United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________to _________
Commission file number 0-13454
NATIONAL PROPERTY INVESTORS 7
(Exact name of registrant as specified in its charter)
California 13-3230613
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NATIONAL PROPERTY INVESTORS 7
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 2003
Assets
Cash and cash equivalents $ 954
Receivables and deposits 466
Restricted escrows 376
Other assets 863
Investment properties:
Land $ 3,738
Buildings and related personal property 45,986
49,724
Less accumulated depreciation (34,722) 15,002
$ 17,661
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 105
Tenant security deposit liabilities 128
Accrued property taxes 185
Other liabilities 333
Mortgage notes payable 25,113
Partners' Deficit:
General partner $ (383)
Limited partners (60,517 units
issued and outstanding) (7,820) (8,203)
$ 17,661
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 7
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Revenues:
Rental income $ 1,742 $ 1,797 $ 3,505 $ 3,579
Other income 128 138 245 266
Total revenues 1,870 1,935 3,750 3,845
Expenses:
Operating 722 689 1,488 1,424
General and administrative 95 167 207 253
Depreciation 534 526 1,064 1,041
Interest 457 455 905 911
Property taxes 122 113 218 225
Total expenses 1,930 1,950 3,882 3,854
Net loss $ (60) $ (15) $ (132) $ (9)
Net loss allocated to general
partner (1%) $ (1) $ -- $ (1) $ --
Net loss allocated to limited
partners (99%) (59) (15) (131) (9)
$ (60) $ (15) $ (132) $ (9)
Net loss per limited
partnership unit $ (0.97) $ (0.25) $ (2.16) $ (0.15)
Distributions per limited
partnership unit $ 21.45 $ 20.72 $ 26.82 $ 20.72
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 7
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Original capital contributions 60,517 $ 1 $30,259 $30,260
Partners' deficit at
December 31, 2002 60,517 $ (366) $(6,066) $(6,432)
Distributions to partners -- (16) (1,623) (1,639)
Net loss for the six months
ended June 30, 2003 -- (1) (131) (132)
Partners' deficit at
June 30, 2003 60,517 $ (383) $(7,820) $(8,203)
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 7
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
2003 2002
Cash flows from operating activities:
Net loss $ (132) $ (9)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation 1,064 1,041
Amortization of loan costs 37 38
Loss on early extinguishment of debt 14 --
Change in accounts:
Receivables and deposits (148) 74
Other assets (116) (38)
Accounts payable 28 (21)
Tenant security deposit liabilities (4) 19
Accrued property taxes 185 165
Other liabilities (131) 53
Net cash provided by operating activities 797 1,322
Cash flows from investing activities:
Property improvements and replacements (233) (312)
Net receipts from (deposits to) restricted escrows 147 (33)
Net cash used in investing activities (86) (345)
Cash flows from financing activities:
Repayment of mortgage notes payable (7,600) --
Proceeds from mortgage notes payable 9,290 --
Payments on mortgage notes payable (212) (197)
Loan costs paid (210) (11)
Distributions to partners (1,639) (1,267)
Net cash used in financing activities (371) (1,475)
Net increase (decrease) in cash and cash equivalents 340 (498)
Cash and cash equivalents at beginning of period 614 912
Cash and cash equivalents at end of period $ 954 $ 414
Supplemental disclosure of cash flow information:
Cash paid for interest $ 890 $ 873
Supplemental disclosure of non-cash activity:
Property improvements and replacements in accounts
payable $ -- $ 41
Replacement reserves in accounts receivable $ 93 $ --
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 7
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of National Property Investors 7
(the "Partnership" or "Registrant") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of NPI Equity Investments, Inc. (the "Managing General Partner"),
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three and
six month periods ended June 30, 2003 are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 2003. For
further information, refer to the financial statements and footnotes thereto
included in the Partnership's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2002. The Managing General Partner is an affiliate of
Apartment Investment and Management Company ("AIMCO"), a publicly traded real
estate investment trust.
Effective April 1, 2002, the Partnership adopted Statement of Financial
Accounting Standards ("SFAS") No. 145, "Rescission of FASB Statements No. 4, 44
and 64". SFAS No. 4 "Reporting Gains and Losses from Extinguishment of Debt,"
required that all gains and losses from extinguishment of debt be aggregated
and, if material, classified as an extraordinary item. SFAS No. 145 rescinds
SFAS No. 4, and accordingly, gains and losses from extinguishment of debt should
only be classified as extraordinary if they are unusual in nature and occur
infrequently. Neither of these criteria applies to the Partnership. As a result,
the accompanying statements of operations for 2003 reflect the loss on early
extinguishment of debt at Patchen Place and South Point Apartments (see "Note
C") in interest expense rather than as an extraordinary item.
Note B - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
During the six months ended June 30, 2003 and 2002, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of the
Partnership's properties as compensation for providing property management
services. The Partnership paid to such affiliates approximately $181,000 and
$188,000 for the six months ended June 30, 2003 and 2002, respectively, which is
included in operating expenses.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $119,000 and
$148,000 for the six months ended June 30, 2003 and 2002, respectively, which is
included in general and administrative expense and investment properties.
Included in these amounts are fees related to construction management services
provided by an affiliate of the Managing General Partner of approximately $7,000
and $19,000 for the six months ended June 30, 2003 and 2002, respectively. The
construction management service fees are calculated based on a percentage of
additions to investment properties.
For services relating to the administration of the Partnership and operation of
Partnership properties, the Managing General Partner is entitled to receive
payment for non-accountable expenses up to a maximum of $150,000 per year from
distributions from operations, based upon the number of Partnership units sold,
subject to certain limitations. The Managing General Partner received
approximately $58,000 and $91,000 in reimbursements for the six month periods
ended June 30, 2003 and 2002, respectively, which is included in general and
administrative expenses.
For managing the affairs of the Partnership, the Managing General Partner of the
Partnership is entitled to receive a partnership management fee. The fee is
equal to 4% of the Partnership's adjusted cash from operations, as defined in
the Partnership Agreement, in any year, provided that 50% of the fee shall not
be paid until the Partnership has distributed to the limited partners adjusted
cash from operations in such year which is equal to 5% of the limited partners'
adjusted invested capital, as defined, on a non-cumulative basis. In addition,
50% of the fee shall not be paid until the Partnership has distributed to the
limited partners adjusted cash from operations in such year which is equal to 8%
of the limited partners' adjusted invested capital on a non-cumulative basis.
The fee shall be paid when adjusted cash from operations is distributed to the
limited partners. The Managing General Partner was not entitled to receive this
fee during the six months ended June 30, 2003 or 2002.
NPI Equity, on behalf of the Partnership and certain affiliated partnerships,
has established a revolving credit facility (the "Partnership Revolver") to be
used to fund deferred maintenance and working capital needs of the Partnership
and certain other affiliated partnerships in the National Property Investors
Partnership Series. The maximum draw available to the Partnership under the
Partnership Revolver is $500,000. Loans under the Partnership Revolver will have
a term of 365 days, be unsecured and bear interest at the prime rate plus 2% per
annum. The maturity date of any such borrowing accelerates in the event of: (i)
the removal of NPI Equity as the managing general partner (whether or not for
cause); (ii) the sale of refinancing of the property by the Partnership (whether
or not a borrowing under the Partnership Revolver was made with respect to such
property); or (iii) the liquidation of the Partnership. At June 30, 2003, the
Partnership had no outstanding amounts due under this line of credit.
In addition to reimbursement for services of affiliates, an affiliate of the
Managing General Partner earned approximately $93,000 for services related to
the refinancings of Patchen Place and South Point Apartments during the six
months ended June 30, 2003. These costs were capitalized and are included in
other assets on the balance sheet.
The Partnership insures its properties up to certain limits through coverage
provided by AIMCO which is generally self-insured for a portion of losses and
liabilities related to workers compensation, property casualty and vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the
Managing General Partner. During the six months ended June 30, 2003 and 2002,
the Partnership was charged by AIMCO and its affiliates approximately $92,000
and $78,000, respectively, for insurance coverage and fees associated with
policy claims administration.
Note C - Refinancing of Mortgage Notes Payable
On May 16, 2003, the Partnership refinanced the mortgage encumbering Patchen
Place Apartments. The refinancing replaced the existing mortgage of $3,000,000
with a new mortgage in the amount of $4,290,000. Total capitalized loan costs
were approximately $98,000 during the six months ended June 30, 2003. The
Partnership recognized a loss on the early extinguishment of debt of
approximately $7,000 during the six months ended June 30, 2003, due to the write
off of unamortized loan costs and debt discounts and prepayment penalties paid.
On June 27, 2003, the Partnership refinanced the mortgage encumbering South
Point Apartments. The refinancing replaced the existing mortgage of $4,600,000
with a new mortgage in the amount of $5,000,000. Total capitalized loan costs
were approximately $112,000 during the six months ended June 30, 2003. The
Partnership recognized a loss on the early extinguishment of debt of
approximately $7,000 during the six months ended June 30, 2003, due to the write
off of unamortized loan costs and debt discounts and prepayment penalties paid.
Initially the May 16, 2003 refinancing of Patchen Place Apartments and the June
27, 2003 refinancing of South Point Apartments were under an interim credit
facility ("Interim Credit Facility") which also provided for the refinancing of
several other properties. The Interim Credit Facility created separate loans for
each property refinanced thereunder, which loans were not cross-collateralized
or cross-defaulted with each other. During the term of the Interim Credit
Facility, Patchen Place and South Point Apartments were required to make
interest-only payments. The first month's interest rate for Patchen Place
Apartments was 2.78% and for South Point Apartments was 2.60%.
As of July 1, 2003, the loan on Patchen Place Apartments was assumed by a
different lender. The credit facility ("Permanent Credit Facility") with the new
lender has a maturity of five years with an option for the Partnership to elect
one five-year extension. This Permanent Credit Facility also created separate
loans for each property refinanced thereunder, which loans are not
cross-collateralized or cross-defaulted with each other. Each note under this
Permanent Credit Facility is initially a variable rate loan, and after three
years the Registrant has the option of converting the note to a fixed rate loan.
The interest rate on the variable rate loans is 85 basis points over the Fannie
Mae discounted mortgage-backed security index (1.8% per annum at July 1, 2003),
and the rate resets monthly. Each loan automatically renews at the end of each
month. In addition, monthly principal payments are required based on a 30-year
amortization schedule, using the interest rate in effect during the first month
that the properties are on the Permanent Credit Facility. The loans may be
prepaid without penalty.
The Registrant anticipates that during the third quarter of 2003 the Interim
Credit Facility Loan on South Point Apartments will be transferred to the lender
on the Permanent Credit Facility. Once transferred, the loan under the Permanent
Credit Facility on South Point Apartments will be on substantially the same
terms as discussed above.
Note D - Casualty Event
On February 15, 2003 an ice storm caused damage to exterior sections on some of
the buildings and to the landscaping at Patchen Place Apartments. No actual
units were damaged during this occurrence. Reconstruction costs of approximately
$36,000 have been incurred as of June 30, 2003. The Partnership does not
anticipate a loss related to this casualty as the Partnership expects the costs
incurred to be covered by insurance. Additional costs of approximately $22,000
have been incurred since June 30, 2003.
Note E - Distributions
The Partnership distributed the following amounts during the six months ended
June 30, 2003 and 2002 (in thousands, except per unit data):
Six Months Per Limited Six Months Per Limited
Ended Partnership Ended Partnership
June 30, 2003 Unit June 30, 2002 Unit
Operations $ 610 $ 9.98 $1,267 $20.72
Refinancing (1) 1,029 16.84 -- --
Total $1,639 $26.82 $1,267 $20.72
(1) Distribution from the refinancing of Patchen Place Apartments during May
2003.
Subsequent to June 30, 2003, the Partnership declared and paid distributions of
approximately $653,000 (approximately $647,000 to the limited partners or $10.69
per limited partnership unit) consisting of approximately $336,000
(approximately $332,000 to the limited partners or $5.49 per limited partnership
unit) from operations and approximately $317,000 (approximately $315,000 to the
limited partners or $5.20 per limited partnership unit) from the refinancing
proceeds of Patchen Place and South Point Apartments.
Note F - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its Managing General Partner and
several of their affiliated partnerships and corporate entities. The action
purported to assert claims on behalf of a class of limited partners and
derivatively on behalf of a number of limited partnerships (including the
Partnership) that are named as nominal defendants, challenging, among other
things, the acquisition of interests in certain Managing General Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities that were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; management of the partnerships
by the Insignia affiliates; and the series of transactions which closed on
October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties
Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Managing General Partner filed a motion seeking dismissal
of the action. In lieu of responding to the motion, the plaintiffs filed an
amended complaint. The Managing General Partner filed demurrers to the amended
complaint, which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Court, at which time
the Court set a final approval hearing for December 10, 1999. Prior to the
December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case and an appeal was taken from the order on
October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff
Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the
putative class. Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001, the Managing General Partner and its affiliates filed a
demurrer to the third amended complaint. On May 14, 2001, the Court heard the
demurrer to the third amended complaint. On July 10, 2001, the Court issued an
order sustaining defendants' demurrer on certain grounds. On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs filed a fourth amended class and derivative action complaint. On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration. On
October 5, 2001, the Managing General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint, which was heard on December 11, 2001.
On February 2, 2002, the Court served its order granting in part the demurrer.
The Court dismissed without leave to amend certain of the plaintiffs' claims. On
February 11, 2002, plaintiffs filed a motion seeking to certify a putative class
comprised of all non-affiliated persons who own or have owned units in the
partnerships. The Managing General Partner and affiliated defendants opposed the
motion. On April 29, 2002, the Court held a hearing on plaintiffs' motion for
class certification and took the matter under submission after further briefing,
as ordered by the court, was submitted by the parties. On July 10, 2002, the
Court entered an order vacating the trial date of January 13, 2003 (as well as
the pre-trial and discovery cut-off dates) and stayed the case in its entirety
through November 7, 2002 so that the parties could have an opportunity to
discuss settlement. On October 30, 2002, the court entered an order extending
the stay in effect through January 10, 2003.
During the third quarter of 2001, a complaint (the "Heller action") was filed
against the same defendants that are named in the Nuanes action, captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended complaint. The Heller action was brought as a purported
derivative action, and asserted claims for, among other things, breach of
fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial
dissolution. Plaintiffs in the Nuanes action filed a motion to consolidate the
Heller action with the Nuanes action and stated that the Heller action was filed
in order to preserve the derivative claims that were dismissed without leave to
amend in the Nuanes action by the Court order dated July 10, 2001. On October 5,
2001, the Managing General Partner and affiliated defendants moved to strike the
first amended complaint in its entirety for violating the Court's July 10, 2001
order granting in part and denying in part defendants' demurrer in the Nuanes
action, or alternatively, to strike certain portions of the complaint based on
the statute of limitations. Other defendants in the action demurred to the
fourth amended complaint, and, alternatively, moved to strike the complaint. On
December 11, 2001, the court heard argument on the motions and took the matters
under submission. On February 4, 2002, the Court served notice of its order
granting defendants' motion to strike the Heller complaint as a violation of its
July 10, 2001 order in the Nuanes action. On March 27, 2002, the plaintiffs
filed a notice appealing the order striking the complaint. Before completing
briefing on the appeal, the parties stayed further proceedings in the appeal in
light of a settlement.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action described below.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the Managing General Partner has also agreed to make
a tender offer to purchase all of the partnership interests in the Partnerships
within one year of final approval, if it is granted, and to provide partners
with the independent appraisals at the time of these tenders. The proposed
settlement also provided for the limitation of the allowable costs which the
Managing General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.
The Managing General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government regulations. Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including, without limitation: national and local
economic conditions; the terms of governmental regulations that affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates; financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest; real estate risks, including variations of real estate values and
the general economic climate in local markets and competition for tenants in
such markets; litigation, including costs associated with prosecuting and
defending claims and any adverse outcomes, and possible environmental
liabilities. Readers should carefully review the Registrant's financial
statements and the notes thereto, as well as the risk factors described in the
documents the Registrant files from time to time with the Securities and
Exchange Commission.
The Partnership's investment properties consist of five apartment complexes. The
following table sets forth the average occupancy of the properties for each of
the six month periods ended June 30, 2003 and 2002:
Average Occupancy
2003 2002
Fairway View II Apartments 92% 92%
Baton Rouge, Louisiana
The Pines Apartments 91% 94%
Roanoke, Virginia
Patchen Place Apartments 94% 83%
Lexington, Kentucky
Northwoods I and II Apartments 95% 96%
Pensacola, Florida
South Point Apartments 89% 92%
Durham, North Carolina
The Managing General Partner attributes the increase in occupancy at Patchen
Place Apartments to increased marketing efforts. The decrease in occupancy at
South Point Apartments is due to a slow economy and a decrease in the student
population while the local schools are on summer break. The decrease in
occupancy at The Pines Apartments is due to layoffs in the area and increased
home purchases due to lower interest rates.
Results of Operations
The Partnership's net loss for the six months ended June 30, 2003 was
approximately $132,000 compared to a net loss of $9,000 for the six months ended
June 30, 2002. The Partnership's net loss for the three months ended June 30,
2003 was approximately $60,000 as compared to a net loss of $15,000 for the
three months ended June 30, 2002. The increase in net loss for the six months
ended June 30, 2003 was due to a decrease in total revenues and an increase in
total expenses. The increase in net loss for the three months ended June 30,
2003 was due to a decrease in total revenues partially offset by a decrease in
total expenses.
Total revenues decreased for the three and six months ended June 30, 2003 due to
decreases in rental and other income. Rental income decreased primarily due to
decreases in average rental rates at South Point, The Pines and Patchen Place
Apartments and a decrease in occupancy at South Point, The Pines and Northwoods
I and II Apartments partially offset by an increase in occupancy at Patchen
Place Apartments. Other income decreased for the three and six months ended June
30, 2003 primarily due to decreased lease cancellation fees at Patchen Place and
The Pines Apartments and reduced late charges at Patchen Place Apartments.
Total expenses increased for the six months ended June 30, 2003 due to increases
in operating and depreciation expenses partially offset by decreased general and
administrative expenses. Total expenses decreased for the three months ended
June 30, 2003 primarily due to decreases in general and administrative expenses
partially offset by increased operating and depreciation expenses. Operating
expenses increased for the three and six months ended June 30, 2003 primarily
due to increases in property and maintenance expenses. Property expenses
increased due to utility expenses primarily at Patchen Place and The Pines
Apartments and payroll and related benefits expenses at Patchen Place Apartments
partially offset by decreases in commissions and bonuses and related benefits at
The Pines Apartments. Maintenance expense increased due to increases in contract
labor for cleaning, trash removal, yards and grounds and interior painting at
all of the Partnership's properties. Depreciation expense increased for the
three and six months ended June 30, 2003 due to property improvements and
replacements completed at all of the Partnership's properties during the last
twelve months.
General and administrative expenses decreased for the three and six months ended
June 30, 2003 primarily due to decreased non-accountable expense reimbursements
paid to the Managing General Partner in connection with distributions made from
operations and a reduction in the costs of services included in the management
reimbursements paid to the Managing General Partner as allowed under the
Partnership Agreement. Also included in general and administrative expenses at
both June 30, 2003 and 2002 are costs associated with the quarterly and annual
communications with investors and regulatory agencies and the annual audit
required by the Partnership Agreement.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expense. As part of this plan, the Managing General Partner attempts to protect
the Partnership from the burden of inflation-related increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due to
changing market conditions, which can result in the use of rental concessions
and rental reductions to offset softening market conditions, there is no
guarantee that the Managing General Partner will be able to sustain such a plan.
Liquidity and Capital Resources
At June 30, 2003, the Partnership had cash and cash equivalents of approximately
$954,000 as compared to approximately $414,000 at June 30, 2002. Cash and cash
equivalents increased by approximately $340,000 from the Partnership's year
ended December 31, 2002 due to approximately $797,000 of cash provided by
operating activities partially offset by approximately $371,000 of cash used in
financing activities and approximately $86,000 of cash used in investing
activities. Cash used in financing activities consisted of payments of principal
made on the mortgages encumbering Fairway View II, The Pines and Northwoods I
and II Apartments, repayment of mortgage notes payable due to the refinancing of
Patchen Place and South Point Apartments, loan costs paid, and distributions to
partners partially offset by proceeds of mortgage notes payable due to the
refinancing of Patchen Place and South Point Apartments. Cash used in investing
activities consisted of property improvements and replacements partially offset
by net withdrawals from escrow accounts maintained by the mortgage lenders. The
Partnership invests its working capital reserves in interest bearing accounts.
NPI Equity, on behalf of the Partnership and certain affiliated partnerships,
has established a revolving credit facility (the "Partnership Revolver") to be
used to fund deferred maintenance and working capital needs of the Partnership
and certain other affiliated partnerships in the National Property Investors
Partnership Series. The maximum draw available to the Partnership under the
Partnership Revolver is $500,000. Loans under the Partnership Revolver will have
a term of 365 days, be unsecured and bear interest at the prime rate plus 2% per
annum. The maturity date of any such borrowing accelerates in the event of: (i)
the removal of NPI Equity as the managing general partner (whether or not for
cause); (ii) the sale of refinancing of the property by the Partnership (whether
or not a borrowing under the Partnership Revolver was made with respect to such
property); or (iii) the liquidation of the Partnership. At June 30, 2003, the
Partnership had no outstanding amounts due under this line of credit.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the various properties to adequately maintain the
physical assets and other operating needs of the Partnership and to comply with
Federal, state and local legal and regulatory requirements. The Managing General
Partner monitors developments in the area of legal and regulatory compliance and
is studying new federal laws, including the Sarbanes-Oxley Act of 2002. The
Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures
with regard to governance, disclosure, audit and other areas. In light of these
changes, the Partnership expects that it will incur higher expenses related to
compliance, including increased legal and audit fees. Capital improvements for
each of the Partnership's properties are detailed below.
Fairway View II
During the six months ended June 30, 2003, the Partnership completed
approximately $20,000 of capital improvements at Fairway View II Apartments,
consisting primarily of floor covering and air conditioning unit replacements.
These improvements were funded from operating cash flow. The Partnership
evaluates the capital improvement needs of the property during the year and
currently expects to complete an additional $48,000 in capital improvements
during the remainder of 2003. The additional capital improvements will consist
primarily of floor covering, air conditioning unit, appliance and roofing
replacements, parking lot upgrades, and balcony upgrades. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as capital reserves and the anticipated cash flow generated by
the property.
The Pines
During the six months ended June 30, 2003, the Partnership completed
approximately $31,000 of capital improvements at The Pines Apartments,
consisting primarily of floor covering and appliance replacements. These
improvements were funded from operating cash flow. The Partnership evaluates the
capital improvement needs of the property during the year and currently expects
to complete an additional $44,000 in capital improvements during the remainder
of 2003. The additional capital improvements will consist primarily of floor
covering, air conditioning unit, and appliance replacements. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property.
Patchen Place
During the six months ended June 30, 2003, the Partnership completed
approximately $67,000 of capital improvements at Patchen Place Apartments,
consisting primarily of floor covering, air conditioning unit, and appliance
replacements and heating upgrades. These improvements were funded from operating
cash flow and replacement reserves. The Partnership evaluates the capital
improvement needs of the property during the year and currently expects to
complete an additional $19,000 in capital improvements during the remainder of
2003. The additional capital improvements will consist primarily of floor
covering, appliance, and air conditioning unit replacements, painting and
balcony and soffit improvements. Additional capital improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and the anticipated cash flow generated by the property.
Northwoods I and II
During the six months ended June 30, 2003, the Partnership completed
approximately $62,000 of capital improvements at Northwoods I and II Apartments,
consisting primarily of floor covering, air conditioning unit, and appliance
replacements and structural improvements. These improvements were funded from
operating cash flow. The Partnership evaluates the capital improvement needs of
the property during the year and currently expects to complete an additional
$53,000 in capital improvements during the remainder of 2003. The additional
capital improvements will consist primarily of floor covering, appliance,
gutter, and roofing replacements and swimming pool upgrades. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property.
South Point
During the six months ended June 30, 2003, the Partnership completed
approximately $53,000 of capital improvements at South Point Apartments,
consisting primarily of floor covering and air conditioning unit replacements.
These improvements were funded from operating cash flow and replacement
reserves. The Partnership evaluates the capital improvement needs of the
property during the year and currently expects to complete an additional $11,000
in capital improvements during the remainder of 2003. The additional capital
improvements will consist primarily of floor covering, air conditioning unit,
and stairwell replacements. Additional capital improvements may be considered
and will depend on the physical condition of the property as well as replacement
reserves and the anticipated cash flow generated by the property.
The additional capital improvements will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.
The Partnership's assets are thought to be sufficient for any near-term needs
(exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $25,113,000 has maturity dates ranging from
October 1, 2012 to December 1, 2021. The mortgage indebtedness of approximately
$15,823,000 that was refinanced during 2000 and 2001 requires monthly payments
until the loans mature between January 2020 and December 2021 at which time the
loans are scheduled to be fully amortized. The Partnership's other mortgage
indebtedness of $9,290,000, that was refinanced during the six months ended June
30, 2003, has balloon payments due in October 2012. The Managing General Partner
will attempt to refinance such indebtedness and/or sell the properties prior to
such maturity dates. If the properties cannot be refinanced or sold for a
sufficient amount, the Registrant may risk losing such properties through
foreclosure.
On May 16, 2003, the Partnership refinanced the mortgage encumbering Patchen
Place Apartments. The refinancing replaced the existing mortgage of $3,000,000
with a new mortgage in the amount of $4,290,000. Total capitalized loan costs
were approximately $98,000 during the six months ended June 30, 2003. The
Partnership recognized a loss on the early extinguishment of debt of
approximately $7,000 during the six months ended June 30, 2003, due to the write
off of unamortized loan costs and debt discounts and prepayment penalties paid.
On June 27, 2003, the Partnership refinanced the mortgage encumbering South
Point Apartments. The refinancing replaced the existing mortgage of $4,600,000
with a new mortgage in the amount of $5,000,000. Total capitalized loan costs
were approximately $112,000 during the six months ended June 30, 2003. The
Partnership recognized a loss on the early extinguishment of debt of
approximately $7,000 during the six months ended June 30, 2003, due to the write
off of unamortized loan costs and debt discounts and prepayment penalties paid.
Initially the May 16, 2003 refinancing of Patchen Place Apartments and the June
27, 2003 refinancing of South Point Apartments were under an interim credit
facility ("Interim Credit Facility") which also provided for the refinancing of
several other properties. The Interim Credit Facility created separate loans for
each property refinanced thereunder, which loans were not cross-collateralized
or cross-defaulted with each other. During the term of the Interim Credit
Facility, Patchen Place and South Point Apartments were required to make
interest-only payments. The first month's interest rate for Patchen Place
Apartments was 2.78% and for South Point Apartments was 2.60%.
As of July 1, 2003, the loan on Patchen Place Apartments was assumed by a
different lender. The credit facility ("Permanent Credit Facility") with the new
lender has a maturity of five years with an option for the Partnership to elect
one five-year extension. This Permanent Credit Facility also created separate
loans for each property refinanced thereunder, which loans are not
cross-collateralized or cross-defaulted with each other. Each note under this
Permanent Credit Facility is initially a variable rate loan, and after three
years the Registrant has the option of converting the note to a fixed rate loan.
The interest rate on the variable rate loans is 85 basis points over the Fannie
Mae discounted mortgage-backed security index (1.8% per annum at July 1, 2003),
and the rate resets monthly. Each loan automatically renews at the end of each
month. In addition, monthly principal payments are required based on a 30-year
amortization schedule, using the interest rate in effect during the first month
that the properties are on the Permanent Credit Facility. The loans may be
prepaid without penalty.
The Registrant anticipates that during the third quarter of 2003 the Interim
Credit Facility Loan on South Point Apartments will be transferred to the lender
on the Permanent Credit Facility. Once transferred, the loan under the Permanent
Credit Facility on South Point Apartments will be on substantially the same
terms as discussed above.
Pursuant to the Partnership Agreement, the term of the Partnership is scheduled
to expire on December 31, 2008. Accordingly, prior to such date the Partnership
will need to either sell its investment properties or extend the term of the
Partnership.
The Partnership distributed the following amounts during the six months ended
June 30, 2003 and 2002 (in thousands, except per unit data):
Six Months Per Limited Six Months Per Limited
Ended Partnership Ended Partnership
June 30, 2003 Unit June 30, 2002 Unit
Operations $ 610 $ 9.98 $1,267 $20.72
Refinancing (1) 1,029 16.84 -- --
Total $1,639 $26.82 $1,267 $20.72
(1) Distribution from the refinancing of Patchen Place Apartments during May
2003.
Subsequent to June 30, 2003, the Partnership declared and paid distributions of
approximately $653,000 (approximately $647,000 to the limited partners or $10.69
per limited partnership unit) consisting of approximately $336,000
(approximately $332,000 to the limited partners or $5.49 per limited partnership
unit) from operations and approximately $317,000 (approximately $315,000 to the
limited partners or $5.20 per limited partnership unit) from the refinancing
proceeds of Patchen Place and South Point Apartments.
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings and/or property sales. The Partnership's cash available for
distribution is reviewed on a monthly basis. There can be no assurance, however,
that the Partnership will generate sufficient funds from operations after
required capital expenditures, to permit further distributions to its partners
during the remainder of 2003 or subsequent periods.
Other
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates owned 41,649.67 limited partnership units
(the "Units") in the Partnership representing 68.82% of the outstanding units at
June 30, 2003. A number of these Units were acquired pursuant to tender offers
made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates
will acquire additional Units in exchange for cash or a combination of cash and
units in the operating partnership of AIMCO either through private purchases or
tender offers. Pursuant to the Partnership Agreement, unitholders holding a
majority of the Units are entitled to take action with respect to a variety of
matters that include, but are not limited to, voting on certain amendments to
the Partnership Agreement and voting to remove the Managing General Partner. As
a result of its ownership of 68.82% of the outstanding Units, AIMCO and its
affiliates are in a position to influence all voting decisions with respect to
the Partnership. However, DeForest Ventures II L.P., from whom Insignia
Properties LP ("IPLP") an affiliate of the Managing General Partner and of AIMCO
acquired 25,399 Units (41.97% of the units), agreed for the benefit of
non-tendering unit holders, that it would vote its Units: (i) against any
increase in compensation payable to the Managing General Partner or to its
affiliates; and (ii) on all other matters submitted by it or its affiliates, in
proportion to the votes cast by third party unit holders. Except for the
foregoing, no other limitations are imposed on IPLP's, AIMCO's or any other
affiliates right to vote each unit held. Although the Managing General Partner
owes fiduciary duties to the limited partners of the Partnership, the Managing
General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As
a result, the duties of the Managing General Partner, as managing general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Managing General Partner to AIMCO, as its sole stockholder.
Critical Accounting Policies and Estimates
The financial statements are prepared in accordance with accounting principles
generally accepted in the United States which require the Partnership to make
estimates and assumptions. The Partnership believes that of its significant
accounting policies, the following may involve a higher degree of judgment and
complexity.
Impairment of Long-Lived Assets
Investment properties are recorded at cost, less accumulated depreciation,
unless considered impaired. If events or circumstances indicate that the
carrying amount of a property may be impaired, the Partnership will make an
assessment of its recoverability by estimating the undiscounted future cash
flows, excluding interest charges, of the property. If the carrying amount
exceeds the aggregate future cash flows, the Partnership would recognize an
impairment loss to the extent the carrying amount exceeds the fair value of the
property.
Real property investments are subject to varying degrees of risk. Several
factors may adversely affect the economic performance and value of the
Partnership's investment properties. These factors include changes in the
national, regional and local economic climate; local conditions, such as an
oversupply of multifamily properties; competition from other available
multifamily property owners and changes in market rental rates. Any adverse
changes in these factors could cause an impairment in the Partnership's assets.
Revenue Recognition
The Partnership generally leases apartment units for twelve-month terms or less.
Rental income attributable to leases is recognized monthly as it is earned and
the Partnership fully reserves all balances outstanding over thirty days. The
Partnership will offer rental concessions during particularly slow months or in
response to heavy competition from other similar complexes in the area. Any
concessions given at the inception of the lease are amortized over the life of
the lease.
ITEM 3. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures. The Partnership's management, with the
participation of the principal executive officer and principal financial officer
of the Managing General Partner, who are the equivalent of the Partnership's
principal executive officer and principal financial officer, respectively, has
evaluated the effectiveness of the Partnership's disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report. Based on such evaluation, the principal
executive officer and principal financial officer of the Managing General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal financial officer, respectively, have concluded that, as of the
end of such period, the Partnership's disclosure controls and procedures are
effective.
(b) Internal Control Over Financial Reporting. There have not been any changes
in the Partnership's internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Partnership's internal control
over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its Managing General Partner and
several of their affiliated partnerships and corporate entities. The action
purported to assert claims on behalf of a class of limited partners and
derivatively on behalf of a number of limited partnerships (including the
Partnership) that are named as nominal defendants, challenging, among other
things, the acquisition of interests in certain Managing General Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities that were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; management of the partnerships
by the Insignia affiliates; and the series of transactions which closed on
October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties
Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Managing General Partner filed a motion seeking dismissal
of the action. In lieu of responding to the motion, the plaintiffs filed an
amended complaint. The Managing General Partner filed demurrers to the amended
complaint, which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Court, at which time
the Court set a final approval hearing for December 10, 1999. Prior to the
December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case and an appeal was taken from the order on
October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff
Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the
putative class. Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001, the Managing General Partner and its affiliates filed a
demurrer to the third amended complaint. On May 14, 2001, the Court heard the
demurrer to the third amended complaint. On July 10, 2001, the Court issued an
order sustaining defendants' demurrer on certain grounds. On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs filed a fourth amended class and derivative action complaint. On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration. On
October 5, 2001, the Managing General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint, which was heard on December 11, 2001.
On February 2, 2002, the Court served its order granting in part the demurrer.
The Court dismissed without leave to amend certain of the plaintiffs' claims. On
February 11, 2002, plaintiffs filed a motion seeking to certify a putative class
comprised of all non-affiliated persons who own or have owned units in the
partnerships. The Managing General Partner and affiliated defendants opposed the
motion. On April 29, 2002, the Court held a hearing on plaintiffs' motion for
class certification and took the matter under submission after further briefing,
as ordered by the court, was submitted by the parties. On July 10, 2002, the
Court entered an order vacating the trial date of January 13, 2003 (as well as
the pre-trial and discovery cut-off dates) and stayed the case in its entirety
through November 7, 2002 so that the parties could have an opportunity to
discuss settlement. On October 30, 2002, the court entered an order extending
the stay in effect through January 10, 2003.
During the third quarter of 2001, a complaint (the "Heller action") was filed
against the same defendants that are named in the Nuanes action, captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended complaint. The Heller action was brought as a purported
derivative action, and asserted claims for, among other things, breach of
fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial
dissolution. Plaintiffs in the Nuanes action filed a motion to consolidate the
Heller action with the Nuanes action and stated that the Heller action was filed
in order to preserve the derivative claims that were dismissed without leave to
amend in the Nuanes action by the Court order dated July 10, 2001. On October 5,
2001, the Managing General Partner and affiliated defendants moved to strike the
first amended complaint in its entirety for violating the Court's July 10, 2001
order granting in part and denying in part defendants' demurrer in the Nuanes
action, or alternatively, to strike certain portions of the complaint based on
the statute of limitations. Other defendants in the action demurred to the
fourth amended complaint, and, alternatively, moved to strike the complaint. On
December 11, 2001, the court heard argument on the motions and took the matters
under submission. On February 4, 2002, the Court served notice of its order
granting defendants' motion to strike the Heller complaint as a violation of its
July 10, 2001 order in the Nuanes action. On March 27, 2002, the plaintiffs
filed a notice appealing the order striking the complaint. Before completing
briefing on the appeal, the parties stayed further proceedings in the appeal in
light of a settlement.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action described below.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the Managing General Partner has also agreed to make
a tender offer to purchase all of the partnership interests in the Partnerships
within one year of final approval, if it is granted, and to provide partners
with the independent appraisals at the time of these tenders. The proposed
settlement also provided for the limitation of the allowable costs which the
Managing General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.
The Managing General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 3.4(a), Agreement of Limited Partnership, incorporated
by reference to Exhibit A to the Prospectus of the Partnership
dated July 5, 1978, included in the Partnership's Registration
Statement on Form S-11 (Reg. No. 2-599991).
Exhibit 3.4(b), Amendments to Agreement of Limited
Partnership, incorporated by reference to the Definitive Proxy
Statement of the Partnership, dated July 2, 1981.
Exhibit 3.4(c), Amendments to Agreement of Limited
Partnership, incorporated by reference to the Definitive Proxy
Statement of the Partnership, dated April 3, 1991.
Exhibit 3.4(d), Amendments to the Agreement of Limited
Partnership, incorporated by reference to the Statement
Furnished in Connection with the Solicitation of Consents of
the Partnership dated August 28, 1992.
Exhibit 10.13, Multifamily Note dated May 16, 2003, between
National Property Investors 7, a California limited
partnership, and GMAC Commercial Mortgage Corporation, a
California corporation, related to Patchen Place Apartments.
Exhibit 10.14, Seventh Reaffirmation and Joinder Agreement
dated June 16, 2003 between AIMCO Properties, LP, a Delaware
limited partnership, National Property Investors 7, a
California limited partnership, GMAC Commercial Mortgage
Corporation, a California corporation, the parties who are the
current borrowers under the Loan Agreement, the parties who
are the Spring Hill Guarantors under the Loan Agreement and
Fannie Mae, a federally chartered and stockholder-owned
corporation, related to Patchen Place Apartments.
Exhibit 10.15, Multifamily Note dated June 27, 2003, between
National Property Investors 7, a California limited
partnership, and Stewart Title of North Carolina, Inc., a
North Carolina corporation, related to South Point Apartments.
Exhibit 10.16, Eighth Reaffirmation and Joinder Agreement
dated July 17, 2003 between AIMCO Properties, LP, a Delaware
limited partnership, National Property Investors 7, a
California limited partnership, GMAC Commercial Mortgage
Corporation, a California corporation, the parties who are the
current borrowers under the Loan Agreement, the parties who
are the Spring Hill Guarantors under the Loan Agreement and
Fannie Mae, a federally chartered and stockholder-owned
corporation, related to South Point Apartments.
Exhibit 31.1, Certification of equivalent of Chief Executive
Officer pursuant to Securities Exchange Act Rules
13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Exhibit 31.2, Certification of equivalent of Chief Financial
Officer pursuant to Securities Exchange Act Rules
13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Exhibit 32.1, Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
b) Reports on Form 8-K filed during the quarter ended June 30, 2003:
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NATIONAL PROPERTY INVESTORS 7
By: NPI EQUITY INVESTMENTS, INC.
Its Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Thomas C. Novosel
Thomas C. Novosel
Senior Vice President
and Chief Accounting Officer
Date: August 13, 2003
Exhibit 31.1
CERTIFICATION
I, Patrick J. Foye, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of National Property
Investors 7;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: August 13, 2003
/s/Patrick J. Foye
Patrick J. Foye
Executive Vice President of NPI Equity
Investments, Inc., equivalent of the chief
executive officer of the Partnership
Exhibit 31.2
CERTIFICATION
I, Paul J. McAuliffe, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of National Property
Investors 7;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: August 13, 2003
/s/Paul J. McAuliffe
Paul J. McAuliffe
Executive Vice President and Chief Financial
Officer of NPI Equity Investments, Inc.,
equivalent of the chief financial officer of
the Partnership
Exhibit 32.1
Certification of CEO and CFO
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-QSB of National Property
Investors 7 (the "Partnership"), for the quarterly period ended June 30, 2003 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), Patrick J. Foye, as the equivalent of the chief executive officer of
the Partnership, and Paul J. McAuliffe, as the equivalent of the chief financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Partnership.
/s/Patrick J. Foye
Name: Patrick J. Foye
Date: August 13, 2003
/s/Paul J. McAuliffe
Name: Paul J. McAuliffe
Date: August 13, 2003
This certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Exhibit 10.13
Patchen Place Apartments
MULTIFAMILY NOTE
(VARIABLE LOAN)
US $4,290,000.00 As of May 16, 2003
FOR VALUE RECEIVED, the undersigned ("Borrower") promises to pay to the
order of GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation, the
principal sum of Four Million Two Hundred Ninety Thousand and 00/100 Dollars (US
$4,290,000.00), with interest on each Variable Loan at an annual rate as
calculated in Section 3 hereof.
This Note is executed and delivered by Borrower pursuant to one of either
(i) that certain Amended and Restated Loan Agreement, dated as of September 16,
2002, by and among certain borrowers signatory thereto and Lender or (ii) that
certain Loan Agreement dated as of November 1, 2002, by and among certain
borrowers signatory thereto and Lender. As used herein, the term "Loan
Agreement" shall mean whichever of the loan agreements described in the
preceding sentence shall apply from time to time in accordance with their
respective terms, along with all amendments, supplements, replacements,
restatements or other modifications thereto or thereof from time to time made.
The Loan Agreement shall evidence the obligation of Borrower to repay a Variable
Loan made by Lender to Borrower in accordance with the terms of the Loan
Agreement. This Note is entitled to the benefit and security of the Loan
Documents provided for in the Loan Agreement, to which reference is hereby made
for a statement of all of the terms and conditions under which the Variable Loan
evidenced hereby is made. The Loan Agreement requires certain of the terms of
each Variable Loan to be evidenced by one or a series of Loan Confirmation
Instruments, and reference is hereby made to each such Loan Confirmation
Instrument for such terms.
1. Defined Terms. As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness" means the principal of, interest
on, or any other amounts due at any time under, this Note, the Security
Instrument or any other Loan Document, including prepayment premiums, late
charges, default interest, and advances to protect the security of the Security
Instrument under Section 12 of the Security Instrument. Event of Default and
other capitalized terms used but not defined in this Note shall have the
meanings given to such terms in the Loan Agreement or, if not defined in the
Loan Agreement, as defined in the Security Instrument (as defined in Paragraph
5).
2. Address for Payment. All payments due under this Note shall be payable at
GMAC Commercial Mortgage Corporation, 200 Witmer Road, Horsham, PA 19044 ,
Attention: Servicing - Account Manager, or such other place as may be designated
by written notice to Borrower from or on behalf of Lender.
3. Payment of Principal and Interest. Principal and interest shall be paid as
follows:
(a) This Note shall evidence a Variable Loan made from time to time under the
Loan Agreement. The Variable Loan shall bear interest at a rate determined in
accordance with Section 2.01 of the Loan Agreement.
(b) Borrower shall pay imputed interest on each Variable Loan in advance in the
form of a Discount in accordance with Section 1.04(b) of the Loan Agreement
(except that Borrower shall pay actual interest on the Variable Loan for the
partial month period, if any, in accordance with Section 1.04(a) of the Loan
Agreement).
(c) Borrower shall make monthly payments of principal each in the amount as set
forth on the attached Amortization Schedule. Lender shall apply each such
principal payment to the outstanding principal amount of the Loan on the
Rollover Date next following receipt of any such payment. If not sooner paid,
the entire principal amount of the Variable Loan shall be due and payable on the
earlier of (i) the termination of the Loan Agreement pursuant to subsection (e)
of Section 1.02 thereof, (ii) the fifth anniversary (unless such date is
extended pursuant to Section 1.07 of the Loan Agreement, in which case, the
tenth anniversary) of the Initial Closing Date or (iii) the maturity date of any
outstanding MBS, unless either (A) not less than five Business Days prior to the
maturity date of the outstanding MBS, a Borrower has requested that the
outstanding MBS be renewed with a new MBS or converted to a Fixed Loan to take
effect on the maturity date of the outstanding MBS and such new MBS has been
issued or conversion has occurred or (B) the MBS is automatically renewed, which
automatic renewal shall occur in the event that a Borrower does not make the
request set forth in subpart (iii)(A) above and does not give Lender notice not
less than five Business days prior to the maturity date of the outstanding MBS
that the Variable Loan related to such outstanding MBS shall be paid on the
maturity date of such outstanding MBS (the "Maturity Date"). Any MBS that is
issued as a result of an automatic renewal of a maturing MBS as contemplated by
subpart (iii)(B) above shall have a maturity date of three (3) months after the
MBS Issue Date.
(d) In addition to payment of principal and the Discount, Borrower shall pay the
Variable Loan Fee due on each Variable Loan in accordance with Section
1.04(b)(ii) of the Loan Agreement.
4. Application of Payments. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness that is less than all
amounts due and payable at such time, Lender may apply that payment to amounts
then due and payable in any manner and in any order determined by Lender, in
Lender's discretion. Borrower agrees that neither Lender's acceptance of a
payment from Borrower in an amount that is less than all amounts then due and
payable nor Lender's application of such payment shall constitute or be deemed
to constitute either a waiver of the unpaid amounts or an accord and
satisfaction.
5. Security. The Indebtedness is secured, among other things, by a multifamily
mortgage, deed to secure debt or deed of trust dated as of the date of this Note
(the "Security Instrument") and reference is made to the Security Instrument for
other rights of Lender concerning the collateral for the Indebtedness.
6. Acceleration. If an Event of Default has occurred and is continuing, the
entire unpaid principal balance, any accrued interest, the prepayment premium
payable under Paragraph 10, if any, and all other amounts payable under this
Note and any other Loan Document shall at once become due and payable, at the
option of Lender, without any additional notice to Borrower. Lender may exercise
this option to accelerate regardless of any prior forbearance.
7. Late Charge. If any monthly amount payable under this Note or under the
Security Instrument or any other Loan Document is not received by Lender within
10 days after the amount is due, Borrower shall pay to Lender, immediately and
without demand by Lender, a late charge equal to 5 percent of such amount.
Borrower acknowledges that its failure to make timely payments will cause Lender
to incur additional expenses in servicing and processing the loan evidenced by
this Note (the "Loan"), and that it is extremely difficult and impractical to
determine those additional expenses. Borrower agrees that the late charge
payable pursuant to this Paragraph represents a fair and reasonable estimate,
taking into account all circumstances existing on the date of this Note, of the
additional expenses Lender will incur by reason of such late payment. The late
charge is payable in addition to, and not in lieu of, any interest payable at
the Default Rate pursuant to Paragraph 8.
8. Default Rate. So long as any monthly installment or any other payment due
under this Note remains past due for 30 days or more, interest under this Note
shall accrue on the unpaid principal balance from the earlier of the due date of
the first unpaid monthly installment or other payment due, as applicable, at a
rate (the "Default Rate") equal to the lesser of 4 percentage points above the
rate stated in the first paragraph of this Note or the maximum interest rate
which may be collected from Borrower under applicable law. If the unpaid
principal balance and all accrued interest are not paid in full on the Maturity
Date, the unpaid principal balance and all accrued interest shall bear interest
from the Maturity Date at the Default Rate. Borrower also acknowledges that its
failure to make timely payments will cause Lender to incur additional expenses
in servicing and processing the Loan, that, during the time that any monthly
installment or payment under this Note is delinquent for more than 30 days,
Lender will incur additional costs and expenses arising from its loss of the use
of the money due and from the adverse impact on Lender's ability to meet its
other obligations and to take advantage of other investment opportunities, and
that it is extremely difficult and impractical to determine those additional
costs and expenses. Borrower also acknowledges that, during the time that any
monthly installment or payment due under this Note is delinquent for more than
30 days, Lender's risk of nonpayment of this Note will be materially increased
and Lender is entitled to be compensated for such increased risk. Borrower
agrees that the increase in the rate of interest payable under this Note to the
Default Rate represents a fair and reasonable estimate, taking into account all
circumstances existing on the date of this Note, of the additional costs and
expenses Lender will incur by reason of Borrower's delinquent payment and the
additional compensation Lender is entitled to receive for the increased risks of
nonpayment associated with a delinquent loan.
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Paragraph 9, Borrower shall have no
personal liability under this Note, the Security Instrument or any other Loan
Document for the repayment of the Indebtedness or for the performance of any
other obligations of Borrower under the Loan Documents, and Lender's only
recourse for the satisfaction of the Indebtedness and the performance of such
obligations shall be Lender's exercise of its rights and remedies with respect
to the Mortgaged Property and any other collateral held by Lender as security
for the Indebtedness. This limitation on Borrower's liability shall not limit or
impair Lender's enforcement of its rights against any guarantor of the
Indebtedness or any guarantor of any obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the repayment of a portion
of the Indebtedness equal to any loss or damage suffered by Lender as a result
of (1) failure of Borrower to pay to Lender upon demand after an Event of
Default, all Rents to which Lender is entitled under Section 3(a) of the
Security Instrument and the amount of all security deposits collected by
Borrower from tenants then in residence; (2) failure of Borrower to apply all
insurance proceeds and condemnation proceeds as required by the Security
Instrument; (3) failure of Borrower to comply with Section 14(d) or (e) of the
Security Instrument relating to the delivery of books and records, statements,
schedules and reports; (4) fraud or written material misrepresentation by
Borrower or any officer, director, partner, member or employee of Borrower in
connection with the application for or creation of the Indebtedness or any
request for any action or consent by Lender; or (5) failure to apply Rents,
first, to the payment of reasonable operating expenses (other than Property
management fees that are not currently payable pursuant to the terms of an
Assignment of Management Agreement or any other agreement with Lender executed
in connection with the Loan) and then to amounts ("Debt Service Amounts")
payable under this Note, the Security Instrument or any other Loan Document
(except that Borrower will not be personally liable (i) to the extent that
Borrower lacks the legal right to direct the disbursement of such sums because
of a bankruptcy, receivership or similar judicial proceeding, or (ii) with
respect to Rents that are distributed in any calendar year if Borrower has paid
all operating expenses and Debt Service Amounts for that calendar year).
(c) Borrower shall become personally liable to Lender for the repayment of all
of the Indebtedness upon the occurrence of any of the following Events of
Default: (1) Borrower's acquisition of any property or operation of any business
not permitted by Section 33 of the Security Instrument; or (2) a Transfer that
is an Event of Default under Section 21 of the Security Instrument.
(d) To the extent that Borrower has personal liability under this Paragraph 9,
Lender may exercise its rights against Borrower personally without regard to
whether Lender has exercised any rights against the Mortgaged Property or any
other security, or pursued any rights against any guarantor, or pursued any
other rights available to Lender under this Note, the Security Instrument, any
other Loan Document or applicable law. For purposes of this Paragraph 9, the
term "Mortgaged Property" shall not include any funds that (1) have been applied
by Borrower as required or permitted by the Security Instrument prior to the
occurrence of an Event of Default, or (2) Borrower was unable to apply as
required or permitted by the Security Instrument because of a bankruptcy,
receivership, or similar judicial proceeding.
10. Voluntary and Involuntary Prepayments. Pursuant to the terms of the Loan
Agreement, Borrower shall pay the entire amount of the Discount on any Variable
Loan in advance. Accordingly, any Variable Loan may be prepaid in whole or in
part and at any time without penalty. Borrower shall give Lender six (6)
Business Days advance notice of any prepayment.
11. Costs and Expenses. Borrower shall pay on demand all reasonable expenses and
costs, including reasonable fees and out-of-pocket expenses of attorneys and
expert witnesses and costs of investigation, incurred by Lender as a result of
any default under this Note or in connection with efforts to collect any amount
due under this Note, or to enforce the provisions of any of the other Loan
Documents, including those incurred in post-judgment collection efforts and in
any bankruptcy proceeding (including any action for relief from the automatic
stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure
proceeding.
12. Forbearance. Any forbearance by Lender in exercising any right or remedy
under this Note, the Security Instrument, or any other Loan Document or
otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount which is less than
the required payment, shall not be a waiver of Lender's right to require prompt
payment when due of all other payments or to exercise any right or remedy with
respect to any failure to make prompt payment. Enforcement by Lender of any
security for Borrower's obligations under this Note shall not constitute an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.
13. Waivers. Except as expressly provided in the Loan Agreement, presentment,
demand, notice of dishonor, protest, notice of acceleration, notice of intent to
demand or accelerate payment or maturity, presentment for payment, notice of
nonpayment, grace, and diligence in collecting the Indebtedness are waived by
Borrower and all endorsers and guarantors of this Note and all other third party
obligors.
14. Loan Charges. If any applicable law limiting the amount of interest or other
charges permitted to be collected from Borrower in connection with the Loan is
interpreted so that any interest or other charge provided for in any Loan
Document, whether considered separately or together with other charges provided
for in any other Loan Document, violates that law, and Borrower is entitled to
the benefit of that law, that interest or charge is hereby reduced to the extent
necessary to eliminate that violation. Borrower agrees to an effective rate of
interest that is the stated rate of interest plus any additional rate of
interest resulting from any other charges or fees that are to be paid by
Borrower to Lender that may be found by a court of competent jurisdiction to be
interest. The amounts, if any, previously paid to Lender in excess of the
permitted amounts shall be applied by Lender to reduce the unpaid principal
balance of this Note. For the purpose of determining whether any applicable law
limiting the amount of interest or other charges permitted to be collected from
Borrower has been violated, all Indebtedness that constitutes interest, as well
as all other charges made in connection with the Indebtedness that constitute
interest, shall be deemed to be allocated and spread ratably over the stated
term of the Note. Unless otherwise required by applicable law, such allocation
and spreading shall be effected in such a manner that the rate of interest so
computed is uniform throughout the stated term of the Note.
15. Commercial Purpose. Borrower represents that the Indebtedness is being
incurred by Borrower solely for the purpose of carrying on a business or
commercial enterprise, and not for personal, family or household purposes.
16. Counting of Days. Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not Business
Days.
17. Governing Law; Consent to Jurisdiction; WAIVER OF JURY TRIAL. The provisions
of Section 11.07 of the Loan Agreement (entitled "Choice of Law; Consent to
Jurisdiction; Waiver of Jury Trial") are hereby incorporated into this Note by
this reference to the fullest extent as if the text of such Section were set
forth in its entirety herein.
18. Captions. The captions of the paragraphs of this Note are for convenience
only and shall be disregarded in construing this Note.
19. Notices. All notices, demands and other communications required or permitted
to be given by Lender to Borrower pursuant to this Note shall be given in
accordance with Section 11.09 of the Loan Agreement.
20. Security for this Note. Reference is made hereby to the Loan Agreement and
the Security Documents for additional rights and remedies of Lender relating to
the indebtedness evidenced by this Note. Each Security Document shall be
released in accordance with the provisions of the Security Documents.
21. Loan May Not Be Reborrowed. Borrower may not re-borrow any amounts under
this Note which it has previously borrowed and repaid under this Note.
22. Default Under Loan Agreement and Other Loan Documents. The occurrence of an
Event of Default under the Loan Agreement or the Security Instrument shall
constitute an "Event of Default" under this Note in accordance with the Loan
Agreement and the Security Instrument. Upon the occurrence of an Event of
Default under the Loan Agreement or the Security Instrument, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof.
23. Loan Confirmation Instruments; Accounting for Variable Loans. The terms of
the Loan Agreement and this Note govern the repayment, and all other terms
relating to the Variable Loan. However, Borrower shall execute a Loan
Confirmation Instrument to create a physical instrument evidencing each MBS
issued to fund the Variable Loan. The Loan Confirmation Instrument executed by
Borrower in accordance with Section 2.02 of the Loan Agreement shall set forth
the amount, term, Discount, Closing Date and certain other terms of each MBS
issued to fund the Variable Loan. The Loan Confirmation Instrument shall
conclusively establish each of the terms described in the preceding sentence,
absent manifest error. The MBS evidenced by the Loan Confirmation Instrument
does not represent a separate indebtedness from that evidenced by this Note. In
making proof of this Note, no other documents other than this Note shall be
required. In making proof of the amount and terms of the outstanding Variable
Loans under this Note, this Note, the related Loan Confirmation Instruments, and
Lender's records concerning payments made by Borrower under this Note, shall be
conclusive evidence of the terms and outstanding amounts of the Variable Loan,
absent manifest error.
24. Modifications to Note. There are standard modifications to this Note that
are attached as Exhibit B-1 and Exhibit B-2 hereto. In addition, there may be
special modifications to this Note attached as Exhibit B-3 hereto. All such
exhibits are hereby incorporated into this Note as a part hereof.
IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal
or has caused this Note to be signed and delivered under seal by its duly
authorized representative. Borrower intends that this Note shall be deemed to be
signed and delivered as a sealed instrument.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
NATIONAL PROPERTY INVESTORS 7, a California
limited partnership
By: NPI Equity Investments, Inc., a Florida
corporation, its sole general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation
By: /s/Ann Bonney
Name: Ann Bonney
Title: Vice President
Exhibit 10.14
SEVENTH REAFFIRMATION AND JOINDER AGREEMENT
THIS SEVENTH REAFFIRMATION AND JOINDER AGREEMENT (this "Agreement") is
made as of June 16, 2003 by and among (i) AIMCO PROPERTIES, L.P., a Delaware
limited partnership ("Guarantor"), (ii) NATIONAL PROPERTY INVESTORS 7, a
California limited partnership (the "Additional Borrower") (individually and
collectively with all Current Borrowers, as defined below, "Borrower"), (iii)
GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation ("Lender"), (iv)
the parties who are the current Borrowers under the Loan Agreement (the "Current
Borrowers"), (v) the parties who are the Spring Hill Guarantors under the Loan
Agreement ("Spring Hill Guarantors") and (vi) FANNIE MAE, a federally chartered
and stockholder-owned corporation ("Fannie Mae").
RECITALS:
A. Lender, Guarantor, the Current Borrowers and the Spring Hill Guarantors
are parties to that certain Amended and Restated Loan Agreement, dated as of
September 16, 2002 (as amended, supplemented, replaced, restated or otherwise
modified from time to time, the "Loan Agreement"). The Loan Agreement was
modified by that certain First Modification, Reaffirmation and Joinder Agreement
dated as of November 25, 2002, which modified the Loan Agreement, added Winthrop
Texas Investors Limited Partnership, a Maryland limited partnership, owner of
the Salem Park Apartments and removed Texas Apartment Investors, a Delaware
general partnership, owner of the Ryan's Point Apartments. The Loan Agreement
was modified by that certain Second Modification, Reaffirmation and Joinder
Agreement dated as of December 27, 2002, which modified the Loan Agreement and
added (i) Shelter Properties IV Limited Partnership, a South Carolina limited
partnership, owner of the Baymeadows Apartments; (ii) Lexington-Oxford
Associates, L.P., an Indiana limited partnership, owner of the Chinoe Creek
Apartments; (iii) ORP Four Limited Partnership, a Maryland limited partnership,
owner of the Shadow Oaks Apartments; and (iv) Springhill Lake Investors Limited
Partnership, a Maryland limited partnership and the Spring Hill Guarantors,
owners of the Spring Hill Lake Apartments. The Loan Agreement was modified by
that certain Third Reaffirmation and Joinder Agreement dated as of January 21,
2003, which added Shannon Manor Apartments, A Limited Partnership, a South
Carolina limited partnership, owner of the Windsor at South Square Apartments.
The Loan Agreement was modified by that certain Fourth Reaffirmation and Joinder
Agreement dated as of February 21, 2003, which added Stonecreek Limited
Partnership, a Tennessee limited partnership, owner of the Cross Creek
Apartments. The Loan Agreement was modified by that certain Fifth Reaffirmation
and Joinder Agreement dated as of April 21, 2003, which added AIMCO Bercado
Shores, L.L.C., a Delaware limited liability company, owner of River Pointe
Apartments. The Loan Agreement was modified by that certain Sixth Reaffirmation
and Joinder Agreement dated as of May 16, 2003 which added (i) DFW Apartment
Investors Limited Partnership, a Delaware limited partnership, owner of Heather
Ridge Apartments; (ii) Houston Pines, A California Limited Partnership, a
California limited partnership, owner of Forest River Apartments; (iii)
Georgetown AIP II, L.P., a South Carolina limited partnership, owner of
Georgetown Apartments; (iv) Wyckford Commons, L.P., a Delaware limited
partnership, owner of Wyckford Commons Apartments; (v) New Lake Meadows, L.P., a
South Carolina limited partnership, owner of Lake Meadows Apartments; and (vi)
AP XII Associates Limited Partnership, a South Carolina limited partnership,
doing business in Pennsylvania as AP XII Associates, Limited Partnership, owner
of Chambers Ridge Apartments.
B. All of Lender's right, title and interest in the Loan Agreement, in the
Loan Documents executed in connection with the Loan Agreement, and in the
transactions contemplated by the Loan Agreement have been assigned to Fannie Mae
pursuant to that certain Assignment of Collateral Agreements and Other Loan
Documents dated as of November 1, 2002 (the "Assignment"). Fannie Mae will not
assume any of the obligations of Lender under the Loan Agreement or the Loan
Documents as a result of the Assignment. Fannie Mae has designated Lender as the
servicer of the Loans contemplated by the Loan Agreement.
C. The parties hereto wish to acknowledge certain modifications to the
Loan Agreement as set forth below.
D. Additional Borrower desires to join in the Loan Agreement as if it were
a Current Borrower thereunder.
E. Guarantor hereby joins in this Agreement to evidence its consent hereto
and to reaffirm its obligations under the Loan Agreement and the Guaranty.
Agreement:
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Recitals. The Recitals set forth above are incorporated herein by reference
as if fully set forth in the body of this Agreement.
2. Definitions. All capitalized terms not defined herein shall have the same
meaning as set forth in the Loan Agreement.
3. Reaffirmation. Current Borrowers hereby reaffirm their respective obligations
pursuant to the Loan Agreement and the Loan Documents to which they are parties.
4. Joinder. Additional Borrower hereby joins in the Loan Agreement as if it were
a Current Borrower thereunder and hereby agrees that all references in the Loan
Agreement and in any other Loan Documents to any Borrower shall include the
Additional Borrower. The information describing the Loan to Additional Borrower
and the Mortgaged Property securing such Loan for purposes of Schedule A to the
Loan Agreement is as follows:
Mortgaged Property Initial Closing Initial Loan Amount
Date Valuation
Patchen Place Apartments May 16, 2003 $6,600,000.00 $4,290,000.00
5. Consent. The parties hereto hereby consent to the provisions of this
Agreement, agree that the Loan Agreement is in full force and effect and confirm
that the provisions of the Related Loan Agreement shall no longer govern the
Loan described in paragraph 4 above.
6. Guaranty. Guarantor hereby (i) acknowledges and consents to the addition of
the Additional Borrower under the Loan Agreement, (ii) acknowledges and consents
to the increase and expansion of the credit facility and the other changes and
the terms and conditions of the Loan Agreement, and (iii) confirms to the Lender
and Fannie Mae that the terms and provisions of the Guaranty for each Loan
remain in full force and effect.
7. Counterparts. This Agreement may be executed in counterparts by the parties
hereto, and each such counterpart shall be considered an original and all such
counterparts shall constitute one and the same document.
8. Governing Law. The provisions of Section 11.07 of the Loan Agreement
(entitled "Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial") are
hereby incorporated into this Agreement to the fullest extent as if the text of
such Section were set forth in its entirety hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
LENDER:
GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation
By: /s/Ann Bonney
Name: Ann Bonney
Title: Vice President
AIMCO:
AIMCO PROPERTIES, L.P., a Delaware
limited partnership
By: AIMCO-GP, Inc., a Delaware
corporation, its general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
ADDITIONAL BORROWER:
(Patchen Place Apartments)
NATIONAL PROPERTY INVESTORS 7, a
California limited partnership
By: NPI Equity Investments, Inc., a
Florida corporation, its sole
general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
CURRENT BORROWERS:
(Heather Ridge Apartments)
DFW APARTMENT INVESTORS LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: Winthrop Financial Associates, A
Limited Partnership, a Maryland
limited partnership, its general
partner
By: NHP Management Company, a
District of Columbia
corporation, its associate
general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Forest River Apartments)
HOUSTON PINES, A CALIFORNIA LIMITED
PARTNERSHIP, a California limited
partnership
By: Angeles Realty Corporation, a
California corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Georgetown Apartments)
GEORGETOWN AIP II, L.P., a South Carolina
limited partnership
By: AIP II Georgetown GP, L.L.C., a
South Carolina limited liability
company, its general partner
By: Angeles Income Properties,
Ltd. II, a California
limited partnership, its
sole member
By: Angeles Realty
Corporation II, a
California
corporation, its
managing general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice
President
(Wyckford Commons Apartments)
WYCKFORD COMMONS, L.P., a Delaware
limited partnership
By: Davidson Properties, Inc., a
Tennessee corporation, its
managing general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Lake Meadows Apartments)
NEW LAKE MEADOWS, L.P., a South Carolina
limited partnership
By: Lake Meadows GP, L.L.C., a South
Carolina limited liability
company, its general partner
By: Angeles Opportunity
Properties, Ltd., A
California Limited
Partnership, a California
limited partnership, its
sole member
By: Angeles Realty
Corporation II, a
California corporation,
its general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice
President
(Chambers Ridge Apartments)
AP XII ASSOCIATES LIMITED PARTNERSHIP, a
South Carolina limited partnership
By: AP XII Associates GP, L.L.C., a South
Carolina limited liability company, its
general partner
By: Angeles Partners XII, a California
limited partnership, is sole member
By: Angeles Realty Corporation II,
a California corporation, its
managing general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Executive Vice
President
(River Pointe Apartments)
AIMCO BERCADO SHORES, L.L.C., a Delaware
limited liability company
By: AIMCO Properties, L.P., a Delaware
limited partnership, its sole
member and manager
By: AIMCO-GP, Inc., a Delaware
corporation, its general
partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice
President
(Cross Creek Apartments)
STONECREEK LIMITED PARTNERSHIP, a
Tennessee limited partnership
By: Davidson Properties, Inc., a
Tennessee corporation, its managing
general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Windsor Apartments)
SHANNON MANOR APARTMENTS, A LIMITED
PARTNERSHIP, a South Carolina limited
partnership
By: AmReal Corporation, a South
Carolina corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Salem Apartments)
WINTHROP TEXAS INVESTORS LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Two Winthrop Limited Partnership, a
Maryland limited partnership, its
general partner
By: Nine Winthrop Properties, Inc.,
a Maryland corporation, its
general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Vice President - Residential
Securities and Debt
(Riverwood Apartments)
RIVER WOOD ASSOCIATES, L.P., an Indiana
limited partnership
By: Oxford General Partners Corporation,
a Delaware corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Lakeside Manor Apartments)
AIMCO LAKESIDE MANOR, L.P., a Delaware
limited partnership
By: AIMCO Holdings, L.P., a Delaware
limited partnership, its general
partner
By: AIMCO Holdings QRS, Inc., a
Delaware corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Big Walnut Apartments)
BIG WALNUT, L.P., a Delaware limited
partnership
By: Davidson Diversified Properties,
Inc., a Tennessee corporation, its
general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Versailles on the Lake Apartments)
DAVIDSON DIVERSIFIED REAL ESTATE I, L.P.,
a Delaware limited partnership
By: Davidson Diversified Properties,
Inc., a Tennessee corporation, its
managing general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Lebanon Station Apartment)
LAKE EDEN ASSOCIATES, L.P., a Delaware
limited partnership
By: Jacques-Miller Associates, a
Tennessee general partnership, its
managing general partner
By: JMA Equities, L.P., a Delaware
limited partnership, its
managing partner
By: MAE JMA, Inc., a Delaware
corporation, its managing
general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Carriage House Apartments)
(Rocky Creek Apartments)
SHELTER PROPERTIES VI LIMITED
PARTNERSHIP, a South Carolina limited
partnership
By: Shelter Realty VI Corporation, a
South Carolina corporation, its
corporate general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Hunt Club Apartments)
DFW RESIDENTIAL INVESTORS LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: Winthrop Financial Associates, A
Limited Partnership, a Maryland
limited partnership, its general
partner
By: NHP Management Company, a
District of Columbia
corporation, its associate
general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Baymeadows Apartments)
SHELTER PROPERTIES IV LIMITED
PARTNERSHIP, a South Carolina limited
partnership
By: Shelter Realty IV Corporation, a
South Carolina corporation, doing
business in Florida as Shelter
Realty IV Corporation of South
Carolina, its managing general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Spring Hill Lake Apartments)
SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Three Winthrop Properties, Inc., a
Massachusetts corporation, its
managing general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President - Residential
Securities and Debt
(Shadow Oaks Apartments)
ORP FOUR LIMITED PARTNERSHIP, a Maryland
limited partnership
By: ORP Corporation IV, a Maryland
corporation, its general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Park at Deerbrook Apartments)
TEXAS APARTMENT INVESTORS, a Delaware
general partnership
By: Texas Residential Investors Limited
Partnership, a Delaware limited
partnership, doing business in Texas
as Texas Winthrop Residential
Investors Limited Partnership, its
general partner
By: Winthrop Properties Limited
Partnership, a Delaware limited
partnership, its general partner
By: Six Winthrop Properties,
Inc., a Delaware
corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Vice President -
Residential Securities
and Debt
SPRING HILL GUARANTORS:
FIRST SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
SECOND SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
THIRD SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
FOURTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
FIFTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
SIXTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
SEVENTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
EIGHTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
NINTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
SPRINGHILL COMMERCIAL LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
SPRINGFIELD FACILITIES, LLC, a Maryland
limited liability company (successor
by merger to Springfield Facilities,
Inc., Maryland corporation)
By: Springhill Commercial Limited
Partnership, a Maryland limited
partnership, its sole member
By: Springhill Lake Investors
Limited Partnership, a Maryland
limited partnership, its sole
general partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities
and Debt
Exhibit 10.15
South Point Apartments
MULTIFAMILY NOTE
(VARIABLE LOAN)
US $5,000,000.00 As of June 27, 2003
FOR VALUE RECEIVED, the undersigned ("Borrower") promises to pay to the
order of GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation, the
principal sum of Five Million and 00/100 Dollars (US $5,000,000.00) with
interest on each Variable Loan at an annual rate as calculated in Section 3
hereof.
This Note is executed and delivered by Borrower pursuant to one of either
(i) that certain Amended and Restated Loan Agreement, dated as of September 16,
2002, by and among certain borrowers signatory thereto and Lender or (ii) that
certain Loan Agreement dated as of November 1, 2002, by and among certain
borrowers signatory thereto and Lender. As used herein, the term "Loan
Agreement" shall mean whichever of the loan agreements described in the
preceding sentence shall apply from time to time in accordance with their
respective terms, along with all amendments, supplements, replacements,
restatements or other modifications thereto or thereof from time to time made.
The Loan Agreement shall evidence the obligation of Borrower to repay a Variable
Loan made by Lender to Borrower in accordance with the terms of the Loan
Agreement. This Note is entitled to the benefit and security of the Loan
Documents provided for in the Loan Agreement, to which reference is hereby made
for a statement of all of the terms and conditions under which the Variable Loan
evidenced hereby is made. The Loan Agreement requires certain of the terms of
each Variable Loan to be evidenced by one or a series of Loan Confirmation
Instruments, and reference is hereby made to each such Loan Confirmation
Instrument for such terms.
1. Defined Terms. As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness" means the principal of, interest
on, or any other amounts due at any time under, this Note, the Security
Instrument or any other Loan Document, including prepayment premiums, late
charges, default interest, and advances to protect the security of the Security
Instrument under Section 12 of the Security Instrument. Event of Default and
other capitalized terms used but not defined in this Note shall have the
meanings given to such terms in the Loan Agreement or, if not defined in the
Loan Agreement, as defined in the Security Instrument (as defined in Paragraph
5).
2. Address for Payment. All payments due under this Note shall be payable at
GMAC Commercial Mortgage Corporation, 200 Witmer Road, Horsham, PA 19044 ,
Attention: Servicing - Account Manager, or such other place as may be designated
by written notice to Borrower from or on behalf of Lender.
3. Payment of Principal and Interest. Principal and interest shall be paid as
follows:
(a) This Note shall evidence a Variable Loan made from time to time under the
Loan Agreement. The Variable Loan shall bear interest at a rate determined in
accordance with Section 2.01 of the Loan Agreement.
(b) Borrower shall pay imputed interest on each Variable Loan in advance in the
form of a Discount in accordance with Section 1.04(b) of the Loan Agreement
(except that Borrower shall pay actual interest on the Variable Loan for the
partial month period, if any, in accordance with Section 1.04(a) of the Loan
Agreement).
(c) Borrower shall make monthly payments of principal each in the amount as set
forth on the attached Amortization Schedule. Lender shall apply each such
principal payment to the outstanding principal amount of the Loan on the
Rollover Date next following receipt of any such payment. If not sooner paid,
the entire principal amount of the Variable Loan shall be due and payable on the
earlier of (i) the termination of the Loan Agreement pursuant to subsection (e)
of Section 1.02 thereof, (ii) the fifth anniversary (unless such date is
extended pursuant to Section 1.07 of the Loan Agreement, in which case, the
tenth anniversary) of the Initial Closing Date or (iii) the maturity date of any
outstanding MBS, unless either (A) not less than five Business Days prior to the
maturity date of the outstanding MBS, a Borrower has requested that the
outstanding MBS be renewed with a new MBS or converted to a Fixed Loan to take
effect on the maturity date of the outstanding MBS and such new MBS has been
issued or conversion has occurred or (B) the MBS is automatically renewed, which
automatic renewal shall occur in the event that a Borrower does not make the
request set forth in subpart (iii)(A) above and does not give Lender notice not
less than five Business days prior to the maturity date of the outstanding MBS
that the Variable Loan related to such outstanding MBS shall be paid on the
maturity date of such outstanding MBS (the "Maturity Date"). Any MBS that is
issued as a result of an automatic renewal of a maturing MBS as contemplated by
subpart (iii)(B) above shall have a maturity date of three (3) months after the
MBS Issue Date.
(d) In addition to payment of principal and the Discount, Borrower shall pay the
Variable Loan Fee due on each Variable Loan in accordance with Section
1.04(b)(ii) of the Loan Agreement.
4. Application of Payments. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness that is less than all
amounts due and payable at such time, Lender may apply that payment to amounts
then due and payable in any manner and in any order determined by Lender, in
Lender's discretion. Borrower agrees that neither Lender's acceptance of a
payment from Borrower in an amount that is less than all amounts then due and
payable nor Lender's application of such payment shall constitute or be deemed
to constitute either a waiver of the unpaid amounts or an accord and
satisfaction.
5. Security. The Indebtedness is secured, among other things, by a multifamily
mortgage, deed to secure debt or deed of trust dated as of the date of this Note
(the "Security Instrument") and reference is made to the Security Instrument for
other rights of Lender concerning the collateral for the Indebtedness.
6. Acceleration. If an Event of Default has occurred and is continuing, the
entire unpaid principal balance, any accrued interest, the prepayment premium
payable under Paragraph 10, if any, and all other amounts payable under this
Note and any other Loan Document shall at once become due and payable, at the
option of Lender, without any additional notice to Borrower. Lender may exercise
this option to accelerate regardless of any prior forbearance.
7. Late Charge. If any monthly amount payable under this Note or under the
Security Instrument or any other Loan Document is not received by Lender within
10 days after the amount is due, Borrower shall pay to Lender, immediately and
without demand by Lender, a late charge equal to 5 percent of such amount.
Borrower acknowledges that its failure to make timely payments will cause Lender
to incur additional expenses in servicing and processing the loan evidenced by
this Note (the "Loan"), and that it is extremely difficult and impractical to
determine those additional expenses. Borrower agrees that the late charge
payable pursuant to this Paragraph represents a fair and reasonable estimate,
taking into account all circumstances existing on the date of this Note, of the
additional expenses Lender will incur by reason of such late payment. The late
charge is payable in addition to, and not in lieu of, any interest payable at
the Default Rate pursuant to Paragraph 8.
8. Default Rate. So long as any monthly installment or any other payment due
under this Note remains past due for 30 days or more, interest under this Note
shall accrue on the unpaid principal balance from the earlier of the due date of
the first unpaid monthly installment or other payment due, as applicable, at a
rate (the "Default Rate") equal to the lesser of 4 percentage points above the
rate stated in the first paragraph of this Note or the maximum interest rate
which may be collected from Borrower under applicable law. If the unpaid
principal balance and all accrued interest are not paid in full on the Maturity
Date, the unpaid principal balance and all accrued interest shall bear interest
from the Maturity Date at the Default Rate. Borrower also acknowledges that its
failure to make timely payments will cause Lender to incur additional expenses
in servicing and processing the Loan, that, during the time that any monthly
installment or payment under this Note is delinquent for more than 30 days,
Lender will incur additional costs and expenses arising from its loss of the use
of the money due and from the adverse impact on Lender's ability to meet its
other obligations and to take advantage of other investment opportunities, and
that it is extremely difficult and impractical to determine those additional
costs and expenses. Borrower also acknowledges that, during the time that any
monthly installment or payment due under this Note is delinquent for more than
30 days, Lender's risk of nonpayment of this Note will be materially increased
and Lender is entitled to be compensated for such increased risk. Borrower
agrees that the increase in the rate of interest payable under this Note to the
Default Rate represents a fair and reasonable estimate, taking into account all
circumstances existing on the date of this Note, of the additional costs and
expenses Lender will incur by reason of Borrower's delinquent payment and the
additional compensation Lender is entitled to receive for the increased risks of
nonpayment associated with a delinquent loan.
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Paragraph 9, Borrower shall have no
personal liability under this Note, the Security Instrument or any other Loan
Document for the repayment of the Indebtedness or for the performance of any
other obligations of Borrower under the Loan Documents, and Lender's only
recourse for the satisfaction of the Indebtedness and the performance of such
obligations shall be Lender's exercise of its rights and remedies with respect
to the Mortgaged Property and any other collateral held by Lender as security
for the Indebtedness. This limitation on Borrower's liability shall not limit or
impair Lender's enforcement of its rights against any guarantor of the
Indebtedness or any guarantor of any obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the repayment of a portion
of the Indebtedness equal to any loss or damage suffered by Lender as a result
of (1) failure of Borrower to pay to Lender upon demand after an Event of
Default, all Rents to which Lender is entitled under Section 3(a) of the
Security Instrument and the amount of all security deposits collected by
Borrower from tenants then in residence; (2) failure of Borrower to apply all
insurance proceeds and condemnation proceeds as required by the Security
Instrument; (3) failure of Borrower to comply with Section 14(d) or (e) of the
Security Instrument relating to the delivery of books and records, statements,
schedules and reports; (4) fraud or written material misrepresentation by
Borrower or any officer, director, partner, member or employee of Borrower in
connection with the application for or creation of the Indebtedness or any
request for any action or consent by Lender; or (5) failure to apply Rents,
first, to the payment of reasonable operating expenses (other than Property
management fees that are not currently payable pursuant to the terms of an
Assignment of Management Agreement or any other agreement with Lender executed
in connection with the Loan) and then to amounts ("Debt Service Amounts")
payable under this Note, the Security Instrument or any other Loan Document
(except that Borrower will not be personally liable (i) to the extent that
Borrower lacks the legal right to direct the disbursement of such sums because
of a bankruptcy, receivership or similar judicial proceeding, or (ii) with
respect to Rents that are distributed in any calendar year if Borrower has paid
all operating expenses and Debt Service Amounts for that calendar year).
(c) Borrower shall become personally liable to Lender for the repayment of all
of the Indebtedness upon the occurrence of any of the following Events of
Default: (1) Borrower's acquisition of any property or operation of any business
not permitted by Section 33 of the Security Instrument; or (2) a Transfer that
is an Event of Default under Section 21 of the Security Instrument.
(d) To the extent that Borrower has personal liability under this Paragraph 9,
Lender may exercise its rights against Borrower personally without regard to
whether Lender has exercised any rights against the Mortgaged Property or any
other security, or pursued any rights against any guarantor, or pursued any
other rights available to Lender under this Note, the Security Instrument, any
other Loan Document or applicable law. For purposes of this Paragraph 9, the
term "Mortgaged Property" shall not include any funds that (1) have been applied
by Borrower as required or permitted by the Security Instrument prior to the
occurrence of an Event of Default, or (2) Borrower was unable to apply as
required or permitted by the Security Instrument because of a bankruptcy,
receivership, or similar judicial proceeding.
10. Voluntary and Involuntary Prepayments. Pursuant to the terms of the Loan
Agreement, Borrower shall pay the entire amount of the Discount on any Variable
Loan in advance. Accordingly, any Variable Loan may be prepaid in whole or in
part and at any time without penalty. Borrower shall give Lender six (6)
Business Days advance notice of any prepayment.
11. Costs and Expenses. Borrower shall pay on demand all reasonable expenses and
costs, including reasonable fees and out-of-pocket expenses of attorneys and
expert witnesses and costs of investigation, incurred by Lender as a result of
any default under this Note or in connection with efforts to collect any amount
due under this Note, or to enforce the provisions of any of the other Loan
Documents, including those incurred in post-judgment collection efforts and in
any bankruptcy proceeding (including any action for relief from the automatic
stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure
proceeding.
12. Forbearance. Any forbearance by Lender in exercising any right or remedy
under this Note, the Security Instrument, or any other Loan Document or
otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount which is less than
the required payment, shall not be a waiver of Lender's right to require prompt
payment when due of all other payments or to exercise any right or remedy with
respect to any failure to make prompt payment. Enforcement by Lender of any
security for Borrower's obligations under this Note shall not constitute an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.
13. Waivers. Except as expressly provided in the Loan Agreement, presentment,
demand, notice of dishonor, protest, notice of acceleration, notice of intent to
demand or accelerate payment or maturity, presentment for payment, notice of
nonpayment, grace, and diligence in collecting the Indebtedness are waived by
Borrower and all endorsers and guarantors of this Note and all other third party
obligors.
14. Loan Charges. If any applicable law limiting the amount of interest or other
charges permitted to be collected from Borrower in connection with the Loan is
interpreted so that any interest or other charge provided for in any Loan
Document, whether considered separately or together with other charges provided
for in any other Loan Document, violates that law, and Borrower is entitled to
the benefit of that law, that interest or charge is hereby reduced to the extent
necessary to eliminate that violation. Borrower agrees to an effective rate of
interest that is the stated rate of interest plus any additional rate of
interest resulting from any other charges or fees that are to be paid by
Borrower to Lender that may be found by a court of competent jurisdiction to be
interest. The amounts, if any, previously paid to Lender in excess of the
permitted amounts shall be applied by Lender to reduce the unpaid principal
balance of this Note. For the purpose of determining whether any applicable law
limiting the amount of interest or other charges permitted to be collected from
Borrower has been violated, all Indebtedness that constitutes interest, as well
as all other charges made in connection with the Indebtedness that constitute
interest, shall be deemed to be allocated and spread ratably over the stated
term of the Note. Unless otherwise required by applicable law, such allocation
and spreading shall be effected in such a manner that the rate of interest so
computed is uniform throughout the stated term of the Note.
15. Commercial Purpose. Borrower represents that the Indebtedness is being
incurred by Borrower solely for the purpose of carrying on a business or
commercial enterprise, and not for personal, family or household purposes.
16. Counting of Days. Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not Business
Days.
17. Governing Law; Consent to Jurisdiction; WAIVER OF JURY TRIAL. The provisions
of Section 11.07 of the Loan Agreement (entitled "Choice of Law; Consent to
Jurisdiction; Waiver of Jury Trial") are hereby incorporated into this Note by
this reference to the fullest extent as if the text of such Section were set
forth in its entirety herein.
18. Captions. The captions of the paragraphs of this Note are for convenience
only and shall be disregarded in construing this Note.
19. Notices. All notices, demands and other communications required or permitted
to be given by Lender to Borrower pursuant to this Note shall be given in
accordance with Section 11.09 of the Loan Agreement.
20. Security for this Note. Reference is made hereby to the Loan Agreement and
the Security Documents for additional rights and remedies of Lender relating to
the indebtedness evidenced by this Note. Each Security Document shall be
released in accordance with the provisions of the Security Documents.
21. Loan May Not Be Reborrowed. Borrower may not re-borrow any amounts under
this Note which it has previously borrowed and repaid under this Note.
22. Default Under Loan Agreement and Other Loan Documents. The occurrence of an
Event of Default under the Loan Agreement or the Security Instrument shall
constitute an "Event of Default" under this Note in accordance with the Loan
Agreement and the Security Instrument. Upon the occurrence of an Event of
Default under the Loan Agreement or the Security Instrument, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof.
23. Loan Confirmation Instruments; Accounting for Variable Loans. The terms of
the Loan Agreement and this Note govern the repayment, and all other terms
relating to the Variable Loan. However, Borrower shall execute a Loan
Confirmation Instrument to create a physical instrument evidencing each MBS
issued to fund the Variable Loan. The Loan Confirmation Instrument executed by
Borrower in accordance with Section 2.02 of the Loan Agreement shall set forth
the amount, term, Discount, Closing Date and certain other terms of each MBS
issued to fund the Variable Loan. The Loan Confirmation Instrument shall
conclusively establish each of the terms described in the preceding sentence,
absent manifest error. The MBS evidenced by the Loan Confirmation Instrument
does not represent a separate indebtedness from that evidenced by this Note. In
making proof of this Note, no other documents other than this Note shall be
required. In making proof of the amount and terms of the outstanding Variable
Loans under this Note, this Note, the related Loan Confirmation Instruments, and
Lender's records concerning payments made by Borrower under this Note, shall be
conclusive evidence of the terms and outstanding amounts of the Variable Loan,
absent manifest error.
24. Modifications to Note. There are standard modifications to this Note that
are attached as Exhibit B-1 and Exhibit B-2 hereto. In addition, there may be
special modifications to this Note attached as Exhibit B-3 hereto. All such
exhibits are hereby incorporated into this Note as a part hereof.
IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal
or has caused this Note to be signed and delivered under seal by its duly
authorized representative. Borrower intends that this Note shall be deemed to be
signed and delivered as a sealed instrument.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
NATIONAL PROPERTY INVESTORS 7, a California
limited partnership, doing business in
North Carolina as National Property
Investors 7 Limited Partnership
By: NPI Equity Investments, Inc., a
Florida corporation, its sole
general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation
By: /s/Ann Bonney
Name: Ann Bonney
Title: Vice President
Exhibit 10.16
EIGHTH REAFFIRMATION AND JOINDER AGREEMENT
THIS EIGHTH REAFFIRMATION AND JOINDER AGREEMENT (this "Agreement") is made
as of July 17, 2003 by and among (i) AIMCO PROPERTIES, L.P., a Delaware limited
partnership ("Guarantor"), (ii) NATIONAL PROPERTY INVESTORS 7, a California
limited partnership, doing business in North Carolina as National Property
Investors 7 Limited Partnership (the "Additional Borrower") (individually and
collectively with all Current Borrowers, as defined below, "Borrower"), (iii)
GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation ("Lender"), (iv)
the parties who are the current Borrowers under the Loan Agreement (the "Current
Borrowers"), (v) the parties who are the Spring Hill Guarantors under the Loan
Agreement ("Spring Hill Guarantors") and (vi) FANNIE MAE, a federally chartered
and stockholder-owned corporation ("Fannie Mae").
RECITALS:
A. Lender, Guarantor, the Current Borrowers and the Spring Hill Guarantors
are parties to that certain Amended and Restated Loan Agreement, dated as of
September 16, 2002 (as amended, supplemented, replaced, restated or otherwise
modified from time to time, the "Loan Agreement"). The Loan Agreement was
modified by that certain First Modification, Reaffirmation and Joinder Agreement
dated as of November 25, 2002, which modified the Loan Agreement, added Winthrop
Texas Investors Limited Partnership, a Maryland limited partnership, owner of
the Salem Park Apartments and removed Texas Apartment Investors, a Delaware
general partnership, owner of the Ryan's Point Apartments. The Loan Agreement
was modified by that certain Second Modification, Reaffirmation and Joinder
Agreement dated as of December 27, 2002, which modified the Loan Agreement and
added (i) Shelter Properties IV Limited Partnership, a South Carolina limited
partnership, owner of the Baymeadows Apartments; (ii) Lexington-Oxford
Associates, L.P., an Indiana limited partnership, owner of the Chinoe Creek
Apartments; (iii) ORP Four Limited Partnership, a Maryland limited partnership,
owner of the Shadow Oaks Apartments; and (iv) Springhill Lake Investors Limited
Partnership, a Maryland limited partnership and the Spring Hill Guarantors,
owners of the Spring Hill Lake Apartments. The Loan Agreement was modified by
that certain Third Reaffirmation and Joinder Agreement dated as of January 21,
2003, which added Shannon Manor Apartments, A Limited Partnership, a South
Carolina limited partnership, owner of the Windsor at South Square Apartments.
The Loan Agreement was modified by that certain Fourth Reaffirmation and Joinder
Agreement dated as of February 21, 2003, which added Stonecreek Limited
Partnership, a Tennessee limited partnership, owner of the Cross Creek
Apartments. The Loan Agreement was modified by that certain Fifth Reaffirmation
and Joinder Agreement dated as of April 21, 2003, which added AIMCO Bercado
Shores, L.L.C., a Delaware limited liability company, owner of River Pointe
Apartments. The Loan Agreement was modified by that certain Sixth Reaffirmation
and Joinder Agreement dated as of May 16, 2003, which added (i) DFW Apartment
Investors Limited Partnership, a Delaware limited partnership, owner of Heather
Ridge Apartments; (ii) Houston Pines, A California Limited Partnership, a
California limited partnership, owner of Forest River Apartments; (iii)
Georgetown AIP II, L.P., a South Carolina limited partnership, owner of
Georgetown Apartments; (iv) Wyckford Commons, L.P., a Delaware limited
partnership, owner of Wyckford Commons Apartments; (v) New Lake Meadows, L.P., a
South Carolina limited partnership, owner of Lake Meadows Apartments; and (vi)
AP XII Associates Limited Partnership, a South Carolina limited partnership,
doing business in Pennsylvania as AP XII Associates, Limited Partnership, owner
of Chambers Ridge Apartments. The Loan Agreement was modified by that certain
Seventh Reaffirmation and Joinder Agreement dated as of June 16, 2003, which
added National Property Investors 7, a California limited partnership, owner of
Patchen Place Apartments.
B. All of Lender's right, title and interest in the Loan Agreement, in the
Loan Documents executed in connection with the Loan Agreement, and in the
transactions contemplated by the Loan Agreement have been assigned to Fannie Mae
pursuant to that certain Assignment of Collateral Agreements and Other Loan
Documents dated as of November 1, 2002 (the "Assignment"). Fannie Mae will not
assume any of the obligations of Lender under the Loan Agreement or the Loan
Documents as a result of the Assignment. Fannie Mae has designated Lender as the
servicer of the Loans contemplated by the Loan Agreement.
C. The parties hereto wish to acknowledge certain modifications to the
Loan Agreement as set forth below.
D. Additional Borrower desires to join in the Loan Agreement as if it were
a Current Borrower thereunder.
E. Guarantor hereby joins in this Agreement to evidence its consent hereto
and to reaffirm its obligations under the Loan Agreement and the Guaranty.
Agreement:
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Recitals. The Recitals set forth above are incorporated herein by reference
as if fully set forth in the body of this Agreement.
2. Definitions. All capitalized terms not defined herein shall have the same
meaning as set forth in the Loan Agreement.
3. Reaffirmation. Current Borrowers hereby reaffirm their respective obligations
pursuant to the Loan Agreement and the Loan Documents to which they are parties.
4. Joinder. Additional Borrower hereby joins in the Loan Agreement as if it were
a Current Borrower thereunder and hereby agrees that all references in the Loan
Agreement and in any other Loan Documents to any Borrower shall include the
Additional Borrower. The information describing the Loan to Additional Borrower
and the Mortgaged Property securing such Loan for purposes of Schedule A to the
Loan Agreement is as follows:
Mortgaged Property Initial Closing Initial Loan Amount
Date Valuation
South Point Apartments June 27, 2003 $7,700,000.00 $5,000,000.00
5. Consent. The parties hereto hereby consent to the provisions of this
Agreement, agree that the Loan Agreement is in full force and effect and confirm
that the provisions of the Related Loan Agreement shall no longer govern the
Loan described in paragraph 4 above.
6. Guaranty. Guarantor hereby (i) acknowledges and consents to the addition of
the Additional Borrower under the Loan Agreement, (ii) acknowledges and consents
to the increase and expansion of the credit facility and the other changes and
the terms and conditions of the Loan Agreement, and (iii) confirms to the Lender
and Fannie Mae that the terms and provisions of the Guaranty for each Loan
remain in full force and effect.
7. Counterparts. This Agreement may be executed in counterparts by the parties
hereto, and each such counterpart shall be considered an original and all such
counterparts shall constitute one and the same document.
8. Governing Law. The provisions of Section 11.07 of the Loan Agreement
(entitled "Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial") are
hereby incorporated into this Agreement to the fullest extent as if the text of
such Section were set forth in its entirety hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
LENDER:
GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation
By: /s/Ann Bonney
Name: Ann Bonney
Title: Vice President
AIMCO:
AIMCO PROPERTIES, L.P., a Delaware
limited partnership
By: AIMCO-GP, Inc., a Delaware
corporation, its general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
ADDITIONAL BORROWER:
(South Point Apartments)
NATIONAL PROPERTY INVESTORS 7, a California
limited partnership, doing business in North
Carolina as National Property Investors 7
Limited Partnership
By: NPI Equity Investments, Inc., a
Florida corporation, its sole general
partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
CURRENT BORROWERS:
(Patchen Place Apartments)
NATIONAL PROPERTY INVESTORS 7, a
California limited partnership
By: NPI Equity Investments, Inc., a
Florida corporation, its sole general
partner.
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Heather Ridge Apartments)
DFW APARTMENT INVESTORS LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: Winthrop Financial Associates, A
Limited Partnership, a Maryland
limited partnership, its general
partner
By: NHP Management Company, a
District of Columbia
corporation, its associate
general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Forest River Apartments)
HOUSTON PINES, A CALIFORNIA LIMITED
PARTNERSHIP, a California limited
partnership
By: Angeles Realty Corporation, a
California corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Georgetown Apartments)
GEORGETOWN AIP II, L.P., a South Carolina
limited partnership
By: AIP II Georgetown GP, L.L.C., a
South Carolina limited liability
company, its general partner
By: Angeles Income Properties,
Ltd. II, a California
limited partnership, its
sole member
By: Angeles Realty
Corporation II, a
California
corporation, its
managing general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice
President
(Wyckford Commons Apartments)
WYCKFORD COMMONS, L.P., a Delaware
limited partnership
By: Davidson Properties, Inc., a
Tennessee corporation, its
managing general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Lake Meadows Apartments)
NEW LAKE MEADOWS, L.P., a South Carolina
limited partnership
By: Lake Meadows GP, L.L.C., a South
Carolina limited liability
company, its general partner
By: Angeles Opportunity
Properties, Ltd., A
California Limited
Partnership, a California
limited partnership, its
sole member
By: Angeles Realty
Corporation II, a
California corporation,
its general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice
President
(Chambers Ridge Apartments)
AP XII ASSOCIATES LIMITED PARTNERSHIP, a
South Carolina limited partnership
By: AP XII Associates GP, L.L.C., a South
Carolina limited liability company, its
general partner
By: Angeles Partners XII, a California
limited partnership, is sole member
By: Angeles Realty Corporation II,
a California corporation, its
managing general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Executive Vice
President
(River Pointe Apartments)
AIMCO BERCADO SHORES, L.L.C., a Delaware
limited liability company
By: AIMCO Properties, L.P., a Delaware
limited partnership, its sole
member and manager
By: AIMCO-GP, Inc., a Delaware
corporation, its general
partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice
President
(Windsor Apartments)
SHANNON MANOR APARTMENTS, A LIMITED
PARTNERSHIP, a South Carolina limited
partnership
By: AmReal Corporation, a South
Carolina corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Salem Apartments)
WINTHROP TEXAS INVESTORS LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Two Winthrop Limited Partnership, a
Maryland limited partnership, its
general partner
By: Nine Winthrop Properties, Inc.,
a Maryland corporation, its
general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Vice President - Residential
Securities and Debt
(Riverwood Apartments)
RIVER WOOD ASSOCIATES, L.P., an Indiana
limited partnership
By: Oxford General Partners Corporation,
a Delaware corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Lakeside Manor Apartments)
AIMCO LAKESIDE MANOR, L.P., a Delaware
limited partnership
By: AIMCO Holdings, L.P., a Delaware
limited partnership, its general
partner
By: AIMCO Holdings QRS, Inc., a
Delaware corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Big Walnut Apartments)
BIG WALNUT, L.P., a Delaware limited
partnership
By: Davidson Diversified Properties,
Inc., a Tennessee corporation, its
general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Versailles on the Lake Apartments)
DAVIDSON DIVERSIFIED REAL ESTATE I, L.P.,
a Delaware limited partnership
By: Davidson Diversified Properties,
Inc., a Tennessee corporation, its
managing general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Lebanon Station Apartment)
LAKE EDEN ASSOCIATES, L.P., a Delaware
limited partnership
By: Jacques-Miller Associates, a
Tennessee general partnership, its
managing general partner
By: JMA Equities, L.P., a Delaware
limited partnership, its
managing partner
By: MAE JMA, Inc., a Delaware
corporation, its managing
general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Carriage House Apartments)
(Rocky Creek Apartments)
SHELTER PROPERTIES VI LIMITED
PARTNERSHIP, a South Carolina limited
partnership
By: Shelter Realty VI Corporation, a
South Carolina corporation, its
corporate general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Hunt Club Apartments)
DFW RESIDENTIAL INVESTORS LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: Winthrop Financial Associates, A
Limited Partnership, a Maryland
limited partnership, its general
partner
By: NHP Management Company, a
District of Columbia
corporation, its associate
general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Baymeadows Apartments)
SHELTER PROPERTIES IV LIMITED
PARTNERSHIP, a South Carolina limited
partnership
By: Shelter Realty IV Corporation, a
South Carolina corporation, doing
business in Florida as Shelter
Realty IV Corporation of South
Carolina, its managing general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Spring Hill Lake Apartments)
SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Three Winthrop Properties, Inc., a
Massachusetts corporation, its
managing general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President - Residential
Securities and Debt
(Shadow Oaks Apartments)
ORP FOUR LIMITED PARTNERSHIP, a Maryland
limited partnership
By: ORP Corporation IV, a Maryland
corporation, its general partner
By:/s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
(Park at Deerbrook Apartments)
TEXAS APARTMENT INVESTORS, a Delaware
general partnership
By: Texas Residential Investors Limited
Partnership, a Delaware limited
partnership, doing business in Texas
as Texas Winthrop Residential
Investors Limited Partnership, its
general partner
By: Winthrop Properties Limited
Partnership, a Delaware limited
partnership, its general partner
By: Six Winthrop Properties,
Inc., a Delaware
corporation, its general
partner
By:/s/Patti K. Fielding
Patti K. Fielding
Vice President -
Residential Securities
and Debt
SPRING HILL GUARANTORS:
FIRST SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
SECOND SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
THIRD SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
FOURTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
FIFTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
SIXTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
SEVENTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
EIGHTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
NINTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
SPRINGHILL COMMERCIAL LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K. Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities and
Debt
SPRINGFIELD FACILITIES, LLC, a Maryland
limited liability company (successor
by merger to Springfield Facilities,
Inc., Maryland corporation)
By: Springhill Commercial Limited
Partnership, a Maryland limited
partnership, its sole member
By: Springhill Lake Investors
Limited Partnership, a Maryland
limited partnership, its sole
general partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By:/s/Patti K.Fielding(SEAL)
Patti K. Fielding
Vice President -
Residential Securities
and Debt