Item 12. Certain Relationships and Related Transactions
The Partnership has no employees and is dependent on the Corporate General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for (i) payments to
affiliates for services and (ii) reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following amounts were paid or
accrued to the Corporate General Partner and affiliates during the years ended
December 31, 2001 and 2000:
2001 2000
(in thousands)
Property management fees $ 302 $ 291
Reimbursement for services of affiliates 456 191
Due to General Partner 185 185
Due from General Partner 11 11
Loan costs paid -- 137
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During the year ended December 31, 2001 and 2000, affiliates of the Corporate
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties for providing property management services. The
Registrant paid to such affiliates approximately $302,000 and $291,000 for the
years ended December 31, 2001 and 2000, respectively.
An affiliate of the Corporate General Partner received reimbursement of
accountable administrative expenses amounting to approximately $456,000 and
$191,000 for the years ended December 31, 2001 and 2000, respectively. Included
in these amounts are fees related to construction management services provided
by an affiliate of the Corporate General Partner of approximately $278,000 and
$3,000 for the years ended December 31, 2001 and 2000, respectively. The
construction management service fees are calculated based on a percentage of
current and certain prior year additions to investment properties and are being
depreciated over 15 years.
During 1986, a liability of approximately $185,000 was incurred to the general
partners for sales commissions earned. Pursuant to the Partnership Agreement,
this liability cannot be paid until certain levels of returns are received by
the limited partners. As of December 31, 2001, the level of return to the
limited partners has not been met.
Beginning in 2001, the Partnership began insuring 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 Corporate General Partner. During the year ended December
31, 2001, the Partnership paid AIMCO and its affiliates approximately $59,000
for insurance coverage and fees associated with policy claims administration.
In addition to its indirect ownership of the combined general partner interests
in the Partnership, AIMCO and its affiliates owned 34,685 limited partnership
units in the Partnership representing 63.06% of the outstanding units at
December 31, 2001. A number of these units were acquired pursuant to tender
offers made by AIMCO or its affiliates. It is possible that AIMCO or its
affiliates will make one or more additional offers to acquire additional limited
partnership interests in the Partnership for cash or in exchange for units in
the operating partnership of AIMCO. Under the Partnership Agreement, unitholders
holding a majority of the Units are entitled to take action with respect to a
variety of matters, which would include without limitation, voting on certain
amendments to the Partnership Agreement and voting to remove the general
partners. As a result of its ownership of 63.06% of the outstanding units, AIMCO
is in a position to control all voting decisions with respect to the Registrant.
When voting on matters, AIMCO would in all likelihood vote the Units it acquired
in a manner favorable to the interest of the Corporate General Partner because
of its affiliation with the Corporate General Partner.
EXHIBIT INDEX
Exhibit
2.1 Agreement and Plan of Merger, dated as of October 1, 1998, by and between
AIMCO and IPT.
3 See Exhibit 4(a)
4 (a) Amended and Restated Certificate and Agreement of Limited Partnership,
[included as Exhibit A to the Prospectus of Registrant dated September 2,
1981 contained in Amendment No. 1 to Registration Statement No. 2-72567 of
Registrant filed September 2, 1981 (the "Prospectus") and incorporated
herein by reference].
(b) Subscription Agreements and Signature Pages [Filed with Amendment No. 1 of
Registration Statement No. 2-72567 of Registrant and incorporated herein by
reference].
(c) Real Estate Note and Deed to Secure Debt and Security Agreement between
Pacific Mutual Life Insurance Company and Shelter Properties III to acquire
North River Village Apartments.*
(d) Modification Agreement between Citibank, N.A. and Southern Associates
Limited Partnership and a Title to Real Estate between Southern Associates
Limited Partnership and Shelter Properties III to acquire Essex Park
Apartments.*
*Filed as Exhibit 4(c) and 4(d), respectively, to Form 10-K of Registrant for
year ended December 31, 1987 and incorporated herein by reference.
10(i) Contract related to acquisition of properties.
(a) Purchase Agreement dated July 1, 1981 and First Addendum to Purchase
Agreement dated August 4, 1981 between Colony House of Murfreesboro and
U.S. Shelter Corporation to purchase Colony House Apartments.**
(b) Purchase Agreement dated July 31, 1981, between Southern Associated Limited
Partnership and U.S. Shelter Corporation to purchase Essex Park
Apartments.**
**Filed as Exhibits 12(a) and 12(b), respectively, to Amendment No. 1 of
Registration Statement No. 2-72567 of Registrant filed September 2, 1981
and incorporated herein by reference.
(c) Purchase Agreement dated December 3, 1981 between Plantation Company of
Georgia and Shelter Properties III to purchase River Parkway Apartments.
[Filed with Form 8-K of Registrant dated November 30, 1981 and incorporated
herein by reference.]
(d) Purchase Agreement dated April 15, 1982 between North River Village Joint
Venture (a partnership) and U.S. Shelter Corporation to purchase North
River Village Apartments. [Filed with Form 8-K of Registrant dated April
21, 1982 and incorporated herein by reference.]
(e) Purchase Agreement dated May 14, 1982 between Lincoln Willowick Greenville
Associates and U.S. Shelter Corporation to purchase Willowick Apartments.
[Filed with Form 8-K of Registrant dated May 14, 1982 and incorporated
herein by reference.]
(f) Contract dated June 12, 1986, between Shelter Properties III and Thomas J.
Gochberg, William T. Bozarth and Michael J. Weinburger, as Trustees of
Security Capital Real Estate Fund to sell River Parkway Apartments. [Filed
as Exhibit 10(f) to Form 10-K of Registrant for year ended December 31,
1987 and incorporated herein by reference.]
10(ii) Form of Management Agreement with U.S. Shelter Corporation subsequently
assigned to Shelter Management Group, L.P. (now known as Insignia
Management, L.P.) [Filed with Amendment No. 1 to Registration Statement,
No. 2-72567 of Registrant and incorporated herein by reference.]
10(iii) Contracts related to refinancing the debt:
(a) First Deeds of Trust and Security Agreements dated October 28, 1992 between
Shelter Properties III and Wesley D. Turner (Trustee) and First
Commonwealth Realty Credit Corporation, a Virginia Corporation, securing
the following properties: Colony House, Essex Park, and Willowick.***
(b) Second Deeds of Trust and Security Agreements dated October 28, 1992
between Shelter Properties III and Wesley D. Turner (Trustee) and First
Commonwealth Realty Credit Corporation, a Virginia Corporation, securing
the following properties: Colony House, Essex Park, and Willowick.***
(c) First Assignments of Leases and Rents dated October 28, 1992 between
Shelter Properties III and Wesley D. Turner (Trustee) and First
Commonwealth Realty Credit Corporation, a Virginia Corporation, securing
the following properties: Colony House, Essex Park, and Willowick.***
(d) Second Assignments of Leases and Rents dated October 28, 1992 between
Shelter Properties III and Wesley D. Turner (Trustee) and First
Commonwealth Realty Credit Corporation, a Virginia Corporation, securing
the following properties: Colony House, Essex Park, and Willowick.***
(e) First Deeds of Trust Notes dated October 28, 1992 between Shelter
Properties III and Wesley D. Turner (Trustee) and First Commonwealth Realty
Credit Corporation, relating to the following properties: Colony House,
Essex Park, and Willowick.***
(f) Second Deeds of Trust Notes dated October 28, 1992 between Shelter
Properties III and Wesley D. Turner (Trustee) and First Commonwealth Realty
Credit Corporation, relating to the following properties: Colony House,
Essex Park, and Willowick.***
***Filed as Exhibit 10(iii) (a) through (f), respectively, to Form 10-KSB of
Registrant for year ended December 31, 1992 and incorporated herein by
reference.
(g) First Deed to Secure Debt and Security Agreement dated September 30, 1993
between North River Village III Limited Partnership and Lexington Mortgage
Company, a Virginia Corporation receiving North River Village.****
(h) Second Deed to Secure Debt and Security Agreement dated September 30, 1993
between North River Village III Limited Partnership and Lexington Mortgage
Company, a Virginia Corporation receiving North River Village.****
(i) First Assignment of Leases and Rents dated September 30, 1993 between North
River Village III Limited Partnership and Lexington Mortgage Company, a
Virginia Corporation receiving North River Village.****
(j) Second Assignment of Leases and Rents dated September 30, 1993 between
North River Village III Limited Partnership and Lexington Mortgage Company,
a Virginia Corporation receiving North River Village.****
(k) First Real Estate Note dated September 30, 1993 between North River Village
III Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation relating to North River Village.****
(l) Second Real Estate Note dated September 30, 1993 between North River
Village III Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation relating to North River Village.****
****Filed as Exhibit 10(iii) (a) through (f) of Form 10QSB for quarter ended
September 30, 1993, and incorporated herein by reference.
(m) Multifamily Note dated December 15, 2000 between Shelter Properties III and
Reilly Mortgage Group, Inc., a District of Columbia corporation securing
Colony House Apartments, Essex Park Apartments, and Willowick Apartments
(filed as Exhibit 10(iii)(m) on Form 8-K February 1, 2001).
(n) Multifamily Deed of Trust, Assignment of Rents, and Security Agreement
dated December 15, 2000 between Shelter Properties III and Reilly Mortgage
Group, Inc., a District of Columbia corporation, securing Colony House
Apartments, Essex Park Apartments, and Willowick Apartments (filed as
Exhibit 10(iii)(n) on Form 8-K February 1, 2001).
99 (a) Prospectus of Registrant dated September 2, 1981 [included in
Registration Statement No. 2-72567, of Registrant] and incorporated herein
by reference.
(b) Agreement of Limited Partnership for North River Village III between
Shelter III GP Limited Partnership and Shelter Properties III entered into
April 30, 1992. [Filed as Exhibit 28(b) to Form 10-KSB of Registrant for
year ended December 31, 1992 and incorporated herein by reference.]
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