Answers to questions submitted by PG

1. Is it accurate and/or safe to assume that Cartel Properties never agreed to eliminate the contingencies related to zoning and SOBU since they are again present in the new contract extension document?

ANSWER: Since the inception of our deal, five (5) other parcels have been added to the project that Cartel is undertaking. The contingency that we’ve seen added to the contract is to reflect the time/effort/money it is taking to make the assemblage happen with the City of Atlanta. The other five (5) parcels are under contract so this should not be a concern.

2. Is there any reason why we were never provided with an executed assignment/special stipulations agreements as reported in many emails received by Bruce?

a. Is it safe to assume that they were never accepted as Bruce reported?

ANSWER: Moving forward, all of the signed agreements will be to you by the COB on Friday, November 14. There was some confusion regarding prior documents relating to whom, exactly, was to send them out. Keller Williams and Cartel can promise that this problem will not happen again. Josh Reeves with Keller Williams (404-547-3622) and Taylor Anderson (404-805-9898) are your contacts henceforth.

3. Can we get clarification regarding Bruce’s emails indicating that the inspection period would end on October 31, 2008, at which point earnest money becomes hard? Cartel did not ask for extension until after the date provided by Bruce (10/31/2008).

ANSWER: Contractually, the extension period did not end until November 11, 2008. Bruce was going off of the date of the contract rather than the binding agreement date (the date contracts were executed by both parties rather than the date noted in MS Word at the top of the document).

4. To clarify a point: The extension agreement basically requires a "free" 90 day extension since the referenced earnest money above was never required and they are not offering additional earnest money. Are we interpreting this correctly?

ANSWER: This is true, the earnest money will not go hard until after the inspection period expires, which is estimated at February 10, 2009. Remember, the date is based upon contract execution dates rather than the dates at the top of the documents. At that point, an additional $80,000.00 will be applied to the earnest account, making the grand total of $120,000.000 in total funds sitting in the account.

5. Related to the extension agreement:

a. Is it accurate to assume they have as long as they wish to obtain all the items outlined in paragraph 3 ("Contingencies")?

ANSWER: In accordance with the agreements, following the 90-day inspection, Cartel only has 60 days to apply for rezoning with the City of Atlanta.

i. What kind of time frame applies to these issues?

ANSWER: See above.

b. Can we get specific clarity, and therefore a date that the "extension period" expires? 90 days from when? The date up to this point has been intentionally ambiguous.

ANSWER: Based upon the contract execution dates, the date is anticipated as February 10, 2009. Remember, this date is based upon everyone getting their contracts in no later than tomorrow. There are some PG homeowners out of town right now and we’re working administratively to get their paperwork processed.

6. There are concerns that the deal is based on obtaining the entitlements/variances/ proper zoning. Do these entitlements/variances/proper zoning issues, in effect, render the sell date as undefined??

ANSWER: By sale date, we assume you mean closing date. That is the worst case scenario date, which is November 9, 2009.

a. For example, if Cartel Properties were granted zoning in 2010, the deal would be extended by contract until 2010. Is this a correct assumption?

ANSWER: No, this assumption is not correct. The expiration date is November 9, 2009. Zoning is processed by the City of Atlanta based upon applications/paperwork submitted by the Cartel Group.

b. There seems to be a conflict between point 4 (assignment section, “…closing no later than November 9, 2009”) with point 3 (contingencies section). Can we get clarification?

ANSWER: Cartel has to file for rezoning on or before 60 days following the end of the 90-day inspection period.

7. Given the experience with Paces Green Partners and the community’s fatigue over this process, is there anything Cartel Properties can provide us with to help assure us that this is, in fact, a ‘real’ transaction? While we do not wish to penalize Mr. Rohrig or the Cartel Group for the prior misrepresentations/errors/intentional omissions of Bruce and Paces Green Partners, it would help if we could be provided with some additional communications regarding this transaction – perhaps a timeline or something tangible to go by. We’ve been left in the dark for so long, any information would help.

ANSWER: Hopefully the blog will help. The timeline is determined by how long it takes to pull parcel information and assemble a new piece of property (put them together). This is a rather tedious process and there are a lot of moving pieces. We are compiling a list of the steps Cartel is taking to see that this transaction is successfully completed; Josh or Taylor will post this information as soon as it becomes available. Surveys have been completed on PG and SOBU Flats and received by George Rohrig; surveys were done by Loo-Turley & Associates. The architect(s) working on the project are Cooper Carry and R+D Plexus. The architectural renderings – there are several options now – are at Cartel Properties.