UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2004
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________to _________
Commission file number 0-11002
CONSOLIDATED CAPITAL PROPERTIES IV
(Exact Name of Registrant as Specified 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)
(864) 239-1000
(Registrant's telephone number)
Check 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 proceeding
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 ___
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
June 30, December 31,
2004 2003
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 3,218 $ 1,537
Receivables and deposits 1,162 1,163
Restricted escrows 1,087 748
Other assets 2,022 1,504
Investment properties:
Land 12,790 12,996
Buildings and related personal property 111,724 109,374
124,514 122,370
Less accumulated depreciation (94,652) (96,547)
29,862 25,823
$ 37,351 $ 30,775
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 1,944 $ 731
Tenant security deposit liabilities 470 510
Accrued property taxes 902 1,247
Other liabilities 1,137 1,107
Distributions payable 715 715
Mortgage notes payable 69,066 67,900
74,234 72,210
Partners' Deficit
General partners (6,867) (7,044)
Limited partners (342,773 units issued and
outstanding) (30,016) (34,391)
(36,883) (41,435)
$ 37,351 $ 30,775
Note: The consolidated balance sheet at December 31, 2003, has been derived from
the audited financial statements at that date but does not include all the
information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
(Restated) (Restated)
Revenues:
Rental income $ 4,802 $ 4,924 $ 9,654 $ 9,645
Other income 629 588 1,222 1,225
Casualty gains 355 -- 399 --
Total revenues 5,786 5,512 11,275 10,870
Expenses:
Operating 2,538 2,133 4,791 4,667
General and administrative 263 271 510 622
Depreciation 617 840 1,322 1,668
Interest 1,171 1,168 2,340 2,342
Property taxes 415 397 809 774
Total expenses 5,004 4,809 9,772 10,073
Income from continuing operations 782 703 1,503 797
Loss from discontinued operations (33) (37) (87) (21)
Gain on sale of discontinued operations -- -- 3,141 6,149
Net income $ 749 $ 666 $ 4,557 $ 6,925
Net income allocated to general partners (4%) $ 30 $ 27 $ 182 $ 277
Net income allocated to limited partners (96%) 719 639 4,375 6,648
$ 749 $ 666 $ 4,557 $ 6,925
Per limited partnership unit:
Income from continuing operations $ 2.19 $ 1.98 $ 4.20 $ 2.24
Loss from discontinued operations (.09) (.12) (.24) (.07)
Gain on sale of discontinued operations -- -- 8.80 17.22
Net income $ 2.10 $ 1.86 $ 12.76 $ 19.39
Distributions per limited partnership unit $ -- $ 10.50 $ -- $ 12.72
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited Total
Partnership General Limited Partners'
Units Partners Partners Deficit
Original capital contributions 343,106 $ 1 $171,553 $171,554
Partners' deficit at
December 31, 2003 342,773 $ (7,044) $(34,391) $(41,435)
Distributions to partners -- (5) -- (5)
Net income for the six months
ended June 30, 2004 -- 182 4,375 4,557
Partners' deficit at
June 30, 2004 342,773 $ (6,867) $(30,016) $(36,883)
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
2004 2003
Cash flows from operating activities:
Net income $ 4,557 $ 6,925
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 1,358 1,796
Amortization of loan costs 98 103
Casualty gains (399) --
Loss on early extinguishment of debt 48 13
Gain on sales of discontinued operations (3,141) (6,149)
Change in accounts:
Receivables and deposits 1 164
Other assets (515) (375)
Accounts payable 304 (307)
Tenant security deposit liabilities (40) (20)
Accrued property taxes (345) (281)
Other liabilities 30 387
Due from affiliates -- 149
Net cash provided by operating activities 1,956 2,405
Cash flows from investing activities:
Property improvements and replacements (5,141) (1,621)
Net (deposits to) withdrawals from restricted escrows (339) 310
Insurance proceeds from casualties 399 --
Net proceeds from sales of discontinued operations 3,794 8,137
Net cash (used in) provided by investing activities (1,287) 6,826
Cash flows from financing activities:
Proceeds from mortgage notes payable 3,810 --
Loan costs paid (149) --
Repayment of mortgage notes payable (2,204) (4,229)
Payments on mortgage notes payable (440) (437)
Distributions to partners (5) (4,395)
Advances from affiliates 900 --
Payments on advances from affiliates (900) --
Net cash provided by (used in) financing activities 1,012 (9,061)
Net increase in cash and cash equivalents 1,681 170
Cash and cash equivalents at beginning of period 1,537 2,127
Cash and cash equivalents at end of period $ 3,218 $ 2,297
Supplemental Disclosures of Cash Flow Information and Non-Cash Activities:
Cash paid for interest was approximately $2,487,000 and $2,629,000 for the six
months ended June 30, 2004 and 2003, respectively.
At June 30, 2004 and December 31, 2003, property improvements and replacements
of approximately $1,052,000 and $243,000, respectively, were included in
accounts payable.
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Consolidated
Capital Properties IV (the "Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of ConCap Equities, Inc. ("CEI" or the "General
Partner"), all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and six months ended June 30, 2004, are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 2004. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Partnership's Annual Report on Form 10-K for
the fiscal year ended December 31, 2003. The General Partner is a subsidiary of
Apartment Investment and Management Company ("AIMCO"), a publicly traded real
estate investment trust.
In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
the accompanying consolidated statements of operations for the three and six
months ended June 30, 2003 have been restated to reflect the operations of Point
West Apartments, as loss from discontinued operations due to its sale in March
2004. In addition, the operations of South Port Apartments are shown as loss
from discontinued operations due to its sale in March 2003.
Note B - 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 Partnership activities.
The Partnership Agreement provides for (i) certain payments to affiliates for
services and (ii) reimbursements of certain expenses incurred by affiliates on
behalf of the Partnership.
Affiliates of the General Partner are entitled to receive 5% of gross receipts
from all the Partnership's properties as compensation for providing property
management services. The Partnership paid to such affiliates approximately
$545,000 and $581,000 for the six months ended June 30, 2004 and 2003,
respectively, which is included in operating expenses and discontinued
operations.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $402,000 and $416,000 for the
six months ended June 30, 2004 and 2003, respectively, which is included in
general and administrative expenses and investment properties. Included in these
amounts are fees related to construction management services provided by an
affiliate of the General Partner of approximately $21,000 and $33,000 for the
six months ended June 30, 2004 and 2003, respectively. The construction
management service fees are calculated based on a percentage of current year
additions to investment properties.
The 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. The Partnership paid approximately $68,000 under this
provision of the Partnership Agreement to the General Partner during the six
months ended June 30, 2003, which is included in general and administrative
expenses. There were no such special management fees paid or earned during the
six months ended June 30, 2004.
For acting as real estate broker in connection with the sale of South Port
Apartments, the General Partner was paid a real estate commission of
approximately $295,000 during the six months ended June 30, 2003. When the
Partnership terminates, the General Partner will have to return this commission
if the limited partners do not receive their original invested capital plus a 6%
per annum cumulative return.
In accordance with the Partnership Agreement, an affiliate of the General
Partner advanced the Partnership approximately $900,000 during the six months
ended June 30, 2004 to assist with the construction of Belmont Place Apartments.
During the same period, the Partnership repaid approximately $905,000, which
included approximately $5,000 of interest. There were no such advances or
repayments during the six months ended June 30, 2003. Interest on advances is
charged at prime plus 2% or 6.00% at June 30, 2004. Interest expense was
approximately $5,000 for the six months ended June 30, 2004. There was no
interest expense for the six months ended June 30, 2003. Subsequent to June 30,
2004, the Partnership received an advance of approximately $1,584,000 to pay
construction invoices for Belmont Place Apartments.
The Partnership insures its properties up to certain limits through coverage
provided by AIMCO which is generally self-insured for a portion of losses and
liabilities related to workers compensation, property casualty and vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner. During the six months ended June 30, 2004 and 2003, the Partnership was
charged by AIMCO and its affiliates approximately $244,000 and $350,000,
respectively, for insurance coverage and fees associated with policy claims
administration.
Note C - Casualty Gains
In October 2003, Citadel Village Apartments suffered fire damage to five
apartment units. Insurance proceeds of approximately $92,000 were received
during the six months ended June 30, 2004. The Partnership recognized a casualty
gain of approximately $92,000 during the six months ended June 30, 2004 as the
damaged assets were fully depreciated at the time of the casualty.
In November 2003, Lake Forest Apartments suffered water damage to some of the
rental units. Insurance proceeds of approximately $44,000 were received during
the six months ended June 30, 2004. The Partnership recognized a casualty gain
of approximately $44,000 during the six months ended June 30, 2004 as the
damaged assets were fully depreciated at the time of the casualty.
In February 2004, The Apartments suffered damage to 180 apartment units due to
an ice storm. During the six months ended June 30, 2004, the Partnership
received insurance proceeds of approximately $190,000, which included
approximately $29,000 for emergency expenses. The Partnership recognized a
casualty gain of approximately $161,000 during the six months ended June 30,
2004 as the damaged assets were fully depreciated at the time of the casualty.
In February 2004, Knollwood Apartments suffered fire damage to some of the
rental units. Insurance proceeds of approximately $47,000 were received during
the six months ended June 30, 2004. The Partnership recognized a casualty gain
of approximately $47,000 during the six months ended June 30, 2004 as the
damaged assets were fully depreciated at the time of the casualty.
In March 2004, Village East Apartments suffered an electrical fire that damaged
six apartment units. Insurance proceeds of approximately $55,000 were received
during the six months ended June 30, 2004. The Partnership recognized a casualty
gain of approximately $55,000 during the six months ended June 30, 2004 as the
damaged assets were fully depreciated at the time of the casualty.
Note D - Disposition of Investment Properties
On March 31, 2004, the Partnership sold Point West Apartments to a third party,
for a gross sales price of $3,900,000. The net proceeds realized by the
Partnership were approximately $3,794,000 after payment of closing costs of
approximately $106,000. The Partnership used approximately $2,204,000 of the net
proceeds to repay the mortgage encumbering the property. The Partnership
realized a gain of approximately $3,141,000 for the six months ended June 30,
2004, as a result of this sale. The property's operations, a loss of
approximately $39,000 and $30,000 for the six months ended June 30, 2004 and
2003, respectively, including revenues of approximately $189,000 and $397,000,
respectively, are included in loss from discontinued operations. In addition,
the Partnership recorded a loss on early extinguishment of debt of approximately
$48,000 for the six months ended June 30, 2004 due to the write off of
unamortized loan costs, which is also included in loss from discontinued
operations in the accompanying consolidated statements of operations.
On March 28, 2003, the Partnership sold South Port Apartments to a third party,
for a gross sale price of $8,625,000. The net proceeds realized by the
Partnership were approximately $8,137,000 after payment of closing costs of
approximately $488,000. The Partnership used approximately $4,229,000 of the net
proceeds to repay the mortgage encumbering the property. The Partnership
realized a gain of approximately $6,149,000 for the six months ended June 30,
2003, as a result of this sale. The property's operations, income of
approximately $22,000 for the six months ended June 30, 2003, including revenues
of approximately $327,000, are included in loss from discontinued operations. In
addition, the Partnership recorded a loss on early extinguishment of debt of
approximately $13,000 for the six months ended June 30, 2003 due to the
write-off of unamortized loan costs, which is also included in loss from
discontinued operations in the accompanying consolidated statements of
operations.
Note E - Redevelopment of Belmont Place Apartments
During 2003, the General Partner determined that Belmont Place Apartments
suffered from severe structural defects in the buildings' foundation and as
such, demolished the property. The General Partner has designed and approved a
redevelopment plan for the property. Site work on the redevelopment began during
the fourth quarter of 2003.
The Partnership has entered into a construction contract with Casden Builders,
Inc. (a related party) to develop the new Belmont Place Apartments at an
estimated cost of approximately $26.4 million. The construction contract
provides for the payment of the cost of the work plus a fee without a maximum
guaranteed price. Construction is expected to be completed in 2005. The
Partnership plans to fund these construction expenditures from operating cash
flow, proceeds from a cross collateralized loan, Partnership reserves and loans
from the General Partner. During the six months ended June 30, 2004,
approximately $4,491,000 of construction costs were incurred. These expenditures
included capitalized construction period interest of approximately $198,000 and
capitalized property tax expense of approximately $111,000.
Note F - Second Mortgage Financing
On June 8, 2004, the Partnership obtained a second mortgage loan on Lake Forest
Apartments in the amount of $2,500,000. The second mortgage requires monthly
payments of interest beginning August 1, 2004 until the loan matures July 1,
2007. Interest is variable and is equal to the one month LIBOR rate plus 300
basis points (4.36% at June 30, 2004). Capitalized loan costs incurred on the
financing were approximately $83,000.
In connection with the new financing, the Partnership agreed to certain
modifications on the existing mortgage loan encumbering Lake Forest Apartments.
The modification of terms consisted of an interest rate of 7.43%, a payment of
approximately $44,000 due on July 1, 2004 and monthly payments of approximately
$42,000, commencing August 1, 2004 through the maturity of July 1, 2014, at
which time a balloon payment of approximately $5,255,000 is due. The previous
terms consisted of monthly payments of approximately $51,000 with a stated
interest rate of 7.13% through the maturity date of October 1, 2021, at which
time the loan was scheduled to be fully amortized.
On June 18, 2004, the Partnership obtained a second mortgage loan on Citadel
Apartments in the amount of $1,310,000. The second mortgage requires monthly
payments of interest beginning August 1, 2004 until the loan matures July 1,
2007. Interest is variable and is equal to the one month LIBOR rate plus 300
basis points (4.36% at June 30, 2004). Capitalized loan costs incurred on the
financing were approximately $66,000.
In connection with the new financing, the Partnership agreed to certain
modifications on the existing mortgage loan encumbering Citadel Apartments. The
modification of terms consisted of an interest rate of 8.55%, a payment of
approximately $38,000 due on July 1, 2004 and monthly payments of approximately
$33,000, commencing August 1, 2004 through the maturity of July 1, 2014, at
which time a balloon payment of approximately $3,748,000 is due. The previous
terms consisted of monthly payments of approximately $40,000 with a stated
interest rate of 8.25% through the maturity date of March 1, 2020, at which time
the loan was scheduled to be fully amortized.
Note G - Contingencies
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its General Partner and several of
their affiliated partnerships and corporate entities. The action purported to
assert claims on behalf of a class of limited partners and derivatively on
behalf of a number of limited partnerships (including the Partnership) that are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia Financial Group, Inc.
("Insignia") and entities that were, at one time, affiliates of Insignia; past
tender offers by the Insignia affiliates to acquire limited partnership units;
management of the partnerships by the Insignia affiliates; and the series of
transactions which closed on October 1, 1998 and February 26, 1999 whereby
Insignia and Insignia Properties Trust, respectively, were merged into AIMCO.
The plaintiffs sought monetary damages and equitable relief, including judicial
dissolution of the Partnership. In addition, during the third quarter of 2001, a
complaint (the "Heller action") was filed against the same defendants that are
named in the Nuanes action, captioned Heller v. Insignia Financial Group. On or
about August 6, 2001, plaintiffs filed a first amended complaint. The Heller
action was brought as a purported derivative action, and asserted claims for,
among other things, breach of fiduciary duty, unfair competition, conversion,
unjust enrichment, and judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the General Partner has also agreed to make at least
one round of tender offers to purchase all of the partnership interests in the
Partnerships within one year of final approval, if it is granted, and to provide
partners with the independent appraisals at the time of these tenders. The
proposed settlement also provided for the limitation of the allowable costs
which the General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
("Objector") filed an appeal seeking to vacate and/or reverse the order
approving the settlement and entering judgment thereto. On November 24, 2003,
the Objector filed an application requesting the Court order AIMCO to withdraw
settlement tender offers it had commenced, refrain from making further offers
pending the appeal and auction any units tendered to third parties, contending
that the offers did not conform with the terms of the Settlement. Counsel for
the Objector (on behalf of another investor) had alternatively requested the
Court take certain action purportedly to enforce the terms of the settlement
agreement. On December 18, 2003, the Court heard oral argument on the motions
and denied them both in their entirety.
On January 28, 2004, Objector filed his opening brief in his pending appeal. On
April 23, 2004, the General Partner and its affiliates filed a response brief in
support of the settlement and the judgment thereto. Plaintiffs have also filed a
brief in support of the settlement. On June 4, 2004, Objector filed a reply to
the briefs submitted by the General Partner and Plaintiffs. No hearing has been
scheduled in the matter.
The General Partner does not anticipate that any costs to the Partnership,
whether legal or settlement costs, associated with these cases will be material
to the Partnership's overall operations.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the General Partner,
was served with a complaint in the United States District Court, District of
Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor
Standards Act ("FLSA") by failing to pay maintenance workers overtime for all
hours worked in excess of forty per week. On March 5, 2004 Plaintiffs filed an
amended complaint also naming NHP Management Company, which is also an affiliate
of the General Partner. The complaint is styled as a Collective Action under the
FLSA and seeks to certify state subclasses in California, Maryland, and the
District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties
L.P. failed to compensate maintenance workers for time that they were required
to be "on-call". Additionally, the complaint alleges AIMCO Properties L.P.
failed to comply with the FLSA in compensating maintenance workers for time that
they worked in responding to a call while "on-call". The defendants have filed
an answer to the amended complaint denying the substantive allegations. Some
discovery has taken place and settlement negotiations continue. Although the
outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe
that the ultimate outcome will have a material adverse effect on its financial
condition or results of operations taken as a whole. Similarly, the General
Partner does not believe that the ultimate outcome will have a material adverse
effect on the Partnership's financial condition or results of operations taken
as a whole.
The Partnership is unaware of any other pending or outstanding litigation
matters involving it or its investment properties that are not of a routine
nature arising in the ordinary course of business.
As previously disclosed, the Central Regional Office of the United States
Securities and Exchange Commission is conducting an investigation relating to
certain matters. AIMCO believes the areas of investigation include AIMCO's
miscalculated monthly net rental income figures in third quarter 2003,
forecasted guidance, accounts payable, rent concessions, vendor rebates, and
capitalization of expenses and payroll. AIMCO is cooperating fully. AIMCO does
not believe that the ultimate outcome will have a material adverse effect on its
consolidated financial condition or results of operations taken as a whole.
Similarly, the General Partner does not believe that the ultimate outcome will
have a material adverse effect on the Partnership's consolidated financial
condition or results of operations taken as a whole.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government regulations. Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including, without limitation: national and local
economic conditions; the terms of governmental regulations that affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates; financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest; real estate risks, including variations of real estate values and
the general economic climate in local markets and competition for tenants in
such markets; litigation, including costs associated with prosecuting and
defending claims and any adverse outcomes, and possible environmental
liabilities. Readers should carefully review the Registrant's financial
statements and the notes thereto, as well as the risk factors described in the
documents the Registrant files from time to time with the Securities and
Exchange Commission.
The Partnership's investment properties consist of thirteen apartment complexes.
The following table sets forth the average occupancy of the properties for the
six months ended June 30, 2004 and 2003:
Average Occupancy
Property 2004 2003
The Apartments (1) 89% 92%
Omaha, NE
Arbours of Hermitage Apartments 93% 94%
Nashville, TN
Briar Bay Racquet Club Apartments 92% 92%
Miami, FL
Belmont Place -- 3%
Marietta, GA
Citadel Apartments 92% 94%
El Paso, TX
Citadel Village Apartments (2) 83% 72%
Colorado Springs, CO
Foothill Place Apartments 86% 87%
Salt Lake City, UT
Knollwood Apartments (3) 88% 96%
Nashville, TN
Lake Forest Apartments 94% 95%
Omaha, NE
Nob Hill Villa Apartments (3) 85% 94%
Nashville, TN
Post Ridge Apartments (3) 90% 96%
Nashville, TN
Rivers Edge Apartments (2) 96% 91%
Auburn, WA
Village East Apartments 69% 69%
Cimarron Hills, CO
(1) The General Partner attributes the decrease in occupancy at The Apartments
to damage sustained in an ice storm in February 2004 which caused many tenants
to vacate the property.
(2) The General Partner attributes the increase in occupancy at Citadel Village
and Rivers Edge Apartments to a more aggressive marketing campaign and the use
of competitive pricing strategies in the local market.
(3) The General Partner attributes the decrease in occupancy at Knollwood, Nob
Hill Villa and Post Ridge Apartments to a more stringent tenant acceptance
policy in order to create a more stable customer base.
During 2003, the General Partner determined that Belmont Place Apartments
suffered from severe structural defects in the buildings' foundation and as
such, demolished the property. The General Partner has designed and approved a
redevelopment plan for the property. Site work on the redevelopment began during
the fourth quarter of 2003.
The Partnership has entered into a construction contract with Casden Builders,
Inc. (a related party) to develop the new Belmont Place Apartments at an
estimated cost of approximately $26.4 million. The construction contract
provides for the payment of the cost of the work plus a fee without a maximum
guaranteed price. Construction is expected to be completed in 2005. The
Partnership plans to fund these construction expenditures from operating cash
flow, proceeds from a cross collateralized loan, partnership reserves and loans
from the General Partner.
The Partnership's financial results are dependent upon a number of factors
including the ability to attract and maintain tenants at the investment
properties, interest rates on mortgage loans, costs incurred to operate the
investment properties, general economic conditions and weather. As part of the
ongoing business plan of the Partnership, the General Partner monitors the
rental market environment 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, the General Partner may use rental concessions and
rental rate reductions to offset softening market conditions, accordingly, there
is no guarantee that the General Partner will be able to sustain such a plan.
Further, a number of factors which are outside the control of the Partnership
such as the local economic climate and weather can adversely or positively
impact the Partnership's financial results.
Results of Operations
The Partnership's net income for the three and six months ended June 30, 2004
was approximately $749,000 and $4,557,000, compared to net income of
approximately $666,000 and $6,925,000 for the three and six months ended June
30, 2003, respectively. The decrease in net income for the six months ended June
30, 2004 is due to the recognition in 2004 of a smaller gain on sale of
discontinued operations.
In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
the accompanying consolidated statements of operations for the three and six
months ended June 30, 2003 have been restated to reflect the operations of Point
West Apartments as loss from discontinued operations due to its sale in March
2004. In addition, the operations of South Port Apartments are shown as loss
from discontinued operations due to its sale in March 2003.
On March 31, 2004, the Partnership sold Point West Apartments to a third party,
for a gross sales price of $3,900,000. The net proceeds realized by the
Partnership were approximately $3,794,000 after payment of closing costs of
approximately $106,000. The Partnership used approximately $2,204,000 of the net
proceeds to repay the mortgage encumbering the property. The Partnership
realized a gain of approximately $3,141,000 for the six months ended June 30,
2004, as a result of this sale. The property's operations, a loss of
approximately $39,000 and $30,000 for the six months ended June 30, 2004 and
2003, respectively, including revenues of approximately $189,000 and $397,000,
respectively, are included in loss from discontinued operations. In addition,
the Partnership recorded a loss on early extinguishment of debt of approximately
$48,000 for the six months ended June 30, 2004 due to the write off of
unamortized loan costs, which is also included in loss from discontinued
operations.
On March 28, 2003, the Partnership sold South Port Apartments to a third party,
for a gross sale price of $8,625,000. The net proceeds realized by the
Partnership were approximately $8,137,000 after payment of closing costs of
approximately $488,000. The Partnership used approximately $4,229,000 of the net
proceeds to repay the mortgage encumbering the property. The Partnership
realized a gain of approximately $6,149,000 for the six months ended June 30,
2003, as a result of this sale. The property's operations, income of
approximately $22,000 for the six months ended June 30, 2003 is included in loss
from discontinued operations. The Partnership also recorded a loss on early
extinguishment of debt of approximately $13,000 for the six months ended June
30, 2003 due to the write-off of unamortized loan costs, which is also included
in loss from discontinued operations.
Excluding the discontinued operations and gain on sales, the Partnership's
income from continuing operations for the three and six months ended June 30,
2004 was approximately $782,000 and $1,503,000, respectively, compared to income
from continuing operations of approximately $703,000 and $797,000 for the
corresponding periods in 2003. Income from continuing operations decreased for
the three month period due to an increase in total expenses partially offset by
an increase in total revenues. Income from continuing operations increased for
the six month period due to an increase in total revenues and a decrease in
total expenses.
Total revenues for the three month period increased due to an increase in other
income and the recognition of casualty gains partially offset by a decrease in
rental income. Other income increased due to an increase in resident application
fees partially offset by a decrease in lease cancellation fees at most of the
investment properties. Rental income decreased due to a decrease in occupancy at
nine of the investment properties. Total revenues for the six month period
increased due to casualty gains recognized in 2004 and a slight increase in
rental income. Rental income increased slightly due to increases in occupancy at
three investment properties and the average rental rate at five investment
properties and a decrease in bad debt expense at five investment properties
offset by a decrease in occupancy at eight investment properties.
In October 2003, Citadel Village Apartments suffered fire damage to five
apartment units. Insurance proceeds of approximately $92,000 were received
during the six months ended June 30, 2004. The Partnership recognized a casualty
gain of approximately $92,000 during the six months ended June 30, 2004 as the
damaged assets were fully depreciated at the time of the casualty.
In November 2003, Lake Forest Apartments suffered water damage to some of the
rental units. Insurance proceeds of approximately $44,000 were received during
the six months ended June 30, 2004. The Partnership recognized a casualty gain
of approximately $44,000 during the six months ended June 30, 2004 as the
damaged assets were fully depreciated at the time of the casualty.
In February 2004, The Apartments suffered damage to 180 apartment units due to
an ice storm. During the six months ended June 30, 2004, the Partnership
received insurance proceeds of approximately $190,000, which included
approximately $29,000 for emergency expenses. The Partnership recognized a
casualty gain of approximately $161,000 during the six months ended June 30,
2004 as the damaged assets were fully depreciated at the time of the casualty.
In February 2004, Knollwood Apartments suffered fire damage to some of the
rental units. Insurance proceeds of approximately $47,000 were received during
the six months ended June 30, 2004. The Partnership recognized a casualty gain
of approximately $47,000 during the six months ended June 30, 2004 as the
damaged assets were fully depreciated at the time of the casualty.
In March 2004, Village East Apartments suffered an electrical fire that damaged
six apartment units. Insurance proceeds of approximately $55,000 were received
during the six months ended June 30, 2004. The Partnership recognized a casualty
gain of approximately $55,000 during the six months ended June 30, 2004 as the
damaged assets were fully depreciated at the time of the casualty.
Total expenses for the three month period increased due to an increase in
operating expense partially offset by a decrease in depreciation expense. Total
expenses for the six month period decreased due to decreases in general and
administrative and depreciation expenses partially offset by an increase in
operating expense. Operating expense for both periods increased due to an
increase in maintenance expense. For the six month period, this increase was
partially offset by a decrease in property expense. Maintenance expense
increased primarily due to fewer capitalized costs associated with the
reconstruction of Belmont Place Apartments. Property expense for the six month
period decreased due to the ongoing construction project at Belmont Place
Apartments which resulted in the property not incurring any property expense for
the period. Depreciation expense for both periods decreased due to the building
at Foothill Place Apartments becoming fully depreciated in 2003 and due to no
depreciation being charged at Belmont Place Apartments during 2004 while the
property is being constructed.
General and administrative expense for the six month period decreased due to a
decrease in management fees paid to the General Partner in connection with
distributions made from operations. Included in general and administrative
expenses for both periods are management reimbursements to the General Partner
as allowed under the Partnership Agreement. Also included are costs associated
with the quarterly and annual communications with investors and regulatory
agencies and the annual audit required by the Partnership Agreement.
Liquidity and Capital Resources
At June 30, 2004, the Partnership had cash and cash equivalents of approximately
$3,218,000 compared to approximately $2,297,000 at June 30, 2003. The increase
in cash and cash equivalents of approximately $1,681,000 from the Partnership's
year ended December 31, 2003, is due to approximately $1,956,000 of cash
provided by operating activities and approximately $1,012,000 of cash provided
by financing activities, partially offset by approximately $1,287,000 of cash
used in investing activities. Cash provided by financing activities consisted of
proceeds from mortgage notes payable and advances received from an affiliate of
the General Partner partially offset by payments of principal on the mortgages
encumbering the Partnership's properties, repayment of the mortgage encumbering
Point West Apartments, repayment of advances and loan costs paid. Cash used in
investing activities consisted of property improvements and replacements and net
deposits to escrow accounts maintained by the mortgage lenders, partially offset
by insurance proceeds received and net proceeds from the sale of Point West
Apartments. The Partnership invests its working capital reserves in interest
bearing accounts.
On June 8, 2004, the Partnership obtained a second mortgage loan on Lake Forest
Apartments in the amount of $2,500,000. The second mortgage requires monthly
payments of interest beginning August 1, 2004 until the loan matures July 1,
2007. Interest is variable and is equal to the one month LIBOR rate plus 300
basis points (4.36% at June 30, 2004). Capitalized loan costs incurred on the
financing were approximately $83,000.
In connection with the new financing, the Partnership agreed to certain
modifications on the existing mortgage loan encumbering Lake Forest Apartments.
The modification of terms consisted of an interest rate of 7.43%, a payment of
approximately $44,000 due on July 1, 2004 and monthly payments of approximately
$42,000, commencing August 1, 2004 through the maturity of July 1, 2014, at
which time a balloon payment of approximately $5,255,000 is due. The previous
terms consisted of monthly payments of approximately $51,000 with a stated
interest rate of 7.13% through the maturity date of October 1, 2021, at which
time the loan was scheduled to be fully amortized.
On June 18, 2004, the Partnership obtained a second mortgage loan on Citadel
Apartments in the amount of $1,310,000. The second mortgage requires monthly
payments of interest beginning August 1, 2004 until the loan matures July 1,
2007. Interest is variable and is equal to the one month LIBOR rate plus 300
basis points (4.36% at June 30, 2004). Capitalized loan costs incurred on the
financing were approximately $66,000.
In connection with the new financing, the Partnership agreed to certain
modifications on the existing mortgage loan encumbering Citadel Apartments. The
modification of terms consisted of an interest rate of 8.55%, a payment of
approximately $38,000 due on July 1, 2004 and monthly payments of approximately
$33,000, commencing August 1, 2004 through the maturity of July 1, 2014, at
which time a balloon payment of approximately $3,748,000 is due. The previous
terms consisted of monthly payments of approximately $40,000 with a stated
interest rate of 8.25% through the maturity date of March 1, 2020, at which time
the loan was scheduled to be fully amortized.
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 General Partner monitors
developments in the area of legal and regulatory compliance. For example, the
Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures
with regard to governance, disclosure, audit and other areas. In light of these
changes, the Partnership expects that it will incur higher expenses related to
compliance, including increased legal and audit fees. Capital improvements
planned for each of the Partnership's properties are detailed below.
The Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $339,000 of capital improvements at The Apartments, consisting
primarily of floor covering replacements, water heaters, and heating system
upgrades. These improvements were funded from operating cash flow and insurance
proceeds. The Partnership evaluates the capital improvement needs of the
property during the year and currently expects to complete an additional
$146,000 in capital improvements during the remainder of 2004. Additional
capital improvements may be considered and will depend on the physical condition
of the property as well as replacement reserves and the anticipated cash flow
generated by the property.
Arbours of Hermitage Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $60,000 of capital improvements at Arbours of Hermitage
Apartments, consisting primarily of structural improvements and floor covering
and appliance replacements. These improvements were funded from operating cash
flow. The Partnership evaluates the capital improvement needs of the property
during the year and currently expects to complete an additional $139,000 in
capital improvements during the remainder of 2004. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property.
Briar Bay Racquet Club Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $28,000 of capital improvements at Briar Bay Racquet Club
Apartments, consisting primarily of appliance and floor covering replacements.
These improvements were funded from operating cash flow. The Partnership
evaluates the capital improvement needs of the property during the year and
currently expects to complete an additional $84,000 in capital improvements
during the remainder of 2004. Additional capital improvements may be considered
and will depend on the physical condition of the property as well as replacement
reserves and the anticipated cash flow generated by the property.
Belmont Place Apartments
During 2003 the General Partner determined that Belmont Place Apartments
suffered from severe structural defects in the building's foundation and as
such, has demolished the property. The General Partner has designed and approved
a redevelopment plan for the property that requires the complete demolition and
reconstruction of the apartment complex. The property was completely demolished
and site work on the redevelopment began during the fourth quarter of 2003.
The Partnership has entered into a construction contract with Casden Builders,
Inc. (a related party) to develop the new Belmont Place Apartments at an
estimated cost of approximately $26.4 million. The construction contract
provides for the payment of the cost of the work plus a fee without a maximum
guaranteed price. Construction is expected to be completed in 2005. The
Partnership plans to fund these construction expenditures from operating cash
flow, proceeds from a cross collateralized loan, partnership reserves and loans
from the General Partner. During the six months ended June 30, 2004,
approximately $4,491,000 of construction costs were incurred. These expenditures
included capitalized construction period interest of approximately $198,000 and
capitalized property tax expense of approximately $111,000.
Citadel Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $9,000 of capital improvements at Citadel Apartments, consisting
primarily of air conditioning unit and appliance replacements. These
improvements were funded from operating cash flow. The Partnership evaluates the
capital improvement needs of the property during the year and currently expects
to complete an additional $135,000 in capital improvements during the remainder
of 2004. Additional capital improvements may be considered and will depend on
the physical condition of the property as well as the anticipated cash flow
generated by the property.
Citadel Village Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $396,000 of capital improvements at Citadel Village Apartments,
consisting primarily of appliance and floor covering replacements. These
improvements were funded from operating cash flow and insurance proceeds. The
Partnership evaluates the capital improvement needs of the property during the
year and currently expects to complete an additional $49,000 in capital
improvements during the remainder of 2004. Additional capital improvements may
be considered and will depend on the physical condition of the property as well
as the anticipated cash flow generated by the property.
Foothill Place Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $192,000 of capital improvements at Foothill Place Apartments,
consisting primarily of water heater and plumbing fixture installations,
appliance and floor covering replacements and structural upgrades. These
improvements were funded from operating cash flow. The Partnership evaluates the
capital improvement needs of the property during the year and currently expects
to complete an additional $56,000 in capital improvements during the remainder
of 2004. Additional capital improvements may be considered and will depend on
the physical condition of the property as well as the anticipated cash flow
generated by the property.
Knollwood Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $72,000 of capital improvements at Knollwood Apartments,
consisting primarily of water heater, appliance and floor covering replacements.
These improvements were funded from operating cash flow and insurance proceeds.
The Partnership evaluates the capital improvement needs of the property during
the year and currently expects to complete an additional $107,000 in capital
improvements during the remainder of 2004. Additional capital improvements may
be considered and will depend on the physical condition of the property as well
as the anticipated cash flow generated by the property.
Lake Forest Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $114,000 of capital improvements at Lake Forest Apartments,
consisting primarily of structural upgrades and floor covering and appliance
replacements. These improvements were funded from operating cash flow and
insurance proceeds. The Partnership evaluates the capital improvement needs of
the property during the year and currently expects to complete an additional
$64,000 in capital improvements during the remainder of 2004. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property.
Nob Hill Villa Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $95,000 of capital improvements at Nob Hill Villa Apartments,
consisting primarily of appliance and floor covering replacements, water heater
replacements and plumbing fixtures. These improvements were funded from
replacement reserves and operating cash flow. The Partnership evaluates the
capital improvement needs of the property during the year and currently expects
to complete an additional $165,000 in capital improvements during the remainder
of 2004. Additional capital improvements may be considered and will depend on
the physical condition of the property as well as replacement reserves and the
anticipated cash flow generated by the property.
Point West Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $3,000 of capital improvements at Point West Apartments,
consisting primarily of floor covering replacements. These improvements were
funded from operating cash flow. The property was sold on March 31, 2004.
Post Ridge Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $72,000 of capital improvements at Post Ridge Apartments,
consisting primarily of parking area improvements and floor covering and water
heater replacements. These improvements were funded from operating cash flow.
The Partnership evaluates the capital improvement needs of the property during
the year and currently expects to complete an additional $11,000 in capital
improvements during the remainder of 2004. Additional capital improvements may
be considered and will depend on the physical condition of the property as well
as the anticipated cash flow generated by the property.
Rivers Edge Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $35,000 of capital improvements at Rivers Edge Apartments,
consisting primarily of floor covering and appliance replacements. These
improvements were funded from operating cash flow. The Partnership evaluates the
capital improvement needs of the property during the year and currently expects
to complete an additional $57,000 in capital improvements during the remainder
of 2004. Additional capital improvements may be considered and will depend on
the physical condition of the property as well as the anticipated cash flow
generated by the property.
Village East Apartments
During the six months ended June 30, 2004, the Partnership completed
approximately $44,000 of capital improvements at Village East Apartments,
consisting primarily of floor covering replacements. These improvements were
funded from operating cash flow and insurance proceeds. The Partnership
evaluates the capital improvement needs of the property during the year and
currently expects to complete an additional $31,000 in capital improvements
during the remainder of 2004. Additional capital improvements may be considered
and will depend on the physical condition of the property as well as replacement
reserves and the anticipated cash flow generated by the property.
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 assets are thought to be sufficient for any near-term needs
(exclusive of capital improvements) of the Partnership. The mortgage
indebtedness encumbering the Partnership's investment properties of
approximately $69,066,000 matures at various dates between 2005 and 2022 with
balloon payments of approximately $42,280,000 due in 2005, $3,810,000 due in
2007, $9,003,000 due in 2014 and $173,000 due in 2022. The General Partner will
attempt to refinance such indebtedness and/or sell the properties prior to such
maturity dates. If a property cannot be refinanced or sold for a sufficient
amount, the Partnership will risk losing such property through foreclosure.
The Partnership distributed the following amounts during the six months ended
June 30, 2004 and 2003 (in thousands except per unit data):
Six Months Per Six Months Per
Ended Limited Ended Limited
June 30, Partnership June 30, Partnership
2004 Unit 2003 Unit
Operations $ -- $ -- $ 792 $ 2.22
Sale (1) -- -- 3,743 10.50
Total $ -- $ -- $4,535 $12.72
(1) Proceeds from the sale of Southport Apartments in March 2003.
In conjunction with the transfer of funds from certain majority-owned sub-tier
limited partnerships to the Partnership, approximately $5,000 and $4,000 was
distributed to the general partner of the majority owned sub-tier limited
partnerships during the six months ended June 30, 2004 and 2003, respectively.
The Partnership's cash available for distribution is reviewed on a monthly
basis. 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. There can be no assurance,
however, that the Partnership will generate sufficient funds from operations,
after planned capital improvement expenditures, to permit distributions to its
partners during the remainder of 2004 or subsequent periods.
Other
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates owned 203,491.50 limited partnership units
(the "Units") in the Partnership representing 59.37% of the outstanding Units at
June 30, 2004. A number of these Units were acquired pursuant to tender offers
made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates
will acquire additional Units in exchange for cash or a combination of cash and
units in AIMCO Properties, L.P., the operating partnership of AIMCO, either
through private purchases or tender offers. Pursuant to the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters that include, but are not limited
to, voting on certain amendments to the Partnership Agreement and voting to
remove the General Partner. As a result of its ownership of 59.37% of the
outstanding units, AIMCO is in a position to control all such voting decisions
with respect to the Partnership. Although the General Partner owes fiduciary
duties to the limited partners of the Partnership, the General Partner also owes
fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of
the General Partner, as general partner, to the Partnership and its limited
partners may come into conflict with the duties of the General Partner to AIMCO,
as its sole stockholder.
Critical Accounting Policies and Estimates
The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the Partnership
to make estimates and assumptions. The Partnership believes that of its
significant accounting policies, the following may involve a higher degree of
judgment and complexity.
Impairment of Long-Lived Assets
Investment properties are recorded at cost, less accumulated depreciation,
unless considered impaired. If events or circumstances indicate that the
carrying amount of a property may be impaired, the Partnership will make an
assessment of its recoverability by estimating the undiscounted future cash
flows, excluding interest charges, of the property. If the carrying amount
exceeds the aggregate future cash flows, the Partnership would recognize an
impairment loss to the extent the carrying amount exceeds the fair value of the
property.
Real property investments are subject to varying degrees of risk. Several
factors may adversely affect the economic performance and value of the
Partnership's investment properties. These factors include, but are not limited
to, changes in the national, regional and local economic climate; local
conditions, such as an oversupply of multifamily properties; competition from
other available multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.
Revenue Recognition
The Partnership generally leases apartment units for twelve-month terms or less.
Rental income attributable to leases is recognized monthly as it is earned. The
Partnership evaluates all accounts receivable from residents and establishes an
allowance, after the application of security deposits, for accounts greater than
30 days past due on current tenants and all receivables due from former tenants.
The Partnership will offer rental concessions during particularly slow months or
in response to heavy competition from other similar complexes in the area. Any
concessions given at the inception of the lease are amortized over the life of
the lease.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
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 June 30, 2004, a 100
basis point increase or decrease in market interest rates would not have a
material impact on the Partnership.
The following table summarizes the Partnership's debt obligations at June 30,
2004. The interest rates represent the weighted-average rates. The fair value of
the debt obligations approximated the recorded value as of June 30, 2004.
Principal amount by expected maturity:
Long Term Debt
Fixed Rate Debt Average Interest Rate
(in thousands)
2004 $ 440 7.78%
2005 43,066 7.36%
2006 797 7.54%
2007 4,670 7.19%
2008 928 7.54%
Thereafter 19,165 7.54%
Total $69,066
ITEM 4. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures. The Partnership's management, with the
participation of the principal executive officer and principal financial officer
of the General Partner, who are the equivalent of the Partnership's principal
executive officer and principal financial officer, respectively, has evaluated
the effectiveness of the Partnership's disclosure controls and procedures (as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the
period covered by this report. Based on such evaluation, the principal executive
officer and principal financial officer of the General Partner, who are the
equivalent of the Partnership's principal executive officer and principal
financial officer, respectively, have concluded that, as of the end of such
period, the Partnership's disclosure controls and procedures are effective.
(b) Internal Control Over Financial Reporting. There have not been any changes
in the Partnership's internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Partnership's internal control
over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its General Partner and several of
their affiliated partnerships and corporate entities. The action purported to
assert claims on behalf of a class of limited partners and derivatively on
behalf of a number of limited partnerships (including the Partnership) that are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia Financial Group, Inc.
("Insignia") and entities that were, at one time, affiliates of Insignia; past
tender offers by the Insignia affiliates to acquire limited partnership units;
management of the partnerships by the Insignia affiliates; and the series of
transactions which closed on October 1, 1998 and February 26, 1999 whereby
Insignia and Insignia Properties Trust, respectively, were merged into AIMCO.
The plaintiffs sought monetary damages and equitable relief, including judicial
dissolution of the Partnership. In addition, during the third quarter of 2001, a
complaint (the "Heller action") was filed against the same defendants that are
named in the Nuanes action, captioned Heller v. Insignia Financial Group. On or
about August 6, 2001, plaintiffs filed a first amended complaint. The Heller
action was brought as a purported derivative action, and asserted claims for,
among other things, breach of fiduciary duty, unfair competition, conversion,
unjust enrichment, and judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the General Partner has also agreed to make at least
one round of tender offers to purchase all of the partnership interests in the
Partnerships within one year of final approval, if it is granted, and to provide
partners with the independent appraisals at the time of these tenders. The
proposed settlement also provided for the limitation of the allowable costs
which the General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
("Objector") filed an appeal seeking to vacate and/or reverse the order
approving the settlement and entering judgment thereto. On November 24, 2003,
the Objector filed an application requesting the Court order AIMCO to withdraw
settlement tender offers it had commenced, refrain from making further offers
pending the appeal and auction any units tendered to third parties, contending
that the offers did not conform with the terms of the Settlement. Counsel for
the Objector (on behalf of another investor) had alternatively requested the
Court take certain action purportedly to enforce the terms of the settlement
agreement. On December 18, 2003, the Court heard oral argument on the motions
and denied them both in their entirety.
On January 28, 2004, Objector filed his opening brief in his pending appeal. On
April 23, 2004, the General Partner and its affiliates filed a response brief in
support of the settlement and the judgment thereto. Plaintiffs have also filed a
brief in support of the settlement. On June 4, 2004, Objector filed a reply to
the briefs submitted by the General Partner and Plaintiffs. No hearing has been
scheduled in the matter.
The General Partner does not anticipate that any costs to the Partnership,
whether legal or settlement costs, associated with these cases will be material
to the Partnership's overall operations.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the General Partner,
was served with a complaint in the United States District Court, District of
Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor
Standards Act ("FLSA") by failing to pay maintenance workers overtime for all
hours worked in excess of forty per week. On March 5, 2004 Plaintiffs filed an
amended complaint also naming NHP Management Company, which is also an affiliate
of the General Partner. The complaint is styled as a Collective Action under the
FLSA and seeks to certify state subclasses in California, Maryland, and the
District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties
L.P. failed to compensate maintenance workers for time that they were required
to be "on-call". Additionally, the complaint alleges AIMCO Properties L.P.
failed to comply with the FLSA in compensating maintenance workers for time that
they worked in responding to a call while "on-call". The defendants have filed
an answer to the amended complaint denying the substantive allegations. Some
discovery has taken place and settlement negotiations continue. Although the
outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe
that the ultimate outcome will have a material adverse effect on its financial
condition or results of operations taken as a whole. Similarly, the General
Partner does not believe that the ultimate outcome will have a material adverse
effect on the Partnership's financial condition or results of operations taken
as a whole.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
See Exhibit Index Attached.
b) Reports on Form 8-K filed during the quarter ended June 30,
2004:
Current report on Form 8-K dated March 31, 2004 and filed on
April 13, 2004 disclosing the sale of Point West Apartments to
a third party.
SIGNATURES
Pursuant to the requirements 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/Martha L. Long
Martha L. Long
Senior Vice President
By: /s/Stephen B. Waters
Stephen B. Waters
Vice President
Date: August 16, 2004
S-K Reference
Number Document Description
3 Certificate of Limited Partnership, as amended to date.
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).
10.60 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. (Incorporated by reference to
the Annual Report on Form 10-K for the year ended December
31, 1995).
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. (Incorporated by reference to
the Annual Report on Form 10-K for the year ended December
31, 1995).
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. (Incorporated by reference to
the Annual Report on Form 10-K for the year ended December
31, 1995).
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. (Incorporated by reference to
the Annual Report on Form 10-K for the year ended December
31, 1995).
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. (Incorporated by reference to
the Annual Report on Form 10-K for the year ended December
31, 1995).
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.
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1995).
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.
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 1995).
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).
10.75 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 (Incorporated by reference to
the Annual Report on Form 10-K for the year ended December
31, 1998).
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).
10.78 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 (Incorporated by reference to the Annual
Report on Form 10-K for the year ended December 31, 2000).
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 (Incorporated by reference to the
Annual Report on Form 10-K for the year ended December 31,
2000).
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 (Incorporated by reference to the
Annual Report on Form 10-K for the year ended December 31,
2000).
10.85 Multifamily Note dated September 27, 2001 between
Consolidated Capital Properties IV, a California limited
partnership, doing business in Nebraska as Consolidated
Capital Properties IV Limited Partnership and AIMCO
Properties, L.P., a Delaware limited partnership, in favor
of GMAC Commercial Mortgage Corporation, a California
corporation (Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended September 30,
2001).
10.86 Multifamily Note dated December 20, 2001 between Post Ridge
Associates, Ltd., a Tennessee limited partnership, and GMAC
Commercial Mortgage Corporation, a California corporation.
(Incorporated by reference to the Annual Report on Form 10-K
for the year ended December 31, 2001).
10.87 Purchase and Sale Contract dated January 14, 2003 between
South Port CCP IV, L.L.C., a South Carolina limited
liability company, and Warren Lortie Associates, Inc., a
California corporation. (Incorporated by reference to the
Annual Report on Form 10-K for the year ended December 31,
2003).
10.88 Reinstatement and First Amendment of Purchase and Sale
Contract between South Port IV, L.L.C., a South Carolina
limited liability company, and Warren Lortie Associates,
Inc., a California corporation. (Incorporated by reference
to the Annual Report on Form 10-K for the year ended
December 31, 2003).
10.89 Form of Multifamily Note dated October 22, 2003 between Post
Ridge Associates, Ltd., Limited Partnership, a Tennessee
limited partnership, and GMAC Commercial Mortgage Corporation,
a California corporation. (Incorporated by reference to the
Annual Report on Form 10-K for the year ended December 31,
2000).
10.90 Form of Replacement Reserve Agreement dated October 22, 2003
between Post Ridge Associates, Ltd., Limited Partnership, a
Tennessee limited partnership, and GMAC Commercial Mortgage
Corporation, a California corporation. (Incorporated by
reference to the Annual Report on Form 10-K for the year ended
December 31, 2003).
10.91 Form on Repair Agreement dated October 22, 2003 between Post
Ridge Associates, Ltd., Limited Partnership, a Tennessee
limited partnership, and GMAC Commercial Mortgage Corporation,
a California corporation. (Incorporated by reference to the
Annual Report on Form 10-K for the year ended December 31,
2003).
10.92 Form of Cross-Collateralization Agreement dated October 22,
2003 between Post Ridge Associates, Ltd., Limited Partnership,
a Tennessee limited partnership, and Federal Home Loan
Mortgage Corporation, a corporation organized and existing
under the laws of the United States of America. (Incorporated
by reference to the Annual Report on Form 10-K for the year
ended December 31, 2003).
10.93 Form of Cross-Collateralization Agreement dated October 22,
2003 between Foothill Chimney Associates Limited Partnership,
a Georgia limited partnership, and Federal Home Loan Mortgage
Corporation, a corporation organized and existing under the
laws of the United States of America. (Incorporated by
reference to the Annual Report on Form 10-K for the year ended
December 31, 2003.)
10.94 Form of Debt Service Escrow Agreement dated October 22, 2003
between Foothill Chimney Associates Limited Partnership, a
Georgia limited partnership, and Federal Homes Loan Mortgage
Corporation, a corporate instrumentality of the United States
of America. (Incorporated by reference to the Annual Report on
Form 10-K for the year ended December 31, 2003.)
10.95 Form of Second Modification to Replacement Reserve Agreement
dated October 22, 2003 between Foothill Chimney Associates
Limited Partnership, a Georgia limited partnership, and
Federal Homes Loan Mortgage Corporation, a corporate
instrumentality of the United States of America. (Incorporated
by reference to the Annual Report on Form 10-K for the year
ended December 31, 2003.)
10.96 Purchase and Sale Contract between Point West Associates
Limited Partnership, a Georgia limited partnership, as Seller
and Focus Development, Inc., a Georgia corporation, as
Purchaser, effective November 17, 2003. (Incorporated by
reference to Form 8-K dated March 31, 2004).
10.97 First Amendment to Purchase and Sale Contract dated January
23, 2004 between Point West Associates Limited Partnership, a
Georgia limited partnership, as Seller and Focus Development,
Inc., a Georgia corporation, as Purchaser. (Incorporated by
reference to Form 8-K dated March 31, 2004).
10.98 Multifamily Note dated June 21, 2004 between Concap Citadel
Associates, Ltd., a Texas limited partnership, and GMAC
Commercial Mortgage Bank.
10.99 Replacement Reserve Agreement dated June 21, 2004 between
Concap Citadel Associates, Ltd. a Texas limited
partnership, and GMAC Commercial Mortgage Bank.
10.100 Allonge and Amendment to Multifamily Note dated June 21,
2004 between Concap Citadel Associates, Ltd., a Texas
limited partnership, and Federal Home Loan Mortgage
Corporation.
10.101 Multifamily Note dated June 8, 2004 between Consolidated
Capital Properties IV, a California limited partnership, doing
business in Nebraska as Consolidated Capital Properties IV
Limited Partnership and GMAC Commercial Mortgage Bank.
10.102 Replacement Reserve Agreement dated June 8, 2004 between
Consolidated Capital Properties IV, a California limited
partnership, doing business in Nebraska as Consolidated
Capital Properties IV Limited Partnership and GMAC Commercial
Mortgage Bank.
10.103 Allonge and Amendment to Multifamily Note dated June 8, 2004
between Consolidated Capital Properties IV, a California
limited partnership, doing business in Nebraska as
Consolidated Capital Properties IV Limited Partnership and
Federal Home Loan Mortgage Corporation.
31.1 Certification of equivalent of Chief Executive Officer
pursuant to Securities Exchange Act Rules
13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
31.2 Certification of equivalent of Chief Financial Officer
pursuant to Securities Exchange Act Rules
13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
Exhibit 31.1
CERTIFICATION
I, Martha L. Long, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Consolidated Capital
Properties IV;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: August 16, 2004
/s/Martha L. Long
Martha L. Long
Senior Vice President of ConCap
Equities, Inc., equivalent of
the chief executive officer of
the Partnership
Exhibit 31.2
CERTIFICATION
I, Stephen B. Waters, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Consolidated Capital
Properties IV;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: August 16, 2004
/s/Stephen B. Waters
Stephen B. Waters
Vice President of ConCap
Equities, Inc., equivalent of the
chief financial officer of the
Partnership
Exhibit 32.1
Certification of CEO and CFO
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Consolidated Capital
Properties IV (the "Partnership"), for the quarterly period ended June 30, 2004
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), Martha L. Long, as the equivalent of the chief executive officer of
the Partnership, and Stephen B. Waters, as the equivalent of the chief financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Partnership.
/s/Martha L. Long
Name: Martha L. Long
Date: August 16, 2004
/s/Stephen B. Waters
Name: Stephen B. Waters
Date: August 16, 2004
This certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Exhibit 10.98
FHLMC Loan No. 002759993
Citadel Apartments
MULTIFAMILY NOTE
MULTISTATE - ADJUSTABLE RATE
REVISION DATE 3-25-04
US $1,310,000.00 Effective Date: as of June 21, 2004
FOR VALUE RECEIVED, the undersigned (together with such party's or
parties' successors and assigns, "Borrower"), jointly and severally (if more
than one) promises to pay to the order of GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank, the principal sum of One Million Three Hundred Ten Thousand and
00/100 Dollars (US $1,310,000.00), with interest on the unpaid principal balance
as hereinafter provided.
1. Defined Terms.
(a) As used in this Note:
"Adjustable Interest Rate" means the variable annual interest rate
calculated for each Interest Adjustment Period so as to equal the
Index Rate for such Interest Adjustment Period (truncated at the
fifth (5th) decimal place if necessary) plus the Margin. However, in
no event will the Adjustable Interest Rate exceed the Capped
Interest Rate.
"Amortization Period" means a period of -0- full consecutive
calendar months.
"Base Recourse" means a portion of the Indebtedness equal to zero
percent (0%) of the original principal balance of this Note.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which Lender is not open for business.
"Capped Interest Rate" is not applicable, there is no Capped
Interest Rate for the Loan.
"Default Rate" means a variable annual interest rate equal to four
(4) percentage points above the Adjustable Interest Rate in effect
from time to time. However, at no time will the Default Rate exceed
the Maximum Interest Rate.
"Index Rate" means, for any Interest Adjustment Period, the
Reference Bill(R) Index Rate for such Interest Adjustment Period.
"Installment Due Date" means, for any monthly installment of
interest only or principal and interest, the date on which such
monthly installment is due and payable pursuant to Section 3 of this
Note. The "First Installment Due Date" under this Note is August 1,
2004.
"Interest Adjustment Period" means each successive one (1) calendar
month period until the entire Indebtedness is paid in full, except
that the first Interest Adjustment Period is the period from the
date of this Note through June 30, 2004. Therefore, the second
Interest Adjustment Period shall be the period from July 1, 2004
through July 31, 2004, and so on until the entire Indebtedness is
paid in full.
"Lender" means the holder from time to time of this Note.
"LIBOR Index" means the British Bankers Association's (BBA) one (1)
month LIBOR Rate for United States Dollar deposits, as displayed on
the LIBOR Index Page used to establish the LIBOR Index Rate.
"LIBOR Index Rate" means, for any Interest Adjustment Period after
the first Interest Adjustment Period, the BBA's LIBOR Rate for the
LIBOR Index released by the BBA most recently preceding the first
day of such Interest Adjustment Period, as such LIBOR Rate is
displayed on the LIBOR Index Page. The LIBOR Index Rate for the
first Interest Adjustment Period means the British Bankers
Association's (BBA) LIBOR Rate for the LIBOR Index released by the
BBA most recently preceding the first day of the month in which the
first Interest Adjustment Period begins, as such LIBOR Rate is
displayed on the LIBOR Index Page. "LIBOR Index Page" is the
Bloomberg L.P., page "BBAM", or such other page for the LIBOR Index
as may replace page BBAM on that service, or at the option of Lender
(i) the applicable page for the LIBOR Index on another service which
electronically transmits or displays BBA LIBOR Rates, or (ii) any
publication of LIBOR rates available from the BBA. In the event the
BBA ceases to set or publish a LIBOR rate/interest settlement rate
for the LIBOR Index, Lender will designate an alternative index, and
such alternative index shall constitute the LIBOR Index Rate.
"Loan" means the loan evidenced by this Note.
"Lockout Period" is not applicable, there is no Lockout Period under
this Note.
"Margin" means three (3.00) percentage points (300 basis points).
"Maturity Date" means the earlier of (i) July 1, 2007 (the
"Scheduled Maturity Date"), and (ii) the date on which the unpaid
principal balance of this Note becomes due and payable by
acceleration or otherwise pursuant to the Loan Documents or the
exercise by Lender of any right or remedy under any Loan Document.
"Maximum Interest Rate" means the rate of interest that results in
the maximum amount of interest allowed by applicable law.
"Reference Bills(R)" means the unsecured general obligations of the
Federal Home Loan Mortgage Corporation ("Freddie Mac") designated by
Freddie Mac as "Reference Bills(R)" and having original durations to
maturity most comparable to the term of the Reference Bill Index,
and issued by Freddie Mac at regularly scheduled auctions. In the
event Freddie Mac shall at any time cease to designate any unsecured
general obligations of Freddie Mac as "Reference Bills", then at the
option of Lender (i) Lender may select from time to time another
unsecured general obligation of Freddie Mac having original
durations to maturity most comparable to the term of the Reference
Bill Index and issued by Freddie Mac at regularly scheduled
auctions, and the term "Reference Bills" as used in this Note shall
mean such other unsecured general obligations as selected by Lender;
or (ii) for any one or more Interest Adjustment Periods, Lender may
use the applicable LIBOR Index Rate as the Index Rate for such
Interest Adjustment Period(s).
"Reference Bill Index" means the one month Reference Bills.
One-month reference bills have original durations to maturity of
approximately 30 days.
"Reference Bill Index Rate" means, for any Interest Adjustment
Period after the first Interest Adjustment Period, the Money Market
Yield for the Reference Bills as established by the Reference Bill
auction conducted by Freddie Mac most recently preceding the first
day of such Interest Adjustment Period, as displayed on the
Reference Bill Index Page. The Reference Bill Index Rate for the
first Interest Adjustment Period means the Money Market Yield for
the Reference Bills as established by the Reference Bill auction
conducted by Freddie Mac most recently preceding the first day of
the month in which the first Interest Adjustment Period begins, as
displayed on the Reference Bill Index Page. The "Reference Bill
Index Page" is the Freddie Mac Debt Securities Web Page (accessed
via the Freddie Mac internet site at www.freddiemac.com), or at the
option of Lender, any publication of Reference Bills auction results
available from Freddie Mac. However, if Freddie Mac has not
conducted a Reference Bill auction within the 60-calendar day period
prior to the first day of an Interest Adjustment Period, the
Reference Bill Index Rate for such Interest Adjustment Period will
be the LIBOR Index Rate for such Interest Adjustment Period.
"Remaining Amortization Period" means, at any point in time, the
number of consecutive calendar months equal to the number of months
in the Amortization Period minus the number of scheduled monthly
installments of principal and interest that have elapsed since the
date of this Note.
"Security Instrument" means the multifamily mortgage, deed to secure
debt or deed of trust effective as of the effective date of this
Note, from Borrower to or for the benefit of Lender and securing
this Note.
"Window Period" means the three (3) consecutive calendar month
period prior to the Scheduled Maturity Date.
"Yield Maintenance Period" means the period from and including the
day following the expiration of the Lockout Period (or if there is
no Lockout Period, from and including the date of this Note) until
but not including N/A.
(b) Other capitalized terms used but not defined in this Note
shall have the meanings given to such terms in the Security
Instrument.
2. Address for Payment. All payments due under this Note shall be
payable at c/o GMAC Commercial Mortgage Corporation, 200
Witmer Road, P.O. Box 809, Horsham, Pennsylvania 19044, Attn:
Servicing-Account Manager, or such other place as may be
designated by Notice to Borrower from or on behalf of Lender.
3. Payments.
(a) Interest will accrue on the outstanding principal balance of
this Note at the Adjustable Interest Rate, subject to the
provisions of Section 8 of this Note.
(b) Interest under this Note shall be computed, payable and
allocated on the basis of an actual/360 interest calculation
schedule (interest is payable for the actual number of days in
each month, and each month's interest is calculated by
multiplying the unpaid principal amount of this Note as of the
first day of the month for which interest in being calculated
by the applicable Adjustable Interest Rate, dividing the
product by 360, and multiplying the quotient by the number of
days in the month for which interest is being calculated). For
convenience in determining the amount of a monthly installment
of principal and interest under this Note, Lender will use a
30/360 interest calculation payment schedule (each year is
treated as consisting of twelve 30-day months). However, as
provided above, the portion of the monthly installment
actually payable as and allocated to interest will be based
upon an actual/360 interest calculation schedule, and the
amount of each installment attributable to principal and the
amount attributable to interest will vary based upon the
number of days in the month for which such installment is
paid. Each monthly payment of principal and interest will
first be applied to pay in full interest due, and the balance
of the monthly payment paid by Borrower will be credited to
principal.
(c) Unless disbursement of principal is made by Lender to Borrower
on the first day of a calendar month, interest for the period
beginning on the date of disbursement and ending on and
including the last day of such calendar month shall be payable
by Borrower simultaneously with the execution of this Note. If
disbursement of principal is made by Lender to Borrower on the
first day of a calendar month, then no payment will be due
from Borrower at the time of the execution of this Note. The
Installment Due Date for the first monthly installment payment
under Section 3(d) of interest only or principal and interest,
as applicable, will be the First Installment Due Date set
forth in Section 1(a) of this Note. Except as provided in this
Section 3(c) and in Section 10, accrued interest will be
payable in arrears.
(d) Beginning on the First Installment Due Date, and continuing
until and including the monthly installment due on the
Maturity Date, accrued interest only shall be payable by
Borrower in consecutive monthly installments due and payable
on the first day of each calendar month. The amount of the
monthly installment of interest only payable pursuant to this
Section 3(d) on an Installment Due Date shall equal the
product of (i) annual interest on the unpaid principal balance
of this Note as of the first day of the Interest Adjustment
Period immediately preceding the Installment Due Date at the
Adjustable Interest Rate in effect for such Interest
Adjustment Period, divided by 360, multiplied by (ii) the
number of days in such Interest Adjustment Period.
(e) All remaining Indebtedness, including all principal and
interest, shall be due and payable by Borrower on the Maturity
Date.
(f) Lender shall provide Borrower with notice, given in the manner
specified in the Security Instrument, of the amount of each
monthly installment due under this Note. However, if Lender
has not provided Borrower with prior notice of the monthly
payment due on any Installment Due Date, then Borrower shall
pay on that Installment Due Date an amount equal to the
monthly installment payment for which Borrower last received
notice. If Lender at any time determines that Borrower has
paid one or more monthly installments in an incorrect amount
because of the operation of the preceding sentence, or because
Lender has miscalculated the Adjustable Interest Rate or has
otherwise miscalculated the amount of any monthly installment,
then Lender shall give notice to Borrower of such
determination. If such determination discloses that Borrower
has paid less than the full amount due for the period for
which the determination was made, Borrower, within 30 calendar
days after receipt of the notice from Lender, shall pay to
Lender the full amount of the deficiency. If such
determination discloses that Borrower has paid more than the
full amount due for the period for which the determination was
made, then the amount of the overpayment shall be credited to
the next installment(s) of interest only or principal and
interest, as applicable, due under this Note (or, if an Event
of Default has occurred and is continuing, such overpayment
shall be credited against any amount owing by Borrower to
Lender).
(g) All payments under this Note shall be made in immediately
available U.S. funds.
(h) Any regularly scheduled monthly installment of interest only
or principal and interest payable pursuant to this Section 3
that is received by Lender before the date it is due shall be
deemed to have been received on the due date for the purpose
of calculating interest due.
(i) Any accrued interest remaining past due for 30 days or more,
at Lender's discretion, may be added to and become part of the
unpaid principal balance of this Note and any reference to
"accrued interest" shall refer to accrued interest which has
not become part of the unpaid principal balance. Any amount
added to principal pursuant to the Loan Documents shall bear
interest at the applicable rate or rates specified in this
Note and shall be payable with such interest upon demand by
Lender and absent such demand, as provided in this Note for
the payment of principal and interest.
(j) In accordance with Section 14, interest charged under this
Note cannot exceed the Maximum Interest Rate. If the
Adjustable Interest Rate at any time exceeds the Maximum
Interest Rate, resulting in the charging of interest hereunder
to be limited to the Maximum Interest Rate, then any
subsequent reduction in the Adjustable Interest Rate shall not
reduce the rate at which interest under this Note accrues
below the Maximum Interest Rate until the total amount of
interest accrued hereunder equals the amount of interest which
would have accrued had the Adjustable Interest Rate at all
times been in effect.
4. Application of Payments. If at any time Lender receives, from
Borrower or otherwise, any amount applicable to the
Indebtedness which is less than all amounts due and payable at
such time, Lender may apply the amount received to amounts
then due and payable in any manner and in any order determined
by Lender, in Lender's discretion. Borrower agrees that
neither Lender's acceptance of a payment from Borrower in an
amount that is less than all amounts then due and payable nor
Lender's application of such payment shall constitute or be
deemed to constitute either a waiver of the unpaid amounts or
an accord and satisfaction.
5. Security. The Indebtedness is secured by, among other things,
the Security Instrument, and reference is made to the Security
Instrument for other rights of Lender as to collateral for the
Indebtedness.
6. Acceleration. If an Event of Default has occurred and is
continuing, the entire unpaid principal balance, any accrued
interest, any prepayment premium payable under Section 10, and
all other amounts payable under this Note and any other Loan
Document, shall at once become due and payable, at the option
of Lender, without any prior notice to Borrower (except if
notice is required by applicable law, then after such notice).
Lender may exercise this option to accelerate regardless of
any prior forbearance. For purposes of exercising such option,
Lender shall calculate the prepayment premium as if prepayment
occurred on the date of acceleration. If prepayment occurs
thereafter, lender shall recalculate the prepayment premium as
of the actual prepayment date.
7. Late Charge.
(a) If any monthly installment of interest or principal and
interest or other amount payable under this Note or under the
Security Instrument or any other Loan Document is not received
in full by Lender within five (5) days after the installment
or other amount is due, counting from and including the date
such installment or other amount is due (unless applicable law
requires a longer period of time before a late charge may be
imposed, in which event such longer period shall be
substituted), Borrower shall pay to Lender, immediately and
without demand by Lender, a late charge equal to five percent
(5%) of such installment or other amount due (unless
applicable law requires a lesser amount be charged, in which
event such lesser amount shall be substituted).
(b) Borrower acknowledges that its failure to make timely payments
will cause Lender to incur additional expenses in servicing
and processing the Loan and that it is extremely difficult and
impractical to determine those additional expenses. Borrower
agrees that the late charge payable pursuant to this Section
represents a fair and reasonable estimate, taking into account
all circumstances existing on the date of this Note, of the
additional expenses Lender will incur by reason of such late
payment. The late charge is payable in addition to, and not in
lieu of, any interest payable at the Default Rate pursuant to
Section 8.
8. Default Rate.
(a) So long as (i) any monthly installment under this Note remains
past due for thirty (30) days or more or (ii) any other Event
of Default has occurred and is continuing, then
notwithstanding anything in Section 3 of this Note to the
contrary, interest under this Note shall accrue on the unpaid
principal balance from the Installment Due Date of the first
such unpaid monthly installment or the occurrence of such
other Event of Default, as applicable, at the Default Rate.
(b) From and after the Maturity Date, the unpaid principal balance
shall continue to bear interest at the Default Rate until and
including the date on which the entire principal balance is
paid in full.
(c) Borrower acknowledges that (i) its failure to make timely
payments will cause Lender to incur additional expenses in
servicing and processing the Loan, (ii) during the time that
any monthly installment under this Note is delinquent for
thirty (30) days or more, Lender will incur additional costs
and expenses arising from its loss of the use of the money due
and from the adverse impact on Lender's ability to meet its
other obligations and to take advantage of other investment
opportunities; and (iii) it is extremely difficult and
impractical to determine those additional costs and expenses.
Borrower also acknowledges that, during the time that any
monthly installment under this Note is delinquent for thirty
(30) days or more or any other Event of Default has occurred
and is continuing, Lender's risk of nonpayment of this Note
will be materially increased and Lender is entitled to be
compensated for such increased risk. Borrower agrees that the
increase in the rate of interest payable under this Note to
the Default Rate represents a fair and reasonable estimate,
taking into account all circumstances existing on the date of
this Note, of the additional costs and expenses Lender will
incur by reason of the Borrower's delinquent payment and the
additional compensation Lender is entitled to receive for the
increased risks of nonpayment associated with a delinquent
loan.
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Section 9, Borrower shall
have no personal liability under this Note, the Security
Instrument or any other Loan Document for the repayment of the
Indebtedness or for the performance of any other obligations
of Borrower under the Loan Documents and Lender's only
recourse for the satisfaction of the Indebtedness and the
performance of such obligations shall be Lender's exercise of
its rights and remedies with respect to the Mortgaged Property
and to any other collateral held by Lender as security for the
Indebtedness. This limitation on Borrower's liability shall
not limit or impair Lender's enforcement of its rights against
any guarantor of the Indebtedness or any guarantor of any
other obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the amount
of the Base Recourse, plus any other amounts for which
Borrower has personal liability under this Section 9.
(c) In addition to the Base Recourse, Borrower shall be personally
liable to Lender for the repayment of a further portion of the
Indebtedness equal to any loss or damage suffered by Lender as
a result of the occurrence of any of the following events:
(i) Borrower fails to pay to Lender upon demand after an Event of Default
all Rents to which Lender is entitled under Section 3(a) of the
Security Instrument and the amount of all security deposits collected
by Borrower from tenants then in residence. However, Borrower will not
be personally liable for any failure described in this subsection (i)
if Borrower is unable to pay to Lender all Rents and security deposits
as required by the Security Instrument because of a valid order issued
in a bankruptcy, receivership, or similar judicial proceeding.
(ii) Borrower fails to apply all insurance proceeds and
condemnation proceeds as required by the Security Instrument.
However, Borrower will not be personally liable for any
failure described in this subsection (ii) if Borrower is
unable to apply insurance or condemnation proceeds as required
by the Security Instrument because of a valid order issued in
a bankruptcy, receivership, or similar judicial proceeding.
(iii) Borrower fails to comply with Section 14(g) or (h) of the
Security Instrument relating to the delivery of books and
records, statements, schedules and reports.
(iv) Borrower fails to pay when due in accordance with the terms of
the Security Instrument the amount of any item below marked
"Deferred"; provided however, that if no item is marked
"Deferred", this Section 9(c)(iv) shall be of no force or
effect
[Deferred] Hazard Insurance premiums or other insurance
premiums, [Collect] Taxes, [Deferred] water and sewer charges
(that could become a
lien on the Mortgaged Property),
[N/A] ground rents,
[Deferred] assessments or other charges (that could become
a lien on the Mortgaged Property)
(d) In addition to the Base Recourse, Borrower shall be personally
liable to Lender for:
(i) the performance of all of Borrower's obligations under Section
18 of the Security Instrument (relating to environmental
matters);
(ii) the costs of any audit under Section 14(g) of the Security
Instrument; and
(iii) any costs and expenses incurred by Lender in connection with
the collection of any amount for which Borrower is personally
liable under this Section 9, including Attorneys' Fees and
Costs and the costs of conducting any independent audit of
Borrower's books and records to determine the amount for which
Borrower has personal liability.
(e) All payments made by Borrower with respect to the Indebtedness
and all amounts received by Lender from the enforcement of its
rights under the Security Instrument and the other Loan
Documents shall be applied first to the portion of the
Indebtedness for which Borrower has no personal liability.
(f) Notwithstanding the Base Recourse, Borrower shall become
personally liable to Lender for the repayment of all of the
Indebtedness upon the occurrence of any of the following
Events of Default:
(i) Borrower's ownership of any property or operation of any
business not permitted by Section 33 of the Security
Instrument;
(ii) a Transfer (including, but not limited to, a lien or
encumbrance) that is an Event of Default under Section 21 of
the Security Instrument, other than a Transfer consisting
solely of the involuntary removal or involuntary withdrawal of
a general partner in a limited partnership or a manager in a
limited liability company; or
(iii) fraud or written material misrepresentation by Borrower or any
officer, director, partner, member or employee of Borrower in
connection with the application for or creation of the
Indebtedness or any request for any action or consent by
Lender.
(g) To the extent that Borrower has personal liability under this
Section 9, Lender may exercise its rights against Borrower
personally without regard to whether Lender has exercised any
rights against the Mortgaged Property or any other security,
or pursued any rights against any guarantor, or pursued any
other rights available to Lender under this Note, the Security
Instrument, any other Loan Document or applicable law. To the
fullest extent permitted by applicable law, in any action to
enforce Borrower's personal liability under this Section 9,
Borrower waives any right to set off the value of the
Mortgaged Property against such personal liability.
10. Voluntary and Involuntary Prepayments.
(a) Any receipt by Lender of principal due under this Note prior
to the Scheduled Maturity Date, other than principal required
to be paid in monthly installments pursuant to Section 3,
constitutes a prepayment of principal under this Note. Without
limiting the foregoing, any application by Lender, prior to
the Scheduled Maturity Date, of any proceeds of collateral or
other security to the repayment of any portion of the unpaid
principal balance of this Note constitutes a prepayment under
this Note.
(b) Borrower may not voluntarily prepay any portion of the
principal balance of this Note during the Lockout Period, if a
Lockout Period is applicable to this Note. However, if any
portion of the principal balance of this Note is prepaid
during the Lockout Period by reason of the application by
Lender of any proceeds of collateral or other security to any
portion of the unpaid principal balance of this Note or
following a determination that the prohibition on voluntary
prepayments during the Lockout Period is in contravention of
applicable law, then Borrower must also pay to Lender upon
demand by Lender, a prepayment premium equal to five percent
(5.0%) of the amount of principal being prepaid.
(c) Following the end of the Lockout Period, Borrower may
voluntarily prepay all of the unpaid principal balance of this
Note on a Business Day designated as the date for such
prepayment in a Notice from Borrower to Lender given at least
30 days prior to the date of such prepayment. Unless otherwise
expressly provided in the Loan Documents, Borrower may not
voluntarily prepay less than all of the unpaid principal
balance of this Note.
(d) Borrower acknowledges that Lender has agreed that principal
may be prepaid other than on the last calendar day of a month
only because, for the purposes of the accrual of interest, any
prepayment received by Lender on any day other than the last
calendar day of the month shall be deemed to have been
received on the last calendar day of the month in which the
prepayment occurs.
(e) In order to voluntarily prepay all or any part of the
principal of this Note, Borrower must also pay to Lender,
together with the amount of principal being prepaid, (i) all
accrued and unpaid interest due under this Note, plus (ii) all
other sums due to Lender at the time of such prepayment, plus
(ii) any prepayment premium calculated pursuant to Section
10(f).
(f) Except as provided in Section 10(g), a prepayment premium
shall be due and payable by Borrower in connection with any
prepayment of principal under this Note during the Yield
Maintenance Period. The prepayment premium shall be 1.0% of
the amount of principal being prepaid.
(g) Notwithstanding any other provision of this Section 10, no
prepayment premium shall be payable with respect to (i) any
prepayment made during the Window Period, or (ii) any
prepayment occurring as a result of the application of any
insurance proceeds or condemnation award under the Security
Instrument, or (iii) any prepayment of the entire principal
balance of this Note that occurs on or after the [N/A].
Installment Due Date under this Note with the proceeds of a
fixed interest rate or fixed-to-float interest rate mortgage
loan that is the subject of a binding commitment for purchase
between the Freddie Mac and a Freddie Mac-approved Program
Plus(R) Seller/Servicer.
(h) Unless Lender agrees otherwise in writing, a permitted or
required prepayment of less than the unpaid principal balance
of this Note shall not extend or postpone the due date of any
subsequent monthly installments or change the amount of such
installments.
(i) Borrower recognizes that any prepayment of any of the unpaid
principal balance of this Note, whether voluntary or
involuntary or resulting from an Event of Default by Borrower,
will result in Lender's incurring loss, including reinvestment
loss, additional expense and frustration or impairment of
Lender's ability to meet its commitments to third parties.
Borrower agrees to pay to Lender upon demand damages for the
detriment caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of
such damages. Borrower therefore acknowledges and agrees that
the formula for calculating prepayment premiums set forth in
this Note represents a reasonable estimate of the damages
Lender will incur because of a prepayment. Borrower further
acknowledges that any lockout and the prepayment premium
provisions of this Note are a material part of the
consideration for the Loan, and that the terms of this Note
are in other respects more favorable to Borrower as a result
of the Borrower's voluntary agreement to the lockout and
prepayment premium provisions.
11. Costs and Expenses. To the fullest extent allowed by
applicable law, Borrower shall pay all expenses and costs,
including Attorneys' Fees and Costs incurred by Lender as a
result of any default under this Note or in connection with
efforts to collect any amount due under this Note, or to
enforce the provisions of any of the other Loan Documents,
including those incurred in post-judgment collection efforts
and in any bankruptcy proceeding (including any action for
relief from the automatic stay of any bankruptcy proceeding)
or judicial or non-judicial foreclosure proceeding.
12. Forbearance. Any forbearance by Lender in exercising any right
or remedy under this Note, the Security Instrument, or any
other Loan Document or otherwise afforded by applicable law,
shall not be a waiver of or preclude the exercise of that or
any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount
which is less than the required payment, shall not be a waiver
of Lender's right to require prompt payment when due of all
other payments or to exercise any right or remedy with respect
to any failure to make prompt payment. Enforcement by Lender
of any security for Borrower's obligations under this Note
shall not constitute an election by Lender of remedies so as
to preclude the exercise of any other right or remedy
available to Lender.
13. Waivers. Borrower and all endorsers and guarantors of this
Note and all other third party obligors waive presentment,
demand, notice of dishonor, protest, notice of acceleration,
notice of intent to demand or accelerate payment or maturity,
presentment for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness.
14. Loan Charges. Neither this Note nor any of the other Loan
Documents shall be construed to create a contract for the use,
forbearance or detention of money requiring payment of
interest at a rate greater than the Maximum Interest Rate. If
any applicable law limiting the amount of interest or other
charges permitted to be collected from Borrower in connection
with the Loan is interpreted so that any interest or other
charge provided for in any Loan Document, whether considered
separately or together with other charges provided for in any
other Loan Document, violates that law, and Borrower is
entitled to the benefit of that law, that interest or charge
is hereby reduced to the extent necessary to eliminate that
violation. The amounts, if any, previously paid to Lender in
excess of the permitted amounts shall be applied by Lender to
reduce the unpaid principal balance of this Note. For the
purpose of determining whether any applicable law limiting the
amount of interest or other charges permitted to be collected
from Borrower has been violated, all Indebtedness that
constitutes interest, as well as all other charges made in
connection with the Indebtedness that constitute interest,
shall be deemed to be allocated and spread ratably over the
stated term of this Note. Unless otherwise required by
applicable law, such allocation and spreading shall be
effected in such a manner that the rate of interest so
computed is uniform throughout the stated term of this Note.
15. Commercial Purpose. Borrower represents that Borrower is
incurring the Indebtedness solely for the purpose of carrying
on a business or commercial enterprise, and not for personal,
family, household, or agricultural purposes.
16. Counting of Days. Except where otherwise specifically
provided, any reference in this Note to a period of "days"
means calendar days, not Business Days.
17. Governing Law. This Note shall be governed by the law of the
Property Jurisdiction.
18. Captions. The captions of the Sections of this Note are for
convenience only and shall be disregarded in construing this
Note.
19. Notices; Written Modifications.
(a) All Notices, demands and other communications required or
permitted to be given pursuant to this Note shall be given in
accordance with Section 31 of the Security Instrument.
(b) Any modification or amendment to this Note shall be
ineffective unless in writing signed by the party sought to be
charged with such modification or amendment; provided,
however, that in the event of a Transfer under the terms of
the Security Instrument that requires Lender's consent, any or
some or all of the Modifications to Multifamily Note set forth
in Exhibit A to this Note may be modified or rendered void by
Lender at Lender's option, by Notice to Borrower and the
transferee, as a condition of Lender's consent.
20. Consent to Jurisdiction and Venue. Borrower agrees that any
controversy arising under or in relation to this Note may be
litigated in the Property Jurisdiction. The state and federal
courts and authorities with jurisdiction in the Property
Jurisdiction shall have jurisdiction over all controversies
that shall arise under or in relation to this Note. Borrower
irrevocably consents to service, jurisdiction, and venue of
such courts for any such litigation and waives any other venue
to which it might be entitled by virtue of domicile, habitual
residence or otherwise. However, nothing in this Note is
intended to limit any right that Lender may have to bring any
suit, action or proceeding relating to matters arising under
this Note in any court of any other jurisdiction.
21. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES
NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING
OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS
LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (B)
WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY
EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF
COMPETENT LEGAL COUNSEL.
22. State-Specific Provisions. N/A
ATTACHED EXHIBIT. The Exhibit noted below, if marked with an "X" in
the space provided, is attached to this Note:
-----
X Exhibit A Modifications to Multifamily Note
-----
IN WITNESS WHEREOF, and in consideration of the Lender's agreement to lend
Borrower the principal amount set forth above, Borrower has signed and delivered
this Note under seal or has caused this Note to be signed and delivered under
seal by its duly authorized representative.
CONCAP CITADEL ASSOCIATES, LTD., a Texas
limited partnership
By: CCP/IV Citadel GP, L.L.C., a South
Carolina limited liability company, its
general partner
By: Consolidated Capital Properties IV, a
California limited partnership,
doing business in Texas as
Consolidated Capital Properties IV,
Ltd., its sole member
By: ConCap Equities, Inc., a Delaware
corporation, its general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
75-2470355
Borrower's Social Security/Employer ID Number
PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE
CORPORATION, WITHOUT RECOURSE.
GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial loan corporation
By: /s/Max W. Foore
Name: Max W. Foore
Title:Limited Signer
FHLMC Loan No. 002759993
Exhibit 10.99
FHLMC Loan No. 002759993
Citadel Apartments
REPLACEMENT RESERVE Agreement
(REVISION DATE 01-31-2003)
This REPLACEMENT RESERVE AGREEMENT ("Agreement") is made and entered into,
to be effective as of June 21, 2004, by and between CONCAP CITADEL ASSOCIATES,
LTD., a Texas limited partnership ("Borrower"), and GMAC COMMERCIAL MORTGAGE
BANK, a Utah industrial bank ("Lender") and its successors and assigns.
W I T N E S S E T H:
WHEREAS, Lender has agreed to make and Borrower has agreed to accept the
Loan, which is to be evidenced by the Note and secured by the Security
Instrument encumbering the Land and the Improvements. The Land is described on
Exhibit "A" attached to this Agreement; and
WHEREAS, as a condition of making the Loan, Lender is requiring Borrower
to establish the Replacement Reserve Fund for the funding of Capital
Replacements throughout the Loan term.
NOW, THEREFORE, for and in consideration of the Loan, the mutual promises
and covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lender and Borrower
agree as follows:
1. Definitions. The following terms used in this Agreement shall have the
meanings set forth below in this Section 1. Any term used in this
Agreement and not defined shall have the meaning given to that term in the
Security Instrument.
(a) "Capital Replacement" means the replacement of those items listed on
Exhibit "B" of this Agreement and such other replacements of equipment,
major components or capital systems related to the Improvements as may be
approved in writing or required by Lender.
(b) "Disbursement Period" means the interval between disbursements from the
Replacement Reserve Fund, which interval shall be no shorter than once a
quarter.
(c) "Improvements" means the buildings, Personal Property and improvements
situated upon the Land, currently constituting a multifamily apartment
project known as Citadel Apartments.
(d) "Initial Deposit" means the amount of Zero Dollars ($0.00) made as of the
date of this Agreement.
(e) "Inspection Fee" means a fee for performing any inspection required by
this Agreement in an amount not to exceed Three Hundred and 00/100 Dollars
($300.00) per inspection.
(f) "Investment Fee" means a one time fee for establishing the Replacement
Reserve Fund in the amount of Fifty and 00/100 Dollars ($50.00).
(g) "Loan" means the loan from Lender to Borrower in the original principal
amount of One Million Three Hundred Ten Thousand and 00/100 Dollars
($1,310,000.00), as evidenced by the Note and secured by the Security
Instrument.
(h) "Minimum Disbursement Request Amount" means Two Thousand Five Hundred and
00/100 Dollars ($2,500.00).
(i) "Monthly Deposit" means the amount of Five Thousand Four Hundred
Thirty-Seven and 00/100 Dollars ($5,437.00) per month to be deposited into
the Replacement Reserve Fund in accordance with this Agreement.
(j) "Property" means the Land and Improvements.
(k) "Replacement Reserve Deposit" means the Initial Deposit, the Monthly
Deposit and/or the Revised Monthly Deposit, as appropriate.
(l) "Replacement Reserve Fund" means the account established pursuant to this
Agreement to defray the costs of Capital Replacements.
(m) "Review Period" means the period ending 36 months after the first monthly
payment date.
(n) "Revised Monthly Deposit" means the amount per month that Lender
determines Borrower must deposit in the Replacement Reserve Fund during
any Subsequent Review Period.
(o) "Security Instrument" means the mortgage, deed of trust, deed to secure
debt, or other similar security instrument encumbering the Property and
securing Borrower's performance of its Loan obligations.
(p) "Subsequent Review Period" means the period of N/A months commencing
either (i) at the termination of the Review Period or (ii) at the
termination of a prior Subsequent Review Period. There may be more than
one Subsequent Review Period.
2. Replacement Reserve Fund.
(a) Establishment; Funding.
(i) Upon the closing of the Loan, the parties shall establish the Replacement
Reserve Fund and, if required by Lender, Borrower shall pay the Initial
Deposit to Lender for deposit into the Replacement Reserve Fund.
(ii) Commencing on the date the first installment of principal and/or interest
is due under the Note and continuing on the same day of each successive
month until the end of the Review Period, Borrower shall pay the Monthly
Deposit to Lender for deposit into the Replacement Reserve Fund, together
with its regular monthly payments of principal and interest as required by
the Note and Security Instrument.
(iii) Prior to the end of the Review Period, Lender will assess the physical
condition of the Property. Lender may adjust the Monthly Deposit at the
termination of the Review Period to reflect Lender's determination of the
condition of the Property. Upon written notice from Lender or Loan
Servicer, Borrower shall begin paying the Revised Monthly Deposit on the
first monthly payment date of the Subsequent Review Period and shall
continue paying the Revised Monthly Deposit until Lender further adjusts
the Replacement Reserve Deposit during a Subsequent Review Period, if
applicable. If Lender does not provide Borrower with written notice of a
Revised Monthly Deposit, Borrower shall continue to pay the Monthly
Deposit or the Revised Monthly Deposit then in effect.
(b) Investment of Deposits. Borrower and Lender agree that Lender shall
hold all moneys deposited into the Replacement Reserve Fund in
an interest bearing account, and any interest earned on such
moneys shall be added to the principal balance of the
Replacement Reserve Fund and disbursed in accordance with the
provisions of this Agreement. Borrower acknowledges and
agrees that it shall not have the right to direct Lender as to
any specific investment of moneys in the Replacement Reserve
Fund. Lender shall not be responsible for any losses
resulting from investment of moneys in the Replacement Reserve
Fund or for obtaining any specific level or percentage of
earnings on such investment. Lender shall be entitled to
deduct the Investment Fee from the Replacement Reserve Fund
for establishing the Replacement Reserve Fund.
(c) Use. Subject to the pledge and security interest and other rights of
Lender set forth in this Agreement, the Replacement Reserve Fund shall be
maintained for the payment of the costs of the Capital Replacements
identified on Exhibit "B".
3. Performance of Capital Replacements; Disbursements.
(a) Requests for Disbursement. Lender shall disburse funds from the
Replacement Reserve Fund, in its sole discretion, as follows:
(i) Borrower's Request. If Borrower determines, at any time or from time
to time, that a Capital Replacement is necessary or
desirable, Borrower shall perform such Capital Replacement
and request from Lender, in writing, reimbursement for such
Capital Replacement. Borrower's request for reimbursement
shall include (A) a detailed description of the Capital
Replacement performed, together with evidence, satisfactory
to Lender, that the cost of such Capital Replacement has
been paid and (B) lien waivers from each contractor and
material supplier supplying labor or materials for such
Capital Replacement, if required by Lender.
(ii) Lender's Request. If Lender shall reasonably determine at any time or from
time to time, that a Capital Replacement is necessary for the proper
maintenance of the Property, it shall so notify Borrower, in writing,
requesting that Borrower obtain and submit to Lender bids for all labor
and materials required in connection with such Capital Replacement.
Borrower shall submit such bids and a time schedule for completing each
Capital Replacement to Lender within thirty (30) days after Borrower's
receipt of Lender's written notice. Borrower shall perform such Capital
Replacement and request from Lender, in writing, reimbursement for such
Capital Replacement. Borrower's request for reimbursement shall include
(A) a detailed description of the Capital Replacement performed, together
with evidence, satisfactory to Lender, that the cost of such Capital
Replacement has been paid and (B) lien waivers from each contractor and
material supplier supplying labor or materials for such Capital
Replacement, if required by Lender.
(b) Conditions Precedent. Disbursement from the Replacement Reserve Fund shall
be made no more frequently than once every Disbursement Period and, except
for the final disbursement, no disbursement shall be made in an amount
less than the Minimum Disbursement Request Amount. Disbursements shall be
made only if the following conditions precedent have been satisfied, as
reasonably determined by Lender:
(i) Payment for Capital Replacement. The Capital Replacement has been
performed and/or installed on the Property in a good and
workmanlike manner with suitable materials (or in the case
of a partial disbursement, performed and/or installed on
the Property to an acceptable stage) and paid for by
Borrower as evidenced by copies of all applicable paid
invoices or bills submitted to Lender by Borrower at the
time Borrower requests disbursement from the Replacement
Reserve Fund.
(ii) No Default. There is no condition, event or act that would constitute a
default (with or without notice and/or lapse of time) under this Agreement
or any other Loan Document.
(iii) Representations and Warranties. All representations and warranties of
Borrower set forth in this Agreement and in the Loan Documents are true in
all material respects.
(iv) Continuing Compliance. Borrower is in full compliance with the provisions
of this Agreement, the other Loan Documents and any request or demand by
Lender permitted hereby.
(v) No Lien Claim. No lien or claim based on furnishing labor or materials has
been filed or asserted against the Property, unless Borrower has properly
provided bond or other security against loss in accordance with applicable
law.
(vi) Approvals. All licenses, permits, and approvals of governmental
authorities required for the Capital Replacement as completed to the
applicable stage have been obtained.
(vii) Legal Compliance. The Capital Replacement as completed to the applicable
stage does not violate any laws, ordinance, rules or regulations, or
building lines or restrictions applicable to the Property.
4. Right to Complete Capital Replacements. If Borrower abandons or fails
to proceed diligently to undertake and/or complete any Capital
Replacement in a timely fashion or is otherwise in default under this
Agreement for 30 days after written notice of such failure by Lender to
Borrower, Lender shall have the right (but not the obligation) to enter
upon the Property and take over and cause the completion of such
Capital Replacement. However, no such notice or grace period shall
apply in the case of such failure which could, in Lender's judgment,
absent immediate exercise by Lender of a right or remedy under this
Agreement, result in harm to Lender or impairment of the security given
under the Security Instrument or any other Loan Document. Any
contracts entered into or indebtedness incurred upon the exercise of
such right may be in the name of Borrower, and Lender is hereby
irrevocably appointed the attorney in fact of Borrower, such
appointment being coupled with an interest, to enter into such
contracts, incur such obligations, enforce any contracts or agreements
made by or on behalf of Borrower (including the prosecution and defense
of all actions and proceedings in connection with the Capital
Replacement and the payment, settlement or compromise of all bills and
claims for materials and work performed in connection with the Capital
Replacement) and do any and all things necessary or proper to complete
any Capital Replacement including signing Borrower's name to any
contracts and documents as may be deemed necessary by Lender. In no
event shall Lender be required to expend its own funds to complete any
Capital Replacement, but Lender may, in its sole discretion, advance
such funds. Any funds advanced shall be added to the outstanding
balance of the Loan, secured by the Security Instrument and payable to
Lender by Borrower in accordance with the provisions of the Security
Instrument pertaining to the protection of Lender's security and
advances made by Lender. Borrower waives any and all claims it may
have against Lender for materials used, work performed or resultant
damage to the Property.
5. Inspection. Lender or any representative of Lender may periodically
inspect any Capital Replacement in process and upon completion during
normal business hours or at any other reasonable time upon reasonable
prior written notice to Borrower (except in an emergency, as determined
by Lender in its discretion or after an Event of Default, in which
event no such prior notice shall be required). Lender shall be
entitled to deduct the Inspection Fee from the Replacement Reserve Fund
for performing any such inspection. If Lender, in its sole discretion,
retains a professional inspection engineer or other qualified third
party to inspect any Capital Replacement, Lender also shall be entitled
to deduct from the Replacement Reserve Fund an amount sufficient to pay
all reasonable fees and expenses charged by such third party inspector.
6. Insufficient Account. If Borrower requests disbursement from the
Replacement Reserve Fund for a Capital Replacement in accordance with this
Agreement in an amount which exceeds the amount on deposit in the
Replacement Reserve Fund, Lender shall disburse to Borrower only the
amount on deposit in the Replacement Reserve Fund. Borrower shall pay all
additional amounts required in connection with any such Capital
Replacement from Borrower's own funds.
7. Security Agreement. To secure Borrower's obligations under this
Agreement and to further secure Borrower's obligations under the Note,
Security Instrument and other Loan Documents, Borrower hereby conveys,
pledges, transfers and grants to Lender a security interest pursuant to
the Uniform Commercial Code of the Property Jurisdiction or any other
applicable law in and to all money in the Replacement Reserve Fund, as
same may increase or decrease from time to time, all interest and
dividends thereon and all proceeds thereof.
8. Post Default. If Borrower defaults in the performance of its
obligations under this Agreement or under the Note, Security Instrument
or any other Loan Document, after the expiration of any applicable
notice or cure period, Lender shall have all remedies available to them
under Article 9 of the Uniform Commercial Code of the Property
Jurisdiction and under any other applicable law. In addition, Lender
may retain all money in the Replacement Reserve Fund, including
interest, and in Lender's discretion, may apply such amounts, without
restriction and without any specific order of priority, to the payment
of any and all indebtedness or obligations of Borrower set forth in the
Note, Security Instrument or any other Loan Document, including, but
not limited to, principal, interest, taxes, insurance, reasonable
attorneys' fees and costs (including those of Lender's in-house
counsel) and disbursements actually incurred and/or repairs to the
Property.
9. Termination. If not sooner terminated by written concurrence of the
parties, this Agreement shall terminate upon the payment in full of the
Loan and all indebtedness incurred in connection therewith and upon such
termination, Lender shall pay to Borrower all funds remaining in the
Replacement Reserve Fund.
10. No Amendment. Nothing contained in this Agreement shall be construed to
amend, modify, alter, change or supersede the terms and provisions of the
Note, Security Instrument or any other Loan Document; and, if there is a
conflict between the terms and provisions of this Agreement and those of
the Note, Security Instrument, or any other Loan Document then the terms
and provisions of the Note, Security Instrument or such other Loan
Document shall control.
11. Release; Indemnity.
(a) Release. Borrower covenants and agrees that, in performing any of its
duties under this Agreement, none of Lender, any Loan
Servicer, or any of their respective agents or employees shall
be liable for any losses, claims, damages, liabilities and
expenses that may be incurred by any of them as a result of
such performance, except that no such party will be released
from liability for any losses, claims, damages, liabilities or
expenses arising out of the willful misconduct or gross
negligence of such party.
(b) Indemnity. Borrower hereby agrees to indemnify and hold harmless
Lender, Loan Servicer and their respective agents and
employees against any and all losses, claims, damages,
liabilities and expenses including, without limitation,
reasonable attorneys' fees and costs (including those of
Lender's in-house counsel) and disbursements, which may be
imposed or incurred by any of them in connection with this
Agreement except that no such party will be indemnified from
liability for any losses, claims, damages, liabilities or
expenses arising out of the willful misconduct or gross
negligence of such party.
12. Choice of Law. This Agreement shall be construed and enforced in
accordance with the laws of the Property Jurisdiction.
13. Successors and Assigns. Lender may assign its rights and interests
under this Agreement in whole or in part and upon any such assignment,
all the terms and provisions of this Agreement shall inure to the
benefit of such assignee to the extent so assigned. The terms used to
designate any of the parties herein shall be deemed to include the
heirs, legal representatives, successors and assigns of such parties;
and the term "Lender" shall also include any lawful owner, holder or
pledgee of the Note. Reference herein to "person" or "persons" shall
be deemed to include individuals and entities. Borrower may not assign
or delegate its rights, interests, or obligations under this Agreement
without first obtaining Lender's prior written consent.
14. Attorneys' Fees. In the event that Lender engages the services of an
attorney at law to enforce the provisions of this Agreement against
Borrower, then Borrower shall pay all costs of such enforcement, including
any reasonable attorneys' fees and costs (including those of Lender's
in-house counsel) and disbursements actually incurred.
15. Compliance with Laws; Insurance Requirements.
(a) Compliance with Laws. Borrower shall ensure that all Capital Replacements
comply with all applicable laws, ordinances, rules and regulations of all
governmental authorities having jurisdiction over the Property and
applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental regulations,
and requirements of insurance underwriters.
(b) Insurance Requirements. In addition to any insurance required under
the Loan Documents, Borrower shall provide or cause to be
provided workers' compensation, builder's risk (if required by
Lender), and public liability insurance and other insurance
required under applicable law in connection with any of the
Capital Replacements. All such policies that can be endorsed
with standard mortgage clauses making losses payable to Lender
or its assigns shall be so endorsed. The originals of such
policies shall be deposited with Loan Servicer.
16. Remedies Cumulative. In the event of Borrower's default under this
Agreement, Lender may exercise all or any one or more of its rights and
remedies available under this Agreement, at law or in equity. Such
rights and remedies shall be cumulative and concurrent, and may be
enforced separately, successively or together, and Lender's exercise of
any particular right or remedy shall not in any way prevent Lender from
exercising any other right or remedy available to Lender. Lender may
exercise any such remedies from time to time as often as Lender chooses.
17. Determinations by Lender. Unless otherwise provided in this Agreement,
in any instance where the consent or approval of Lender may be given or
is required, or where any determination, judgment or decision is to be
rendered by Lender under this Agreement, the granting, withholding or
denial of such consent or approval and the rendering of such
determination, judgment or decision shall be made or exercised by
Lender (or its designated representative) at its sole and exclusive
option and in its sole and absolute discretion.
18. Completion of Capital Replacements. Lender's disbursement of moneys
from the Replacement Reserve Fund or other acknowledgment of completion
of any Capital Replacement in a manner satisfactory to Lender shall not
be deemed a certification by Lender that the Capital Replacement has
been completed in accordance with applicable building, zoning or other
codes, ordinances, statutes, laws, regulations or requirements of any
governmental authority or agency. Borrower shall at all times have the
sole responsibility for ensuring that all Capital Replacements are
completed in accordance with all such governmental requirements.
19. No Agency or Partnership. Nothing contained in this Agreement shall
constitute Lender as a joint venturer, partner or agent of Borrower, or
render Lender liable for any debts, obligations, acts, omissions,
representations or contracts of Borrower.
20. Entire Agreement. This Agreement and the other Loan Documents
represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral
agreements. There are no oral agreements between the parties. All
prior or contemporaneous agreements, understandings, representations
and statements, oral or written, are merged into this Agreement and the
other Loan Documents. Neither this Agreement nor any of its provisions
may be waived, modified, amended, discharged or terminated except in
writing signed by the party against which the enforcement of the
waiver, modification, amendment, discharge or termination is sought,
and then only to the extent set forth in writing; provided, however,
that in the event of a Transfer requiring Lender's consent under the
terms of the Security Instrument, one or more or all of the
Modifications to Agreement set forth in Exhibit C (if any) may be
modified or rendered void by Lender at Lender's option by notice to
Borrower/transferee.
21. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original document and all of which
together shall constitute one agreement.
ATTACHED EXHIBITS. The following Exhibits are attached to this
Agreement:
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X Exhibit A Legal Description of the Land (required)
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X Exhibit B Capital Replacements (required)
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Exhibit C Modifications to Agreement
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
BORROWER:
CONCAP CITADEL ASSOCIATES, LTD., a Texas
limited partnership
Borrower's Social Security or
Taxpayer Identification No. By: CCP/IV Citadel GP, L.L.C., a South
Carolina
75-2470355 Limited liability company, its
general partner
By: Consolidated Capital Properties
IV, a California limited
partnership, its sole member
By: ConCap Equities, Inc., a
Delaware corporation, its
general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
LENDER:
GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank
By: /s/Max W. Foore
Name: Max W. Foore
Title:Limited Signer
Exhibit 10.100
Old Freddie Mac Loan Number: 002728532
New Freddie Mac Loan Number: 002759985
Citadel Apartments
ALLONGE AND AMENDMENT TO MULTIFAMILY NOTE
(Citadel Apartments)
ALLONGE AND AMENDMENT dated effective as of June 21, 2004 (this
"Allonge"), to the Multifamily Note dated as of February 23, 2000 (the "Note"),
in the original principal amount of Four Million Seven Hundred Ten Thousand and
00/100 Dollars ($4,710,000.00), executed by CONCAP CITADEL ASSOCIATES, LTD., a
Texas limited partnership, as "Borrower", to the order of ARCS COMMERCIAL
MORTGAGE CO., L.P., a California limited partnership ("Original Lender"), and
assigned by Original Lender to and currently held by the FEDERAL HOME LOAN
MORTGAGE CORPORATION as "Lender".
For valuable consideration, the receipt and sufficiency are hereby acknowledged,
Borrower and Lender hereby amend the Note as follows:
1. From and after the effective date of this Allonge until the Initial Maturity
Date, interest will accrue on the outstanding principal amount of the Note at
the annual rate of eight and fifty-five hundredths percent (8.55%);
2. As of the effective date of this Allonge, the unpaid principal balance of the
Note is $4,238,452.00. The monthly installment of principal and interest payable
by Borrower on July 1, 2004, shall be in the amount of $37,668.31, reflecting
interest at the rate originally provided for in the Note from June 1, 2004 to
the effective date of this Allonge and interest at the rate provided for in
section 1 of this Allonge for the remainder of the month of June 2004. Paragraph
3(b) of the Note is modified to provide that beginning August 1, 2004, and on
the first day of each consecutive and successive month thereafter until the
Maturity Date, Borrower will pay monthly installment of principal and interest
under the Note in the amount of Thirty Two Thousand Seven Hundred Forty and
34/100 ($32,740.34).
3. The "Maturity Date" provided for in Paragraph 3(c) of the Note is revised to
July 1, 2014, subject to the provisions of new Paragraph 22 of the Note set
forth below.
4. Paragraph 10(b) of the Note is revised by deleting "one hundred eighty (180)
days" and substituting "zero (0) days".
5. Subparagraph 10(c)(1) of the Note is revised to provide that the Yield
Maintenance Period will end on July 1, 2014.
6. For the purposes of computing the Assumed Reinvestment Rate under Paragraph
10 of the Note, the applicable U.S. Treasury Security is revised to the 11.25%
U.S. Treasury Security due February 15, 2015.
7. A new Paragraph 22 is added to the Note as follows:
22. Extension of Maturity Date. So long as the Maturity Date has not
occurred prior to July 1, 2014 (for the purposes of this Paragraph 22, the
"Initial Maturity Date"), the Indebtedness is not paid in full on the
Initial Maturity Date, and no other Event of Default, or event or
circumstances which, with the giving of notice or passage of time, or
both, could constitute an Event of Default, exists on the Initial Maturity
Date, then the date for full payment of the Indebtedness automatically
shall be extended for a period of twelve (12) months (the "Extension
Period") until July 1, 2015, or any earlier date on which the unpaid
principal balance of this Note becomes due and payable by acceleration or
otherwise (the "Extended Maturity Date"). Principal and interest shall be
payable during the Extension Period, in immediately available funds, as
follows:
(a) On the Initial Maturity Date, Borrower must make the regularly
scheduled monthly payment set forth in Paragraph 3(b).
(b) During the Extension Period, interest will accrue on the unpaid
principal balance of this Note at the "Adjustable Interest Rate"
(hereinafter defined). Notwithstanding anything in this Note that may be
to the contrary, during the Extension Period, interest under this Note
shall be computed, due and payable on the basis of a 360-day year and the
actual number of days in the month for which interest is being calculated
(divide the annual interest by 360, and multiply the quotient by the
number of days in the month for which interest is being calculated),
notwithstanding that the amount of any monthly payment of principal and
interest may be calculated on a "30/360" basis. The amount payable as
interest, or allocated to interest, will vary depending upon the number of
days in the month for which interest is being calculated, in addition to
varying as the Adjustable Interest Rate varies.
(c) During the Extension Period, consecutive monthly installments of
principal and interest shall be payable on the first day of each month
beginning on August 1, 2014, and continuing during the Extension Period
until the Extended Maturity Date. The date on which a monthly installment
of principal and interest is due pursuant to this Section 23(c) is
referred to as that installment's "Installment Due Date". The amount of
the monthly installment of principal and interest payable on an
Installment Due Date, and the portion thereof attributable to principal
and the portion thereof attributable to interest, shall be calculated so
as to equal the monthly payment amount which would be payable on the
Installment Due Date, and allocation thereof between principal and
interest, as if the unpaid principal balance of this Note as of the first
day of the calendar month preceding the Installment Due Date, together
with interest thereon at the Adjustable Interest Rate in effect on the
first day of the calendar month preceding the Installment Due Date, were
to be fully amortized (using an actual/360 method of computing interest)
in equal monthly payments paid on the first day of each calendar month
over an assumed amortization period commencing on the first day of the
calendar month preceding the Installment Due Date and ending on the first
day of the 360th full calendar month following the date of this Note.
Alternatively, Lender may calculate the monthly installment amount on a
"30/360" basis but allocate first to interest the amount due using an
actual/360 method of computing interest and the balance to principal.
Lender shall provide Borrower with Notice of the amount of each monthly
installment due hereunder.
(d) Any accrued interest remaining past due for 30 days or more may,
at Lender's discretion, be added to and become part of the unpaid
principal balance and shall bear interest at the rate or rates specified
in this Note, and any reference to "accrued interest" shall refer to
accrued interest which has not become part of the unpaid principal
balance. All unpaid Indebtedness shall be due and payable in full on the
Extended Maturity Date. The unpaid principal balance shall continue to
bear interest after the Extended Maturity Date at the Default Rate set
forth in Paragraph 22(j) until and including the date on which it is paid
in full.
(e) Any regularly scheduled monthly installment payable pursuant to
Paragraph 22(c) that is received by Lender before the Installment Due Date
shall be deemed to have been received on the Installment Due Date solely
for the purpose of calculating interest due.
(f) If Lender at any time determines that it has miscalculated the
Adjustable Interest Rate or the amount of any monthly installment, then
Lender shall give Notice to Borrower of the corrected Adjustable Interest
Rate and corrected installments. If Borrower has paid one or more monthly
installments calculated at the incorrect Adjustable Interest Rate or
calculated incorrectly and (i) if the corrected Adjustable Interest Rate
or corrected installment results in an increase in the applicable monthly
payment(s), Borrower, within 10 calendar days after receipt of the Notice
from Lender, shall pay to Lender any sums that Borrower would have
otherwise been obligated to pay to Lender under this Note had the amount
of the Adjustable Interest Rate or monthly installment not been
miscalculated, or (ii) if the corrected Adjustable Interest Rate or
monthly installment results in an overpayment having been made by
Borrower, then the amount of the overpayment shall be credited to the next
installment(s) of principal and interest due under this Note (or, if an
Event of Default has occurred and is continuing, such overpayment shall be
credited against any amount owing by Borrower to Lender).
(g) In accordance with this Note, interest charged hereunder cannot
exceed the maximum amount of interest allowed by applicable law. The rate
of interest which results in the maximum amount of interest allowed by
applicable law is referred to as the "Maximum Rate". If the Applicable
Interest Rate at any time exceeds the Maximum Rate, resulting in the
charging of interest hereunder to be limited to the Maximum Rate, then any
subsequent reduction in the Applicable Interest Rate shall not reduce the
rate at which interest under this Note accrues until the total amount of
interest accrued hereunder equals the amount of interest which would have
accrued had the Applicable Interest Rate at all times been in effect.
(h) During the Extension Period, Borrower may pay the entire unpaid
Indebtedness on any Business Day designated as the date for such payment
in a written notice from Borrower to Lender given at least 30 days prior
to the date of such payment. No prepayment premium will be payable by
Borrower during the Extension Period.
(i) The following defined terms are added to this Note:
(i) "Adjustable Interest Rate" means the variable per annum
rate at which interest will accrue on the outstanding
principal balance of this Note. The Adjustable Interest Rate
applicable during any Interest Adjustment Period will equal
the Index Rate, truncated at the fifth (5th) decimal place if
necessary, for such Interest Adjustment Period, plus the
Margin.
(ii) "Margin" means two and one-half (2.5) percentage points
(250 basis points).
(iii) "Index Rate" means, for any Interest Adjustment Period,
the Reference Bill(R) Index Rate for such Interest Adjustment
Period. However, if Freddie Mac has not conducted a Reference
Bill auction within the 60-calendar day period prior to the
first day of an Interest Adjustment Period, the Index Rate for
such Interest Adjustment Period will be the LIBOR Index Rate
for such Interest Adjustment Period minus one-tenth of one
percentage point.
(iv) "Interest Adjustment Period" means each successive one
calendar month beginning on the Initial Maturity Date and
continuing until the entire Indebtedness is paid in full.
(v) "LIBOR Index" means the British Bankers Association's
(BBA) one month LIBOR Rate for United States Dollar (may be
displayed as "USD") deposits, as displayed on the LIBOR Index
Page used to establish the LIBOR Index Rate, as more fully set
forth below.
(vi) "LIBOR Index Rate" means, for any Interest Adjustment
Period after the first Interest Adjustment Period, the British
Bankers Association's (BBA) LIBOR Rate for the LIBOR Index, as
of 11:00 a.m. (London time) on the second London Banking Day
preceding the first day of such Interest Adjustment Period, as
such LIBOR Rate is displayed on the LIBOR Index Page. The
LIBOR Index Rate for the first Interest Adjustment Period
means the British Bankers Association's (BBA) LIBOR Rate for
the LIBOR Index, as of 11:00 a.m. (London time) on the second
London Banking Day preceding the first day of the month in
which the first Interest Adjustment Period begins, as such
LIBOR Rate is displayed on the LIBOR Index Page. The "LIBOR
Index Page" is the Bloomberg L.P., page "BBAM", or such other
page for the LIBOR Index as may replace page BBAM on that
service, or at the option of Lender (i) the applicable page
for the LIBOR Index on another service which electronically
transmits or displays BBA LIBOR Rates, or (ii) any publication
of LIBOR rates available from the BBA. In the event the BBA
ceases to set or publish a LIBOR rate/interest settlement rate
for the LIBOR Index, Lender will designate an alternative
index, and such alternative index shall constitute the LIBOR
Index Rate. A "London Banking Day" is any day on which banks
are open for dealing in interbank deposits in London.
(vii) "Reference Bills(R)" means the unsecured general
obligations of Freddie Mac designated by Freddie Mac as
"Reference Bills(R)" and having original duration to maturity
most comparable to the term of the Reference Bill Index, and
issued by Freddie Mac at regularly scheduled auctions. In the
event Freddie Mac shall at any time cease to designate any
unsecured general obligations of Freddie Mac as "Reference
Bills", then at the option of Lender (i) Lender may select
from time to time another unsecured general obligation of
Freddie Mac having original duration to maturity most
comparable to the term of the Reference Bill Index and issued
by Freddie Mac at regularly scheduled auctions, and the term
"Reference Bills" as used in this Note shall mean such other
unsecured general obligations as selected by Lender; or (ii)
for any one or more Interest Adjustment Periods, Lender may
use the applicable LIBOR Index Rate as the Index Rate for such
Interest Adjustment Period(s).
(viii) "Reference Bill Index" means the one-month Reference
Bills. One-month Reference Bills have maturities of
approximately 30 days.
(ix) "Reference Bill Index Rate" means, for any Interest
Adjustment Period after the first Interest Adjustment Period,
the Money Market Yield for the Reference Bills as established
by the Reference Bill auction conducted by Freddie Mac most
recently preceding the first day of such Interest Adjustment
Period, as displayed on the Reference Bill Index Page. The
Reference Bill Index Rate for the first Interest Adjustment
Period means the Money Market Yield for the Reference Bills as
established by the Reference Bill auction conducted by Freddie
Mac most recently preceding the first day of the month in
which the first Interest Adjustment Period begins, as
displayed on the Reference Bill Index Page. The "Reference
Bill Index Page" is the Freddie Mac Debt Securities Web Page
(accessed via the Freddie Mac internet site at
www.freddiemac.com), or at the option of Lender, any
publication of Reference Bills auction results available from
Freddie Mac.
(j) Notwithstanding anything else in this Note to the contrary,
during the Extension Period and thereafter, the Default Rate will equal
the greater of the amount calculated pursuant to Paragraph 8 and four (4)
percentage points above the Adjustable Interest Rate, but in no event more
than the Maximum Rate.
(k) Notwithstanding anything in Paragraph 10 that may be deemed to
be to the contrary, the Yield Maintenance Period expires on the Initial
Maturity Date and any prepayment of principal prior to the Initial
Maturity Date must be accompanied by the applicable prepayment premium.
(l) If the Extension Period becomes effective, during the Extension
Period and thereafter, any references to the "Maturity Date" of the Note
in any other Loan Document shall be deemed to mean the Extended Maturity
Date.
(m) Anything in Section 21 of the Security Instrument to the
contrary notwithstanding, Borrower will not request that Lender consent
to, and Lender will not consent to, a Transfer during the Extension
Period.
8. From and after the effective date of this Allonge: (i) references in the Note
and the other Loan Documents to the "Security Instrument" mean the Security
Instrument dated as of the date of the Note, as amended by the First Amendment
to Security Instrument dated as of the date of this Allonge, and (ii) references
in the Loan Documents to the "Note" mean the Note as amended by this Allonge.
9. The Note remains in full force and effect and, except as amended hereby,
unmodified. This Allonge is not intended as a discharge, substitution or
novation of the indebtedness of the Note. Borrower hereby confirms that it has
no defenses or offsets of any kind against any of the indebtedness due under the
Note as modified and amended by this Allonge.
10. Guarantor has signed this Allonge to confirm that its Guaranty remains in
full force and effect and extends to the Note as amended by this Allonge and to
the Security Instrument as amended. Borrower and Guarantor acknowledge that the
request that Lender accept and execute this Allonge is within the scope of
Paragraph 9(e)(3) of the Note.
11. This Allonge is intended to be executed on multiple counterpart signature
pages. Signature Pages Follow
In Witness Whereof, the undersigned have executed this Allonge and Amendment to
Multifamily Note as of the effective date provided for therein.
BORROWER:
CONCAP CITADEL ASSOCIATES, LTD., a Texas
limited partnership
By: CCP/IV Citadel GP, L.L.C., a South
Carolina limited liability
company, its general partner
By: Consolidated Capital Properties
IV, a California limited
partnership, doing business in
Texas as Consolidated Capital
Properties IV, Ltd., its sole
member
By: ConCap Equities, Inc., a
Delaware corporation, its
general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
In Witness Whereof, the undersigned has executed this Allonge and Amendment to
Multifamily Note as of the effective date provided for therein.
LENDER:
FEDERAL HOME LOAN MORTGAGE CORPORATION
By: /s/Dennis B. Graven
Name: Dennis B. Graven
Title: Regional Director - Multifamily
SEEN AND AGREED:
GUARANTOR:
AIMCO PROPERTIES, L.P., a Delaware
limited partnership
By: AIMCO-GP, Inc., a Delaware
corporation, its general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
Exhibit 10.101
FHLMC Loan No. 002759888
Lake Forest Apartments
MULTIFAMILY NOTE
MULTISTATE - ADJUSTABLE RATE
REVISION DATE 3-25-04
US $2,500,000.00 Effective Date: as of June 8, 2004
FOR VALUE RECEIVED, the undersigned (together with such party's or
parties' successors and assigns, "Borrower"), jointly and severally (if more
than one) promises to pay to the order of GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank, the principal sum of Two Million Five Hundred Thousand and
00/100 Dollars (US $2,500,000.00), with interest on the unpaid principal balance
as hereinafter provided.
1. Defined Terms.
(a) As used in this Note:
"Adjustable Interest Rate" means the variable annual interest rate
calculated for each Interest Adjustment Period so as to equal the
Index Rate for such Interest Adjustment Period (truncated at the
fifth (5th) decimal place if necessary) plus the Margin. However, in
no event will the Adjustable Interest Rate exceed the Capped
Interest Rate.
"Amortization Period" means a period of -0- full consecutive
calendar months.
"Base Recourse" means a portion of the Indebtedness equal to zero
percent (0%) of the original principal balance of this Note.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which Lender is not open for business.
"Capped Interest Rate" is not applicable, there is no Capped
Interest Rate for the Loan.
"Default Rate" means a variable annual interest rate equal to four
(4) percentage points above the Adjustable Interest Rate in effect
from time to time. However, at no time will the Default Rate exceed
the Maximum Interest Rate.
"Index Rate" means, for any Interest Adjustment Period, the
Reference Bill(R) Index Rate for such Interest Adjustment Period.
"Installment Due Date" means, for any monthly installment of
interest only or principal and interest, the date on which such
monthly installment is due and payable pursuant to Section 3 of this
Note. The "First Installment Due Date" under this Note is August 1,
2004.
"Interest Adjustment Period" means each successive one (1) calendar
month period until the entire Indebtedness is paid in full, except
that the first Interest Adjustment Period is the period from the
date of this Note through June 30, 2004. Therefore, the second
Interest Adjustment Period shall be the period from July 1, 2004
through July 31, 2004, and so on until the entire Indebtedness is
paid in full.
"Lender" means the holder from time to time of this Note.
"LIBOR Index" means the British Bankers Association's (BBA) one (1)
month LIBOR Rate for United States Dollar deposits, as displayed on
the LIBOR Index Page used to establish the LIBOR Index Rate.
"LIBOR Index Rate" means, for any Interest Adjustment Period after
the first Interest Adjustment Period, the BBA's LIBOR Rate for the
LIBOR Index released by the BBA most recently preceding the first
day of such Interest Adjustment Period, as such LIBOR Rate is
displayed on the LIBOR Index Page. The LIBOR Index Rate for the
first Interest Adjustment Period means the British Bankers
Association's (BBA) LIBOR Rate for the LIBOR Index released by the
BBA most recently preceding the first day of the month in which the
first Interest Adjustment Period begins, as such LIBOR Rate is
displayed on the LIBOR Index Page. "LIBOR Index Page" is the
Bloomberg L.P., page "BBAM", or such other page for the LIBOR Index
as may replace page BBAM on that service, or at the option of Lender
(i) the applicable page for the LIBOR Index on another service which
electronically transmits or displays BBA LIBOR Rates, or (ii) any
publication of LIBOR rates available from the BBA. In the event the
BBA ceases to set or publish a LIBOR rate/interest settlement rate
for the LIBOR Index, Lender will designate an alternative index, and
such alternative index shall constitute the LIBOR Index Rate.
"Loan" means the loan evidenced by this Note.
"Lockout Period" is not applicable, there is no Lockout Period under
this Note.
"Margin" means three (3.00) percentage points (300 basis points).
"Maturity Date" means the earlier of (i) July 1, 2007 (the
"Scheduled Maturity Date"), and (ii) the date on which the unpaid
principal balance of this Note becomes due and payable by
acceleration or otherwise pursuant to the Loan Documents or the
exercise by Lender of any right or remedy under any Loan Document.
"Maximum Interest Rate" means the rate of interest that results in
the maximum amount of interest allowed by applicable law.
"Reference Bills(R)" means the unsecured general obligations of the
Federal Home Loan Mortgage Corporation ("Freddie Mac") designated by
Freddie Mac as "Reference Bills(R)" and having original durations to
maturity most comparable to the term of the Reference Bill Index,
and issued by Freddie Mac at regularly scheduled auctions. In the
event Freddie Mac shall at any time cease to designate any unsecured
general obligations of Freddie Mac as "Reference Bills", then at the
option of Lender (i) Lender may select from time to time another
unsecured general obligation of Freddie Mac having original
durations to maturity most comparable to the term of the Reference
Bill Index and issued by Freddie Mac at regularly scheduled
auctions, and the term "Reference Bills" as used in this Note shall
mean such other unsecured general obligations as selected by Lender;
or (ii) for any one or more Interest Adjustment Periods, Lender may
use the applicable LIBOR Index Rate as the Index Rate for such
Interest Adjustment Period(s).
"Reference Bill Index" means the one month Reference Bills.
One-month reference bills have original durations to maturity of
approximately 30 days.
"Reference Bill Index Rate" means, for any Interest Adjustment
Period after the first Interest Adjustment Period, the Money Market
Yield for the Reference Bills as established by the Reference Bill
auction conducted by Freddie Mac most recently preceding the first
day of such Interest Adjustment Period, as displayed on the
Reference Bill Index Page. The Reference Bill Index Rate for the
first Interest Adjustment Period means the Money Market Yield for
the Reference Bills as established by the Reference Bill auction
conducted by Freddie Mac most recently preceding the first day of
the month in which the first Interest Adjustment Period begins, as
displayed on the Reference Bill Index Page. The "Reference Bill
Index Page" is the Freddie Mac Debt Securities Web Page (accessed
via the Freddie Mac internet site at www.freddiemac.com), or at the
option of Lender, any publication of Reference Bills auction results
available from Freddie Mac. However, if Freddie Mac has not
conducted a Reference Bill auction within the 60-calendar day period
prior to the first day of an Interest Adjustment Period, the
Reference Bill Index Rate for such Interest Adjustment Period will
be the LIBOR Index Rate for such Interest Adjustment Period.
"Remaining Amortization Period" means, at any point in time, the
number of consecutive calendar months equal to the number of months
in the Amortization Period minus the number of scheduled monthly
installments of principal and interest that have elapsed since the
date of this Note.
"Security Instrument" means the multifamily mortgage, deed to secure
debt or deed of trust effective as of the effective date of this
Note, from Borrower to or for the benefit of Lender and securing
this Note.
"Window Period" means the three (3) consecutive calendar month
period prior to the Scheduled Maturity Date.
"Yield Maintenance Period" means the period from and including the
day following the expiration of the Lockout Period (or if there is
no Lockout Period, from and including the date of this Note) until
but not including N/A.
(b) Other capitalized terms used but not defined in this Note
shall have the meanings given to such terms in the Security
Instrument.
2. Address for Payment. All payments due under this Note shall be
payable at c/o GMAC Commercial Mortgage Corporation, 200
Witmer Road, P.O. Box 809, Horsham, Pennsylvania 19044,
Attention: Servicing - Account Manager, or such other place as
may be designated by Notice to Borrower from or on behalf of
Lender.
3. Payments.
(a) Interest will accrue on the outstanding principal balance of
this Note at the Adjustable Interest Rate, subject to the
provisions of Section 8 of this Note.
(b) Interest under this Note shall be computed, payable and
allocated on the basis of an actual/360 interest calculation
schedule (interest is payable for the actual number of days in
each month, and each month's interest is calculated by
multiplying the unpaid principal amount of this Note as of the
first day of the month for which interest in being calculated
by the applicable Adjustable Interest Rate, dividing the
product by 360, and multiplying the quotient by the number of
days in the month for which interest is being calculated). For
convenience in determining the amount of a monthly installment
of principal and interest under this Note, Lender will use a
30/360 interest calculation payment schedule (each year is
treated as consisting of twelve 30-day months). However, as
provided above, the portion of the monthly installment
actually payable as and allocated to interest will be based
upon an actual/360 interest calculation schedule, and the
amount of each installment attributable to principal and the
amount attributable to interest will vary based upon the
number of days in the month for which such installment is
paid. Each monthly payment of principal and interest will
first be applied to pay in full interest due, and the balance
of the monthly payment paid by Borrower will be credited to
principal.
(c) Unless disbursement of principal is made by Lender to Borrower
on the first day of a calendar month, interest for the period
beginning on the date of disbursement and ending on and
including the last day of such calendar month shall be payable
by Borrower simultaneously with the execution of this Note. If
disbursement of principal is made by Lender to Borrower on the
first day of a calendar month, then no payment will be due
from Borrower at the time of the execution of this Note. The
Installment Due Date for the first monthly installment payment
under Section 3(d) of interest only or principal and interest,
as applicable, will be the First Installment Due Date set
forth in Section 1(a) of this Note. Except as provided in this
Section 3(c) and in Section 10, accrued interest will be
payable in arrears.
(d) Beginning on the First Installment Due Date, and continuing
until and including the monthly installment due on the
Maturity Date, accrued interest only shall be payable by
Borrower in consecutive monthly installments due and payable
on the first day of each calendar month. The amount of the
monthly installment of interest only payable pursuant to this
Section 3(d) on an Installment Due Date shall equal the
product of (i) annual interest on the unpaid principal balance
of this Note as of the first day of the Interest Adjustment
Period immediately preceding the Installment Due Date at the
Adjustable Interest Rate in effect for such Interest
Adjustment Period, divided by 360, multiplied by (ii) the
number of days in such Interest Adjustment Period.
(e) All remaining Indebtedness, including all principal and
interest, shall be due and payable by Borrower on the Maturity
Date.
(f) Lender shall provide Borrower with notice, given in the manner
specified in the Security Instrument, of the amount of each
monthly installment due under this Note. However, if Lender
has not provided Borrower with prior notice of the monthly
payment due on any Installment Due Date, then Borrower shall
pay on that Installment Due Date an amount equal to the
monthly installment payment for which Borrower last received
notice. If Lender at any time determines that Borrower has
paid one or more monthly installments in an incorrect amount
because of the operation of the preceding sentence, or because
Lender has miscalculated the Adjustable Interest Rate or has
otherwise miscalculated the amount of any monthly installment,
then Lender shall give notice to Borrower of such
determination. If such determination discloses that Borrower
has paid less than the full amount due for the period for
which the determination was made, Borrower, within 30 calendar
days after receipt of the notice from Lender, shall pay to
Lender the full amount of the deficiency. If such
determination discloses that Borrower has paid more than the
full amount due for the period for which the determination was
made, then the amount of the overpayment shall be credited to
the next installment(s) of interest only or principal and
interest, as applicable, due under this Note (or, if an Event
of Default has occurred and is continuing, such overpayment
shall be credited against any amount owing by Borrower to
Lender).
(g) All payments under this Note shall be made in immediately
available U.S. funds.
(h) Any regularly scheduled monthly installment of interest only
or principal and interest payable pursuant to this Section 3
that is received by Lender before the date it is due shall be
deemed to have been received on the due date for the purpose
of calculating interest due.
(i) Any accrued interest remaining past due for 30 days or more,
at Lender's discretion, may be added to and become part of the
unpaid principal balance of this Note and any reference to
"accrued interest" shall refer to accrued interest which has
not become part of the unpaid principal balance. Any amount
added to principal pursuant to the Loan Documents shall bear
interest at the applicable rate or rates specified in this
Note and shall be payable with such interest upon demand by
Lender and absent such demand, as provided in this Note for
the payment of principal and interest.
(j) In accordance with Section 14, interest charged under this
Note cannot exceed the Maximum Interest Rate. If the
Adjustable Interest Rate at any time exceeds the Maximum
Interest Rate, resulting in the charging of interest hereunder
to be limited to the Maximum Interest Rate, then any
subsequent reduction in the Adjustable Interest Rate shall not
reduce the rate at which interest under this Note accrues
below the Maximum Interest Rate until the total amount of
interest accrued hereunder equals the amount of interest which
would have accrued had the Adjustable Interest Rate at all
times been in effect.
4. Application of Payments. If at any time Lender receives, from
Borrower or otherwise, any amount applicable to the
Indebtedness which is less than all amounts due and payable at
such time, Lender may apply the amount received to amounts
then due and payable in any manner and in any order determined
by Lender, in Lender's discretion. Borrower agrees that
neither Lender's acceptance of a payment from Borrower in an
amount that is less than all amounts then due and payable nor
Lender's application of such payment shall constitute or be
deemed to constitute either a waiver of the unpaid amounts or
an accord and satisfaction.
5. Security. The Indebtedness is secured by, among other things,
the Security Instrument, and reference is made to the Security
Instrument for other rights of Lender as to collateral for the
Indebtedness.
6. Acceleration. If an Event of Default has occurred and is
continuing, the entire unpaid principal balance, any accrued
interest, any prepayment premium payable under Section 10, and
all other amounts payable under this Note and any other Loan
Document, shall at once become due and payable, at the option
of Lender, without any prior notice to Borrower (except if
notice is required by applicable law, then after such notice).
Lender may exercise this option to accelerate regardless of
any prior forbearance. For purposes of exercising such option,
Lender shall calculate the prepayment premium as if prepayment
occurred on the date of acceleration. If prepayment occurs
thereafter, lender shall recalculate the prepayment premium as
of the actual prepayment date.
7. Late Charge.
(a) If any monthly installment of interest or principal and
interest or other amount payable under this Note or under the
Security Instrument or any other Loan Document is not received
in full by Lender within five (5) days after the installment
or other amount is due, counting from and including the date
such installment or other amount is due (unless applicable law
requires a longer period of time before a late charge may be
imposed, in which event such longer period shall be
substituted), Borrower shall pay to Lender, immediately and
without demand by Lender, a late charge equal to five percent
(5%) of such installment or other amount due (unless
applicable law requires a lesser amount be charged, in which
event such lesser amount shall be substituted).
(b) Borrower acknowledges that its failure to make timely payments
will cause Lender to incur additional expenses in servicing
and processing the Loan and that it is extremely difficult and
impractical to determine those additional expenses. Borrower
agrees that the late charge payable pursuant to this Section
represents a fair and reasonable estimate, taking into account
all circumstances existing on the date of this Note, of the
additional expenses Lender will incur by reason of such late
payment. The late charge is payable in addition to, and not in
lieu of, any interest payable at the Default Rate pursuant to
Section 8.
8. Default Rate.
(a) So long as (i) any monthly installment under this Note remains
past due for thirty (30) days or more or (ii) any other Event
of Default has occurred and is continuing, then
notwithstanding anything in Section 3 of this Note to the
contrary, interest under this Note shall accrue on the unpaid
principal balance from the Installment Due Date of the first
such unpaid monthly installment or the occurrence of such
other Event of Default, as applicable, at the Default Rate.
(b) From and after the Maturity Date, the unpaid principal balance
shall continue to bear interest at the Default Rate until and
including the date on which the entire principal balance is
paid in full.
(c) Borrower acknowledges that (i) its failure to make timely
payments will cause Lender to incur additional expenses in
servicing and processing the Loan, (ii) during the time that
any monthly installment under this Note is delinquent for
thirty (30) days or more, Lender will incur additional costs
and expenses arising from its loss of the use of the money due
and from the adverse impact on Lender's ability to meet its
other obligations and to take advantage of other investment
opportunities; and (iii) it is extremely difficult and
impractical to determine those additional costs and expenses.
Borrower also acknowledges that, during the time that any
monthly installment under this Note is delinquent for thirty
(30) days or more or any other Event of Default has occurred
and is continuing, Lender's risk of nonpayment of this Note
will be materially increased and Lender is entitled to be
compensated for such increased risk. Borrower agrees that the
increase in the rate of interest payable under this Note to
the Default Rate represents a fair and reasonable estimate,
taking into account all circumstances existing on the date of
this Note, of the additional costs and expenses Lender will
incur by reason of the Borrower's delinquent payment and the
additional compensation Lender is entitled to receive for the
increased risks of nonpayment associated with a delinquent
loan.
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Section 9, Borrower shall
have no personal liability under this Note, the Security
Instrument or any other Loan Document for the repayment of the
Indebtedness or for the performance of any other obligations
of Borrower under the Loan Documents and Lender's only
recourse for the satisfaction of the Indebtedness and the
performance of such obligations shall be Lender's exercise of
its rights and remedies with respect to the Mortgaged Property
and to any other collateral held by Lender as security for the
Indebtedness. This limitation on Borrower's liability shall
not limit or impair Lender's enforcement of its rights against
any guarantor of the Indebtedness or any guarantor of any
other obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the amount
of the Base Recourse, plus any other amounts for which
Borrower has personal liability under this Section 9.
(c) In addition to the Base Recourse, Borrower shall be personally
liable to Lender for the repayment of a further portion of the
Indebtedness equal to any loss or damage suffered by Lender as
a result of the occurrence of any of the following events:
(i) Borrower fails to pay to Lender upon demand after an Event of Default
all Rents to which Lender is entitled under Section 3(a) of
the Security Instrument and the amount of all security
deposits collected by Borrower from tenants then in
residence. However, Borrower will not be personally liable
for any failure described in this subsection (i) if
Borrower is unable to pay to Lender all Rents and security
deposits as required by the Security Instrument because of
a valid order issued in a bankruptcy, receivership, or
similar judicial proceeding.
(ii) Borrower fails to apply all insurance proceeds and
condemnation proceeds as required by the Security Instrument.
However, Borrower will not be personally liable for any
failure described in this subsection (ii) if Borrower is
unable to apply insurance or condemnation proceeds as required
by the Security Instrument because of a valid order issued in
a bankruptcy, receivership, or similar judicial proceeding.
(iii) Borrower fails to comply with Section 14(g) or (h) of the
Security Instrument relating to the delivery of books and
records, statements, schedules and reports.
(iv) Borrower fails to pay when due in accordance with the terms of
the Security Instrument the amount of any item below marked
"Deferred"; provided however, that if no item is marked
"Deferred", this Section 9(c)(iv) shall be of no force or
effect
[Deferred] Hazard Insurance premiums or other insurance
premiums,
[Collect] Taxes,
[Deferred] water and sewer charges (that could become a lien
on the Mortgaged Property),
[N/A] ground rents,
[Deferred] assessments or other charges (that could become a
lien on the Mortgaged Property)
(d) In addition to the Base Recourse, Borrower shall be personally liable to
Lender for:
(i) the performance of all of Borrower's obligations under Section
18 of the Security Instrument (relating to environmental
matters);
(ii) the costs of any audit under Section 14(g) of the Security
Instrument; and
(iii) any costs and expenses incurred by Lender in connection with
the collection of any amount for which Borrower is personally
liable under this Section 9, including Attorneys' Fees and
Costs and the costs of conducting any independent audit of
Borrower's books and records to determine the amount for which
Borrower has personal liability.
(e) All payments made by Borrower with respect to the Indebtedness
and all amounts received by Lender from the enforcement of its
rights under the Security Instrument and the other Loan
Documents shall be applied first to the portion of the
Indebtedness for which Borrower has no personal liability.
(f) Notwithstanding the Base Recourse, Borrower shall become
personally liable to Lender for the repayment of all of the
Indebtedness upon the occurrence of any of the following
Events of Default:
(i) Borrower's ownership of any property or operation of any
business not permitted by Section 33 of the Security
Instrument;
(ii) a Transfer (including, but not limited to, a lien or
encumbrance) that is an Event of Default under Section 21 of
the Security Instrument, other than a Transfer consisting
solely of the involuntary removal or involuntary withdrawal of
a general partner in a limited partnership or a manager in a
limited liability company; or
(iii) fraud or written material misrepresentation by Borrower or any
officer, director, partner, member or employee of Borrower in
connection with the application for or creation of the
Indebtedness or any request for any action or consent by
Lender.
(g) To the extent that Borrower has personal liability under this
Section 9, Lender may exercise its rights against Borrower
personally without regard to whether Lender has exercised any
rights against the Mortgaged Property or any other security,
or pursued any rights against any guarantor, or pursued any
other rights available to Lender under this Note, the Security
Instrument, any other Loan Document or applicable law. To the
fullest extent permitted by applicable law, in any action to
enforce Borrower's personal liability under this Section 9,
Borrower waives any right to set off the value of the
Mortgaged Property against such personal liability.
10. Voluntary and Involuntary Prepayments.
(a) Any receipt by Lender of principal due under this Note prior
to the Scheduled Maturity Date, other than principal required
to be paid in monthly installments pursuant to Section 3,
constitutes a prepayment of principal under this Note. Without
limiting the foregoing, any application by Lender, prior to
the Scheduled Maturity Date, of any proceeds of collateral or
other security to the repayment of any portion of the unpaid
principal balance of this Note constitutes a prepayment under
this Note.
(b) Borrower may not voluntarily prepay any portion of the
principal balance of this Note during the Lockout Period, if a
Lockout Period is applicable to this Note. However, if any
portion of the principal balance of this Note is prepaid
during the Lockout Period by reason of the application by
Lender of any proceeds of collateral or other security to any
portion of the unpaid principal balance of this Note or
following a determination that the prohibition on voluntary
prepayments during the Lockout Period is in contravention of
applicable law, then Borrower must also pay to Lender upon
demand by Lender, a prepayment premium equal to five percent
(5.0%) of the amount of principal being prepaid.
(c) Following the end of the Lockout Period, Borrower may
voluntarily prepay all of the unpaid principal balance of this
Note on a Business Day designated as the date for such
prepayment in a Notice from Borrower to Lender given at least
30 days prior to the date of such prepayment. Unless otherwise
expressly provided in the Loan Documents, Borrower may not
voluntarily prepay less than all of the unpaid principal
balance of this Note.
(d) Borrower acknowledges that Lender has agreed that principal
may be prepaid other than on the last calendar day of a month
only because, for the purposes of the accrual of interest, any
prepayment received by Lender on any day other than the last
calendar day of the month shall be deemed to have been
received on the last calendar day of the month in which the
prepayment occurs.
(e) In order to voluntarily prepay all or any part of the
principal of this Note, Borrower must also pay to Lender,
together with the amount of principal being prepaid, (i) all
accrued and unpaid interest due under this Note, plus (ii) all
other sums due to Lender at the time of such prepayment, plus
(ii) any prepayment premium calculated pursuant to Section
10(f).
(f) Except as provided in Section 10(g), a prepayment premium
shall be due and payable by Borrower in connection with any
prepayment of principal under this Note during the Yield
Maintenance Period. The prepayment premium shall be 1.0% of
the amount of principal being prepaid.
(g) Notwithstanding any other provision of this Section 10, no
prepayment premium shall be payable with respect to (i) any
prepayment made during the Window Period, or (ii) any
prepayment occurring as a result of the application of any
insurance proceeds or condemnation award under the Security
Instrument, or (iii) any prepayment of the entire principal
balance of this Note that occurs on or after the [N/A]
Installment Due Date under this Note with the proceeds of a
fixed interest rate or fixed-to-float interest rate mortgage
loan that is the subject of a binding commitment for purchase
between the Freddie Mac and a Freddie Mac-approved Program
Plus(R) Seller/Servicer.
(h) Unless Lender agrees otherwise in writing, a permitted or
required prepayment of less than the unpaid principal balance
of this Note shall not extend or postpone the due date of any
subsequent monthly installments or change the amount of such
installments.
(i) Borrower recognizes that any prepayment of any of the unpaid
principal balance of this Note, whether voluntary or
involuntary or resulting from an Event of Default by Borrower,
will result in Lender's incurring loss, including reinvestment
loss, additional expense and frustration or impairment of
Lender's ability to meet its commitments to third parties.
Borrower agrees to pay to Lender upon demand damages for the
detriment caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of
such damages. Borrower therefore acknowledges and agrees that
the formula for calculating prepayment premiums set forth in
this Note represents a reasonable estimate of the damages
Lender will incur because of a prepayment. Borrower further
acknowledges that any lockout and the prepayment premium
provisions of this Note are a material part of the
consideration for the Loan, and that the terms of this Note
are in other respects more favorable to Borrower as a result
of the Borrower's voluntary agreement to the lockout and
prepayment premium provisions.
11. Costs and Expenses. To the fullest extent allowed by
applicable law, Borrower shall pay all expenses and costs,
including Attorneys' Fees and Costs incurred by Lender as a
result of any default under this Note or in connection with
efforts to collect any amount due under this Note, or to
enforce the provisions of any of the other Loan Documents,
including those incurred in post-judgment collection efforts
and in any bankruptcy proceeding (including any action for
relief from the automatic stay of any bankruptcy proceeding)
or judicial or non-judicial foreclosure proceeding.
12. Forbearance. Any forbearance by Lender in exercising any right
or remedy under this Note, the Security Instrument, or any
other Loan Document or otherwise afforded by applicable law,
shall not be a waiver of or preclude the exercise of that or
any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount
which is less than the required payment, shall not be a waiver
of Lender's right to require prompt payment when due of all
other payments or to exercise any right or remedy with respect
to any failure to make prompt payment. Enforcement by Lender
of any security for Borrower's obligations under this Note
shall not constitute an election by Lender of remedies so as
to preclude the exercise of any other right or remedy
available to Lender.
13. Waivers. Borrower and all endorsers and guarantors of this
Note and all other third party obligors waive presentment,
demand, notice of dishonor, protest, notice of acceleration,
notice of intent to demand or accelerate payment or maturity,
presentment for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness.
14. Loan Charges. Neither this Note nor any of the other Loan
Documents shall be construed to create a contract for the use,
forbearance or detention of money requiring payment of
interest at a rate greater than the Maximum Interest Rate. If
any applicable law limiting the amount of interest or other
charges permitted to be collected from Borrower in connection
with the Loan is interpreted so that any interest or other
charge provided for in any Loan Document, whether considered
separately or together with other charges provided for in any
other Loan Document, violates that law, and Borrower is
entitled to the benefit of that law, that interest or charge
is hereby reduced to the extent necessary to eliminate that
violation. The amounts, if any, previously paid to Lender in
excess of the permitted amounts shall be applied by Lender to
reduce the unpaid principal balance of this Note. For the
purpose of determining whether any applicable law limiting the
amount of interest or other charges permitted to be collected
from Borrower has been violated, all Indebtedness that
constitutes interest, as well as all other charges made in
connection with the Indebtedness that constitute interest,
shall be deemed to be allocated and spread ratably over the
stated term of this Note. Unless otherwise required by
applicable law, such allocation and spreading shall be
effected in such a manner that the rate of interest so
computed is uniform throughout the stated term of this Note.
15. Commercial Purpose. Borrower represents that Borrower is
incurring the Indebtedness solely for the purpose of carrying
on a business or commercial enterprise, and not for personal,
family, household, or agricultural purposes.
16. Counting of Days. Except where otherwise specifically
provided, any reference in this Note to a period of "days"
means calendar days, not Business Days.
17. Governing Law. This Note shall be governed by the law of the
Property Jurisdiction.
18. Captions. The captions of the Sections of this Note are for
convenience only and shall be disregarded in construing this
Note.
19. Notices; Written Modifications.
(a) All Notices, demands and other communications required or
permitted to be given pursuant to this Note shall be given in
accordance with Section 31 of the Security Instrument.
(b) Any modification or amendment to this Note shall be
ineffective unless in writing signed by the party sought to be
charged with such modification or amendment; provided,
however, that in the event of a Transfer under the terms of
the Security Instrument that requires Lender's consent, any or
some or all of the Modifications to Multifamily Note set forth
in Exhibit A to this Note may be modified or rendered void by
Lender at Lender's option, by Notice to Borrower and the
transferee, as a condition of Lender's consent.
20. Consent to Jurisdiction and Venue. Borrower agrees that any
controversy arising under or in relation to this Note may be
litigated in the Property Jurisdiction. The state and federal
courts and authorities with jurisdiction in the Property
Jurisdiction shall have jurisdiction over all controversies
that shall arise under or in relation to this Note. Borrower
irrevocably consents to service, jurisdiction, and venue of
such courts for any such litigation and waives any other venue
to which it might be entitled by virtue of domicile, habitual
residence or otherwise. However, nothing in this Note is
intended to limit any right that Lender may have to bring any
suit, action or proceeding relating to matters arising under
this Note in any court of any other jurisdiction.
21. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES
NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING
OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS
LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (B)
WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY
EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF
COMPETENT LEGAL COUNSEL.
22. State-Specific Provisions. N/A
ATTACHED EXHIBIT. The Exhibit noted below, if marked with an "X" in
the space provided, is attached to this Note:
-----
X Exhibit A Modifications to Multifamily Note
-----
IN WITNESS WHEREOF, and in consideration of the Lender's agreement to lend
Borrower the principal amount set forth above, Borrower has signed and delivered
this Note under seal or has caused this Note to be signed and delivered under
seal by its duly authorized representative.
CONSOLIDATED CAPITAL PROPERTIES IV, a
California limited partnership, doing
business in Nebraska as Consolidated
Capital Properties IV Limited Partnership
By: ConCap Equities, Inc., a Delaware
corporation, its general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
94-2768742
Borrower's Social Security/Employer ID
Number
PAY TO THE ORDER OF FEDERAL HOME LOAN
MORTGAGE CORPORATION, WITHOUT RECOURSE.
GMAC COMMERCIAL MORTGAGE BANK, a
Utah industrial bank
By: /s/Max W. Foore
Name: Max W. Foore
Title: Limited Signer
FHLMC Loan No. 002759888
Exhibit 10.102
FHLMC Loan No. 002759888
Lake Forest Apartments
REPLACEMENT RESERVE Agreement
(REVISION DATE 01-31-2003)
This REPLACEMENT RESERVE AGREEMENT ("Agreement") is made and entered into,
to be effective as of June 8, 2004, by and between CONSOLIDATED CAPITAL
PROPERTIES IV, a California limited partnership, doing business in Nebraska as
Consolidated Capital Properties IV Limited Partnership ("Borrower"), and GMAC
COMMERCIAL MORTGAGE BANK, a Utah industrial bank ("Lender") and its successors
and assigns.
W I T N E S S E T H:
WHEREAS, Lender has agreed to make and Borrower has agreed to accept the
Loan, which is to be evidenced by the Note and secured by the Security
Instrument encumbering the Land and the Improvements. The Land is described on
Exhibit "A" attached to this Agreement; and
WHEREAS, as a condition of making the Loan, Lender is requiring Borrower
to establish the Replacement Reserve Fund for the funding of Capital
Replacements throughout the Loan term.
NOW, THEREFORE, for and in consideration of the Loan, the mutual promises
and covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lender and Borrower
agree as follows:
1. Definitions. The following terms used in this Agreement shall have the
meanings set forth below in this Section 1. Any term used in this
Agreement and not defined shall have the meaning given to that term in the
Security Instrument.
(a) "Capital Replacement" means the replacement of those items listed on
Exhibit "B" of this Agreement and such other replacements of equipment,
major components or capital systems related to the Improvements as may be
approved in writing or required by Lender.
(b) "Disbursement Period" means the interval between disbursements from the
Replacement Reserve Fund, which interval shall be no shorter than once a
quarter.
(c) "Improvements" means the buildings, Personal Property and improvements
situated upon the Land, currently constituting a multifamily apartment
project known as Lake Forest Apartments.
(d) "Initial Deposit" means the amount of zero ($0) made as of the date of
this Agreement.
(e) "Inspection Fee" means a fee for performing any inspection required by
this Agreement in an amount not to exceed Three Hundred and 00/100 Dollars
($300.00) per inspection.
(f) "Investment Fee" means a one time fee for establishing the Replacement
Reserve Fund in the amount of Fifty and 00/100 Dollars ($50.00).
(g) "Loan" means the loan from Lender to Borrower in the original principal
amount of Two Million Five Hundred Thousand and 00/100 Dollars
($2,500,000.00), as evidenced by the Note and secured by the Security
Instrument.
(h) "Minimum Disbursement Request Amount" means Two Thousand Five Hundred and
00/100 Dollars ($2,500.00).
(i) "Monthly Deposit" means the amount of Six Thousand Five Hundred and 00/100
Dollars ($6,500.00) per month to be deposited into the Replacement Reserve
Fund in accordance with this Agreement.
(j) "Property" means the Land and Improvements.
(k) "Replacement Reserve Deposit" means the Initial Deposit, the Monthly
Deposit and/or the Revised Monthly Deposit, as appropriate.
(l) "Replacement Reserve Fund" means the account established pursuant to this
Agreement to defray the costs of Capital Replacements.
(m) "Review Period" means the period ending 36 months after the first monthly
payment date.
(n) "Revised Monthly Deposit" means the amount per month that Lender
determines Borrower must deposit in the Replacement Reserve Fund during
any Subsequent Review Period.
(o) "Security Instrument" means the mortgage, deed of trust, deed to secure
debt, or other similar security instrument encumbering the Property and
securing Borrower's performance of its Loan obligations.
(p) "Subsequent Review Period" means the period of N/A months commencing
either (i) at the termination of the Review Period or (ii) at the
termination of a prior Subsequent Review Period. There may be more than
one Subsequent Review Period.
2. Replacement Reserve Fund.
(a) Establishment; Funding.
(i) Upon the closing of the Loan, the parties shall establish the Replacement
Reserve Fund and, if required by Lender, Borrower shall pay the Initial
Deposit to Lender for deposit into the Replacement Reserve Fund.
(ii) Commencing on the date the first installment of principal and/or interest
is due under the Note and continuing on the same day of each successive
month until the end of the Review Period, Borrower shall pay the Monthly
Deposit to Lender for deposit into the Replacement Reserve Fund, together
with its regular monthly payments of principal and interest as required by
the Note and Security Instrument.
(iii) Prior to the end of the Review Period, Lender will assess the physical
condition of the Property. Lender may adjust the Monthly Deposit at the
termination of the Review Period to reflect Lender's determination of the
condition of the Property. Upon written notice from Lender or Loan
Servicer, Borrower shall begin paying the Revised Monthly Deposit on the
first monthly payment date of the Subsequent Review Period and shall
continue paying the Revised Monthly Deposit until Lender further adjusts
the Replacement Reserve Deposit during a Subsequent Review Period, if
applicable. If Lender does not provide Borrower with written notice of a
Revised Monthly Deposit, Borrower shall continue to pay the Monthly
Deposit or the Revised Monthly Deposit then in effect.
(b) Investment of Deposits. Borrower and Lender agree that Lender shall
hold all moneys deposited into the Replacement Reserve Fund in an
interest bearing account, and any interest earned on such moneys
shall be added to the principal balance of the Replacement
Reserve Fund and disbursed in accordance with the provisions of
this Agreement. Borrower acknowledges and agrees that it shall
not have the right to direct Lender as to any specific investment
of moneys in the Replacement Reserve Fund. Lender shall not be
responsible for any losses resulting from investment of moneys in
the Replacement Reserve Fund or for obtaining any specific level
or percentage of earnings on such investment. Lender shall be
entitled to deduct the Investment Fee from the Replacement
Reserve Fund for establishing the Replacement Reserve Fund.
(c) Use. Subject to the pledge and security interest and other rights of
Lender set forth in this Agreement, the Replacement Reserve Fund shall be
maintained for the payment of the costs of the Capital Replacements
identified on Exhibit "B".
3. Performance of Capital Replacements; Disbursements.
(a) Requests for Disbursement. Lender shall disburse funds from the
Replacement Reserve Fund, in its sole discretion, as follows:
(i) Borrower's Request. If Borrower determines, at any time or from time
to time, that a Capital Replacement is necessary or
desirable, Borrower shall perform such Capital Replacement
and request from Lender, in writing, reimbursement for such
Capital Replacement. Borrower's request for reimbursement
shall include (A) a detailed description of the Capital
Replacement performed, together with evidence, satisfactory
to Lender, that the cost of such Capital Replacement has
been paid and (B) lien waivers from each contractor and
material supplier supplying labor or materials for such
Capital Replacement, if required by Lender.
(ii) Lender's Request. If Lender shall reasonably determine at any time or from
time to time, that a Capital Replacement is necessary for the proper
maintenance of the Property, it shall so notify Borrower, in writing,
requesting that Borrower obtain and submit to Lender bids for all labor
and materials required in connection with such Capital Replacement.
Borrower shall submit such bids and a time schedule for completing each
Capital Replacement to Lender within thirty (30) days after Borrower's
receipt of Lender's written notice. Borrower shall perform such Capital
Replacement and request from Lender, in writing, reimbursement for such
Capital Replacement. Borrower's request for reimbursement shall include
(A) a detailed description of the Capital Replacement performed, together
with evidence, satisfactory to Lender, that the cost of such Capital
Replacement has been paid and (B) lien waivers from each contractor and
material supplier supplying labor or materials for such Capital
Replacement, if required by Lender.
(b) Conditions Precedent. Disbursement from the Replacement Reserve Fund shall
be made no more frequently than once every Disbursement Period and, except
for the final disbursement, no disbursement shall be made in an amount
less than the Minimum Disbursement Request Amount. Disbursements shall be
made only if the following conditions precedent have been satisfied, as
reasonably determined by Lender:
(i) Payment for Capital Replacement. The Capital Replacement has been
performed and/or installed on the Property in a good and
workmanlike manner with suitable materials (or in the case
of a partial disbursement, performed and/or installed on
the Property to an acceptable stage) and paid for by
Borrower as evidenced by copies of all applicable paid
invoices or bills submitted to Lender by Borrower at the
time Borrower requests disbursement from the Replacement
Reserve Fund.
(ii) No Default. There is no condition, event or act that would constitute a
default (with or without notice and/or lapse of time) under this Agreement
or any other Loan Document.
(iii) Representations and Warranties. All representations and warranties of
Borrower set forth in this Agreement and in the Loan Documents are true in
all material respects.
(iv) Continuing Compliance. Borrower is in full compliance with the provisions
of this Agreement, the other Loan Documents and any request or demand by
Lender permitted hereby.
(v) No Lien Claim. No lien or claim based on furnishing labor or materials has
been filed or asserted against the Property, unless Borrower has properly
provided bond or other security against loss in accordance with applicable
law.
(vi) Approvals. All licenses, permits, and approvals of governmental
authorities required for the Capital Replacement as completed to the
applicable stage have been obtained.
(vii) Legal Compliance. The Capital Replacement as completed to the applicable
stage does not violate any laws, ordinance, rules or regulations, or
building lines or restrictions applicable to the Property.
4. Right to Complete Capital Replacements. If Borrower abandons or fails
to proceed diligently to undertake and/or complete any Capital
Replacement in a timely fashion or is otherwise in default under this
Agreement for 30 days after written notice of such failure by Lender to
Borrower, Lender shall have the right (but not the obligation) to enter
upon the Property and take over and cause the completion of such
Capital Replacement. However, no such notice or grace period shall
apply in the case of such failure which could, in Lender's judgment,
absent immediate exercise by Lender of a right or remedy under this
Agreement, result in harm to Lender or impairment of the security given
under the Security Instrument or any other Loan Document. Any
contracts entered into or indebtedness incurred upon the exercise of
such right may be in the name of Borrower, and Lender is hereby
irrevocably appointed the attorney in fact of Borrower, such
appointment being coupled with an interest, to enter into such
contracts, incur such obligations, enforce any contracts or agreements
made by or on behalf of Borrower (including the prosecution and defense
of all actions and proceedings in connection with the Capital
Replacement and the payment, settlement or compromise of all bills and
claims for materials and work performed in connection with the Capital
Replacement) and do any and all things necessary or proper to complete
any Capital Replacement including signing Borrower's name to any
contracts and documents as may be deemed necessary by Lender. In no
event shall Lender be required to expend its own funds to complete any
Capital Replacement, but Lender may, in its sole discretion, advance
such funds. Any funds advanced shall be added to the outstanding
balance of the Loan, secured by the Security Instrument and payable to
Lender by Borrower in accordance with the provisions of the Security
Instrument pertaining to the protection of Lender's security and
advances made by Lender. Borrower waives any and all claims it may
have against Lender for materials used, work performed or resultant
damage to the Property.
5. Inspection. Lender or any representative of Lender may periodically
inspect any Capital Replacement in process and upon completion during
normal business hours or at any other reasonable time upon reasonable
prior written notice to Borrower (except in an emergency, as determined
by Lender in its discretion or after an Event of Default, in which
event no such prior notice shall be required). Lender shall be
entitled to deduct the Inspection Fee from the Replacement Reserve Fund
for performing any such inspection. If Lender, in its sole discretion,
retains a professional inspection engineer or other qualified third
party to inspect any Capital Replacement, Lender also shall be entitled
to deduct from the Replacement Reserve Fund an amount sufficient to pay
all reasonable fees and expenses charged by such third party inspector.
6. Insufficient Account. If Borrower requests disbursement from the
Replacement Reserve Fund for a Capital Replacement in accordance with this
Agreement in an amount which exceeds the amount on deposit in the
Replacement Reserve Fund, Lender shall disburse to Borrower only the
amount on deposit in the Replacement Reserve Fund. Borrower shall pay all
additional amounts required in connection with any such Capital
Replacement from Borrower's own funds.
7. Security Agreement. To secure Borrower's obligations under this
Agreement and to further secure Borrower's obligations under the Note,
Security Instrument and other Loan Documents, Borrower hereby conveys,
pledges, transfers and grants to Lender a security interest pursuant to
the Uniform Commercial Code of the Property Jurisdiction or any other
applicable law in and to all money in the Replacement Reserve Fund, as
same may increase or decrease from time to time, all interest and
dividends thereon and all proceeds thereof.
8. Post Default. If Borrower defaults in the performance of its
obligations under this Agreement or under the Note, Security Instrument
or any other Loan Document, after the expiration of any applicable
notice or cure period, Lender shall have all remedies available to them
under Article 9 of the Uniform Commercial Code of the Property
Jurisdiction and under any other applicable law. In addition, Lender
may retain all money in the Replacement Reserve Fund, including
interest, and in Lender's discretion, may apply such amounts, without
restriction and without any specific order of priority, to the payment
of any and all indebtedness or obligations of Borrower set forth in the
Note, Security Instrument or any other Loan Document, including, but
not limited to, principal, interest, taxes, insurance, reasonable
attorneys' fees and costs (including those of Lender's in-house
counsel) and disbursements actually incurred and/or repairs to the
Property.
9. Termination. If not sooner terminated by written concurrence of the
parties, this Agreement shall terminate upon the payment in full of the
Loan and all indebtedness incurred in connection therewith and upon such
termination, Lender shall pay to Borrower all funds remaining in the
Replacement Reserve Fund.
10. No Amendment. Nothing contained in this Agreement shall be construed to
amend, modify, alter, change or supersede the terms and provisions of the
Note, Security Instrument or any other Loan Document; and, if there is a
conflict between the terms and provisions of this Agreement and those of
the Note, Security Instrument, or any other Loan Document then the terms
and provisions of the Note, Security Instrument or such other Loan
Document shall control.
11. Release; Indemnity.
(a) Release. Borrower covenants and agrees that, in performing any of its
duties under this Agreement, none of Lender, any Loan Servicer,
or any of their respective agents or employees shall be liable
for any losses, claims, damages, liabilities and expenses that
may be incurred by any of them as a result of such performance,
except that no such party will be released from liability for any
losses, claims, damages, liabilities or expenses arising out of
the willful misconduct or gross negligence of such party.
(b) Indemnity. Borrower hereby agrees to indemnify and hold harmless
Lender, Loan Servicer and their respective agents and employees
against any and all losses, claims, damages, liabilities and
expenses including, without limitation, reasonable attorneys'
fees and costs (including those of Lender's in-house counsel) and
disbursements, which may be imposed or incurred by any of them in
connection with this Agreement except that no such party will be
indemnified from liability for any losses, claims, damages,
liabilities or expenses arising out of the willful misconduct or
gross negligence of such party.
12. Choice of Law. This Agreement shall be construed and enforced in
accordance with the laws of the Property Jurisdiction.
13. Successors and Assigns. Lender may assign its rights and interests
under this Agreement in whole or in part and upon any such assignment,
all the terms and provisions of this Agreement shall inure to the
benefit of such assignee to the extent so assigned. The terms used to
designate any of the parties herein shall be deemed to include the
heirs, legal representatives, successors and assigns of such parties;
and the term "Lender" shall also include any lawful owner, holder or
pledgee of the Note. Reference herein to "person" or "persons" shall
be deemed to include individuals and entities. Borrower may not assign
or delegate its rights, interests, or obligations under this Agreement
without first obtaining Lender's prior written consent.
14. Attorneys' Fees. In the event that Lender engages the services of an
attorney at law to enforce the provisions of this Agreement against
Borrower, then Borrower shall pay all costs of such enforcement, including
any reasonable attorneys' fees and costs (including those of Lender's
in-house counsel) and disbursements actually incurred.
15. Compliance with Laws; Insurance Requirements.
(a) Compliance with Laws. Borrower shall ensure that all Capital Replacements
comply with all applicable laws, ordinances, rules and regulations of all
governmental authorities having jurisdiction over the Property and
applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental regulations,
and requirements of insurance underwriters.
(b) Insurance Requirements. In addition to any insurance required under
the Loan Documents, Borrower shall provide or cause to be
provided workers' compensation, builder's risk (if required by
Lender), and public liability insurance and other insurance
required under applicable law in connection with any of the
Capital Replacements. All such policies that can be endorsed
with standard mortgage clauses making losses payable to Lender or
its assigns shall be so endorsed. The originals of such policies
shall be deposited with Loan Servicer.
16. Remedies Cumulative. In the event of Borrower's default under this
Agreement, Lender may exercise all or any one or more of its rights and
remedies available under this Agreement, at law or in equity. Such
rights and remedies shall be cumulative and concurrent, and may be
enforced separately, successively or together, and Lender's exercise of
any particular right or remedy shall not in any way prevent Lender from
exercising any other right or remedy available to Lender. Lender may
exercise any such remedies from time to time as often as Lender chooses.
17. Determinations by Lender. Unless otherwise provided in this Agreement,
in any instance where the consent or approval of Lender may be given or
is required, or where any determination, judgment or decision is to be
rendered by Lender under this Agreement, the granting, withholding or
denial of such consent or approval and the rendering of such
determination, judgment or decision shall be made or exercised by
Lender (or its designated representative) at its sole and exclusive
option and in its sole and absolute discretion.
18. Completion of Capital Replacements. Lender's disbursement of moneys
from the Replacement Reserve Fund or other acknowledgment of completion
of any Capital Replacement in a manner satisfactory to Lender shall not
be deemed a certification by Lender that the Capital Replacement has
been completed in accordance with applicable building, zoning or other
codes, ordinances, statutes, laws, regulations or requirements of any
governmental authority or agency. Borrower shall at all times have the
sole responsibility for ensuring that all Capital Replacements are
completed in accordance with all such governmental requirements.
19. No Agency or Partnership. Nothing contained in this Agreement shall
constitute Lender as a joint venturer, partner or agent of Borrower, or
render Lender liable for any debts, obligations, acts, omissions,
representations or contracts of Borrower.
20. Entire Agreement. This Agreement and the other Loan Documents
represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral
agreements. There are no oral agreements between the parties. All
prior or contemporaneous agreements, understandings, representations
and statements, oral or written, are merged into this Agreement and the
other Loan Documents. Neither this Agreement nor any of its provisions
may be waived, modified, amended, discharged or terminated except in
writing signed by the party against which the enforcement of the
waiver, modification, amendment, discharge or termination is sought,
and then only to the extent set forth in writing; provided, however,
that in the event of a Transfer requiring Lender's consent under the
terms of the Security Instrument, one or more or all of the
Modifications to Agreement set forth in Exhibit C (if any) may be
modified or rendered void by Lender at Lender's option by notice to
Borrower/transferee.
21. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original document and all of which
together shall constitute one agreement.
ATTACHED EXHIBITS. The following Exhibits are attached to this
Agreement:
------
X Exhibit A Legal Description of the Land (required)
------
------
X Exhibit B Capital Replacements (required)
------
------
Exhibit C Modifications to Agreement
------
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
BORROWER:
CONSOLIDATED CAPITAL PROPERTIES IV, a
California limited partnership, doing
Borrower's Social Security or business in Nebraska as Consolidated
Capital
Taxpayer Identification No. Properties IV Limited Partnership
94-2768742
By: ConCap Equities, Inc., a Delaware
corporation, its general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
LENDER:
GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank
By: /s/Max W. Foore
Name: Max W. Foore
Title: Limited Signer
Exhibit 10.103
Old Freddie Mac Loan Number: 002738589
New Freddie Mac Loan Number: 002759845
Lake Forest Apartments
ALLONGE AND AMENDMENT TO MULTIFAMILY NOTE
(Lake Forest Apartments)
ALLONGE AND AMENDMENT dated effective as of June 8, 2004 (this "Allonge"),
to the Multifamily Note dated as of September 27, 2001 (the "Note"), in the
original principal amount of Six Million Five Hundred Thousand and 00/100
Dollars ($6,500,000.00), executed by CONSOLIDATED CAPITAL PROPERTIES IV, a
California limited partnership, doing business in Nebraska as Consolidated
Capital Properties IV Limited Partnership, as "Borrower", to the order of GMAC
COMMERCIAL MORTGAGE CORPORATION, a California corporation ("Original Lender"),
and assigned by Original Lender to and currently held by the FEDERAL HOME LOAN
MORTGAGE CORPORATION as "Lender".
For valuable consideration, the receipt and sufficiency are hereby acknowledged,
Borrower and Lender hereby amend the Note as follows:
1. From and after the effective date of this Allonge until the Initial Maturity
Date, interest will accrue on the outstanding principal amount of the Note at
the annual rate of seven and forty-three hundredths percent (7.43%);
2. As of the effective date of this Allonge, the unpaid principal balance of the
Note is $6,068,531.69. The monthly installment of principal and interest payable
by Borrower on July 1, 2004, shall be in the amount of $44,185.95, reflecting
interest at the rate originally provided for in the Note from June 1, 2004 to
the effective date of this Allonge and interest at the rate provided for in
section 1 of this Allonge for the remainder of the month of June 2004. Paragraph
3(b) of the Note is modified to provide that beginning August 1, 2004, and on
the first day of each consecutive and successive month thereafter until the
Maturity Date, Borrower will pay monthly installment of principal and interest
under the Note in the amount of Forty-Two Thousand One Hundred Forty-One and
56/100 Dollars ($42,141.56).
3. The "Maturity Date" provided for in Paragraph 3(c) of the Note is revised to
July 1, 2014, subject to the provisions of new Paragraph 22 of the Note set
forth below.
4. Paragraph 10(b) of the Note is revised by deleting "one hundred eighty (180)
days" and substituting "zero (0) days".
5. Subparagraph 10(c)(1) of the Note is revised to provide that the Yield
Maintenance Period will end on July 1, 2014.
6. For the purposes of computing the Assumed Reinvestment Rate under Paragraph
10 of the Note, the applicable U.S. Treasury Security is revised to the 11.25%
U.S. Treasury Security due February 15, 2015.
7. A new Paragraph 22 is added to the Note as follows:
22. Extension of Maturity Date. So long as the Maturity Date has not
occurred prior to July 1, 2014 (for the purposes of this Paragraph 22, the
"Initial Maturity Date"), the Indebtedness is not paid in full on the
Initial Maturity Date, and no other Event of Default, or event or
circumstances which, with the giving of notice or passage of time, or
both, could constitute an Event of Default, exists on the Initial Maturity
Date, then the date for full payment of the Indebtedness automatically
shall be extended for a period of twelve (12) months (the "Extension
Period") until July 1, 2015, or any earlier date on which the unpaid
principal balance of this Note becomes due and payable by acceleration or
otherwise (the "Extended Maturity Date"). Principal and interest shall be
payable during the Extension Period, in immediately available funds, as
follows:
(a) On the Initial Maturity Date, Borrower must make the regularly
scheduled monthly payment set forth in Paragraph 3(b).
(b) During the Extension Period, interest will accrue on the unpaid
principal balance of this Note at the "Adjustable Interest Rate"
(hereinafter defined). Notwithstanding anything in this Note that may be
to the contrary, during the Extension Period, interest under this Note
shall be computed, due and payable on the basis of a 360-day year and the
actual number of days in the month for which interest is being calculated
(divide the annual interest by 360, and multiply the quotient by the
number of days in the month for which interest is being calculated),
notwithstanding that the amount of any monthly payment of principal and
interest may be calculated on a "30/360" basis. The amount payable as
interest, or allocated to interest, will vary depending upon the number of
days in the month for which interest is being calculated, in addition to
varying as the Adjustable Interest Rate varies.
(c) During the Extension Period, consecutive monthly installments of
principal and interest shall be payable on the first day of each month
beginning on August 1, 2014, and continuing during the Extension Period
until the Extended Maturity Date. The date on which a monthly installment
of principal and interest is due pursuant to this Section 23(c) is
referred to as that installment's "Installment Due Date". The amount of
the monthly installment of principal and interest payable on an
Installment Due Date, and the portion thereof attributable to principal
and the portion thereof attributable to interest, shall be calculated so
as to equal the monthly payment amount which would be payable on the
Installment Due Date, and allocation thereof between principal and
interest, as if the unpaid principal balance of this Note as of the first
day of the calendar month preceding the Installment Due Date, together
with interest thereon at the Adjustable Interest Rate in effect on the
first day of the calendar month preceding the Installment Due Date, were
to be fully amortized (using an actual/360 method of computing interest)
in equal monthly payments paid on the first day of each calendar month
over an assumed amortization period commencing on the first day of the
calendar month preceding the Installment Due Date and ending on the first
day of the 360th full calendar month following the date of this Note.
Alternatively, Lender may calculate the monthly installment amount on a
"30/360" basis but allocate first to interest the amount due using an
actual/360 method of computing interest and the balance to principal.
Lender shall provide Borrower with Notice of the amount of each monthly
installment due hereunder.
(d) Any accrued interest remaining past due for 30 days or more may,
at Lender's discretion, be added to and become part of the unpaid
principal balance and shall bear interest at the rate or rates specified
in this Note, and any reference to "accrued interest" shall refer to
accrued interest which has not become part of the unpaid principal
balance. All unpaid Indebtedness shall be due and payable in full on the
Extended Maturity Date. The unpaid principal balance shall continue to
bear interest after the Extended Maturity Date at the Default Rate set
forth in Paragraph 22(j) until and including the date on which it is paid
in full.
(e) Any regularly scheduled monthly installment payable pursuant to
Paragraph 22(c) that is received by Lender before the Installment Due Date
shall be deemed to have been received on the Installment Due Date solely
for the purpose of calculating interest due.
(f) If Lender at any time determines that it has miscalculated the
Adjustable Interest Rate or the amount of any monthly installment, then
Lender shall give Notice to Borrower of the corrected Adjustable Interest
Rate and corrected installments. If Borrower has paid one or more monthly
installments calculated at the incorrect Adjustable Interest Rate or
calculated incorrectly and (i) if the corrected Adjustable Interest Rate
or corrected installment results in an increase in the applicable monthly
payment(s), Borrower, within 10 calendar days after receipt of the Notice
from Lender, shall pay to Lender any sums that Borrower would have
otherwise been obligated to pay to Lender under this Note had the amount
of the Adjustable Interest Rate or monthly installment not been
miscalculated, or (ii) if the corrected Adjustable Interest Rate or
monthly installment results in an overpayment having been made by
Borrower, then the amount of the overpayment shall be credited to the next
installment(s) of principal and interest due under this Note (or, if an
Event of Default has occurred and is continuing, such overpayment shall be
credited against any amount owing by Borrower to Lender).
(g) In accordance with this Note, interest charged hereunder cannot
exceed the maximum amount of interest allowed by applicable law. The rate
of interest which results in the maximum amount of interest allowed by
applicable law is referred to as the "Maximum Rate". If the Applicable
Interest Rate at any time exceeds the Maximum Rate, resulting in the
charging of interest hereunder to be limited to the Maximum Rate, then any
subsequent reduction in the Applicable Interest Rate shall not reduce the
rate at which interest under this Note accrues until the total amount of
interest accrued hereunder equals the amount of interest which would have
accrued had the Applicable Interest Rate at all times been in effect.
(h) During the Extension Period, Borrower may pay the entire unpaid
Indebtedness on any Business Day designated as the date for such payment
in a written notice from Borrower to Lender given at least 30 days prior
to the date of such payment. No prepayment premium will be payable by
Borrower during the Extension Period.
(i) The following defined terms are added to this Note:
(i) "Adjustable Interest Rate" means the variable per annum
rate at which interest will accrue on the outstanding
principal balance of this Note. The Adjustable Interest Rate
applicable during any Interest Adjustment Period will equal
the Index Rate, truncated at the fifth (5th) decimal place if
necessary, for such Interest Adjustment Period, plus the
Margin.
(ii) "Margin" means two and one-half (2.5) percentage points
(250 basis points).
(iii) "Index Rate" means, for any Interest Adjustment Period,
the Reference Bill(R) Index Rate for such Interest Adjustment
Period. However, if Freddie Mac has not conducted a Reference
Bill auction within the 60-calendar day period prior to the
first day of an Interest Adjustment Period, the Index Rate for
such Interest Adjustment Period will be the LIBOR Index Rate
for such Interest Adjustment Period minus one-tenth of one
percentage point.
(iv) "Interest Adjustment Period" means each successive one
calendar month beginning on the Initial Maturity Date and
continuing until the entire Indebtedness is paid in full.
(v) "LIBOR Index" means the British Bankers Association's
(BBA) one month LIBOR Rate for United States Dollar (may be
displayed as "USD") deposits, as displayed on the LIBOR Index
Page used to establish the LIBOR Index Rate, as more fully set
forth below.
(vi) "LIBOR Index Rate" means, for any Interest Adjustment
Period after the first Interest Adjustment Period, the British
Bankers Association's (BBA) LIBOR Rate for the LIBOR Index, as
of 11:00 a.m. (London time) on the second London Banking Day
preceding the first day of such Interest Adjustment Period, as
such LIBOR Rate is displayed on the LIBOR Index Page. The
LIBOR Index Rate for the first Interest Adjustment Period
means the British Bankers Association's (BBA) LIBOR Rate for
the LIBOR Index, as of 11:00 a.m. (London time) on the second
London Banking Day preceding the first day of the month in
which the first Interest Adjustment Period begins, as such
LIBOR Rate is displayed on the LIBOR Index Page. The "LIBOR
Index Page" is the Bloomberg L.P., page "BBAM", or such other
page for the LIBOR Index as may replace page BBAM on that
service, or at the option of Lender (i) the applicable page
for the LIBOR Index on another service which electronically
transmits or displays BBA LIBOR Rates, or (ii) any publication
of LIBOR rates available from the BBA. In the event the BBA
ceases to set or publish a LIBOR rate/interest settlement rate
for the LIBOR Index, Lender will designate an alternative
index, and such alternative index shall constitute the LIBOR
Index Rate. A "London Banking Day" is any day on which banks
are open for dealing in interbank deposits in London.
(vii) "Reference Bills(R)" means the unsecured general
obligations of Freddie Mac designated by Freddie Mac as
"Reference Bills(R)" and having original duration to maturity
most comparable to the term of the Reference Bill Index, and
issued by Freddie Mac at regularly scheduled auctions. In the
event Freddie Mac shall at any time cease to designate any
unsecured general obligations of Freddie Mac as "Reference
Bills", then at the option of Lender (i) Lender may select
from time to time another unsecured general obligation of
Freddie Mac having original duration to maturity most
comparable to the term of the Reference Bill Index and issued
by Freddie Mac at regularly scheduled auctions, and the term
"Reference Bills" as used in this Note shall mean such other
unsecured general obligations as selected by Lender; or (ii)
for any one or more Interest Adjustment Periods, Lender may
use the applicable LIBOR Index Rate as the Index Rate for such
Interest Adjustment Period(s).
(viii) "Reference Bill Index" means the one-month Reference
Bills. One-month Reference Bills have maturities of
approximately 30 days.
(ix) "Reference Bill Index Rate" means, for any Interest
Adjustment Period after the first Interest Adjustment Period,
the Money Market Yield for the Reference Bills as established
by the Reference Bill auction conducted by Freddie Mac most
recently preceding the first day of such Interest Adjustment
Period, as displayed on the Reference Bill Index Page. The
Reference Bill Index Rate for the first Interest Adjustment
Period means the Money Market Yield for the Reference Bills as
established by the Reference Bill auction conducted by Freddie
Mac most recently preceding the first day of the month in
which the first Interest Adjustment Period begins, as
displayed on the Reference Bill Index Page. The "Reference
Bill Index Page" is the Freddie Mac Debt Securities Web Page
(accessed via the Freddie Mac internet site at
www.freddiemac.com), or at the option of Lender, any
publication of Reference Bills auction results available from
Freddie Mac.
(j) Notwithstanding anything else in this Note to the contrary,
during the Extension Period and thereafter, the Default Rate will equal
the greater of the amount calculated pursuant to Paragraph 8 and four (4)
percentage points above the Adjustable Interest Rate, but in no event more
than the Maximum Rate.
(k) Notwithstanding anything in Paragraph 10 that may be deemed to
be to the contrary, the Yield Maintenance Period expires on the Initial
Maturity Date and any prepayment of principal prior to the Initial
Maturity Date must be accompanied by the applicable prepayment premium.
(l) If the Extension Period becomes effective, during the Extension
Period and thereafter, any references to the "Maturity Date" of the Note
in any other Loan Document shall be deemed to mean the Extended Maturity
Date.
(m) Anything in Section 21 of the Security Instrument to the
contrary notwithstanding, Borrower will not request that Lender consent
to, and Lender will not consent to, a Transfer during the Extension
Period.
8. From and after the effective date of this Allonge: (i) references in the Note
and the other Loan Documents to the "Security Instrument" mean the Security
Instrument dated as of the date of the Note, as amended by the First Amendment
to Security Instrument dated as of the date of this Allonge, and (ii) references
in the Loan Documents to the "Note" mean the Note as amended by this Allonge.
9. The Note remains in full force and effect and, except as amended hereby,
unmodified. This Allonge is not intended as a discharge, substitution or
novation of the indebtedness of the Note. Borrower hereby confirms that it has
no defenses or offsets of any kind against any of the indebtedness due under the
Note as modified and amended by this Allonge.
10. Guarantor has signed this Allonge to confirm that its Guaranty remains in
full force and effect and extends to the Note as amended by this Allonge and to
the Security Instrument as amended. Borrower and Guarantor acknowledge that the
request that Lender accept and execute this Allonge is within the scope of
Paragraph 9(e)(3) of the Note.
11. This Allonge is intended to be executed on multiple counterpart signature
pages. Signature Pages Follow
In Witness Whereof, the undersigned have executed this Allonge and Amendment to
Multifamily Note as of the effective date provided for therein.
BORROWER:
CONSOLIDATED CAPITAL PROPERTIES IV, a
California limited partnership, doing
business in Nebraska as Consolidated
Capital Properties IV Limited Partnership
By: ConCap Equities, Inc., a Delaware
corporation, its general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President
In Witness Whereof, the undersigned has executed this Allonge and Amendment to
Multifamily Note as of the effective date provided for therein.
LENDER:
FEDERAL HOME LOAN MORTGAGE CORPORATION
By: /s/Dennis B. Graven
Name: Dennis B. Graven
Title:Regional Director - Multifamily
SEEN AND AGREED:
GUARANTOR:
AIMCO PROPERTIES, L.P., a Delaware
limited partnership
By: AIMCO-GP, Inc., a Delaware
corporation, its general partner
By: /s/Patti K. Fielding
Patti K. Fielding
Executive Vice President