constitute a
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waiver of such Venturer's rights hereunder.
X.05 Severability. In the event any provision of this Agreement or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
X.06 Binding Agreement. Subject to the restrictions on transfers and
encumbrances set forth herein, this Agreement shall inure to the benefit of and
be binding upon the undersigned Venturers and their respective legal
representatives, successors, and assigns. Whenever in this Agreement a reference
to any Venturer is made, such reference shall be deemed to include a reference
to the legal representatives, successors, and assigns of such Venturer.
X.07 Equitable Remedies. The rights and remedies of any of the
Venturers hereunder shall not be mutually exclusive, i.e., the exercise of one
or more of the provisions hereof shall not preclude the exercise of any other
provisions hereof. Each of the Venturers confirms that damages at law may be an
inadequate remedy for a breach or threatened breach of this Agreement and agrees
that, in the event of a breach or threatened breach of any provision hereof, the
respective rights and obligations hereunder shall be enforceable by specific
performance, injunction, or other equitable remedy, but nothing herein contained
is intended to, nor shall it, limit or affect any right or rights at law or by
statute or otherwise of any party aggrieved as against the other for a breach or
threatened breach of any provision hereof, it being the intention by this
Section to make clear the agreement of the Venturers that the respective rights
and obligations of the Venturers hereunder shall be enforceable in equity as
well as at law or otherwise.
X.08 Prevailing Party. In the event of a dispute between the Venturers,
the prevailing Venturer shall be entitled to reasonable attorney's fee and
paralegal fees and court cost incurred prior to and during any litigation,
mediation or bankruptcy proceedings including interest from the date said fees
and costs were advanced by the prevailing Venturer at the rate of ten percent
(10%) per annum.
X.09 Insurance. The Venture shall obtain, carry and maintain in force,
on behalf of the Venture, such insurance as approved by the Venture.
X.10 General Indemnification of Venturers. Neither Venturer shall be
liable to the Venture or to the other Venturer for losses, costs, damages, or
expenses suffered by the Venture or the other Venturer which arose out of any
action or inaction of the Venturer if the Venturer was not guilty of bad faith,
fraud, willful misconduct, negligence or breach of its fiduciary obligations or
default of its obligations under this Agreement. The Venture shall indemnify the
Venturers against any and all claims, demands, liabilities, damages, costs,
expenses, or losses incurred or suffered by the Venturers in the performance of
their duties if the same were not the result of the negligence, bad faith,
fraud, or willful misconduct of the Venturers or breach of this Agreement or
their fiduciary obligations by the Venturers. All judgments against the Venture
or any Venturer, with respect to which a Venturer is entitled to indemnification
must first be satisfied from the Venture assets.
13
<PAGE>
X.11 Number and Gender. Whenever required by the context hereof, the
singular shall be deemed to include the plural, the plural shall be deemed to
include the singular, and the masculine, feminine and neuter genders shall each
be deemed to include the others.
X.12 Headings. All headings contained in this Agreement are for
convenience of reference only and shall not be considered in any way in
connection with the interpretation or enforcement of any provisions of this
Agreement.
X.13 Counterparts. This Agreement may be executed and delivered in one
or more counterpart copies, and all counterpart copies so executed and delivered
shall each be deemed to be an original and all together shall constitute one and
the same Agreement binding on all of the parties hereto; provided, however, that
no signature shall be binding or effective unless and until all signatures shall
have been obtained and delivered.
X.14 Survival. In the event this Agreement shall be terminated in
accordance with the provisions of Article VIII hereof, the provisions of
Articles VIII and IX hereof shall remain in full force and effect and shall be
binding upon the Venturers for all purposes.
X.15 Waiver of Jury Trial. Each of the Venturers hereby knowingly,
voluntarily and intentionally waives (to the fullest extent permitted by
applicable law) any rights it may have to a trial by jury of any disputes
arising under or relating to this Agreement and agrees that any such dispute
shall be tried before a judge sitting without a jury. Each of the Venturers
hereby irrevocably consents to the jurisdiction and venue of the Courts of the
State of Delaware and of any Federal Court located within Newcastle County,
Delaware in connection with any action or proceeding arising out of or relating
to this Agreement or the actions contemplated hereby. Each Venturer hereby
waives personal service of any process in connection with any such action or
proceeding and agrees that the service thereof may be made by certified or
registered mail directed to the Venturer, and its counsel, at the address of
such Venturer, set forth below their respective signatures, or at such other
addresses of which the Venturer has given notice as provided in Section 10.01
hereof. In the alternative, any Venturer may effect service upon any other
Venturer in any other form or manner permitted by law.
IN WITNESS WHEREOF, this Agreement is executed effective as of the date
set forth above.
Community Acquisition and
Development Corporation, a Delaware
corporation
By: /s/ Joseph W. Gaynor
------------------------------------------
Joseph W. Gaynor
President
Address: 2 Ponds Edge Drive
Chadds Ford, PA 19317
14
<PAGE>
Asset Investors Operating
Partnership, L.P., a Delaware
limited partnership
By: Asset Investors Corporation, a Maryland
corporation, authorized to transact
business as Asset Investors
Corporation of Maryland, general
partner
By: /s/ Kevin Nystrom
------------------------------------
Name: Kevin Nystrom
Title: Senior Vice President and
Chief Financial Officer
Address: 3600 S. Yosemite Street
Suite 900
Denver, CO 80237
AIC Community Management Partnership,
a Delaware general partnership
By: Community Management Investors
Corporation, a Delaware corporation,
general partner
By:/s/ Bruce E. Moore
-------------------------------------
Bruce E. Moore
President
Address: 2 Ponds Edge Drive
Chadds Ford, PA 19317
-AND-
15
<PAGE>
By: AIC Manufactured Housing Corp.,
a Delaware corporation
By: /s/Kevin Nystrom
-------------------------------------
Name: Kevin Nystrom
Title: Vice President
Address: 3600 S. Yosemite Street
Suite 900
Denver, CO 80237
16
6374-005-447654.01
EARN-OUT AGREEMENT
(Casa Del Mar)
THIS EARN-OUT AGREEMENT, dated as of the 27th day of October, 1997, is
made and entered into by and between COMMUNITY CASA DEL MAR JOINT VENTURE, a
Delaware general partnership (hereinafter referred to as "Community"), and
WILDER CORPORATION OF DELAWARE, a Delaware corporation (hereinafter referred to
as "Wilder") and AIC COMMUNITY MANAGEMENT PARTNERSHIP, a Delaware partnership,
d/b/a Brandywine Communities ("Brandywine").
W I T N E S S E T H
In consideration of the mutual covenants set forth herein,
the parties hereto hereby agree as follows:
ARTICLE I
Definitions
1.01 "Affiliate" means any entity in which Wilder, or Community or a
shareholder, partner or member of Wilder owns, directly or indirectly, ten (10%)
percent or more of the capital interests or voting power thereof respectively,
or any individual or entity which owns, directly or indirectly, ten (10%)
percent or more of the capital interests or voting power of either Community or
Wilder, shareholders, partners or members thereof, respectively.
1.02 "Agreement" means this Earn-Out Agreement, as it may be modified
from time to time in accordance with the provisions hereof or by agreement of
Community and Wilder , as provided herein.
1.03 "Effective Date" means the 27 day of October, 1997.
1.04 "Earn-Out Price" means the sum of Sixteen Thousand Five Hundred
Fifty Dollars ($16,550.00) for each Newly Occupied Pad as that term is
hereinafter defined in Section 2.01(c).
1.05 "Property" means the Casa Del Mar Mobile Home Park described in
Exhibit "A" attached hereto and incorporated herein by reference. The address of
the Property is 29200 Jones Loop Road, Punta Gorda, Florida 33950.
1.06 "Potential Earn-Out Pads" (as such term is defined below in
Section 2.01(c)) and located on the Property.
1.07 "Sales Agreement" means that certain Agreement of Sale, having an
effective date of August 24, 1997, as amended September 30, 1997, and further
amended October 8, 1997, by and between Community Acquisition Joint Venture,
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<PAGE>
a/k/a Community Acquisition and Development Partnership as assigned to Community
wherein Wilder has agreed to sell to Community and Community has agreed to
purchase from Wilder the Property.
ARTICLE II
Earn-Out
2.01 Earn-Out. As a condition precedent to Wilder's obligation to sell
the Property and as part of the net purchase price of Three Million Eight
Hundred Fifty Thousand Dollars ($3,850,000.00), of which One Million Five
Hundred Thousand Dollars ($1,500,000.00), in value has been paid and Two Million
Three Hundred Fifty Thousand Dollars ($2,350,000.00), is still due and owing to
Wilder, Wilder and Community have agreed as follows:
(a) Management. Community shall during the term of this
Agreement enter into a management agreement with Brandywine under the terms and
conditions of the Management Agreement, a copy of which is attached hereto and
marked Exhibit "B" (the "Management Agreement").
(b) Manufactured Home Sales. Community shall retain Brandywine
to be a licensed manufactured home dealer, to handle the sales and re-sales of
manufactured homes within the Property. Community shall prepare for Wilder's
approval, a manufactured home marketing budget and rental rate pro forma (the
"MHM Budget"). Community shall provide the necessary funds that are needed to
satisfy the MHM Budget. The initial MHM Budget is attached hereto and
incorporated herein by reference. So long as Community maintains this MHM
Budget, including a cost of living adjustment throughout the term of this
Agreement, the MHM Budget shall be deemed approved by Wilder.
(c) Newly Occupied Pads. As of September 30, 1997, a total of
ninety-eight (98) manufactured housing pads are currently occupied on this
Property or subject to pending contracts (and these pads subject to pending
contracts were purchased by Community) as evidence by that certain Rent Roll
dated as of the 30th day of September, 1997, and certified as of October 24,
1997, by Wilder to be true and correct, a copy of which is attached hereto and
incorporated herein by reference as Exhibit "C" (the "Existing Occupied Pads").
At full occupancy of Phase I of the Property it will have a total of 243
manufactured housing pads in Phase I (of which three (3) are being utilized for
the water plant) leaving a balance of two hundred and forty (240) developed lots
. Thus, as of October 24, 1997, one hundred forty two (142) manufactured housing
pads are currently unoccupied in Phase I (the "Potential Earn-Out Pads"). At the
end of each Monthly Earn-Out Period (as such term is defined below), the parties
shall determine which of the Potential Earn-Out Pads were occupied by Tenants.
The Potential Earn-Out Pads that were occupied during such prior Monthly
Earn-Out Period shall hereinafter be referred to the "Newly Occupied Pads".
During each subsequent Monthly Earn-Out Period, the manufactured housing pads
that were deemed Newly Occupied Pads for such prior Monthly Earn-Out Period
shall for purposes of this Agreement, thereafter be deemed part of the Existing
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<PAGE>
Occupied Pads and removed from the pads deemed Potential Earn-Out Pads.
(d) Marketing Criteria. Community agrees to have on-site at
all times during the term of this Agreement, at least eight (8) manufactured
home models and an on-site sales team of not less than one (1) sales personnel
during normal business hours and Community shall use its best efforts to obtain
additional off-site signage to advertise the Property. Community also agrees to
include this Property along with all other properties owned by Community or its
Affiliates in its national advertising program.
(e) Earn-Out. Commencing as of the Effective Date, through and
including December 1, 1997, and monthly thereafter (the "Monthly Earn-Out
Period(s)") until November 1, 2022, Community agrees to pay Wilder the sum of
Sixteen Thousand Five Hundred Fifty Dollars ($16,550.00), for each newly
occupied Pad (the "Monthly Earn-Out") The Monthly Earn-Out shall be paid by
Community to Wilder on or before the 15th day of each month following each
Monthly Earn-Out Period. Unless this Agreement is terminated pursuant to
subparagraph (g) hereof, this Agreement shall terminate sixty (60) days
following the earlier of: (i) When Phase I of the Property no longer has any
Potential Earn-Out Pads remaining; or (ii) November 1, 2022, at which time
Wilder shall execute a Satisfaction of the Performance Mortgage referenced in
Section 3.02 below, during which sixty (60) day period the parties shall
complete a final accounting of the Monthly Earn-Out due Wilder hereunder and pay
any sums due Wilder. Any sums due Wilder under the Annual Earn-Out shall be paid
prior to the recording of the Satisfaction of Performance Mortgage in the Public
Records of Charlotte County, Florida.
(f) Earn-Out Payment. From October 27, 1997, to October 30,
1999, Wilder shall at its option: receive the sum of Sixteen Thousand Five
Hundred Fifty Dollars ($16,550.00) (the "Earn-Out Price") in cash for each Newly
Occupied Pad or in lieu of said cash, be paid in 4,729 AIOP Limited Partners
Partnership Units (the "AIOP Units") as calculated on the closing price as of
August 29, 1997(which was $3.50) of the stock of Asset Investors Corporation as
published in the Wall Street Journal. Commencing November 1, 1999, and annually
thereafter on November 1st of each year (the "Adjustment Date") during the term
of this Agreement, Wilder shall at its option, receive the Earn-Out Price in
cash or in lieu of said cash, the number of AIOP Units calculated by the closing
price as of the last Friday of October of that year of the stock of Asset
Investors Corporation as published in the Wall Street Journal, divided into the
Earn-Out Price to establish the number of AIOP Units per Newly Occupied Pad for
that twelve (12) month period; for example, if the stock price is $4.50, then
the number of AIOP Units would be 3,678 until the next Adjustment Date.
(g) Early Termination. If Community: (i) fails to fund the MHM
Budget for a period of thirty (30) days after written notice of the default by
Wilder, and/or (ii) fails to pay Wilder in cash or AIOP Units, the Earn-Out
Price after thirty (30) days written notice of default by Wilder, then Wilder
may terminate this Agreement.
(h) Remedies. In the event Wilder elects to terminate this
Page 3
<PAGE>
Agreement pursuant to paragraph (g) above (the "Early Termination"), Wilder
shall have the option to sue for specific performance and damages or exercise
its rights and remedies under the terms and conditions of the mortgage of even
date herewith (the "Performance Mortgage"). Any sums due Wilder shall bear
interest at the rate of fifteen percent (15%) per annum from the due date until
paid in full.
ARTICLE III
General
3.01 Books of Account and Records. The books of account and other
records pertaining to the Earn-Out shall be maintained by Brandywine at the
expense of Community at all times at 2 Ponds Edge Drive, Chadds Ford, PA 19317.
The books of account shall be maintained on a cash receipts and expenditures
basis in accordance with generally accepted accounting principles, consistently
applied, and shall show all items of income, expense, assets, liabilities,
costs, receipts, profits and losses pertaining to this Agreement, and such other
matters as the accountants of Community shall deem reasonably necessary or
appropriate. Wilder shall have the right during usual business hours to audit,
examine, and make copies of or extracts from said books of account or records as
they pertain to the Earn-Out. Such right may be exercised by an independent
certified public accountant designated by such party. Such Party shall bear all
expenses incurred in any such examination made at its request.
3.02 Performance Mortgage. Simultaneously herewith, Community has
executed a Performance Mortgage securing the performance of Community hereunder
which incorporates the terms and conditions of this Agreement by reference, as
if more specifically set forth therein.
3.03 Notices.
(a) All notices, offers, demands or requests provided for or
permitted to be given to any party, or any permitted transferee of the interest
of said party pursuant to this Agreement, must be in writing and shall be deemed
to have been properly given or served when personally delivered to the party
entitled thereto or by depositing the same in the United States mail, addressed
to said party, postpaid and registered with return receipt requested at the
address set forth on the signature page of this Agreement.
(b) All notices, offers, demands, and requests shall be
effective upon personal delivery or upon being deposited in the United States
mail in accordance with subparagraph (a) above. However, the time period in
which a response to any such notice, offer, demand or request must be given
shall commence to run three (3) days after mailing or actual delivery, whichever
occurs first. Rejection or other refusal to accept or the inability to deliver
because of changed address shall be deemed to be receipt of the notice, demand,
or request sent.
(c) By giving to the other party at least fifteen (15) days
Page 4
<PAGE>
written notice thereof, the parties hereto and their respective successors and
assigns shall have the right from time to time and at any time during the term
of this Agreement to change their respective addresses and each shall have the
right to specify as his address any other address within the United States of
America.
3.04 Governing Law. This Agreement and the obligations of the parties
hereunder shall be interpreted, construed, and enforced in accordance with the
laws of the State of Florida.
3.05 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto relative to the transactions contemplated hereunder
and supersedes any and all prior negotiations, understandings, or agreements in
regard thereto. No variations, modifications, or changes herein or hereof shall
be binding upon either Party unless and until set forth in a document duly
executed by or on behalf of each such Party as an amendment to this Agreement.
3.06 Waiver. None of the terms of this Agreement may be waived except
by an instrument in writing signed by each of the parties hereto. No consent or
waiver, express or implied, by any Party to or of any breach or default in the
performance by another Party of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance by such other Party of the same or any other obligations of such
party hereunder. Failure on the part of any party to complain of any act or
failure to act of the other party or to declare the other party in default,
irrespective of how long such failure continues, shall not constitute a waiver
of such party's rights hereunder.
3.07 Severability. In the event any provision of this Agreement or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
3.08 Binding Agreement. Subject to the restrictions on transfers and
encumbrances set forth herein, this Agreement shall inure to the benefit of and
be binding upon the undersigned parties and their respective legal
representatives, successors, and assigns. Whenever in this Agreement a reference
to any party is made, such reference shall be deemed to include a reference to
the legal representatives, successors, and assigns of such party.
3.09 Equitable Remedies. The rights and remedies of any of the parties
hereunder shall not be mutually exclusive, i.e., the exercise of one or more of
the provisions hereof shall not preclude the exercise of any other provisions
hereof. Each party confirms that damages at law may be an inadequate remedy for
a breach or threatened breach of this Agreement and agrees that, in the event of
a breach or threatened breach of any provision hereof, the respective rights and
obligations hereunder shall be enforceable by specific performance, injunction,
or other equitable remedy, but nothing herein contained is intended to, nor
shall it, limit or affect any right or rights at law or by statute or otherwise
Page 5
<PAGE>
of any party aggrieved as against the other for a breach or threatened breach of
any provision hereof, it being the intention by this Agreement to make clear the
agreement of the parties that the respective rights and obligations of the
parties hereunder shall be enforceable in equity as well as at law or otherwise.
Notwithstanding the exercise of the rights and remedies of Wilder hereunder or
under the Performance Mortgage, this Agreement and the Performance Mortgage
shall be subject to and subordinate and inferior to any lease or rental
agreement entered into by Community with any tenant occupying a manufactured
home on the Property and the only rights Wilder has with respect to a Newly
Occupied Pad shall be the collection of the Earn-Out Price due Wilder for that
Newly Occupied Pad. In the event of a foreclosure under the terms of the
Performance Mortgage, Community shall have the continued right to manage the
Property and lease Newly Occupied Pads and re-lease Existing Occupied Pads until
Wilder is paid in full through the exercise of its judgment in foreclosure.
3.10 Casa Del Mar Utilities. Wilder acknowledges receipt of that
certain letter from H2O Utility Services, Inc.("H2O") dated October 22, 1997
wherein H2O indicates that it may cost up to One Hundred Thousand Dollars
($100,000.00) (the "Bid") to expand the existing Casa Del Mar Water Treatment
Facility (the "Facility") to permit said Facility to service Phase I at Casa Del
Mar. Community and Wilder agree that as a post closing item, they will rebid the
Bid or allow H2O to perform the additional engineering needed to give Community
a firm bid in order to satisfy this condition precident to the closing of the
purchase of Casa Del Mar. Once a firm bid is obtained and accepted by the
parties that amount will be due and owing by Wilder, but in no event shall the
Bid exceed One Hundred Thousand Dollars ($100,000.00). Community agrees to
advance the amount due under the approved Bid upon the execution of the contract
pertaining to the approved Bid and Wilder shall reimburse Community the amount
so advanced up to One Hundred Thousand Dollars ($100,000.00) from the Earn-Out
Price payments due Wilder commencing with the thirty first (31st) Earn-Out Price
payment until said amount is totally reimbursed to Community, after which all
subsequent Earn-Out Price payments shall be payable to Wilder in accordance with
this Agreement.
3.11 Prevailing Party. In the event of a dispute between the parties,
the prevailing party shall be entitled to reasonable attorney's fee and
paralegal fees and court cost incurred prior to and during any litigation,
mediation or bankruptcy proceedings including interest from the date said fees
and costs were advanced by the prevailing party at the rate of ten percent (10%)
per annum.
3.12 Number and Gender. Whenever required by the context hereof, the
singular shall be deemed to include the plural, the plural shall be deemed to
include the singular, and the masculine, feminine and neuter genders shall each
be deemed to include the others.
3.13 Headings. All headings contained in this Agreement are for
convenience of reference only and shall not be considered in any way in
connection with the interpretation or enforcement of any provisions of this
Agreement.
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<PAGE>
3.14 Counterparts. This Agreement may be executed and delivered in one
or more counterparts and by facsimile, and all of which shall be fully effective
as an original and all of which shall constitute one and the same instrument
binding on all of the parties hereto; provided, however, that no signature shall
be binding or effective unless and until all signatures shall have been obtained
and delivered.
3.15 Joinder. Brandywine hereby joins in the execution of this
Agreement so as to bind said parties to the specific paragraphs set forth herein
as well as the terms and conditions of the exhibits referenced herein in which
Brandywine is to be a party.
3.16 Waiver of Jury Trial. Each of the parties hereby knowingly,
voluntarily and intentionally waives (to the fullest extent permitted by
applicable law) any rights it may have to a jury trial by jury of any disputes
arising under or relating to this Agreement and agrees that any such dispute
shall be tried before a judge sitting without a jury. Each of the parties hereby
irrevocably consents to the jurisdiction and venue of the Courts of the State of
Florida and of any Federal Court located within Hillsborough County, Florida in
connection with any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. Each party hereby waives
personal service of any process in connection with any such action or proceeding
and agrees that the service thereof may be made by certified or registered mail
directed to the party, and its counsel, at the address of such party, and its
counsel, set forth in Section 3.03 hereof, or at such other addresses of which
the party has given notice as provided in Section 3.03 hereof. In the
alternative, any party may effect service upon any other party in any other form
or manner permitted by law.
THE REST OF THIS PAGE LEFT INTENTIONALLY BLANK
Page 7
<PAGE>
IN WITNESS WHEREOF, this Agreement is executed effective as of the date
set forth above.
WITNESSETH: COMMUNITY CASA DEL MAR JOINT
VENTURE, a Delaware general partnership
By: COMMUNITY ACQUISITION AND DEVELOPMENT
CORPORATION
/s/ Katherine A. Baserap
- ---------------------------------
Name: Katherine A. Baserap By: /s/ Joseph W. Gaynor
---------------------------------
Joseph W. Gaynor, President
/s/ Mary Canotenoto Address: 2637 McCormick Dr., Ste.
- ---------------------------------
B
Name: Mary Canotenoto Clearwater, FL 33759
WILDER CORPORATION OF DELAWARE, a
Delaware corporation
/s/ Mary Canotenoto By:/s/Maurice Wilder
- --------------------------------- ----------------------------------------
Name: Mary Canotenoto Maurice Wilder, President
.Address: 3000 Gulf to Bay Blvd. 6th Floor
/s/ Katherine A. Baserap Clearwater, FL 34619
- -----------------------------
Name: Katherine A. Baserap
AIC Community Management Partnership, a
Delaware general partnership, d/b/a
Brandywine Communities
/s/ Katherine A. Baserap
- ----------------------------- By:Community Management Investors
Name: Katherine A. Baserap Corporation,
a Delaware corporation, General Partner
By: /s/Joseph W. Gaynor
/s/ Mary Canotenoto --------------------------------
Name: Mary Canotenoto Joseph W. Gaynor Vice President
Address: 2 Ponds Edge Drive
Chadds Ford, PA 19317
Page 8
SCHEDULE OF OMITTED
AGREEMENTS OF SALE
The Company has also entered into three additional Agreements of Sale which are
substantially identical to the following Agreement of Sale in all material
respects except as to the Real Property, Purchase Price, and Additional Purchase
Price (as a percentage of the seller's cost of Mobile Home Inventory). Listed
below are the material details in which such documents differ from the document
filed as part of this exhibit.
<TABLE>
<CAPTION>
Additional
Purchase Price Purchase Price *
Real Property
- ---------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
Pinewood Mobile Home Park and Pleasant Living Mobile Home Park $10,700,000 100%
Brentwood Estates $ 1,250,000 80%
Casa del Mar Estates Mobile Home Park $ 3,850,000 100%
<FN>
* as a percentage of the seller's cost of Mobile Home Inventory
</FN>
</TABLE>
<PAGE>
(Community Acquisition and Development
National Agreement of Sale)
AGREEMENT OF SALE
(Sunlake Estates)
THIS AGREEMENT OF SALE made as of this 22nd day of August, 1997, by and
between COMMUNITY ACQUISITION AND DEVELOPMENT PARTNERSHIP, a Delaware joint
venture("BUYER") and WILDER CORPORATION OF DELAWARE, a Delaware corporation
("SELLER").
WHEREAS, SELLER is the fee simple owner of certain premises commonly
known as SUNLAKE ESTATES, located in Lake County, Florida, more particularly
described in Exhibit "A" attached hereto and made a part hereof (together with
all rights and easements appurtenant thereto and all permanent improvements,
fixtures and utility systems thereon, being hereinafter collectively referred to
as the "Real Property"); and
WHEREAS, SELLER desires to sell and BUYER desires to purchase the Real
Property and all personal property, including Mobile Home Inventory (the "Mobile
Home Inventory"), if any, and equipment described in the Schedule of Personal
Property attached hereto as Exhibit "B" and "B-1", respectively, and made a part
hereof (the "Personal Property"), under the terms and conditions set forth
herein (the aforesaid Real Property and Personal Property being hereinafter
collectively referred to as the "Property").
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, together with other valuable considerations, the receipt and sufficiency
of which is hereby acknowledged, SELLER agrees to sell and BUYER agrees to buy
the Property on and under the terms and conditions herein set forth.
1. SALE AND PURCHASE OF PROPERTY. SELLER agrees to sell and convey to
BUYER and BUYER agrees to purchase:
(a) All of SELLER's right, title and interest in and to the
Real Property, together with all right, title and interest of SELLER in and to
any land lying in the beds of any streets, avenues, alleys or passages, open or
proposed, bounding or abutting the Real Property, and drainage rights
appurtenant to the Real Property, together with all right, title and interest,
if any, of SELLER, in and to any easements, rights of way or passageways
appurtenant to or benefiting the Real Property and free of all liens and
encumbrances except the Permitted Exceptions, as that term is defined in
Paragraph 4 hereof;
(b) All articles of personal property of whatsoever nature or
sort, if any, which are owned by SELLER and which, as of the date of this
Agreement of Sale, are attached or appurtenant to or used in connection with or
located in or upon the Real Property, and any additions thereto or replacements
thereof which may be made between the date of this Agreement of Sale and the
date of Closing hereunder (all of the foregoing being hereinafter collectively
referred to as the "Personal Property"), which Personal Property shall be
Page 1
<PAGE>
conveyed by SELLER to BUYER at Closing by a quit-claim bill of sale; and
SELLER's interest in the Mobile Home Inventory shall be transferred by
certificates of title to the mobile homes listed on Schedule B-1 attached
hereto, if any.
SELLER's interest in the Real Property and the Personal Property are
hereinafter sometimes referred to collectively as the "Property".
2. CONSIDERATION. The total consideration to be paid by BUYER for the
Property shall be in the sum of FIVE MILLION SEVEN HUNDRED THOUSAND DOLLARS
($5,700,000.00) (the "Purchase Price").
3. PAYMENT OF CONSIDERATION. The Purchase Price shall be paid as
follows:
(a) Within five (5) calendar days of the Effective Date of
this Agreement of Sale, as that term is defined in paragraph 34 below, BUYER
shall deliver to Chicago Title Insurance Company, 700 S. Flower, 9th Floor, Los
Angeles, CA 90017 (the "Escrow Agent"), the sum of FIFTY THOUSAND DOLLARS
($50,000.00) which shall represent the earnest money deposit for the Property,
"Deposit". It is hereby agreed that the Deposit shall be in the form of a check
from BUYER and it shall be deposited by Escrow Agent in its Trust Account until
the expiration of the BUYER's Inspection Period (as hereinafter defined).
(b) The Escrow Agent shall, upon receipt from BUYER of a
complete and fully executed W-9 Reporting Form, deposit the Deposit (the
"Deposit") into an interest bearing money market account, which interest shall
accrue to BUYER's benefit unless BUYER defaults hereunder.
(c) BUYER shall pay Seller at Closing an additional purchase
price (the "Additional Purchase Price"), a sum equal to SELLER's cost of the
Mobile Home Inventory, including setups as set forth on Exhibit "B-1", if any.
(d) BUYER shall pay to SELLER at Closing by wire transfer of
immediately available federal funds at the office of the Escrow Agent the
balance of the Purchase Price and Additional Purchase Price, if any, however, at
least five (5) business days prior to Closing, SELLER shall have the option
("Seller's Stock Option") by written notice to BUYER to receive in lieu of cash,
operating partnership units ("AIOP Units") in Asset Investors Operating
Partnership, L.P., a Delaware limited partnership ("AIOP"), which are
convertible to stock in Asset Investors Corporation ("AIC"), based on the
greater of book value or market value of AIC stock as of the date of Closing,
for all or any portion of the net proceeds due Seller at Closing. The AIOP Units
and AIC stock shall be Rule 144 restricted stock for a period of one year from
the date of closing.
(e) If SELLER does not elect Seller's Stock Option as set
forth in paragraph 3(c) above, BUYER shall cooperate with SELLER or SELLER's
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Exchange Facilitator/Accommodator to achieve an IRS Code Section 1031 Exchange,
so long as BUYER incurs no additional costs or liability, nor is required to
take title to other property involved in such exchange, if any. The transaction
contemplated by this Agreement is not subject to or conditioned upon such
exchange being accomplished
4. TITLE INSURANCE.
A. Within five (5) days of the Effective Date of this
Agreement by SELLER, SELLER shall deliver to BUYER and Escrow Agent a copy of
the owner's current title insurance policy, if any, together with copies of all
instruments recorded in the public records or otherwise encumbering the
Property, subsequent to the effective date of said Policy.
B. Within twenty (20) days of the Effective Date of this
Agreement, Escrow Agent shall, at SELLER's expense, deliver to BUYER and BUYER's
Attorney for approval, as hereinafter provided, with a copy provided to SELLER's
attorney, a preliminary owner's title binder for a title insurance policy,
together with copies of all exception documents referred to therein, to be
issued by an agent of Escrow Agent licensed and qualified to do business in the
state in which the Real Property is located (the "State"). The binder and policy
to be issued pursuant thereto shall be paid for by SELLER, shall be issued at
the minimum promulgated rate, and shall be in an amount equal to the amount of
the purchase price. The policy and binder shall be in a current ALTA standard
form "B", except that there shall be no exceptions unless agreed to by BUYER.
The policy shall insure marketable title.
C. BUYER shall have ten (10) days after receipt of the title
binder, together with copies of all exception documents referred to therein, and
the survey called for in paragraph 5 hereof to give written notice to SELLER or
SELLER's attorney of any objections by BUYER to the state of title (including
any matters shown on the survey which are unacceptable to BUYER). Failure of
BUYER to deliver a written notice of disapproval of the state of title to SELLER
or SELLER's attorney within said ten (10) day period shall be conclusive
evidence that BUYER has approved each and every matter contained in said
preliminary title report and shown on the survey and that BUYER will accept
title in that condition.
D. After due notice, SELLER shall have a reasonable time, not
to exceed thirty (30) days, to cure any title defects (and if necessary, the
Closing shall be delayed for that period). If SELLER fails to cure any title
defect as to which due notice is given, BUYER shall have the option to:
(a) terminate this Agreement, in which case BUYER
shall notify SELLER that BUYER will not proceed with the purchase, whereupon
this Agreement shall terminate and all parties shall be released from any
further obligations hereunder, except that BUYER shall be entitled to an
immediate refund of all monies paid in respect of the purchase price plus
accrued interest, if any, or
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(b) proceed under this Agreement and accept title to
the Real Property subject to such defects, in which case the Closing shall take
place on the later of the date set for Closing as hereinafter provided or on a
date mutually agreed upon by SELLER and BUYER which shall be within ten (10)
days from the date of such election by BUYER (the date finally set by the
parties hereto for the Closing shall be hereinafter referred to as the "Closing
Date").
E. Escrow Agent or its agent, shall be in attendance at the
Closing and be in a position to issue the title policy upon recording the
appropriate documents and insure that SELLER has complied with all requirements
set forth under the applicable state statutes to extinguish any right of
purchase or rescission in favor of any tenants or homeowners association.
5. SURVEY. BUYER shall, at its expense, within twenty (20) days of the
Effective Date of this Agreement of Sale, obtain a current "as built" survey of
the Real Property. The survey must be acceptable and certified to BUYER and to
the Title Insurer insuring the Real Property so that the "survey" and "claims of
easements" exceptions can be removed from the title policy, and must be prepared
in accordance with the minimum requirements adopted by the agency or authority
regulation the preparation of surveys in the State in which the Real Property is
located. The survey shall locate all easements, streets, common area
improvements, building setback lines, and other manmade objects, excluding
manufactured homes and shall be super- imposed over an aerial photograph so as
to locate all manufactured homes and vacant spaces, if any. If the survey
discloses an encroachment or setback violation, this shall be deemed a defect in
title and paragraph 4 above, shall apply. The survey shall be dated and signed
by a registered and/or licensed land surveyor in the state in which the Real
Property is located. The surveyor's seal shall be affixed to the survey. The
surveyor's registration and/or license number shall be indicated thereon, and
the legal description of the Real Property shall be set forth on the survey. Any
other survey requirements in the Title Commitment shall also be complied with,
including a surveyor's certificate acceptable to the Title Insurer and counsel
for BUYER.
6. REPRESENTATIONS AND WARRANTIES.
A. To induce BUYER to enter into this Agreement, SELLER makes
the following representations and warranties, all of which shall be true and
correct continuously throughout the term of this Agreement, and which shall
survive the closing of title for a period of six (6) months from the Closing
Date (hereinafter defined):
(a) SELLER is the owner of the Property and has the
authority to execute and deliver this Agreement.
(b) To the best of SELLER's knowledge, there are no
special or other assessments levied against or relating to the Property and
SELLER does not know of any proposed assessments.
(c) No goods or services have been contracted for by
SELLER or furnished to the Real Property on SELLER's behalf which might give
rise to any mechanic's liens upon or affecting all or any part of the Real
Property.
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(d) There are no leases which affect the Real
Property except as set forth in the Rent Roll attached hereto as Exhibit "C" and
made a part hereof and the information contained on the Rent Roll is true and
correct; no rental agents, brokers or finders have any rights with regard to
such leases and there are no commissions payable in connection therewith; no
tenant has an option to purchase any part of the Property; and SELLER is the
assignee under each such lease and has the right to assign same to BUYER.
(e) SELLER has received no notice of any violations
of any law, ordinance, rule, order, regulation, code or requirement, including
any requirement contained in any hazard insurance policy covering the Property
or any part thereof or of any board of fire underwriters or other body
exercising similar functions, which are applicable to the Property or to any
part thereof or which are applicable to the use or manner of use, occupancy,
possession or operation of the Property.
(f) To the best of SELLER's knowledge, SELLER has
obtained and kept in good standing all governmental permits, licenses, and
approvals necessary for the operation of the Property as a manufactured housing
(mobile home) community, including, as applicable, all County Health Permits or
other applicable permits, State Department of Environmental Protection permits
and State HRS permits, and, to the best of SELLER's knowledge, there are no
material violations currently existing thereunder.
(g) A prospectus of the type required by the State
and local governmental agencies having jurisdiction over the Real Property (the
"Governing Laws"), has been provided to each tenant of the Property, if so
required by the Governing Laws. BUYER will not provide any prospectus to a
tenant of the Property prior to Closing unless both SELLER and BUYER have
approved such prospectus in writing.
(h) SELLER has not contracted for any services or
employment and has made no commitments or obligations therefor which will bind
BUYER as a successor in interest with respect to the Property except those
contracts listed in Exhibit "D" (the "Service Contracts"). With respect to the
Service Contracts: (i) amounts paid or payable thereunder shall be prorated
between the parties at the Closing and credits shall be given the parties as
appropriate to such prorations; and (ii) they can each be terminated upon thirty
(30) days written notice or less except (i) Garbage Removal Agreement, (ii)
Sludge Removal Agreement, (iii) CATV Agreement, and (iv) Laundry Leases.
(i) Except in the ordinary course of SELLER's
business, SELLER will not enter into any amendment to or modification of any of
the Leases prior to the Closing Date, which will reduce, forgive, or postpone
any rents or which would otherwise materially affect the value of the Property,
without BUYER's consent; no rents or other deposits are or will on the Closing
Date be held by SELLER, except only tenant security deposits and prepaid rents
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for the current month; and no commissions or other fees payable to any person,
entity or agent are due on the rentals collected or to be collected under the
Leases.
(j) Pending Closing hereunder, SELLER shall conduct
its business involving the Property in the ordinary course, and during said
period will:
(1) Refrain from entering into any contracts
or other commitments regarding the Property, other than in the ordinary and
usual course of business, without the prior written consent of BUYER;
(2) Continue to maintain and repair the
Property in at least the manner which SELLER has previously maintained and
repaired the Property, and SELLER will permit or commit no waste of the
Property;
(3) Keep in effect SELLER's existing
policies of public liability and hazard and extended coverage insurance insuring
the Property; and
(k) No tenant has been granted any rent concession
not reflected on the face of the copy of the lease for that tenant as provided
by SELLER to BUYER (other than as set forth on the Rent Roll).
(l) To the best of SELLER's knowledge no underground
storage tanks, hazardous substances, or contaminants subject to Federal, state
or local laws or regulation have been used, stored or located on, under or about
the Property in any manner contrary to applicable law and the Property is free
from environmental contamination by such hazardous substances which require
remediation except as set forth in any Phase I Environmental Audit Summary
attached hereto as Exhibit "E".
B. SELLER, by executing this Agreement, agrees to indemnify,
defend and save and hold BUYER harmless from and against any and all losses,
costs, expenses, liabilities, claims, causes of action, suits or other matters
by reason of any breach of the above representations and warranties. Such
indemnification includes, but is not limited to, costs and attorneys' fees and
expenses (including attorneys' fees and expenses on appeal) reasonably incurred
in connection with the defense of any claims against BUYER by any party arising
out of the above matters. The SELLER's foregoing indemnity obligation shall
survive Closing and delivery of the Special Warranty Deed hereunder for a period
of six (6) months. In addition, should any representation or warranty made by
SELLER hereunder be determined by BUYER at or before Closing to be incorrect and
BUYER opt to terminate this Agreement as a result thereof, SELLER shall be
obligated to reimburse BUYER promptly upon written demand for the costs of
BUYER's diligence review of the Property through the date of termination up to a
maximum of $25,000.00. This indemnity obligation shall survive Closing and
delivery of the Special Warranty Deed hereunder and shall include all attorneys'
fees and costs incurred in collection of all sums due from SELLER to BUYER
pursuant to this Indemnity, together with interest on said sums at the maximum
rate permitted by law through collection.
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C. In the event that any one or more of the representations or
warranties given by SELLER to BUYER in paragraph 6(a) above is/are determined by
BUYER between the Closing Date and the Effective Date, to be inaccurate, BUYER
shall give written notice to SELLER and SELLER shall have the option to: use its
best efforts to promptly cure the violation(s); reimburse BUYER for the
reasonable cost of cure (including all reasonable attorneys' fees, engineering
fees, or other applicable fees, costs and charges not to exceed $5,000.00); or
to contest BUYER's determination by written notice to BUYER, in which event
BUYER shall have the option to pursue the rights and remedies available to BUYER
pursuant to paragraph 20 of this Agreement.
7. TERMITE INSPECTION AND REPORT. Prior to the expiration of the
Inspection Period and at BUYER's expense, BUYER shall obtain a termite
certificate for the Property. Any infestation or damage therefrom found to be
existing shall be repaired in a reasonable time, not to exceed two (2) months
from the Closing Date, at SELLER's expense not to exceed $1,000.00. In the event
SELLER fails to make said repairs within said time period, BUYER shall have the
right to make said repairs and to collect the cost thereof (not to exceed
$1,000.00) from SELLER in the manner provided for a reproration pursuant to
paragraph 12 below. Any sums advanced by BUYER in this connection shall bear
interest at the highest lawful rate until paid. This paragraph shall survive the
closing of this transaction and delivery of the Special Warranty Deed.
8. BUYER'S INSPECTION PERIOD.BUYER shall have until the Closing Date
("BUYER's Inspection Period") commencing from the Effective Date, during which
time BUYER shall have the right to perform such due diligence evaluations as
BUYER may reasonably require in connection with its evaluation of the Property,
including, but not limited to, environmental, soils, flood plain, legal,
financial and engineering studies, all at BUYER's sole cost and expense. BUYER
hereby indemnifies and agrees to hold harmless and defend SELLER from and
against any and all losses or claims for property damage or personal injury or
any liability under any environmental or other law arising out of BUYER's
inspections and BUYER and/or any contractor of BUYER shall, prior to entry on
the Real Property hereunder, obtain casualty/liability insurance in an amount
satisfactory to SELLER, or to add SELLER to existing policies as a named
insured, and provide SELLER with a certificate of insurance evidencing that
SELLER is insured against any such loss. In the event that any inspection by
BUYER or any consultant engaged by BUYER in connection with BUYER's due
diligence results in any damage or disturbance to the Property or any other
damage or disturbance which Tenant requires SELLER to repair, BUYER shall cause
such consultant, or undertake itself, at no cost to SELLER, to repair promptly
such damage and restore such Property to the condition it was in immediately
prior to such inspection. If BUYER, in BUYER's reasonable judgment, believes the
results of its due diligence investigation to be unsatisfactory, BUYER may elect
to terminate this Agreement of Sale by written notice to SELLER delivered not
later than the last day of BUYER's Inspection Period. In such event, the Deposit
will be refunded to BUYER by Escrow Agent. If BUYER fails to deliver notice of
termination, as aforesaid, BUYER shall be deemed to have irrevocably waived its
right to terminate this Agreement of Sale pursuant to this paragraph 8, and
shall be obligated to pay to the Escrow Agent the Deposit described in paragraph
3(b). BUYER's Inspection Period shall be extended one (1) day for each day
SELLER fails to provide BUYER with the following:
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1. Current Rent Roll;
2. Monthly Financial Statements for the previous thirty-
six (36) months;
3. Community Prospectus or comparable State required
documents;
4. Mobile Home Inventory List;
5. Previous Title Insurance Policy;
6. Prior Survey;
7. Liability Listing (contingent and non-contingent);
8. Lists of all current and previous legal action;
9. Existing Environmental Phase I Report (if any);
10. True Copies of paid real estate and personal
property tax bills for the previous three (3) years;
11. True Copies of Rental Increase Notices for previous
three (3) years.
9. CONDITIONS PRECEDENT. The following are conditions precedent to
BUYER's obligation to close and consummate the transaction contemplated by this
Agreement. BUYER and only BUYER, may waive one or more of these conditions. In
the event that all of these conditions are not satisfied or fulfilled by the
Closing Date, BUYER may elect not to close this transaction, and in such event,
BUYER shall be entitled to the prompt return from Escrow Agent of the Deposit:
A. The representations and warranties of SELLER contained in
paragraph 6 above, and all other representations and warranties of SELLER
contained herein, shall be true and correct on the Closing Date. SELLER, by
having closed the sale of the Property, shall be deemed conclusively to have
certified that as of the Closing Date all such representations and warranties
were true and correct on the Closing Date.
B. There shall have been no material change in the physical
condition or the net operating income of the Property.
10. CLOSING. The sale and purchase transaction contemplated by this
Agreement shall be closed and consummated on or before September 30, 1997 (the
"Closing Date") unless otherwise mutually extended in writing by the SELLER and
BUYER. Closing shall be at the offices of SELLER's counsel or, at BUYER's
option, may be effected through the mail as coordinated by counsel for SELLER
and BUYER. Notice shall be given to Escrow Agent at least five (5) days in
advance of the date established by the parties for Closing. The Closing shall be
at 10:00 A.M., Eastern Standard Time on the Closing Date unless otherwise agreed
by the parties or their counsel. At Closing, SELLER and, as applicable, BUYER
shall execute and deliver the following documents in form acceptable to BUYER
and/or undertake the following:
A. All corporate or applicable partnership certifications,
resolutions and approvals necessary to evidence both the SELLER's and BUYER's
authority to enter into and consummate the transactions contemplated by this
Agreement.
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B. Special Warranty Deed from SELLER to BUYER conveying title
to the Real Property to BUYER free and clear of all liens, encumbrances and
matters other than the Permitted Exceptions.
C. Bill of Sale from SELLER to BUYER transferring the Personal
Property free and clear of all liens and encumbrances together with the original
Motor Vehicle Certificate of Title (properly endorsed and lien free) for each
mobile home unit and motor vehicle included in this purchase and sale.
D. Affidavit of No Liens by SELLER.
E. Affidavit of Non-Foreign Status by SELLER.
F. Affidavit of Compliance by SELLER in conformity with
Governing Laws, if applicable.
G. Updated Certified rent roll dated and accurate as of the
Closing Date and certified by SELLER to BUYER.
H. Assignment from SELLER to BUYER assigning all of SELLER's
right, title and interest, to the extent it exists and without representation or
warranty, in and to the name by which the Property is commonly known, all
authorizations, permits and licenses relating to the operation of the Property
which are assignable by SELLER, if any, and all leases, contracts and other
items required to be assigned as set forth in this Agreement free and clear of
all liens and encumbrances except for the matters permitted in this Agreement;
all of which shall be assumed by BUYER effective from and after the Closing
Date. SELLER shall undertake all action, and execute all forms, required by all
governmental authorities and contract vendors to effect this assignment.
I. Assignment by SELLER, to the extent they exist and without
representation or warranty, of all currently existing and effective claims,
guaranties, warranties, indemnifications and all other rights, if any, which
SELLER may have against suppliers, laborers, materialmen, contractors, or
sub-contractors arising out of or in connection with the installation,
construction and maintenance of the Property; all of which shall be assumed by
BUYER effective from and after the Closing Date.
J. Assignment by SELLER, to the extent they exist and without
representation or warranty, to BUYER of all agreements, if any, which SELLER has
for access and utilities to service the Property; all of which shall be assumed
by BUYER effective from and after the Closing Date.
K. Closing Statement by SELLER and BUYER.
L. Such other documents as are reasonably necessary to close
and consummate the purchase and sale transaction contemplated by this Agreement.
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M. SELLER shall deliver to BUYER all existing plans and
specifications relating to the improvements located upon the Property which are
in SELLER's possession or reasonably accessible to SELLER.
N. SELLER shall deliver and assign to BUYER all of SELLER's
right, title and interest, if any, in and to all licenses, permits, certificates
of occupancy, mobile home titles (for SELLER owned mobile home units, if any)
and such other comparable certificates or documents issued by the appropriate
governmental authorities with respect to the Property or any part thereof which
are legally assignable by SELLER, if any.
O. BUYER shall deliver to SELLER the adjusted cash portion of
the Purchase Price and authorize Escrow Agent's delivery of the Deposit to
SELLER. Said sum shall be paid, at SELLER's election, by locally drawn cashier's
check or Federal Reserve Bank wire transfer.
11. CLOSING COSTS. SELLER shall pay for the cost of any corrective
documents required for marketable and insurable title, transfer stamps, if any,
on the Special Warranty Deed and all costs associated with the issuance of the
title binder and policy. BUYER shall pay for the cost of recording the Special
Warranty Deed and survey. Each party shall bear its own attorneys' fees and
other professional costs, except as otherwise provided for herein.
12. PRORATIONS. Except as otherwise set forth in this Agreement, all
taxes and other operating expenses and revenue of the Property shall be prorated
as of the Closing Date. Taxes shall be prorated based upon the current year's
tax taking into account the maximum available discount. If the Closing takes
place and the current year's taxes are not fixed and the current year's
assessment is available, taxes shall be prorated based upon such assessment and
the prior year's millage. If the current year's assessment is not available,
then taxes shall be prorated on the prior year's tax taking into account the
maximum available discount. In the event the tax proration is incorrect on the
Closing Date because the property is reassessed for the tax year of the Closing
by the governmental agency having jurisdiction over the Property, subsequent to
the Closing Date, BUYER or SELLER shall be entitled, as the case may be, to a
reproration of such taxes upon written request made to the other party. SELLER
or BUYER shall remit the reproration adjustment amount requested within ten (10)
days of request therefor. In the event SELLER or BUYER fails to remit the
reproration amount requested within said ten (10) day period, the party seeking
reimbursement shall be entitled to all costs of collection, including all
attorneys' fees and costs incurred in collection thereof and the amount owing
shall bear interest at the highest lawful rate until paid, it being acknowledged
that this right shall survive Closing and delivery of the Special Warranty Deed.
Any rents received by SELLER in respect of the period after the Closing Date
shall be promptly remitted to BUYER. With regard to delinquent rents, if any,
BUYER shall not be held responsible for and BUYER shall not be required to
institute any proceedings whatsoever to collect such delinquent rents. However,
all rents received by BUYER attributable to periods prior to the Closing Date
shall be promptly remitted by BUYER to SELLER. All rents collected after the
Closing shall be first applied to current rents due, then to rents for periods
prior to the Closing Date unless they are clearly intended by the tenant to
apply for the period prior to Closing in which event they shall be promptly
remitted to SELLER. This obligation to remit shall survive the Closing and
delivery of the Special Warranty Deed. SELLER shall deliver to BUYER at the
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Closing, copies of such statements, invoices bills and receipts as shall be
requested by BUYER to enable BUYER to verify the accuracy of the amounts of any
prorations made pursuant to this paragraph. BUYER shall be credited at Closing
with all advance rentals and tenant security deposits previously paid to SELLER.
All prorations shall be made so that SELLER has the benefit of all income and
the burden of all expenses up to and including the Closing Date and BUYER has
the benefit of all income and the burden of all expenses after the Closing Date.
13. DELIVERY OF POSSESSION. At Closing, SELLER shall deliver to BUYER
possession of the Real Property free and clear of all leases, tenancies or
occupancy and subject only to the Permitted Exceptions.
14. FIRE OR OTHER CASUALTY. For purposes of this Agreement of Sale, a
"minor casualty" shall be any casualty occurring to the Real Property which
causes damages of less than One Hundred Fifty Thousand Dollars ($150,000.00) to
the Real Property. Any other casualty shall be a "major casualty". If, prior to
Closing hereunder, the Real Property is subjected to a major or minor casualty
of which SELLER becomes aware, SELLER shall give BUYER prompt written notice
thereof. If such casualty is a minor casualty, this Agreement of Sale shall
remain in full force and effect and the purchase contemplated herein shall be
concluded with no further adjustment, and at Closing SELLER shall assign,
transfer and set over to BUYER all of the right, title and interest of SELLER in
and to any awards that have been or that may thereafter be made for such
casualty, subject only to any rights of Tenant under each Lease. If such
casualty is a major casualty, the Real Property shall be considered a defective
parcel and BUYER shall have the right to terminate this Agreement whereupon the
Deposit will be refunded to the BUYER and the parties will be released from any
further liability hereunder.
15. EMINENT DOMAIN. For purposes of this Agreement of Sale, a "minor
condemnation" shall be any taking or condemnation by any body having the power
of condemnation or eminent domain which causes damages of less than One Hundred
Fifty Thousand Dollars ($150,000.00) to the Real Property. Any other taking or
condemnation shall be a "major condemnation". If prior to Closing hereunder the
Real Property is subjected to a major or minor condemnation of which SELLER
becomes aware, SELLER shall give BUYER prompt written notice thereof. If such
condemnation is a minor condemnation, this Agreement of Sale shall remain in
full force and effect and the purchase contemplated herein, less any interest
taken by eminent domain or condemnation, shall be effected with no further
adjustment, and at Closing, SELLER shall assign, transfer and set over to BUYER
all of the right, title and interest of SELLER in and to any awards that have
been or that may thereafter be made for such taking, subject only to rights of
Tenant under any Lease. If such condemnation is a major condemnation, the Real
Property subject to the major condemnation shall be considered a defective
parcel and BUYER shall have the right to terminate this Agreement whereupon the
Deposit will be refunded to the BUYER and the parties will be released from any
further liability hereunder
16. NOTICES. All notices and other communications under this Agreement
of Sale shall be in writing and shall be effectively given only if sent by
nationally recognized overnight courier service, postage prepaid, return receipt
requested, addressed as follows:
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To SELLER: Wilder Corporation of Delaware
3000 Gulf to Bay Boulevard
Sixth Floor
Clearwater, FL 34619
Fax: (813) 791-1798; (813) 799-2111
With a copy to: Mary Carotenuto, Esq.
3000 Gulf to Bay Blvd, Ste. 206
Clearwater, FL 37753
Fax: (813) 797-7826; (813) 725-0270
To BUYER: Community Acquisition and Development Partnership
Attn: Joseph W. Gaynor
2637 McCormick Dr., Ste. B
Clearwater, FL 34619
FAX No. (813) 791-9200; (813) 669-9200
With a copy to: Kevin Nystrom
Commercial Assets, Inc.
3600 Yosemite St., Ste. 350
Denver, CO 80237
FAX No. (303) 773-3461; (303) 759-8600
or such other address as the party to be notified shall have designated to the
other party hereby by notice delivered in . accordance herewith. All such
notices shall be deemed given on the business day next following the day such
notice is accepted for delivery by the overnight courier service.
17. ASSIGNMENT OF NAME. At Closing, SELLER shall assign to BUYER,
without limitation, all of its right, title and interest in the name by which
the Property is commonly known hereinbefore referred to.
18. ASSIGNMENT. BUYER may assign its rights and interests under this
Agreement of Sale to AIOP or an affiliate to be formed by BUYER without first
obtaining the prior written consent of SELLER. Prior to the expiration of the
Inspection Period, BUYER will notify SELLER of the identity of any proposed
assignee of this Agreement of Sale.
19. SUPPLIES. Inventories of supplies, including but not limited to
paint, toilet tissue, soap, paper towels and all cleaning materials, if any
located on the Real Property on the Closing Date shall be transferred to BUYER
at no additional cost at the time of Closing and shall be covered by the Bill of
Sale.
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20. DEFAULT BY SELLER. If, under the provisions of this Agreement,
SELLER shall be obligated to complete the sale of the Property but fails to do
so within the applicable period provided for closing and such default continues
for a period of fifteen (15) days after written notice thereof from BUYER to
SELLER, or shall otherwise fail to perform any of the other obligations of
SELLER hereunder within the required time period, BUYER shall have the option,
to be exercised in its sole discretion, to: (a) apply to the Circuit Court of
the County where the Real Property is located to seek to have specific
performance under this Agreement and in such action shall have the right to
recover legally cognizable damages suffered by BUYER by reason of the delay in
BUYER's acquisition of the Property; or (b) sue SELLER for legally cognizable
damages sustained by BUYER by reason of the default of SELLER provided, however,
that in no event shall the damages recoverable exceed Fifty Thousand Dollars
($50,000.00); or (c) obtain the prompt return from Escrow Agent of the Deposit,
with interest, together with any other amounts due and owing to BUYER pursuant
to the terms of this Agreement, and thereafter terminate this Agreement.
21. DEFAULT BY BUYER. If, under the provisions of this Agreement, BUYER
shall be obligated to complete the purchase of the Property but fails to do so
within the applicable period provided for closing, and such default continues
for a period of fifteen (15) days after written notice thereof from SELLER to
BUYER, SELLER shall have the option, to be exercised in its sole discretion, to:
(a) apply to the Circuit Court of the County where the Real Property is located
to seek to have specific performance under this Agreement and in such action
shall have the right to recover legally cognizable damages suffered by SELLER by
reason of the delay in BUYER's acquisition of the Property; or (b) sue BUYER for
legally cognizable damages sustained by SELLER by reason of the default of BUYER
provided, however, that in no event shall the damages recoverable exceed Fifty
Thousand Dollars ($50,000.00); or (c) obtain the prompt release from Escrow
Agent of the Deposit, with interest, together with any other amounts due and
owing to SELLER pursuant to the terms of this Agreement, and thereafter
terminate this Agreement.
22. PROVISIONS WITH RESPECT TO ESCROW.
(a) The duties and obligations of Escrow Agent hereunder shall
be entirely administrative and ministerial and not discretionary. Escrow Agent
shall be under no responsibility in respect of the Deposit other than to
faithfully follow the instructions herein contained. Escrow Agent may
conclusively rely upon any instructions or documents delivered to it by BUYER
and SELLER and purportedly executed by a duly authorized officer or partner
thereof and shall be under-no duty of independent inquiry with respect to any
facts or circumstances recited therein. In the event that any notice or
instruction required to be delivered to Escrow Agent hereunder is not so
delivered, Escrow Agent may hold the Deposit, if any, pending delivery to Escrow
Agent of such instruction or notice and may exercise all of Escrow Agent's
rights and remedies hereunder or otherwise provided by law. The parties hereto
jointly and severally agree to reimburse and indemnify Escrow Agent for, and
hold Escrow Agent harmless against, any loss, liability or expense, including
but not limited to, reasonable attorney's fees, which may be asserted against
Escrow Agent or to which Escrow Agent may be exposed or which may be incurred by
reason of the acceptance of, or the performance of duties and obligations under
this Agreement of Sale, except arising from such Escrow Agent's gross negligence
or willful misconduct. In no event shall Escrow Agent be liable for any loss,
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cost or damage arising out of the performance of its duties hereunder, except
for acts of gross negligence or willful misconduct.
(b) In the event of any dispute or disagreement of Sale in
connection with the performance by Escrow Agent of its duties under this
Agreement of Sale, including, but not limited to, the respective rights of the
parties to the Deposit, Escrow Agent may consult with counsel selected and
employed by Escrow Agent, and Escrow Agent shall suffer no liability for any
action taken or suffered in good faith in accordance with the opinion of such
counsel, if any, provided, however, that the Deposit shall be disbursed in
accordance with the terms of this Agreement of Sale. Notwithstanding any other
provision of this Agreement of Sale, if any dispute or difference arises among
the parties or if any conflicting demand shall be made upon Escrow Agent, Escrow
Agent shall not be required to determine the same or take any action thereon.
Rather, Escrow Agent may await settlement of the controversy by appropriate
legal proceedings; or Escrow Agent may, by written notice to the parties hereto,
initiate litigation to determine to whom the Deposit held under this Agreement
of Sale shall be delivered; or Escrow Agent may file suit in interpleader with
the proper court in the United States District Court for the Eastern District of
New York, for the purpose of having the respective rights of the parties
adjudicated. Escrow Agent, upon initiation of such suit, may deposit with the
court the Deposit and, upon giving notice thereof to the parties hereto, Escrow
Agent shall be fully released and discharged from all further obligations
hereunder with respect to the Deposit except arising from gross negligence or
willful misconduct of Escrow Agent.
23. ACCEPTANCE DATE. SELLER shall have until 5:00 P.M. (EST) on the
twenty-fifth (25th) day of August, 1997, within which to accept this Agreement.
In the event SELLER fails to accept this Agreement as of that time and date,
this Agreement shall be null and void and of no further effect unless extended
by BUYER whereupon the Closing Date shall be extended one day for each day the
acceptance of Seller is delayed by Seller.
24. BROKER'S COMMISSION. SELLER and BUYER each warrant that there are
no real estate or other brokers or finders of any type involved in this
transaction, if any, and each party shall indemnify and hold harmless the other
party from all claims or damages for any brokerage commissions and/or fees being
claimed arising out of this transaction resulting from the actions of the
defaulting party.
25. SURVIVAL OF AGREEMENT. The terms and conditions of this Agreement
which expressly so state shall survive the Closing hereof.
26. TIME IS OF THE ESSENCE. SELLER and BUYER acknowledge that time is
of the essence of this Agreement.
27 MODIFICATIONS. The parties acknowledge that this Agreement is the
entire agreement between the parties with respect to the subject matter hereof
and that this Agreement cannot be modified without a written agreement executed
by both parties.
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28 ATTORNEYS' FEES. In the event of any litigation between the parties
arising out of this Agreement, or the collection of any funds due BUYER or
SELLER pursuant to this Agreement, the prevailing party shall be entitled to
recover all costs incurred and reasonable attorneys' fees and expenses incurred.
As used herein and throughout this Agreement, the term "attorneys' fees" shall
be deemed to include all fees incurred whether by attorneys, paralegals, legal
assistants or law clerks whether in pretrial, trial, appeal, bankruptcy,
collection or declaratory proceedings. The provisions of this paragraph shall
survive Closing and delivery of the Special Warranty Deed.
29 EXHIBITS. In the event that any exhibit which is referred to in this
Agreement is not attached hereto at the time of execution of this Agreement by
SELLER and BUYER, SELLER shall promptly cause any such missing exhibit to be
prepared and submitted to BUYER for BUYER's approval within fifteen (15) days
from the Effective Date hereof. Upon approval of a given exhibit by BUYER, the
same shall be incorporated into this Agreement by written agreement executed by
SELLER and BUYER.
30 CONSTRUCTION. This Agreement has been negotiated between the
parties, each of whom have been represented by counsel. Accordingly, this
Agreement shall not be construed against either party as the drafter of the
Agreement in the event of any litigation with respect to it.
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31 RADON GAS Radon is a naturally occurring radioactive gas that, when
it has accumulated in a building in sufficient quantities, may present health
risks to persons who are exposed to it over time. Levels of radon that exceed
federal and state guidelines have been found in buildings in the State in which
the Real Property is located. Additional information regarding radon and radon
testing may be obtained from your county public health unit.
32 VENUE. Venue for any legal proceeding hereunder shall be in the
State in which the Real Property is located, except with respect to an
interpleader action pursuant to paragraph 3(a) above which the parties
acknowledge shall be instituted in Boston, Massachusetts, pursuant to said
paragraph.
33 WAIVER OF JURY TRIAL. SELLER and BUYER knowingly, voluntarily and
intentionally waive any right to trial by jury in respect to any litigation
arising out of, under or in connection with this Agreement or the transaction
described herein.
34 EFFECTIVE DATE. Unless otherwise set forth herein, the Effective
Date shall be the date this Agreement is executed by the SELLER, so long as
SELLER returns a fully executed duplicate original of this Agreement to the
BUYER, by either hand delivery or postmarked as of the date of the execution of
this Agreement by the SELLER. Each day of delay in returning the executed
Agreement to the BUYER shall likewise extend the Effective Date.
35 COUNTERPART EXECUTION. This Agreement may be executed in several
counterparts, each of which shall be fully effective as an original and all of
which together shall constitute one and the same instrument.
36 FACSIMILE. A facsimile of this Agreement or any portion hereof,
including the signature page of any party, shall be deemed an original for all
purposes.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals the day and year indicated below.
WITNESSES: COMMUNITY ACQUISITION AND DEVELOPMENT
PARTNERSHIP, a Delaware joint venture
By: COMMUNITY ACQUISITION AND DEVELOPMENT
CORPORATION, a Delaware corporation
By:______________________________
Print Name:_____________________ Joseph W. Gaynor, President
"BUYER"
Print Name:_____________________
As to BUYER Buyer's execution date: ______________
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WILDER CORPORATION OF DELAWARE, a
Delaware corporation
By:________________________________
Print Name:______________________ Maurice Wilder, President
Print Name:______________________ "SELLER"
As to SELLER
Seller's execution date____________
______________________________ of ________________________________
joins in this Agreement of Sale for the sole purpose of agreeing to act as
Escrow Agent and to be legally bound to hold the Deposit in accordance with the
provisions in Paragraphs 3(a) and 22 hereof.
CHICAGO TITLE INSURANCE COMPANY
By:________________________
____________________
As Escrow Agent
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Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8, No. 33-42605) of Asset Investors Corporation of our report dated September
12, 1997, with respect to the Statement of Excess of Revenues over Specific
Operating Expenses of The Wilder Manufactured Home Communities for the year
ended December 31, 1996, included in the Current Report (Form 8-K) dated October
30, 1997.
ERNST & YOUNG LLP
Phoenix, Arizona
November 13, 1997
