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5 $ <br />Costs of Merger <br />• Transfer of titles: $17.00 per title. We have received legal advice that two properties may <br />be listed on the same title, thus reducing costs. Maximum cost: $255. <br />• Legal expenses: A local attorney offers to do the necessary work for $500 plus the cost of <br />filing titles, above. <br />• Costs of assuming mortgages: None, per ARI Treasurer's discussions with both banks. <br />• $500 for additional fees or unanticipated expenses. <br />• Final 2009 audit of ARI and final 2009 tax return: $6,500 (based on budget amount in <br />2009) <br />The only unusual costs, over and above usual accounting work, are the legal costs and the filing <br />fees, a maximum total of $1,255. <br />Because ARI will transfer all assets, including cash reserves, to EmPOWERment, <br />EmPOWERment will take responsibility for paying for ARI's final audit and tax return. The <br />properties transferred to EmPOWERment will provide the income to cover that expense, as <br />shown above. <br />Dissolution of ARI and Basis for Transfer <br />ARI and EMPOWERMENT intend to close the merger no later than December 31, 2009. If the <br />process carries over into 2010, the expenses for ARI's audit and an additional tax return will add <br />to the costs of merger. We want to avoid that. <br />Article VIII of ARI's Bylaws read: Upon the dissolution of the corporation and after the <br />payment or the provision for payment of all the liabilities of the Corporation, the Board will <br />dispose of all of the assets of the Corporation exclusively for the purposes of the Corporation or <br />to organizations that are then qualified as tax-exempt under section S01(c) (3) of the Internal <br />Revenue Code. Any assets not so disposed of will become property of Orange County, the county <br />in which the principal office of the corporation is based. <br />The basis for transferring properties to EmPOWERment is referred to above. <br />One or more members of the ARI Board will be pleased to join the Board of EmPOWERment, if <br />invited. <br />[Prepared by Nora Esthimer, President of the Board of Directors, Affordable Rentals, Inc, <br />with input from the Board of ARI, Delores Bailey, and members of the Board of <br />EmPOWERment, Inc, and advice from the auditors of both organizations and the Community <br />Enterprise Clinic of Duke University Law School.] <br />