- 59 -
was not rented as of the closing date. We refer to this
payment as the rent advance.
The purchaser's obligations under the rental purchase
agreement were also subject to the condition that the
purchaser shall have obtained "an appraisal of each of the
Properties prepared by a FNMA/FHLMC qualified appraiser on
a standard FHMA/FHLMC form which shall reflect the value of
each Property equal to or greater than the purchase price".
It appears that EPIC assigned to EA 84-III its rights
as purchaser under the rental purchase agreement dated
August 3, 1983, with Pitman & Japhet. The record does not
contain an instrument of assignment. In any event, on
September 30, 1983, EA 84-III purchased the 40 condominium
units at the Reflections.
To finance its purchase of the condominiums, EA 84-III
borrowed $2,590,200, approximately 85 percent of the
aggregate purchase price, from EMI. EA 84-III executed 40
nonrecourse promissory notes in the aggregate principal
amount of $2,590,200, that were each payable to EMI with
monthly installments of interest at the annual rate of
14.125 percent. The record does not contain any of the
40 promissory notes, but their terms are summarized in the
84 offering memorandum as follows:
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