SCHEDULE 14C
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
[ ] Definitive Information Statement
CONSOLIDATED CAPITAL GROWTH FUND
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required
[X] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies: Limited
Partnership Units
(2) Aggregate number of securities to which transaction applies: 49,196
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction: $22,800,000, based on
contract price for property being sold.
(5) Total fee paid: $1,844.52
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: $
(2) Form, Schedule or Registration Statement No.: ____________
(3) Filing Party:
(4) Date Filed
INFORMATION STATEMENT
FOR
CONSOLIDATED CAPITAL GROWTH FUND
Stanford Place 3
4582 South Ulster Street Parkway, Suite 1100
Denver, Colorado 80237
Dear Limited Partner:
We are sending you this information statement to inform you that ConCap
Equities, Inc., a Delaware corporation, the general partner of the partnership,
has agreed to sell the partnership's apartment complex known as Doral Springs.
Doral Springs will be sold to FF Realty LLC, an unaffiliated third party, for
$22,800,000 cash. The general partner and affiliates of the general partner who
are holders of greater than 50% of the limited partnership units have already
consented to the sale of Doral Springs. The general partner has conflicts of
interest in the sale of Doral Springs as described in greater detail herein,
including the receipt of certain fees to be paid in connection with the
completion of the sale. After the sale of Doral Springs closes, we estimate that
there will be approximately $128 per limited partnership unit to distribute to
the limited partners. This amount is an estimate, and as explained below, it is
based on a number of assumptions. We expect the distribution will occur 60 to
120 days after the sale closes. This information statement contains information
about the sale and the reason that the general partner has decided that the sale
is in the best interests of the limited partners.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
The date of this information statement is July __, 2003.
This information statement is being mailed on or about July __, 2003 to all
holders at the close of business on July __, 2003 of the limited partnership
units of Consolidated Capital Growth Fund, a California limited partnership.
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SUMMARY OF THE TRANSACTION
The following is a summary of the transaction:
FF Realty LLC or an affiliate of FF Realty LLC will acquire Doral Springs for
$22,800,000 cash pursuant to a purchase and sale agreement dated as of June 6,
2003 between FF Realty LLC and the partnership. The completion of the sale is
scheduled to occur on or before August 6, 2003, subject to certain extension
options.
After application of the proceeds of the sale of Doral Springs to repayment of
mortgage debt and payment of transaction expenses, including mortgage prepayment
penalty and general partner's disposition fee, approximately $7.3 million will
be available for distribution to the partners, of which $6.3 million will be
available for distribution to the limited partners, and the remainder to the
general partner. Upon the completion of the sale of Doral Springs, the
partnership will continue to hold and operate its remaining apartment complex
known as The Lakes Apartments, located in Raleigh, North Carolina.
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REASONS FOR THE SALE OF DORAL SPRINGS
The general partner has determined that the sale of Doral Springs is in the best
interest of the limited partners after considering the following:
o The property was completed in 1972, and given its age, the property
probably will require substantial capital expenditures in the future
for which existing reserves will not be adequate.
o Market conditions are currently favorable for selling properties of
this type because of the availability of favorable financing terms and
the general withdrawal of capital from the stock markets and into
alternative investments such as real estate.
o The current economic downturn may make it difficult to find a buyer at
a future date or to sell the property at as favorable a price.
The factors described above were not the only factors considered by the general
partner. The general partner did not find it practicable to quantify or
otherwise assign relative weights to any of the factors considered. However,
after taking into account all of the factors, the general partner concluded that
this offer would be preferred over any other alternative available and
recommended the transaction as the best way to secure value for the limited
partners. For these reasons, the general partner has approved the sale and the
agreement, and limited partners holding a majority of the limited partnership
units also approved the sale and the agreement.
THE SELLER
Consolidated Capital Growth Fund is located at c/o AIMCO, 4582 South Ulster
Street Parkway, Suite 1100, Denver, Colorado 80237. The phone number for
Consolidated Capital Growth Fund is (888) 789-8600.
THE BUYER
FF Realty LLC, which is not affiliated with the partnership, agreed to acquire
the property through an arms length negotiation. The general partner or its
affiliates have conducted business with the buyer or its affiliates from time to
time. The buyer's primary business is to operate and hold real estate properties
for investment. The buyer or its affiliates plan to manage and operate Doral
Springs upon completion of the sale. FF Realty LLC has an office located at 5510
Morehouse Drive, Suite 200, San Diego, CA 92121. The phone number for FF Realty
LLC is 858-457-2123.
THE PROPERTY
The partnership has owned and operated the property, a 368-unit apartment
complex located in Dade County, Florida, since November 3, 1987. There is a
first mortgage loan on the property with an unpaid balance of approximately
$10,376,372. The partnership has other indebtedness of approximately $160,465.
The loan encumbering the property is subject to a prepayment
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penalty of approximately $3,667,000, which will be deducted from the purchase
price and paid by the purchaser at the closing.
NO OTHER ALTERNATIVES CONSIDERED BY THE GENERAL PARTNER
The general partner did not explore any other alternatives to selling Doral
Springs.
APPROVAL OF THE SALE
The general partner approved the sale and determined that it is in the best
interests of the partnership and the limited partners.
Section 2 of the partnership's amended agreement of limited partnership, dated
February 10, 1977, permits the partnership to sell all or substantially all of
its assets if the sale is approved by the limited partners holding a majority of
the limited partnership units entitled to vote thereon.
As of June 6, 2003, the partnership has approximately 1,990 limited partners who
collectively own 49,196 outstanding limited partnership units. Each limited
partnership unit represents approximately 0.0020% of the outstanding limited
partnership units. Affiliates of the general partner currently own approximately
31,843.25 limited partnership units or 64.078% of the outstanding limited
partnership units. On June 30, 2003, the holders of these 64.078% of the
outstanding limited partnership units gave their written consent approving and
adopting the sale. The following limited partners, all of which are affiliates
of the general partner, executed a written consent:
<Table>
<Caption>
NAME AND ADDRESS NUMBER OF LIMITED PERCENT OF
OF BENEFICIAL OWNER PARTNERSHIP UNITS CLASS
AIMCO IPLP, L.P.
55 Beattie Place, Greenville, SC 19,310.65 38.860%
Madison River Properties, L.L.C
55 Beattie Place, Greenville, SC 2,690 5.413%
AIMCO Properties, L.P.
Stanford Place 3, 4582 S. Ulster St. Parkway,
Suite 1100, Denver, CO 80237 9,841.6 19.805%
TOTAL: 31,842.25 64.078%
=============== ==========
</Table>
As a result, the holders of a majority of the limited partnership units have
approved the sale. Accordingly, no vote of any other limited partnership unit
holder is necessary to approve the sale and, therefore, the partnership is not
soliciting any other votes.
Subject to the terms and conditions of the purchase and sale agreement, we
contemplate that the sale will be consummated within two months, but no sooner
than 20 days after the mailing of this
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information statement and following satisfaction or waiver of the conditions
contained in the agreement. See "Summary of Agreement."
INTEREST OF CERTAIN PERSONS IN THE SALE
The general partner has conflicts of interest with respect to the sale. The
general partner and/or its affiliates will receive disposition fees of
approximately $334,000. In addition, because a general partner generally is
liable for all recourse debts and other liabilities of a partnership when the
partnership's assets are insufficient, a sale of the property reduces the
general partner's liability for existing and future partnership debt and
liabilities.
USE OF PROCEEDS
We estimate that we will use the gross proceeds from the sale as follows
(subject, however, to such reductions in the purchase price and reallocations in
the proceeds as determined by the general partner, in its reasonable discretion,
to address objections made by the purchaser to the condition of the property):
<Table>
Gross purchase price $ 22,800,000
Plus: Cash and cash equivalents 210,609
Plus: Other partnership assets 215,215
Less: Mortgage debt, including accrued interest (10,376,372)
Less: Accounts payable, accrued expenses and other liabilities (160,465)
Less: Prepayment Penalty (3,667,000)
Less: Disposition Fee payable to General Partner (334,000)
Less: Disposition Fee payable to Third Party (350,000)
Less: Reserves for Contingencies (684,000)
Less: Closing costs/sales commissions (334,000)
TOTAL $ 7,319,987
Net proceeds distributable to all Partners $ 7,319,987
Percentage of proceeds allocable to Limited Partners 86%
Net proceeds distributable to Limited Partners $ 6,295,189
Total number of Units 49,196
Distributable net proceeds per Unit $ 128
</Table>
This estimate assumes the closing occurs before August 6, 2003 and is based on
information known to the general partner at this time. Of course, many factors
could cause the actual use of proceeds to vary from this estimate, including
delays or unforeseen complications with the closing or contingent liabilities of
the partnership.
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FEDERAL INCOME TAX CONSEQUENCES
The tax consequences to you of a sale of the property may be significant. The
following discussion briefly summarizes the typical material aspects of the
federal income tax consequences of the limited partners that should be
considered in connection with the sale; however, the tax consequences to you
could be materially different for a variety of reasons. The discussion is based
on current law, which is subject to change (possibly with retroactive effect),
and does not consider state, local and foreign income tax aspects of the sale.
For purposes of this tax discussion, references to "I.R.C. Section" are to
sections of the Internal Revenue Code of 1986, as amended. THIS DISCUSSION DOES
NOT ADDRESS SPECIAL CONSIDERATIONS AND RULES APPLICABLE TO LIMITED PARTNERS THAT
ARE TAX-EXEMPT OR FOREIGN ENTITIES.
No ruling will be requested from the Internal Revenue Service on any of the tax
matters discussed herein. The federal income tax consequences to the limited
partners from the sale cannot be predicted with absolute certainty. We cannot
assure that the Internal Revenue Service will not audit or question the
treatment of any item discussed herein.
EACH LIMITED PARTNER SHOULD CONSULT AND MUST RELY UPON HIS, HER, OR ITS OWN TAX
ADVISOR IN ORDER TO UNDERSTAND FULLY THE FEDERAL, STATE, LOCAL AND FOREIGN
INCOME AND ESTATE AND GIFT TAX CONSEQUENCES TO HIM, HER, OR IT ARISING FROM THE
SALE.
TAX CONSEQUENCES IF THE PROPERTY IS SOLD. The partnership will recognize gain
from a sale of the property to the extent that the amount the partnership
realizes from that sale exceeds its adjusted basis in the property. The
partnership's amount realized from the sale includes the sum of cash it receives
from the purchaser plus the fair market value of any property it receives other
than money. If the purchaser assumes or takes the property subject to
liabilities which encumber the property, the face amount of those liabilities
also is included in the partnership's amount realized as though the purchaser
had made a cash payment to the partnership in the same amount. Selling expenses
of the partnership, such as brokerage commissions, legal fees, and title costs,
reduce the partnership's amount realized. Any gain recognized by the partnership
will be allocated to the partners, including the limited partners, in accordance
with the partnership agreement. We estimate that approximately $156 gain will be
allocated per unit to the limited partners. This amount is an estimate based on
a number of assumptions with respect to closing costs discussed under "Use of
Proceeds."
NOTE: The partnership's gain generally will be taxed as gain arising from the
sale of property used in the partnership's trade or business under I.R.C.
Section 1231 ("I.R.C. Section 1231 gain"). Each limited partner will be
allocated its share of the partnership's I.R.C. Section 1231 gain. In general,
if the combination of all I.R.C. Section 1231 gains and losses of a particular
limited partner for a taxable year results in a net gain, all of such gains and
losses will be characterized as long-term capital gains and losses. If the
combination results in a net loss, all of such gains and losses will be
characterized as ordinary gains and losses. However, notwithstanding the
foregoing, gains from the sale or exchange of I.R.C. Section 1231 property will
be treated as ordinary gains to the extent of a limited partner's unrecaptured
net I.R.C.
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Section 1231 losses for the five most recent prior years. As a result, all or a
portion of any I.R.C. Section 1231 gain from the sale of the partnership's
property allocated to a limited partner may be treated as ordinary income,
rather than long-term capital gain, if the limited partner has had net I.R.C.
Section 1231 losses in prior years.
Under I.R.C. Section 1245, gain recognized by the partnership from the sale of
any of its depreciable or amortizable personal property and certain statutorily
designated real property, i.e., "depreciation recapture gain," is
re-characterized as ordinary income and will be allocated to the partners as
such. The amount of the partnership's depreciation recapture gain equals the
amount by which the lower of the (i) amount realized or (ii) recomputed basis
(i.e., the property's basis plus all amounts allowed for depreciation) of the
transferred depreciable or amortizable personal property exceeds that property's
adjusted basis.
Under I.R.C. Section 1250, no portion of the gain recognized by the partnership
upon the disposition of its residential rental real property generally is
re-characterized as ordinary income because such property is depreciated using
the straight-line method. However, under I.R.C. Section 291 (a)(1), a portion of
a corporation's capital gain from the disposition of residential rental real
property is re-characterized as ordinary income. The portion that is
re-characterized equals 20% of the amount that would have been treated as
ordinary income under I.R.C. Section 1245 if the transferred property were
I.R.C. Section 1245 property (which generally would be all depreciation
deductions previously claimed). Therefore, under I.R.C. Section 291(a)(1),
corporate limited partners of the partnership may recognize ordinary income upon
a disposition of the partnership's residential rental real property.
In the case of limited partners of the partnership that are individuals,
estates, or trusts, the application of I.R.C. Section 1250 will not require
those taxpayers to recognize gain taxable as ordinary income; however, those
limited partners may be allocated gain from the partnership's sale of the
property that is taxed as "unrecaptured I.R.C. Section 1250 gain." Unrecaptured
I.R.C. section 1250 gain generally is equal to the gain on the sale of real
property that is attributable to straight-line depreciation. The maximum federal
tax rate at which unrecaptured I.R.C. Section 1250 gain currently is 25%.
In the case of limited partners that are individuals, trusts, or estates, gain
from the sale of the partnership's property that is not taxed as ordinary income
or as unrecaptured I.R.C. Section 1250 gain generally is taxed at a current
maximum capital gains tax rate of 15%. Gain from the sale of the partnership's
property that is allocated to limited partners that are corporations is not
subject to preferential capital gains tax rates.
If a limited partner possesses suspended tax losses, tax credits, or other items
of tax benefit, such items may be used to reduce any tax liability that arises
with respect to any gain resulting from the sale of the partnership's property
and allocated to that limited partner. The determination of whether a limited
partner possesses suspended tax losses, tax credits, or other items of tax
benefit that may reduce any gain resulting from the sale will depend upon each
limited partner's individual circumstances. Limited partners are urged to
consult with their tax advisors in this regard.
DISTRIBUTIONS OF CASH. A distribution of cash by the partnership to a limited
partner will be treated as an amount realized from a sale of the limited
partner's interest in the partnership and
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will result in taxable gain only to the extent that the distribution exceeds the
limited partner's adjusted tax basis in his, her, or its partnership interest.
Otherwise, distributions will be tax free, and the adjusted basis of the limited
partner's partnership interest will be decreased, but not below zero.
Generally, any gain recognized by a limited partner arising from a cash
distribution by the partnership will be capital gain. Nevertheless, to the
extent that a portion of that gain is attributable to "unrealized receivables"
of the partnership, including depreciation recapture, or to certain inventory
items described in I.R.C. Section 751, such gain will be taxed as ordinary
income. We do not believe that any portion of the distributions to limited
partners will be treated as attributable to "unrealized receivables" of the
partnership or to inventory items.
PROCEEDS AVAILABLE FOR DISTRIBUTION TO THE LIMITED PARTNERS FROM THE PROPERTY'S
SALE AFTER REPAYMENT OF THE PARTNERSHIP'S DEBTS MAY BE LESS THAN THE GAIN
RECOGNIZED BY THE PARTNERSHIP (AS A RESULT OF THE SALE) THAT IS ALLOCABLE TO THE
PARTNERS, GAIN RECOGNIZED BY THE PARTNERS AS A RESULT OF ANY CASH DISTRIBUTIONS
FROM THE PARTNERSHIP, AND ANY TAX LIABILITY RESULTING FROM THE FOREGOING.
ACCORDINGLY, LIMITED PARTNERS MAY BE REQUIRED TO USE FUNDS FROM SOURCES OTHER
THAN THE PARTNERSHIP IN ORDER TO PAY ANY TAX LIABILITIES THAT MAY ARISE AS A
RESULT OF THE RECOGNITION OF GAIN.
TAX CONSEQUENCES IF THE PROPERTY IS NOT SOLD. THE PROPERTY HAS BEEN DEPRECIATED
TO APPROXIMATELY 57.3% OF ITS ORIGINAL COST BASIS. AS A RESULT, IT IS LIKELY
THAT CONTINUED OPERATION OF THE PROPERTY WILL GENERATE TAXABLE INCOME TO THE
LIMITED PARTNERS, SINCE IT IS UNLIKELY THAT THERE WILL BE ADEQUATE DEPRECIATION
AND OTHER DEDUCTIONS EQUAL TO OR GREATER THAN THE INCOME GENERATED FROM THE
PROPERTY. Accordingly, limited partners may be required to use funds from
sources other than the partnership in order to pay any tax liabilities that may
arise as a result of the partnership's continued operation of the property. The
partnership also will continue to incur the administrative costs of operating
the partnership, including the cost of preparing and filing a partnership tax
return. If a limited partner possesses suspended tax losses, tax credits, or
other items of tax benefit, such items may potentially be used to reduce any tax
liability that arises with respect to any taxable net income as a result of the
continued operation of the property by the partnership. Limited partners are
urged to consult their tax advisors in this regard.
NO APPRAISAL RIGHTS
Limited partners are not entitled to dissenters' appraisal rights under
applicable law or the partnership agreement in connection with the sale.
REGULATORY APPROVALS
Other than the filing and distribution of this information statement, no
regulatory approvals are required for the sale.
PLANS AFTER THE SALE
Upon completion of the sale of Doral Springs, after the payment of the
transaction-related costs and other outstanding obligations, the partnership
will continue to own and operate its other
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apartment complex known as The Lakes Apartments, located in Raleigh, North
Carolina, subject to a first mortgage of $12,240,000.
PARTNERSHIP BUSINESS
The partnership is a publicly held limited partnership organized under the
California Uniform Limited Partnership Act on July 1, 1984. ConCap Equities,
Inc. became the sole general partner of the partnership on July 17, 1991. The
general partner was owned by Insignia Properties Trust ("IPT"). Effective
February 26, 1999, IPT was merged into Apartment Investment and Management
Company ("AIMCO"), a publicly traded real estate investment trust. Thus, the
general partner is now a wholly owned subsidiary of AIMCO. The partnership
agreement provides that the partnership is to terminate on December 31, 2006,
unless terminated before such date.
The partnership's primary business is to operate and hold real estate properties
for investment. Funds obtained during the public offering were invested in four
existing apartment properties. The partnership has now sold one of these
investment properties. See below for a description of the partnership's
remaining properties.
The partnership has no employees. Management and administrative services are
performed by the general partner and by agents retained by the general partner.
An affiliate of the general partner provides such property management services.
PARTNERSHIP PROPERTIES
The following table sets forth the partnership's investments in properties:
<Table>
<Caption>
PROPERTY DATE OF PURCHASE TYPE OF OWNERSHIP USE
-------- ---------------- ----------------- ---
The Lakes Apartments, 05/1988 Fee ownership, subject to Apartment - 600 units
Raleigh, North Carolina a first mortgage
Doral Springs Apartments, 11/3/1987 Fee ownership, subject to Apartment - 368 units
Miami, Florida a first mortgage
Churchill Park Apartments, 5/23/1990 Fee ownership, subject to Apartment - 384 units
Louisville, Kentucky(1) a first mortgage
</Table>
(1) The partnership has agreed to sell Churchill Park to Churchill Park
Investments, an unaffiliated third party, for $13,100,000 cash. The transaction
is scheduled to close by July 23, 2003. We estimate that as of March 31, 2003,
there will be approximately $93 per limited partnership unit to distribute to
the limited partners after the closing of the Churchill Park sale. We expect the
distribution to occur 60 to 120 days after the sale closes.
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SUMMARY OF THE PURCHASE AND SALE AGREEMENT
The following summarizes the material terms and conditions of the Doral Springs
purchase and sale agreement.
THE PURCHASED ASSETS
The partnership has agreed to sell to the buyer all of the partnership's
interest in and to the property, together with all the buildings and
improvements located thereon and certain associated property.
EXCLUSIONS FROM THE SALE OF THE PROPERTY
The property expressly excludes cash or other funds; refunds, rebates or other
claims, or any interest thereon, for periods or events occurring prior to the
closing; utility and similar deposits; insurance or other prepaid items; the
partnership's proprietary books and records; any right, title or interest in or
to the AIMCO Marks; any Buyer's Access computer and/or software; AIMCO Benchmark
Series Books; Connect: Remote Horizon Software; any other software installed on
any computer transferred as part of the sale; equipment leased by the
partnership and the interest of the partnership in any equipment provided to the
property for use, but not owned or leased by the partnership; or property owned
or leased by any tenant or guest, employee or other person furnishing goods or
services to the property; or property and equipment owned by the partnership,
which in the ordinary course of business of the property is not used exclusively
for the business, operation or management of the property.
ASSUMED LIABILITIES
The buyer agreed to assume the partnership's liabilities and obligations under
the property contracts and the leases after the closing.
THE EXISTING LOAN
The outstanding principal balance of the existing loan from Federal Home Loan
Mortgage Corporation as of June 6, 2003 was $10,311,252. The outstanding
principal balance of the loan at closing shall be paid out of the balance of the
purchase price due at the closing.
PURCHASE PRICE
The purchase price for the property is $22,800,000, payable as follows: (i) a
$150,000 deposit upon the execution of the agreement to be held in escrow until
the closing, (ii) an additional non-refundable $150,000 deposit upon the
expiration of the buyer's due diligence period for its examination of the
property to be held in escrow until the closing, and (iii) the balance of the
purchase price at the closing. The amount of the then-outstanding principal
balance of the loan shall be paid from the proceeds of the purchase price due at
the closing and will reduce the cash at closing payable to the partnership. Of
the initial $150,000 deposit, $100,000 shall be non-refundable upon payment
unless a refundable event (as defined in the purchase and sale agreement)
occurs. The balance of the initial deposit ($50,000) shall be refundable even if
a refundable event has not occurred through the expiration of the buyer's due
diligence period in
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the event that the buyer terminates the agreement during the buyer's due
diligence period. If the buyer does not terminate the agreement, all of the
$150,000 initial deposit, along with the second $150,000 deposit, shall become
non-refundable upon the expiration of the buyer's due diligence period;
provided, however, that if the agreement is terminated due to a default of or
breach by the partnership of the agreement and the buyer chooses to seek damages
in lieu of specific performance, then both deposits shall be returned to the
buyer.
CLOSING
The sale of the property will take place 30 days following the expiration of the
buyer's due diligence period. The partnership shall have the option to extend
the closing to the last business day of the month in which the closing otherwise
would occur or to such other date as the partnership determines is desirable in
connection with the prepayment of the loan. Further, the partnership may extend
the closing (i) for up to 30 days to satisfy a condition to be satisfied by the
partnership or (ii) such later date as is mutually acceptable to the partnership
and the buyer.
REPRESENTATIONS AND WARRANTIES
The agreement contains the customary seller representations and warranties by
the partnership, including, without limitation, representations regarding
corporate existence and qualification; corporate authority; non-contravention of
existing contracts; possessory interest in the property; litigation;
governmental violations; defaults under property contracts; and insurance
policies.
The agreement also contains customary purchaser representations and warranties
by the buyer, including, without limitation, representations and warranties
regarding corporate existence and qualification; corporate authority;
non-contravention of existing contracts; litigation; and non-reliance upon the
partnership's representations and warranties other than those in the agreement.
COVENANTS
The partnership has agreed that from the expiration of the buyer's due diligence
period through the closing, it will continue to operate the property in the
ordinary course of business and subject to the following covenants:
o the partnership will not voluntarily create or cause any lien or
encumbrance to attach to the property between the date of the
agreement and the closing date (other than leases in the ordinary
course of business which shall not exceed a term of six (6) months,
and property contracts in the ordinary course of business which can be
terminated on thirty (30) days or less notice without penalty).
CONDITIONS
The partnership's obligation to complete the sale of the property is subject to
satisfaction of the following conditions on or before the closing unless waived
in whole or in part by the partnership:
o All of the documents and funds required to be delivered by the buyer
to the partnership at the closing shall have been delivered;
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o Each of the representations, warranties and covenants of the buyer
shall be true in all material respects as of the closing;
o The buyer shall have complied with, fulfilled and performed in all
material respects each of the covenants, terms and conditions to be
complied with, fulfilled or performed by the buyer; and
o there shall not be pending or, to the knowledge of either buyer or
partnership, any litigation or threatened litigation which, if
determined adversely, would restrain the consummation of any of the
transactions contemplated by the agreement or declare illegal, invalid
or nonbinding any of the covenants or obligations of the buyer.
The buyer's obligation to complete the sale of the property is subject to
satisfaction of the following conditions on or before the closing unless waived
in whole or in part by the buyer:
o All of the documents required to be delivered by the partnership to
the buyer at the closing shall have been delivered;
o Each of the representations, warranties and covenants of the
partnership shall be true in all material respects as of the closing;
o The partnership shall have complied with, fulfilled and performed in
all material respects each of the covenants, terms and conditions to
be complied with, fulfilled or performed by the partnership;
o Neither the partnership nor the partnership's general partner shall be
a debtor in any bankruptcy proceeding nor shall have been in the last
six months a debtor in any bankruptcy proceeding;
o A taking of all or any part of the property must not have been
commenced or threatened in writing;
o The actual occupancy level of the Property shall not have decreased by
more than 15% from the actual occupancy level on the effective date of
the purchase and sale contract; and
o The partnership shall have terminated any property contracts which
buyer is not assuming.
TERMINATION AND DEFAULT
During the buyer's due diligence period for its examination of the property, the
buyer may terminate the agreement for any reason or no reason. If the buyer
terminates the agreement during the buyer's due diligence period other than upon
the occurrence of a refundable event, then $50,000 of the initial $150,000
deposit shall be returned to the buyer.
The agreement may be terminated at any time after the expiration of the buyer's
due diligence period through the closing:
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o By the partnership, if the buyer defaults in its obligations hereunder
to (a) deliver any of the deposits, (b) deliver to the partnership the
required closing deliveries specified under the agreement, or (c)
deliver the purchase price at the time required by the agreement and
close on the purchase of the property on the closing. The partnership
may also terminate the agreement if the buyer defaults in any of its
representations, warranties or obligations; and
o By the buyer, if the partnership defaults in its representations,
warranties, covenants, or obligations under the agreement, including
selling the property.
If the partnership terminates the agreement due to a default of or breach by the
buyer, then the partnership is entitled to keep all the buyer's deposits as
liquidated damages. If the buyer terminates the agreement due to a default or
breach of the partnership, then the buyer may choose to either (i) recover the
buyer's deposits, or (ii) seek specific performance for the conveyance of the
property to the buyer. In the event buyer is unable to enforce the remedy of
specific performance after using commercially reasonable efforts to seek to
enforce such remedy, then in lieu of obtaining specific performance, buyer has
the right to bring suit for damages against the partnership in an amount not to
exceed $250,000 in addition to receiving reimbursement of the buyer's deposits.
EXPENSES AND CLOSING COSTS
The partnership shall pay any recordation or transfer taxes and one-half of the
customary closing costs of the escrow agent for the sale of the property. The
buyer shall pay the cost of recording the deed to the property, any mortgage
taxes, the costs of the title policy, including any premiums or fees required to
be paid by the buyer with respect to its title policy for the property, and
one-half of the customary closing costs of the escrow agent for the sale of the
property.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
Only one information statement is being delivered to multiple limited partners
sharing an address unless the partnership has received contrary instructions
from one or more of the limited partners.
The partnership will undertake to deliver promptly upon written or oral request
a separate copy of this information statement to a limited partner at a shared
address to which the partnership delivered a single copy of the information
statement. If a limited partner wishes to notify the partnership that he or she
wishes to receive a separate copy of this information statement, the limited
partner may contact the partnership as follows:
By mail: Consolidated Capital Growth Fund
4582 S. Ulster Street Parkway Suite 1100
Denver, CO 80237
By telephone: (888) 789-8600
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A limited partner may also use the above telephone number, facsimile number or
mailing address to notify the partnership that limited partners sharing an
address request delivery of a single copy of this information statement if they
are receiving multiple copies of information statements.
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