SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
NATIONAL PROPERTY INVESTORS 7
A CALIFORNIA LIMITED PARTNERSHIP
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: Limited
Partnership Units
(2) Aggregate number of securities to which transaction applies: 60,571
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined): $8,360,000
(4) Proposed maximum aggregate value of transaction: $8,360,000
(5) Total fee paid: $676.32
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
NATIONAL PROPERTY INVESTORS 7
A CALIFORNIA LIMITED PARTNERSHIP
c/o THE ALTMAN GROUP, INC.
1275 Valley Brook Avenue
Lyndhurst, New Jersey 07071
November 24, 2003
Dear Limited Partner:
We are writing to request your consent to the sale (the "Sale") by National
Property Investors 7, a California limited partnership (the "Partnership"), of
its ownership of the apartment complex known as South Point Apartments, located
in Durham County, North Carolina ("South Point"), and the ratification (the
"Ratification") of the sale by the Partnership of its ownership of the apartment
complexes known as Northwoods Apartments, located in Escambia County, Florida
("Northwoods"), and Patchen Place Apartments, located in Fayette County,
Kentucky ("Patchen Place"). The sale by the Partnership of South Point,
Northwoods and Patchen Place in a 12-month period constitutes the sale of more
than 66 2/3% of the net book value of all of the Partnership's property in a
single sale, or in multiple sales in the same 12-month period, and, therefore,
pursuant to the partnership agreement of the Partnership dated as of October 11,
1983, as amended (the "Partnership Agreement"), the Partnership is required to
obtain the consent of the limited partners owning more than 50% of the
outstanding limited partnership units of the Partnership in order to sell South
Point. The sale by the Partnership of its ownership of South Point is the
transaction that causes the Partnership to exceed the 66 2/3% threshold.
Accordingly, the South Point sale is the sale for which the Partnership is
seeking your consent. Although the Partnership is not required to seek limited
partner consent for the individual sales of its interests in Northwoods and
Patchen Place, it seeks ratification of those sales because all three sales
combined constitute more than 66 2/3% of the net book value of all of the
Partnership's property in a single sale, or in multiple sales in the same
12-month period. If the requisite limited partner consent is not received with
regard to the Sale and Ratification, the Partnership will not sell South Point
but will complete the sale of Northwoods. The sale of Patchen Place closed on
October 31, 2003.
Enclosed for your consideration is a Consent Solicitation Statement, dated
November 24, 2003 (the "Solicitation Statement"), and a form of Consent of
Limited Partner (the "Consent Form") for indicating whether or not you wish to
grant your consent to the Sale and Ratification. The consent of limited partners
who own more than 50% of all outstanding limited partnership units is required
to approve the Sale and Ratification. As described more fully below, affiliates
of NPI Equity Investments, Inc., a Florida corporation, the managing general
partner of the Partnership (the "Managing General Partner"), have the right to
independently vote 46.27% of the limited partnership units and intend to consent
to the Sale and Ratification. As a result, and due to the voting restriction
described more fully below, the consent of an additional 2.16% of the limited
partnership units, or 1,309 limited partnership units, is all that is required
to approve the Sale and Ratification.
THE MANAGING GENERAL PARTNER RECOMMENDS THAT YOU CONSENT
TO THE SALE AND RATIFICATION
The Managing General Partner recommends that you consent to the Sale and
Ratification by fully completing, dating and signing the enclosed Consent Form
and returning it by hand, mail, overnight courier or fax, pursuant to the
instructions below.
YOUR PARTICIPATION IS VERY IMPORTANT. PLEASE REVIEW THIS LETTER AND THE
INFORMATION IN THE ATTACHED SOLICITATION STATEMENT AND RETURN THE ENCLOSED
CONSENT FORM PER THE INSTRUCTIONS BELOW. PLEASE NOTE THAT THIS SOLICITATION WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 18, 2003.
If you have any questions or require any assistance in completing and returning
the Consent Form, please contact our Solicitation Agent, The Altman Group, Inc.,
by mail at 1275 Valley Brook Avenue, Lyndhurst, New Jersey 07071; by overnight
courier service at 1275 Valley Brook Avenue, Lyndhurst, New Jersey 07071; by fax
at (201) 460-0050; or by telephone at (800) 461-2657.
Very truly yours,
NATIONAL PROPERTY INVESTORS 7,
a California limited partnership
By: NPI EQUITY INVESTMENTS, INC.,
a Florida corporation,
its Managing General Partner
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
CONSENT SOLICITATION STATEMENT
FOR
NATIONAL PROPERTY INVESTORS 7
A CALIFORNIA LIMITED PARTNERSHIP
c/o THE ALTMAN GROUP, INC.
1275 Valley Brook Avenue
Lyndhurst, New Jersey 07071
November 24, 2003
Dear Limited Partner:
This Consent Solicitation Statement (the "Solicitation Statement") is being
furnished to the limited partners of record as of the close of business on
November 24, 2003 (the "Record Date"), of National Property Investors 7, a
California limited partnership (the "Partnership"), in connection with the
solicitation of consent to approve the sale (the "Sale") by the Partnership of
its ownership of the apartment complex known as South Point Apartments, located
in Durham County, North Carolina ("South Point"), and the ratification (the
"Ratification") of the sale by the Partnership of its ownership of the apartment
complexes known as Northwoods Apartments, located in Escambia County, Florida
("Northwoods"), and Patchen Place Apartments, located in Fayette County,
Kentucky ("Patchen Place"). The sale by the Partnership of South Point,
Northwoods and Patchen Place (collectively referred to herein as the
"Properties") in a 12-month period constitutes the sale of more than 66 2/3% of
the net book value of all of the Partnership's property in a single sale, or in
multiple sales in the same 12-month period, and, therefore, pursuant to
partnership agreement of the Partnership dated as of October 11, 1983, as
amended (the "Partnership Agreement"), the Partnership is required to obtain the
consent of the limited partners owning more than 50% of the outstanding limited
partnership units of the Partnership in order to sell South Point. The sale by
the Partnership of its ownership of South Point is the transaction that causes
the Partnership to exceed the 66 2/3% threshold. Accordingly, the sale of South
Point is the sale for which the Partnership is seeking consent. Although the
Partnership is not required to seek limited partner consent for the individual
sales of its interests in Northwoods and Patchen Place, it is seeking
ratification of those sales because the sale of all three Properties combined
constitutes more than 66 2/3% of the net book value of all of the Partnership's
property in a single sale, or in multiple sales in the same 12-month period. If
the requisite limited partner consent is not received with regard to the Sale
and Ratification, the Partnership will not sell South Point but will complete
the sale of Northwoods. The sale of Patchen Place closed on October 31, 2003.
After each sale closes, we estimate that there will be approximately $48, $38
and $46 in pre-tax distributions per limited partnership unit to distribute to
the limited partners as a result of the sale of Northwoods, Patchen Place and
South Point, respectively. These amounts are estimates, and, as explained below,
are based on a number of assumptions. We expect the distributions for each sale
will occur one to three months after each sale closes. This Solicitation
Statement contains information regarding the sale of the Properties and the
reasons that NPI Equity Investments, Inc., the managing general partner of the
Partnership (the "Managing General Partner"), has decided that the sale of the
Properties is in the best interests of the limited partners. The Managing
General Partner has conflicts of interest in the sales as described in greater
detail below.
This Consent Solicitation Statement is being solicited by the Managing General
Partner on behalf of the Partnership. This Solicitation Statement, and the
accompanying form of Consent of Limited Partner (the "Consent Form"), are first
being mailed to the limited partners on or about November 24, 2003.
THE MANAGING GENERAL PARTNER RECOMMENDS THAT YOU CONSENT
TO THE SALE AND RATIFICATION
THIS SOLICITATION OF CONSENTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
DECEMBER 18, 2003 (THE "EXPIRATION DATE").
SEE "RISK FACTORS" BEGINNING ON PAGE 2 OF THIS SOLICITATION STATEMENT FOR A
DESCRIPTION OF RISK FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH THE SALE
AND RATIFICATION.
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Questions and requests for assistance may be directed to the Solicitation Agent,
The Altman Group, Inc., by mail at 1275 Valley Brook Avenue, Lyndhurst, New
Jersey 07071; by overnight courier service at 1275 Valley Brook Avenue,
Lyndhurst, New Jersey 07071; by fax at (201) 460-0050; or by telephone at (800)
461-2657.
RISK FACTORS
Before deciding whether or not to consent to the Sale and Ratification, you
should consider carefully the following risks:
THE VALUE OF THE PROPERTIES COULD BE ADVERSELY AFFECTED IF THE SALES DO NOT
OCCUR. The proposed sale of South Point and Northwoods may not occur for a
number of reasons. Each sale is conditioned on customary closing conditions and,
as detailed above with respect to the sale of South Point, the consent of the
limited partners being obtained. Failure of a sale to occur could cause a
perception in the market that the respective property is worth less than the
price in the sale agreement for the proposed transaction.
TIME FRAME REGARDING SALES OF PROPERTIES. We continually consider whether a
property should be sold or otherwise disposed of after consideration of the
relevant factors, including prevailing economic conditions, availability of
favorable financing and tax considerations, with a view to achieving maximum
capital appreciation for the Partnership. At the current time, we believe that
the sales of the Properties would be advantageous given market conditions, the
condition of each Property and tax considerations. In particular, we considered
the changes in the local rental market, the potential for appreciation in the
value of each Property and the tax consequences to you and your partners
relating to the sales of the Properties. However, we cannot predict or guarantee
that now is the most advantageous time to sell the Properties.
CONFLICTS OF INTEREST OF MANAGING GENERAL PARTNER. We have conflicts of interest
with respect to the sales of the Properties. Based on financial statements dated
September 30, 2003, approximately $35,007.57 of partnership indebtedness to us
(and our affiliates) will be repaid from the sale proceeds. In addition, because
a general partner generally also is liable for all recourse debts and other
liabilities of a partnership when the partnership's assets are insufficient, a
sale of property reduces the general partner's liability for existing and future
partnership debt and liabilities. Furthermore, Apartment Investment and
Management Company ("AIMCO") and its affiliates hold an ownership interest in us
and own 68.82% of the outstanding limited partnership units of the Partnership
(at September 30, 2003). As a result of its ownership of 68.82% of the
outstanding limited partnership units, AIMCO is in a position to influence all
voting decisions with respect to the Partnership. (See "Record Date; Consents
Required" for a discussion of AIMCO's effective voting control.) Although we owe
fiduciary duties to the limited partners of the Partnership, we also owe
fiduciary duties to AIMCO, which owns all of the stock of AIMCO/IPT, Inc., our
sole stockholder. As a result, our duties, as managing general partner, to the
Partnership and its limited partners may come into conflict with our duties to
AIMCO.
POSSIBLE ADVERSE TAX CONSEQUENCES TO LIMITED PARTNERS. Limited partners may
recognize gain as a result of the sale of the Properties. EACH LIMITED PARTNER
SHOULD CONSULT AND RELY ON ITS, HIS OR HER TAX ADVISOR REGARDING THE TAX
CONSEQUENCES TO IT, HIM OR HER OF THE SALE OF THE PROPERTIES. For example, cash
distributions from the sale of the Properties may be less than the taxable gain
recognized by each limited partner. Certain possible tax consequences of the
sales are discussed in more detail below under "Federal Income Tax
Consequences."
RECORD DATE; CONSENTS REQUIRED
The Partnership has fixed November 24, 2003 as the Record Date for determining
the limited partners entitled to notice of and consent to the Sale and
Ratification. Only limited partners of record on the Record Date may execute and
deliver a Consent Form. Approval of the Sale and Ratification requires the
affirmative consent of limited partners who own more than 50% of the
Partnership's outstanding limited partnership units.
As of the Record Date, there were 60,517 limited partnership units issued and
outstanding. Accordingly, approval of the Sale and Ratification will require the
affirmative consent of limited partners who own at least 30,259 limited
partnership units. Assuming receipt of the required consents, the consent of the
limited partners to the Sale and
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Ratification will become effective on the Expiration Date. Our affiliates
currently own 41,649.67 limited partnership units, or 68.82% of the outstanding
limited partnership units. Holders of these outstanding limited partnership
units have indicated to us that they will consent to the Sale and Ratification.
However, 25,399 of these 41,649.67 limited partnership units held by our
affiliates are subject to a voting restriction.
Under a settlement agreement entered into by DeForest Ventures II, L.P., a prior
owner of these units, DeForest Ventures II, L.P. agreed that it would vote the
25,399 limited partnership units in the same proportion as the votes of units
not held or controlled by it on any matter that is submitted to a vote of the
limited partners by the general partner of the Partnership or its affiliates.
These limited partnership units were acquired by one of our affiliates through a
merger which means that these units are still subject to this voting
restriction. Our affiliates can vote free of this voting restriction an
aggregate of approximately 46.27% of the limited partnership units, consisting
of the 16,250.67 limited partnership units acquired by our affiliates in
transactions unrelated to the merger and owned by an entity which is not
controlled by the owner of the units subject to the voting restriction plus a
corresponding proportion of the restricted limited partnership units. The
remaining portion of the 25,399 limited partnership units will be voted by us in
the same proportion as the other consents received for the Sale and
Ratification. As a result, the consent of the owners of an additional 1,309
limited partnership units, or approximately 2.16% of the limited partnership
units, will be required to approve the Sale and Ratification. Only 2.16% of the
limited partnership units unaffiliated with us are required to consent because
once this consent is achieved the same percentage of the remaining 25,399
limited partnership units subject to the voting restriction will automatically
be voted in favor of the Sale and Ratification.
In addition, your consent to the Sale and Ratification will authorize us, in our
discretion, to reduce the purchase price for a particular Property up to 10% and
make any other amendments to the purchase and sale agreements for the Properties
which, in our opinion, are necessary, appropriate or desirable in connection
with the sale of the Properties and that do not materially and adversely affect
the Partnership.
SOLICITATION OF CONSENTS
Consents will be solicited by mail, telephone, e-mail and in person.
Solicitations may be made by representatives of us, none of whom will receive
additional compensation for such solicitations. The cost of preparing,
assembling, printing and mailing this Solicitation Statement and the enclosed
Consent Form will be borne by the Partnership. The Partnership has retained The
Altman Group, Inc. to act as its Solicitation Agent in connection with this
consent solicitation. The fees and expenses of the Solicitation Agent will be
paid by the Partnership.
CONSENT PROCEDURES
LIMITED PARTNERS WHO DESIRE TO CONSENT TO THE SALE AND RATIFICATION SHOULD DO SO
BY MARKING THE APPROPRIATE BOX ON THE INCLUDED CONSENT FORM AND BY SIGNING,
DATING AND DELIVERING THE CONSENT FORM TO THE SOLICITATION AGENT BY HAND, MAIL,
OVERNIGHT COURIER OR FACSIMILE AT THE ADDRESS OR FACSIMILE NUMBER SET FORTH ON
THE CONSENT FORM, ALL IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND
THEREIN.
All Consent Forms that are properly completed, signed and delivered to the
Solicitation Agent and not properly revoked (See "Revocation of Instructions"
below) prior to the Expiration Date, will be given effect in accordance with the
specifications thereof. IF A CONSENT FORM IS DELIVERED AND NEITHER THE
"CONSENTS," THE "WITHHOLDS CONSENT" NOR THE "ABSTAINS" BOX IS MARKED, BUT THE
CONSENT FORM IS OTHERWISE PROPERLY COMPLETED AND SIGNED, THE LIMITED PARTNER
WILL BE DEEMED TO HAVE CONSENTED TO THE SALE AND RATIFICATION.
Consent Forms must be executed in exactly the same manner as the name(s) in
which ownership of the limited partnership units is registered. If the limited
partnership units to which a Consent Form relates are held by two or more joint
holders, all such holders should sign the Consent Form. If a Consent Form is
signed by a trustee, partner, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary, agency or representative capacity, such person must so indicate when
signing and submit with the Consent Form evidence satisfactory to the
Partnership of authority to execute the Consent Form.
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The execution and delivery of a Consent Form will not affect a limited partner's
right to sell or transfer the limited partnership units. All Consent Forms
received by the Solicitation Agent (and not properly revoked) prior to the
Expiration Date will be effective notwithstanding a record transfer of such
limited partnership units subsequent to the Record Date, unless the limited
partner revokes such Consent Form prior to 5:00 p.m., New York City time, on the
Expiration Date by following the procedures set forth under "Revocation of
Instructions" below.
All questions as to the validity, form and eligibility (including time of
receipt) regarding consent procedures will be determined by us in our sole
discretion, which determination will be conclusive and binding. The Partnership
reserves the right to reject any or all Consent Forms that are not in proper
form. The Partnership also reserves the right to waive any defects,
irregularities or conditions of delivery as to particular Consent Forms. Unless
waived, all such defects or irregularities in connection with the deliveries of
Consent Forms must be cured within such time as we determine. Neither we nor any
of our affiliates or any other persons shall be under any duty to give any
notification of any such defects, irregularities or waivers, nor shall any of
them incur any liability for failure to give such notification. Deliveries of
Consent Forms will not be deemed to have been made until any irregularities or
defects therein have been cured or waived. The interpretations of the terms and
conditions of this solicitation by us shall be conclusive and binding.
REVOCATION OF INSTRUCTIONS
Any limited partner who has delivered a Consent Form to the Solicitation Agent
may revoke the instructions set forth in such Consent Form by delivering to the
Solicitation Agent a written notice of revocation prior to 5:00 p.m., New York
City time, on the Expiration Date. In order to be effective, a notice of
revocation of the instructions set forth in a Consent Form must (i) contain the
name of the person who delivered the Consent Form, (ii) be in the form of a
subsequent Consent Form marked either as "CONSENTS," "WITHHOLDS CONSENT" or
"ABSTAINS," as the case may be, or in a writing delivered to us stating that the
prior Consent Form is revoked, (iii) be signed by the limited partner in the
same manner as the original signature on the Consent Form, and (iv) be received
by the Solicitation Agent prior to 5:00 p.m., New York City time, on the
Expiration Date at one of its addresses or facsimile number set forth on the
Consent Form. A purported notice of revocation that lacks any of the required
information, is dispatched to an improper address or telephone number or is not
received in a timely manner will not be effective to revoke the instructions set
forth in a Consent Form previously given. A revocation of the instructions set
forth in a Consent Form can only be accomplished in accordance with the
foregoing procedures. NO LIMITED PARTNER MAY REVOKE THE INSTRUCTIONS SET FORTH
IN A CONSENT FORM AFTER 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
NO APPRAISAL RIGHTS
Limited partners of the Partnership are not entitled to dissenters' appraisal
rights under California law or the Partnership Agreement in connection with the
Sale and Ratification.
REGULATORY APPROVALS
Other than the filing and distribution of this Solicitation Statement, no
regulatory approvals are required for the sale.
GENERAL PARTNER'S RECOMMENDATION
We recommend that the limited partners consent to the Sale and Ratification. We
believe that the Sale and Ratification are in the best interests of the
Partnership and its limited partners. In making its determination, the General
Partner considered a number of factors, including the following:
o The tax benefits of continued investment in the Properties
have been substantially eliminated for most limited partners
due principally to declining depreciation deductions from the
Properties.
o The Properties were completed in 1979, 1974 and 1980,
respectively, and given their age, the Properties probably
will require substantial capital expenditures in the future
for which existing reserves may not be adequate.
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o Market conditions are currently favorable for selling
properties of this type because of the availability of
favorable financing terms and the general withdrawal of
capital from the stock markets and into alternative
investments such as real estate.
o The recent economic downturn may make it difficult to find
buyers at a future date or to sell the Properties at as
favorable a price.
o Due to the economic downturn and the age of the Properties,
the occupancy rates at Northwoods have been declining since
2001 and the rental rates at Patchen Place and South Point
have been declining since 2001.
In general, we regularly evaluate a sale of the Partnership's properties by
considering various factors, such as the Partnership's financial position and
real estate market conditions. We monitor the properties' specific locale and
sub-market conditions (including stability of the surrounding neighborhood),
evaluating current trends, competition, new construction and economic changes.
We oversee each asset's operating performance and continuously evaluate the
physical improvement requirements. In addition, the financing structure for each
property (including any prepayment penalties), tax implications, availability of
attractive mortgage financing and the investment climate are all considered.
Another significant factor that we consider is the tax consequences of a
particular sale of property. After taking into account the foregoing
considerations, we believe it to be in the best interests of the Partnership and
the limited partners to sell the Properties.
For these reasons, we have approved the sale of the Properties and the
respective purchase and sale agreements, the terms and conditions of which are
described in greater detail below.
SUMMARY OF THE TRANSACTIONS
The following is a summary of the purchase and sale transactions for the
Properties:
NORTHWOODS
Watervliet Shores Associates, a New York general partnership, or an affiliate
thereof, will acquire Northwoods for $11,800,000, either through cash or a
combination of cash plus the assumption by the buyer of the outstanding
principal balance of the loan encumbering Northwoods, pursuant to a purchase and
sale agreement dated as of September 11, 2003. The completion of the sale of
Northwoods is scheduled to occur on approximately December 3, 2003 (subject to
extension to no later than December 31, 2003).
PATCHEN PLACE
Vermeil, LLC, a Kentucky limited liability company, acquired Patchen Place for
$7,000,000 cash, less $5,000 in lender fees (e.g., any applicable penalties and
costs to prepay the loan encumbering the property), pursuant to a purchase and
sale agreement dated as of July 31, 2003, as amended. The sale of Patchen Place
closed on October 31, 2003.
SOUTH POINT
The Dilweg Companies, LLC, a North Carolina limited liability company, or an
affiliate thereof, will acquire South Point for $8,360,000 cash, less lender
fees (e.g., any applicable penalties and costs to prepay the loan encumbering
the property), pursuant to a purchase and sale agreement dated as of July 31,
2003, as reinstated and amended as of September 5, 2003 and November 6, 2003.
The completion of the sale of South Point is scheduled to occur approximately
December 22, 2003 (subject to extension pursuant to the agreement to January 30,
2004).
THE SALES PROCESS
NORTHWOODS
On January 9, 2003, we hired Apartment Realty Advisors, a national real estate
brokerage firm, to market Northwoods. They marketed Northwoods nationally and
regionally to prospective buyers known to be interested in
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the acquisition of multifamily housing projects similar to Northwoods. The
broker received offers from nine potential purchasers. We evaluated prospective
purchasers and offers in terms of price offered, feasibility of the proposed
transaction, credibility of the prospective purchaser and ability of the
prospective purchaser to close. We chose to accept the offer described in this
letter based on these criteria. The broker has received brokerage fees from us
and our affiliates from time to time. Neither we nor our affiliates bid on
Northwoods.
PATCHEN PLACE
On October 14, 2002, we hired Hendricks & Partners, a national real estate
brokerage firm, to market Patchen Place. They marketed Patchen Place nationally
and regionally to prospective buyers known to be interested in the acquisition
of multifamily housing projects similar to Patchen Place. The broker received
offers from ten potential purchasers. We evaluated prospective purchasers and
offers in terms of price offered, feasibility of the proposed transaction,
credibility of the prospective purchaser and ability of the prospective
purchaser to close. We chose to accept the offer described in this letter based
on these criteria. The broker has received brokerage fees from us and our
affiliates from time to time. Neither we nor our affiliates bid on Patchen
Place.
SOUTH POINT
On June 6, 2003, we hired The Apartment Group, a national real estate brokerage
firm, to market the Property. They marketed South Point nationally and
regionally to prospective buyers known to be interested in the acquisition of
multifamily housing projects similar to South Point. The broker received offers
from nine potential purchasers. We evaluated prospective purchasers and offers
in terms of price offered, feasibility of the proposed transaction, credibility
of the prospective purchaser, and ability of the prospective purchaser to close.
We chose to accept the offer described in this letter based on these criteria.
The broker has received brokerage fees from us and our affiliates from time to
time. Neither we nor our affiliates bid on South Point.
THE BUYERS
The buyers of the Properties, which are not affiliated with the Partnership,
agreed to acquire the Properties through arms-length negotiations. We or our
affiliates may have conducted business with each of the buyers or their
affiliates from time to time. The Northwoods buyer, Watervliet Shores
Associates, has an office located at 2 Tower Place, Albany New York 12203, and
its phone number is (518) 458-8500. The Patchen Place buyer, Vermeil, LLC, has
an office located at 501 S. Second Street, Suite 200, Louisville, Kentucky
40202, and its phone number is (502) 533-4900. The South Point buyer, The Dilweg
Companies, LLC, has an office located at 5310 South Alston Avenue, Suite 210,
Durham, North Carolina 27713, and its phone number is (919) 313-2769.
THE PROPERTIES
NORTHWOODS
The Partnership has owned and operated Northwoods, a 320-unit apartment complex
located in Escambia County, Florida, since July 1985. Prior to the sale of
Patchen Place, Northwoods constituted approximately 40% of the Partnership's
outstanding assets. There is a first mortgage loan on Northwoods with an unpaid
balance of approximately $6,696,649 (as of September 30, 2003). The loan
encumbering Northwoods will either be assumed by the buyer or paid in full at
closing, with the costs of all fees and costs of such assumption or
payment-in-full to be paid by the buyer.
PATCHEN PLACE
The Partnership owned and operated Patchen Place, a 202-unit apartment complex
located in Fayette County, Kentucky, since July 1985. Prior to the sale of
Patchen Place, it constituted approximately 14% of the Partnership's outstanding
assets. There was a first mortgage loan on Patchen Place with an unpaid balance
of approximately $4,253,864 (as of September 30, 2003), which was paid in full
at closing, with the costs of all fees and costs of such payment-in-full paid by
the buyer and deducted from the purchase price payable to the Partnership.
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SOUTH POINT
The Partnership has owned and operated South Point, a 180-unit apartment complex
located in Durham County, North Carolina, since March 1986. Prior to the sale of
Patchen Place, South Point constituted approximately 17% of the Partnership's
outstanding assets. There is a first mortgage loan on South Point with an unpaid
balance of approximately $4,989,639 (as of September 30, 2003). The loan
encumbering South Point will be paid in full at closing, with the costs of all
fees and costs of such payment-in-full to be paid by the buyer and deducted from
the purchase price payable to the Partnership.
APPROVAL OF THE SALE
We have approved the sale of the Properties and determined that such sales are
in the best interests of the Partnership and the limited partners.
Section 16.2.5 of the Partnership Agreement provides that the Partnership's sale
of all or substantially all of its assets, or 66?% or more of the net book value
of all of the Partnership's property, in a single sale, or in multiple sales in
the same 12-month period, must be approved by the limited partners owning a
majority of the limited partnership units entitled to vote thereon.
As of September 30, 2003, the Partnership has approximately 1,109 limited
partners who collectively own 60,517 outstanding limited partnership units. Each
limited partnership unit represents approximately 0.0017% of the outstanding
limited partnership units. Our affiliates currently own 41,649.67 limited
partnership units, or 68.82% of the outstanding limited partnership units.
Holders of these outstanding limited partnership units have indicated to us that
they will consent to the Sale and Ratification. However, 25,399 of these
41,649.67 limited partnership units held by our affiliates are subject to a
voting restriction.
Under a settlement agreement entered into by DeForest Ventures II, L.P., a prior
owner of these units, DeForest Ventures II, L.P. agreed that it would vote the
25,399 limited partnership units in the same proportion as the votes of units
not held or controlled by it on any matter that is submitted to a vote of the
limited partners by the general partner of the Partnership or its affiliates.
These limited partnership units were acquired by one of our affiliates through a
merger which means that these units are still subject to this voting
restriction. Our affiliates can vote free of this voting restriction an
aggregate of approximately 46.27% of the limited partnership units, consisting
of the 16,250.67 limited partnership units acquired by our affiliates in
transactions unrelated to the merger and owned by an entity which is not
controlled by the owner of the units subject to the voting restriction plus a
corresponding proportion of the restricted limited partnership units. The
remaining portion of the 25,399 limited partnership units will be voted by us in
the same proportion as the other consents received for the Sale and
Ratification. As a result, the consent of the owners of an additional 1,309
limited partnership units, or approximately 2.16% of the limited partnership
units, will be required to approve the Sale and Ratification. Only 2.16% of the
limited partnership units unaffiliated with us are required to consent because
once this consent is achieved the same percentage of the remaining 25,399
limited partnership units subject to the voting restriction will automatically
be voted in favor of the Sale and Ratification.
In addition, your consent to the Sale and Ratification will authorize us, in our
discretion, to reduce the purchase price for a particular Property up to 10% and
make any other amendments to the purchase and sale agreements for the Properties
which, in our opinion, are necessary, appropriate or desirable in connection
with the sale of the Properties and that do not materially and adversely affect
the Partnership.
CONFLICTS OF INTEREST
We have conflicts of interest with respect to the sale of the Properties. A
general partner generally is liable for all recourse debts and other liabilities
of a partnership when the partnership's assets are insufficient. The sale of the
Properties reduces our liability for existing and future Partnership debt and
liabilities. Furthermore, AIMCO and its affiliates hold an ownership interest in
us and own 68.82% of the outstanding limited partnership units (at September 30,
2003). As a result of such ownership, AIMCO is in a position to influence all
voting decisions with respect to the Partnership. (See "Record Date; Consents
Required" for a discussion of AIMCO's effective voting control.) Although we owe
fiduciary duties to the limited partners of the Partnership, we also owe
fiduciary duties to AIMCO, which owns all of the stock of AIMCO/IPT, Inc., our
sole stockholder. As a result, our duties, as managing general partner, to the
Partnership and its limited partners may come into conflict with our duties to
AIMCO.
7
USE OF PROCEEDS
NORTHWOODS
We estimate that we will use the gross proceeds from the sale of Northwoods as
follows (subject, however, to such reductions in the purchase price and
reallocations in the proceeds as determined by us, in our reasonable discretion,
to address objections made by the Northwoods buyer to the condition of
Northwoods):
<Table>
Gross purchase price $ 11,800,000
Plus: Cash and cash equivalents 193,026
Plus: Other Partnership assets 74,109
Less: Mortgage debt, including accrued interest (6,696,649)
Less: Accounts payable, accrued expenses and other liabilities (201,799)
Less: Estimated state entity and withholding taxes 0
Less: Reserves for contingencies (354,000)
Less: Closing costs/sales commissions (354,000)
Less: Lender fees (1,533,812)
------------
TOTAL $ 2,926,875
Net proceeds distributable to all partners $ 2,926,875
Percentage of proceeds allocable to limited partners 99%
Net proceeds distributable to limited partners $ 2,897,606
Total number of units 60,517
Distributable net proceeds per unit $ 48
</Table>
These estimates assume that the closing occurs as of September 30, 2003 and are
based on information known to us at this time. These figures will adjust based
on the fact that closing will occur after September 30, 2003. Of course, many
factors could cause the actual use of proceeds to vary from this estimate,
including delays or unforeseen complications with the closing or contingent
liabilities of the Partnership.
PATCHEN PLACE
We will use the gross proceeds from the sale of Patchen Place as follows:
<Table>
Gross purchase price $ 7,000,000
Plus: Cash and cash equivalents 113,614
Less: Mortgage debt, including accrued interest (4,253,864)
Less: Accounts payable, accrued expenses and other liabilities (66,925)
Less: Reserves for contingencies (209,850)
Less: Closing costs/sales commissions (251,829)
Less: Lender fees (5,000)
------------
TOTAL $ 2,326,146
Net proceeds distributable to all partners $ 2,326,146
Percentage of proceeds allocable to limited partners 99%
Net proceeds distributable to limited partners $ 2,302,885
Total number of units 60,517
Distributable net proceeds per unit $ 38
</Table>
These numbers are the actual figures based on the closing of the transaction on
October 31, 2003.
8
SOUTH POINT
We estimate that we will use the gross proceeds from the sale of South Point as
follows (subject, however, to such reductions in the purchase price and
reallocations in the proceeds as determined by us, in our reasonable discretion,
to address objections made by the South Point buyer to the condition of South
Point):
<Table>
Gross purchase price $ 8,360,000
Plus: Cash and cash equivalents 112,536
Plus: Other Partnership assets 365,659
Less: Mortgage debt, including accrued interest (4,989,639)
Less: Accounts payable, accrued expenses and other liabilities (116,290)
Less: Estimated state entity and withholding taxes (424,062)
Less: Reserves for contingencies (250,800)
Less: Closing costs/sales commissions (250,800)
------------
TOTAL 2,806,604
Net proceeds distributable to all partners $ 2,806,604
Percentage of proceeds allocable to limited partners 99%
Net proceeds distributable to limited partners $ 2,778,538
Total number of units 60,517
Distributable net proceeds per unit $ 46
</Table>
These estimates assume that the closing occurs as of September 30, 2003 and are
based on information known to us at this time. These figures will adjust based
on the fact that closing will occur after September 30, 2003. Of course, many
factors could cause the actual use of proceeds to vary from this estimate,
including delays or unforeseen complications with the closing or contingent
liabilities of the Partnership.
FEDERAL INCOME TAX CONSEQUENCES
The tax consequences to you of a sale of the Properties may be significant. The
following discussion briefly summarizes the typical material aspects of the
federal income tax consequences for the limited partners that should be
considered in connection with the sale; however, the tax consequences to you
could be materially different.
EACH LIMITED PARTNER SHOULD CONSULT AND MUST RELY UPON HIS, HER OR ITS OWN TAX
ADVISOR IN ORDER TO UNDERSTAND FULLY THE FEDERAL, STATE, LOCAL AND FOREIGN
INCOME AND ESTATE AND GIFT TAX CONSEQUENCES TO HIM, HER OR IT ARISING FROM THE
SALE OF THE PROPERTIES.
The discussion is based on current law, which is subject to change (possibly
with retroactive effect), and does not consider state, local and foreign income
tax aspects of the sale of the Properties. For purposes of this tax discussion,
references to "I.R.C. Section" are to sections of the Internal Revenue Code of
1986, as amended. THIS DISCUSSION DOES NOT ADDRESS SPECIAL CONSIDERATIONS AND
RULES APPLICABLE TO LIMITED PARTNERS THAT ARE TAX-EXEMPT OR FOREIGN ENTITIES.
No ruling will be requested from the Internal Revenue Service on any of the tax
matters discussed herein. The federal income tax consequences to the limited
partners from the sale of the Properties cannot be predicted with absolute
certainty. We cannot assure that the Internal Revenue Service will not audit or
question the treatment of any item discussed herein.
The following discussion assumes that the Partnership will recognize gain on the
sale of each of the Properties. The following discussion also assumes that the
Partnership is characterized as a partnership for federal income tax purposes.
If the Partnership is treated for federal income tax purposes as an association,
any cash available for distribution after each sale would be substantially
reduced and the tax consequences would be materially different than as described
below.
9
TAX CONSEQUENCES IF EACH PROPERTY IS SOLD. The Partnership will recognize gain
from a sale of each Property to the extent that the amount the Partnership
realizes from each sale exceeds its adjusted basis in the Property. The
Partnership's amount realized from each sale includes the sum of cash it
receives from the buyer plus the fair market value of any property it receives
other than money. If each buyer assumes or takes each Property subject to
liabilities which encumber such Property, the face amount of those liabilities
also is included in the Partnership's amount realized as though the respective
buyer had made a cash payment to the Partnership in the same amount. Selling
expenses of the Partnership, such as brokerage commissions, legal fees and title
costs, reduce the Partnership's amount realized with respect to each sale. Any
gain recognized by the Partnership will be allocated to the partners, including
the limited partners, in accordance with the Partnership Agreement. We estimate
that approximately $126, $81 and $95 gain will be allocated per unit to the
limited partners for the sale of Northwoods, Patchen Place and South Point,
respectively. These amounts are estimates based on a number of assumptions as
discussed under "Use of Proceeds."
Generally, if a partnership is a "dealer" with respect to a property, any gain
that it recognizes on the sale of that property will be taxed as ordinary
income. Alternatively, to the extent that a partnership is not a "dealer" with
respect to a property, any gain in excess of "depreciation recapture gain"
(discussed below) and "unrecaptured I.R.C. Section 1250 gain" (discussed below)
generally will be taxed as gain arising from the sale of property used in the
Partnership's trade or business under I.R.C. Section 1231 ("I.R.C. Section 1231
gain"). Each limited partner will be allocated its share of the Partnership's
I.R.C. Section 1231 gain. In general, if the combination of all I.R.C. Section
1231 gains and losses of a particular limited partner for a taxable year results
in a net gain, all of such gains and losses will be characterized as long-term
capital gains and losses. If the combination results in a net loss, all of such
gains and losses will be characterized as ordinary gains and losses. However,
notwithstanding the foregoing, net I.R.C. Section 1231 gains will be treated as
ordinary gains to the extent of a limited partner's unrecaptured net I.R.C.
Section 1231 losses for the five most recent prior years. As a result, all or a
portion of any I.R.C. Section 1231 gain from the sale of the Partnership's
property allocated to a limited partner may be treated as ordinary income,
rather than long-term capital gain, if the limited partner has had net I.R.C.
Section 1231 losses in prior years.
Under I.R.C. Section 1245, gain recognized by the Partnership from the sale of
any of its depreciable or amortizable personal property and certain statutorily
designated real property, i.e., "depreciation recapture gain," is
re-characterized as ordinary income and will be allocated to the partners as
such. The amount of the Partnership's depreciation recapture gain equals the
amount by which the lower of the (i) amount realized or (ii) recomputed basis
(i.e., a property's basis plus all amounts allowed for depreciation) of the
transferred property exceeds that property's adjusted basis.
Under I.R.C. Section 1250, no portion of the gain recognized by the Partnership
upon the disposition of its residential rental real property generally is
re-characterized as ordinary income because such property is depreciated using
the straight-line method. However, under I.R.C. Section 291(a)(1), a portion of
a corporation's capital gain from the disposition of residential rental real
property is re-characterized as ordinary income. The portion that is
re-characterized equals 20% of the amount that would have been treated as
ordinary income under I.R.C. Section 1245 if the transferred property were
I.R.C. Section 1245 property (which generally would be all depreciation
deductions previously claimed). Therefore, under I.R.C. Section 291(a)(1),
corporate limited partners of the Partnership may recognize ordinary income upon
disposition of the Partnership's residential rental real property.
In the case of limited partners of the Partnership that are individuals, estates
or trusts, the application of I.R.C. Section 1250 will not require those
taxpayers to recognize gain taxable as ordinary income; however, those limited
partners may be allocated gain from the Partnership's sale of each Property that
is taxed as "unrecaptured I.R.C. Section 1250 gain." Unrecaptured I.R.C. Section
1250 gain generally is equal to the gain on the sale of real property that is
attributable to straight-line depreciation. The maximum federal tax rate
applicable to unrecaptured I.R.C. Section 1250 gain currently is 25%.
In the case of limited partners that are individuals, trusts or estates, gain
from the sale of the Partnership's property that is not taxed as ordinary income
or as unrecaptured I.R.C. Section 1250 gain generally is taxed at a capital
gains tax rate, the current maximum rate of which is 15%. Gain from the sale of
the Partnership's property that is allocated to limited partners that are
corporations is not subject to preferential capital gains tax rates.
10
If a limited partner possesses suspended tax losses, tax credits or other items
of tax benefit, such items may be used to reduce any tax liability that arises
with respect to any gain resulting from the sale of the Partnership's property
and allocated to that limited partner. The determination of whether a limited
partner possesses suspended tax losses, tax credits or other items of tax
benefit that may reduce any gain resulting from the sale will depend upon each
limited partner's individual circumstances. Limited partners are urged to
consult with their tax advisors in this regard.
DISTRIBUTIONS OF CASH. A distribution of cash by the Partnership to a limited
partner will be treated as an amount realized from a sale of the limited
partner's interest in the Partnership and will result in taxable gain only to
the extent that the distribution exceeds the limited partner's adjusted tax
basis in his, her or its Partnership interest. Otherwise, distributions will be
tax free, and the adjusted basis of the limited partner's Partnership interest
will be decreased, but not below zero.
Generally, any gain recognized by a limited partner arising from a cash
distribution by the Partnership will be capital gain. Nevertheless, to the
extent that a portion of that gain is attributable to "unrealized receivables"
of the Partnership, including depreciation recapture, or to certain inventory
items described in I.R.C. Section 751, such gain will be taxed as ordinary
income.
PROCEEDS AVAILABLE FOR DISTRIBUTION TO THE LIMITED PARTNERS FROM THE SALE OF
EACH PROPERTY AFTER REPAYMENT OF THE PARTNERSHIP'S DEBTS MAY BE LESS THAN THE
GAIN RECOGNIZED BY THE PARTNERSHIP (AS A RESULT OF EACH SALE) THAT IS ALLOCABLE
TO THE PARTNERS, THE GAIN RECOGNIZED BY THE PARTNERS AS A RESULT OF ANY CASH
DISTRIBUTIONS FROM THE PARTNERSHIP, AND ANY TAX LIABILITY RESULTING FROM THE
FOREGOING. ACCORDINGLY, LIMITED PARTNERS MAY BE REQUIRED TO USE FUNDS FROM
SOURCES OTHER THAN THE PARTNERSHIP IN ORDER TO PAY ANY TAX LIABILITIES THAT MAY
ARISE AS A RESULT OF THE RECOGNITION OF GAIN.
TAX CONSEQUENCES IF THE PROPERTY IS NOT SOLD. Northwoods, Patchen Place and
South Point have depreciated approximately 90.96%, 92.84% and 90.58%,
respectively, for United States federal income tax purposes. As a result, it is
likely that continued operation of each Property will generate taxable income to
the limited partners, since it is unlikely that there will be adequate
depreciation and other deductions equal to or greater than the income generated
from each Property. However, it is anticipated that there will not be any cash
available for distribution since it is expected that all or substantially all of
each Property's cash flow will be used to service the Partnership's liabilities.
Accordingly, limited partners may be required to use funds from sources other
than the Partnership in order to pay any tax liabilities that may arise as a
result of the Partnership's continued operation of the Properties. The
Partnership also will continue to incur the administrative costs of operating
the Partnership, including the cost of preparing and filing partnership tax
returns, and it will continue to receive management fees. If a limited partner
possesses suspended tax losses, tax credits or other items of tax benefit, such
items may potentially be used to reduce any tax liability that arises with
respect to any taxable net income as a result of the continued operation of each
Property by the Partnership. Limited partners are urged to consult their tax
advisors in this regard.
PLANS AFTER THE SALE
Upon the completion of the transactions in this Solicitation Statement, the
Partnership will continue to hold and operate its remaining interest in the
apartment complexes known as Fairway View II Apartments, located Baton Rouge,
Louisiana, and Pines of Roanoke, located in Roanoke, Virginia. As of the date of
this Solicitation Statement, the Partnership is in the bidding process regarding
the potential sale of Fairway View II Apartments and the estimated sales price
is $8,500,000, less lender fees. Pines of Roanoke is listed for sale at a price
of $9,100,000, less lender fees. Seven offers have been received for Pines of
Roanoke but the property is not yet under contract. Assuming the sale of
Northwoods and South Point occur, and given that Patchen Place has already been
sold, the sale of Fairway View II Apartments and/or Pines of Roanoke will
require separate consent of the limited partners, assuming any such sale occurs
within 12 months of October 31, 2003, the date on which the sale of Patchen
Place closed.
PARTNERSHIP BUSINESS
The Partnership is a publicly held limited partnership organized in October
1983, under the California Uniform Limited Partnership Act, to acquire and
operate residential apartment complexes. We were a wholly-owned subsidiary of
Insignia Properties Trust. Effective February 26, 1999, Insignia Properties
Trust was merged into
11
AIMCO, a publicly traded real estate investment trust. We are now a wholly-owned
subsidiary of AIMCO. Our directors and officers also serve as executive officers
of AIMCO. The Partnership Agreement provides that the Partnership is to
terminate on December 31, 2008, unless terminated before such date.
The Partnership's primary business is to operate and hold real estate properties
for investment. Funds obtained during the public offering were invested in seven
existing apartment properties. The Partnership has sold three of these
investment properties and, as of the date of this Solicitation Statement,
continues to operate the remaining four residential apartment complexes located
throughout the southeastern United States. See below for a description of the
Partnership's remaining properties.
The Partnership, through its public offering of limited partnership units,
offered up to 100,000 limited partnership units aggregating $30,259,000. Since
the Partnership's initial offering, we have not received, nor are the limited
partners required to make, additional capital contributions. We intend to
maximize the operating results and, ultimately, the net realizable value of each
of the Partnership's properties in order to achieve the best possible return for
the limited partners. Such results may best be achieved by holding and operating
the properties or through property sales or exchanges, refinancings, debt
restructurings or relinquishment of the assets. The Partnership evaluates each
of its holdings periodically to determine the most appropriate strategy for each
of the assets.
The Partnership has no employees. Management and administrative services are
performed by us and by agents retained by us. An affiliate of ours provides such
property management services.
For information on certain pending litigation, please refer to the Partnership's
most recent report on Form 10-QSB (for the quarterly period ended September 30,
2003) filed with the Securities and Exchange Commission.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
None of our directors or officers own any limited partnership units. The
following table sets forth certain information regarding limited partnership
units of the Partnership owned by each person or entity who is known by the
Partnership to own beneficially more than 5% of the limited partnership units as
of September 30, 2003:
<Table>
<Caption>
NAME AND ADDRESS NUMBER OF LIMITED PARTNERSHIP
OF BENEFICIAL OWNER UNITS PERCENT OF CLASS
AIMCO IPLP, L.P.
Stanford Place 3, 4582 S. Ulster St. Parkway, Suite 1100, 25,399.00 (1) 41.97%
Denver, CO 80237
AIMCO Properties, L.P.
Stanford Place 3, 4582 S. Ulster St. Parkway, Suite 1100, 16,250.67 (2) 26.85%
Denver, CO 80237
TOTAL: 41,649.67 68.82%
</Table>
- ----------
(1) The Units may be deemed beneficially owned by AIMCO-GP, Inc. (which is the
general partner of AIMCO Properties, L.P.) and AIMCO (which owns AIMCO-GP,
Inc.).
(2) The Units may be deemed beneficially owned by AIMCO/IPT, Inc. (which is the
general partner of Insignia Properties, L.P.) and AIMCO (which owns AIMCO/IPT,
Inc.).
12
PARTNERSHIP PROPERTIES
The following table sets forth the Partnership's current investment in real
property:
<Table>
<Caption>
PROPERTY DATE OF PURCHASE TYPE OF OWNERSHIP USE
Fairway View II Apartments, 11/84 Fee ownership, subject to Apartment - 204 units
Baton Rouge, Louisiana a first mortgage
Pines of Roanoke Apartments 4/85 Fee ownership, subject to Apartment - 216 units
Roanoke, Virginia a first mortgage
Patchen Place Apartments, 7/85 Fee ownership, subject to Apartment - 202 units
Lexington, Kentucky a first mortgage
(Sold on October 31, 2003)
Northwoods I and II Apartments, 7/85 Fee ownership, subject to Apartment - 320 units
Pensacola, Florida a first mortgage
South Point Apartments, Durham, 3/86 Fee ownership, subject to Apartment - 180 units
North Carolina a first mortgage
</Table>
SUMMARY OF THE NORTHWOODS PURCHASE AND SALE AGREEMENT
The following summarizes the material terms and conditions of the purchase and
sale agreement for Northwoods.
THE PURCHASED ASSETS
The Partnership has agreed to sell all of the Partnership's interest in and to
Northwoods, together with all the buildings and improvements located thereon and
certain associated property.
EXCLUSIONS FROM THE SALE OF THE NORTHWOODS
The sale transaction expressly excludes cash or other funds; refunds, rebates or
other claims, or any interest thereon, for periods or events occurring prior to
the closing; utility and similar deposits; insurance or other prepaid items; the
Partnership's proprietary books and records; any right, title or interest in or
to certain intellectual property rights; equipment leased by the Partnership and
the interest of the Partnership in any equipment provided to Northwoods for use,
but not owned or leased by the Partnership; or property owned or leased by any
tenant or guest, employee or other person furnishing goods or services to
Northwoods; or property and equipment owned by the Partnership, which in the
ordinary course of business of Northwoods is not used exclusively for the
business, operation or management of Northwoods.
ASSUMED LIABILITIES
The buyer agreed to assume the Partnership's liabilities and obligations under
property contracts and leases after the closing.
THE EXISTING LOAN
If approved by the lender, the buyer has agreed to assume all of the
Partnership's obligations with respect to the existing loan from Federal Home
Loan Mortgage Corporation in the original principal amount of $7,000,000.
PURCHASE PRICE
The purchase price for Northwoods is $11,800,000, payable as follows: (i) a
$150,000 deposit upon the execution of the agreement to be held in escrow until
the closing, and (ii) the balance of the purchase price at the closing. As of
the date of this Solicitation Statement, the buyer has deposited a total of
$150,000 into escrow with the title company, which amount is, pursuant to the
terms of the agreement, non-refundable (subject only to the satisfaction of the
buyer's conditions to closing thereunder); provided, however, that if the
agreement is terminated due to a default of or breach by the Partnership of the
agreement and the buyer chooses to seek damages in lieu of specific performance,
then the full $150,000 deposit shall be returned to the buyer.
13
CLOSING
The sale of Northwoods is scheduled to occur on December 3, 2003. The
Partnership shall have the option to extend the closing to the last business day
of the month in which the closing otherwise would occur or to such other date as
the Partnership determines is desirable in connection with the loan assumption
or, in the event the lender fails to approve the loan assumption, the
then-outstanding principal balance of the loan shall be paid out of the balance
of the purchase price due at the closing. Further, the Partnership may extend
the closing (i) for up to 30 days to satisfy a condition to be satisfied by the
Partnership, (ii) in order to finalize the drafting with lender and lender's
counsel of all documents necessary or desirable to accomplish the loan
assumption, or (iii) such later date as is mutually acceptable to the
Partnership and the buyer.
REPRESENTATIONS AND WARRANTIES
The agreement contains the customary seller representations and warranties by
the Partnership, including, without limitation, representations and warranties
regarding corporate existence and qualification; corporate authority;
non-contravention of existing contracts; validity and enforceability of the
agreement; possessory interest in the property; litigation; governmental
violations; material defaults under property contracts; and hazardous or toxic
materials. The Partnership's aggregate liability for a breach of its
representations and warranties is capped at $50,000 and is limited to claims
brought within 6 months after the closing.
The agreement also contains customary purchaser representations and warranties
by the buyer, including, without limitation, representations and warranties
regarding existence and qualification; corporate authority; non-contravention of
existing contracts; validity and enforceability of the agreement; litigation;
and non-reliance upon the Partnership's representations and warranties other
than those in the agreement.
COVENANTS
The Partnership has agreed that, from the expiration of the buyer's due
diligence period through the closing, it will continue to operate Northwoods in
the ordinary course of business and subject to the following covenants:
o except as necessary in the Partnership's sole discretion to
address (a) any life or safety issue at Northwoods or (b) any
other matter which in the Partnership's reasonable discretion
materially adversely affecting the use, operation or value of
Northwoods, the Partnership will not make any material
alterations to Northwoods or remove any material fixtures and
tangible personal property without the prior written consent
of the buyer; and
o other than utility easements and temporary construction
easements granted by the Partnership in the ordinary course of
business, the Partnership will not voluntarily create or cause
any lien or encumbrance to attach to Northwoods unless the
buyer approves such lien or encumbrance.
CONDITIONS
The Partnership's obligation to complete the sale of Northwoods is subject to
satisfaction of the following conditions on or before the closing unless waived
in whole or in part by the Partnership:
o All of the documents and funds required to be delivered by the
buyer to the Partnership at the closing shall have been
delivered;
o Each of the representations, warranties and covenants of the
buyer shall be true in all material respects as of the
closing;
o The buyer shall have complied with, fulfilled and performed in
all material respects each of the covenants, terms and
conditions to be complied with, fulfilled or performed by the
buyer; and
14
o The loan assumption shall have occurred, or, if permitted or
required under the agreement, the then-outstanding principal
balance of the loan shall be paid out of the balance of the
purchase price due at the closing.
The buyer's obligation to complete the sale of Northwoods is subject to
satisfaction of the following conditions on or before the closing unless waived
in whole or in part by the buyer:
o All of the documents required to be delivered by the
Partnership to the buyer at the closing shall have been
delivered;
o Each of the representations, warranties and covenants of the
Partnership shall be true in all material respects as of the
closing;
o The Partnership shall have complied with, fulfilled and
performed in all material respects each of the covenants,
terms and conditions to be complied with, fulfilled or
performed by the Partnership; and
o Neither the Partnership nor us shall be a debtor in any
bankruptcy proceeding nor shall have been in the last six
months a debtor in any bankruptcy proceeding.
TERMINATION AND DEFAULT
The agreement may be terminated at any time after the expiration of the buyer's
due diligence period through the closing:
o By the Partnership, if the buyer defaults in its obligations
under the agreement to (a) deliver any of the deposits, (b)
deliver to the Partnership the required closing deliveries
specified under the agreement, or (c) deliver the purchase
price at the time required by the agreement and close on the
purchase of Northwoods on the closing date. The Partnership
may also terminate the agreement if the buyer defaults in any
of its representations, warranties or obligations, and such
default continues for more than ten days after written notice
from the Partnership; and
o By the buyer, if the Partnership defaults in its
representations, warranties, covenants or obligations under
the agreement, including selling Northwoods and such default
continues for more than ten days after written notice from the
buyer.
If the Partnership terminates the agreement due to a default of or breach by the
buyer, then the Partnership is entitled to keep all the buyer's deposits as
liquidated damages. If the buyer terminates the agreement due to a default or
breach of the Partnership, then the buyer may choose to either (i) recover its
out-of-pocket costs up to an aggregate $20,000 (in which event, the buyer's
deposits would be returned to the buyer), or (ii) seek specific performance for
the conveyance of Northwoods to the buyer (but not damages).
EXPENSES AND CLOSING COSTS
The buyer shall pay any transfer, mortgage assumption, sales, use, gross
receipts or similar taxes, the cost of recording the deed to Northwoods and any
release of the mortgage, any premiums or fees with respect to the title policy
for Northwoods, and one-half of the customary closing costs of the escrow agent
for the sale of Northwoods. The Partnership shall pay the base premium for the
title policy, the cost of recording the release of the mortgage securing
repayment of the loan (in the event that the lender fails to approve the loan
assumption and the then-outstanding principal balance of the loan is paid out of
the balance of the purchase price due at the closing), and one-half of the
customary closing costs of the escrow agent. The buyer shall also pay all costs
associated with the loan assumption or the then-outstanding principal balance of
the loan shall be paid out of the balance of the purchase price due at the
closing, whichever may be applicable as of the closing. Additionally, the
Partnership shall pay for the broker commission of Apartment Realty Advisors,
which has served as the Partnership's broker, in accordance with a separate
written contract between Apartment Realty Advisors and the Partnership.
15
SUMMARY OF THE PATCHEN PLACE PURCHASE AND SALE AGREEMENT
The following summarizes the material terms and conditions of the purchase and
sale agreement for Patchen Place.
THE PURCHASED ASSETS
The Partnership agreed to sell all of the Partnership's interest in and to
Patchen Place, together with all the buildings and improvements located thereon
and certain associated property.
EXCLUSIONS FROM THE SALE OF PATCHEN PLACE
The sale transaction expressly excluded receivables; property contracts; leases;
permits; cash or other funds, whether in petty cash or house "banks," or on
deposit in bank accounts or in transit for deposit; refunds, rebates or other
claims, or any interest thereon, for periods or events that occurred prior to
the closing; utility and similar deposits; insurance or other prepaid items; the
Partnership's proprietary books and records; any right, title or interest in or
to certain intellectual property rights; equipment leased by the Partnership and
the interest of the Partnership in any equipment provided to Patchen Place for
use, but not owned or leased by the Partnership; or property owned or leased by
any tenant or guest, employee or other person furnishing goods or services to
Patchen Place; or property and equipment owned by the Partnership, which in the
ordinary course of business of Patchen Place is not used exclusively for the
business, operation or management of Patchen Place.
ASSUMED LIABILITIES
The buyer of Patchen Place assumed the Partnership's liabilities and obligations
under property contracts and leases after the closing.
THE LOAN
The outstanding principal balance of the loan from GMAC encumbering Patchen
Place was paid out of the balance of the purchase price paid at the closing.
PURCHASE PRICE
The purchase price paid by the buyer for Patchen Place at closing was
$7,000,000, less lender fees of $5,000.
CLOSING
The sale of Patchen Place closed on October 31, 2003.
REPRESENTATIONS AND WARRANTIES
The Patchen Place agreement contains the customary seller representations and
warranties by the Partnership, including, without limitation, representations
and warranties regarding corporate existence and qualification; corporate
authority; non-contravention of existing contracts; validity and enforceability
of the agreement; possessory interest in the property; litigation; governmental
violations; and material defaults under property contracts. The Partnership's
aggregate liability for a breach of its representations and warranties is capped
at $50,000 and is limited to claims brought within six months after the closing.
The Patchen Place agreement also contains customary purchaser representations
and warranties by the buyer, including, without limitation, representations and
warranties regarding existence and qualification; corporate authority;
non-contravention of existing contracts; validity and enforceability of the
agreement; litigation (except as otherwise expressly disclosed to buyer in the
agreement); and non-reliance upon the Partnership's representations and
warranties other than those in the agreement.
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EXPENSES AND CLOSING COSTS
The buyer paid (a) one-half of all applicable sales, use, gross receipts or
similar taxes, (b) the cost of recording the instruments required to discharge
all applicable liens and encumbrances against Patchen Place, (c) all applicable
premiums and fees required to be paid by the buyer with respect to its title
policy for Patchen Place, and (d) one-half of the customary closing costs of the
escrow agent for the sale of Patchen Place. The Partnership paid (i) the
applicable transfer tax, (ii) one-half of all applicable sales, use, gross
receipts or similar taxes, (iii) the base premium for the title policy, and (iv)
one-half of the customary closing costs of the escrow agent. The buyer also paid
all applicable costs associated with the payoff of the loan, including without
limitation all prepayment penalties and pay-off fees; however, buyer received a
credit at closing for such costs. Additionally, the Partnership paid for the
broker commission to Hendricks & Partners, which served as the Partnership's
broker, in accordance with a separate written contract between Hendricks &
Partners and the Partnership.
SUMMARY OF THE SOUTH POINT PURCHASE AND SALE AGREEMENT
The following summarizes the material terms and conditions of the purchase and
sale agreement for South Point.
THE PURCHASED ASSETS
The Partnership has agreed to sell all of the Partnership's interest in and to
South Point, together with all the buildings and improvements located thereon
and certain associated property.
EXCLUSIONS FROM THE SALE OF SOUTH POINT
The sale transaction expressly excludes cash or other funds; refunds, rebates or
other claims, or any interest thereon, for periods or events occurring prior to
the closing; utility and similar deposits; insurance or other prepaid items; the
Partnership's proprietary books and records; any right, title or interest in or
to certain intellectual property rights; equipment leased by the Partnership and
the interest of the Partnership in any equipment provided to South Point for
use, but not owned or leased by the Partnership; or property owned or leased by
any tenant or guest, employee or other person furnishing goods or services to
South Point; or property and equipment owned by the Partnership, which in the
ordinary course of business of South Point is not used exclusively for the
business, operation or management of South Point.
ASSUMED LIABILITIES
The buyer of South Point agreed to assume after the closing the Partnership's
liabilities and obligations under (i) the leases and (ii) those property
contracts which the buyer does not desire to terminate at the closing which, by
their terms, are assignable to the buyer. Additionally, the buyer agreed to
either (a) assume the Partnership's liabilities and obligations under any
contracts affecting South Point for the purchase of gas, electricity or other
utility services after the closing, or (b) pay to the Partnership at the closing
the reasonably calculated costs for the period after the closing for any such
utility contracts (with the Partnership to remain responsible for payment of
such utility contracts after the closing).
THE EXISTING LOAN
The buyer of South Point and the Partnership have agreed that, at the closing,
the then-outstanding principal balance of the outstanding first mortgage loan on
South Point shall be paid out of the proceeds of the purchase price due at the
closing.
PURCHASE PRICE
The purchase price for the South Point is $8,360,000, less lender fees, payable
as follows: (i) a $150,000 deposit upon the execution of the South Point
agreement to be held in escrow until the closing (except as set forth below),
and (ii) the balance of the purchase price at the closing. Upon the expiration
of the buyer's feasibility period, or November 6, 2003, the deposit became
non-refundable and $75,000 of the deposit was released to the Partnership. If
the agreement is terminated due to (i) a default of or breach by the Partnership
of the agreement or (ii) the failure
17
of the Partnership to satisfy certain conditions in the agreement, and the buyer
chooses to seek damages in lieu of specific performance, then the full $150,000
deposit shall be returned to the buyer.
CLOSING
The sale of the South Point is scheduled to take place on December 22, 2003. The
Partnership shall have the option to extend the closing to December 31, 2003 or
to such other date as the Partnership determines is desirable in connection with
the loan payoff. Further, the Partnership may extend the closing (i) for up to
30 days to satisfy a condition to be satisfied by the Partnership, or (ii) such
later date as is mutually acceptable to the Partnership and the buyer.
REPRESENTATIONS AND WARRANTIES
The South Point agreement contains the customary seller representations and
warranties by the Partnership, including, without limitation, representations
and warranties regarding corporate existence and qualification; corporate
authority; non-contravention of existing contracts; validity and enforceability
of the agreement; possessory interest in the property; non-foreign person status
under Section 1445 of the Internal Revenue Code; litigation; governmental
violations; material defaults under property contracts; and hazardous or toxic
materials. Additionally, the Partnership has represented as to the material
accuracy of the rent roll attached to the property (to be updated at the
closing). The Partnership's aggregate liability for a breach of its
representations and warranties is capped at $200,000 and is limited to claims
brought within 12 months after the closing.
The South Point agreement also contains customary purchaser representations and
warranties by the buyer, including, without limitation, representations and
warranties regarding existence and qualification; corporate authority;
non-contravention of existing contracts; validity and enforceability of the
agreement; litigation; and non-reliance upon the Partnership's representations
and warranties other than those in the agreement.
COVENANTS
The Partnership has agreed that from the effective date of the South Point
agreement through the closing, it will continue to operate South Point in the
ordinary course of business and subject to the following covenants:
o The Partnership may enter into new contracts or leases
involving South Point, renew existing leases or modify,
terminate or accept the surrender or forfeiture of any of the
leases involving South Point, modify any contracts involving
South Point, or institute and prosecute any available remedies
for default under any such leases or contracts without first
obtaining the written consent of the buyer, as long as any
such new contracts or any new or renewed leases do not have a
term in excess of one year (or such longer period of time for
which such contracts or leases are entered into by the
Partnership in the ordinary course of its operation of South
Point) without the prior written consent of the buyer;
o except as necessary in the Partnership's sole discretion to
address (a) any life or safety issue at South Point or (b) any
other matter which in the Partnership's reasonable discretion
materially adversely affecting the use, operation or value of
South Point, the Partnership will not make any material
alterations to South Point or remove any material fixtures and
tangible personal property without the prior written consent
of the buyer; and
o other than utility easements and temporary construction
easements granted by the Partnership in the ordinary course of
business, the Partnership will not voluntarily create or cause
any lien or encumbrance to attach to South Point unless the
buyer approves such lien or encumbrance.
CONDITIONS
The Partnership's obligation to complete the sale of South Point is subject to
satisfaction of the following conditions on or before the closing unless waived
in whole or in part by the Partnership:
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o All of the documents and funds required to be delivered by the
buyer to the Partnership at the closing shall have been
delivered;
o Each of the representations, warranties and covenants of the
buyer shall be true in all material respects as of the
closing;
o The buyer shall have complied with, fulfilled and performed in
all material respects each of the covenants, terms and
conditions to be complied with, fulfilled or performed by the
buyer; and
o The Partnership shall have received all consents and approvals
to the consummation of the transactions contemplated by the
agreement (a) of the Partnership's partners, members,
managers, shareholders or directors to the extent required by
the Partnership's (of the Partnership's affiliates')
organizational documents, or (b) that are required by law.
The buyer's obligation to complete the sale of South Point is subject to
satisfaction of the following conditions on or before the closing unless waived
in whole or in part by the buyer:
o All of the documents required to be delivered by the
Partnership to the buyer at the closing shall have been
delivered;
o Each of the representations, warranties and covenants of the
Partnership shall be true in all material respects as of the
closing;
o The Partnership shall have complied with, fulfilled and
performed in all material respects each of the covenants,
terms and conditions to be complied with, fulfilled or
performed by the Partnership; and
o Neither the Partnership nor us shall be a debtor in any
bankruptcy proceeding nor shall have been in the last six
months a debtor in any bankruptcy proceeding.
TERMINATION AND DEFAULT
The South Point agreement may be terminated at any time after the expiration of
the buyer's due diligence period through the closing:
o By the Partnership, if the buyer defaults in its obligations
under the agreement to (a) deliver the deposit, (b) deliver to
the Partnership the required closing deliveries specified
under the agreement, or (c) deliver the purchase price at the
time required by the agreement and close on the purchase of
South Point on the closing date. The Partnership may also
terminate the agreement if the buyer defaults in any of its
representations, warranties or obligations, and such default
continues for more than ten days after written notice from the
Partnership; and
o By the buyer, if the Partnership defaults in its
representations, warranties, covenants or obligations under
the agreement, including selling South Point, and such default
continues for more than ten days after written notice from the
buyer.
If the Partnership terminates the agreement due to a default of or breach by the
buyer, then the Partnership is entitled to keep the buyer's deposit as
liquidated damages. If the buyer terminates the agreement due to a default or
breach of the Partnership, then the buyer may choose to either (i) recover its
out-of-pocket costs up to an aggregate $35,000 (in which event, the buyer's
deposit would be returned to the buyer), or (ii) seek specific performance for
the conveyance of South Point to the buyer (but not damages).
EXPENSES AND CLOSING COSTS
The Partnership shall pay any transfer taxes and one-half of the customary
closing costs of the escrow agent for the sale of South Point. The buyer shall
pay any sales, use, gross receipts or similar taxes, the cost of recording any
19
instruments required to discharge any liens or encumbrances against South Point,
any premiums or fees required for the title policy, one-half of the customary
closing costs of the escrow agent for the sale of South Point and any costs of
the buyer's counsel acting as recording agent pursuant to the terms of the
agreement. The buyer shall also pay all costs associated with the loan payoff,
but such costs will be deducted from the purchase price due at closing.
Additionally, the Partnership shall pay for the broker commission of The
Apartment Group, which has served as the Partnership's broker, in accordance
with the terms of a separate written contract between The Apartment Group and
the Partnership. The Partnership intends to pay this commission out of the
balance of the purchase price payable on the closing, which will reduce the cash
at closing to the Partnership. The buyer is responsible for paying a broker
commission to its broker, Sequoia Realty, LLC, in accordance with the terms of a
separate written contract between Sequoia Realty, LLC and the buyer.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Exchange Act and are
required to file annual and quarterly reports, proxy statements and other
information with the SEC. You can inspect and copy reports and other information
filed by us with the SEC at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. You may also obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0300. The SEC also
maintains an Internet site at http:\\www.sec.gov that contains reports, proxy
and information statements regarding issuers, including us, that file
electronically with the SEC.
You should only rely on the information incorporated by reference or provided in
this Solicitation Statement or any supplement. We have not authorized anyone
else to provide you with information. You should not assume that the information
in this Solicitation Statement or any supplement is accurate as of any date
other than the date on the front of this Solicitation Statement or the
supplement.
We are "incorporating by reference" into this Solicitation Statement certain
information we have filed with the SEC, which means that we are disclosing
important information to you by referring you to those documents. The
information incorporated by reference is deemed to be part of this Solicitation
Statement, except for any information superseded by information contained
directly in this Solicitation Statement. These documents contain important
information about us and our finances. This Solicitation Statement incorporates
by reference:
o Our annual report on Form 10-KSB for the year ended December
31, 2002.
o Our quarterly report on Form 10-QSB for the period ended March
31, 2003.
o Our quarterly report on Form 10-QSB for the period ended June
30, 2003.
o Our quarterly report on Form 10-QSB for the period ended
September 30, 2003.
All documents we file with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act from the date of this Solicitation Statement
shall also be deemed to be incorporated herein by reference and will
automatically update information in this Solicitation Statement.
You may request a copy of these filings, at no cost, by writing or calling us at
the following address or telephone number: c/o THE ALTMAN GROUP, INC., 1275
Valley Brook Avenue, Lyndhurst, New Jersey 07071, Telephone: (800) 461-2657.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS
This Solicitation Statement is being delivered to all holders of record of the
outstanding limited partnership units as of the Record Date. The Partnership
will undertake to deliver promptly upon written or oral request additional
copies of this Solicitation Statement to any limited partner that requests
additional copies. In order to obtain such additional copies, the limited
partner may contact the Partnership by mail at c/o THE ALTMAN GROUP, INC., 1275
Valley Brook Avenue, Lyndhurst, New Jersey 07071; by telephone at (800)
461-2657; or by facsimile at (201) 460-0050.
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Questions and requests for assistance regarding this Solicitation Statement and
the matters set forth herein may be directed to the Solicitation Agent, The
Altman Group, Inc. by mail at 1275 Valley Brook Avenue, Lyndhurst, New Jersey
07071; by overnight courier service at 1275 Valley Brook Avenue, Lyndhurst, New
Jersey 07071; by fax at (201) 460-0050; or by telephone at (800) 461-2657.
Very truly yours,
NATIONAL PROPERTY INVESTORS 7
By: NPI EQUITY INVESTMENTS, INC.,
a Florida corporation,
its Managing General Partner
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
21
CONSENT OF LIMITED PARTNER
OF
NATIONAL PROPERTY INVESTORS 7
A CALIFORNIA LIMITED PARTNERSHIP
The undersigned, a limited partner of National Property Investors 7, a
California limited partnership (the "Partnership"), and the holder of units (the
"Units") of limited partnership interest in the Partnership, acting with respect
to all of the Units owned by the undersigned, hereby:
[___] CONSENTS [___] WITHHOLDS CONSENT [___] ABSTAINS
with respect to the following actions of the Partnership:
1. The sale (the "Sale") by the Partnership of its interest in
the apartment complex known as South Point Apartments, located
in Durham County, North Carolina; and
2. The ratification (the "Ratification") of the sale by the
Partnership of its interests in the apartment complexes known
as Northwoods Apartments, located in Escambia County, Florida,
and Patchen Place Apartments, located in Fayette County,
Kentucky.
In addition, your consent to the Sale and Ratification will authorize the
Managing General Partner, in its discretion, to reduce the purchase price for a
particular Property up to 10% and make any other amendments to the purchase and
sale agreements for the Properties which, in its opinion, are necessary,
appropriate or desirable in connection with the sale of the Properties and that
do not materially and adversely affect the Partnership.
THE MANAGING GENERAL PARTNER OF THE PARTNERSHIP RECOMMENDS THAT YOU CONSENT TO
THE SALE AND RATIFICATION.
IF NO ELECTION IS SPECIFIED, ANY OTHERWISE PROPERLY COMPLETED AND SIGNED CONSENT
FORM WILL BE DEEMED TO BE A CONSENT TO THE SALE AND RATIFICATION.
The undersigned hereby acknowledges receipt of the Consent Solicitation
Statement, dated November 24, 2003. THIS CONSENT IS SOLICITED ON BEHALF OF
NATIONAL PROPERTY INVESTORS 7, BY NPI EQUITY INVESTMENTS, INC., THE MANAGING
GENERAL PARTNER.
The undersigned hereby constitutes and appoints the managing general partner of
the Partnership as his or her attorney-in-fact for the purposes of executing any
and all documents and taking any and all actions required under the partnership
agreement in connection with this consent solicitation or in order to implement
the actions set forth above.
A FULLY COMPLETED, SIGNED AND DATED COPY OF THIS CONSENT FORM SHOULD BE SENT TO
THE SOLICITATION AGENT BY HAND, MAIL, OVERNIGHT COURIER OR BY FAX TO THE ADDRESS
OR FAX NUMBER SPECIFIED ON THE LAST PAGE BELOW.
Please sign exactly as you hold your limited partnership units. When signing as
an attorney-in-fact, executor, administrator, trustee or guardian, please give
your full title. If an interest is jointly held, each holder should sign. If a
corporation, please sign in full corporate name by a duly authorized officer. If
a partnership, please sign in partnership name by a duly authorized person.
ALL RESPONSES MUST BE RECEIVED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME,
ON DECEMBER 18, 2003.
[Signature Page Follows]
DATE: ________ ___, 2003 INDIVIDUAL
--------------------------------------------
Signature (Individual)
--------------------------------------------
Signature (All record holders should sign)
--------------------------------------------
Type or Print Name(s)
--------------------------------------------
Tax Identification or Social Security Number
--------------------------------------------
Telephone Number
DATE: ________ ___, 2003 CORPORATION, PARTNERSHIP, TRUST OR OTHER
ENTITY*
--------------------------------------------
Type or Print Name of Entity
By:
----------------------------------------
Its:
---------------------------------------
--------------------------------------------
Type or Print Name
--------------------------------------------
Tax Identification or Social Security Number
--------------------------------------------
Telephone Number
*If interests are held by an entity, the Certificate of Signatory must also be
completed.
CERTIFICATE OF SIGNATORY
To be completed if consent is signed for by an entity.
I, , am the of
---------------------------- ------------------
(the "Entity").
- -------------------------
I certify that I am empowered and duly authorized by the Entity to
execute this consent form, and certify that the consent form has been duly and
validly executed on behalf of the Entity and constitutes the legal and binding
obligations of the Entity.
Dated: ________ ___, 2003
------------------------------------
Signature
------------------------------------
Please Print Name
THE SIGNED CONSENT FORM SHOULD BE DELIVERED BY ANY ONE OF THESE METHODS:
By Facsimile: By Overnight Courier:
(201) 460-0050 The Altman Group, Inc.
1275 Valley Brook Avenue
Lyndhurst, New Jersey 07071
Attn: Paul Schulman
By Mail: By Hand:
The Altman Group, Inc. The Altman Group, Inc.
1275 Valley Brook Avenue 1275 Valley Brook Avenue
Lyndhurst, New Jersey 07071 Lyndhurst, New Jersey 07071
Attn: Paul Schulman Attn: Paul Schulman
For Information, Please
Call Paul Schulman at:
(800) 461-2657