Amendment of Agreement of Limited Partnership of 150 CCM Black Oak, Ltd., dated as of November 7, 2014, by and among 150 Black Oak GP, Inc. and CCM Development USA Corporation, American Real Estate Investments, LLC and the Fogarty Family Trust II

This Binding Term Sheet is between the Limited Partners of the 150 CCM Black Oak LP. The Limited Partners are Fogarty Family Trust II, CCM Development USA Corp, and American Real Estate Investments, LLC (“Partners”). Upon execution of this Binding Term Sheet, the Limited Partnership Agreement (“LPA”) between the Partners, dated March 20, 2014, will be amended to incorporate the changes addressed below. All Partners understand that this Binding Term Sheet is an amendment to the LPA in accordance with Article XI of the LPA. As the General Partner is comprised of two limited partners, the signatures of the applicable limited partners will signify consent of the General Partner.

 

CCM shall fund the immediate equity needs of Black Oak, defined as $7,440,697.29, as outlined below (the “Additional Contribution”). This is the total funding requirement. Under section 3.2 of the LPA, this Additional Contribution will accrue interest at a 15% annual rate. This Additional Contribution will be a loan with a standard 1st lien note and deed of trust securing the repayment of the Additional Contribution. The Partners will continue to work towards refinancing the Additional Contribution with third party bank financing. If refinancing the Additional Contribution does not occur by January 1, 2015, CCM will receive an additional equity interest of  5%  (five percent) in the form of a contribution of 5% from Fogarty Family Trust II’s current ownership and no contribution from American Real Estate Investments, LLC. If necessary, CCM will guarantee repayment of any loan that refinances the Additional Contribution, but the refinancing must be on reasonable and competitive lending terms.

 

Repayment of the Additional Contribution will occur upon the earliest of: 1) refinancing with a third party bank loan; or 2) sale of Black Oak Section One lots (expected in the 2nd Quarter of 2015). In the event the Additional Contribution is not repaid from third party bank refinancing or the sale of section one lots, and the partnership has Distributable Cash, the Additional Contributions shall be paid as provided in Section 5.1 (2) of the LPA.

 

 

 

 

** Development costs on the above list will be paid as expenses (which shall be approved by IAD), will be delivered directly to IAD, and will be paid (when due) directly from an IAD bank account.

 

 

 

 

 

 

For partnership costs that are reimbursable, the reimbursed costs shall be distributed to the Partners per the above updated percentage partnership contributions. The Partners acknowledge that the attached September 12, 2014 pro-forma financial statements estimate a total of $13,581,115 of reimbursable costs to the partnership. [This number is comprised of the estimates of $11,776,115 from land sale to the improvement district (streets, drainage and parks) and $1,805,000 of Aqua Reimbursements (W & S)].

 

ARETE will also receive 3% of development costs and IAD will receive 2% of development costs. Development costs are costs of the partnership, excluding the cost to purchase the land.