ROYAL PALM
JOINT VENTURE AGREEMENT
THIS ROYAL PALM JOINT VENTURE AGREEMENT, dated this 13th day of May,
1997, is made and entered into by and between Royal Palm Village, LLC, a Georgia
limited liability company (hereinafter referred to as "Royal Palm") and Asset
Investors Operating Partnership, LP, a Delaware limited partnership (hereinafter
referred to as "AIOP") (Royal Palm 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
1.01 "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.
1.02 "Agreement" means this Royal Palm 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.
1.03 "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).
1.04 "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.
1.05 "Project" means Royal Palm Village Mobile Home Park, located on
the Property and having a street address of 0000 X. Xxxxxxx 00-00 Xxxx, Xxxxxx
Xxxx, Xxxxxxx 00000, together with the Construction Improvements to be
constructed thereon, if any.
1.06 "Property" means the real property described on Exhibit A attached
hereto and incorporated herein by reference.
1.07 "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
2.01 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.
2.02 Name of Venture. The business and affairs of the Venture shall be
conducted solely under the name of "Royal Palm 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.
2.03 Principal Place of Business. The principal place of business of
the Venture shall be 0000 XxXxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, or such
other address as may be agreed to by the Venturers.
2.04 Form of Ownership and Title. The title to the Property shall
remain in the name of Royal Palm and held solely for the benefit of the Venture
pursuant to the terms, conditions and provisions of this Agreement. 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 Royal Palm for the
benefit of the Venture.
ARTICLE III.
3.01 Purposes, Powers and Development Functions. The purposes of the
Venture shall be strictly limited to the acquisition, ownership, operation, and
development of the Property, the construction of the Construction Improvements
and the sale or Conversion of the Project, and such other activities as shall be
directly related and incidental thereto.
ARTICLE IV.
Management of Venture
4.01 Business Decisions. No act shall be taken, sum expended, decision
made or obligation incurred by the Venture or any Venturer
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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).
4.02 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:
(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.
4.03 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.
4.04 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, Royal Palm will be responsible for directing and overseeing all
aspects of the Conversion. Prior to the Commencement of any Conversion, Royal
Palm shall prepare for the Venture's approval a Conversion Budget and Proforma
(the "Conversion Budget").
(c) Development and Construction. Royal Palm shall be
responsible for overseeing the development of Property and construction of the
Construction Improvements. Royal Palm 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.
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Royal Palm 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, Royal Palm 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
V below. Royal Palm shall prepare, for the approval by the Venture a Floor Plan
Budget for each Project (the "FP Budget").
4.05 Tax Matters Partner. Royal Palm 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
5.01 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:
Royal Palm 50%
AIOP 50%
The foregoing percentages are herein referred to as the "Capital Interests."
5.02 Required Capital. Capital shall be required for (i) current
improvement costs in the amount of $200,000.00; (ii) the cost of the Set-ups;
(iii) the future acquisition cost of the Property by the Venture on August 1,
2000, in the amount of the balance of the first mortgage held by Prime Plus
Realty Partners, a Pennsylvania limited partnership, which is currently
$2,800,000.00; (iv) the costs needed to satisfy the D&C Budget; (v) the costs
needed to satisfy the MHM Budget; and (vi) the costs, if any, needed to satisfy
the FP Budget, including the cost of the debt service thereon (the "Required
Capital"). Capital, when so required pursuant to this Section 5.02, shall be
contributed by AIOP in the form of a Loan to the Venture in accordance with
Section 5.06.
5.03 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,
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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 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).
5.04 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.
5.05 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
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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.
5.06 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 Royal Palm. In the
event of any sales of any Project or interests in the Approved Entities 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
6.01 Construction Compensation. Once the Construction Improvements have
commenced as contemplated hereunder, Royal Palm 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.
6.02 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.
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ARTICLE VII.
Profits, Losses and Accounting
7.01 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:
(A) Income From Capital Transactions. All net
taxable income realized by the Venture which is attributable to
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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 determin- ing
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
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allocations among the Venturers pursuant to this Article VII, but merely the
character of income so allocated.
7.02 Credits. Tax credits shall be allocated among the Venturers in
accordance with paragraph 7.01(c)(i) hereof.
7.03 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.
7.04 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.
7.05 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.
7.06 Fiscal Year. The fiscal year of the Venture shall be the calendar
year.
7.07 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.
7.08 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 0 Xxxxx Xxxx Xxxxx, Xxxxxx Xxxx, XX 00000 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
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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
8.01 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.
8.02 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
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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 dissolu-
tion 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:
(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
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distribute the balance thereafter remaining in the manner hereinafter
provided; and
(v) To the Venturers pursuant to their Capital
Interests.
8.03 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.
8.04 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
9.01 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 Royal Palm which
assignment shall be conditioned upon the assignee executing an assignment and
assumption agreement, the form of which is attached hereto as Exhibit C.
9.02 (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.
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(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 Royal Palm is the purchasing Venturer,
at the Closing, Royal Palm shall also cause the Venture as applicable to repay
to AIOP all loans made by AIOP to such entity (including accrued but unpaid
interest). If AIOP is the purchasing Venturer, contemporaneously with the
closing, Royal Palm shall convey fee simple title of the Property to the
Venture.
(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.
9.03 Xxxxxxx Money. The purchasing Venturer shall, at the commencement
of said 90-day period, place the sum of $50,000.00 in non-refundable xxxxxxx
money, within a mutually agreeable escrow agent.
9.04 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.
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9.05 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.
ARTICLE X.
General
10.01 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.
10.02 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.
10.03 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
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of this Agreement modified only to comply with any statutory requirements
governing that form of ownership.
10.04 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
waiver of such Venturer's rights hereunder.
10.05 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.
10.06 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.
10.07 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.
10.08 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
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including interest from the date said fees and costs were advanced by the
prevailing Venturer at the rate of ten percent (10%) per annum.
10.09 Insurance. The Venture shall obtain, carry and maintain in force,
on behalf of the Venture, such insurance as approved by the Venture.
10.10 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.
10.11 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.
10.12 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.
10.13 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.
10.14 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.
10.15 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
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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.
Royal Palm Village, LLC,
a Georgia limited liability company
By: Parkemore Fairview LLC, a
Georgia limited liability
company, Authorized Member
By:/s/Xxxxx X. Xxxxx
------------------------------
Xxxxx X. Xxxxx, Authorized Member
Address: 0000 XxXxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Asset Investors Operating
Partnership, L.P., a Delaware
limited partnership
By: Asset Investors Corporation, a
Maryland corporation
By: /s/Xxxxxx X. Xxx
-------------------------------
Xxxxxx X. Xxx, President
Address: 0000 X. Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
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AIC Community Management Partnership,
a Delaware general partnership
By: Community Management Investors
Corporation, a Delaware
corporation, general partner
By: /s/Xxxxx X. Xxxxx
-----------------------------
Xxxxx X. Xxxxx, President
Address: 0 Xxxxx Xxxx Xxxxx
Xxxxxx Xxxx, XX 00000
and
By: AIC Manufactured Housing Corp.,
a Delaware corporation
By: /s/Xxxxxx X. Xxx
-----------------------------
Xxxxxx X. Xxx, President
Address: 0000 X. Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
6374-001-0415997.02
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