================================================================================
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Meridian Healthcare Growth and Income Fund Limited Partnership
(Name of Registrant as Specified in Its Charter)
MACKENZIE PATTERSON FULLER, INC.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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:
5) Total fee paid:
[ ] 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:
================================================================================
PRELIMINARY COPIES
MacKenzie Patterson Fuller, Inc.,
1640 School Street
Moraga, California 94556
The General Partners of Meridian Healthcare Growth and Income Fund Limited
Partnership (the "Partnership") have requested your vote in favor of three
proposals (the "Proposals"), according to the Partnership's Consent Solicitation
Statement filed with the Securities and Exchange Commission on June 21, 2005
(the "Partnership's Consent Solicitation").
The Partnership is trying to get you to approve three Proposals:
(1) the sale of all or substantially all of the skilled nursing facilities
indirectly owned by the Partnership (each a "Facility" and,
collectively, the "Facilities") to FC Properties VI, LLC, a Delaware
limited liability company ("Purchaser") for what we believe to be an
inadequate, untested price;
(2) the amendment of the Limited Partnership Agreement to remove your power
to approve such transactions, and
(3) the winding-up, dissolution and liquidation of the Fund upon the sale
of the properties.
We at MacKenzie Patterson Fuller, Inc., a California corporation engaged in a
variety of investment and real estate-related business activities, including
management of private investment funds ("MPF" or "we"), strongly encourage you
grant us a proxy with respect to, or to vote against, the Proposals for the
following reasons:
(1) We strongly believe that the proposed sale to the Purchaser for an
aggregate gross purchase price of $50,000,000 is untested and inadequate,
given the fact that the General Partners have not marketed the Facilities
for sale.
o We believe that if effectively marketed for sale, the Facilities could
be sold for substantially more than $50,000,000. Our basis for this
belief is two-fold. First, in our experience, active marketing through
a national brokerage firm almost always results in significantly higher
sales prices. This is especially true in today's competitive market for
income-producing properties. Second, we have obtained a report from
Senior Living Investment Brokerage, Inc. that estimates that the
Facilities are worth between $62,300,000 and $68,500,000, and that in
marketing the Facilities, it would ask $70,000,000! (See the summary of
this report and the firm below).
o We believe that the General Partners may have agreed to this sale
because they benefit from the continued management contract for the
Facilities (Section 6.3 of the Asset Purchase Agreement states:
"Management Agreements. Seller acknowledges that Purchaser shall
communicate and negotiate with the Manager for the purpose of entering
into contracts pursuant to which Manager will manage the Facilities for
Purchaser following Closing." We believe that because the Manager will
be able to stay in place, the Development General Partner may have been
willing to sell the Facilities for below market value. The Development
General Partners is owned by the Manager, as disclosed in the
Partnership's filings. However, we have no evidence, direct or
otherwise, that this in fact influenced the sale price. Our basis for
the belief is that it is one possible explanation for what we believe
is a below-market sale price).
o We and our affiliates recently offered to purchase your Units for $20
per Unit pursuant to a tender offer, which amount is substantially the
same amount the General Partners have estimated you would receive from
this sale. (See Consent Solicitation Statement filed by the Partnership
on June 21, 2005). If you tendered your Units pursuant to our offer,
you have already granted us a proxy, so there is no need for you to
respond to this proxy statement or the General Partners'. Ostensibly,
you would have tendered your Units to us if you thought the Sale was a
good idea, because you would have received approximately the same
proceeds. Thus, you may well believe, as we do, that this sale price is
inadequate. If so, please give us your proxy to vote against the sale
and stay with the Partnership until the Facilities can be sold for what
we believe to be their true value. However, please note that even if we
are successful in blocking the Sale, we have no ability to force the
General Partner to market the Facilities to anyone else except through
the exercise of our rights as limited partners. If you grant us your
proxy, you are voting against this Sale, not in favor of an alternative
sale.
(2) The proposed Amendment of Limited Partnership Agreement would permit the
General Partners to sell all or substantially all of the Partnership's
assets without first obtaining your consent. We see no reason to permit the
General Partners unfettered discretion to sell the Facilities for whatever
price and upon whatever terms they see fit, if the present sale is not
consummated.
1
(3) We are not interested in opposing dissolution of the Partnership if the
Facilities are sold (if we are unsuccessful in our attempt to stop the
sale), but the first proposal is contingent upon the dissolution proposal
being approved. Thus, we are seeking your proxy to vote against this
proposal as well.
Limited partners of record at the close of business on June 1, 2005 are entitled
to vote on the Proposals. IN ORDER TO COUNT, THIS CONSENT FORM MUST BE RECEIVED
BY THE PARTNERSHIP PRIOR TO 5:00 P.M., EASTERN TIME, ON JULY 18, 2005, UNLESS
EXTENDED BY THE GENERAL PARTNERS IN THEIR SOLE DISCRETION. Thus, please return
this proxy to us as soon as possible and, in any event, prior to July 18, 2005
at 5:00 P.M. so that we can send all such proxies to the General Partners in
time. If you grant us your proxy, you are voting against this Sale, not in favor
of an alternative sale.
Very truly yours,
C. E. PATTERSON President
MacKenzie Patterson Fuller, Inc.
Moraga, California
July __, 2005
2
IMPORTANT: PLEASE FILL IN, DATE, SIGN, AND PROMPTLY MAIL THE ENCLOSED GREEN
PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE
TO ASSURE THAT YOUR UNITS VOTED.
Meridian Healthcare Growth and Income Fund Limited Partnership
PROXY STATEMENT
OF
MACKENZIE PATTERSON FULLER, INC. ("MPF")
THIS SOLICITATION IS BEING MADE BY MPF AND NOT ON BEHALF
OF THE GENERAL PARTNERS OF THE COMPANY.
The accompanying proxy is solicited by MacKenzie Patterson Fuller, Inc.
("MPF"), a California corporation that manages several investment funds that own
units in the Partnership ("Units"), for use in the Consent Solicitation of
Meridian Healthcare Growth and Income Fund Limited Partnership, a Delaware
limited partnership (the "Partnership") mailed to limited partners June 21, 2005
by the Partnership, for the purposes set forth in the accompanying Proxy
Statement. The date of this Proxy Statement is July __, 2005, the approximate
date on which this Proxy Statement and the accompanying form of proxy were first
sent or given to unitholders.
SOLICITATION AND VOTING
Voting Securities. According to the Partnership's Consent Solicitation,
only unitholders of record as of the close of business on June 1, 2005 will be
entitled to vote in the Consent Solicitation. As of that date, there were
1,540,040 Units issued and outstanding, all of which are entitled to vote with
respect to all matters to be decided in the Consent Solicitation. Each
unitholder of record as of that date is entitled to one vote for each Unit held
by him, her, or it. The Limited Partnership Agreement of the Partnership (the
"Partnership Agreement") provides that a majority of all Units entitled to vote
is required to approve the Proposals.
Solicitation of Proxies. The expenses incurred in connection with
soliciting proxies will be borne by MPF and its affiliates. MPF may solicit
unitholders by mail, email, telephone, facsimile, or in person through its
regular employees, and will request banks, brokers, and other custodians,
nominees, and fiduciaries to solicit customers for whom they hold Units of the
Partnership and will reimburse them for their reasonable, out-of-pocket costs.
None of the persons soliciting proxies has any substantial interest in any
matter to be acted upon at the Consent Solicitation, other than MPF's and its
funds' interests as unitholders. MPF does not, at this time, intend to retain
commercial solicitation or advisory services to assist in this matter. Should
such services be retained in the future, the terms of such an agreement will be
made available. The entire expense of soliciting proxies for the Consent
Solicitation is being borne by MPF. MPF will not seek reimbursement for such
expenses from the Partnership. Costs of this solicitation of proxies are
expected to be approximately $20,000, primarily in legal and mailing costs.
Total incurred to date in furtherance of or in connection with the solicitation
of proxies is approximately $5,000. We intend to deliver a proxy statement and
form of proxy to all unitholders of record of the Partnership, which is greater
than the percentage of Units required to reject the Proposals.
Voting of Proxies. All valid proxies received prior to the expiration of
the Consent Solicitation will be exercised. All Units represented by a proxy
will be voted, and where a proxy specifies a unitholder's choice with respect to
any matter to be acted upon, the Units will be voted in accordance with that
specification. If no choice is indicated on the proxy, the Units will be voted
AGAINST the Partnership Proposals. A unitholder giving a proxy has the power to
revoke his, her, or its proxy at any time prior to the time it is exercised by
delivery to the General Partners of the Partnership, or to us, of either a
written instrument revoking the proxy, or a duly executed proxy with a later
date, or a duly executed Consent Solicitation with a later date. If we are
unsuccessful in our attempt to solicit sufficient proxies to prevent the Sale,
the Sale will proceed as planned by the General Partners. If you grant us your
proxy, you are voting against this Sale, not in favor of an alternative sale.
PROPOSAL NO. 1
APPROVAL OF THE SALE OF THE FACILITIES
Background
The General Partners of the Partnership have agreed, subject to your approval,
to the sale of the seven skilled nursing facilities (the "Facilities") owned by
the Operating Partnerships (as defined below), all of the real property on which
the Facilities are located, and all of the personal property located at the
Facilities and/or used primarily in connection with the operation of the
Facilities, pursuant to the Asset Purchase Agreement dated as of February 11,
2005 (the "Purchase Agreement"), by and among FC Properties VI, LLC, a Delaware
limited liability company ("Purchaser"), and Plainfield Meridian Limited
Partnership, Caton Manor Meridian Limited Partnership, Frederick Meridian
Limited Partnership, Hamilton Meridian Limited Partnership, Randallstown
Meridian Limited Partnership, Mooresville Meridian Limited Partnership, and
Spencer Meridian Limited Partnership, all Maryland limited partnerships and
subsidiaries of the Fund (each an "Operating Partnership" and, collectively, the
"Seller") (the "Sale").
3
The gross aggregate purchase price for the Facilities pursuant to the Purchase
Agreement is an amount equal to approximately $50,000,000, plus the payment of
the Net Working Capital (as defined in the Purchase Agreement) (collectively the
"Purchase Price"). We at MPF believe that this price is inadequate for two
reasons:
1) We believe the Partnership could only know the true market value of the
Facilities by engaging in an active marketing of the Facilities.
2) We believe that if effectively marketed for sale, the Facilities could
be sold for substantially more than $50,000,000. Our basis for this
belief is two-fold. First, in our experience, active marketing through
a national brokerage firm almost always results in significantly higher
sales prices. This is especially true in today's competitive market for
income-producing properties. Second, we have obtained a report from
Senior Living Investment Brokerage, Inc. that estimates that the
Facilities are worth between $62,300,000 and $68,500,000, and that in
marketing the Facilities, it would ask $70,000,000! (see below)
A complete description of the terms of the Purchase Agreement, and a copy of the
agreement, has been provided to you by the General Partners in the Consent
Solicitation Statement dated June 21, 2005 on Schedule 14A, which is also
available from the Securities and Exchange Commission or via the EDGAR database
at www.sec.gov. You should review the General Partners' Consent Solicitation
prior to making a decision as to whether to grant us your proxy. You can also
contact us for a copy of this Consent Solicitation, and we will provide it to
you free of charge within one business day of your request.
Senior Living Investment Brokerage, Inc. Report
Brief Description of Qualifications: The principals at Senior Living Investment
Brokerage, Inc. ("Senior Living") have the knowledge and expertise to value and
market the Facilities. Senior Living has sold over 400 senior housing facilities
and has over $300 million in transactional experience. Representing sellers of
long-term care facilities is all it does. Its principals have a combined
experience of over 62 years in financing, developing, selling, acquiring,
brokering, appraising, and managing commercial real estate.
Method of Selection: One of our affiliated companies owns a nursing home in
Kansas that Senior Living is currently marketing for sale. Senior Living has
also consulted with us in the past about possible refinancing opportunities for
two of our affiliates' nursing facilities. We asked Senior Living if it would be
willing to analyze the Facilities and prepare a proposal as if it were being
considered to market the Facilities for sale. We selected this brokerage firm
because of the pre-existing relationship our principals have with the firm, and
because we believe the firm is extremely well-qualified to determine the value
of the Facilities given its expertise and experience.
Relationship and Compensation to be Received: The only relationship between
Senior Living and us is the Listing Agreement between Senior Living and our
affiliate to sell a skilled nursing facility owned by that affiliate in Kansas.
Pursuant to that Listing Agreement, Senior Living will be paid a customary
brokerage commission. No compensation was paid or will be paid to Senior Living
for the analysis it performed on the value of the Facilities.
Summary of Report:
We requested Senior Living to prepare a marketing proposal for the Facilities,
as if it were being considered to be the broker for the sale of the Facilities
(of course, this was hypothetical because we do not control who would be
retained to market and sell the Facilities if the Partnership decided to market
them because we are not the General Partners). Senior Living determined the two
most common variables used when pricing Skilled Nursing Facilities: the Income
Approach (or Capitalization Rates and Gross Income Multiple) and Sold
Comparables. Senior Living relied on information disclosed in Partnership's Form
10-K for the fiscal year ended December 31, 2004. In order to determine a value
based upon capitalization rates, it had to choose an appropriate rate (the
Income Approach determines value by dividing net operating income by the chosen
capitalization rate). It reviewed three sources, National Investment Center, The
Senior Care Investment Report, and Senior Housing Investment Survey to determine
the range of recent capitalization rates for similar properties. Given the
stability of the Facilities' performance, as well as other positive
characteristics, Senior Living believes an 11.0% to 11.5% capitalization rate is
an appropriate range for valuation purposes. Applying these capitalization rates
to the Facilities' performance yields a value of between $65,500,000 and
$68,500,000.
Using the Gross Income Multiple ("GIM") analysis, Senior Living looked to the
average GIM for skilled nursing facilities in 2004 and 2003, 0.73, according to
the Senior Care Acquisition Report. It increased the GIM by 0.22 for the sale of
the Facilities because of the increased economies of scale offered in a
portfolio sale of multiple properties. Thus, it used a GIM of 0.95. The GIM is
the sale price divided by the gross revenue. Thus, using a GIM of 0.95 yields a
probable sale price of approximately $62,300,000 based upon 2004 revenue, as
disclosed by the Partnership.
Senior Living also looked at several comparable sales of skilled nursing
facilities in comparable markets to determine a value for the Facilities. It did
4
so by calculating the sale price "per bed" and multiplying by the number of beds
in the Facilities. Analyzing the comparable sales and adjusting for the
attributes of the Facilities, Senior Living determined that at least $60,000 per
bed was appropriate, yielding a $66,200,000 value for the Facilities.
Senior Living concluded, based upon the information available and the above
analysis, that it would ask $70,000,000 for the Facilities were it the brokerage
firm hired to sell the Facilities.
Purpose and Effect of the Proposal
The General Partners are required by the Partnership Agreement to obtain the
consent of the limited partners prior to a sale of the assets of the
Partnership. Thus, the General Partners are seeking your consent, which, if
obtained, would satisfy that condition to the Purchase Agreement and would allow
the Sale to proceed.
Consequences of Proposal
The General Partners have estimated that you would receive between $20 and $21
per Unit in proceeds from the Sale, although because they commit to resolicit
your consent if the proceeds are less than $18, by implication, the amount you
will receive could be as low as $18 per Unit.
We are asking you not to give that consent because we believe the Sale is not in
your best interest and that an active marketing of the Facilities could bring a
substantially higher sale price. We have demonstrated our conviction with our
previous offer to purchase your Units for $20 per Unit, approximately the amount
that the General Partner estimates you would receive from the Sale and
dissolution of the Partnership. If you grant us your proxy, and we are
successful in getting a majority of the Unitholders to vote against the Sale,
the Sale will not go through to Purchaser. Pursuant to the terms of the
Development General Partner's waiver of its right of first refusal, it would
then have the right to purchase the Facilities pursuant to the same terms. We
anticipate that the Development General Partner would not do so because if
Unitholders reject the Sale, we see no reason they would approve a sale under
the same terms to the General Partner. We anticipate that we would solicit
proxies to oppose any such sale as well. Thereafter, the Partnership can
actively market the Facilities for 120 days without the right of first refusal
restriction that the General Partners say impeded obtaining a higher price.
However, please note that even if we are successful in blocking the Sale, we
have no ability to force the General Partner to market the Facilities to anyone
else except through the exercise of our rights as limited partners. Further, the
General Partners have not committed that they will market the Facilities for
sale if the Sale is not approved; they may choose not to do so. If our
solicitation is successful, there can be no assurance that the Facilities will
be sold in the near future, or at all, or produce greater proceeds for the
limited partners. Even if the Partnership finds another buyer for the
Facilities, the distribution of any proceeds from such a future sale would occur
at a significantly later date than under the proposed Sale, and any such sale
would be subject to the Development General Partner's right of first refusal (or
waiver thereof) if after the 120 day period mentioned above. If you grant us
your proxy, you are voting against this Sale, not in favor of an alternative
sale.
Vote Required and MPF's Recommendation
The affirmative vote of a majority of the outstanding Units is required
for approval of this proposal. Abstentions will have the same effect as a "NO"
vote.
MPF recommends a vote "AGAINST" the Proposal to approve the Sale of the
Facilities.
PROPOSAL NO. 2
DISSOLUTION OF THE PARTNERSHIP
Background
If the General Partners are successful in obtaining consent to the Sale, they
also want your approval to file a certificate of cancellation of the Fund and to
proceed to liquidate, dissolve and wind-up the Fund and distribute its net
assets to limited partners in accordance with the Partnership Agreement and
applicable law (the "Liquidation"). The General Partners estimate that the net
assets of the Fund available for distribution to limited partners following the
Sale will be in a range of $20.00 to $21.00 per Unit prior to any reduction due
to state or local tax withholding. Limited partners will also receive a pro rata
beneficial interest in the liquidating trust, which the General Partners
estimate could provide additional distributions in a range of approximately
$0.00 to $0.32 per Unit. The General Partners have stated that they will
resolicit the consent of Investors in the event that distributions to investors
will be less than $18.00 per Unit. Thus, your distributions could be as low as
$18.00 per Unit (or even less, in which case you would have your consent
solicited again).
Because approval of each of the Sale and the Liquidation is contingent upon
limited partner approval of both of Proposals, if the holders of a majority of
5
the issued and outstanding Units do not approve the Liquidation, the Sale and
Liquidation will not occur and the General Partners will continue to conduct the
business and affairs of the Fund in accordance with the Fund's limited
partnership agreement.
Purpose and Effect of the Proposal
The General Partners want your consent to dissolve the Partnership if it also
gets consent from the limited partners to the Sale. If both the Sale proposal
and the Liquidation proposal are approved, the General Partners will have the
authority they need to consummate the Sale and liquidate the Partnership.
Consequences of Proposal
If a majority of limited partners consent to the Liquidation and to the Sale,
the Sale will be consummated, the Partnership dissolved, and final distributions
made to the limited partners. The General Partners have estimated that limited
partners will receive approximately $20 to $21 per Unit plus an interest in the
liquidating trust, which they estimate could provide $0.00 to $0.32 per Unit,
although such amounts could be as low as $18.00 per Unit without your consent
being solicited again.
If you grant us your proxy, and we are successful in getting a majority to vote
against the Liquidation and the Sale, then the Facilities will not be sold to
the Purchaser. The Development General Partner will then have the right to
purchase the Facilities pursuant to the exact same terms, including your
consent.
Vote Required and MPF's Recommendation
The affirmative vote of a majority of the outstanding Units is required
for approval of this proposal. Abstentions will have the same effect as a "NO"
vote.
MPF recommends a vote "AGAINST" Proposal to dissolve the Partnership.
PROPOSAL NO. 3
AMENDMENT OF LIMITED PARTNERSHIP AGREEMENT TO PERMIT GENERAL PARTNERS TO BYPASS
LIMITED PARTNER APPROVAL OF FUTURE SALE
Background
The General Partners intend to consummate the Sale pursuant to the terms and
conditions of the Purchase Agreement if the limited partners approve the Sale
and Liquidation. However, the General Partners also want authority to sell all
or substantially all of the Fund Property to unaffiliated third party purchasers
in the future without first obtaining the consent of limited partners, in the
event, and solely to the extent that, the Sale is not consummated for any
reason. Thus, if limited partners do not approve the Sale at this price, the
General Partners want you to give them authority to sell the Property at any
price! The General Partners want to amend the Partnership Agreement to remove
the requirement that limited partners approve the sale of all or substantially
of the Partnership's assets (the "Amendment").
Purpose and Effect of the Amendment
If limited partners approve the Amendment, and the closing of the Sale does not
occur, the Partnership may sell the Partnership's property in the future at any
price without the consent of the holders of a majority of outstanding Units. If
the closing of the Sale occurs the Amendment will be moot.
Vote Required and MPF's Recommendation
The affirmative vote of a majority of the outstanding Units is required
for approval of this proposal. Abstentions will have the same effect as a "NO"
vote.
MPF recommends a vote "AGAINST" approval of the amendment of the
Partnership Agreement.
6
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Outstanding Voting Securities; Record Date
As of the Record Date, there were 1,540,040 Units outstanding, which represent
all of the voting securities of the Fund. Each Unit is entitled to one vote.
Only Investors of record as of the Record Date will be entitled to notice of and
to execute and deliver a Consent Form.
Security Ownership of Certain Beneficial Owners and Management
According to the Partnership's definitive Consent Solicitation Statement on
Schedule 14A, filed June 21, 2005, the following table sets forth certain
information, as of June 1, 2005, the beneficial ownership of Units of the Fund
by persons or entities beneficially owning more than 5% of the Units, the
individual directors and officers of the Administrative General Partner, the
individual directors and officers of the Development General Partner and all of
the directors and officers of each of the Administrative General Partner and the
Development General Partner as a group. Additionally, we have added information
about our affiliates ownership of Units.
- ---------------------------------------------------------------------------------------------------------------------------------
Name Title of Class Amount of Units Beneficially Percent of Class
Owned
- ---------------------------------------------------------------------------------------------------------------------------------
Brown Healthcare Holding Co., Inc.
300 East Lombard Street
Suite 1200 Units of Limited Partnership 40 .0026%
Baltimore, Maryland 21202 Interests
- ---------------------------------------------------------------------------------------------------------------------------------
Directors and Officers of
Administrative General Partner as
a Group(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Directors and Officers of
Development General Partner as
a Group(1)
- ---------------------------------------------------------------------------------------------------------------------------------
MacKenzie Patterson Fuller, Inc. (2)
1640 School Street Units of Limited Partnership 124,629 8%
Moraga, CA 94556 Interests
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>
Notes:
(1) - Less than 1%
(2) - Units are owned by investment funds managed by MacKenzie Patterson Fuller,
Inc., which has sole voting and dispositive control over such Units and so is
deemed to beneficially own such Units. MacKenzie Patterson Fuller, Inc.
disclaims beneficial ownership of such Units. No individual entity managed by
MacKenzie Patterson Fuller, Inc. owns greater than 5% of the Partnership's
Units. See below under "INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON"
for a list of entities and their respective ownership of Units.
</FN>
MARKET FOR UNITS; DISTRIBUTIONS
There is no established public trading market for the Units. The Purchasers
review of independent secondary market reporting publications such as The Direct
Investments Spectrum (formerly The Partnership Spectrum) and The Stanger Report,
reported trades ranging from $12.00 to $16.77 in the past year. The American
Partnership Board, another independent, third-party source, reported sales at
$16.77 in the 3rd Quarter 2004. Our affiliates recently completed a tender offer
in which it purchased 90,431 Units for $20.00 per Unit. The General Partners
reported that "To the best of the General Partners' knowledge between January 1,
2004 and March 31, 2005 Units have traded in the range of $10.00 to $21.50 per
Unit. The General Partners believe there are presently offers outstanding to
purchase Units that range from $16.50 to $20.00." (See the Consent Solicitation
filed by the Partnership on June 21, 2005).
The information published by these independent sources is believed to be the
product of their private market research and does not constitute the
comprehensive transaction reporting of a securities exchange. Accordingly, the
Purchasers do not know whether the foregoing information is accurate or
complete.
According to the General Partners, the Partnership declared quarterly cash
distributions to Investors for 1999 through the first quarter of 2005 as set
forth in the following table:
7
Quarter 2005 2004 2003 2002 2001 2000 1999
1st 0.3750 0.3750 0.3750 0.5313 0.5313 0.5313 0.5313
2nd - 0.3750 0.3750 0.5313 0.5313 0.5313 0.5313
3rd - 0.3750 0.3750 0.5313 0.5313 0.5313 0.5313
4th - 0.3750 0.3750 0.2813 0.5313 0.5313 0.5313
Totals 0.3750 1.5000 1.5000 1.8750 2.1251 2.1251 2.1250
(See the Consent Solicitation filed by the Partnership on June 21, 2005).
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
We and our directors, executive officers, and other employees may be deemed to
be participants in the solicitation of proxies of the Partnership's unitholders
to vote in the manner requested by this letter. We are the manager of certain
investment funds, which collectively beneficially own the following Units of
limited partnership interest of the Partnership. Our investment funds and we
have no substantial interest in this solicitation other than as owners of the
Partnership's Units.
Name Units (all Common Stock) Percentage
MPF-NY 2005, LLC 18,000 1.17%
MPF DeWaay Premier Fund, LLC 12,000 *
MP Value Fund 7, LLC 10,100 *
Mackenzie Patterson Special Fund 7, LLC 12,000 *
Mackenzie Patterson Special Fund 6, LLC 9,500 *
Mackenzie Patterson Special Fund 6-A, LLC 7,000 *
Mackenzie Patterson Special Fund 5, LLC 14,458 *
MPF Acquisition Co. 3, LLC 3,750 *
Accelerated High Yield Institutional Investors, Ltd., L.P. 13,240 *
Moraga Gold, LLC 9,681 *
MP Falcon Fund, LLC 5,080 *
Cal-Kan, Inc. 2,400 *
MP Falcon Growth Fund 2, LLC 1,300 *
MP Value Fund 4, LLC 6,120 *
All participants as a group 124,629 8.1%
*Represents less than 1% of the outstanding Units of the Partnership. Calculated
on the basis of 1,540,040 Units outstanding, as disclosed by the Partnership in
its Consent Solicitation on Schedule 14A, filed June 21, 2005.
Previously Provided Documents
The following documents, which have been previously furnished to each person
solicited in connection with this Consent Solicitation in the Partnership's
Consent Solicitation Statement on Schedule 14A filed June 21, 2005, have been
omitted from this Proxy Statement:
(a) the "Summary Term Sheet" on the second page 1 through page 7; (b) the
contact information of the principal executive offices of the Partnership on
page 41; (c) the description of the general nature of the business conducted by
the Partnership on page 12; (d) the terms of the Sale, Liquidation, and
Amendment as outlined on pages 13-33; (e) the regulatory approvals required for
the Sale outlined on page 27; (f) Interests of Certain Persons on pages 10-11;
and (g) Selected financial data on page 39.
Very truly yours,
C. E. PATTERSON
Chief Executive Officer and President
MacKenzie Patterson, Inc.
8
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Proxy for the Consent Solicitation of Unitholders
Mailed by the Partnership June 21, 2005
Solicited by MacKenzie Patterson Fuller, Inc.,
NOT by the General Partners of the Partnership
The undersigned hereby appoints MacKenzie Patterson Fuller, Inc. and/or
C. E. Patterson, with full power of substitution, to represent the undersigned
and to vote all of the Units of limited partnership interest in Meridian
Healthcare Growth and Income Fund Limited Partnership (the "Partnership"), which
the undersigned is entitled to vote in the Consent Solicitation of Unitholders
of the Partnership mailed by the Partnership on or about on June 21, 2005, and
for any extension, adjournment, or postponement or further solicitation thereof
as hereinafter specified upon the proposals listed below and as more
particularly described in the Proxy Statement of MacKenzie Patterson Fuller,
Inc. dated July __, 2005 (the "Proxy Statement"), receipt of which is hereby
acknowledged.
THE UNITS REPRESENTED HEREBY SHALL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, SUCH UNITS SHALL BE VOTED "AGAINST" PROPOSALS 1, 2, AND
3.
YOU ARE URGED TO SIGN AND PROMPTLY MAIL THIS PROXY IN THE RETURN
ENVELOPE SO THAT YOUR UNITS WILL BE VOTED.
MPF RECOMMENDS MARKING "DOES NOT CONSENT" ON PROPOSAL NUMBER 1
In Proposal Number 1, the General Partners request that the limited partners
consent to:
"1. The sale of all of the rights in the real property on which each of the
Facilities owned and operated by the Operating Partnerships of the Fund are
located and all of the interests in or rights to use, if any, certain personal
property located at the Facilities and/or used primarily in connection with the
operation of the Facilities, pursuant to the Asset Purchase Agreement dated as
of February 11, 2005 by and among FC Properties VI, LLC, a Delaware limited
liability company and Plainfield Meridian Limited Partnership, Caton Manor
Meridian Limited Partnership, Frederick Meridian Limited Partnership, Hamilton
Meridian Limited Partnership, Randallstown Meridian Limited Partnership,
Mooresville Meridian Limited Partnership, and Spencer Meridian Limited
Partnership each Maryland limited partnerships and subsidiaries of the Fund
(each an "Operating Partnership" and, collectively, the "Seller") (the "Sale")
and the grant to the General Partners, or any one of them, through their
officers, employees, and agents, of the authority to negotiate, execute, and
deliver all documents, agreements, instruments, and certificates, and pay all
fees, expenses and disbursements (including, but not limited to, real estate
broker commissions), and take any and all other actions as they or any one of
them may deem necessary or advisable in connection with or relating to the
Sale."
|_| DOES NOT CONSENT |_| ABSTAINS |_| CONSENTS
MPF RECOMMENDS MARKING "DOES NOT CONSENT" ON PROPOSAL NUMBER 2
In Proposal Number 2, the General Partners request that the limited partners
consent:
"2. To the liquidation, dissolution and winding-up of the Fund pursuant to
Article 8 of the Partnership Agreement following the consummation of the Sale
(the "Liquidation")."
|_| DOES NOT CONSENT |_| ABSTAINS |_| CONSENTS
MPF RECOMMENDS MARKING "DOES NOT CONSENT" ON PROPOSAL NUMBER 3
In Proposal Number 3, the General Partners request that the limited partners
consent:
"3. To the Amendment to the Agreement of Limited Partnership of the Fund, dated
as of December 8, 1987 (as amended, supplemented or otherwise modified from time
to time) (the "Partnership Agreement") to permit the General Partners to sell
all or substantially all of the assets of the Fund to unaffiliated third parties
without first obtaining Investor consent (the "Amendment")."
|_| DOES NOT CONSENT |_| ABSTAINS |_| CONSENTS
Signature: Joint Signature:
----------------------- ----------------------------
(if held jointly)
Name: Name:
---------------------------- ----------------------------
Title:
---------------------------
Please sign your name(s) in the same Estimated # of
manner as the name(s) in which ownership Units Being voted:
of the Units is registered. When Units are ---------------
held by two or more joint holders, all
such holders must sign. When signing as Dated:
attorney-in-fact, executor, administrator, ----------------
trustee or guardian, please give full title
as such. If a corporation, please sign in
full corporate name by the President or other
authorized officer. If a partnership, please
sign in partnership name by an authorized
partner. If a limited liability company,
please sign in the limited liability company
name by the members or the duly authorized
manager.