1
EXHIBIT (a)(7)
SUPPLEMENT TO
OFFER TO PURCHASE FOR CASH
AIMCO
AIMCO Properties, L.P.
is offering to purchase any and all units of limited partnership interests in
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
FOR $38,250 PER UNIT IN CASH
HIGHEST PRICE BEING OFFERED
Upon the terms and subject to the conditions set for herein, we will accept any
and all units validly tendered in response to our offer. If units are validly
tendered and not properly withdrawn prior to the expiration date and the
purchase of all such units would result in there being less than 320
unitholders, we will purchase only 99% of the total number of units so tendered
by each limited partner.
Our offer is not subject to a minimum number of units being tendered.
Our offer and your withdrawal rights will expire at 5:00 P.M., New York City
time, on July 10, 2000, unless we extend the deadline.
You will not pay any partnership transfer fees if you tender your units. You
will pay any other fees and costs, including any transfer taxes.
Our offer price will be reduced for any distributions subsequently made by your
partnership prior to the expiration of our offer.
SEE "RISK FACTORS" IN THE OFFER TO PURCHASE, DATED MAY 15, 2000, FOR A
DESCRIPTION OF RISK FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH OUR
OFFER, INCLUDING THE FOLLOWING:
o We determined our original offer price of $35,686 per unit based on
valuing your partnerships property at $68,000,000 and our increased
offer price of $38,250 per unit without any arms-length negotiations.
Accordingly, our offer price may not reflect the fair market value of
your units.
o In connection with a proposed refinancing of the partnerships only
property, your partnership understands that the lender has obtained
an appraisal of the property of $82,950,000 on an unencumbered basis.
o Your general partner and the property manager of your partnership's
property is a subsidiary of ours and, therefore, the general partner
has substantial conflicts of interest with respect to our offer.
(continued on next page)
--------------------------------------------------
If you desire to accept our offer, you should complete and sign the
enclosed acknowledgment and agreement in accordance with the instructions
thereto and the letter of transmittal and instructions thereto which are Annex
I to this Supplement and mail or deliver the signed acknowledgment and
agreement and any other required documents to River Oaks Partnership Services,
Inc., which is acting as Information Agent in connection with our offer, at one
of its addresses set forth on the back cover of this Supplement. You only need
to return the acknowledgment and agreement. QUESTIONS AND REQUESTS FOR
ASSISTANCE OR FOR ADDITIONAL COPIES OF THE OFFER TO PURCHASE, THE SUPPLEMENTS
THERETO, OR THE ACKNOWLEDGMENT AND AGREEMENT MAY ALSO BE DIRECTED TO THE
INFORMATION AGENT AT (888) 349-2005.
June 23, 2000
2
(Continued from prior page)
o We are making this offer with a view to making a profit and,
therefore, there is a conflict between our desire to purchase your
units at a low price and your desire to sell your units at a high
price.
o Continuation of your partnership will result in our affiliates
continuing to receive management fees from your partnership. Such
fees would not be payable if your partnership was liquidated.
o It is possible that we may conduct a future offer at a higher price.
o For any units that we acquire from you, you will not receive any
future distributions from operating cash flow of your partnership or
upon a sale or refinancing of property owned by your partnership.
o If we acquire a only a few of units, we will control the voting
decisions with respect to your partnership, including but not limited
to the removal of the general partner, most amendments to the
partnership agreement and the sale of all or substantially all of
your partnership assets.
2
3
INTRODUCTION
On May 15, 2000, we commenced an offer to acquire all of the outstanding
units of your partnership, in exchange for $35,686 in cash per unit, net to the
seller, without interest, less the amount of distributions, if any, made by
your partnership in respect of any unit from May 15, 2000 until the expiration
date. We have now increased our offer price to $38,250. If units are validly
tendered and not properly withdrawn prior to the expiration date and the
purchase of all such units would result in there being less than 320
unitholders, we will purchase only 99% of the total number of units so tendered
by each limited partner. Our offer is made upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 15, 2000, this
Supplement and in the accompanying acknowledgment and agreement.
We will pay any transfer fees imposed for the transfer of units by your
partnership. However, you will have to pay any governmental transfer taxes that
apply to your sale. You will also have to pay any fees or commissions imposed
by your broker in assisting you to tender your units, or by any custodian or
other trustee of any Individual Retirement Account or benefit plan which is the
owner of record of your units. Although the fees charged for transferring units
from an Individual Retirement Account vary, such fees are typically $25-$50 per
transaction.
We have retained River Oaks Partnership Services, Inc. to act as the
Information Agent in connection with our offer. We will pay all charges and
expenses in connection with the services of the Information Agent. The offer is
not conditioned on any minimum number of the units being tendered. However,
certain other conditions do apply. See "The Offer - Section 17. Conditions of
the Offer," in the Offer to Purchase. Under no circumstances will we be
required to accept any unit if the transfer of that unit to us would be
prohibited by the agreement of limited partnership of your partnership.
We have extended the expiration date of our offer to 5:00 p.m., New York
City time, on July 10, 2000. If you desire to accept our offer, you must
complete and sign the acknowledgment and agreement in accordance with the
instructions contained therein and the letter of transmittal and the
instructions thereto, Appendix I to this Supplement, and forward or hand
deliver the enclosed acknowledgment and agreement, together with any other
required documents, to the Information Agent. If you have already tendered your
units in accordance with any prior letter of transmittal and acknowledgment and
agreement, you need not take any further action to continue to tender your
units. You may withdraw your tender of units pursuant to the offer at any time
prior to the expiration date of our offer and, if we have not accepted such
units for payment, on or after July 17, 2000.
We expressly reserve the right, in our reasonable discretion, at any time
and from time to time, to extend the period of time during which our offer is
open and thereby delay acceptance for payment of, and the payment for, any
unit. Notice of any such extension will promptly be disseminated to you in a
manner reasonably designed to inform you of such change. Further, any extension
may be followed by a press release or public announcement which will be issued
no later than 9:00 a.m., New York City time, on the next business day after the
scheduled expiration date of our offer, in accordance with Rule 14e-1(d) under
the Securities Exchange Act of 1934.
On June 12, 2000 several unaffiliated third parties commenced a tender
offer to purchase up to 60 of the outstanding units at a purchase price of
$38,000 per unit. The partnership and the general partner of your partnership
have provided the following information for inclusion in this Supplement: The
general partner believes that our offer is fair, the general partner believes
that you must make your own decision whether or not to participate in any
offer, based upon a number of factors, including your financial position, your
need or desire for liquidity, other financial opportunities available to you,
and your tax position and the tax consequences to you of selling your units.
However, the general partner notes that the our offer is at the highest price
of the offers and if you wish to sell your units for cash, you should do so at
the highest price. Therefore the general partner is recommending against the
unaffiliated third parties' offer. LIMITED PARTNERS ARE URGED TO READ OUR OFFER
TO PURCHASE, THE SUPPLEMENTS THERETO AND THE RELATED MATERIALS CAREFULLY AND IN
THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS. The general
partner of your Partnership is our affiliate.
PROPOSED REFINANCING
Your partnership sole property has a mortgage with a principal balance
of approximately $44,823,000 which is due next year. Your partnership has
entered into a commitment letter to refinance the existing mortgage. The new
mortgage is expected to be for $51,000,000 with monthly payments of $415,543,
which fully amortize the principal over the new mortgage's expected twenty year
term. The new mortgage is expected to have a fixed interest rate of 7.65%.
Your partnership expects to use the net proceeds from the refinancing to
repay the existing mortgage, to make repairs and improvements required under
the proposed refinancing of $3,050,000 and to distribute the balance to the
partners. Under the terms of your partnership's agreement of limited
partnership, the general partner, in connection with the refinancing, is
entitled to receive a mortgage brokerage fee based on the prevailing market
rates for such fees in the vicinity of your partnership's property.
3
4
In connection with the proposed loan, the general partner of your
partnership understands that the proposed lender has obtained an appraisal of
the property at $82,950,000 on an unencumbered basis.
No assurances can be given that the proposed mortgage will be entered into
or that the terms will be as described herein.
4