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FORM 10-K--ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
[No Fee Required]
For the fiscal year ended December 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[No Fee Required]
For the transition period from _________to _________
Commission file number 0-11002
CONSOLIDATED CAPITAL PROPERTIES IV
(Name of small business issuer in its charter)
California 94-2768742
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interests
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests as of December 31, 2000. No market exists for the limited partnership
interests of the Registrant, and, therefore, no aggregate market value can be
determined.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Description of Business
Consolidated Capital Properties IV (the "Partnership" or "Registrant") was
organized on September 22, 1981 as a limited partnership under the California
Uniform Limited Partnership Act. On December 18, 1981, the Partnership commenced
a public offering for the sale of 200,000 Units with the general partner's right
to increase the offering to 400,000 Units. The Units represent equity interests
in the Partnership and entitle the holders thereof to participate in certain
allocations and distributions of the Partnership. The sale of Units closed on
December 14, 1983, with 343,106 Units sold at $500 each, or gross proceeds of
$171,553,000 to the Partnership. Since its initial offering, the Partnership has
not received, nor are limited partners required to make, additional capital
contributions.
By the end of fiscal year 1985, approximately 73% of the proceeds raised had
been invested in 48 properties. Of the remaining 27%, 11% was required for
organizational and offering expenses, sales commissions and acquisition fees,
and 16% was retained in Partnership reserves for project improvements and
working capital as required by the Partnership Agreement.
The general partner of the Partnership is ConCap Equities, Inc., a Delaware
corporation (the "General Partner" or "CEI"). The General Partner is a
subsidiary of Apartment Investment and Management Company ("AIMCO"). The
directors and officers of the General Partner also serve as executive officers
of AIMCO. The Partnership Agreement provides that the Partnership is to
terminate on December 31, 2011 unless terminated prior to that date.
The Partnership's primary business and only industry segment is real estate
related operations. The Partnership is engaged in the business of operating and
holding real estate properties for investment. As of the close of fiscal year
1985, the Partnership had completed its property acquisition stage and had
acquired 48 properties. At December 31, 2000, the Partnership owned 15
income-producing properties (or interests therein), which range in age from 24
to 29 years old, principally located in the midwest, southeastern and
southwestern United States. Prior to 2000, the Partnership had disposed of 32
properties originally owned by the Partnership. In December 2000, the
Partnership sold an additional property. See "Item 2. Description of Properties"
for further information about the Partnership's remaining properties.
The real estate business in which the Partnership is engaged is highly
competitive. There are other residential properties within the market area of
the Partnership's properties. The number and quality of competitive properties,
including those which may be managed by an affiliate of the General Partner, in
such market area could have a material effect on the rental market for the
apartments at the Registrant's properties and the rents that may be charged for
such apartments. While the General Partner and its affiliates own and/or control
a significant number of apartment units in the United States, such units
represent an insignificant percentage of total apartment units in the United
States and competition for the apartments is local.
Both the income and expenses of operating the properties owned by the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar properties resulting from various
market conditions, increases/decreases in unemployment or population shifts,
changes in the availability of permanent mortgage financing, changes in zoning
laws, or changes in patterns or needs of users. In addition, there are risks
inherent in owning and operating residential properties because such properties
are susceptible to the impact of economic and other conditions outside of the
control of the Partnership.
The Registrant has no employees. Property management and administrative services
are provided by the General Partner and by agents of the General Partner. The
General Partner has also selected an affiliate to provide real estate advisory
and asset management services to the Partnership. As advisor, such affiliate
provides all Partnership accounting and administrative services, investment
management, and supervisory services over property management and leasing.
There have been, and it is possible there may be other, Federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.
The Partnership monitors its properties for evidence of pollutants, toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental testing has been performed which resulted in no material adverse
conditions or liabilities. In no case has the Partnership received notice that
it is a potentially responsible party with respect to an environmental clean up
site.
A further description of the Partnership's business is included in "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in "Item 7" of this Form 10-K.
Transfers of Control
Upon the Partnership's formation in 1981, Consolidated Capital Equities
Corporation ("CCEC"), a Colorado corporation, was the corporate general partner
and Consolidated Capital Management Company ("CCMC"), a California general
partnership, was the non-corporate general partner. In 1988, through a series of
transactions, Southmark Corporation ("Southmark") acquired a controlling
interest in CCEC. In December 1988, CCEC filed for reorganization under Chapter
11 of the United States Bankruptcy Code. In 1990, as part of its reorganization
plan, CEI acquired CCEC's general partner interests in the Partnership and in 15
other affiliated public limited partnerships (the "Affiliated Partnerships") and
CEI replaced CCEC as managing general partner in all 16 partnerships. The
selection of CEI as the sole managing general partner was approved by a majority
of the Limited Partners in the Partnership and in each of the affiliated
partnerships pursuant to a solicitation of the Limited Partners dated August 10,
1990. As part of this solicitation, the Limited Partners also approved an
amendment to the Partnership Agreement to limit changes of control of the
Partnership, and the conversion of CCMC from a general partner to a special
limited partner, thereby leaving CEI as the sole general partner of the
Partnership. On November 14, 1990, CCMC was dissolved and its special limited
partnership interest was divided among its former partners. All of CEI's
outstanding stock was owned by Insignia Properties Trust ("IPT") (See below).
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and IPT merged into AIMCO, a
publicly traded real estate investment trust, with AIMCO being the surviving
corporation (the "Insignia Merger"). As a result, AIMCO acquired 100% ownership
interest in the General Partner. The General Partner does not believe that this
transaction has had or will have a material effect on the affairs and operations
of the Partnership.
Item 2. Description of Properties
The Partnership originally acquired 48 properties of which thirteen (13) were
sold, ten (10) were conveyed to lenders in lieu of foreclosure, and ten (10)
were foreclosed upon by the lenders. As of December 31, 2000, the Partnership
owned fifteen (15) apartment complexes. Additional information about the
properties is found in "Item 8. Financial Statements and Supplementary Data".
Date of
Property Purchase Type of Ownership Use
The Apartments (1) 04/84 Fee ownership, subject to Apartment
Omaha, Nebraska a first mortgage 204 units
Arbours of Hermitage Apts. (1) 09/83 Fee ownership subject to Apartment
Nashville, Tennessee a first mortgage 350 units
Briar Bay Racquet Club Apts. (2) 09/82 Fee ownership subject to Apartment
Miami, Florida a first mortgage 194 units
Chimney Hill Apts. (2) 08/82 Fee ownership subject to Apartment
Marietta, Georgia a first mortgage 326 units
Citadel Apts. (1) 05/83 Fee ownership subject Apartment
El Paso, Texas to a first mortgage 261 units
Citadel Village Apts. (1) 12/82 Fee ownership subject Apartment
Colorado Springs, Colorado to a first mortgage 122 units
Foothill Place Apts. (2) 08/85 Fee ownership subject Apartment
Salt Lake City, Utah to a first mortgage 450 units
Knollwood Apts. (1) 07/82 Fee ownership subject Apartment
Nashville, Tennessee to a first mortgage 326 units
Lake Forest Apts. 04/84 Fee ownership subject Apartment
Omaha, Nebraska to a first mortgage 312 units
Nob Hill Villa Apts. (1) 04/83 Fee ownership subject Apartment
Nashville, Tennessee to a first mortgage 472 units
Point West Apts. (1) 11/85 Fee ownership subject Apartment
Charleston, South Carolina a first mortgage 120 units
Post Ridge Apts. (2) 07/82 Fee ownership subject Apartment
Nashville, Tennessee to a first mortgage 150 units
Rivers Edge Apts. (2) 04/83 Fee ownership subject Apartment
Auburn, Washington to a first mortgage 120 units
South Port Apts. (3) 11/83 Fee ownership subject Apartment
Tulsa, Oklahoma to a first mortgage 240 units
Village East Apts. (1) 12/82 Fee ownership subject Apartment
Cimarron Hills, Colorado to a first mortgage 137 units
(1) Property is held by a limited partnership and/or limited liability
corporation in which the Partnership owns a 100% interest.
(2) Property is held by a limited partnership in which the Registrant owns a
99% interest.
(3) Property is held by a limited partnership in which the Partnership owns a
50% interest.
Schedule of Properties
Set forth below for each of the Registrant's properties is the gross carrying
value, accumulated depreciation, depreciable life, method of depreciation and
Federal tax basis.
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
(in thousands) (in thousands)
The Apartments $ 9,070 $ 7,355 5-18 yrs S/L $ 1,919
Arbours of Hermitage
Apartments 14,517 11,270 5-18 yrs S/L 3,755
Briar Bay Racquet Club
Apartments 8,006 6,563 5-18 yrs S/L 2,078
Chimney Hill Apartments 11,624 9,908 5-18 yrs S/L 2,624
Citadel Apartments 7,959 6,679 5-18 yrs S/L 1,144
Citadel Village
Apartments 4,438 3,553 5-18 yrs S/L 1,411
Foothill Place
Apartments 16,017 10,213 5-18 yrs S/L 7,267
Knollwood Apartments 12,014 9,823 5-18 yrs S/L 2,706
Lake Forest Apartments 9,761 7,335 5-18 yrs S/L 2,283
Nob Hill Villa
Apartments 13,621 11,502 5-18 yrs S/L 2,160
Point West Apartments 3,216 2,435 5-40 yrs S/L 1,142
Post Ridge Apartments 5,227 4,032 5-18 yrs S/L 1,371
Rivers Edge Apartments 3,507 2,696 5-18 yrs S/L 991
South Port Apartments 8,793 6,755 5-18 yrs S/L 1,975
Village East Apartments 3,744 3,153 5-18 yrs S/L 739
Total $131,514 $103,272 $33,565
See "Note A" to the consolidated financial statements included in "Item 8.
Financial Statements and Supplementary Data" for a description of the
Partnership's depreciation policy.
Schedule of Property Indebtedness
The following table sets forth certain information relating to the loans
encumbering the Registrant's properties.
Principal Principal Principal
Balance At Balance At Stated Balance
December 31, December 31, Interest Period Maturity Due At
Property 2000 1999 Rate Amortized Date Maturity (3)
(in thousands) (in thousands)
The Apartments $ 4,703 $ 3,294 8.37% 20 yrs 03/20 $ --
Arbours of Hermitage
Apartments 5,650 5,650 6.95% (1) 12/05 5,650
Briar Bay Racquet Club
Apartments 3,500 3,500 6.95% (1) 12/05 3,500
Chimney Hill Apartments 5,400 5,400 6.95% (1) 12/05 5,400
Citadel Apartments 4,638 4,565 8.25% 20 yrs 03/20 --
Citadel Village Apartments 2,450 2,450 6.95% (1) 12/05 2,450
Foothill Place 10,100 10,100 6.95% (1) 12/05 10,100
Apartments
Knollwood Apartments 6,780 6,780 6.95% (1) 12/05 6,780
Lake Forest Apartments 4,700 4,700 7.33% (1) 11/03 4,700
Nob Hill Villa Apartments 6,926 7,050 9.20% 25 yrs 04/05 6,250
Point West Apartments 2,407 2,460 7.86% 20 yrs 12/19 --
Post Ridge Apartments 4,050 4,050 7.33% (1) 11/03 4,050
Rivers Edge Apartments 3,979 1,924 7.82% 20 yrs 09/20 --
South Port Apartments 4,358 4,409 7.19% 30 yrs 12/04 4,119
Stratford Place Apartments -- 2,515 8.65% (2) 09/00 --
Village East Apartments 2,150 2,150 6.95% (1) 12/05 2,150
Totals $71,791 $70,997 $55,149
(1) Monthly payments of interest only at the stated rate until maturity.
(2) On December 28, 2000, the Partnership sold Stratford Place Apartments to
an unaffiliated third party.
(3) See "Item 8. Financial Statements and Supplementary Date - Note D" for
information with respect to the Registrant's ability to prepay these loans
and other specific details about the loans.
See "Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations" for information relating to the financing at Point West
Apartments in the fourth quarter of 1999, the refinancing of the mortgages
encumbering The Apartments and Citadel Apartments in February 2000, the
refinancing of the mortgage encumbering Stratford Place Apartments in May 2000,
and the refinancing of the mortgage encumbering River's Edge Apartments in
August 2000.
Rental Rate and Occupancy
The following table sets forth the average annual rental rates and occupancy for
2000 and 1999 for each property.
Average Annual Average
Rental Rates Occupancy
(per unit)
Property 2000 1999 2000 1999
The Apartments $ 7,088 $ 6,989 94% 93%
Arbours of Hermitage Apartments 7,697 7,388 94% 96%
Briar Bay Racquet Club Apartments 9,204 8,922 97% 96%
Chimney Hill Apartments 8,553 8,238 94% 95%
Citadel Apartments 6,892 6,800 92% 94%
Citadel Village Apartments 9,098 8,818 96% 97%
Foothill Place Apartments 8,043 7,973 96% 97%
Knollwood Apartments 8,197 7,983 94% 96%
Lake Forest Apartments 7,530 7,452 89% 87%
Nob Hill Villa Apartments 6,277 6,191 94% 94%
Point West Apartments 6,450 6,002 97% 97%
Post Ridge Apartments 9,763 9,440 92% 96%
Rivers Edge Apartments 7,795 7,448 98% 97%
South Port Apartments 6,641 6,346 96% 95%
Village East Apartments 7,756 7,422 97% 98%
The decrease in occupancy at Post Ridge Apartments is due to increased
competition in the local market.
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties are subject to competition from other
residential apartment complexes in the area. The General Partner believes that
all of the properties are adequately insured. Each property is an apartment
complex which leases units for lease terms of one year or less. No residential
tenant leases 10% or more of the available rental space. All of the properties
are in good physical condition, subject to normal depreciation and deterioration
as is typical for assets of this type and age.
Real Estate Taxes and Rates
Real estate taxes and rates in 2000 for each property were:
2000 2000 1999 1999
Billing Rate Billing Rate (1)
(in thousands) (in thousands)
The Apartments $135 1.9% $121 2.2%
Arbours of Hermitage Apartments 149 3.4% 149 3.4%
Briar Bay Racquet Club Apartments 169 2.2% 170 2.3%
Chimney Hill Apartments 135 2.9% 130 2.9%
Citadel Apartments 147 2.9% 147 2.9%
Citadel Village Apartments 23 5.8% 21 5.9%
Foothill Place Apartments 180 0.8% 188 1.5%
Knollwood Apartments 163 3.4% 163 3.4%
Lake Forest Apartments 190 1.9% 166 2.2%
Nob Hill Villa Apartments 205 4.2% 205 4.2%
Point West Apartments 35 36.4% 35 36.9%
Post Ridge Apartments 92 3.4% 92 3.4%
Rivers Edge Apartments 55 1.5% 56 1.5%
South Port Apartments 62 1.4% 61 1.5%
Village East Apartments 21 5.9% 20 5.6%
(1) The rates for some properties have been recalculated based on assessed
value to be consistent.
Capital Improvements
The Apartments
During 2000, the Partnership completed approximately $44,000 of capital
improvements at the property, consisting primarily of carpet and vinyl
replacement, air conditioning units, and major landscaping. These improvements
were funded from operating cash flow and insurance proceeds. The Partnership is
currently evaluating the capital improvement needs of the property for the
upcoming year. The minimum amount to be budgeted is expected to be $275 per unit
or $56,100. Additional improvements may be considered and will depend on the
physical condition of the property as well as replacement reserves and
anticipated cash flow generated by the property.
Arbours of Hermitage Apartments
During 2000, the Partnership completed approximately $1,375,000 of capital
improvements at the property, consisting primarily of vinyl siding replacements,
structural improvements, fencing upgrades, and floor covering and appliance
replacements. These improvements were funded primarily from operating cash flow.
The Partnership is currently evaluating the capital improvement needs of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $275 per unit or $96,250. Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.
Briar Bay Racquet Club Apartments
During 2000, the Partnership completed approximately $158,000 of capital
improvements at the property, consisting primarily of carpet and vinyl
replacements, plumbing upgrades, and structural improvements. These improvements
were funded from operating cash flow and reserves. The Partnership is currently
evaluating the capital improvement needs of the property for the upcoming year.
The minimum amount to be budgeted is expected to be $275 per unit or $53,350.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Chimney Hill Apartments
During 2000, the Partnership completed approximately $387,000 of capital
improvements at the property, consisting primarily of plumbing, electrical and
structural upgrades, and roof, floor covering and counter top replacements.
These improvements were funded from operating cash flow and reserves. The
Partnership is currently evaluating the capital improvement needs of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $275 per unit or $89,650. Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.
Citadel Apartments
During 2000, the Partnership completed approximately $105,000 of capital
improvements at the property, consisting primarily of roof and floor covering
replacements, air conditioning unit replacements, and water heater upgrades.
These improvements were funded from operating cash flow. The Partnership is
currently evaluating the capital improvement needs of the property for the
upcoming year. The minimum amount to be budgeted is expected to be $275 per unit
or $71,775. Additional improvements may be considered and will depend on the
physical condition of the property as well as replacement reserves and
anticipated cash flow generated by the property.
Citadel Village Apartments
During 2000, the Partnership completed approximately $153,000 of capital
improvements at the property, consisting primarily of floor covering
replacements, plumbing upgrades, and structural improvements. These improvements
were funded from operating cash flow. The Partnership is currently evaluating
the capital improvement needs of the property for the upcoming year. The minimum
amount to be budgeted is expected to be $275 per unit or $33,550. Additional
improvements may be considered and will depend on the physical condition of the
property as well as replacement reserves and anticipated cash flow generated by
the property.
Foothill Place Apartments
During 2000, the Partnership completed approximately $473,000 of capital
improvements at the property, consisting primarily of floor covering and
appliance replacements, lighting upgrades, structural improvements, air
conditioning unit replacements, and water heater upgrades. These improvements
were funded from operating cash flow. The Partnership is currently evaluating
the capital improvement needs of the property for the upcoming year. The minimum
amount to be budgeted is expected to be $275 per unit or $123,750. Additional
improvements may be considered and will depend on the physical condition of the
property as well as replacement reserves and anticipated cash flow generated by
the property.
Knollwood Apartments
During 2000, the Partnership completed approximately $561,000 of capital
improvements at the property, consisting primarily of appliance, floor covering
and roof replacements, cabinet replacements, and plumbing and air conditioning
upgrades. These improvements were funded from operating cash flow. The
Partnership is currently evaluating the capital improvement needs of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $275 per unit or $89,650. Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.
Lake Forest Apartments
During 2000, the Partnership completed approximately $185,000 of capital
improvements at the property, consisting primarily of appliance and floor
covering replacements, water heater and structural upgrades. These improvements
were primarily funded from operating cash flow and reserves. The Partnership is
currently evaluating the capital improvement needs of the property for the
upcoming year. The minimum amount to be budgeted is expected to be $275 per unit
or $85,800. Additional improvements may be considered and will depend on the
physical condition of the property as well as replacement reserves and
anticipated cash flow generated by the property.
Nob Hill Villa Apartments
During 2000, the Partnership completed approximately $413,000 of capital
improvements at the property, consisting primarily of appliance and floor
covering replacements, structural improvements, and water heater and plumbing
upgrades. These improvements were primarily funded from operating cash flow and
reserves. The Partnership is currently evaluating the capital improvement needs
of the property for the upcoming year. The minimum amount to be budgeted is
expected to be $275 per unit or $129,800. Additional improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.
Point West Apartments
During 2000, the Partnership completed approximately $45,000 of capital
improvements at the property, consisting primarily of floor covering, appliance
and air conditioning replacements. These improvements were funded from operating
cash flow. The Partnership is currently evaluating the capital improvement needs
of the property for the upcoming year. The minimum amount to be budgeted is
expected to be $275 per unit or $33,000. Additional improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.
Post Ridge Apartments
During 2000, the Partnership completed approximately $286,000 of capital
improvements at the property, consisting primarily of plumbing upgrades, floor
covering and appliance replacements, structural upgrades, and recreational
facilities improvements. These improvements were primarily funded from operating
cash flow and reserves. The Partnership is currently evaluating the capital
improvement needs of the property for the upcoming year. The minimum amount to
be budgeted is expected to be $275 per unit or $41,250. Additional improvements
may be considered and will depend on the physical condition of the property as
well as replacement reserves and anticipated cash flow generated by the
property.
Rivers Edge Apartments
During 2000, the Partnership completed approximately $83,000 of capital
improvements at the property, consisting primarily of plumbing upgrades, and
appliance and floor covering replacements. These improvements were funded from
operating cash flow. The Partnership is currently evaluating the capital
improvement needs of the property for the upcoming year. The minimum amount to
be budgeted is expected to be $275 per unit or $33,000. Additional improvements
may be considered and will depend on the physical condition of the property as
well as replacement reserves and anticipated cash flow generated by the
property.
South Port Apartments
During 2000, the Partnership completed approximately $615,000 of capital
improvements at the property, consisting primarily of air conditioning, floor
covering and appliance replacements and plumbing upgrades. These improvements
were funded from operating cash flow and reserves. The Partnership is currently
evaluating the capital improvement needs of the property for the upcoming year.
The minimum amount to be budgeted is expected to be $275 per unit or $66,000.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Village East Apartments
During 2000, the Partnership completed approximately $82,000 of capital
improvements at the property, consisting primarily of floor covering
replacements, plumbing upgrades, and electrical enhancements. These improvements
were funded from operating cash flow. The Partnership is currently evaluating
the capital improvement needs of the property for the upcoming year. The minimum
amount to be budgeted is expected to be $275 per unit or approximately $37,675.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Stratford Place Apartments
During 2000, the Partnership completed approximately $659,000 of capital
improvements at the property, consisting primarily of building improvements and
renovations, fencing upgrades, floor covering replacement, appliance
replacements, and roof replacement. The property was sold on December 28, 2000.
Item 3. Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, its General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging, among other things, the acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc. ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited partnership units; management of
the partnerships by the Insignia affiliates; and the Insignia Merger. The
plaintiffs seek monetary damages and equitable relief, including judicial
dissolution of the Partnership. On June 25, 1998, the General Partner filed a
motion seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs filed an amended complaint. The General Partner filed demurrers to
the amended complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Court, at which time
the Court set a final approval hearing for December 10, 1999. Prior to the
December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the General Partner and its affiliates terminated the
proposed settlement. In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement. On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken from the order on October 5, 2000. On
December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann &
Bernstein LLP as new lead counsel for plaintiffs and the putative class.
Plaintiffs filed a third amended complaint on January 19, 2001. On March 2,
2001, the General Partner and its affiliates filed a demurrer to the third
amended complaint. The General Partner does not anticipate that costs associated
with this case will be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
Item 4. Submission of Matters to a Vote of Security Holders
The unit holders of the Partnership did not vote on any matter during the
quarter ended December 31, 2000.
PART II
Item 5. Market for the Registrant's Units of Limited Partnership and
Related Security Holder Matters
(A) No established trading market for the Partnership's Units exists, nor is
one expected to develop.
(B) Title of Class Number of Unitholders of Record
Limited Partnership Units 8,159 as of December 31, 2000
There were 342,773 Units outstanding at December 31, 2000, of which affiliates
of the General Partner owned 183,867.50 Units or approximately 53.641%.
The following table sets forth the distributions declared by the Partnership for
the years ended December 31, 1998, 1999, 2000, and subsequent to December 31,
2000 (see "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations" for more details):
Distributions
Per Limited
Aggregate Partnership Unit
(in thousands)
01/01/98 - 12/31/98 $ 3,951 (1) $11.07
01/01/99 - 12/31/99 17,601 (2) 49.29
01/01/00 - 12/31/00 11,239 (3) 31.32
Subsequent to 12/31/00 3,828 (4) 10.64
(1) Distributions were made from cash from operations.
(2) Consists of approximately $12,544,000 of cash from operations and
approximately $5,057,000 of cash from surplus funds. The surplus funds
were from the financing at Point West Apartments and previously
undistributed refinance proceeds from 1996 and 1997. Of these amounts,
$4,318,000 was accrued at December 31, 1999. In January 2000,approximately
$4,113,000 of this distribution was paid and the remainder was accrued
at December 31, 2000.
(3) Consists of approximately $6,250,000 of cash from operations and
approximately $4,989,000 of cash from surplus cash. The surplus funds were
from the refinancing of The Apartments, Citadel Apartments, Stratford
Place Apartments, and River's Edge Apartments and sales proceeds from
Overlook Apartments sold in December 1999. Approximately $197,000 of this
distribution from surplus cash was accrued at December 31, 2000.
(4) Consists of approximately $1,218,000 from operations and approximately
$2,610,000 from surplus funds. The surplus funds were from sales proceeds
from Stratford Place Apartments sold in December 2000.
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves and the timing of the debt
maturities, refinancings and/or property sales. The Partnership's distribution
policy is reviewed on a quarterly basis. There can be no assurance, however,
that the Partnership will generate sufficient funds from operations after
required capital expenditures to permit further distributions to its partners in
the year 2001 or subsequent periods. See "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" for information
relating to anticipated capital expenditures at the properties.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 183,867.50 limited
partnership units in the Partnership representing 53.641% of the outstanding
units. A number of these units were acquired pursuant to tender offers made by
AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make
one or more additional offers to acquire additional limited partnership
interests in the Partnership for cash or in exchange for units in the operating
partnership of AIMCO. Under the Partnership Agreement, unitholders holding a
majority of the Units are entitled to take action with respect to a variety of
matters, which would include without limitation, voting on certain amendments to
the Partnership Agreement and voting to remove the General Partner. As a result
of its ownership of 53.641% of the outstanding units, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the General Partner because of their affiliation
with the General Partner.
Item 6. Selected Financial Data
The following table sets forth a summary of certain financial data for the
Partnership. Certain reclassifications have been made to the 1996 and 1997
information to conform to the 1998, 1999 and 2000 presentation. This summary
should be read in conjunction with the Partnership's consolidated financial
statements and notes thereto appearing in "Item 8. Financial Statements and
Supplementary Data."
Years Ended December 31,
(in thousands, except per unit data)
Consolidated Statements
of Operations 2000 1999 1998 1997 1996
Total revenues $ 33,687 $ 31,189 $ 30,093 $ 28,710 $ 27,907
Total expenses (25,006) (25,071) (26,164) (28,296) (28,780)
Income (loss) before
extraordinary items 8,681 6,118 3,929 414 (873)
Extraordinary items (207) -- (5) (47) 2,909
Net income $ 8,474 $ 6,118 $ 3,924 $ 367 $ 2,036
Per Limited Partnership Unit:
Income (loss) before
extraordinary items $ 24.31 $ 17.13 $ 11.00 $ 1.15 $ (2.45)
Extraordinary items (0.58) -- (0.01) (0.12) 8.15
Net income $ 23.73 $ 17.13 $ 10.99 $ 1.03 $ 5.70
Distributions per Limited
Partnership Unit $ 31.32 $ 49.29 $ 11.07 $ 7.01 $ 12.91
Limited Partnership Units
outstanding 342,773 342,773 342,773 342,773 342,783
Consolidated Balance Sheets
Total assets $ 38,870 $ 44,464 $ 50,671 $ 52,381 $ 53,844
Mortgage notes payable $ 71,791 $ 70,997 $ 70,775 $ 72,439 $ 71,763
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
INTRODUCTION
The matters discussed in this Form 10-K contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained in this Form 10-K and the other filings with the Securities and
Exchange Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations, including forward-looking
statements pertaining to such matters, does not take into account the effects of
any changes to the Registrant's business and results of operation. Accordingly,
actual results could differ materially from those projected in the
forward-looking statements as a result of a number of factors, including those
identified herein.
The operations of the Partnership primarily include operating and holding
income-producing real estate properties for the benefit of its partners.
Therefore, the following discussion of operations, liquidity and capital
resources will focus on these activities and should be read in conjunction with
"Item 8. Financial Statements and Supplementary Data" and the notes related
thereto included elsewhere in this report.
Results of Operations
The Partnership's income before extraordinary items totaled approximately
$8,681,000 for the year ended December 31, 2000, as compared to approximately
$6,118,000 for the year ended December 31, 1999 and income before extraordinary
items of approximately $3,929,000 for the year ended December 31, 1998. For the
year ended December 31, 2000, an increase in total revenues and a decrease in
expenses resulted in an increase in income before extraordinary items as
compared to 1999.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
2000 Compared to 1999
Revenues:
The increase in total revenues is attributable to increased gain on the sale of
investment properties, casualty gain, and other income for the year ended
December 31, 2000, as compared to the year ended December 31, 1999. The
Partnership recognized a gain on the sale of Stratford Place Apartments of
approximately $3,440,000 versus a gain on the sale of Overlook Apartments of
approximately $638,000 recognized in 1999. Excluding the results of Stratford
Place Apartments and Overlook Apartments, total revenues increased due to an
increase in rental and other income. The increase in rental income is due to
increased rental rates at the Partnership's investment properties accompanied by
increased occupancy levels at five of the properties, which more than offset
occupancy decreases at eight properties. The increase in rental income is also
due to increases in tenant reimbursements primarily at Arbor East Apartments. An
increase in bad debt expense at most of the Partnership's properties partially
offset the increase in rental income. A casualty gain of approximately $154,000
at Stratford Place Apartments due to a fire which damaged 12 apartment units
also contributed to the increase in total revenues for the year ended December
31, 2000. The increase in other income is primarily attributable to an increase
in interest income due to higher average balances being maintained in interest
bearing accounts.
Expenses:
Excluding the results of Stratford Place Apartments and Overlook Apartments,
total expenses increased due to increases in operating and interest expenses
partially offset by a decrease in general and administrative expenses. Operating
expenses increased due to reduced net insurance proceeds on casualties,
increased utility charges, and increased salary expenses; partially offset by
decreased interior building expenses and decreased snow removal charges. During
the twelve months ended December 31,1999, there were several small insurance
claims made and proceeds received, primarily at Nob Hill Villa Apartments. Fewer
similar claims were made during the twelve months ended December 31, 2000 at
various Partnership properties. The increase in interest expense is primarily
attributable to the new financing at Point West Apartments late in 1999 and due
to increased debt balances at The Apartments, Stratford Place Apartments, Rivers
Edge, and Citadel Apartments due to refinancings in 2000. General and
administrative expenses decreased due to a decrease in the 9% management fee on
distributions from operating cash flows partially offset by increases in the
cost of services included in the management reimbursements to the Managing
General Partner as allowed under the Partnership Agreement and in professional
fees. Extraordinary loss on early extinguishment of debt increased primarily due
to the refinancings at Stratford Place Apartments, The Apartments, and Citadel
Apartments (see discussions below).
On December 28, 2000, ConCap Stratford Associated, Ltd. sold Stratford Place
Apartments to an unaffiliated third party for $7,600,000. After payment of
closing costs of approximately $586,000, the net proceeds received by the
Partnership were approximately $2,508,000. The purchaser assumed the mortgage
encumbering the property of approximately $4,505,000. The gain on the sale
recognized during the fourth quarter of 2000 was approximately $3,440,000.
1999 Compared to 1998
Revenues:
The increase in total revenues is primarily attributable to increased rental
income for the year ended December 31, 1999, as compared to the year ended
December 31, 1998. These increases are due to increased rental rates at the
Partnership's investment properties accompanied by increased occupancy levels at
some of the properties which more than offset occupancy decreases at other
properties. An increase in bad debt expense at most of the Partnership's
properties partially offset the increase in rental income. The gain on the sale
of Overlook Apartments of approximately $638,000 recognized in 1999 also
contributed to the increase in total revenue versus a casualty gain of
approximately $363,000 recognized in 1998. Partially offsetting these increases
was a decrease in other income for 1999 as compared to 1998. The decrease in
other income is due to reduced interest income as a result of lower cash
balances being held in interest bearing accounts.
Expenses:
Total expenses decreased primarily due to reductions in operating expense and,
to a lesser extent, reductions in depreciation expenses partially offset by
increases in general and administrative expense and property tax expense.
Operating expenses decreased due to a decrease in maintenance expenses in 1999
due to the completion of repair and maintenance projects in 1998 as well as a
change in the Partnership's accounting policy as discussed above. In addition,
there were decreases in 1999 in expenses related to casualties at some of the
Partnership's properties incurred in 1998. Depreciation expense decreased due to
major assets at several of the Partnership's investment properties becoming
fully depreciated during 1999. General and administrative expenses increased
primarily due to an increase in the 9% management fee on distributions from
operating cash flows. Distributions from operations increased by approximately
$8,593,000 during 1999 as compared to 1998. In addition, legal expenses
increased due to the settlement of a lawsuit as discussed in the Partnership's
Form 10-K at December 31, 1998. Included in general and administrative expenses
at both December 31, 1999 and 1998, are reimbursements to the General Partner
allowed under the Partnership Agreement associated with the quarterly and annual
communications with investors and regulatory agencies and the annual audit
required by the Partnership Agreement are also included. Property tax expense
increased due to an increase in the assessed value at several of the
Partnership's properties.
On December 14, 1999, Overlook Associates, Ltd. sold Overlook to an unaffiliated
third party for $1,975,000. After payment of closing costs of approximately
$84,000 the net proceeds received by the Partnership were approximately
$1,891,000. The Partnership used most of the proceeds to pay off the mortgage
encumbering the property of approximately $1,780,000. The remaining net proceeds
were used to establish additional cash reserves for the Partnership. The
Partnership's gain on the sale during the fourth quarter of 1999 was
approximately $638,000.
LIQUIDITY AND CAPITAL RESOURCES
2000 Compared to 1999
At December 31, 2000, the Partnership held cash and cash equivalents of
approximately $6,377,0000 as compared to approximately $8,921,000 at December
31, 1999. The decrease in cash and cash equivalents of approximately $2,544,000
since the Partnership's year ended December 31, 1999 is due to approximately
$14,921,000 of cash used in financing activities, partially offset by
approximately $10,130,000 and $2,247,000 of cash provided by operating and
investing activities, respectively. Cash used in financing activities consisted
primarily of payoffs of mortgages on The Apartments, Citadel Apartments,
Stratford Place Apartments, and Rivers Edge Apartments due to refinancing,
distributions to partners, payment of new loan costs, payments of principal on
the mortgages encumbering the Partnership's properties, and prepayment penalties
associated with the repaid mortgages, partially offset by proceeds from the
refinancing of The Apartments, Citadel Apartments, Stratford Place Apartments,
and Rivers Edge Apartments. Cash provided by investing activities consisted
primarily of proceeds from the sale of Stratford Place Apartments, net
withdrawals from restricted escrows, and insurance proceeds received from a fire
at Stratford Place Apartments (see discussion below), partially offset by
property improvements and replacements. The Partnership invests its excess cash
in interest bearing accounts.
In January 2000, Stratford Place Apartments had a fire which damaged 12
apartment units and 30% of the roof. Insurance proceeds of approximately
$354,000 were received during the year ended December 31, 2000. The Managing
General Partner successfully completed the repairs prior to the sale of the
property on December 28, 2000. The Partnership recognized a casualty gain of
approximately $154,000 for the year ended December 31, 2000.
1999 Compared to 1998
At December 31, 1999, the Partnership held cash and cash equivalents of
approximately $8,921,000 as compared to approximately $13,241,000 at December
31, 1998. The decrease in cash and cash equivalents of approximately $4,320,000
since the Partnership's year ended December 31, 1998 is due to approximately
$13,108,000 and $1,975,000 of cash used in financing and investing activities,
respectively, partially offset by approximately $10,763,000 of cash provided by
operating activities. Cash used in financing activities consisted primarily of
distributions to partners and, to a lesser extent, payments of principal on the
mortgages encumbering the Partnership's properties, payoff of the Overlook
mortgage, and payment of loan costs slightly offset by proceeds from the
financing of Point West Apartments. Cash used in investing activities consisted
primarily of property improvements and replacements, which was partially offset
by proceeds from the sale of Overlook and net withdrawals from restricted
escrows. The Partnership invests its working capital reserves in money market
accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership and to comply with Federal,
state, and local legal and regulatory requirements. The Partnership is currently
evaluating the capital improvement needs of the properties for the upcoming
year. The minimum amount to be budgeted is expected to be $275 per unit or
$1,040,600. Additional improvements may be considered and will depend on the
physical condition of the properties as well as replacement reserves and
anticipated cash flow generated by the properties. The additional capital
expenditures will be incurred only if cash is available from operations or from
Partnership reserves. To the extent that such budgeted capital improvements are
completed, the Partnership's distributable cash flow, if any, may be adversely
affected at least in the short term.
The Partnership's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $71,791,000 matures at various dates between 2003
and 2020.
On August 31, 2000, the Partnership refinanced the mortgage encumbering Rivers
Edge Apartments. The refinancing replaced mortgage indebtedness of approximately
$1,895,000 with a new mortgage of $4,000,000. The mortgage was refinanced at a
rate of 7.82% compared to a prior rate of 8.40% and matures on September 1,
2020. Capitalized loan costs incurred for the refinancing were approximately
$90,000. There was no extraordinary loss recognized due to the refinancing
occurring at the maturity of the prior mortgage.
On May 31, 2000, the Partnership refinanced the mortgage encumbering Stratford
Place Apartments. The refinancing replaced mortgage indebtedness of
approximately $2,493,000 with a new mortgage of $4,550,000. The mortgage was
refinanced at a rate of 8.48% compared to the prior rate of 8.65% and matures on
June 1, 2020. Capitalized loan costs incurred for the refinancing were
approximately $149,000. The Partnership wrote off approximately $4,000 in
unamortized loan costs and paid prepayment penalties of approximately $1,000
resulting in an extraordinary loss on early extinguishment of debt of
approximately $5,000. On December 28, 2000, the Partnership sold Stratford Place
Apartments to an unaffiliated third party whom assumed the mortgage encumbering
the property. The Partnership wrote off the unamortized loan costs resulting in
an additional extraordinary loss on early extinguishment of debt of
approximately $143,000.
On February 28, 2000, the Partnership refinanced the mortgage encumbering
Citadel Apartments. The refinancing replaced mortgage indebtedness of
approximately $4,548,000 with a new mortgage of $4,710,000. The mortgage was
refinanced at a rate of 8.25% compared to the prior rate of 8.38% and matures on
March 1, 2020. Capitalized loan costs incurred for the refinancing were
approximately $142,000. The Partnership wrote off approximately $19,000 in
unamortized loan costs and paid prepayment penalties of approximately $7,000
resulting in an extraordinary loss on early extinguishment of debt of
approximately $26,000.
On February 2, 2000, the Partnership refinanced the mortgage encumbering The
Apartments. The refinancing replaced mortgage indebtedness of approximately
$3,288,000 with a new mortgage of $4,775,000. The mortgage was refinanced at a
rate of 8.37% compared to the prior rate of 8.34% and matures on March 1, 2020.
Capitalized loan costs incurred for the refinancing were approximately $129,000.
The Partnership wrote off approximately $11,000 in unamortized loan costs and
paid prepayment penalties of approximately $22,000 resulting in an extraordinary
loss on early extinguishment of debt of approximately $33,000.
On November 9, 1999, the Partnership obtained financing on Point West Apartments
in the amount of $2,460,000. The mortgage was financed at a rate of 7.86% and
matures on December 1, 2019. Capitalized loan costs incurred for the financing
were approximately $47,000 during the year ended December 31, 1999. An
additional $20,000 of loan costs were incurred during the year ended December
31, 2000.
Subsequent to year end, the Partnership declared and paid distributions of
approximately $1,188,000 (approximately $1,140,000 to the limited partners or
$3.33 per limited partnership unit) from operations and approximately $2,610,000
(approximately $2,506,000 to the limited partners or $7.31 per limited
partnership unit) from sales proceeds of Stratford Place Apartments which sold
in December of 2000. Approximately $104,000 is payable to the General Partner
and special limited partners from the sale proceeds as this portion is
subordinated and deferred per the Partnership Agreement until the limited
partners receive 100% of their original capital contributions from surplus
funds. In conjunction with the transfer of funds from their certain
majority-owned sub-tier limited partnerships to the Partnership, approximately
$30,000 was distributed subsequent to year end to the general partner of the
majority owned sub-tier limited partnerships.
During 2000, the Partnership declared distributions of approximately $11,183,000
(approximately $10,736,000 to the limited partners or $31.32 per limited
partnership unit) consisting of approximately $6,194,000 (approximately
$5,947,000 to the limited partners or $17.35 per limited partnership unit) from
operations and approximately $4,989,000 (approximately $4,789,000 to the limited
partners or $13.97 per limited partnership unit) of refinancing proceeds from
The Apartments, Citadel Apartments, Rivers Edge Apartments, and Stratford Place
Apartments and sale proceeds from Overlook Apartments which sold December 1999.
Approximately $197,000 of the distribution from proceeds was payable at December
31, 2000 to the General Partner and special limited partners as this
distribution is subordinated and deferred per the Partnership Agreement until
the limited partners receive 100% of their original capital contributions from
surplus funds. In conjunction with the transfer of funds from their certain
majority-owned sub-tier limited partnerships to the Partnership, approximately
$56,000 was distributed to the general partner of the majority owned sub-tier
limited partnerships.
During 1999, the Partnership paid distributions of approximately $13,283,000
(approximately $12,730,000 to the limited partners or $37.14 per limited
partnership unit) consisting of cash flow from operations totaling approximately
$10,670,000 (approximately $10,117,000 to the limited partners or $29.52 per
limited partnership unit) and approximately $2,613,000 (all to the limited
partners or $7.62 per limited partnership unit) representing funds from
previously undistributed refinance proceeds from 1996 and 1997. As of December
31, 1999, the Partnership had a distribution payable of approximately $4,318,000
(approximately $3,921,000 to the limited partners or $11.44 per limited
partnership unit) consisting of cash from operations of approximately $1,874,000
(approximately $1,679,000 to the limited partners or $4.90 per limited
partnership unit) and a distribution of refinance proceeds representing funds
from the financing of Point West Apartments of approximately $2,444,000
(approximately $2,242,000 to the limited partners or $6.54 per limited
partnership unit).In January 2000, approximately $4,113,000 of this distribution
was paid and the remainder was accrued at December 31, 2000.
During 1998, the Partnership declared and paid distributions attributable to
cash flow from operations totaling approximately $3,951,000 (approximately
$3,793,000 to the limited partners or $11.07 per limited partnership unit).
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves, and the timing of debt
maturities, refinancings, and/or property sales. The Partnership's distribution
policy is reviewed on a quarterly basis. There can be no assurance, however,
that the Partnership will generate sufficient funds from operations after
required capital expenditures to permit further distributions to its partners in
the year 2001 or subsequent periods.
On September 16, 2000, the Partnership sought the vote of the limited partners
to amend the Partnership Agreement to eliminate the requirement for the
Partnership to maintain reserves equal to at least 5% of the limited partners'
capital contributions less distributions as reserve requirements of the
Partnership. The vote, sought pursuant to a Consent Solicitation, expired on
October 16, 2000 at which time the amendment was approved by the requisite
percent of limited partnership units.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 183,867.50 limited
partnership units in the Partnership representing 53.641% of the outstanding
units. A number of these units were acquired pursuant to tender offers made by
AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make
one or more additional offers to acquire additional limited partnership
interests in the Partnership for cash or in exchange for units in the operating
partnership of AIMCO. Under the Partnership Agreement, unitholders holding a
majority of the Units are entitled to take action with respect to a variety of
matters, which would include without limitation, voting on certain amendments to
the Partnership Agreement and voting to remove the General Partner. As a result
of its ownership of 53.641% of the outstanding units, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the General Partner because of their affiliation
with the General Partner.
Item 7a. Market Risk Factors
The Partnership is exposed to market risks from adverse changes in interest
rates. In this regard, changes in U.S. interest rates affect the interest earned
on the Partnership's cash and cash equivalents as well as interest paid on its
indebtedness. As a policy, the Partnership does not engage in speculative or
leveraged transactions, nor does it hold or issue financial instruments for
trading purposes. The Partnership is exposed to changes in interest rates
primarily as a result of its borrowing activities used to maintain liquidity and
fund business operations. To mitigate the impact of fluctuations in U.S.
interest rates, the Partnership maintains its debt as fixed rate in nature by
borrowing on a long-term basis. Based on interest rates at December 31, 2000, a
100 basis point increase or decrease in market interest rate would not have a
material impact on the Partnership.
The following table summarizes the Partnership's debt obligations at December
31, 2000. The interest rates represent the weighted-average rates. The fair
value of the the debt obligations approximated the recorded value as of December
31, 2000.
Long-term Debt
Principal amount by expected maturity: Fixed Rate Debt Average Interest Rate
(in thousands)
2001 $ 542 8.11%
2002 588 8.11%
2003 9,389 7.92%
2004 4,807 8.11%
2005 42,812 7.51%
Thereafter 13,653 8.07%
Total $71,791
Item 8. Financial Statements and Supplementary Data
CONSOLIDATED CAPITAL PROPERTIES IV
LIST OF FINANCIAL STATEMENTS
Report of Ernst & Young LLP, Independent Auditors
Consolidated Balance Sheets - December 31, 2000 and 1999
Consolidated Statements of Operations - Years ended December 31, 2000,
1999 and 1998
Consolidated Statements of Changes in Partners' Deficit - Years ended
December 31, 2000, 1999, and 1998
Consolidated Statements of Cash Flows - Years ended December 31, 2000,
1999 and 1998
Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Consolidated Capital Properties IV
We have audited the accompanying consolidated balance sheets of Consolidated
Capital Properties IV as of December 31, 2000 and 1999, and the related
consolidated statements of operations, changes in partners' deficit, and cash
flows for each of the three years in the period ended December 31, 2000. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Partnership's management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Consolidated
Capital Properties IV at December 31, 2000 and 1999, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.
/s/ERNST & YOUNG LLP
Greenville, South Carolina
March 15, 2001
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
December 31,
2000 1999
Assets (Restated)
Cash and cash equivalents $ 6,377 $ 8,921
Receivables and deposits 1,854 2,162
Restricted escrows 900 1,402
Other assets 1,497 1,403
Investment properties (Notes D and H):
Land 10,907 12,094
Buildings and related personal property 120,607 122,539
131,514 134,633
Less accumulated depreciation (103,272) (104,057)
28,242 30,576
$ 38,870 $ 44,464
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 1,021 $ 960
Tenant security deposit liabilities 488 506
Accrued property taxes 1,311 1,284
Other liabilities 1,510 1,287
Distribution payable 402 4,318
Mortgage notes payable (Note D) 71,791 70,997
76,523 79,352
Partners' Deficit
General partners (6,798) (6,634)
Limited partners (342,773 units issued and
outstanding) (30,855) (28,254)
(37,653) (34,888)
$ 38,870 $ 44,464
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
2000 1999 1998
Revenues:
Rental income $27,859 $28,533 $27,620
Other income 2,234 2,018 2,110
Gain on sale of investment property 3,440 638 --
Casualty gain 154 -- 363
Total revenues 33,687 31,189 30,093
Expenses:
Operating 11,242 11,146 12,449
General and administrative 1,844 1,942 1,188
Depreciation 4,161 4,398 4,871
Interest 5,851 5,661 5,840
Property taxes 1,908 1,924 1,816
Total expenses 25,006 25,071 26,164
Income before extraordinary items 8,681 6,118 3,929
Extraordinary loss on early extinguishment of
debt (Note D) (207) -- --
Extraordinary loss on retirement of debt -- -- (5)
Net income (Note J) $ 8,474 $ 6,118 $ 3,924
Net income allocated to general partners (4%) $ 339 $ 245 $ 157
Net income allocated to limited partners (96%) 8,135 5,873 3,767
Net income $ 8,474 $ 6,118 $ 3,924
Net income per limited partnership unit:
Income before extraordinary items $ 24.31 $ 17.13 $ 11.00
Extraordinary loss on early extinguishment
of debt (0.58) -- --
Extraordinary loss on retirement of debt -- -- (0.01)
Net income per limited partnership unit $ 23.73 $ 17.13 $ 10.99
Distributions per limited partnership unit $ 31.32 $ 49.29 $ 11.07
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partners Partners Total
Original capital contributions 343,106 $ 1 $171,553 $171,554
Partners' deficit at
December 31, 1997 342,773 $ (6,174) $(17,204) $(23,378)
Net income for the year ended
December 31, 1998 -- 157 3,767 3,924
Distributions to partners -- (158) (3,793) (3,951)
Partners' deficit at
December 31, 1998 342,773 (6,175) (17,230) (23,405)
Net income for the year ended
December 31, 1999 -- 245 5,873 6,118
Distributions to partners -- (704) (16,897) (17,601)
Partners' deficit at
December 31, 1999 342,773 (6,634) (28,254) (34,888)
Net income for the year ended
December 31, 2000 -- 339 8,135 8,474
Distributions to partners -- (503) (10,736) (11,239)
Partners' deficit at
December 31, 2000 342,773 $ (6,798) $(30,855) $(37,653)
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2000 1999 1998
Cash flows from operating activities: (Restated)
Net income $ 8,474 $ 6,118 $ 3,924
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 4,161 4,398 4,871
Amortization of loan costs 281 315 317
Gain on sale of investment property (3,440) (638) --
Casualty gain (154) -- (363)
Extraordinary loss on early extinguishment of
debt 207 -- --
Extraordinary loss on retirement of debt -- -- 5
Change in accounts:
Receivables and deposits 327 32 (344)
Other assets (22) (203) 115
Accounts payable 61 581 (147)
Tenant security deposit liabilities (18) (62) (12)
Accrued property taxes 27 (25) (3)
Other liabilities 228 247 111
Net cash provided by operating activities 10,132 10,763 8,474
Cash flows from investing activities:
Property improvements and replacements (5,624) (5,207) (3,717)
Net proceeds from sale of investment property 2,508 1,891 --
Collections on notes receivable -- -- 48
Net withdrawals from restricted escrows 502 1,341 431
Net insurance proceeds from casualties 354 -- 487
Net cash provided by (used in) investing
activities (2,260) (1,975) (2,751)
Cash flows from financing activities:
Payments on mortgage notes payable (512) (458) (437)
Repayment of mortgage notes payable (12,224) (1,780) (194)
Proceeds from mortgage notes payable 18,035 2,460 --
Prepayment penalties (30) -- (5)
Loan costs paid (530) (47) (17)
Distributions to partners (15,155) (13,283) (3,919)
Net cash used in financing activities (10,416) (13,108) (4,572)
Net (decrease) increase in cash and cash equivalents (2,544) (4,320) 1,151
Cash and cash equivalents at beginning of the year 8,921 13,241 12,090
Cash and cash equivalents at end of year $ 6,377 $ 8,921 $ 13,241
Supplemental disclosure of noncash activity:
Extinguishment of debt in connection with sale of
investment property $ 4,505 $ -- $ --
Supplemental Disclosures of Cash Flow Information and Non-Cash Activities:
At December 31, 2000, distributions payable and distributions to partners were
each adjusted by $197,000 for non-cash activity.
At December 31, 1999, distributions to partners of approximately $4,318,000 were
declared and approximately $4,113,000 of this balance was paid during the year
ended December 31, 2000. The remaining balance is deferred per the Partnership
Agreement.
At December 31, 1998, notes and interest receivable and mortgage notes payable
were adjusted by approximately $1,033,000 related to Denbigh Wood Apartments
(see "Note E"), and distributions were adjusted by approximately $32,000,
respectively, for non-cash activity.
Cash paid for interest was approximately $5,552,000, $5,372,000 and $5,528,000
for the years ended December 31, 2000, 1999, and 1998, respectively.
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000
Note A - Organization and Significant Accounting Policies
Organization: Consolidated Capital Properties IV (the "Partnership" or
"Registrant"), a California limited partnership, was formed on September 22,
1981, to operate and hold real estate properties. The general partner of the
Partnership is ConCap Equities, Inc. (the "General Partner" or "CEI"), a
Delaware corporation. Additionally, the General Partner is a subsidiary of
Apartment Investment and Management Company ("AIMCO"). The directors and
officers of the General Partner also serve as executive officers of AIMCO. The
Partnership Agreement provides that the Partnership is to terminate on December
31, 2011 unless terminated prior to that date. As of December 31, 2000, the
Partnership operates 15 residential properties in or near major urban areas in
the United States.
Upon the Partnership's formation in 1981, Consolidated Capital Equities
Corporation ("CCEC"), a Colorado corporation, was the corporate general partner
and Consolidated Capital Management Company ("CCMC"), a California general
partnership, was the non-corporate general partner. In 1988, through a series of
transactions, Southmark Corporation ("Southmark") acquired controlling interest
in CCEC. In December 1988, CCEC filed for reorganization under Chapter 11 of the
United States Bankruptcy Code. In 1990, as part of CCEC's reorganization plan,
CEI acquired CCEC's general partner interests in the Partnership and in 15 other
affiliated public limited partnerships (the "Affiliated Partnerships") and CEI
replaced CCEC as managing general partner in all 16 partnerships. The selection
of CEI as the sole managing general partner was approved by a majority of the
limited partners in the Partnership and in each of the Affiliated Partnerships
pursuant to a solicitation of the Limited Partners dated August 10, 1990. As
part of the solicitation, the Limited Partners also approved an amendment to the
Partnership Agreement to limit changes of control of the Partnership, and the
conversion of CCMC from a general partner to a Special Limited Partner, thereby
leaving CEI as the sole general partner of the Partnership. On November 14,
1990, CCMC was dissolved and its Special Limited Partnership interest was
divided among its former partners.
All of CEI's outstanding stock is owned by Insignia Properties Trust ("IPT"),
which is an affiliate of AIMCO. In December 1994, the parent of GII Realty,
Inc., entered into a transaction (the "Insignia Transaction") in which an
affiliate of Insignia acquired an option (exercisable in whole or in part from
time to time) to purchase all of the stock of GII Realty, Inc. and, pursuant to
a partial exercise of such option, acquired 50.5% of that stock. As part of the
Insignia Transaction, the Insignia affiliate also acquired all of the
outstanding stock of Partnership Services, Inc., an asset management entity, and
a subsidiary of Insignia acquired all of the outstanding stock of Coventry
Properties, Inc., a property management entity. In addition, confidentiality,
non-competition, and standstill arrangements were entered into between certain
of the parties. Those arrangements, among other things, prohibit GII Realty's
former sole shareholder from purchasing Partnership Units for a period of three
years. On October 24, 1995, the Insignia affiliate exercised the remaining
portion of its option to purchase all of the remaining outstanding capital stock
of GII Realty, Inc.
Consolidation: The consolidated financial statements include the Partnership's
majority interest in a joint venture which owns South Port Apartments. The
Partnership has the ability to control the major operating and financial
policies of the joint venture. No minority interest has been reflected for the
joint venture because minority interests are limited to the extent of their
equity capital, and losses in excess of the minority interest equity capital are
charged against the Partnership's interest. Should the losses reverse, the
Partnership would be credited with the amount of minority interest losses
previously absorbed.
The Partnership's consolidated financial statements also include the accounts of
the Partnership, its wholly-owned partnerships, and its 99% limited partnership
interest in Briar Bay Apartments Associates, Ltd., Post Ridge Associates, Ltd.,
Concap River's Edge Associates, Ltd., Foothill Chimney Associates, L.P., and
ConCap Stratford Associates, Ltd. The Partnership may remove the general partner
of its 99% owned partnerships; therefore, the partnerships are deemed controlled
and therefore consolidated by the Partnership. All significant interpartnership
balances have been eliminated.
Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, in
banks and money market accounts. At certain times, the amount of cash deposited
at a bank may exceed the limit on insured deposits. Cash balances include
approximately $2,899,000 and $218,000 at December 31, 2000 and 1999,
respectively, that are maintained by the affiliated management company on behalf
of affiliated entities in a cash concentration account.
Security Deposits: The Partnership requires security deposits from lessees for
the duration of the lease and such deposits are included in receivables and
deposits. Deposits are refunded when the tenant vacates, provided the tenant has
not damaged its space and is current on its rental payments.
Restricted Escrows:
Capital Improvement Reserves - At the time of the refinancing of the
mortgage note payable encumbering Nob Hill Villa, $219,000 of the proceeds
were designated for certain capital improvements. At the time of the
refinancing of the mortgages note payable encumbering the Arbours of
Hermitage, Briar Bay, Chimney Hill, Citadel Village, Foothill Place,
Knollwood, and Village East, approximately $1,145,000 was designated for
certain capital improvements. At the time of the refinancing of the
mortgage note payable encumbering Lake Forest, $555,000 of the proceeds
were designated for certain capital improvements. At the time of the
refinancing of the mortgage note payable encumbering South Port, $238,000
of the proceeds were designated for certain capital improvements. At
December 31, 2000, the total remaining escrow balance is approximately
$213,000 for South Port Apartments. The capital improvement reserves for
the Arbours of Hermitage, Briar Bay, Chimney Hill, Citadel Village,
Foothill Place, Knollwood and Village East had been fully utilized as of
December 31, 2000.
Replacement Reserve Account - At the time of the refinancing of the
mortgage notes payable encumbering the Arbours of Hermitage, Briar Bay,
Chimney Hill, Citadel Village, Foothill Place, Knollwood, and Village
East, $507,000 of the proceeds, ranging from $191 to $325 per unit, were
designated for replacement reserves. At the time of the refinancing of the
mortgage note payable encumbering Post Ridge, $389,000 of the proceeds
were designated for replacement reserves. These funds were established to
cover necessary repairs and replacements of existing improvements. At
December 31, 2000, the total remaining reserve balance was approximately
$687,000.
Investments in Real Estate: Investment properties consist of fifteen apartment
complexes, which are stated at cost. Acquisition fees are capitalized as a cost
of real estate. In accordance with Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of", the Partnership records impairment losses
on long-lived assets used in operations when events and circumstances indicate
that the assets might be impaired and the undiscounted cash flows estimated to
be generated by those assets are less than the carrying amounts of those assets.
The impairment loss is measured by comparing the fair value of the assets to its
carrying amount. Costs of apartment properties that have been permanently
impaired have been written down to appraised value. No adjustments for
impairment of value were recorded in any of the years ended December 31, 2000,
1999, or 1998.
Depreciation: Depreciation is provided by the straight-line method over the
estimated lives of the investment properties and related personal property. For
Federal income tax purposes, the accelerated cost recovery method is used (1)
for real property over 18 years for additions after March 15, 1984, and before
May 9, 1985, and 19 years for additions after May 8, 1985 and before January 1,
1987, and (2) for personal property over 5 years for additions prior to January
1, 1987. As a result of the Tax Reform Act of 1986, for additions after December
31, 1986, the alternative depreciation system is used for depreciation of (1)
real property over 40 years and (2) personal property additions over 5-20 years.
Leases: The Partnership generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its leases. In addition,
the General Partner's policy is to offer rental concessions during particularly
slow months or in response to heavy competition from other similar complexes in
the area. Concessions are charged against rental income as incurred.
Loan Costs: Loan costs, net of accumulated amortization, of $1,180,000,
$1,119,000 and $1,377,000 at December 31, 2000, 1999 and 1998, respectively, are
amortized using the straight-line method over the lives of the related mortgage
notes. Unamortized loan costs are included in other assets. Amortization of loan
costs is included in interest expense.
Fair Value of Financial Statements: SFAS No. 107, "Disclosures about Fair Value
of Financial Instruments", as amended by SFAS No. 119, "Disclosures about
Derivative Financial Instruments and Fair Value of Financial Instruments",
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate fair value. Fair value is defined in the SFAS as the amount at which
the instruments could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. The Partnership believes
that the carrying amount of its financial instruments (except for long term
debt) approximates their fair value due to the short term maturity of these
instruments. The fair value of the Partnership's long term debt, after
discounting the scheduled loan payments to maturity, approximates its carrying
balance.
Allocation of Net Income and Net Loss: The Partnership Agreement provides for
net income (losses) and distributions of distributable cash from operations to
be allocated generally 96% to the Limited Partners and 4% to the General
Partner.
Net Income (Loss) Per Limited Partnership Unit: Net income (loss) per Limited
Partnership Unit is computed by dividing net income (loss) allocated to the
Limited Partners by the number of Units outstanding. Per Unit information has
been computed based on the number of Units outstanding at the beginning of each
year.
Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information" established standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports. It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. As defined in SFAS No. 131, the Partnership has only one reportable
segment. The General Partner believes that segment-based disclosures will not
result in a more meaningful presentation than the consolidated financial
statements as currently presented.
Advertising Costs: Advertising costs of approximately $543,000, $549,000 and
$482,000 in 2000, 1999 and 1998, respectively, are charged to operating
expense as incurred.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Commitments: On September 16, 2000, the Partnership sought the vote of the
limited partners to amend the Partnership Agreement to eliminate the requirement
for the Partnership to maintain reserves equal to at least 5% of the limited
partners' capital contributions less distributions as reserve requirements of
the Partnership. The vote, sought pursuant to a Consent Solicitation, expired on
October 16, 2000 at which time the amendment was approved by the requisite
percent of limited partnership units.
Reclassification: Certain reclassifications have been made to the 1999
balances to conform to the 2000 presentation.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and IPT merged into AIMCO, a
publicly traded real estate investment trust, with AIMCO being the surviving
corporation (the "Insignia Merger"). As a result, AIMCO acquired 100% ownership
interest in the General Partner. The General Partner does not believe that this
transaction has had or will have a material effect on the affairs and operations
of the Partnership.
Note C - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all of the Partnership
activities. The Partnership Agreement provides for certain payments to
affiliates for services and as reimbursements of certain expenses incurred by
affiliates on behalf of the Partnership. The following transactions with the
General Partner and/or its affiliates were incurred in 2000, 1999 and 1998:
2000 1999 1998
(in thousands)
Property management fees (included in
operating expense) $1,515 $1,547 $1,478
Reimbursements for services of affiliates
(included in investment property,
general and administrative expense
and operating expense) 1,103 565 627
Partnership management fee (included in
general and administrative expense) 535 1,084 341
Loan costs (included in other assets) 180 25 7
Real estate commission 268 -- --
During the years ended December 31, 2000, 1999 and 1998, affiliates of the
General Partner were entitled to receive 5% of gross receipts from all of the
Partnership's properties as compensation for providing property management
services. The Partnership paid to such affiliates approximately $1,515,000,
$1,547,000 and $1,478,000 for the years ended December 31, 2000, 1999 and 1998,
respectively.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $1,103,000, $565,000 and
$627,000, for the years ended December 31, 2000, 1999 and 1998, respectively.
The Limited Partnership Agreement ("Partnership Agreement") provides for a
special management fee equal to 9% of the total distributions made to the
limited partners from cash flow provided by operations to be paid to the General
Partner for executive and administrative management services. Affiliates of the
General Partner of the Partnership earned approximately $535,000, $1,084,000 and
$341,000 under this provision of the Partnership Agreement for the years ended
December 31, 2000, 1999 and 1998, respectively.
In addition to reimbursement for services of affiliates, the Partnership paid an
affiliate of the General Partner approximately $180,000, $25,000, and $7,000 in
2000, 1999 and 1998, respectively, for loan costs which are capitalized and
included in other assets on the consolidated balance sheets. These loan costs
were associated with the refinancing of four of the Partnership's properties in
2000 and one of the Partnership's properties in 1999 (see "Note D").
For acting as real estate broker in connection with the sale of Overlook
Apartments in December 1999, the General Partner was paid a real estate
commission of approximately $40,000 during the year ended December 31, 2000. For
acting as real estate broker in connection with the sale of Stratford Place
Apartments, the General Partner earned a real estate commission of approximately
$228,000. The commission is accrued at December 31, 2000. When the Partnership
terminates, the General Partner will have to return these commissions if the
limited partners do not receive their original invested capital plus a 6% per
annum cumulative return.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 183,867.50 limited
partnership units in the Partnership representing 53.641% of the outstanding
units. A number of these units were acquired pursuant to tender offers made by
AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make
one or more additional offers to acquire additional limited partnership
interests in the Partnership for cash or in exchange for units in the operating
partnership of AIMCO. Under the Partnership Agreement, unitholders holding a
majority of the Units are entitled to take action with respect to a variety of
matters, which would include without limitation, voting on certain amendments to
the Partnership Agreement and voting to remove the General Partner. As a result
of its ownership of 53.641% of the outstanding units, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the General Partner because of their affiliation
with the General Partner.
Note D - Mortgage Notes Payable
The principle terms of mortgage notes payable are as follows:
Principal Principal Monthly Principal
Balance At Balance At Payment Stated Balance
December 31, December 31, Including Interest Maturity Due At
Property 2000 1999 Interest Rate Date Maturity
The Apartments $ 4,703 $ 3,294 $ 41 (c) 8.37% 03/20 $ --
Arbours of Hermitage
Apartments 5,650 5,650 33 (a) 6.95% 12/05 5,650
Briar Bay Racquet Club
Apartments 3,500 3,500 20 (a) 6.95% 12/05 3,500
Chimney Hill Apartments 5,400 5,400 31 (a) 6.95% 12/05 5,400
Citadel Apartments 4,638 4,565 40 (d) 8.25% 03/20 --
Citadel Village Apartments 2,450 2,450 14 (a) 6.95% 12/05 2,450
Foothill Place Apartments 10,100 10,100 58 (a) 6.95% 12/05 10,100
Knollwood Apartments 6,780 6,780 39 (a) 6.95% 12/05 6,780
Lake Forest Apartments 4,700 4,700 29 (a) 7.33% 11/03 4,700
Nob Hill Villa Apartments 6,926 7,050 64 9.20% 04/05 6,250
Point West Apartments 2,407 2,460 20 (b) 7.86% 12/19 --
Post Ridge Apartments 4,050 4,050 25 (a) 7.33% 11/03 4,050
Rivers Edge Apartments 3,979 1,924 33 (e) 7.82% 09/20 --
South Port Apartments 4,358 4,409 31 7.19% 12/04 4,119
Stratford Place Apartments -- 2,515 -- (f) 8.65% 09/00 --
Village East Apartments 2,150 2,150 12 (a) 6.95% 12/05 2,150
Total $71,791 $70,997 $ 490 $55,149
(a) Monthly payments of interest only at the stated rate until maturity.
(b) Debt was obtained effective November 9, 1999 (see below for further
explanation).
(c) Debt was obtained effective February 2, 2000 (see below for further
explanation).
(d) Debt was obtained effective February 28, 2000 (see below for further
explanation).
(e) Debt was obtained effective August 31, 2000 (see below for further
explanation).
(f) On December 28, 2000, the Partnership sold Stratford Place Apartments to
an unaffiliated third party.
On August 31, 2000, the Partnership refinanced the mortgage encumbering Rivers
Edge Apartments. The refinancing replaced mortgage indebtedness of approximately
$1,895,000 with a new mortgage of $4,000,000. The mortgage was refinanced at a
rate of 7.82% compared to a prior rate of 8.40% and matures on September 1,
2020. Capitalized loan costs incurred for the refinancing were approximately
$90,000. There was no extraordinary loss recognized due to the refinancing
occurring at the maturity of the prior mortgage.
On May 31, 2000, the Partnership refinanced the mortgage encumbering Stratford
Place Apartments. The refinancing replaced mortgage indebtedness of
approximately $2,493,000 with a new mortgage of $4,550,000. The mortgage was
refinanced at a rate of 8.48% compared to the prior rate of 8.65% and matures on
June 1, 2020. Capitalized loan costs incurred for the refinancing were
approximately $149,000. The Partnership wrote off approximately $4,000 in
unamortized loan costs and paid prepayment penalties of approximately $1,000
resulting in an extraordinary loss on early extinguishment of debt of
approximately $5,000. On December 20, 2000, the Partnership sold Stratford Place
Apartments to an unaffiliated third party whom assumed the mortgage encumbering
the property. The Partnership wrote off the unamortized loan costs resulting in
an additional extraordinary loss on early extinguishment of debt of
approximately $143,000.
On February 28, 2000, the Partnership refinanced the mortgage encumbering
Citadel Apartments. The refinancing replaced mortgage indebtedness of
approximately $4,548,000 with a new mortgage of $4,710,000. The mortgage was
refinanced at a rate of 8.25% compared to the prior rate of 8.38% and matures on
March 1, 2020. Capitalized loan costs incurred for the refinancing were
approximately $142,000. The Partnership wrote off approximately $19,000 in
unamortized loan costs and paid prepayment penalties of approximately $7,000
resulting in an extraordinary loss on early extinguishment of debt of
approximately $26,000.
On February 2, 2000, the Partnership refinanced the mortgage encumbering The
Apartments. The refinancing replaced mortgage indebtedness of approximately
$3,288,000 with a new mortgage of $4,775,000. The mortgage was refinanced at a
rate of 8.37% compared to the prior rate of 8.34% and matures on March 1, 2020.
Capitalized loan costs incurred for the refinancing were approximately $129,000.
The Partnership wrote off approximately $11,000 in unamortized loan costs and
paid prepayment penalties of approximately $22,000 resulting in an extraordinary
loss on early extinguishment of debt of approximately $33,000.
On November 9, 1999, the Partnership obtained financing on Point West Apartments
in the amount of $2,460,000. The mortgage was financed at a rate of 7.86% and
matures on December 1, 2019. Capitalized loan costs incurred for the financing
were approximately $47,000 during the year ended December 31, 1999. An
additional $20,000 of loan costs were incurred during the year ended December
31, 2000.
The notes payable represent borrowings on the properties purchased by the
Partnership. The notes are non-recourse, and are collateralized by deeds of
trust on the investment properties. The notes mature between 2003 and 2020 and
bear interest at rates ranging from 6.95% to 9.20%. Various mortgages require
prepayment penalties if repaid prior to maturity. Further, the properties may
not be sold subject to existing indebtedness.
Future annual principal payments required under the terms of the mortgage notes
payable subsequent to December 31, 2000, are as follows (in thousands):
2001 $ 542
2002 588
2003 9,389
2004 4,807
2005 42,812
Thereafter 13,653
Total $71,791
Note E - Sale of Real Estate
In August 1994, the Partnership sold the Denbigh Woods Apartments. In connection
with the sale, the Partnership accepted a $1,200,000 wrap-note receivable and
received net sales proceeds of $881,000. The wrap-note receivable accrued
interest at an annual rate of 9%, required monthly payments of principal and
interest totaling $11,814, and matured in March 1996. The Partnership negotiated
with the purchaser to extend the note on a number of occasions, at the same
interest rate, ultimately until December 31, 1998. All other terms of the note
remain unchanged. Since the wrap-around promissory note was subordinate and
inferior to the first-lien mortgages, the Partnership remained obligated under
two underlying first-lien mortgages totaling approximately $1,248,000 which were
secured by the Denbigh Woods Apartments. Pursuant to the sale contract, the
Partnership received, from the purchaser, a capital improvement escrow totaling
$150,000. After completion in 1997 of certain repairs and capital improvements
at the property, the Partnership fully reimbursed the purchaser the balance
remaining in the escrow account. The two mortgages, as well as the note and any
accrued interest receivable, were repaid in full on December 31, 1998.
Approximately $5,000 of prepayment penalties were paid in connection with
repayment of one of the mortgage notes payable.
Note F - Disposition of Real Estate
On December 28, 2000, ConCap Stratford Associated, Ltd. sold Stratford Place
Apartments to an unaffiliated third party for $7,600,000. After payment of
closing costs of approximately $587,000, the net proceeds received by the
Partnership were approximately $2,508,000. The purchaser assumed the mortgage
encumbering the property of approximately $4,505,000. The gain on the sale of
Stratford Place Apartments during the fourth quarter of 2000 was approximately
$3,440,000.
The sales transactions are summarized as follows (amounts in thousands):
Net sale price, net of selling costs $ 7,013
Less: Net real estate (1) (3,574)
Net other assets 1
Gain on sale of real estate $ 3,440
(1) Net of accumulated depreciation of approximately $4,851,000.
On December 14, 1999, Overlook Associates, Ltd. sold Overlook Apartments to an
unaffiliated third party for $1,975,000. After payment of closing costs of
approximately $84,000 the net proceeds received by the Partnership were
approximately $1,891,000. The Partnership used most of the proceeds to pay off
the mortgage encumbering the property of approximately $1,780,000. The remaining
net proceeds were used to establish additional cash reserves for the
Partnership. The Partnership's gain on the sale during the fourth quarter of
1999 was approximately $638,000.
The following pro-forma information reflects the operations of the Partnership
for the twelve months ended December 31, 2000, 1999 and 1998, as if Overlook and
Stratford Place Apartments had been sold January 1, 1998.
2000 1999 1998
Revenues (in thousands) $28,496 $27,946 $27,672
Net income (in thousands) 5,034 5,272 3,850
Income per limited partnership unit 14.10 14.76 10.78
Note G - Distributions
Subsequent to year end, the Partnership declared and paid distributions of
approximately $1,188,000 (approximately $1,140,000 to the limited partners or
$3.33 per limited partnership unit) from operations and approximately $2,610,000
(approximately $2,506,000 to the limited partners or $7.31 per limited
partnership unit) from sales proceeds of Stratford Place Apartments which sold
in December of 2000. Approximately $104,000 is payable to the General Partner
and special limited partners from the sale proceeds as this portion is
subordinated and deferred per the Partnership Agreement until the limited
partners receive 100% of their original capital contributions from surplus
funds. In conjunction with the transfer of funds from their certain
majority-owned sub-tier limited partnerships to the Partnership, approximately
$30,000 was distributed subsequent to year end to the general partner of the
majority owned sub-tier limited partnerships.
During 2000, the Partnership declared distributions of approximately $11,183,000
(approximately $10,736,000 to the limited partners or $31.32 per limited
partnership unit) consisting of approximately $6,194,000 (approximately
$5,947,000 to the limited partners or $17.35 per limited partnership unit) from
operations and approximately $4,989,000 (approximately $4,789,000 to the limited
partners or $13.97 per limited partnership unit) of refinancing proceeds from
The Apartments, Citadel Apartments, Rivers Edge Apartments, and Stratford Place
Apartments and sale proceeds from Overlook Apartments which sold December 1999.
Approximately $197,000 of the distribution from proceeds was payable at December
31, 2000 to the General Partner and special limited partners as this
distribution is subordinated and deferred per the Partnership Agreement until
the limited partners receive 100% of their original capital contributions from
surplus funds. In conjunction with the transfer of funds from their certain
majority-owned sub-tier limited partnerships to the Partnership, approximately
$56,000 was distributed to the general partner of the majority owned sub-tier
limited partnerships.
During 1999, the Partnership paid distributions of approximately $13,283,000
(approximately $12,730,000 to the limited partners or $37.14 per limited
partnership unit) consisting of cash flow from operations totaling approximately
$10,670,000 (approximately $10,117,000 to the limited partners or $29.52 per
limited partnership unit) and approximately $2,613,000 (all to the limited
partners or $7.62 per limited partnership unit) representing funds from
previously undistributed refinance proceeds from 1996 and 1997. As of December
31, 1999, the Partnership had a distribution payable of approximately $4,318,000
(approximately $3,921,000 to the limited partners or $11.44 per limited
partnership unit) consisting of cash from operations of approximately $1,874,000
(approximately $1,679,000 to the limited partners or $4.90 per limited
partnership unit) and a distribution representing funds from the financing of
Point West Apartments of approximately $2,444,000 (approximately $2,242,000 to
the limited partners or $6.54 per limited partnership unit). In January 2000,
approximately $4,113,000 of this distribution was paid and the remainder was
accrued at December 31, 2000.
During 1998, the Partnership declared and paid distributions attributable to
cash flow from operations totaling approximately $3,951,000 (approximately
$3,793,000 to the limited partners or $11.07 per limited partnership unit).
Note H - Real Estate and Accumulated Depreciation
Initial Cost
To Partnership
(in thousands)
Net Cost
Buildings Capitalized
and (Written-Down)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
(in thousands) (in thousands)
The Apartments $ 4,703 $ 438 $ 6,218 $ 2,414
Arbours of Hermitage
Apartments 5,650 547 8,574 5,396
Briar Bay Racquet Club
Apartments 3,500 1,084 5,271 1,651
Chimney Hill Apartments 5,400 659 7,188 3,777
Citadel Apartments 4,638 695 5,619 1,645
Citadel Village Apartments 2,450 337 3,334 767
Foothill Place Apartments 10,100 3,492 9,435 3,090
Knollwood Apartments 6,780 345 7,065 4,604
Lake Forest Apartments 4,700 692 5,811 3,258
Nob Hill Villa Apartments 6,926 490 8,922 4,209
Point West Apartments 2,407 285 2,919 12
Post Ridge Apartments 4,050 143 2,498 2,586
Rivers Edge Apartments 3,979 512 2,160 835
South Port Apartments 4,358 1,175 6,496 1,122
Village East Apartments 2,150 184 2,236 1,324
Totals $71,791 $11,078 $83,746 $36,690
Gross Amount At Which
Carried
At December 31, 2000
(in thousands)
Buildings
And
Related
Personal Accumulated Date of Date Depreciable
Description Land Property Total Depreciation Construction Acquired Life-Years
(in thousands)
The Apartments $ 438 $ 8,632 $ 9,070 $ 7,355 1973 04/84 5-18
Arbours of Hermitage
Apartments 547 13,970 14,517 11,270 1973 09/83 5-18
Briar Bay Racquet Club
Apartments 1,084 6,922 8,006 6,563 1975 09/82 5-18
Chimney Hill Apartments 659 10,965 11,624 9,908 1973 08/82 5-18
Citadel Apartments 694 7,265 7,959 6,679 1973 05/83 5-18
Citadel Village Apartments 337 4,101 4,438 3,553 1974 12/82 5-18
Foothill Place Apartments 3,402 12,615 16,017 10,213 1973 08/85 5-18
Knollwood Apartments 345 11,669 12,014 9,823 1972 07/82 5-18
Lake Forest Apartments 692 9,069 9,761 7,335 1971 04/84 5-18
Nob Hill Villa Apartments 490 13,131 13,621 11,502 1971 04/83 5-18
Point West Apartments 206 3,010 3,216 2,435 1973 11/85 5-40
Post Ridge Apartments 143 5,084 5,227 4,032 1972 07/82 5-18
Rivers Edge Apartments 512 2,995 3,507 2,696 1976 04/83 5-18
South Port Apartments 1,175 7,618 8,793 6,755 -- 11/83 5-18
Village East Apartments 183 3,561 3,744 3,153 1973 12/82 5-18
Totals $10,907 $120,607 $131,514 $103,272
Reconciliation of "Real Estate and Accumulated Depreciation":
Years Ended December 31,
2000 1999 1998
(in thousands)
Real Estate
Balance at beginning of year $134,633 $134,232 $130,653
Additions 5,624 5,207 3,717
Property dispositions - other (8,743) (4,806) (138)
Balance at end of year $131,514 $134,633 $134,232
Accumulated Depreciation
Balance at beginning of year $104,057 $103,250 $ 98,490
Additions charged to expense 4,161 4,398 4,871
Property dispositions - other (4,946) (3,591) (111)
Balance at end of year $103,272 $104,057 $103,250
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 2000, 1999 and 1998, is approximately $149,980,000, $152,079,000
and $151,943,000. The accumulated depreciation taken for Federal income tax
purposes at December 31, 2000, 1999 and 1998, is approximately $116,415,000,
$116,541,000 and $115,959,000, respectively.
Note I - Casualties
In January 2000, Stratford Place Apartments had a fire which damaged 12
apartment units and 30% of the roof. Insurance proceeds of approximately
$354,000 were received during the year ended December 31, 2000. The General
Partner successfully completed the repairs prior to the sale of the property on
December 20, 2000. The Partnership recognized a casualty gain of approximately
$154,000 for the year ended December 31, 2000.
In the third quarter of 1998, Foothill Place Apartments sustained windstorm
damage. The Partnership incurred expenses of approximately $27,000. These costs
are included in net casualty gain for the year ended December 31, 1998.
In March 1998, Nob Hill Apartments had a fire that destroyed one apartment unit
in a section of a 24-unit building. Additionally, the remaining units in this
section of the building, as well as the laundry room, sustained water and smoke
damage which eventually caused mold and mildew. Work on the project was
substantially completed at September 30, 1998. Approximately $204,000 of net
insurance proceeds were received in 1998, with such amount included in net
casualty gain for the year ended December 31, 1998.
In November 1997, Overlook Apartments had a fire which destroyed one apartment
unit and caused water and smoke damage in the remaining apartment units in the
affected building. Insurance proceeds of approximately $239,000 were received
during the year ended December 31, 1998. Repair efforts were completed in July
1998 and the related costs have been capitalized as a part of the investment
property. Total insurance proceeds received less the cost of repairs and the
write off of assets replaced, resulted in a net casualty of approximately
$192,000 for the year ended December 31, 1998.
Note J - Income Taxes
The Partnership is classified as a partnership for Federal income tax purposes.
Accordingly, no provision for income taxes is made in the consolidated financial
statements of the Partnership. Taxable income or loss of the Partnership is
reported in the income tax returns of its partners.
The following is a reconciliation between net income as reported in the
consolidated financial statements and Federal taxable income allocated to the
partners in the Partnership's information return for the years ended December
31, 2000, 1999 and 1998 (in thousands, except per unit data):
2000 1999 1998
Net income as reported $ 8,474 $ 6,118 $ 3,924
(Deduct) add:
Deferred revenue and other
liabilities (151) (393) 408
Depreciation differences 15 473 864
Accrued expenses 30 39 15
Minority interest (302) (220) --
Other 41 (29) 78
Gain (loss) on casualty/
disposition/foreclosure 412 (514) (396)
Federal taxable income $ 8,519 $ 5,474 $ 4,893
Federal taxable income per
Limited Partnership unit $ 23.86 $ 15.33 $ 13.70
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
Net liabilities as reported $(37,653)
Land and Buildings 18,466
Accumulated depreciation (13,143)
Syndication fees 18,871
Other 5,338
Net liabilities - Federal tax basis $ (8,121)
Note K - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, its General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging, among other things, the acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc. ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited partnership units; management of
the partnerships by the Insignia affiliates; and the Insignia Merger. The
plaintiffs seek monetary damages and equitable relief, including judicial
dissolution of the Partnership. On June 25, 1998, the General Partner filed a
motion seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs filed an amended complaint. The General Partner filed demurrers to
the amended complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Court, at which time
the Court set a final approval hearing for December 10, 1999. Prior to the
December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the General Partner and its affiliates terminated the
proposed settlement. In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement. On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken from the order on October 5, 2000. On
December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann &
Bernstein LLP as new lead counsel for plaintiffs and the putative class.
Plaintiffs filed a third amended complaint on January 19, 2001. On March 2,
2001, the General Partner and its affiliates filed a demurrer to the third
amended complaint. The General Partner does not anticipate that costs associated
with this case will be material to the Partnership's overall operations.
Note L - Selected Quarterly Financial Data (unaudited)
The following is a summary of the unaudited quarterly results of operations for
the Partnership (in thousands, except per unit data):
2000 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
Total revenues $ 7,399 $ 7,548 $ 7,539 $ 11,201 $ 33,687
Total expenses (6,180) (6,175) (6,284) (6,367) (25,006)
Income before extraordinary
items 1,219 1,373 1,255 4,834 8,681
Extraordinary items (59) (5) -- (143) (207)
Net income $ 1,160 $ 1,368 $ 1,255 $ 4,691 $ 8,474
Per limited partnership unit:
Income before extraordinary
item $ 3.41 $ 3.84 $ 3.52 $ 13.54 $ 24.31
Extraordinary loss on early
extinguishment of debt (0.16) (0.01) -- (0.41) (0.58)
Net income $ 3.25 $ 3.83 $ 3.52 $ 13.13 $ 23.73
1999 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
Total revenues $ 7,551 $ 7,589 $ 7,746 $ 8,303 $ 31,189
Total expenses (6,415) (6,051) (5,877) (6,728) (25,071)
Net income $ 1,136 $ 1,538 $ 1,869 $ 1,575 $ 6,118
Net income per limited
partnership unit $ 3.18 $ 4.31 $ 5.23 $ 4.41 $ 17.13
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
Consolidated Capital Properties IV (the "Registrant" or "Partnership") has no
officers or directors. ConCap Equities, Inc. ("CEI" or the "General Partner")
manages and controls the Partnership and has general responsibility and
authority in all matters affecting its business.
The names of the directors, and executive officers of the General Partner, their
ages and the nature of all positions presently held by them are set forth below.
Name Age Position
Patrick J. Foye 43 Executive Vice President and Director
Martha L. Long 41 Senior Vice President and Controller
Patrick J. Foye has been Executive Vice President and Director of the General
Partner since October 1, 1998. Mr. Foye has served as Executive Vice President
of AIMCO since May 1998. Prior to joining AIMCO, Mr. Foye was a partner in the
law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to 1998 and was
Managing Partner of the firm's Brussels, Budapest and Moscow offices from 1992
through 1994. Mr. Foye is also Deputy Chairman of the Long Island Power
Authority and serves as a member of the New York State Privatization Council.
He received a B.A. from Fordham College and a J.D. from Fordham University Law
School.
Martha L. Long has been Senior Vice President and Controller of the General
Partner since October 1998 as a result of the acquisition of Insignia Financial
Group, Inc. As of February 2001, Ms. Long was also appointed head of the service
business for AIMCO. From June 1994 until January 1997, she was the Controller
for Insignia, and was promoted to Senior Vice President - Finance and Controller
in January 1998, retaining that title until October 1998. From 1988 to June
1994, Ms. Long was Senior Vice President and Controller for The First Savings
Bank, FSB in Greenville, South Carolina.
One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited partnerships which
either have a class of securities registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section 15(d) of such Act. Further, one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general partner of AIMCO Properties, L.P., entities that have a class of
securities registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting requirements of Section 15 (d) of such
Act.
The executive officers and director of the General Partner fulfill the
obligations of the Audit Committee and oversee the Partnership's financial
reporting process on behalf of the General Partner. Management has the primary
responsibility for the financial statements and the reporting process including
the systems of internal controls. In fulfilling its oversight responsibilities,
the executive officers and director of the General Partner reviewed the audited
financial statements with management including a discussion of the quality, not
just the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the financial
statements.
The executive officers and director of the General Partner reviewed with the
independent auditors, who are responsible for expressing an opinion on the
conformity of those audited financial statements with generally accepted
accounting principles, their judgments as to the quality, not just the
acceptability, of the Partnership's accounting principles and such other matters
as are required to be discussed with the Audit Committee or its equivalent under
generally accepted auditing standards. In addition, the Partnership has
discussed with the independent auditors the auditors' independence from
management and the Partnership including the matters in the written disclosures
required by the Independence Standards Board and considered the compatibility of
non-audit services with the auditors' independence.
The executive officers and director of the General Partner discussed with the
Partnership's independent auditors the overall scope and plans for their audit.
In reliance on the reviews and discussions referred to above, the executive
officers and director of the General Partner have approved the inclusion of the
audited financial statements in the Form 10-K for the year ended December 31,
2000 for filing with the Securities and Exchange Commission.
The General Partner has reappointed Ernst & Young LLP as independent auditors to
audit the financial statements of the Partnership for the current fiscal year.
Fees for the last fiscal year were annual audit services of approximately
$130,000 and non-audit services (principally tax-related) of approximately
$72,000.
Item 11. Executive Compensation
None of the directors and officers of the General Partner received any
remuneration from the Registrant during the year ended December 31, 2000.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
Except as provided below, as of December 31, 2000, no person or group was known
to CEI to own of record or beneficially own more than five percent of the Units
of the Partnership:
Entity Number of Units Percentage
Insignia Properties LP 67,033.50 19.556%
(an affiliate of AIMCO)
IPLP Acquisition I, LLC 29,612.50 8.639%
(an affiliate of AIMCO)
AIMCO Properties LP 87,221.50 25.446%
(an affiliate of AIMCO)
Insignia Properties LP and IPLP Acquisition I, LLC are indirectly, ultimately
owned by AIMCO. Its business address is 55 Beattie Place, Greenville, SC 29602.
AIMCO Properties, L.P. is indirectly ultimately controlled by AIMCO. Its
business address is 2000 South Colorado Blvd., Denver, CO 80222.
(b) Beneficial Owners of Management
Neither CEI nor any of the directors or officers or associates of CEI own any
Units of the Partnership of record or beneficially.
(c) Changes in Control
Beneficial Owners of CEI
As of December 31, 2000, the following persons were known to CEI to be the
beneficial owners of more than five percent (5%) of its common stock:
Number of Percent
Name and Address CEI Shares Of Total
Insignia Properties Trust ("IPT") 100,000 100%
55 Beattie Place, Greenville, SC 29602
Effective February 26, 1999, IPT was merged with and into AIMCO. As of December
31, 2000, AIMCO owns 51% of the outstanding common shares of beneficial interest
of IPT.
Item 13. Certain Relationships and Related Transactions
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all of the Partnership
activities. The Partnership Agreement provides for certain payments to
affiliates for services and as reimbursements of certain expenses incurred by
affiliates on behalf of the Partnership. The following transactions with the
General Partner and/or its affiliates were incurred in 2000, 1999 and 1998:
2000 1999 1998
(in thousands)
Property management fees $1,515 $1,547 $1,478
Reimbursements for services of affiliates 1,103 565 627
Partnership management fee 535 1,084 341
Loan costs 180 25 7
Real estate commission 268 -- --
During the years ended December 31, 2000, 1999 and 1998, affiliates of the
General Partner were entitled to receive 5% of gross receipts from all of the
Partnership's properties as compensation for providing property management
services. The Partnership paid to such affiliates approximately $1,515,000,
$1,547,000 and $1,478,000 for the years ended December 31, 2000, 1999 and 1998,
respectively.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $1,103,000, $565,000 and
$627,000, for the years ended December 31, 2000, 1999 and 1998, respectively.
The Limited Partnership Agreement ("Partnership Agreement") provides for a
special management fee equal to 9% of the total distributions made to the
limited partners from cash flow provided by operations to be paid to the General
Partner for executive and administrative management services. Affiliates of the
General Partner of the Partnership earned approximately $535,000, $1,084,000 and
$341,000 under this provision of the Partnership Agreement for the years ended
December 31, 2000, 1999 and 1998, respectively.
In addition to reimbursement for services of affiliates, the Partnership paid an
affiliate of the General Partner approximately $180,000, $25,000, and $7,000 in
2000, 1999 and 1998, respectively, for loan costs which are capitalized. These
loan costs were associated with the refinancing of four of the Partnership's
properties in 2000 and one of the Partnership's properties in 1999.
For acting as real estate broker in connection with the sale of Overlook
Apartments in December 1999, the General Partner was paid a real estate
commission of approximately $40,000 during the year ended December 31, 2000. For
acting as real estate broker in connection with the sale of Stratford Place
Apartments, the General Partner earned a real estate commission of approximately
$228,000. The commission is accrued at December 31, 2000. When the Partnership
terminates, the General Partner will have to return these commissions if the
limited partners do not receive their original invested capital plus a 6% per
annum cumulative return.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 183,867.50 limited
partnership units in the Partnership representing 53.641% of the outstanding
units. A number of these units were acquired pursuant to tender offers made by
AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make
one or more additional offers to acquire additional limited partnership
interests in the Partnership for cash or in exchange for units in the operating
partnership of AIMCO. Under the Partnership Agreement, unitholders holding a
majority of the Units are entitled to take action with respect to a variety of
matters, which would include without limitation, voting on certain amendments to
the Partnership Agreement and voting to remove the General Partner. As a result
of its ownership of 53.641% of the outstanding units, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the General Partner because of their affiliation
with the General Partner.
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements
Consolidated Balance Sheets - December 31, 2000 and 1999
Consolidated Statements of Operations - Years Ended December 31,
2000, 1999 and 1998
Consolidated Statements of Changes in Partners' Deficit - Years
Ended December 31, 2000, 1999 and 1998
Consolidated Statements of Cash Flows - Years Ended December 31,
2000, 1999 and 1998
Notes to Consolidated Financial Statements
2. Schedules
All schedules are omitted because either they are not required, or
not applicable or the financial information is included in the
financial statements or notes thereto.
3. Exhibits
S-K Reference
Number Document Description
2.1 Agreement and Plan of Merger, dated as of October 1, 1999 by
and between AIMCO and IPT; incorporated by reference to
Registrant's Current Report on Form 8-K dated October 1, 1999.
3 Certificate of Limited Partnership, as amended to date.
10.1 Property Management Agreement No. 105 dated October 23,
1990, by and between the Partnership and CCEC (Incorporated
by reference to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990).
10.2 Property Management Agreement No. 106 dated October 23,
1990, by and between the LeTourneau Associates, Ltd. and
CCEC (Incorporated by reference to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 1990).
10.3 Property Management Agreement No. 107 dated October 23,
1990, by and between Overlook Associates, Ltd. and CCEC
(Incorporated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1990).
10.4 Property Management Agreement No., 108 dated October 23,
1990, by and between Park 77 Associates, Ltd. and CCEC
(Incorporated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1990).
10.5 Property Management Agreement No., 205 dated October 23,
1990, by and between the Partnership and CCEC (Incorporated
by reference to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990).
10.6 Property Management Agreement No., 306 dated October 23,
1990, by and between the Partnership and CCEC (Incorporated
by reference to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990).
10.7 Property Management Agreement No., 307 dated October 23,
1990, by and between Point West Associates, Ltd. and CCEC
(Incorporated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1990).
10.8 Property Management Agreement No., 403 dated October 23,
1990, by and between the Partnership and CCEC (Incorporated
by reference to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990).
10.9 Property Management Agreement No., 404 dated October 23,
1990, by and between Denbigh Village Associates, Ltd. and
CCEC (Incorporated by reference to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 1990).
10.10 Property Management Agreement No., 405 dated October 23,
1990, by and between Stratford Place Associates, Ltd. and
CCEC (Incorporated by reference to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 1990).
10.11 Bill of Sale and Assignment dated October 23, 1990, by and
between CCEC and ConCap Services Company (Incorporated by
reference to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1990).
10.12 Assignment and Assumption Agreement dated October 23, 1990, by
and between CCEC and ConCap Management Limited Partnership
("CCMLP") (Incorporated by reference to the Quarterly Report
on Form 10-Q for the quarter ended September 30, 1990).
10.13 Assignment and Assumption Agreement as to Certain Property
Management Services dated October 23, 1990, by and between
CCMLP and ConCap Capital Company (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990).
10.14 Assignment and Assumption Agreement dated October 23, 1990, by
and between CCMLP and The Hayman Company (100 Series of
Property Management Contracts) (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990).
10.15 Assignment and Assumption Agreement dated October 23, 1990, by
and between CCMLP and Horn-Barlow Companies (200 Series of
Property Management Contracts). (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990).
10.16 Assignment and Assumption Agreement dated October 23, 1990,
by and between CCMLP and Metro ConCap, Inc. (300 Series of
Property Management Contracts). (Incorporated by reference
to the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990).
10.17 Assignment and Assumption Agreement dated October 23, 1990, by
and between CCMLP and R&B Realty Group (400 Series of Property
Management Contracts). (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter ended September
30, 1990).
10.18 Assignment and Assumption Agreement dated February 21, 1991,
by and between the Partnership and Greenbriar Apartments
Associates Limited Partnership (Property Management Agreement
No. 403). CCMLP and Horn-Barlow Companies (200 Series of
Property Management Contracts). (Incorporated by reference to
the Annual Report on Form 10-K for the year ended December 31,
1991).
10.19 Assignment and Assumption Agreement dated April 1, 1991, by
and between the Partnership and ConCap Village East
Apartments Associates, L.P. (Property Management Agreement
No. 205). (Incorporated by reference to the Annual Report on
Form 10-K for the year ended December 31, 1991).
10.20 Assignment and Assumption Agreement dated April 1, 1991, by
and between the Partnership and Nob Hill Apartments
Associates, L.P. (Property Management Agreement No. 306).
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1991).
10.21 Assignment and Assumption Agreement dated April 1, 1991, by
and between the Partnership and Barnett Regency Tower
Associates, Limited Partnership (Property Management
Agreement No. 105). (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December 31, 1991).
10.22 Assignment and Assumption of Property Management Agreement
dated August 1, 1991, by and between R & B Realty Group and R
& B Apartment Management Company, Inc. (Property Management
Agreement with Denbigh Village Associates, Ltd.).
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1991).
10.23 Assignment and Assumption of Property Management Agreement
dated August 1, 1991, by and between R & B Realty Group and R
& B Apartment Management Company, Inc. (Property Management
Agreement with Greenbriar Associates Limited Partnership).
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1991).
10.24 Assignment and Assumption of Property Management Agreement
dated August 1, 1991, by and between R & B Realty Group and R
& B Apartment Management Company, Inc. (Property Management
Agreement with the Partnership concerning Briar Bay Racquet
Club). (Incorporated by reference to the Annual Report on Form
10-K for the year ended December 31, 1991).
10.25 Assignment and Assumption of Property Management Agreement
dated August 1, 1991, by and between R & B Realty Group and R
& B Apartment Management Company, Inc. (Property Management
Agreement with Stratford Place Associates, Ltd.).
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1991).
10.26 Assignment and Assumption Agreement dated September 1, 1991,
by and between the Partnership and CCP IV Associates, Ltd.
(Property Management Agreement No. 306). (Incorporated by
reference to the Annual Report on Form 10-K for the year
ended December 31, 1991).
10.27 Assignment and Assumption Agreement dated September 1, 1991,
by and between the Partnership and CCP IV Associates, Ltd.
(Property Management Agreement No. 205). (Incorporated by
reference to the Annual Report on Form 10-K for the year
ended December 31, 1991).
10.28 Assignment and Assumption Agreement dated September 1, 1991,
by and between ConCap Village East Apartments Associates,
L.P. and CCP IV Associates, Ltd. (Property Management
Agreement No. 205). (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December 31, 1991).
10.29 Assignment and Assumption Agreement dated September 15,
1991, by and between the Partnership and Foothill Chimney
Associates Limited Partnership (Property Management
Agreement No. 105). (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December 31, 1991).
10.30 Assignment and Assumption Agreement dated September 15,
1991, by and between the Partnership and Foothill Chimney
Associates Limited Partnership (Property Management
Agreement No. 205). (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December 31, 1991).
10.31 Construction Management Cost Reimbursement Agreement dated
January 1, 1991, by and between the Partnership and
Horn-Barlow Companies (the "Horn-Barlow Construction
Management Agreement") (Incorporated by reference to the
Annual Report on Form 10-K for the year ended December 31,
1991).
10.33 Assignment and Assumption Agreement dated September 15, 1991,
by and between the Partnership and Foothill Chimney Associates
Limited Partnership (Horn-Barlow Construction Management
Agreement Concerning Chimney Hill Apartments). (Incorporated
by reference to the Annual Report on Form 10-K for the year
ended December 31, 1991).
10.34 Assignment and Assumption Agreement dated September 1, 1991,
by and between ConCap Village East Apartments Associates,
L.P. and CCP IV Associates, Ltd. (Village East Construction
Agreement). (Incorporated by reference to the Annual Report
on Form 10-K for the year ended December 31, 1991).
10.35 Construction Management Cost Reimbursement Agreement dated
January 1, 1991, by and between the Partnership and Metro
ConCap, Inc. (the "Metro Construction Management Agreement")
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1991).
10.36 Assignment and Assumption Agreement dated September 1, 1991,
by and between the Partnership and CCP IV Associates, Ltd.
(Metro Construction Management Agreement concerning Arbour
East and Knollwood Apartments). (Incorporated by reference to
the Annual Report on Form 10-K for the year ended December 31,
1991).
10.37 Construction Management Cost Reimbursement Agreement dated
January 1, 1991, by and between the Partnership and The Hayman
Company (the "Hayman Construction Management Agreement")
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1991).
10.38 Assignment and Assumption Agreement dated September 15, 1991,
by and between the Partnership and Foothill Chimney Associates
Limited Partnership (Hayman Construction Management Agreement
concerning Chimney Hill Apartments). (Incorporated by
reference to the Annual Report on Form 10-K for the year ended
December 31, 1991).
10.39 Construction Management Cost Reimbursement Agreement dated
January 1, 1991, by and between the Partnership and R & B
Apartment Management Company, Inc. (Incorporated by reference
to the Annual Report on Form 10-K for the year ended December
31, 1991).
10.40 Construction Management Cost Reimbursement Agreement dated
January 1, 1991, by and between ConCap Metro Centre
Associates, L.P. and R & B Commercial Management Company, Inc.
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1991).
10.41 Investor Services Agreement dated October 23, 1990, by and
between the Partnership and CCEC (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990). (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December 31, 1991). .
10.42 Assignment and Assumption Agreement (Investor Services
Agreement) dated October 23, 1990, by and between CCEC and
ConCap Services Company (Incorporated by reference to the
Annual Report on Form 10-K for the year ended December 31,
1990).
10.43 Letter of Notice dated December 20, 1991, from Partnership
Services, Inc. ("PSI") to the Partnership regarding the change
in ownership and dissolution of ConCap Services Company
whereby PSI assumed the Investor Services Agreement.
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1991).
10.44 Financial Services Agreement dated October 23, 1990, by and
between the Partnership and CCEC (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990).
10.45 Assignment and Assumption Agreement (Financial Service
Agreement) dated October 23, 1990, by and between CCEC and
ConCap Capital Company (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter ended September
30, 1990).
10.46 Letter of Notice dated December 20, 1991, from PSI to the
Partnership regarding the change in ownership and dissolution
of ConCap Capital Company whereby PSI (Incorporated by
reference to the Annual Report on Form 10-K for the year ended
December 31, 1991).
10.47 Property Management Agreement No. 419 dated May 13, 1993, by
and between the Partnership and Coventry Properties, Inc.
(Incorporated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1993).
10.48 Assignment and Assumption Agreement (Property Management
Agreement No. 419) dated May 13, 1993, by and between
Coventry Properties, Inc., R & B Apartment Management
Company, Inc. and Partnership Services, Inc. (Incorporated
by reference to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993).
10.49 Assignment and Assumption as to certain Property Management
Services dated May 13, 1993, by and between Coventry
Properties, Inc. and Partnership Services, Inc.
(Incorporated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1993).
10.50 Property Management Agreement No. 419A dated October 11,
1993, by and between ConCap Stratford Associates, Ltd. and
Coventry Properties, Inc. (Incorporated by reference to the
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993).
10.51 Assignment and Assumption Agreement (Property Management
Agreement No. 419A) dated October 11, 1993, by and between
Coventry Properties, Inc., R & B Apartment Management
Company, Inc. and Partnership Services, Inc. (Incorporated
by reference to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993).
10.52 Assignment and Agreement as to Certain Property Management
Services dated October 11, 1993, by and between Coventry
Properties, Inc., and Partnership Services, Inc.
(Incorporated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1993).
10.53 Property Management Agreement No. 427A dated October 11,
1993, by and between ConCap River's Edge Associates, Ltd.
and Coventry Properties, Inc. (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993).
10.54 Assignment and Assumption Agreement (Property Management
Agreement No. 427A) dated October 11, 1993, by and between
Coventry Properties, Inc., R & B Apartment Management
Company, Inc. and Partnership Services, Inc. (Incorporated
by reference to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993).
10.55 Assignment and Agreement as to Certain Property Management
Services dated October 11, 1993, by and between Coventry
Properties, Inc., and Partnership Services, Inc.
(Incorporated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1993).
10.56 Property Management Agreement No. 513A dated August 18,
1993, by and between ConCap Citadel Associates, Ltd. and
Coventry Properties, Inc.
10.57 Assignment and Agreement as to Certain Property Management
Services dated November 17, 1993, by and between Coventry
Properties, Inc., and Partnership Services, Inc.
10.58 Property Management Agreement No. 514 dated June 1, 1993, by
and between the Partnership and Coventry Properties, Inc.
10.59 Assignment and Agreement as to Certain Property Management
Services dated November 17, 1993, by and between Coventry
Properties, Inc., and Partnership Services, Inc.
10.60 Stock and Asset Purchase Agreement, dated December 8, 1994
(the "Gordon Agreement"), among MAE-ICC, Inc. ("MAE-ICC"),
Gordon Realty Inc. ("Gordon"), GII Realty, Inc. ("GII
Realty"), and certain other parties. (Incorporated by
reference to Form 8-K dated December 8, 1994).
10.61 Exercise of the Option (as defined in the Gordon Agreement),
dated December 8, 1994, between MAE-ICC and Gordon.
(Incorporated by reference to Form 8-K dated December 8,
1994).
10.62 Contracts related to refinancing of debt:
(a) Deed of Trust and Security Agreement dated March 27,
1995 between Nob Hill Villa Apartment Associates, L.P., a
Tennessee limited partnership, and First Union National Bank
of North Carolina, a North Carolina Corporation.
(b) Promissory Note dated March 27, 1995 between Nob Hill
Villa Apartment Associates, L.P., a Tennessee limited
partnership, and First Union National Bank of North
Carolina, a North Carolina Corporation.
(c) Assignment of leases and Rents dated March 27, 1995
between Nob Hill Villa Apartment Associates, L.P., a
Tennessee limited partnership, and First Union National Bank
of North Carolina, a North Carolina Corporation.
10.63 Multifamily Note dated November 30, 1995 between Briar Bay
Apartments, LTD., a Texas limited partnership, and Lehman
Brothers Holdings Inc. d/b/a Lehman Capital, A Division of
Lehman Brothers Holdings Inc.
10.64 Multifamily Note dated November 30, 1995 between CCP IV
Associates, LTD., a Texas limited partnership, and Lehman
Brothers Holdings Inc. d/b/a Lehman Capital, A Division of
Lehman Brothers Holdings Inc.
10.65 Multifamily Note dated November 30, 1995 between CCP IV
Associates, LTD., a Texas limited partnership, and Lehman
Brothers Holdings Inc. d/b/a Lehman Capital, A Division of
Lehman Brothers Holdings Inc.
10.66 Multifamily Note dated November 30, 1995 between CCP IV
Associates, LTD., a Texas limited partnership, and Lehman
Brothers Holdings Inc. d/b/a Lehman Capital, A Division of
Lehman Brothers Holdings Inc.
10.67 Multifamily Note dated November 30, 1995 between CCP IV
Associates, LTD., a Texas limited partnership, and Lehman
Brothers Holdings Inc. d/b/a Lehman Capital, A Division of
Lehman Brothers Holdings Inc.
10.68 Multifamily Note dated November 30, 1995 between Foothill
Chimney Associates Limited Partnership, a Georgia limited
partnership, and Lehman Brothers Holdings Inc. d/b/a Lehman
Capital, A Division of Lehman Brothers Holdings Inc.
10.69 Multifamily Note dated November 30, 1995 between Foothill
Chimney Associates Limited Partnership, a Georgia limited
partnership, and Lehman Brothers Holdings Inc. d/b/a Lehman
Capital, A Division of Lehman Brothers Holdings Inc.
10.70 Multifamily Note dated September 30, 1996 between Foothill
Post Ridge Associates, Ltd. Limited Partnership, a Tennessee
Limited Partnership and Lehman Brothers Holdings Inc. d/b/a
Lehman Capital, A Division of Lehman Brothers Holdings, Inc.
10.71 Exercise of the remaining portion of the option (as defined in
the Gordon Agreement), dated December 8, 1994 between MAE-ICC
and Gordon. (Incorporated by reference to Form 8-K dated
October 24, 1995).
10.72 Multifamily Note dated November 1, 1996 between Post Ridge
Associates, Ltd., Limited Partnership, a Tennessee Limited
Partnership and Lehman Brothers Holdings Inc. d/b/a Lehman
Capital, A Division of Lehman Brothers Holdings, Inc.
10.73 Amended and Restated Multifamily note dated November 1,
1996, between Post Ridge Associates, Ltd., Limited
Partnership, a Tennessee Limited Partnership and Lehman
Brothers Holding, Inc. d/b/a Lehman Capital, a division of
Lehman Brothers Holdings, Inc.
10.74 Multifamily Note dated November 1, 1996 between Consolidated
Capital Properties IV, a California Limited Partnership and
Lehman Brothers Holdings Inc. d/b/a Lehman Capital, A
Division of Lehman Brothers Holdings, Inc.
10.75 Mortgage and Security Agreement dated November 18, 1997,
between Southport CCP IV, L.L.C., a South Carolina limited
liability company and Lehman Brothers Holdings, Inc. d/b/a
Lehman Capital, a division of Lehman Brothers Holdings,
Inc., a Delaware Corporation.
10.76 Multifamily Note dated November 9, 1999 between Point West
Associates Limited Partnership, a Georgia limited partnership
and GMAC Commercial Mortgage Corporation, a California
corporation. (Incorporated by reference to Annual Report on
Form 10-K ended December 31, 1999).
10.77 Purchase and Sale Contract between Registrant and Overlook
Associates, Ltd, a Georgia limited partnership dated December
13, 1999, documenting sale of Overlook Apartments located in
Memphis, Tennessee. (Incorporated by reference to Annual
Report on Form 10-K ended December 31, 1999).
10.78 Multifamily Note dated February 2, 2000 between Apartment
Associates, Ltd., a Texas limited partnership and ARCS
Commercial Mortgage Co., L.P., a California limited
partnership. (Incorporated by reference to Annual Report on
Form 10-K ended December 31, 1999).
10.79 Multifamily Note dated February 28, 2000 between ConCap
Citadel Associated, Ltd., a Texas limited partnership and
ARCs Commercial Mortgage Cl., L.P., a California
corporation. (Incorporated by reference to Annual Report on
Form 10-K ended December 31, 1999).
10.80 Multifamily Note dated May 31, 2000 between Concap Stratford
Associates, Ltd., a Texas limited partnership and ARCS
Commercial Mortgage Co., L.P., a California limited
partnership. (Incorporated by reference to Quarterly Report
on Form 10-Q for quarter ended June 30, 2000.)
10.81 Multifamily Note dated August 29, 2000 between ConCap Rivers
Edge Associates, Ltd., a Texas Limited Partnership, and GMAC
Commercial Mortgage Corporation, a California Corporation.
(Incorporated by reference to Quarterly Report on Form 10-Q
for quarter ended September 30, 2000.)
10.82 Purchase and Sale Contract dated September 26, 2000 between
ConCap Stratford Associates, Ltd., a Texas Limited
Partnership, and First Worthing Company Limited, a Texas
Limited Partnership.
10.83 First Amendment to Purchase and Sale Contract dated October
26, 2000 between ConCap Stratford Associates, Ltd., a Texas
Limited Partnership, and First Worthing Company Limited, a
Texas Limited Partnership.
10.84 Second Amendment to Purchase and Sale Contract dated October
31, 2000 between ConCap Stratford Associates, Ltd., a Texas
Limited Partnership, and First Worthing Company Limited, a
Texas Limited Partnership.
11 Statement regarding computation of Net Income per Limited
Partnership Unit (Incorporated by reference to Note A of
Item 8 - Financial Statements of this Form 10-K).
16.1 Letter, dated August 12, 1992, from Ernst & Young to the
Securities and Exchange Commission regarding change in
certifying accountant. (Incorporated by reference to Form 8-K
dated August 6, 1992).
16.2 Letter dated May 9, 1995 from the Registrant's former
independent accountant regarding its concurrence with the
statements made by the Registrant regarding a change in the
certifying accountant. (Incorporated by reference to Form 8-K
dated May 3, 1995).
19.1 Chapter 11 Plan of CCP/IV Associates, Ltd. (Restated to
incorporate first amended Chapter 11 Plan filed October 27,
1992 and second amendments to Chapter 11 Plan of CCP/IV
Associates, Ltd. filed December 14, 1992) dated December 14,
1992, and filed December 14, 1992, in the United States
Bankruptcy Court for the Middle District of Tennessee.
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1992).
19.2 First amended disclosure statement to accompany Chapter 11
Plan, dated February 21, 1992, and amended October 27, 1992
filed by CCP/IV Associates, Ltd. filed October 27, 1992, in
the United States Bankruptcy Court for the Middle District of
Tennessee. (Incorporated by reference to the Annual Report on
Form 10-K for the year ended December 31, 1992).
(b) Reports on Form 8-K filed during the fourth quarter of calendar year 2000:
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CONSOLIDATED CAPITAL PROPERTIES IV
By: ConCap Equities, Inc.
General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller
Date:
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities on the date indicated.
/s/Patrick J. Foye Date:
Patrick J. Foye
Executive Vice President and Director
/s/Martha L. Long Date:
Martha L. Long
Senior Vice President and Controller
Exhibit 10.82
PURCHASE AND SALE CONTRACT
BETWEEN
CONCAP STRATFORD ASSOCIATES, LTD.,
a Texas limited partnership
AS SELLER
AND
FIRST WORTHING COMPANY LIMITED
a Texas limited partnership
AS PURCHASER
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT ("Purchase Contract" or the "Agreement")
is entered into as of the ________ day of September, 2000 (the "Effective Date")
by and between CONCAP STRATFORD ASSOCIATES, LTD., a Texas limited partnership,
having a principal address at 2000 South Colorado Blvd., Tower Two, Suite
2-1000, Denver, Colorado 80222 ("Seller") and FIRST WORTHING COMPANY LIMITED, a
Texas limited partnership, having a principal address at 8144 Walnut Hill Lane,
Suite 550, Dallas, Texas 75231 ("Purchaser").
NOW, THEREFORE WITNESSETH: That for and in consideration of mutual
covenants and agreements hereinafter set forth, Seller and Purchaser hereby
agree as follows:
RECITALS
R-1. Seller holds fee title to the parcel or parcels of real estate located in
Travis County, Texas, as more particularly described in Exhibit "A" attached
hereto and made a part hereof. Improvements have been constructed on the land
described in this Recital.
R-2. Purchaser desires to purchase and Seller has agreed to sell such land,
improvements and certain associated property, defined below as the "Property" on
the terms and conditions set forth below, (which terms and conditions shall
control in the event of any conflict with these Recitals), such that on the
"Closing Date" (as hereinafter defined) the Property will be conveyed by special
warranty deed to Purchaser.
R-3. Purchaser has agreed to pay to Seller the Purchase Price for the Property,
and Seller has agreed to sell the Property to Purchaser, on the terms and
conditions set forth below.
R-4. Purchaser intends to make investigations regarding the Property, and
Purchaser's intended uses of the Property, as Purchaser deems necessary and
desirable.
ARTICLE 1
DEFINED TERMS
1.1 Unless otherwise defined elsewhere herein, terms with initial capital
letters in this Purchase Contract shall have the meanings set forth in this
ARTICLE 1 below.
1.1.1 "Assumption Approval" shall have the meaning given such term
in ARTICLE 4.
1.1.2 "Business Day" means any day other than a Saturday or Sunday
or Federal holiday or legal holiday in the State of Texas.
1.1.3 "Closing" means the consummation of the purchase and sale and
related transactions contemplated by this Purchase Contract in accordance with
the terms and conditions of this Purchase Contract.
1.1.4 "Closing Date" means the date on which date the Closing of the
conveyance of the Property is required to be held under the terms and conditions
of this Purchase Contract and on which date full payment of the Purchase Price
for the Property shall have been paid to and received by Seller in immediately
available U.S. funds.
1.1.5 "Deed" has the meaning given such term in Section 7.2.1.1.
1.1.6 "Excluded Permits" means those Permits which, under applicable
law, are nontransferable and such other Permits as may be designated as Excluded
Permits on Exhibit "B", if any, attached hereto.
1.1.7 "Fixtures and Tangible Personal Property" means all fixtures,
furniture, furnishings, fittings, equipment, machinery, computers (to the extent
located on the Property and owned by Seller), fax machines (to the extent
located on the Property and owned by Seller), copiers (to the extent located on
the Property and owned by Seller), apparatus, appliances and other articles of
tangible personal property now located on the Land or in the Improvements as of
the date of this Purchase Contract and used or usable in connection with any
present or future occupation or operation of all or any part of the Property,
but only to the extent transferable, including, without limitation, the tangible
personal property listed on Schedule 1.1.6 attached hereto (subject to such
dispositions, substitutions and replacements thereof as are made by Seller in
the ordinary course of business from and after the Effective Date). The term
"Fixtures and Tangible Personal Property" does not include (i) equipment leased
by Seller and the interest of Seller in any equipment provided to the Property
for use, but not owned or leased, by Seller, or (ii) property owned or leased by
Tenants and guests, employees or other persons furnishing goods or services to
the Property, or (iii) property and equipment owned by Seller, which in the
ordinary course of business of the Property is not used exclusively for the
business, operation or management of the Property or (iv) the property and
equipment, if any, expressly identified in Exhibit "C".
1.1.8 "Improvements" means all buildings and improvements,located on
the Land.
1.1.9 "Land" means all of those certain tracts of land described on
Exhibit "A" attached hereto, and all rights, privileges and appurtenances
pertaining thereto.
1.1.10 "Lease(s)" means the interest of Seller in and to all leases,
subleases and other occupancy agreements for individual apartment units, whether
or not of record, which provide for the use or occupancy of space or facilities
on or relating to the Property and which are in force as of the Effective Date
for the Property or thereafter entered into as permitted in Section 6.5.
1.1.11 "Loan Documents" shall have the meaning given such term in
ARTICLE 4.
1.1.12 "Management Contract" means the agreement(s) between Seller
and Manager pertaining to the Land and Improvements.
1.1.13 "Manager" means AIMCO Properties, L.P., or one of its
affiliates.
1.1.14 "Miscellaneous Property Assets" means all contract rights,
leases, concessions, warranties, plans, drawings and other items of intangible
personal property relating to the ownership or operation of the Property and
owned by Seller, but only to the extent transferable, excluding, however, (i)
receivables, (ii) Property Contracts, (iii) Leases, (iv) Permits, (v) Fixtures
and Tangible Personal Property, (vi) Security Deposits, (vii) cash or other
funds, whether in petty cash or house "banks," or on deposit in bank accounts or
in transit for deposit, (viii) refunds, rebates or other claims, or any interest
therein, for periods or events occurring prior to the Closing Date, (ix) utility
and similar deposits, (x) insurance or other prepaid items, (xi) reports
prepared by Seller for its use with respect to information contained in Seller's
books and records, and (xii) the Management Contract, except to the extent that
Seller receives a credit on the closing statement for any such item. The term
"Miscellaneous Property Assets" shall also include the following, but only to
the extent owned by Seller and in Seller's possession: site plans, surveys, soil
and substrata studies, architectural renderings, plans and specifications,
engineering plans and studies, floor plans, tenant data sheets, landscape plans
and other plans or studies of any kind, if any, which relate to the Land and or
the Improvements or the Fixtures and Tangible Personal Property. The term
"Miscellaneous Property Assets" shall also include all of Seller's rights, if
any, in and to the name "STRATFORD PLACE APARTMENTS".
1.1.15 "Mortgage" shall have the meaning given such term in Section
6.4.
1.1.16 "Mortgagee" means the current holder of record of the
Mortgage.
1.1.17 "Permits" means all licenses and permits granted by
governmental authorities having jurisdiction over the Property in respect of the
matter to which the applicable license or permit applies and owned by Seller and
used in or relating to the ownership, occupancy or operation of the Property or
any part thereof not subject to a Lease.
1.1.18 "Permitted Exceptions" means those exceptions or conditions
permitted to encumber the title to the Property in accordance with the
provisions of Section 6.2.
1.1.19 "Property" means the Land and Improvements and all rights of
Seller relating to the Land and the Improvements, including without limitation,
any rights, title and interest of Seller, if any, in and to (i) any strips and
gores adjacent to the Land and any land lying in the bed of any street, road, or
avenue opened or proposed, in front of or adjoining the Land, to the center line
thereof; (ii) any unpaid award for any taking by condemnation or any damage to
the Property by reason of a change of grade of any street or highway; (iii) all
of the easements, rights, privileges, and appurtenances belonging or in any way
appertaining to the Property; together with all Fixtures and Tangible Personal
Property, Property Contracts, Leases, Security Deposits, Permits other than
Excluded Permits, and the Miscellaneous Property Assets.
1.1.20 "Property Contracts" means all purchase orders, maintenance,
service, or utility contracts and contracts, which relate to the ownership,
maintenance, construction or repair and/or operation of the Property and which
are not cancelable on 90 days' or shorter notice, except Leases.
1.1.21 "Purchase Contract" means this Purchase and Sale Contract by
and between Seller and Purchaser.
1.1.22 "Purchase Price" means the total consideration to be paid by
Purchaser to Seller for the purchase of the Property as set forth in Section
3.1.
1.1.23 "Security Deposits" means all (i) prepaid rent held as
security, (ii) security deposits, and (iii) pet deposits, if any, held by Seller
under any of the Leases.
1.1.24 "Seller's Note Obligation" shall mean the promissory note or
notes more particularly described on Schedule 1.1.24.
1.1.25 "Survey" shall have the meaning ascribed thereto in Section
6.1.
1.1.26 "Tenant" means any person or entity entitled to occupy any
portion of the Property under a Lease.
1.1.27 "Title Commitment" or "Title Commitments" shall have the
meaning ascribed thereto in Section 3.1.1.
1.1.28 "Title Insurer" shall have the meaning set forth in Section
6.1.
ARTICLE 2
PURCHASE AND SALE OF PROPERTY
2.1 Seller agrees to sell and convey the Property to Purchaser and
Purchaser agrees to purchase the Property from Seller, in accordance with the
terms and conditions set forth in this Purchase Contract.
ARTICLE 3
PURCHASE PRICE & DEPOSIT
3.1 The total purchase price ("Purchase Price") for the Property shall be
Seven Million Seven Hundred Fifty Thousand and No/100 Dollars ($7,750,000.00),
which shall be paid by Purchaser, as follows:
3.1.1 On the date hereof, Purchaser shall deliver to FIDELITY
NATIONAL TITLE INSURANCE COMPANY ("Escrow Agent" or the "Title Insurer") a
deposit in the sum of Fifty Thousand and No/100 Dollars ($50,000.00), in cash,
(such sum being hereinafter referred to and held as the "Initial Deposit").
Purchaser and Seller each approve the form of Escrow Agreement attached as
Exhibit "D". On or before 2:00 p.m. Austin, Texas time, on the Business Day
immediately following the expiration of the Feasibility Period (and provided
that this Agreement has not been terminated by Purchaser on the last day of the
Feasibility Period), Purchaser shall deposit into escrow with the Escrow Agent
the additional sum of One Hundred Fifty Thousand and No/100 Dollars
($150,000.00) (the "Additional Deposit"). As used herein, the term "Deposit"
shall mean, collectively, the Initial Deposit and the Additional Deposit. Seller
and Purchaser agree that the amount of One Hundred and No/100 Dollars ($100.00)
shall be paid by Purchaser to Seller concurrently with the deposit into escrow
of the Deposit, as consideration for Seller's execution and delivery of this
Purchase Contract (the "Independent Contract Consideration"). The Independent
Contract Consideration is independent of any other consideration or payment
provided for in this Purchase Contract and, notwithstanding anything to the
contrary herein, is non-refundable in all events.
3.1.2 The Escrow Agent shall hold the Deposit and make delivery of
the Deposit to the party entitled thereto under the terms hereof. Escrow Agent
shall invest the Deposit as directed by Purchaser, and all interest and income
thereon shall remain the property of Purchaser and shall be remitted to
Purchaser at the Closing or sooner if this Purchase Contract is terminated prior
to the Closing.
3.1.3 If the sale of the Property is closed by the date fixed
therefor (or any extension date provided for herein or by the mutual written
consent of the parties hereto, given or withheld in their respective sole
discretion), monies held as the Deposit shall be applied to the Purchase Price
on the Closing Date and the balance of the Purchase Price, less adjustments
provided for herein, shall be paid at Closing to Seller in immediately available
funds.
ARTICLE 4
FINANCING
4.1 Seller has advised Purchaser that, as of the Effective Date, the
Property is encumbered by certain liens securing the Seller's Note Obligation.
Subject to any restrictions on assumption that may be set forth in the documents
evidencing or pertaining to the Seller's Note Obligation, including but not
limited to the Mortgage (all of said documents being collectively referred to
herein as the "Loan Documents"), Purchaser may, at its option and its sole cost
and expense, seek to obtain the approval of the Mortgagee to (i) the transfer of
the Property to Purchaser and the assumption by Purchaser of Seller's
obligations under the Seller's Note Obligation and the other Loan Documents,
effective as of the Closing Date, and (ii) the release of Seller and its
affiliate guarantor(s) from all liability with respect to the Seller's Note
Obligation and the other Loan Documents, effective as of the Closing Date
(collectively referred to herein as the "Assumption Approval"). Seller and
Purchaser shall cooperate in the preparation and submission of all necessary
applications and notices to the Mortgagee for the Assumption Approval. Any and
all amounts or fees due and payable in connection with the assumption of the
Seller's Note Obligation and the other Loan Documents, and the release of Seller
and its affiliate guarantor(s) (other than scheduled payments of principal,
interest, escrows, and reserves due prior to the Closing Date) shall be paid by
Purchaser. The ability of Purchaser to obtain the Assumption Approval shall not
constitute a condition to the Closing, such that the failure to obtain
Assumption Approval shall not be a basis for the termination of this Purchase
Contract. In the event Purchaser does not elect to assume the Seller's Note
Obligation and the other Loan Documents, it is specifically agreed that Seller
shall not be obligated to prepay the Seller's Note Obligation until the Closing
Date and then only from the proceeds of the Purchase Price and, that Purchaser
shall be responsible for the payment of all costs and fees associated with the
prepayment of the Seller's Note Obligation, including but not limited to any
prepayment penalty or premium imposed by the holder of Seller's Note Obligation.
4.2 All payments made by Seller under the Loan Documents shall be prorated
appropriately so that Seller has made all payments until the Closing Date and
Purchaser has made all such payments from and after the Closing Date. Purchaser
shall reimburse Seller at Closing for all tax, insurance, and other escrow
deposits paid by Seller and then held by Lender in accordance with the Loan
Documents. Seller shall indemnify and hold Purchaser harmless from and against
all claims, demands, liabilities, and causes of action arising under the Loan
Documents before the Closing Date. Purchaser shall indemnify and hold Seller
harmless from and against all claims, demands, liabilities, and causes of action
arising under the Loan Documents from and after the Closing Date. The foregoing
obligations shall survive Closing pursuant to the provisions of Section .
ARTICLE 5
FEASIBILITY PERIOD
5.1 Subject to the terms of Section 5.3 below, for thirty (30) calendar
days following the Effective Date (the "Feasibility Period"), Purchaser, and its
agents, contractors, engineers, surveyors, attorneys, and employees
("Consultants") shall have the right from time to time to enter onto the
Property:
5.1.1 To conduct and make any and all customary studies, tests,
examinations and inspections, or investigations of or concerning the Property
(including without limitation, engineering and feasibility studies, evaluation
of drainage and flood plain, soil tests for bearing capacity and percolation and
surveys, including topographical surveys).
5.1.2 To confirm any and all matters which Purchaser may reasonably
desire to confirm with respect to the Property.
5.1.3 To ascertain and confirm the suitability of the Property for
Purchaser's intended use.
5.1.4 To review all Materials and, at the offices of the Manager
located at the Property, to review and copy (at Purchaser's expense) Seller's
books and records relating to the Property (other than reports prepared by
Seller for its own use) and all Leases.
5.2 Purchaser shall have the right to terminate this Purchase Contract for
any reason, or no reason, by giving written Notice to Seller on or before 5:00
p.m. Austin, Texas time, on the date of expiration of the Feasibility Period. If
Purchaser exercises such right to terminate, this Purchase Contract shall
terminate and be of no further force and effect, subject to and except for
Purchaser's obligations under Section 5.3, and Escrow Agent shall promptly
return the Deposit to Purchaser. If Purchaser fails to provide Seller with
written Notice of cancellation prior to the end of the Feasibility Period in
strict accordance with the Notice provisions of this Purchase Contract, this
Purchase Contract shall remain in full force and effect and Purchaser shall no
longer have any right to terminate this Purchase Contract pursuant to this
ARTICLE 5.
5.3 Purchaser shall indemnify and hold Seller harmless for any actions
taken by Purchaser and its Consultants on the Property. Purchaser shall
indemnify, defend (with attorneys selected by Seller) and hold Seller harmless
from any and all claims, damages, costs and liability which may arise due to
such entries, surveys, tests, investigations and the like except those arising
from the mere discovery of adverse conditions. Seller shall have the right,
without limitation, to disapprove any and all entries, surveys, tests,
investigations and the like that in Seller's reasonable judgment could result in
any injury to the Property or breach of any agreement, or expose Seller to any
liability, costs, liens or violations of applicable law, or otherwise adversely
affect the Property or Seller's interest therein. Purchaser shall exercise
commercially reasonable efforts to minimize disruption to the Tenants in
connection with Purchaser's or its Consultants' activities pursuant to this
Section. No consent by the Seller to any such activity shall be deemed to
constitute a waiver by Seller or assumption of liability or risk by Seller.
Purchaser hereby agrees to restore the Property to the same condition existing
immediately prior to Purchaser's exercise of its rights pursuant to this ARTICLE
5 at Purchaser's sole cost and expense. Purchaser shall maintain commercial
general liability insurance with broad form contractual and personal injury
liability endorsements with respect to Purchaser's activities on the Property
pursuant to this Section 5.3, with coverages of not less than $1,000,000.00 for
injury or death to any one person and $2,000,000.00 for injury or death to more
than one person and $500,000.00 with respect to property damage, by water or
otherwise. The provisions of this Section shall survive the Closing or
termination of this Purchase Contract for a period of one (1) year from the
Execution Date.
5.4 Purchaser shall not permit any mechanic's or materialmen's liens or
any other liens to attach to the Property by reason of the performance of any
work or the purchase of any materials by Purchaser or any other party in
connection with any studies or tests conducted by or for Purchaser. Purchaser
shall give notice to Seller twenty-four (24) hours prior to entry onto the
Property, shall deliver proof of insurance coverage required above to Seller and
shall permit Seller to have a representative present during all investigations
and inspections conducted with respect to the Property. Purchaser shall take all
reasonable actions and implement all protections necessary to ensure that all
actions taken in connection with the investigations and inspections of the
Property, and all equipment, materials and substances generated, used or brought
onto the Property pose no material threat to the safety of persons or the
environment and cause no damage to the Property or other property of Seller or
other persons. All information made available by Seller to Purchaser in
accordance with this Purchase Contract or obtained by Purchaser in the course of
its investigations shall be treated as confidential information by Purchaser,
and, prior to the purchase of the Property by Purchaser, Purchaser shall use
commercially reasonably efforts to prevent its Consultants, agents and employees
from divulging such information to any unrelated third parties except as
reasonably necessary to third parties engaged by Purchaser for the limited
purpose of analyzing and investigating such information for the purpose of
consummating the transaction contemplated by this Purchase Contract, including
Purchaser's attorneys and representatives, prospective lenders and engineers.
5.5 Seller shall deliver to Purchaser, within ten (10) days from the
Effective Date, copies of the following (none of which shall include proprietary
information of Seller): (a) Seller's form residential lease agreement(s) used at
the Property, (b) the Loan Documents and all Property Contracts, (c) any
technical, engineering, environmental, ADA and Fair Housing Act compliance and
handicapped access reports prepared for Seller by third parties in Seller's
possession or control relating to the Property and prepared for Seller by third
parties, and (d) those items set forth in Schedule 5.5 (collectively, the
"Materials"). If the sale of the Property is not closed by the Closing Date,
Purchaser shall, within five (5) calendar days, return all such Materials to
Seller.
ARTICLE 6
TITLE
6.1 Seller shall promptly cause to be delivered to Purchaser (a) a
preliminary title report or commitment (the "Title Commitment") prepared by
Fidelity National Title Insurance Company (the "Title Insurer") to issue an
Owner's Policy of Title Insurance (the "Title Policy") insuring title to the
Property to be good and indefeasible in the amount of the Purchase Price,
subject only to the Permitted Exceptions (described below), together with
legible copies of all instruments identified therein as exceptions, and (b) a
survey of the Land and Improvements having a date not more than sixty (60) days
prior to the Effective Date, prepared in accordance with and complying with the
minimum requirements of ALTA, in a form, and certified as of a date satisfactory
to the Title Insurer to delete standard survey exceptions from the Title Policy,
except for any Permitted Exceptions, and (i) showing all improvements, recorded
easements (to the extent locatable), set back lines and such other matters shown
as exceptions by the Title Commitments; (ii) showing the right of way for all
adjacent public streets; (iii) specifically disclosing whether (and, if so, what
part of) any of the Property is in an area designated as requiring flood
insurance under applicable federal laws regulating lenders; (iv) containing a
perimeter legal description of the Property; (v) certified to Purchaser,
Purchaser's lender, Seller and Title Insurer as being true and correct; and (vi)
certifying the legal description set forth therein as describing the Property to
be purchased by Purchaser pursuant to the terms of this Purchase Contract (the
"Survey"). On or before ten (10) days following Purchaser's receipt of the Title
Commitment, the documents of record reflected therein, and the Survey, Purchaser
shall give written notice (the "Objection Notice") to the attorneys for Seller
of any conditions of title subject to which Purchaser is not obligated to take
the Property pursuant to the provisions of this Purchase Contract (the
"Objections") separately specifying and setting forth each such Objection.
Seller shall have no obligation to cure any Objection, but may extend the
Closing Date for up to an additional thirty (30) days to cure any such matter.
If Seller gives Purchaser notice (the "Response Notice") that Seller is unable
or unwilling to cure any Objection set forth in the Objection Notice, or if
Seller fails to or does not give Purchaser a Response Notice, Purchaser may, as
its exclusive remedy, elect by written notice to Seller, within five (5)
Business Days after the Objection Notice is given, either (a) to accept such
title as Seller is able to convey without any reduction or abatement of the
Purchase Price, or (b) to terminate this Purchase Contract in which event the
Deposit shall be returned to Purchaser. If Purchaser fails to give notice of its
election to terminate this Agreement within such five (5) business day period,
Purchaser shall be deemed to have waived such Objections and to have elected to
proceed to close the transactions contemplated by this Purchase Contract. Should
any exceptions to Schedule B of the Title Commitment be added thereto after
Purchaser's Objection Notice has been given, Purchaser and Seller shall have the
same rights, as identified above, with respect to any new exception.
6.2 All matters disclosed on the Title Commitment which are not objected
to in the Objection Notice as timely delivered or which are waived or deemed
waived by Purchaser pursuant to the provisions of Section 6.1 above shall be
deemed to be Permitted Exceptions, other than (a) the Mortgage, (b) unpaid liens
for real estate and personal property taxes for years prior to the fiscal year
in which the Closing Date occurs and (c) any other matter which Seller is
obligated to pay and discharge at the Closing under this Purchase Contract, and
the amount thereof chargeable to Seller, plus interest and penalties thereon, if
any, shall be deducted from the Purchase Price on the Closing Date and paid to
the Title Insurer for the payment of such matters. Purchaser agrees to accept
title to the Land and Improvements subject to the Permitted Exceptions.
6.3 Seller agrees that Purchaser shall be provided with, and that Seller
shall be responsible for payment of the basic premium for the issuance of, the
Title Policy to be issued to Purchaser by the Title Insurer at Closing, which
shall be issued to Purchaser at Closing subject only to the Permitted
Encumbrances and standard printed exceptions as contained in a standard form
owner policy of title insurance, provided, however, that the rights of parties
in possession exception shall be limited to those parties holding under written
leases, and the exceptions pertaining to taxes shall be limited to the year in
which the Closing occurs and subsequent taxes and assessments for prior years
due to change in use or ownership. Purchaser agrees that it shall be solely
responsible for payment of all costs, fees and premiums related to all
endorsements or amendments thereof.
6.4 Notwithstanding the foregoing, any deeds of trust and/or mortgages or
other monetary encumbrances, other than the mortgage securing the Seller's Note
Obligation (the "Mortgage") and any other Loan Documents of record, shall not be
deemed Permitted Exceptions, whether Purchaser gives written notice of such or
not, and shall be paid off, satisfied, discharged and/or cured by Seller at or
before Closing.
6.5 Seller covenants that it will not voluntarily create or cause any lien
or encumbrance to attach to the Property between the Effective Date and the
Closing Date (other than Leases and Property Contracts in the ordinary course of
business); any such monetary lien or encumbrance so attaching by voluntary act
of Seller (hereinafter, a "Voluntary Intervening Lien") shall be discharged by
the Seller at or prior to Closing on the Closing Date or any extended Closing
Date. Except as expressly provided in this ARTICLE 6, Seller shall not be
required to undertake efforts to remove any Objection or other lien,
encumbrance, security interest, exception, objection or other matter, to make
any expenditure of money or institute litigation or any other judicial or
administrative proceeding, and Seller may elect not to discharge the same;
provided, however, if any lien or encumbrance (other than a Voluntary
Intervening Lien) attaches to the Property between the date of this Purchase
Contract and the Closing Date, Seller shall be required to satisfy or discharge
said lien or encumbrance at or prior to the Closing, provided that Seller shall
not be required to expend more than $50,000 in connection with such satisfaction
or discharge. If the amount required to satisfy or discharge such lien or
encumbrance exceeds $50,000, Purchaser shall have the option of either (a)
paying the excess amount over $50,000 required to satisfy or discharge such
lien, and proceeding to the Closing, or (b) terminating this Purchase Contract,
in which case, the Deposit shall be returned and refunded to Purchaser and
neither party shall have any further liability hereunder, subject to and except
for Purchaser's liability under Section 5.3 of this Purchase Contract. Seller
shall have no option to terminate this Purchase Contract if Purchaser has
elected to pay the amount in excess of $50,000 to satisfy or discharge such lien
or encumbrance.
6.6 Seller shall be responsible for the costs of the Survey initially
delivered to Purchaser pursuant to Section 6.1. Purchaser may, at its sole cost
and expense, cause the Survey delivered to it by Seller to be revised, updated
and/or recertified in accordance with Purchaser's instructions. In such event,
an original counterpart of the Survey shall be promptly delivered by Purchaser
to Seller and its attorney. In the event the perimeter legal description of the
Property contained in the Survey differs from that contained in the deed or
deeds by which Seller took title to the Property, the latter description shall
be used in the Deed.
ARTICLE 7
CLOSING
7.1 Date, Place Of Closing, Prorations, Delinquent Rent and Closing Costs.
7.1.1 The Closing shall occur on the date which is thirty (30) days
following the expiration of the Feasibility Period, provided, however, that (a)
Purchaser may extend the Closing Date by an additional thirty (30) days (that
is, to a date not later than ninety [90] days following the Effective Date) if
(i) not later than the last day of the Feasibility Period Purchaser has provided
Notice to Seller that it has initiated the obtainment of Assumption Approval and
is diligently pursuing the same, and (ii) not later than two (2) Business Days
prior to the Closing Date Purchaser provides Notice to Seller that, after
diligent efforts, it has not yet obtained Assumption Approval and desires to
extend the Closing Date in order to continue the pursuit of Assumption Approval;
provided further, that, (b) if the Closing date is extended pursuant to the
provisions of the preceding clause (a), Purchaser may, not later than two (2)
Business Days prior to the Closing Date, further extend the Closing Date by an
additional fifteen (15) days (that is, to a date not later than one hundred and
five [105] days following the Effective Date) in order to continue the pursuit
of Assumption Approval if Assumption Approval has not been obtained by the date
of such Notice after diligent efforts, provided that, not later than 2:00 p.m.,
Austin, Texas time, of the date which is two (2) Business Days prior to the
Closing Date, Purchaser delivers to Seller Notice that, after diligent efforts,
it has not yet obtained Assumption Approval and desires to extend the Closing
Date in order to continue the pursuit of Assumption Approval and delivers to
Escrow Agent an additional deposit in the amount of Fifty Thousand and No/100
Dollars ($50,000.00), which deposit shall become a part of, and be applied in
the same manner as, the Deposit, then the Closing Date shall be extended to such
date. The Closing shall occur through an escrow with Escrow Agent, whereby the
Seller, Purchaser and their attorneys need not be physically present at the
Closing and may deliver documents by overnight air courier or other means.
Notwithstanding the foregoing, Purchaser shall have the right to accelerate the
Closing Date to an earlier date selected by the Purchaser on the condition that
(i) on or before 5:00 p.m., Austin, Texas time, on the date which is not less
than fifteen (15) days prior to the accelerated Closing Date selected by
Purchaser, Purchaser delivers Notice to Seller that Purchaser is electing to
accelerate the Closing Date pursuant to this Section 7.1.1 (which shall include
the proposed accelerated Closing Date), and (ii) Seller is able to satisfy all
of the conditions to Closing to be satisfied by Seller notwithstanding the
acceleration of the Closing Date to such earlier date (it being understood and
agreed that Seller shall have no obligation to close on such accelerated Closing
Date if such would result in the default of Seller thereunder).
7.1.2 The Closing Date may be extended without penalty at the option
of Seller to a date not later than thirty (30) days following the Closing Date
specified in Section 7.1.1 above to satisfy a condition to Closing to be
satisfied by Seller, or such later date as is mutually acceptable to Seller and
Purchaser.
7.1.3 All normal and customarily proratable items, including,
without limitation, rents and other income from the Property ("Rents"),
operating expenses, fees payable to governmental authorities and personal
property taxes, shall be prorated as of the Closing Date, Seller being charged
or credited, as appropriate, for all of same attributable to the period up to
the Closing Date (and credited for any amounts paid by Seller attributable to
the period on or after the Closing Date, if assumed by Purchaser) and Purchaser
being responsible for, and credited or charged, as the case may be, for all of
same attributable to the period on and after the Closing Date. All unapplied
Security Deposits, if any, shall be transferred by Seller to Purchaser at the
Closing or Seller shall be given a credit therefor against the Purchase Price,
as Seller may elect. Purchaser shall assume at Closing the obligations under the
Property Contracts assumed by Purchaser, provided that any payments under the
Property Contracts have been prorated. Any real estate ad valorem or similar
taxes for the Property, or any installment of assessments payable in
installments which installment is payable in the calendar year of Closing, shall
be prorated to the date of Closing, based upon actual days involved. The
proration of real property taxes or installments of assessments shall be based
upon the assessed valuation and tax rate figures for the year in which the
Closing occurs to the extent the same are available; provided, that in the event
that actual figures (whether for the assessed value of the Property or for the
tax rate) for the year of Closing are not available at the Closing Date, the
proration shall be made using the tax rate from the preceding year. The
provisions of this Section 7.1.3 shall apply during the Proration Period (as
defined below). Rents and all related charges shall be prorated based on actual
collections as of the Closing Date.
7.1.4 If any of the items subject to proration hereunder cannot be
prorated at the Closing because the information necessary to compute such
proration is unavailable, or if any errors or omissions in computing prorations
at the Closing are discovered subsequent to the Closing, then such item shall be
reapportioned and such errors and omissions corrected as soon as practicable
after the Closing Date and the proper party reimbursed, which obligation shall
survive the Closing for a period (the "Proration Period") from the Closing Date
until one (1) year after the Closing Date. Neither party hereto shall have the
right to require a recomputation of a Closing proration or a correction of an
error or omission in a Closing proration unless within the Proration Period one
of the parties hereto (i) has obtained the previously unavailable information or
has discovered the error or omission, and (ii) has given Notice thereof to the
other party together with a copy of its good faith recomputation of the
proration and copies of all substantiating information used in such
recomputation. The failure of a party to obtain any previously unavailable
information or discover an error or omission with respect to an item subject to
proration hereunder and to give Notice thereof as provided above within the
Proration Period shall be deemed a waiver of its right to cause a recomputation
or a correction of an error or omission with respect to such item after the
Closing Date.
7.1.5 If on the Closing Date any Tenant is in arrears in any Rent
payment under any Tenant lease (the "Delinquent Rent"), any Delinquent Rent
received by Purchaser and Seller from such Tenant after the Closing shall be
applied to amounts due and payable by such Tenant during the following periods
in the following order of priority: (i) first, to the period of time after the
Closing Date, and (ii) second, to the period of time before the Closing Date. If
Delinquent Rent or any portion thereof received by Seller or Purchaser after the
Closing are due and payable to the other party by reason of this allocation, the
appropriate sum, less a proportionate share of any reasonable attorneys' fees
and costs and expenses expended in connection with the collection thereof, shall
be promptly paid to the other party. Any monies received by Seller after Closing
shall be forwarded to Purchaser for disbursement in accordance with the order of
payment provided herein above. After the Closing, Seller shall continue to have
the right, but not the obligation, in its own name, to demand payment of and to
collect Delinquent Rent owed to Seller by any Tenant, which right shall include,
without limitation, the right to continue or commence legal actions or
proceedings against any Tenant (provided, that Seller shall not commence any
legal actions or proceedings against any Tenant which continues as a Tenant at
the Property after Closing without the prior consent of Purchaser, which may be
withheld in Purchaser's sole discretion), and the delivery of the Assignment as
defined in Section 7.2.1.3 shall not constitute a waiver by Seller of such
right. The provisions of this Section 7.1.5 shall apply during the ninety (90)
days following the Closing Date.
7.1.6 Seller shall pay the cost of all transfer taxes (e.g., excise
stamp taxes) and Purchaser shall pay the cost of all recording costs with
respect to the Closing. Seller and Purchaser shall share equally in the costs of
the Escrow Agent for escrow fees but not any other fees and charges of the Title
Insurer.
7.2 Items To Be Delivered Prior To Or At Closing.
7.2.1 Seller. At Closing, Seller shall deliver to Escrow Agent (for
delivery to Purchaser upon the consummation of the Closing), each of the
following items, as applicable:
7.2.1.1 Special Warranty Deed in the form attached as Exhibit
"E" (the "Deed"). The acceptance of such deed at Closing, shall be deemed to be
full performance of, and discharge of, every agreement and obligation on
Seller's part to be performed under this Purchase Contract, except for those
that this Purchase Contract specifically provides shall survive Closing.
7.2.1.2 A Bill of Sale without recourse or warranty in the
form attached as Exhibit "F", covering all Property Contracts, Leases, Security
Deposits, Permits (other than Excluded Permits) and Fixtures and Tangible
Personal Property required to be transferred to Purchaser with respect to such
Property. Purchaser shall countersign the same so as to effect an assumption by
Purchaser of, among other things, Seller's obligations thereunder.
7.2.1.3 An Assignment (to the extent assignable and in force
and effect) without recourse or warranty in the form attached as Exhibit "G" of
all of Seller's right, title and interest in and to the Miscellaneous Property
Assets, subject to any required consents. Purchaser shall countersign the same
so as to effect an assumption by Purchaser, including, without limitation, of
Seller's obligations thereunder.
7.2.1.4 A closing statement executed by Seller.
7.2.1.5 A title affidavit or, at Seller's option, an
indemnity, as applicable, in the customary form reasonably acceptable to Seller
and Title Insurer to enable Title Insurer to delete the standard exceptions to
the title insurance policy to be issued pursuant to the Title Commitment (the
"Title Policy") (other than matters constituting any Permitted Exceptions and
matters which are to be completed or performed post-Closing); provided that such
affidavit does not subject Seller to any greater liability, or impose any
additional obligations, other than as set forth in this Purchase Contract.
7.2.1.6 A certification of Seller's non-foreign status
pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended.
7.2.1.7 Except for the items expressly listed above to be
delivered at Closing, delivery of any other required items shall be deemed made
by Seller to Purchaser, if Seller leaves such documents at the Property in their
customary place of storage or in the custody of Purchaser's representatives.
7.2.1.8 Evidence that the Management Agreement has been
terminated.
7.2.1.9 A Rent Roll (as defined in Schedule 5.5) for the
Property, updated to the Closing Date and certified by Seller but limited to
Seller's knowledge.
7.2.1.10 Resolutions, certificates of good standing, and such
other organizational documents as Title Insurer shall reasonably require
evidencing Seller's authority to consummate this transaction.
7.2.1.11 To the extent in Seller's possession or control,
originals or copies of the Leases, Property Contracts, Permits (other than
Excluded Permits), lease files, warranties, guaranties, operating manuals, keys
to the Property and Seller's books and records (other than reports prepared by
Seller for its own use) regarding the Property.
7.2.1.12 Such other instruments, documents or certificates as
are required to be delivered by Purchaser to Seller in accordance with any of
the other provisions of this Purchase Contract.
7.2.2 Purchaser. At Closing, Purchaser shall deliver to the Title
Company (for disbursement or delivery to Seller upon Closing) the following
items with respect to the Property being conveyed at such Closing:
7.2.2.1 The full Purchase Price as required by ARTICLE 3
hereof minus the then outstanding amount of the Seller's Note Obligation, plus
any fees or penalties necessary to assume the Seller's Note Obligation, and plus
or minus the adjustments or prorations required by this Purchase Contract. If at
Closing there are any liens or encumbrances on the Property that Seller is
obligated or elects to pay and discharge, Seller may use any portion of the
Purchase Price for the Property(s) to satisfy the same, provided that Seller
shall have delivered to Title Company, on such Closing instruments in recordable
form sufficient to satisfy such liens and encumbrances of record (or, as to any
mortgages or deeds of trust, appropriate payoff letters, acceptable to the Title
Insurer), together with the cost of recording or filing such instruments. The
existence of any such liens or encumbrances shall not be deemed objections to
title if Seller shall comply with the foregoing requirements.
7.2.2.2 A closing statement executed by Purchaser.
7.2.2.3 A countersigned counterpart of the Bill of Sale in the
form attached as Exhibit "F".
7.2.2.4 A countersigned counterpart of the Assignment in the
form attached as Exhibit "G".
7.2.2.5 Evidence that all conditions precedent to the
Assumption Approval, including but not limited to the release of Seller and its
affiliate guarantor(s) from all liability under the Loan Documents, have been
satisfied.
7.2.2.6 Such other instruments, documents or certificates as
are required to be delivered by Purchaser to Seller in accordance with any of
the other provisions of this Purchase Contract.
7.2.3 Notice to Tenants. At Closing, Seller and Purchaser shall
execute and deliver a letter, dated as of the date of Closing and addressed to
all Tenants, informing such Tenants of the transfer of the Property and the
assignment of the Leases to Purchaser, together with an instruction to pay all
amounts due or to become due under the Leases to Purchaser, including an
acknowledgment by Purchaser of receipt of all security deposits (specifying the
exact dollar amount of the security deposit) and that Purchaser is responsible
for the Tenant's security deposit, and in compliance with Section 92.105 of the
Texas Property Code. The letter shall be in the form of Exhibit "I" attached
hereto.
ARTICLE 8
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF SELLER AND PURCHASER
8.1 Representations, Warranties and Covenants Of Seller.
8.1.1 For the purpose of inducing Purchaser to enter into this
Purchase Contract and to consummate the sale and purchase of the Property in
accordance herewith, Seller represents and warrants to Purchaser the following
as of the Effective Date and as of the Closing Date:
8.1.1.1 Seller is lawfully and duly organized, and, if
applicable, in good standing under the laws of the state of its formation set
forth in the initial paragraph of this Purchase Contract; and has or at the
Closing shall have the power and authority to sell and convey the Property and
to execute the documents to be executed by Seller and prior to the Closing will
have taken as applicable, all corporate, partnership, limited liability company
or equivalent entity actions required for the execution and delivery of this
Purchase Contract, and the consummation of the transactions contemplated by this
Purchase Contract. The compliance with or fulfillment of the terms and
conditions hereof will not conflict with, or result in a breach of, the terms,
conditions or provisions of, or constitute a default under, any contract to
which Seller is a party or by which Seller is otherwise bound. Seller has not
made any other contract for the sale of, or given any other person the right to
purchase, all or any part of any of the Property;
8.1.1.2 Seller owns indefeasible fee title to the Property,
including all real property contained therein required to be sold to Purchaser,
subject only to the Permitted Exceptions (provided, however, that if this
representation is untrue, Purchaser's remedies shall be limited to the right to
terminate this Purchase Contract as provided in Section 6.1 and receive a return
of the Deposit, and Seller shall have no other liability as a result thereof
other than such liability as may exist after Closing under the covenant of title
contained in the Deed);
8.1.1.3 There are no parties in possession of the Property,
except for occupants, guests and tenants under the Leases (provided, however,
that if this representation is or becomes untrue, Purchaser's remedies shall be
limited to the right to terminate this Purchase Contract as provided in Section
6.1 and receive a return of the Deposit, and Seller shall have no other
liability as a result thereof, either before or after Closing);
8.1.1.4 The joinder of no person or entity other than Seller
is necessary to convey the Property, fully and completely, to Purchaser at
Closing, or to fulfill Seller's obligations under this Purchase Contract, and
Seller has all necessary right and authority to convey and assign to Purchaser
all contract rights and warranties required to be conveyed and assigned to
Purchaser hereunder;
8.1.1.5 Purchaser has no duty to collect withholding taxes for
Seller pursuant to the Foreign Investors Real Property Tax Act of 1980, as
amended;
8.1.1.6 To Seller's knowledge, there are no actions,
proceedings, litigation or governmental investigations or condemnation actions
either pending or threatened against the Property, as applicable;
8.1.1.7 Seller has no knowledge of any claims for labor
performed, materials furnished or services rendered in connection with
constructing, improving or repairing any of the Property, as applicable, caused
by Seller and which remain unpaid beyond the date for which payment was due and
in respect of which liens may or could be filed against any of the Property, as
applicable;
8.1.1.8 Seller has not received any written notice of any
proposed taking,condemnation or special assessment with respect to the Property;
8.1.1.9 Seller has not received any written notice of any
uncured violations of any federal, state, county or municipal law, ordinance,
order, regulation or requirement affecting the Property;
8.1.1.10 Seller has not received any written notice of any
default by Seller under any of the Property Contracts that will not be
terminated on the Closing Date;
8.1.1.11 Until the Closing Date, Seller agrees to (a) maintain
its existing insurance policies covering the Property in full force and effect
through the Closing Date, (b) continue to maintain and operate the Property in
substantially the same manner as Seller has been operating the Property
immediately prior to the Effective Date, (c) cause any of the units on the
Property that are vacant as of three days prior to the Closing Date to be in
"make ready" condition on the Closing Date, and (d) following the expiration of
the Feasibility Period, not enter into any new Lease (i) having a term of less
than three (3) months or longer than twelve (12) months, (ii) having a rental
rate less than those of similar type and/or size as reflected in the Rent Roll,
(iii) using tenant credit requirements which depart materially from those
currently used by Seller, or (iv) which offers any rental discount or lease
incentive except those that would be fully realized or paid by Seller before
Closing; and
8.1.1.12 To Seller's knowledge, all documents relating to the
Property that are delivered by Seller to Purchaser in connection with this
Purchase Contract, are true, correct and complete in all material respects, and
none contain any untrue statement of a material fact or omit to state a material
fact.
8.1.1.13 At all times from the date of this Agreement to
Closing Seller shall keep and perform all of the material obligations to be
performed by the landlord under the Leases in the ordinary course of its
business consistent with its past practices.
8.1.1.14 Not remove any Fixtures and Tangible Personal
Property unless it is replaced with a comparable item of equal quality and
quantity as existed as of the time of such removal or unless such disposition,
substitution or replacement is made in the ordinary course of business.
8.1.1.15 Seller shall, subject to the prorations set forth in
this Agreement, cause all non-contested trade accounts and costs and expenses of
operation and maintenance of the Property incurred prior to the Closing to be
promptly paid when due.
8.1.1.16 Seller shall not, except for matters related to the
health, safety or welfare of the tenants, nor make any material alterations in
the Property without the prior written consent of Purchaser.
8.1.1.17 To Seller's knowledge, there are no leases,
tenancies, licenses or other rights of occupancy or use for any portion of the
Property other than the Property Contracts and except as set forth in the Rent
Roll.
8.1.1.18 Except as set forth on the Rent Roll, no tenant under
any of the Leases is entitled to any concession, allowance, rebate or refund.
8.1.1.19 To Seller's knowledge, there are no management,
service, equipment, supply, security, maintenance, concession or other
agreements with respect to or affecting the Property, except for the Property
Contracts to be conveyed to Purchaser at Closing.
8.1.1.20 To Seller's knowledge, there is no action, suit or
proceeding pending or threatened, against or affecting Seller or the Property or
any portion thereof arising out of the ownership, management or operation of the
Property, in any court or before or by any federal, state, county or municipal
department, commission, board, bureau or agency or other governmental
instrumentality, except those set forth on the list of pending or threatened
litigation provided to Purchaser, if any.
8.1.1.21 At all times from the Effective Date of this
Agreement to Closing Seller shall keep and perform all of its obligations under
the Loan Documents.
8.1.2 Except for the representations and warranties expressly set
forth above in Subsection 8.1.1, the Property is expressly purchased and sold
"AS IS," "WHERE IS," and "WITH ALL FAULTS." The Purchase Price and the terms and
conditions set forth herein are the result of arm's-length bargaining between
entities familiar with transactions of this kind, and said price, terms and
conditions reflect the fact that Purchaser shall have the benefit of, and except
for Seller's representations, warranties and covenants in this Agreement, is not
relying upon any information provided by Seller or Broker or statements,
representations or warranties, express or implied, made by or enforceable
directly against Seller or Broker, including, without limitation, any relating
to the value of the Property, the physical or environmental condition of the
Property, any state, federal, county or local law, ordinance, order or permit;
or the suitability, compliance or lack of compliance of the Property with any
regulation, or any other attribute or matter of or relating to the Property
(other than any covenants of title contained in the Deed and the representations
set forth in this ARTICLE 8). If Seller provides or has provided any documents,
summaries, opinions or work product of consultants, surveyors, architects,
engineers, title companies, governmental authorities or any other person or
entity with respect to the Property, including, without limitation, the offering
prepared by Broker, Purchaser and Seller agree that Seller has done so or shall
do so only for the convenience of both parties, but, excluding the Rent Roll,
the reliance by Purchaser upon any such documents, summaries, opinions or work
product shall not create or give rise to any liability of or against Seller,
Seller's partners or affiliates or any of their respective partners, officers,
directors, participants, employees, attorneys, representatives, successors,
assigns or predecessors-in-interest. Purchaser acknowledges and agrees that no
representation has been made and no responsibility is assumed by Seller with
respect to current and future applicable zoning or building code requirements or
the compliance of the Property with any other laws, rules, ordinances or
regulations, the financial earning capacity or expense history of the Property,
the continuation of contracts, continued occupancy levels of the Property, or
any part thereof, or the continued occupancy by tenants of any Leases or,
without limiting any of the foregoing, occupancy at Closing. Prior to Closing,
Seller shall have the right, but not the obligation, to enforce its rights
against any and all Property occupants, guests or tenants. Except as otherwise
set forth herein, Purchaser agrees that the departure or removal, prior to
Closing, of any of such guests, occupants or tenants shall not be the basis for,
nor shall it give rise to, any claim on the part of Purchaser, nor shall it
affect the obligations of Purchaser under this Purchase Contract in any manner
whatsoever; and Purchaser shall close title and accept delivery of the deed with
or without such tenants in possession and without any allowance or reduction in
the Purchase Price under this Purchase Contract.
8.1.3 Seller agrees that Purchaser shall be entitled to rely on the
foregoing representations and warranties made by Seller herein and that
Purchaser has so relied. Seller and Purchaser agree that those representations
and warranties contained in Section 8.1 shall survive Closing for a period of
one (1) year (the "Survival Period"). Seller shall have no liability after the
Survival Period with respect to the representations and warranties contained
herein except to the extent that Purchaser has filed a lawsuit against Seller
during the Survival Period for breach of any representation or warranty. In the
event that Seller breaches any representation contained in Section 8.1 and
Purchaser had knowledge of such breach prior to the Closing Date, Purchaser
shall be deemed to have waived any right of recovery, and Seller shall not have
any liability in connection therewith.
8.1.4 Representations and warranties above made to the knowledge of
Seller shall not be deemed to imply any duty of inquiry. For purposes of this
Purchase Contract, the term Seller's "knowledge" shall mean and refer to only
actual knowledge of the "Designated Representative" (as hereinafter defined) of
the Seller and shall not be construed to refer to the knowledge of any other
partner, officer, director, agent, employee or representative of the Seller, or
any affiliate of the Seller, or to impose upon such Designated Representative
any duty to investigate the matter to which such actual knowledge or the absence
thereof pertains, or to impose upon such Designated Representative any
individual personal liability. As used herein, the term Designated
Representative shall refer to (a) Harry Alcock, or (b) Jessica Cordero, of
Manager (the "Designated Representative").
8.2 Representations And Warranties Of Purchaser
8.2.1 For the purpose of inducing Seller to enter into this Purchase
Contract and to consummate the sale and purchase of the Property in accordance
herewith, Purchaser represents and warrants to Seller the following as of the
Effective Date and as of the Closing Date:
8.2.1.1 Purchaser is a limited partnership duly organized and
validly existing under the laws of Texas.
8.2.1.2 Purchaser, acting through any of its or their duly
empowered and authorized officers or members, has all necessary power and
authority to own and use its properties and to transact the business in which it
is engaged, and has full power and authority to enter into this Purchase
Contract, to execute and deliver the documents and instruments required of
Purchaser herein, and to perform its obligations hereunder.
8.2.1.3 No pending or, to the knowledge of Purchaser,
threatened litigation exists which if determined adversely would restrain the
consummation of the transactions contemplated by this Purchase Contract or would
declare illegal, invalid or non-binding any of Purchaser's obligations or
covenants to Seller.
8.2.1.4 Purchaser is (or at the Closing will be) duly
authorized to execute and deliver, acting through its duly empowered and
authorized officers and members, respectively, and perform this Purchase
Contract and all documents and instruments and transactions contemplated hereby
or incidental hereto, and such execution, delivery and performance by Purchaser
does not (i) violate any of the provisions of its organizational documents, (ii)
violate any provision of any law, governmental rule or regulation currently in
effect, (iii) violate any judgment, decree, writ, injunction, award,
determination or order currently in effect that names or is specifically
directed at Purchaser or its property, and (iv) require the consent, approval,
order or authorization of, or any filing with or notice to, any court or other
governmental authority.
8.2.1.5 The joinder of no person or entity other than
Purchaser is necessary to consummate the transactions to be performed by
Purchaser and Purchaser has all necessary right and authority to perform such
acts as are required and contemplated by this Purchase Contract.
8.2.2 Purchaser has not dealt with any broker, finder or any other
person, in connection with the purchase of or the negotiation of the purchase of
the Property that might give rise to any claim for commission against Seller or
lien or claim against the Property except for Broker.
ARTICLE 9
CONDITIONS PRECEDENT TO CLOSING
9.1 Purchaser's obligation to close under this Purchase Contract, shall be
subject to and conditioned upon the fulfillment of each and all of the following
conditions precedent:
9.1.1 All of the documents required to be delivered by Seller to
Purchaser at the Closing pursuant to the terms and conditions hereof shall have
been delivered and shall be in form and substance reasonably satisfactory to
Purchaser and consistent with the terms of this Agreement;
9.1.2 Each of the representations, warranties and covenants of
Seller contained herein shall be true in all material respects as of the Closing
Date (and Purchaser shall be permitted to perform an inspection of the Property
immediately prior to the Closing Date to verify same);
9.1.3 Seller 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 Seller hereunder;
9.1.4 Neither Seller nor Seller's general partner shall be a debtor
in any bankruptcy proceeding or shall have been in the last 6 months a debtor in
any bankruptcy proceeding;
9.1.5 A taking of all or any part of the Property must not have been
commenced or threatened in writing;
9.1.6 The actual occupancy level of the Property shall not have
decreased by more than ten percent (10%) from the actual occupancy level on the
Effective Date;
9.1.7 Notwithstanding anything to the contrary, there are no other
conditions on Purchaser's obligation to Close except as expressly set forth
above. If any of the above conditions is not satisfied, then notwithstanding
anything to the contrary contained in this Purchase Contract, Purchaser may, at
its option (a) extend the Closing Date to permit satisfaction of such condition,
(b) waive such condition and proceed to Closing and accept title to the Property
with an agreed-upon offset or deduction from the Purchase Price (assuming Seller
and Purchaser can agree upon such offset or deduction amount, and neither party
has any obligation to come to an agreement), (c) waive such condition and
proceed to Closing and accept title to the Property without any offset or
deduction from the Purchase Price, or (d) notify Seller of Purchaser's election
to terminate this Purchase Contract and receive a return of the Deposit from the
Escrow Agent in accordance with the provisions of ARTICLE 12 hereof provided,
however, that in the case of the failure of the representations and warranties
contained in Section 8.1.1.2 to be true and correct on the Closing Date, or the
failure to satisfy the conditions in Sections 9.1.5 and/or 9.1.6, Purchaser
shall have no rights or remedies under the provisions of ARTICLE 12 other than
to receive a return of the Deposit as its sole and exclusive remedy.
9.2 Without limiting any of the rights of Seller elsewhere provided for in
this Purchase Contract, Seller's obligation with respect to the conveyance of
the Property under this Purchase Contract shall be subject to and conditioned
upon the fulfillment of each and all of the following conditions precedent:
9.2.1 Purchaser's representations and warranties set forth in this
Purchase Contract shall have been true and correct in all material respects when
made, and shall be true and correct in all material respects on the Closing Date
and as of the Effective Date as though such representations and warranties were
made at and as of such date and time.
9.2.2 Purchaser shall have fully performed and complied with all
covenants, conditions, and other obligations in this Purchase Contract to be
performed or complied with by it at or prior to Closing including, without
limitation, payment in full of the Purchase Price.
9.2.3 There shall not be pending or, to the knowledge of either
Purchaser or Seller, any litigation or threatened litigation which, if
determined adversely, would restrain the consummation of any of the transactions
contemplated by this Purchase Contract or declare illegal, invalid or nonbinding
any of the covenants or obligations of the Purchaser.
9.2.4 Notwithstanding anything to the contrary, there are no other
conditions on Seller's obligation to Close except as expressly set forth above.
If any of the above conditions is not satisfied, then notwithstanding anything
to the contrary contained in this Purchase Contract, Seller may, at its option
(a) extend the Closing Date to permit satisfaction of such condition, (b) waive
such condition and proceed to Closing, or (c) notify Purchaser of Seller's
election to terminate this Purchase Contract and receive the Deposit from the
Escrow Agent which Seller shall retain as liquidated damages, as its sole and
exclusive remedy hereunder, in accordance with the provisions of ARTICLE 12
hereof, provided, however, that in the case of any failure to satisfy the
condition contained in Section 9.2.3 above due to the action or threat of action
of a party other than Purchaser (or an affiliate or assignee of Purchaser), and
all of the other conditions of Seller's obligation to close have been satisfied,
Seller shall not be entitled to receipt of the Deposit but the Deposit shall be
returned to Purchaser by the Escrow Agent.
ARTICLE 10
BROKERAGE
10.1 Seller represents and warrants to Purchaser that it has dealt only
with Patrick Slavin of Hendricks & Partners ("Broker") in connection with this
Purchase Contract. Seller and Purchaser each represents and warrants to the
other that other than Broker, it has not dealt with or utilized the services of
any other real estate broker, sales person or finder in connection with this
Purchase Contract, and each party agrees to indemnify the other party from and
against all claims for brokerage commissions and finder's fees arising from or
attributable to the acts or omissions of the indemnifying party.
10.2 Seller agrees to pay Broker a commission according to the terms of a
separate agreement. Broker shall not be deemed a party or third party
beneficiary of this Purchase Contract.
10.3 Broker assumes no responsibility for the condition of the Property or
representation for the performance of this Purchase Contract by the Seller or
Purchaser.
10.4 The Texas Real Estate License Act requires written notice to
Purchaser from any licensed real estate broker or salesman who is to receive a
commission from Purchaser that Purchaser should have an attorney of its own
selection examine an abstract of title to the property being acquired or that
Purchaser should be furnished with or should obtain a title insurance policy.
Notice to that effect is, therefore, hereby given to Purchaser on behalf of
Broker.
ARTICLE 11
POSSESSION
11.1 Possession of the Property subject to the Permitted Exceptions shall
be delivered to Purchaser at the Closing, subject to Purchaser's earlier right
of entry for inspection as set forth in ARTICLE 5.
ARTICLE 12
DEFAULTS AND REMEDIES
12.1 In the event Purchaser is obligated, but fails or refuses to close
the transaction contemplated by this Purchase Contract, Seller and Purchaser
agree that it would be impractical and extremely difficult to estimate the
damages which Seller may suffer. Therefore, Seller and Purchaser hereby agree
that, except for the Purchaser's obligations to Seller under Section 5.3, the
reasonable estimate of the total net detriment that Seller would suffer in the
event that Purchaser so terminates this Purchase Contract or defaults hereunder
on or prior to the Closing Date is and shall be, as Seller's sole and exclusive
remedy (whether at law or in equity), the right to receive from the Escrow Agent
and retain the full amount of the Deposit. The payment of the Deposit as
liquidated damages is not intended as a forfeiture or penalty within the meaning
of applicable law and is intended to settle all issues and questions about the
amount of damages suffered by Seller in the applicable event, except only for
damages under Section 5.3 above, irrespective of the time when the inquiry about
such damages may take place. Upon any such failure by Purchaser hereunder, this
Purchase Contract shall be terminated, and neither party shall have any further
rights or obligations hereunder, each to the other, except for the Purchaser's
obligations to Seller under Section 5.3 above, and the right of Seller to
collect the Deposit as liquidated damages.
12.2 If the Closing does not occur as a result of Seller's default
hereunder, Purchaser's sole remedy shall be to elect to either (a) terminate
this Purchase Contract and receive reimbursement of the Deposit and Purchaser's
actual and verified out of pocket expenses incurred in connection with the
transaction contemplated herein (but not exceeding $200,000.00 in the aggregate)
or (b) enforce specific performance of this Purchase Contract, provided,
however, that in the case of the breach of the representations and warranties
contained in Section 8.1.1.2 to be true and correct on the Closing Date, or in
the case of the failure of Seller to satisfy the conditions in Sections 9.1.5
and/or 9.1.6, Purchaser shall have no rights or remedies under the provisions of
this Section 12.2 other than to receive a return of the Deposit as its sole and
exclusive remedy.
ARTICLE 13
RISK OF LOSS OR CASUALTY
13.1 In the event that the Property is damaged or destroyed by fire or
other casualty after the Effective Date but prior to Closing, and the cost of
repair is more than $200,000, then Seller will have no obligation to repair such
damage or destruction and, at Purchaser's option, this Agreement shall
terminate. In the event Purchaser elects not to terminate this Agreement, this
transaction shall be closed in accordance with the terms of this Agreement,
notwithstanding any such damage or destruction, and Purchaser shall receive, at
Closing all insurance proceeds pertaining thereto (plus a credit against the
Purchase Price in the amount of any deductible payable by Seller in connection
therewith), but only to the extent the damage or destruction has not been
repaired by Seller out of the insurance proceeds.
13.2 In the event that the Property is damaged or destroyed by fire or
other casualty after the Effective Date but prior to the Closing, and the cost
of repair is less than $200,000, this transaction shall be closed in accordance
with the terms of this Agreement, notwithstanding the damage or destruction;
provided, however, at Purchaser's option, Seller shall make such repairs if they
can be reasonably effected before the Closing. If Seller is unable to effect
such repairs, then Purchaser shall receive at Closing all insurance proceeds
pertaining thereto to the extent that such proceeds relate to work not performed
as of the Closing Date (plus a credit against the Purchase Price in the amount
of any deductible payable by Seller in connection therewith if the repairs have
not yet been commenced), but only to the extent the damage or destruction has
not been repaired by Seller out of the insurance proceeds. If the damage to the
Property contemplated under Section 13.1 or this Section 13.2 includes damage to
individual apartment units which render such units uninhabitable, and the
Closing occurs prior to the complete repair of such apartment units, Seller
shall reimburse Purchaser for rents lost as result of the casualty by paying to
Purchaser the Rent Amount upon the issuance of a final certificate of occupancy
for each building or portion of the Property containing the damaged units. "Rent
Amount" means the amount of rent which would have been payable (at Seller's
then-current rental rates) for the units made uninhabitable by the casualty for
the period of time they will be so uninhabitable (as reasonably determined by
Seller and Purchaser) multiplied by 93%.
ARTICLE 14
LEAD-BASED PAINT DISCLOSURE
14.1 Seller and Purchaser hereby acknowledge completion of the Lead-Based
Paint Disclosure form attached as Exhibit "J" hereto and the delivery of such
executed form prior to the Effective Date.
ARTICLE 15
EMINENT DOMAIN
15.1 In the event that at the time of Closing all or any part of the
Property is (or has previously been) acquired, or is about to be acquired, by
authority of any governmental agency in purchase in lieu thereof (or in the
event that at such time there is any notice of any such acquisition or intent to
acquire by any such governmental agency), Purchaser shall have the right, at
Purchaser's option, to terminate this Purchase Contract by giving written Notice
within Fifteen (15) days of Purchaser's receipt from Seller of notice of the
occurrence of such event and recover the Deposit hereunder, or to settle in
accordance with the terms of this Purchase Contract for the full Purchase Price
and receive the full benefit or any condemnation award.
ARTICLE 16
MISCELLANEOUS
16.1 Exhibits And Schedules
All Exhibits and Schedules, whether or not annexed hereto, are a part of
this Purchase Contract for all purposes.
16.2 Assignability
Subject to Section 16.18, this Purchase Contract is not assignable without
first obtaining the prior written approval of the non-assigning party, except
that Purchaser may assign all or an undivided interest in this Purchaser
Contract to one or more entities so long as (i) Purchaser or its affiliate
remains a part of the purchasing entity(ies), and (ii) Purchaser is not released
from its liability hereunder.
16.3 Binding Effect
This Purchase Contract shall be binding upon and inure to the benefit of
Seller and Purchaser, and their respective successors, heirs and permitted
assigns.
16.4 Captions
The captions, headings, and arrangements used in this Purchase Contract
are for convenience only and do not in any way affect, limit, amplify, or modify
the terms and provisions hereof.
16.5 Number And Gender Of Words
Whenever herein the singular number is used, the same shall include the
plural where appropriate, and words of any gender shall include each other
gender where appropriate.
16.6 Notices
All Notices, demands, requests and other communications required pursuant
to the provisions of this Purchase Contract ("Notice") shall be in writing and
shall be deemed to have been properly given or served for all purposes (i) if
sent by Federal Express or a nationally recognized overnight carrier for next
business day delivery, on the first business day following deposit of such
Notice with such carrier, or (ii) if personally delivered, on the actual date of
delivery or (iii) if sent by certified mail, return receipt requested postage
prepaid, on the fifth (5th) Business Day following the date of mailing, or (iv)
if sent by telecopier, then on the actual date of delivery (as evidenced by a
telecopier confirmation) provided that a copy of the telecopy and confirmation
is also sent by U.S. mail, addressed as follows:
If to Seller: If to Purchaser:
CONCAP STRATFORD ASSOCIATES, LTD. FIRST WORTHING COMPANY
2000 South Colorado Boulevard LIMITED
Tower Two, Suite 2-1000 8144 Walnut Hill Lane
Denver, Colorado 80222 Suite 550
Attn: Mr. Harry Alcock Dallas, Texas 75231
Telephone No. (303) 691-4344 Attn: Greg Cason
Facsimile No. (303) 691-5662 Telephone No. (214) 739-8141
Facsimile No. (214) 369-4130
And With a copy to
Argent Real Estate Munsch Hardt Kopf & Harr, P.C.
1401 Brichell Avenue 4000 Fountain Place
Suite 520 1445 Ross Avenue
Miami, Florida 33131 Dallas, Texas 75202-2790
Attn: David Marquette Attn: Mark Stetler
Telephone No. (305) 371-9299 Telephone: (214) 855-7530
Facsimile No. (305) 374-2386 Facsimile No. (214) 978-4386
With a copy to
Jackson Walker L.L.P.
112 E. Pecan
Suite 2100
San Antonio, Texas 78205
Attn: Eileen E. Scherlen, Esq.
Telephone No. (210) 978-7784
Facsimile No. (210) 978-7790
Any of the parties may designate a change of address by Notice in writing
to the other parties. Whenever in this Purchase Contract the giving of Notice by
mail or otherwise is required, the giving of such Notice may be waived in
writing by the person or persons entitled to receive such Notice.
16.7 Governing Law And Venue
The laws of the State in which the Land is located shall govern the
validity, construction, enforcement, and interpretation of this Purchase
Contract, unless otherwise specified herein except for the conflict of laws
provisions thereof. All claims, disputes and other matters in question arising
out of or relating to this Purchase Contract, or the breach thereof, shall be
decided by proceedings instituted and litigated in a court for the district in
which the Property is situated, and the parties hereto expressly consent to the
venue and jurisdiction of such court.
16.8 Entirety And Amendments
This Purchase Contract embodies the entire Purchase Contract between the
parties and supersedes all prior Purchase Contracts and understandings, if any,
relating to the Property, and may be amended or supplemented only by an
instrument in writing executed by the party against whom enforcement is sought.
16.9 Severability
If any provision of this Purchase Contract is held to be illegal, invalid,
or unenforceable under present or future laws, such provision shall be fully
severable. The Purchase Contract shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part of this
Purchase Contract; and the remaining provisions of this Purchase Contract shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance from this Purchase
Contract. In lieu of such illegal, invalid, or unenforceable provision, there
shall be added automatically as a part of this Purchase Contract a provision as
similar in terms to such illegal, invalid, or unenforceable provision as may be
possible to make such provision legal, valid, and enforceable.
16.10 Multiple Counterparts
This Purchase Contract may be executed in a number of identical
counterparts. If so executed, each of such counterparts is to be deemed an
original for all purposes and all such counterparts shall, collectively,
constitute one Purchase Contract. In making proof of this Purchase Contract, it
shall not be necessary to produce or account for more than one such counterpart.
16.11 Further Acts
In addition to the acts and deeds recited herein and contemplated and
performed, executed and/or delivered by Seller and Purchaser, Seller and
Purchaser agree to perform, execute and/or deliver or cause to be performed,
executed and/or delivered any and all such further acts, deeds, and assurances
as may be necessary to consummate the transactions contemplated hereby.
16.12 Construction
No provision of this Purchase Contract shall be construed in favor of, or
against, any particular party by reason of any presumption with respect to the
drafting of this Purchase Contract; both parties, being represented by counsel,
having fully participated in the negotiation of this instrument.
16.13 Confidentiality
Purchaser shall not disclose the purchase price or specific contract terms
contained in this Purchase Contract, shall keep the same confidential, provided
that Purchaser may disclose the terms and conditions of this Purchase Contract
(i) as required by law, (ii) to consummate the terms of this Purchase Contract,
or any financing relating thereto, or (iii) to Purchaser's or Seller's partners,
public officials, lenders, attorneys and accountants. Any information provided
by Seller to Purchaser under the terms of this Purchase Contract is for
informational purposes only. Such information is also confidential and Purchaser
shall be prohibited from making such information public to any other person or
entity other than its agents and legal representatives, without Seller's prior
written authorization, which may be granted or denied in Seller's sole
discretion.
16.14 Time Of The Essence
It is expressly agreed by the parties hereto that time is of the essence
with respect to this Purchase Contract.
16.15 Cumulative Remedies And Waiver
No remedy herein conferred or reserved is intended to be exclusive of any
other available remedy or remedies herein conferred or referred except as
expressly stated otherwise, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Purchase
Contract. No delay or omission to exercise any right or power accruing upon any
default, omission, or failure of performance hereunder shall impair any right or
power or shall be construed to be a waiver thereof, but any such right and power
may be exercised from time to time and as often as may be deemed expedient. No
waiver, amendment, release, or modification of this Purchase Contract shall be
established by conduct, custom, or course of dealing.
16.16 Litigation Expenses
In the event either party hereto commences litigation against the other to
enforce its rights hereunder, the prevailing party in such litigation shall be
entitled to recover from the non-prevailing party its reasonable attorneys' fees
and expenses incidental to such litigation.
16.17 Time Periods
Should the last day of a time period fall on a weekend or legal holiday,
the next Business Day thereafter shall be considered the end of the time period.
16.18 Exchange
At Seller's sole cost and expense, Seller may structure and consummate the
sale of the Property to Purchaser as part of a like-kind exchange (an
"Exchange") intended to qualify under ss. 1031 of the Internal Revenue Code of
1986, as amended, provided that: (a) the Closing shall not be delayed or
affected by reason of an Exchange; (b) Seller shall effect an Exchange through
an assignment of this Agreement, and its rights under this Agreement, to a
qualified intermediary; and (c) Purchaser shall not be required to take an
assignment of the agreement relating to the exchange property or be required to
acquire or hold title to any real property for purposes of consummating an
Exchange. Purchaser shall cooperate fully and promptly with Seller's conduct of
the Exchange, provided that all costs and expenses generated in connection with
the Exchange shall be borne solely by Seller. If Seller uses a qualified
intermediary to effectuate the Exchange, any assignment of the rights or
obligations of Seller hereunder shall not relieve, release or absolve Seller of
its obligations to Purchaser. Seller shall indemnify and hold harmless Purchaser
from and against any and all liability arising from and out of the Exchange.
16.19 No Personal Liability of Officers, Trustees or Directors of Seller's
Partners
Purchaser acknowledges that this Agreement is entered into by Seller which
is a Texas limited partnership, and Purchaser agrees that no individual officer,
trustee, director or representative of the partners of Seller shall have any
personal liability under this Agreement or any document executed in connection
with the transactions contemplated by this Agreement.
16.20 No Personal Liability of Officers,Trustees or Directors of Purchaser
Seller acknowledges that this Agreement is entered into by Purchaser which
is a Texas limited partnership and Seller agrees that no individual officer,
trustee, director or representative of Purchaser shall have any personal
liability under this Agreement or any document executed in connection with this
Agreement.
16.21 No Exclusive Negotiations
Seller shall have the right, at all times, to solicit backup offers and
enter into discussions, negotiations, or any other communications concerning or
related to the sale of the Property with any third-party; provided, however,
that such communications are subject to the terms of this Agreement, and that
Seller shall not enter into any contract or binding agreement with a third-party
for the sale of the Property unless such agreement is contingent on the
termination of this Agreement without the Property having been conveyed to
Purchaser.
16.22 DTPA WAIVER.
IT IS THE INTENT OF SELLER AND PURCHASER THAT THE RIGHTS AND REMEDIES WITH
RESPECT TO THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT SHALL BE GOVERNED BY
LEGAL PRINCIPLES OTHER THAN THE TEXAS DECEPTIVE TRADE PRACTICES-CONSUMER
PROTECTION ACT. ACCORDINGLY, TO THE MAXIMUM EXTENT APPLICABLE AND PERMITTED BY
LAW (AND WITHOUT ADMITTING SUCH APPLICABILITY), PURCHASER HEREBY WAIVES THE
PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT,
CHAPTER 17, SUBCHAPTER 3 (OTHER THAN SECTION 17.555, WHICH IS NOT WAIVED), TEXAS
BUSINESS AND COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND
PROTECTIONS. FOR PURPOSES OF THE WAIVERS SET FORTH IN THIS AGREEMENT, PURCHASER
HEREBY WARRANTS AND REPRESENTS UNTO SELLER THAT (A) PURCHASER HAS KNOWLEDGE AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE IT TO EVALUATE THE
MERITS AND RISKS OF THE TRANSACTION CONTEMPLATED UNDER THIS AGREEMENT, (B)
PURCHASER IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION WITH SELLER
REGARDING THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, (C) PURCHASER IS
REPRESENTED BY LEGAL COUNSEL THAT IS SEPARATE AND INDEPENDENT OF SELLER AND
SELLER'S LEGAL COUNSEL AND (D) PURCHASER HAS CONSULTED WITH PURCHASER'S LEGAL
COUNSEL REGARDING THIS AGREEMENT PRIOR TO PURCHASER'S EXECUTION OF THIS
AGREEMENT AND VOLUNTARILY CONSENTS TO THIS WAIVER.
[Remainder of Page Intentionally Left Blank]
NOW WHEREFORE, the parties hereto have executed this Purchase Contract
under seal as of the date first set forth above.
Seller:
CONCAP STRATFORD ASSOCIATES, LTD.,
a Texas limited partnership
By: ConCap CCP/IV Stratford
Properties, Inc., a Texas corporation,
its general partner
By:
Harry Alcock
Execute Vice President
Purchaser:
FIRST WORTHING COMPANY LIMITED
a Texas limited partnership
By: SWG Central, Inc.
a Texas corporation, General Partner
By:
Name:
Title:
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINED TERMS...................................................2
ARTICLE 2 PURCHASE AND SALE OF PROPERTY...................................5
ARTICLE 3 PURCHASE PRICE & DEPOSIT........................................5
ARTICLE 4 FINANCING.......................................................6
ARTICLE 5 INSPECTIONS.....................................................5
ARTICLE 6 TITLE...........................................................9
ARTICLE 7 CLOSING........................................................11
ARTICLE 8 REPRESENTATIONS, WARRANTIES AND COVENANTS
OF SELLER AND PURCHASER........................................16
ARTICLE 9 CONDITIONS PRECEDENT TO CLOSING................................21
ARTICLE 10 BROKERAGE......................................................22
ARTICLE 11 POSSESSION.....................................................23
ARTICLE 12 DEFAULTS AND REMEDIES..........................................23
ARTICLE 13 RISK OF LOSS OR CASUALTY.......................................24
ARTICLE 14 LEAD-BASED PAINT DISCLOSURE....................................21
ARTICLE 15 EMINENT DOMAIN.................................................25
ARTICLE 16 MISCELLANEOUS..................................................25
Exhibit 10.83
FIRST AMENDMENT
TO PURCHASE AND SALE CONTRACT
THIS FIRST AMENDMENT TO PURCHASE AND SALE CONTRACT (this "Amendment") is
entered into as of the 26th day of October, 2000, by and between CONCAP
STRATFORD ASSOCIATES, LTD., a Texas limited partnership ("Seller"), and FIRST
WORTHING COMPANY LIMITED, a Texas corporation ("Purchaser").
RECITALS:
A. Purchaser and Seller have entered into that certain Purchase and Sale
Contract (the "Purchase Contract") dated as of September __, 2000, covering
certain parcels of real property located in Travis County, Texas, as more
particularly described in the Purchase Contract.
B. Purchaser and Seller desire to amend the Purchase Contract in
certain respects, as set forth below.
C. All capitalized terms used but not defined in this Amendment
shall have the meaning ascribed to them in the Purchase Contract.
AGREEMENTS:
FOR TEN DOLLARS AND OTHER GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND
SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, Purchaser and Seller hereby agree
as follows:
1. The introductory paragraph to the Purchase Contract is hereby modified
and amended so that the Effective Date of the Purchase Contract shall be
September 26, 2000.
2. Section 5.1 of the Purchase Contract is hereby modified and amended to
extend the expiration of the Feasibility Period from thirty (30) calendar days
following the Effective Date to October 27, 2000.
3. Except as expressly modified by this Amendment, the Purchase
Contract is in full force and effect as originally written.
4. This Amendment may be executed (a) by facsimile transmission, the same
of which will be treated as an original, and (b) in one or more counterparts,
each of which shall be deemed an original and all of which combined shall
constitute one and the same instrument.
5. Each of the parties executing this Amendment represents and warrants
that it has been fully authorized and has the requisite authority to bind the
respective party to the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first set forth above.
Seller:
CONCAP STRATFORD ASSOCIATES, LTD., a
Texas limited partnership
By: ConCap CCP/IV Stratford
Properties, Inc., a Texas
corporation,
its general partner
By:
Harry Alcock
Execute Vice President
Purchaser:
FIRST WORTHING COMPANY LIMITED,
a Texas limited partnership
By: SWG Central, Inc.,
a Texas corporation, General Partner
By:
Gregory A. Cason
Executive Vice President
Exhibit 10.84
REINSTATEMENT AND SECOND AMENDMENT
TO PURCHASE AND SALE CONTRACT
THIS REINSTATEMENT AND SECOND AMENDMENT TO PURCHASE AND SALE CONTRACT
(this "Amendment") is entered into as of the 31st day of October, 2000, by and
between CONCAP STRATFORD ASSOCIATES, LTD., a Texas limited partnership
("Seller"), and FWC APARTMENT ACQUISITION COMPANY, L.P., a Texas limited
partnership ("Purchaser").
RECITALS:
A. Seller and Purchaser's predecessor have entered into that certain
Purchase and Sale Contract (the "Purchase Contract") dated as of September 26,
2000, covering certain parcels of real property located in Travis County, Texas,
as more particularly described in the Purchase Contract.
B. First Worthing Company Limited, the original "Purchaser" under the
Contract, has assigned all of its rights and obligations under the Purchase
Contract to Purchaser.
C. The Purchase Contract was amended and modified by that certain First
Amendment to Purchase and Sale Contract, dated as of October 26, 2000, by and
between Purchaser and Seller.
D. Purchaser terminated the Purchase Contract on October 27, 2000.
E. Purchaser and Seller desire to reinstate and amend the Purchase
Contract in certain respects, as set forth below.
F. All capitalized terms used but not defined in this Amendment shall
have the meaning ascribed to them in the Purchase Contract.
AGREEMENTS:
FOR TEN DOLLARS AND OTHER GOOD AND VALUABLE CONSIDERATION THE RECEIPT AND
SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, Purchaser and Seller hereby agree
as follows:
1. The introductory clause of Section 3.1 of the Purchase Contract is
hereby amended and restated in its entirety as follows:
The total purchase price ("Purchase Price") for the Property shall
be Seven Million Six Hundred Thousand and No/100 Dollars ($7,600,000.00),
which shall be paid by Purchaser, as follows:
2. Section 4.1 of the Purchase Contract is hereby amended and
restated in its entirety as follows:
4.1 Seller has advised Purchaser that, as of the Effective Date, the
Property is encumbered by certain liens securing the Seller's Note
Obligation. Subject to any restrictions on assumption that may be set
forth in the documents evidencing or pertaining to the Seller's Note
Obligation, including but not limited to the Mortgage (all of said
documents being collectively referred to herein as the "Loan Documents"),
Purchaser intends to seek the obtainment of the approval of the Mortgagee
to (i) the transfer of the Property to Purchaser and the assumption by
Purchaser of Seller's obligations under the Seller's Note Obligation and
the other Loan Documents, effective as of the Closing Date, and (ii) the
release of Seller and its affiliate guarantor(s) from all liability with
respect to the Seller's Note Obligation and the other Loan Documents,
effective as of the Closing Date (collectively referred to herein as the
"Assumption Approval"). Purchaser agrees that it shall diligently pursue
the obtainment of Loan Approval and, in connection therewith, Seller and
Purchaser shall cooperate in the preparation and submission of all
necessary applications and notices to the Mortgagee for the Assumption
Approval. Purchaser agrees to promptly comply with all reasonable requests
of the Mortgagee in connection with the obtaining of the Assumption
Approval, including providing all financial statements and other documents
reasonably requested by the Mortgagee. Any and all amounts or fees due and
payable in connection with the assumption of the Seller's Note Obligation
and the other Loan Documents, and the release of Seller and its affiliate
guarantor(s) (other than scheduled payments of principal, interest,
escrows, and reserves due prior to the Closing Date) shall be paid by
Purchaser. The ability of Purchaser to obtain the Assumption Approval
shall not constitute a condition to the Closing, such that the failure to
obtain Assumption Approval shall not be a basis for the termination of
this Purchase Contract; provided, however, if Assumption Approval is (i)
conditioned on a material change in the terms of the Loan Documents not
contemplated by Section 21(c)(5) of the Mortgage; (ii) denied based on
standards of eligibility, credit, management or other standards, as
contemplated by Section 21(c)(3)of the Mortgage, which are materially
different than those customarily applied by the Mortgagee at the time of
the proposed transfer of the Property to Purchaser for approval of similar
mortgages or multifamily properties; or (iii) denied for a reason or
reasons other than as contemplated by the provisions of Section 21 of the
Mortgage (in any such case, an "Arbitrary Denial of Assumption Approval"),
then Purchaser may elect by written Notice to Seller to terminate this
Purchase Contract within five (5) Business Days of Purchaser's receipt of
the Mortgagee's Arbitrary Denial of Assumption Approval, in which event
the Deposit shall be returned to Purchaser and neither Seller nor
Purchaser shall have any further obligation or liability to the other
under this Purchase Contract (except as provided in Section 5.3 hereof).
In the event Purchaser does not elect to terminate this Purchase Contract,
it is specifically agreed that Seller shall not be obligated to prepay the
Seller's Note Obligation until the Closing Date and then only from the
proceeds of the Purchase Price and, that Purchaser shall be responsible
for the payment of all costs and fees associated with the prepayment of
the Seller's Note Obligation, including but not limited to any prepayment
penalty or premium imposed by the holder of Seller's Note Obligation.
3. Section 9.1 of the Purchase Contract is hereby amended to:
(a) add, as a new Section 9.1.7, the following:
9.1.7. Purchaser shall not have received from the
Mortgagee a written Arbritrary Denial of Assumption Approval.
and
(b) to renumber the old Section 9.1.7 as Section 9.1.8
4. Except as expressly modified by this Amendment, the Purchase
Contract is in full force and effect as originally written.
4. This Amendment may be executed (a) by facsimile transmission, the same
of which will be treated as an original, and (b) in one or more counterparts,
each of which shall be deemed an original and all of which combined shall
constitute one and the same instrument.
5. Each of the parties executing this Amendment represents and warrants
that it has been fully authorized and has the requisite authority to bind the
respective party to the terms hereof.
[Rest of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first set forth above.
Seller:
CONCAP STRATFORD ASSOCIATES, LTD., a Texas
limited partnership
By: ConCap CCP/IV Stratford
Properties, Inc., a Texas
corporation,
its general partner
By:
Harry Alcock
Execute Vice President
Purchaser:
FWC ACQUISITION COMPANY, L.P.,
a Texas limited partnership
By: FWC Operation GP, LLC,
a Texas limited liability company,
its general partner
By:
Name:
Title: