Exhibit (b)
[RED LETTERHEAD]
October 29, 2001
Xx. Xxxx Xxxxxx
President
ARV Assisted Living, Inc.
000 Xxxxxxx Xxx., X-0
Xxxxx Xxxx, XX 00000
RE: ACQUISITION/BRIDGE FINANCING TO ARV ASSISTED LIVING, INC. ("ARV") TO
FUND THE PURCHASE OF UP TO 18,666 PARTNERSHIP UNITS OF ARV PIII.
Dear Xx. Xxxxxx:
This letter is to follow up on our recent discussions regarding the
referenced Project. We are willing to provide financing for the acquisition of
the partnership units of ARV PIII not already owned by ARV (the "Loan") using
the funding capabilities of Red Mortgage Capital, Inc. ("RMC") and/or other
lenders (collectively, "Lender") under the terms and conditions described
herein.
Identified below are the basic transaction parameters for the Loan:
Borrower: ARV Assisted Living, Inc.
Loan Amount: $4,250,000
Loan Interest Rate: 10.25%
Financing Fees: $125,000
Maturity: January 1, 2003
Additional Collateral: a) Deposit or pledge of cash in the amount of $2.2
million, or a lesser amount depending upon ARV's
ownership interest in ARV PIII post-tender.
b) Assignment of all existing partnership interest
owned and all partnership units purchased by ARV as
part of this financing. In addition, ARV shall
pledge 100% of its equity interest in Villa Colima.
Other Terms and Conditions: a) ARV will commit a minimum of $3,250,000 cash to the
acquisition of the partnership interest. ARV will
fund the first $3,000,000 to purchase the
partnership unit purchases, followed by up to
$4,000,000 by RMC. Any additional partnership unit
purchases above the $7,000,000 total will be funded
equally by ARV and RMC, up to an additional
$250,000 each.
b) ARV can apply a portion of the required cash
contribution by purchasing a subordinated piece of
RMC's loan with no foreclosure rights.
c) Final approval of additional Loan by RMC's Loan
Committee.
Xx. Xxxx Xxxxxx
October 29, 2001
Page 2
We understand that this transaction is scheduled to close on November
15(th), 2001. Please call with any questions, and we look forward to working
with you again.
Very truly yours,
RED MORTGAGE CAPITAL, INC.
XXXXX XXXXX SIG
Xxxxx X. Xxxxx
Managing Director
cc:
Xxxxxxxxx X. Xxxxxx -- Red Mortgage Capital, Inc. (Columbus, OH)
Xxxxxxx X. Xxxx -- Red Mortgage Capital, Inc. (Columbus, OH)
Xxxx X. Xxxxx -- Red Mortgage Capital, Inc. (Columbus, OH)
