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Exhibit 10(b)
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT is made as of the 30th day of June, 1997, by and
between Seller and Purchaser (such parties being hereinafter defined).
ARTICLE I
Definitions
As used in this Agreement, unless the context otherwise requires or is
otherwise herein expressly provided, the following terms shall have the
following meanings:
1.1 IGC PROPERTY: (a) A forty-nine percent (49%) share of the
limited partnership interests in Coachman's
Limited Partnership, a Maryland limited
partnership; and
(b) A nine-tenths percent (0.9%) share of the
general partnership interests in Coachman's
Limited Partnership, a Maryland limited
partnership;
1.2 PURCHASER: Interstate Business Corporation, a corporation
organized and existing under the laws of Delaware
with an address at:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1.3 SELLER: Interstate General Company L.P., a Delaware
limited partnership, its assignees, designees, or
nominees, with an address at:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1.4 SETTLEMENT: The consummation of the sale and purchase provided
for in this Agreement to occur as provided in
Article VII hereof.
1.5 IGC PARTNERSHIP: Coachman's Limited Partnership.
1.6 IGC PARTNERSHIP
AGREEMENT: The Partnership Agreement under which the IGC
Partnership is currently organized.
1.7 APPRAISED VALUE: In respect to the IGC Property means the value of
such property as set forth in Exhibit A hereto.
1.8 APPRAISER: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Co., Inc.
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ARTICLE II
Sale and Purchase
2.1 Purchase. For and in consideration of the mutual promises,
covenants, representations, warranties, and agreements contained herein:
(a) Seller shall sell and convey and Purchaser shall purchase the
IGC Property; and
(b) in consideration therefor, Purchaser shall pay to the Seller
the amount of One Dollar ($1.00) (the "Purchase Price").
2.2 Appraisal. The Appraiser has determined that the Purchase Price
exceeds the amount which would be distributed to Seller as a Limited and
General Partner of the IGC Partnership in the context of liquidation of its
Partnership. A copy of the appraisal is attached as Exhibit A hereto.
ARTICLE III
Representations and Warranties of Seller
Seller represents and warrants to Purchaser that as of the date of the
execution of this Agreement, and as of the date of Settlement:
3.1 Legal Status. Seller is a limited partnership, organized,
validly existing, and in good standing under the laws of Delaware and
subject to the performance of Seller of its obligations under Section 6.1
hereof, (i) Seller has the power to enter into this Agreement and to
consummate the transactions provided for herein; (ii) the undersigned
officers of Seller's general partner have full power, authority and legal
right to enter into this Agreement on behalf of Seller; and (iii) no other
party has any rights, title or interest in any of the IGC Property.
3.2 Compliance with Other Instruments, etc. Neither the entering
into this Agreement nor the consummation of the transactions contemplated
hereby will constitute or result in a violation or breach by Seller of its
limited partnership agreement, or, subject to the performance by Seller of
its obligations under Section 6.1 hereof, of any contract or other
instrument to which it is a party, or to which it is subject or by which it
or any of its assets or properties may be bound.
3.3 Compliance with Laws, etc. Neither the entering into of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute or result in a violation or breach by Seller of any judgment,
order, writ, injunction or decree issued against or imposed upon it, or
result, subject to the performance by Seller of its obligations under
Section 6.1 hereof, in a violation of any applicable law, order, rule or
regulation of any governmental authority. There is no action, suit,
proceeding or investigation pending in any court or before or by any
federal, district, county, or municipal department, commission, board,
bureau, agency or other government instrumentality, which would prevent the
consummation of the transactions contemplated by this Agreement or which
would become a cloud on the title of the IGC Property or any portion
thereof or which questions the validity or enforceability of the
transactions contemplated by this Agreement or any action taken pursuant
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hereto. No approval, consent, order or authorization of, or designation
of, registration or filing (other than for recording purposes) with any
governmental authority is required in connection with the due and valid
execution and delivery of this Agreement by Seller and its compliance with
the provisions hereof and the consummation of the transactions contemplated
hereby except as provided in Section 6.1 hereof.
3.4 The IGC Property.
(a) The percentages of partnership interest of the IGC
Partnership and the persons or entities owning the same are, and shall be
immediately prior to Settlement, as set forth on Exhibit B hereto.
(b) Seller shall have delivered to the Purchaser at or prior to
Settlement copies of all of the documents, agreements and other items and
materials required to be delivered by Seller hereunder and there have not
been and will not be pending as of Settlement any changes thereto or
amendments thereof without the prior written approval of Purchaser.
(c) The partnership interests as shown on Exhibit B are fully
paid and non-assessable. Seller has good and marketable title to the IGC
Property and, subject to performance by Seller of its obligations under
Section 6.1 hereof, has the sole and entire right, power, capacity and
authority to (i) enter into this Agreement and to sell, deliver, convey,
assign and transfer all right, title and interest in and to the IGC
Property, free and clear of any option, call, contract, commitment, demand,
lien, claim, pledge, charge, security interest, or encumbrance whatsoever,
and (ii) to vest in Purchaser good and marketable title to the IGC
Property, free and clear of all liens, encumbrances and adverse claims
whatsoever. Seller has not granted any option or otherwise made any
commitment to any person to sell, exchange, transfer or dispose of any of
the IGC Property, other than as set forth in this Agreement.
(d) There will not be pending or threatened on the Settlement
date any litigation, proceeding or investigation which may result in any
material adverse change in the final valuation of the IGC Property, and
Seller does not know of any basis for any such litigation, proceeding or
investigation.
(e) Except as disclosed to the Purchaser to the best of Seller's
knowledge, Seller is not in violation of any order, judgment, law, statute,
regulation or ordinance.
(f) Neither the execution and delivery of this Agreement nor the
sale of the IGC Property hereunder will, subject to the performance by
Seller of its obligations under Section 6.1 hereof, violate any provision
of, or result in the acceleration of any obligation under, any security,
mortgage, note, debenture, loan, lease, agreement, instrument, order,
judgment or decree to which either the Seller or the IGC Partnership is a
party or by which either the Sellers or the IGC Partnership is bound.
(g) The board of directors of the managing general partner of
Seller has duly approved the transactions contemplated by this Agreement
and has authorized the execution and delivery of this Agreement by the
officers of Seller who are executing this Agreement and have all necessary
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions provided for herein.
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(h) There are no actions or proceedings pending or threatened to
liquidate, reorganize or dissolve the Seller or IGC Partnership.
(i) Between the date hereof and Settlement, Purchaser or its
agents shall be given complete and unlimited access to the records of
Seller relating to the IGC Property.
(j) All federal, state and local income, withholding, sales,
franchise and other taxes due or payable by the Seller with respect to the
IGC Property have been paid by the Seller and all returns due with respect
thereto have been filed. Seller does hereby indemnify and hold harmless
Purchaser against any loss, cost, damage or expense arising from nonpayment
of any taxes whatsoever owed by the Seller or which may be assessed against
the Seller for periods prior to Settlement.
(k) No representation, warranty or covenant by Seller or in this
Agreement, or any statement, certificate or schedule made, furnished or to
be furnished to Purchaser pursuant hereto or in connection with the
transactions contemplated hereby, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material
fact necessary to make the statements contained therein not misleading.
(l) Notwithstanding any investigation or audit conducted before
or after Settlement, and notwithstanding any facts or circumstances which
any party may have obtained or discovered as a result of such
investigation, audit or otherwise, the parties shall be entitled to rely
upon the representations and warranties set forth herein.
3.5 Violations. To the best of Seller's knowledge, there are no
violations of, and Seller has received no notice or other record of any
violations of, any federal, district or municipal laws, ordinances, orders,
regulations and requirements affecting the IGC Property or any portion
thereof.
ARTICLE IV
Representations and Warranties of Purchaser
Purchaser represents and warrants to Seller that as of the date of the
execution of this Agreement, and as of the date of Settlement:
4.1 Legal Status. (i) Purchaser is a corporation organized, validly
existing, and in good standing under the laws of Delaware; (ii) Purchaser
has the power to enter into this Agreement and to perform its obligations
as provided for herein; and (iii) the undersigned have full power,
authority and legal right to enter into this Agreement on behalf of
Purchaser, and to consummate the transaction provided for herein.
4.2 Compliance with Other Instruments, etc. Neither the entering
into of this Agreement nor the consummation of the transactions
contemplated hereby will constitute or result in a violation or breach by
Purchaser of its limited partnership agreement or other corporate
documents, or, subject to the performance by Seller of its obligations
under Section 6.1 hereof, of any contract or other instrument to which it
is a party, or to which it is subject or by which it or any of its assets
or properties may be bound.
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4.3 Compliance with Laws, etc. Neither the entering into of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute or result in a violation or breach by Purchaser of any judgment,
order, writ, injunction or decree issued against or imposed upon it, or
result, subject to the performance by Purchaser of its obligations under
Section 6.1 hereof, in a violation of any applicable law, order, rule or
regulation of any governmental authority. There is no action, suit,
proceeding or investigation pending in any court or before or by any
federal, district, county, or municipal department, commission, board,
bureau, agency or other government instrumentality, which would prevent the
consummation of the transactions contemplated by this Agreement or which
would become a cloud on the title of the IGC Property or any portion
thereof or which questions the validity or enforceability of the
transactions contemplated by this Agreement or any action taken pursuant
hereto. No approval, consent, order or authorization of, or designation
of, registration or filing (other than for recording purposes) with any
governmental authority is required in connection with the due and valid
execution and delivery of this Agreement by Purchaser and its compliance
with the provisions hereof and consummation of the transactions
contemplated hereby except as provided in Section 6.1 hereof.
4.4 No Violation. The Purchaser is not in violation of any order,
judgment, law, statute, regulation or ordinance.
4.5 Authorization. The Board of Directors of Purchaser have duly
approved the transactions contemplated by this Agreement and have
authorized the execution and delivery of this Agreement by the undersigned
on behalf of Purchaser.
4.6 No Liquidation. There are no actions or proceedings pending or
threatened to liquidate, reorganize or dissolve the Purchaser.
ARTICLE V
Survival of Representations and Warranties; Further Assurances
5.1 Survival and Merger. The representations and warranties set
forth in Article III and IV of this Agreement shall be deemed to have been
made again on and as of the date of Settlement and shall then be true and
correct and shall remain operative and shall survive the Settlement and the
execution, delivery and recordation of the Instruments of Conveyance and
shall not be merged therein. Purchaser shall have the right to exercise
any and all legal and equitable rights and remedies for any breach of
Seller's representations and warranties hereunder which are disclosed after
Settlement.
5.2 Further assurances; Hold Harmless.
(a) Seller agrees that, upon request of Purchaser, it shall (or
direct the officers and employees of its general partner to, if applicable)
execute and deliver all documents, and take any other actions which may in
the reasonable opinion of Purchaser be necessary or desirable to protect or
record the right or title of Purchaser to the IGC Property, or to aid in
the prosecution or defense of any rights arising therefrom, all without
further consideration.
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(b) Seller agrees to indemnify and hold harmless Purchaser at
all times after the Settlement against and with respect to: (i) any breach
by Seller of any of its obligations, representations or warranties
hereunder, (ii) any cost, expense or damages incurred by Purchaser in
connection with perfecting its right and title to the IGC Property,
(iii) any claim asserted by any of the IGC Partnerships against Purchaser
for any unsatisfied obligation of Seller to any such IGC Partnership,
(iv) any loss or claim arising from any act or failure to act by Seller in
its capacity as general partner of IGC Partnership, (v) any failure to
obtain the consents or the approval referred to in Section 6.1 hereof or
(vi) any claim asserted by HUD (defined below), other government agency or
any lending institution arising from consummation of the transactions
contemplated hereby.
ARTICLE VI
Covenants and Conditions of Settlement
The obligations of the Purchaser hereunder shall be subject to the
fulfillment of the following conditions, and the Seller agrees to fulfill
such conditions:
6.1 Instruments of Conveyance. Seller shall execute and deliver to
the Purchaser appropriate assignments of the IGC Property. Such
assignments shall be substantially in form and substance equivalent to the
Assignment of Partnership Interest and Amendment to the Agreement of
Limited Partnership attached hereto as Exhibit C. The assignments
contemplated herein shall be expressly subject, if required, to the
approval of the U.S. Department of Housing and Urban Development ("HUD), or
other applicable regulatory agency or lending institution (provided,
however, that such approval need not be received prior to Settlement
hereunder), and shall, as required, require that the assignee thereunder
expressly assume any applicable Regulatory Agreement or similar instrument.
Seller shall obtain all such approvals and complete such refinancing by
July 31, 1997.
6.2 Property Information. Promptly upon execution and delivery of
this Agreement, Seller shall deliver to Purchaser such information as is
required by Purchaser with respect to the IGC Property.
6.3 Original Documents. At Settlement, Seller shall deliver to
Purchaser all original documents pertaining to the IGC Property which it
has in its possession.
6.4 Certification. In the event Seller shall have complied with any
of the foregoing provisions relating to furnishing information to Purchaser
relating to the IGC Property, a certification by Seller that such
documentation is true, correct, and complete as of the date of Settlement
shall be deemed to satisfy such requirements.
6.5 Satisfaction of Liens. Any and all liens, of any type
whatsoever, with respect to the IGC Property, or as to which it may be
subject, shall have been satisfied or otherwise released of record by
Seller, prior to Settlement, or provision satisfactory to Purchaser shall
have been made by Seller for its full and complete release.
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6.6 Settlement Representations and Warranties. At Settlement, each
of the representations and warranties of the Seller contained in this
Agreement is deemed to have been made again on and as at the Settlement and
shall be true and correct in all material respects as at the Settlement.
Seller shall indemnify and hold harmless Purchaser from and against all
loss, damages, costs or expenses (including reasonable attorney's fees)
resulting from or in any way related to any breach thereof.
6.7 Purchaser Consents. To the extent required under the IGC
Partnership Agreement, but subject to performance by Seller of its
obligations under Section 6.1 hereof, upon Settlement, Purchaser, in its
capacity a general partner of the IGC Partnership shall be deemed to have
consented to the transfers of the IGC Property.
6.8 Conversion of General Partnership Interest. IGC agrees, as soon
as practicable, to obtain approval of HUD to convert Seller's .1% general
partnership interest into a .1% limited partnership interest, and upon such
approval Seller's general partnership interest shall be so converted.
ARTICLE VII
Settlement
7.1 Settlement. Settlement shall take place in the office of the
Purchaser's designated legal counsel at 10:00 a.m. on the day established
by this Agreement. Settlement hereunder shall occur no later than June 30,
1997.
ARTICLE VIII
Default and Termination
8.1 Purchaser's Default. If the transaction herein contemplated
shall not be consummated on the date of Settlement because of the
Purchaser's default, then Seller may exercise any and all legal and
equitable rights or remedies available to it, including, without
limitation, the right to specific performance and/or recovery of damages.
8.2 Seller's Default. If the transaction herein contemplated shall
not be consummated on the date of Settlement because of Seller's default,
then Purchaser may exercise any and all legal and equitable rights or
remedies available to it, including, without limitation, the right to
specific performance and/or recovery of damages.
ARTICLE IX
Recision and Reformation
9.1 Reformation in Certain Events. If (i) the approvals referred to
in Section 6.1 hereof with respect to any portion of the IGC Property is
not obtained, or (ii) in the opinion of counsel to Purchaser, any such
approvals that are obtained are insufficient to vest in Purchaser free and
clear title to any portion of the IGC Property, or (iii) HUD or any
governmental agency or lending institution commences or threatens to
commence a legal proceeding arising from the consummation of the
transactions contemplated hereby in which HUD or such other agency or
institution either asserts rights in any portion of the IGC Property or
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claims which, in the reasonable opinion of Purchaser, may materially reduce
the value of any portion of the IGC Property (any such event being referred
to herein as a "Transfer Defect"), then Purchaser, at its option, may
rescind to purchase the sale of the IGC Property. Promptly upon receipt of
notice of such recision, the Purchase Price shall be returned by the Seller
to the Purchaser.
9.2 Recision. If, as a result of one or more Transfer Defects,
Purchaser determines that it is unable to obtain substantially all of the
benefits of ownership of the IGC Property or otherwise is deprived of any
material inducement to its willingness to enter into and perform this
Agreement, Purchaser, by notice to Seller, may rescind the purchase and
sale of the IGC Property. In such event the Purchase Price shall be
refunded to the Purchaser by the Seller.
9.3 Procedures. Upon any recision in accordance with Section 9.1 or
9.2 hereof, Purchaser and Seller shall execute any such documents and take
any such action as shall be determined by either to be necessary or
desirable to restore the benefits of ownership of the IGC Property to the
status quo immediately preceding the Settlement. Seller shall bear all
costs and expenses of any such recision.
ARTICLE X
General Provisions
10.1 Modifications and Waivers. No modification, waiver, amendment,
discharge or change of this Agreement, except as otherwise provided herein,
shall be valid unless the same is in writing and signed by the party
against which the enforcement of such modification, waiver, amendment,
discharge or change is sought. This Agreement contains the entire
agreement between the parties relating to the transactions contemplated
hereby, and all prior or contemporaneous agreements, understandings,
representations and statements, oral or written, are merged herein.
10.2 Successors and Assigns. All terms of this Agreement shall be
binding upon, and inure to the benefit of and be enforceable by the parties
hereto and their respective legal representatives, successors and assigns.
10.3 Governing Law. This Agreement is intended to be performed in the
State of Maryland and shall be construed and enforced in accordance with
the internal laws thereof.
10.4 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given
if delivered personally, or by recognized air courier, or if sent by
registered or certified mail, return receipt requested, and postage
prepaid, to a party at its address set forth above, or at such other
address as such party may specify from time to time by written notice to
the other party.
10.5 Exhibits. All exhibits and schedules referred to herein and
attached hereto are incorporated by reference into this Agreement.
10.6 Severability. If any provision of this Agreement or any
application thereof shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
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provisions hereof and any other application thereof shall not in any way be
affected or impaired, and such remaining provisions shall continue in full
force and effect.
10.7 Construction. Each party hereto and its counsel has reviewed and
revised (or requested revisions of) this Agreement, and the normal rule of
construction that any ambiguities are to be resolved against the drafting
party shall not be applicable in the construction and interpretation of
this Agreement.
10.8 Time Periods. Any time period hereunder which expires on, or any
date hereunder which occurs on, a Saturday, Sunday or legal United States
holiday, shall be deemed to be postponed to the next business day. The
first day of any time period hereunder which runs "from" or "after" a given
day shall be deemed to occur on the day subsequent to that given day.
10.9 Captions. The captions of this Agreement are inserted for
convenience of reference only and do not define, describe or limit the
scope or the intent of this Agreement or any term hereof.
10.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
10.11 Remedies Cumulative. Notwithstanding anything else herein to the
contrary, the remedies of each party provided for herein shall be
cumulative. The existence of any one remedy shall not impair the right of
any party to seek and obtain any other remedy available to such party
hereunder or otherwise under applicable law or equity.
10.12 Broker's Fees. Purchaser and Seller each hereby warrant and
represent to the each other that they have not dealt with any broker or
agent in connection with the transactions contemplated herein. Each party
hereto hereby indemnifies and holds harmless the other party from and
against any and all claims, demands, causes of action, loss, damage,
liabilities, costs and expenses (including reasonable attorney's fees)
arising from any inaccuracy or breach of the foregoing warranty and
representation.
10.13 Expenses. Seller shall bear all costs of the transactions
contemplated by this Agreement including the cost of the Appraisals, except
for the fees and expenses of Purchaser's counsel in negotiating this
Agreement, which shall be borne by Purchaser.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
PURCHASER:
ATTEST INTERSTATE BUSINESS CORPORATION
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
_____________________________ ___________________________________
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------ -----------------------------------
Its [Assistant] Secretary Its President
-----------------------------------
SELLER:
INTERSTATE GENERAL COMPANY, L.P.
ATTEST By: Interstate General Management
Corporation, general partner
/s/ ▇▇▇▇ ▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------- ----------------------------------
Name ▇▇▇▇ ▇▇▇▇▇▇ Name ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------ ----------------------------------
Its [Assistant] Secretary Its President
----------------------------------
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Exhibit A
▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ & CO., INC. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
FINANCIAL AND MANAGEMENT CONSULTANTS ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
June 23, 1997
Independent Members of the
Board of Directors of
Interstate General Company L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
You have advised us that Interstate Business Corporation ("IBC")
intends to enter into a transaction (the "Transaction") with Interstate
General Company L.P. ("IGC") whereby IBC will acquire the general partner
and limited partner interests (the "Coachmans Interest") in Coachmans, L.P.
(the "Partnership") held by IGC, and that the purchase price shall be one
dollar. You have further advised us that the assets of Coachmans, L.P.
include a 104 unit apartment complex based in St. ▇▇▇▇▇▇▇, Maryland, and
other non-real estate assets with an aggregate value of approximately
$200,000. Furthermore, you have advised us that the property is subject to:
i) a first mortgage (the "First Mortgage") with a principal balance
outstanding as of June 15, 1997 of approximately $5,885,000; ii) a working
capital loan (the "Working Capital Loan") due to IBC with an outstanding
balance of approximately $1,308,000; and iii) other liabilities of
approximately $211,000.
The independent members of the Board of Directors of IGC (the
"Independent Directors") have requested that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Co., Inc.
("▇▇▇▇▇▇▇") provide its opinion as to the fairness, from a financial point
of view, of the Consideration offered to IGC in the Transaction.
▇▇▇▇▇▇▇, founded in 1978, has provided information, research,
investment banking and consulting services to clients located throughout
the United States, including major New York Stock Exchange member firms and
insurance companies and over seventy companies engaged in the management
and operation of partnerships. The investment banking activities of
▇▇▇▇▇▇▇ include financial advisory services, asset and securities
valuations, industry and company research and analysis, litigation support
and expert witness services, and due diligence investigations in connection
with both publicly registered and privately placed securities transactions.
▇▇▇▇▇▇▇, as part of its investment banking business, is regularly
engaged in the valuation of businesses and their securities in connection
with mergers, acquisitions, and reorganizations and for estate, tax,
corporate and other purposes. In particular, ▇▇▇▇▇▇▇'▇ valuation practice
principally involves partnerships, partnership securities and the assets
typically owned through partnerships including, but not limited to, real
estate, oil and gas reserves, cable television systems, and equipment
leasing assets.
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In arriving at the opinion set forth below, we have:
1. Reviewed the financial statements of the Partnership for the year
ended December 31, 1996 and for the quarter ended March 31, 1997;
2. Reviewed the summary appraisal report prepared as of December 31,
1996 by ▇▇▇▇▇▇▇ and including the apartment project known as
Coachman's Landing;
3. Conducted such other inquiries as we deemed appropriate.
To evaluate the fairness from a financial point of view of the
consideration, we observed that: i) the appraised value of the real estate
asset of the Partnership known as Coachman's Landing was $6,560,000 as of
December 31, 1996, as determined by ▇▇▇▇▇▇▇; ii) the value of the non-real
estate assets of the Partnership as determined by management of IGC was
approximately $200,000; iii) the aggregate liabilities of the Partnership
approximates $7,404,000 and include the balance outstanding on the First
Mortgage of approximately $5,885,000, the Working Capital Loan of
approximately $1,308,000, and other liabilities of approximately $211,000;
iv) the total liabilities of $7,404,000 exceed the value of the underlying
assets of approximately $6,760,000 by approximately $644,000; v) the First
Mortgage and the Working Capital Loan are senior to, in all respects,
distributions to Limited and General Partners of the Partnership; and vi)
the Consideration exceeds the amount which would be distributed to IGC as a
Limited Partner and General Partner of the Partnership in the context of a
liquidation of the Partnership.
In rendering this opinion, we have not made an independent evaluation
or appraisal of the non-real estate assets and liabilities of the
Partnership. We have also relied on the assurance of IGC and the
Partnership that: the calculations made to determine allocations, within
the Partnership, between the General Partners, and Limited Partners are
consistent with the Partnership's partnership agreement; that any financial
projections of pro forma statements or adjustments provided to us were
reasonably prepared or adjusted on bases consistent with actual historical
experience or reflected the best currently available estimates and good
faith judgments; that no material changes have occurred in the value of the
Partnership's real estate asset between the date of the appraisal and the
date of this Opinion; and that IGC and the Partnership are not aware of any
information or facts regarding the Partnership that would cause the
information supplied to us to be incomplete or misleading.
We have not been requested to, and therefore did not: (i) select the
method of determining the Consideration offered; (ii) make any
recommendation to IGC with respect to whether to accept or reject the
Transaction; or (iii) express any opinion as to the business decision to
accept or reject the Transaction, alternatives to the Transaction or tax
factors resulting from the Transaction. Our opinion is based on business,
economic, real estate and securities markets, and other conditions as could
be evaluated as of the date of our analysis and addresses the Transaction
in the context of information available as of the date of our analysis.
Events occurring after that date may materially affect the assumptions used
in preparing the opinion.
13
Based upon and subject to the foregoing, and in reliance thereon, it
is our opinion that as of the date of this letter the Consideration offered
in the Transaction is fair to IGC from a financial point of view.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis of summary description. We
have advised the Independent Members and IGC that our entire analysis must
be considered as a whole and that selecting portions of our analysis and
the factors considered by us, without considering all analyses and factors,
could create an incomplete view of the evaluation process underlying this
opinion.
Sincerely,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Co., Inc.
Shrewsbury, New Jersey
June 23, 1997
14
Exhibit B
OWNERSHIP INTEREST IN COACHMAN'S LIMITED PARTNERSHIP
GENERAL PARTNERSHIP INTEREST PERCENTAGE
---------------------------- ----------
Interstate Business Corporation 1%
Interstate General Company L.P. 1%
LIMITED PARTNERSHIP INTEREST
----------------------------
Interstate Business Corporation 49%
Interstate General Company L.P. 49%
15
Exhibit C
ASSIGNMENT OF PARTNERSHIP INTEREST
AND AMENDMENT TO THE CERTIFICATE OF
LIMITED PARTNERSHIP OF
COACHMAN'S LIMITED PARTNERSHIP
This Agreement is made as of the 30th day of June, 1997, by and
between Interstate Business Corporation, a Delaware corporation ("IBC") and
Interstate General Company L.P., a Delaware Limited Partnership ("IGC").
WHEREAS, IGC is a 1% general partner and a 49% limited partner in
Coachman's Limited Partnership, a Maryland Limited Partnership, (the
"Partnership"); and
WHEREAS, IBC is a 1% general partner and a 49% limited partner in
the Partnership; and
WHEREAS, IGC wishes to assign its 49% limited partnership
interest and 90% of its general partnership interest in the Partnership to
IBC and to amend the Certificate of Limited Partnership of the
Partnership as amended and restated (the "Partnership Certificate") to
reflect the assignment of the general and limited partnership interest from
IGC to IBC.
W I T N E S S E T H :
In consideration of the mutual promises of the parties hereto and
of other good and valuable consideration, receipt and sufficiency of which
are hereby acknowledged, the parties hereto intending legally to be bound
hereby agree as follows:
1. Assignment. IGC does hereby sell, transfer, assign, and
convey to IBC all of its right, title and interest in and to 90% of its
general partnership interest and its full 49% limited partnership interest
including but not limited to IGC's interest in the capital or income of the
Partnership attributable to the .9% general partnership interest and the
49% limited partnership interest in the Partnership.
2. Acceptance of Assignment. IBC does hereby accept the
assignment as provided for in Section 1 and by this agreement becomes the
owner of the additional .9% general partnership interest and the 49%
limited partnership interest in the Partnership.
3. Amendment of Partnership Certificate. The Partnership
Certificate is hereby amended to substitute IBC for IGC as the owner of an
additional .9% general partnership interest and the 49% limited partnership
interest in the Partnership.
4. Effective Date. This agreement shall be effective as of
June 30, 1997. IBC and IGC do hereby agree that as between themselves all
rights and obligations created pursuant to this agreement shall be created
as of June 30, 1997, notwithstanding the provisions of any other agreements
to which such parties may be bound which require that the consent of
persons or entities other than IBC and IGC be obtained prior to the
transfer of the limited partnership interest in the Partnership. (The
parties understand that a transfer of partnership interests may require HUD
16
approval.) In confirmation of this agreement IBC and IGC agree that IBC
may ▇▇▇ IGC in law, or in equity, to require IGC to pay over to it any
distributions, whether such distributions are in the nature of capital or
income, made by the Partnership to IGC in respect of the .9% general
partnership interest and the 49% limited partnership interest in the
Partnership. All provisions dealing with the rights and obligations by and
between IBC and IGC in respect of the .9% general partnership interest and
the 49% limited partnership interest in the Partnership shall take effect
as of June 30, 1997, notwithstanding the failure of any other parties to
approve this agreement prior to such date.
5. Representations and Warranties of IGC and IBC.
(a) IGC represents and warrants that it is a limited
partnership in good standing, duly organized, and existing under the laws
of the State of Delaware, that it has the lawful authority to enter into
and perform this agreement and by proper action has duly authorized the
execution, delivery and performance of this agreement, and that upon
execution and delivery of this agreement by IBC and IGC, this agreement
will be valid and binding on IGC and enforceable against IGC in accordance
with its terms. IGC also represents and warrants that it has made no
assignment or attempted assignment of the .9% general partnership interest
and the 49% limited partnership interest in the Partnership other than the
assignment contemplated by this agreement and that, on June 30, 1997,
provided this agreement has been executed by IBC and IGC, good and
marketable title to the .9% general partnership interest and the 49%
limited partnership interest in the Partnership will be assigned in
accordance with the terms of this agreement to IBC.
(b) IBC represents and warrants that it is a corporation in
good standing, duly organized, and existing under the laws of the State of
Delaware, that it has the lawful authority to enter into and perform this
agreement and by proper action has duly authorized the execution and
delivery of this agreement, and that upon execution and delivery of this
agreement by IBC and IGC, this agreement will be valid and
binding on IBC and enforceable against IBC in accordance with its terms.
6. Governing Law. This agreement shall be construed in
accordance with and governed by the laws of the State of Maryland.
7. Counterparts. This agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which shall constitute a single agreement.
8. Headings. The headings in this agreement are for convenience
only and do not constitute a part of the agreement.
9. Agreement Entire. This agreement sets forth all (and it is
intended by the parties hereto to be an integration of all) of the
promises, agreements, conditions, understandings, warranties and
representations among the parties hereto with respect to the matters
contained herein, and there are no promises, agreements, conditions,
understandings, warranties or representations, oral or written, expressed
or implied, among them other than as set forth herein.
17
10. Binding Effect. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, personal and legal representatives, successors
and assigns.
11. Notices. All notices pertaining to the matters covered by
this agreement shall be sent by certified or registered mail, with return
receipt requested, and first class postage prepaid, (1) if to IGC, to ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (2) if to IBC, to
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Notices shall
be deemed given on the date they are mailed.
12. Gender and Number. Use of any gender herein shall be deemed
to be or include the other genders and the use of the singular shall be
deemed to be or include the plural (and vice versa) where appropriate.
13. Severability. If any provisions of this agreement, or the
application thereof to any person or circumstance, shall for any reason and
to any extent be invalid and unenforceable, the remainder of this agreement
and the application of such provision to other persons or circumstances
shall not be affected thereby, and shall be enforced.
IN WITNESS WHEREOF the parties hereto have signed this agreement
under seal as of the 30th day of June, 1997.
MANAGING GENERAL PARTNER:
INTERSTATE GENERAL COMPANY, L.P.
By: INTERSTATE GENERAL MANAGEMENT
CORPORATION
General Partner
ATTEST:
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------- ---------------------------
Print Name: ▇▇▇▇ ▇▇▇▇▇▇ Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------- -------------------
Title: Asst. Secretary Title: President
------------------ ------------------------
[CORPORATE SEAL]
GENERAL PARTNER:
INTERSTATE BUSINESS CORPORATION
ATTEST:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------- ---------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Print Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------- -------------------
Title: Asst. Secretary Title: President
------------------ ------------------------
[CORPORATE SEAL]
18
WITHDRAWING LIMITED PARTNER:
INTERSTATE GENERAL COMPANY, L.P.
By: INTERSTATE GENERAL MANAGEMENT
CORPORATION
General Partner
ATTEST:
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------- ---------------------------
Print Name: ▇▇▇▇ ▇▇▇▇▇▇ Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------- -------------------
Title: Asst. Secretary Title: President
------------------ ------------------------
[CORPORATE SEAL]
LIMITED PARTNER:
INTERSTATE BUSINESS CORPORATION
ATTEST:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------- ---------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Print Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------- -------------------
Title: Asst. Secretary Title: President
------------------ ------------------------
[CORPORATE SEAL]
STATE OF MARYLAND )
) ss:
COUNTY OF ▇▇▇▇▇▇▇ )
I, ▇▇▇▇▇▇ ▇▇▇▇▇, a Notary Public in and for the jurisdiction
aforesaid, hereby certify that ▇▇▇▇▇ ▇. ▇▇▇▇▇, who is personally well known
to me to be the person who executed the foregoing instrument as President
of Interstate General Management Corporation, General Partner of Interstate
General Company L.P., Managing General Partner in the foregoing instrument,
personally appeared before me and acknowledged that he executed the
foregoing instrument in his capacity as such officer for the uses and
purposes therein contained.
WITNESS my hand and notarial seal this 26th day of June, 1997.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Notary Public
My Commission Expires: 02-01-01
19
STATE OF MARYLAND )
) ss:
COUNTY OF ▇▇▇▇▇▇▇ )
I, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a Notary Public in and for the jurisdiction
aforesaid, hereby certify that ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, who is personally well
known to me to be the person who executed the foregoing instrument as
President of Interstate Business Corporation, General Partner in the
foregoing instrument, personally appeared before me and acknowledged that
he executed the foregoing instrument in his capacity as such officer for
the uses and purposes therein contained.
WITNESS my hand and notarial seal this 26th day of June, 1997.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Notary Public
My Commission Expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) ss:
COUNTY OF ▇▇▇▇▇▇▇ )
I, ▇▇▇▇▇▇ ▇▇▇▇▇, a Notary Public in and for the jurisdiction
aforesaid, hereby certify that ▇▇▇▇▇ ▇. ▇▇▇▇▇, who is personally well known
to me to be the person who executed the foregoing instrument as President
of Interstate General Management Corporation, General Partner of Interstate
General Company L.P., Withdrawing Limited Partner in the foregoing
instrument, personally appeared before me and acknowledged that he executed
the foregoing instrument in his capacity as such officer for the uses and
purposes therein contained.
WITNESS my hand and notarial seal this 26th day of June, 1997.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Notary Public
My Commission Expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) ss:
COUNTY OF ▇▇▇▇▇▇▇ )
I, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a Notary Public in and for the jurisdiction
aforesaid, hereby certify that ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, who is personally well
known to me to be the person who executed the foregoing instrument as
President of Interstate Business Corporation, Limited Partner in the
foregoing instrument, personally appeared before me and acknowledged that
he executed the foregoing instrument in his capacity as such officer for
the uses and purposes therein contained.
WITNESS my hand and notarial seal this 26th day of June, 1997.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Notary Public
My Commission Expires: 01-10-01