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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 SEPTEMBER 30, 2002
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: 0-11779
S/M REAL ESTATE FUND VII, LTD.
Exact Name of Registrant as Specified in its Charter
Texas 75-1845682
----- ----------
(State or other jurisdiction of incorporation of organization) (I.R.S. Employer Identification No.)
5520 LBJ Freeway, Suite 500, Dallas, Texas 75240
- ------------------------------------------ -----
(Address of principal executive offices) (Zip code)
(972) 404-7100
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No Not yet applicable X
--- --- ---
S/M REAL ESTATE FUND VII, LTD.
BALANCE SHEETS AT SEPTEMBER 30, AT DECEMBER 31,
2002 2001
(UNAUDITED)
------------- -------------
ASSETS
Real estate, at cost:
Land $ 962,216 $ 962,216
Building and improvements 7,956,802 7,971,336
------------- -------------
8,919,018 8,933,552
Less accumulated depreciation (6,999,600) (6,724,462)
------------- -------------
1,919,418 2,209,090
Cash and cash equivalents 311,505 216,234
Cash held in escrow 218,482 53,049
Restricted cash - replacement reserve 12,380 106,371
Accounts receivable 6,878 3,846
Other assets, net 72,981 57,859
------------- -------------
TOTAL ASSETS $ 2,541,644 $ 2,646,449
============= =============
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
First mortgage note payable $ 6,165,600 $ 6,218,682
Accounts payable:
Trade 14,363 13,470
Affiliates 45,199 40,665
Accrued expenses and other liabilities 182,145 39,991
------------- -------------
Total Liabilities 6,407,307 6,312,808
------------- -------------
Partners' Deficit:
General Partners (125,268) (123,275)
Limited Partners (11,080 units outstanding) (3,740,395) (3,543,084)
------------- -------------
Total Partners' Deficit (3,865,663) (3,666,359)
------------- -------------
TOTAL LIABILITIES AND PARTNERS' DEFICIT $ 2,541,644 $ 2,646,449
============= =============
STATEMENT OF PARTNERS' DEFICIT (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
------------- ------------- -------------
BALANCE AT DECEMBER 31, 2001 $ (123,275) $ (3,543,084) $ (3,666,359)
Net loss (1,993) (197,311) (199,304)
------------- ------------- -------------
BALANCE AT SEPTEMBER 30, 2002 $ (125,268) $ (3,740,395) $ (3,865,663)
============= ============= =============
See accompanying notes to the financial statements. 2
S/M REAL ESTATE FUND VII, LTD.
STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
2002 2001 2002 2001
------------- ------------- ------------- -------------
INCOME
Rental $ 339,558 $ 365,812 $ 1,060,860 $ 1,083,546
Interest and other 2,096 4,244 4,313 11,810
------------- ------------- ------------- -------------
Total Income 341,654 370,056 1,065,173 1,095,356
------------- ------------- ------------- -------------
EXPENSES
Property operating 198,058 202,055 553,107 532,798
Interest 113,031 114,276 336,342 339,973
Depreciation and amortization 108,324 107,491 323,451 324,485
General and administrative 23,066 19,943 51,577 57,945
------------- ------------- ------------- -------------
Total Expenses 442,479 443,765 1,264,477 1,255,201
------------- ------------- ------------- -------------
NET LOSS $ (100,825) $ (73,709) $ (199,304) $ (159,845)
============= ============= ============= =============
NET LOSS ALLOCATED:
To the General Partners $ (1,008) $ (737) $ (1,993) $ (1,598)
To the Limited Partners (99,817) (72,972) (197,311) (158,247)
------------- ------------- ------------- -------------
$ (100,825) $ (73,709) $ (199,304) $ (159,845)
============= ============= ============= =============
PER LIMITED PARTNERSHIP UNIT
(11,080 OUTSTANDING) $ (9.01) $ (6.59) $ (17.81) $ (14.28)
============= ============= ============= =============
See accompanying notes to the financial statements. 3
S/M REAL ESTATE FUND VII, LTD.
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 2001
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (199,304) $ (159,845)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 323,451 324,485
Increase (decrease) in cash arising from changes in
operating assets and liabilities:
Cash held in escrow (165,433) (129,651)
Accounts receivable (3,032) (2,381)
Other assets (19,707) (9,758)
Accounts payable 5,427 4,417
Accrued expenses and other liabilities 142,154 147,747
------------- -------------
Net cash provided by operating activities 83,556 175,014
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (increase) in restricted cash - replacement reserve 93,991 (38,139)
Additions to real estate (29,194) (29,201)
------------- -------------
Net cash provided by (used in) investing activities 64,797 (67,340)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES - Payments of principal
on first mortgage note payable (53,082) (49,451)
------------- -------------
Net increase in cash and cash equivalents 95,271 58,223
Cash and cash equivalents, beginning of period 216,234 136,606
------------- -------------
Cash and cash equivalents, end of period $ 311,505 $ 194,829
============= =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 336,342 $ 339,973
============= =============
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
Write-off of fully depreciated building and improvements $ 43,728 $ 10,123
============= =============
See accompanying notes to the financial statements. 4
STATEMENTS OF CASH FLOWS (UNAUDITED)
NOTES TO THE FINANCIAL STATEMENTS
The quarterly unaudited financial statements for S/M Real Estate Fund VII, Ltd.
(the "Partnership") include all normal and recurring adjustments which are, in
the opinion of the general partners, necessary to present a fair statement of
financial position as of September 30, 2002, the results of operations for the
three and nine months ended September 30, 2002 and 2001, the change in partners'
deficit for the nine months ended September 30, 2002, and the cash flows for the
nine months ended September 30, 2002 and 2001. Results of operations for the
period are not necessarily indicative of the results to be expected for the full
year.
No significant events have occurred subsequent to fiscal year 2001, and no
material contingencies exist which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those estimates.
During the nine months ended September 30, 2002 and 2001, the general partners
or their affiliates were reimbursed for Partnership administrative and operating
expenses, excluding property and construction management fees, in the amounts of
$8,891 and $7,730, respectively. Property management fees earned by an affiliate
of the Partnership's general partners were $42,604 and $43,420 for the nine
months ended September 30, 2002 and 2001, respectively.
The financial information included in this interim report as of September 30,
2002 and for the three and nine months ended September 30, 2002 and 2001 has
been prepared by management without audit by independent certified public
accountants. The Partnership's 2001 annual report contains audited financial
statements including the notes to the financial statements and should be read in
conjunction with the financial information contained in this interim report.
In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets" (SFAS 144), establishing financial
accounting and reporting for the impairment or disposal of long-lived assets.
The provisions of SFAS 144 were effective for the Partnership on January 1,
2002. The implementation of SFAS 144 on January 1, 2002 had no effect on the
Partnership's financial position or results of operations.
In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44, and 62, Amendment of FASB Statement No. 13, and Technical Corrections."
The main provisions of this statement address the classification of debt
extinguishments and accounting for certain lease transactions. Implementation of
this statement is expected to have no impact on the financial statements of the
Partnership.
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." The main provisions of this statement address
the recognition of liabilities associated with an exit or disposal activity.
Implementation of this statement is expected to have no impact on the financial
statements of the Partnership.
5
S/M REAL ESTATE FUND VII, LTD.
PART I, ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Liquidity and Capital Resources
Under the terms of the Partnership's loan agreement, the Partnership is required
to make fixed monthly payments of principal and interest in the amount of
$43,269 until maturity on January 1, 2009, at which time the entire outstanding
principal balance and accrued interest is due. Under the terms of the loan
agreement, the Partnership is required to make monthly contributions of $3,905
which are held by the lender pending application for the completion of certain
required repairs to the Fifth Avenue property. At September 30, 2002, the
balance in this replacement reserve account was $12,380.
Cash and cash equivalents totaled $311,505 at September 30, 2002, compared to
$216,234 at December 31, 2001. The $95,271 increase is primarily attributable to
cash provided by operations and the release of restricted cash (see below)
partially offset by debt service payments and payments made to the replacement
reserve account and escrow account.
Cash held in escrow increased to $218,482 at September 30, 2002, from $53,049 at
December 31, 2001. The $165,433 increase is attributable to contributions to the
insurance and real estate tax escrow as required by the Partnership's loan
agreement.
Restricted cash replacement reserve decreased to $12,380 at September 30, 2002,
from $106,371 at December 31, 2001. The $93,991 decrease is attributable to the
release of $129,622 for replacements and completed required lender repairs,
offset in part by monthly contributions to the replacements reserve in
accordance with the terms of the loan agreement.
Other assets increased to $72,981 at September 30, 2002, from $57,859 at
December 31, 2001. The increase is primarily due to increases in prepaid
insurance which was partially offset by the amortization of loan costs.
Accounts receivable totaled $6,878 at September 30, 2002, compared to $3,846 at
December 31, 2001. The increase is primarily attributable to the timing of
tenant rental receipts. Accounts payable totaled $59,562 at September 30, 2002,
compared to $54,135 at December 31, 2001. The increase is primarily attributable
to the timing of payments for property management fees.
Accrued expenses and other liabilities totaled $182,145 at September 30, 2002,
compared to $39,991 at December 31, 2001. The change is primarily attributable
to the timing of payments for real estate taxes and partnership administrative
costs.
The Partnership's general partners currently expect funds from operations to be
sufficient to pay all obligations for 2002, including debt service. In the event
of any cash flow deficits, it is expected that such deficits will be funded by
the Partnership's existing cash balances. However, there can be no assurance
that the Partnership will have sufficient cash to fund such deficits.
Results of Operations
Operations resulted in net losses of $100,825 and $199,304 for the three and
nine-month periods ended September 30, 2002, respectively, compared with net
losses of $73,709 and $159,845 for the three and nine-month periods ended
September 30, 2001, respectively. The increased net loss for the three and
nine-months ended September 30, 2002 from the corresponding periods in 2001 are
primarily attributable to decreases in rental income and increases in property
operating expenses.
Rental income totaled $339,558 and $1,060,860 for the three and nine-month
periods ended September 30, 2002, respectively, compared to $365,812 and
$1,083,546, respectively, for the corresponding periods in 2001. Occupancy at
Fifth Avenue averaged approximately 94% and 95% for the three and nine-month
periods ended September 30, 2002, respectively, compared to 98% and 96% for the
three and nine-month periods ended September 30, 2001, respectively. The average
rental income per occupied square foot at Fifth Avenue was $8.59 and $8.75 for
the three and nine months ended September 30, 2002, respectively, compared to
$8.85 and $8.92, respectively, for the corresponding periods in 2001. The
decreases in the average rental income per occupied square foot in 2002 is
primarily attributable to an increase in rental concessions.
6
S/M REAL ESTATE FUND VII, LTD.
Total expenses for the three and nine-month periods ended September 30, 2002
were $442,479 and $1,264,477, respectively, compared to $443,765 and $1,255,201,
respectively, for the three and nine-month periods ended September 30, 2001. The
increase for the nine months ended September 30, 2002 from the corresponding
period in 2001 is primarily attributable to an increase in property operating
expenses offset in part by a decrease in partnership administration costs.
Property operating expenses consist primarily of on-site personnel expenses,
utility costs, repair and maintenance costs, property management fees,
advertising costs, insurance and real estate taxes. Property operating expenses
for the three and nine-month periods ended September 30, 2002 were $198,058 and
$553,107, respectively, compared to $202,055 and $532,798, respectively, for the
three and nine-month periods ended September 30, 2001. The increase for the nine
months ended September 30, 2002 from the corresponding period in 2001 is
primarily attributable to higher utility costs and property insurance costs.
General and administrative expenses for the three and nine-month periods ended
September 30, 2002 were $23,066 and $51,577, respectively, compared to $19,943
and $57,945, respectively, for the three and nine-month periods ended September
30, 2001. The increase for the three month period ended September 30, 2002 from
the corresponding period in 2001 is primarily due to higher professional
expenses. The decrease for the nine month period ended September 30, 2002 from
the corresponding period in 2001 is primarily due to lower legal expenses and
other professional expenses.
General
Words or phrases when used in this Form 10-Q or other filings with the
Securities and Exchange Commission, such as "does not believe" and "believes,"
or similar expressions are intended to identify "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
PART I, ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the information related to the market
risk of the Partnership since December 31, 2001.
PART I, ITEM 4. CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, we carried out an evaluation,
under the supervision and with the participation of the chief executive officer
and chief financial officer of our general partner, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on this
evaluation, the chief executive officer and chief financial officer concluded
that our disclosure controls and procedures are effective in timely alerting
them to material information required to be included in our periodic SEC
reports.
In addition, we reviewed our internal controls, and there has been no
significant changes in our internal controls or in other factors including any
corrective actions with regard to significant deficiencies and material
weaknesses that could significantly affect those controls subsequent to the
date of their last evaluation.
7
S/M REAL ESTATE FUND VII, LTD.
PART II OTHER INFORMATION
ITEMS 1-5 Not applicable.
ITEM 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
2.1 Voluntary Petition of Shearson-Murray Real
Estate Fund VII, Ltd. to commence a case
under Chapter 11 of the Federal Bankruptcy
Code in the United States Bankruptcy Court
for the Western District of Texas-Austin
Division, as filed on June 6, 1989.
Reference is made to Exhibit 2a to the
Partnership's Annual Report on Form 10-K
filed with the Securities and Exchange
Commission on June 14, 1989.
2.2 Modified First Amended Plan of
Reorganization of Shearson-Murray Real
Estate Fund VII, Ltd. in the United States
Bankruptcy Court for the Western District of
Texas-Austin Division Case No. 89-11662-LC
filed February 20, 1990. Reference is made
to the Partnership's Annual Report on Form
10-K filed with the Securities and Exchange
Commission on April 12, 1990.
3 Agreement of Limited Partnership of
Shearson-Murray Real Estate Fund VII, Ltd.,
as amended as of September 30, 1983.
Reference is made to Partnership's Form 8-K
filed with the Securities and Exchange
Commission on October 26, 1983. Reference is
made to Exhibit A to the Prospectus dated
June 10, 1983 contained in Amendment No. 3
to Partnership's Form S-11 Registration
Statement filed with the Securities and
Exchange Commission June 10, 1983.
10.1 Assignment and Assumption Agreement between
Murray Management Corporation and Anterra
Management Corporation for property
management and leasing services dated
January 1, 1990. Reference is made to
Exhibit 10u to the Partnership's Annual
Report on Form 10-K filed with the
Securities and Exchange Commission May 15,
1990.
10.2 Loan Agreement between S/M Real Estate Fund
VII, Ltd. and General Electric Capital
Corporation, dated December 3, 1998.
Reference is made to Exhibit 10.1 to
Partnership's Form 8-K filed with the
Securities and Exchange Commission on
December 14, 1998.
99.1 Pages A-16 to A-18 of Exhibit A to the
Prospectus dated June 10, 1983, contained in
Amendment No. 3 to Partnership's Form S-11
Registration Statement filed with the
Securities and Exchange Commission on June
10, 1983. Reference is made to Exhibit 28a
to the Partnership's Annual Report on Form
10-K filed with the Securities and Exchange
Commission on May 12, 1988.
99.2 Pages 10-18 of the Prospectus dated June 10,
1983, contained in Amendment No. 3 to
Partnership's Form S-11 Registration
Statement filed with the Securities and
Exchange Commission on June 10, 1983.
Reference is made to Exhibit 28b to the
Partnership's Annual Report on Form 10-K
filed with the Securities and Exchange
Commission on May 12, 1988.
8
S/M REAL ESTATE FUND VII, LTD.
99.3 Compromise Settlement Agreement between S/M
Real Estate Fund VII, Ltd. and Federal
National Mortgage Association, dated May 6,
1996. Reference is made to Exhibit 99.1 to
the Partnership's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996
filed with the Securities and Exchange
Commission.
99.4 $5,830,000 Multifamily Note and Addendum,
dated May 30, 1996. Reference is made to
Exhibit 99.2 to the Partnership's Quarterly
Report on Form 10-Q for the quarter ended
June 30, 1996 filed with the Securities and
Exchange Commission.
99.5 $681,142 Subordinate Multifamily Note and
Addendum, dated May 30, 1996. Reference is
made to Exhibit 99.3 to the Partnership's
Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996 filed with the
Securities and Exchange Commission.
99.6 $6,400,000 Promissory Note, dated December
3, 1998. Reference is made to Exhibit 99.1
of the Partnership's Form 8-K filed with the
Securities and Exchange Commission on
December 14, 1998.
99.7 Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
99.8 Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K - No reports on Form 8-K
were filed during the quarter ended
September 30, 2002.
9
S/M REAL ESTATE FUND VII, LTD.
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.
S/M REAL ESTATE FUND VII, LTD.
BY: SM7 APARTMENT INVESTORS INC.
General Partner
Date: November 12, 2002 BY: /s/ Richard E. Hoffmann
---------------------------
Name: Richard E. Hoffmann
Title: Chief Executive Officer,
Director, President and
Treasurer
Date: November 12, 2002 BY: /s/ Sandy Robison
---------------------------
Name: Sandy Robison
Title: Chief Financial Officer,
Vice President,
Secretary and Controller
10
S/M REAL ESTATE FUND VII, LTD.
CERTIFICATIONS
I, Richard E. Hoffmann, certify that:
1. I have reviewed this quarterly report on Form 10-Q of S/M Real
Estate Fund VII, Ltd.;
2. Based on my knowledge, this quarterly 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
quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report,
fairly present in all material respects the financial
condition, results of operations and cash flows of the
registrant as of, and for, the period presented in this
quarterly report;
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures 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
quarterly report is being prepared;
b) evaluated the effectiveness of our disclosure
controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report
(the "Evaluation Date"); and
c) presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect our ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in our internal controls;
6. The registrant's other certifying officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
S/M REAL ESTATE FUND VII, LTD.
BY: SM7 APARTMENT INVESTORS INC.
General Partner
Date: November 12, 2002 BY: /s/ Richard E. Hoffmann
---------------------------
Name: Richard E. Hoffmann
Title: Chief Executive Officer,
Director, President and
Treasurer
11
S/M REAL ESTATE FUND VII, LTD.
CERTIFICATIONS
I, Sandy Robison, certify that:
1. I have reviewed this quarterly report on Form 10-Q of S/M Real
Estate Fund VII, Ltd.;
2. Based on my knowledge, this quarterly 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
quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report,
fairly present in all material respects the financial
condition, results of operations and cash flows of the
registrant as of, and for, the period presented in this
quarterly report;
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures 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
quarterly report is being prepared;
b) evaluated the effectiveness of our disclosure
controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report
(the "Evaluation Date"); and
c) presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect our ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in our internal controls;
6. The registrant's other certifying officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
S/M REAL ESTATE FUND VII, LTD.
BY: SM7 APARTMENT INVESTORS INC.
General Partner
Date: November 12, 2002 BY: /s/ Sandy Robison
---------------------------
Name: Sandy Robison
Title: Chief Financial Officer,
Vice President,
Secretary and Controller
12
S/M REAL ESTATE FUND VII, LTD.
INDEX TO EXHIBITS
Document
Number Description
- -------- -----------
2.1 Voluntary Petition of Shearson-Murray Real Estate Fund VII,
Ltd. to commence a case under Chapter 11 of the Federal
Bankruptcy Code in the United States Bankruptcy Court for the
Western District of Texas-Austin Division, as filed on June 6,
1989. Reference is made to Exhibit 2a to the Partnership's
Annual Report on Form 10-K filed with the Securities and
Exchange Commission on June 14, 1989.
2.2 Modified First Amended Plan of Reorganization of
Shearson-Murray Real Estate Fund VII, Ltd. in the United
States Bankruptcy Court for the Western District of
Texas-Austin Division Case No. 89-11662-LC filed February 20,
1990. Reference is made to the Partnership's Annual Report on
Form 10-K filed with the Securities and Exchange Commission on
April 12, 1990.
3 Agreement of Limited Partnership of Shearson-Murray Real
Estate Fund VII, Ltd., as amended as of September 30, 1983.
Reference is made to Partnership's Form 8-K filed with the
Securities and Exchange Commission on October 26, 1983.
Reference is made to Exhibit A to the Prospectus dated June
10, 1983 contained in Amendment No. 3 to Partnership's Form
S-11 Registration Statement filed with the Securities and
Exchange Commission on June 10, 1983.
10.1 Assignment and Assumption Agreement between Murray Management
Corporation and Anterra Management Corporation for property
management and leasing services dated January 1, 1990.
Reference is made to Exhibit 10u to the Partnership's Annual
Report on Form 10-K filed with the Securities and Exchange
Commission May 15, 1990.
10.2 Loan Agreement between S/M Real Estate Fund VII, Ltd. and
General Electric Capital Corporation, dated December 3, 1998.
Reference is made to Exhibit 10.1 to Partnership's Form 8-K
filed with the Securities and Exchange Commission on December
14, 1998.
99.1 Pages A-16 to A-18 of Exhibit A to the Prospectus dated June
10, 1983, contained in Amendment No. 3 to Partnership's Form
S-11 Registration Statement filed with the Securities and
Exchange Commission on June 10, 1983. Reference is made to
Exhibit 28a to the Partnership's Annual Report on Form 10-K
filed with the Securities and Exchange Commission on May 12,
1988.
99.2 Pages 10-18 of the Prospectus dated June 10, 1983, contained
in Amendment No. 3 to Partnership's Form S-11 Registration
Statement filed with the Securities and Exchange Commission on
June 10, 1983. Reference is made to Exhibit 28b to the
Partnership's Form 10-K filed with the Securities and Exchange
Commission on May 12, 1988.
99.3 Compromise Settlement Agreement between S/M Real Estate Fund
VII, Ltd. and Federal National Mortgage Association, dated May
6, 1996. Reference is made to Exhibit 99.1 to the
Partnership's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996 filed with the Securities and Exchange
Commission.
99.4 $5,830,000 Multifamily Note and Addendum, dated May 30, 1996.
Reference is made to Exhibit 99.2 to the Partnership's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1996 filed with the Securities and Exchange Commission.
99.5 $681,142 Subordinate Multifamily Note and Addendum, dated May
30, 1996. Reference is made to Exhibit 99.3 to the
Partnership's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996 filed with the Securities and Exchange
Commission.
99.6 $6,400,000 Promissory Note, dated December 3, 1998. Reference
is made to Exhibit 99.1 of the Registrant's Form 8-K filed
with the Securities and Exchange Commission on December 14,
1998.
13
S/M REAL ESTATE FUND VII, LTD.
INDEX TO EXHIBITS (continued)
Document
Number Description
- -------- -----------
99.7 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.8 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.