UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
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 ss.240.14a-12
Housing Programs Limited
(Name of Registrant as Specified In Its Charter)
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[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
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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:
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PRELIMINARY COPY -- SUBJECT TO COMPLETION
As filed with the Securities and Exchange Commission on October 27, 2005
HOUSING PROGRAMS LIMITED
CONSENT SOLICITATION STATEMENT
Dear Limited Partner:
We are writing to recommend and seek your consent to amendments to the
agreement of limited partnership (the "Partnership Agreement") of Housing
Programs Limited (the "Partnership"). We believe that these amendments (the
"Amendments") will facilitate the sale of the Partnership's interests (the
"Project Interests") in the local limited partnerships that own the low income
housing projects (the "Projects") in which the Partnership has invested. We
are seeking your consent to amend the Partnership Agreement to:
o eliminate the requirement that the cash proceeds from the sale of an
individual Project or Project Interest must be at least as great as
the tax liability to the limited partners resulting from that sale;
and
o modify the provision in the Partnership Agreement that requires
limited partner approval for a sale of all or substantially all
assets so that a sale of a single Project (or a sale of Project
Interests related to a single Project) does not require limited
partner approval, even if all Projects or Project Interests are
ultimately sold.
We believe that the Amendments are fair to the limited partners, and we
recommend that you "CONSENT" to the Amendments. You should note, however, that
our recommendation is subject to the following conflicts of interest and
risks, as described more fully in this Consent Solicitation Statement in the
section entitled "THE PROPOSED AMENDMENTS--Risks and Disadvantages of the
Amendments":
o The Amendments will permit the general partners to initiate or
consent to a sale of a Project or Project Interests in transactions
that result in tax liabilities to limited partners in excess of the
cash proceeds arising from such disposition.
o NAPICO and HPC II, general partners of the Partnership, have a
conflict of interest in determining when, and at what price, to
initiate or consent to the sale of a Project or Project Interest,
because their controlling stockholder and the limited partners, both
of whom are owed fiduciary duties, could have conflicting interests
in such a sale.
o The general partners are entitled to receive disposition fees upon a
sale of a Project, which they would not receive in a foreclosure, and
therefore have a conflict of interest in recommending the Amendments.
o Expenses, including disposition fees paid to the general partners,
may consume all or substantially all of the net proceeds from a
disposition.
o The Amendments will permit the general partners to initiate or
consent to a sale of all or substantially all of the Partnership's
assets without limited partner approval if the assets are sold in
multiple transactions that do not involve, and are not part of a
series of related transactions involving, the sale of all or
substantially all of the Projects (or Project Interests) or if the
asset to be sold is a single Project (or the Project Interests
related to a single Project).
We urge you to read carefully this Consent Solicitation Statement before
completing your consent card. Your consent is important. Approval requires the
consent of a majority of the outstanding limited partner interests. Failure to
return your consent card by 5:00 p.m. EST on __________, 2005 will be treated
as a consent to the Amendments. Please sign, date and return the enclosed
consent card as promptly as possible.
We urge you to consult your tax advisor regarding the federal, state,
local and other tax consequences to you of a sale or other disposition of a
Project or Project Interests.
If you have any questions about this consent solicitation, please do not
hesitate to contact The Altman Group, the Partnership's consent solicitation
agent, at (800) 217-9608.
Very truly yours,
NATIONAL PARTNERSHIP INVESTMENTS CORP.,
HOUSING PROGRAMS CORPORATION II,
General Partner of Housing Programs Limited
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of this consent solicitation statement
or determined if this consent solicitation statement is truthful or complete.
Any representation to the contrary is a criminal offense.
This Consent Solicitation Statement and the enclosed form of Consent Card
are first being mailed to limited partners on or about __________, 2005.
BACKGROUND
The Partnership is a limited partnership that was formed under the
laws of the State of California in 1984. As of October 27, 2005, there were
6,105 units (the "Units") of limited partnership interest outstanding. The
general partners of the Partnership are National Partnership Investments
Corp., a California corporation ("NAPICO"), National Partnership Investments
Associates (also known as "Coast Housing Investments Associates"), a
California limited partnership ("NPIA"), and Housing Programs Corporation II,
a Delaware corporation ("HPC II"). NAPICO has primary responsibility for the
performance of any duties required to be performed by the general partners,
and NAPICO has the sole and final discretion to manage and control the
business of the Partnership and make all decisions relating to it. The
Partnership has no employees of its own.
The principal business of the Partnership is to invest, directly or
indirectly, in other limited partnerships that own or lease and operate
federal, state and local government-assisted housing projects. The
Partnership's original objectives were to own and operate real estate assets
for investment so as to obtain (i) tax benefits for the limited partners, (ii)
reasonable protection for the Partnership's capital investments, (iii)
potential for appreciation, subject to considerations of capital preservation
and (iv) potential for future cash distributions from operations (on a limited
basis), refinancings or sales of assets. We have been successful in
accomplishing the Partnership's original objectives. Through December 31,
1999, the Partnership had provided the limited partners with cumulative tax
benefits (assuming the maximum applicable individual federal income tax rates
and passive loss limitations) and cash distributions of approximately 74.5% of
their original capital contributions. In 1986, however, the tax laws changed
in such a way as to substantially reduce the ongoing tax benefits to the
limited partners. As a result, we determined that the best course of action
was to facilitate the sale of a majority of the Partnership's interests in
real property, subject to the consent of general partners of local limited
partnerships where required.
The Partnership currently holds Project Interests in four Projects.
The mortgage loans of these Projects are payable to or insured by various
governmental agencies. The Partnership, as a limited partner of the local
limited partnerships, does not exercise control over the activities and
operations of the local limited partnerships that own the Projects. However,
the general partner of one of the local limited partnerships has indicated
that it will take action pursuant to NAPICO's direction. The general partner
of each local limited partnership retains responsibility for maintaining,
operating and managing the Projects. In some cases, the Partnership has the
right to initiate (or to cause the general partner of the local limited
partnership to initiate) the sale of a Project. In other cases, the sale of a
Project requires the consent of the general partner of the local limited
partnership that owns that Project. In some cases, the sale of a Project
requires the Partnership's consent. In some cases, the sale of Project
Interests in a local limited partnership requires the consent of the general
partner of that partnership. As a limited partner, the Partnership's risk of
loss related to any local limited partnership is limited to the amount of its
investment in that partnership.
One of the Projects, Cloverdale Heights Apartments ("Cloverdale"), a
100-unit Project in Crawfordsville, Indiana, is subject to a purchase money
note secured by the Partnership's (and the local general partner's) interests
in the local limited partnership that owns Cloverdale. This note matured in
December 2000, with an aggregate of over $2.5 million in unpaid principal and
accrued interest as of September 30, 2005. Cloverdale does not have sufficient
funds to pay off the note, and there is substantial doubt that a future sale
of Cloverdale or the income from operations of Cloverdale will be sufficient
to pay off the note. As a result, the Partnership's interest in Cloverdale has
been at risk of foreclosure for several years. Currently, Cloverdale operates
at a deficit. An entity unaffiliated with NAPICO has offered to buy Cloverdale
for a purchase price of $1.25 million. This sale is contingent on, among other
things, approval of the U.S. Department of Housing and Urban Development. The
holder of the purchase money note has agreed to substantially discount the
note such that the Partnership would receive $75,000 from the sale. If the
purchase money note were not discounted, the Partnership would not receive any
proceeds from the sale. We believe that it would be in the best interest of
the limited partners for the Partnership to consent to this sale because the
Partnership will receive $0 if its interest in Cloverdale is foreclosed. We
estimate that the net cash proceeds from the sale would be $12 per Unit. We
estimate that the resulting taxable income to a limited partner who acquired
Units in the original offering would be $182 per Unit. As a result, the tax
liability of the limited partners resulting from the sale could exceed the
cash proceeds from the sale. The Partnership Agreement currently prohibits a
sale under these circumstances. The first Amendment described below would
eliminate this prohibition and allow the Partnership to consent to the
proposed sale of Cloverdale.
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THE PROPOSED AMENDMENTS
The full text of the Amendments is attached as Annex A hereto. The
opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to the legality of the
proposed Amendments is attached as Annex B hereto. We are seeking your consent
to amend the Partnership Agreement in the following ways:
Permit Sales Where the Cash Proceeds Would Be Less Than the Tax Liability
The Partnership Agreement currently prohibits the Partnership from
selling any Project or Project Interest if the cash proceeds from such sale
would be less than the taxes at the then maximum state and federal tax rates.
We are seeking your approval to amend the Partnership Agreement to eliminate
this prohibition. This Amendment would allow the Partnership to initiate or
consent to the sale of a Project or Project Interests in situations where the
cash proceeds are less than the limited partners' tax liability associated
with the sale. We urge you to consult your tax advisor regarding the federal,
state, local and other tax consequences to you of a sale or other disposition
of a Project or Project Interests.
Amend the "Sale of All or Substantially All Assets" Provision
The Partnership Agreement currently prohibits the Partnership from
selling all or substantially all of the Partnership's assets without limited
partner consent. We are seeking your consent to modify this provision so that
a sale of a single Project (or a sale of Project Interests related to a single
Project) that is not part of a series of related transactions involving the
sale of multiple Projects (or Project Interests related to multiple Projects)
that constitute all or substantially all of the Projects does not require
limited partner approval, even if all Projects (or Project Interests) are
ultimately sold.
Benefits of the Amendments
We believe that the Amendments will benefit the Partnership for the
following reasons:
o The Amendments will give the Partnership greater flexibility in
initiating or consenting to sales of Projects or Project Interests. In
some cases, we believe that the Partnership should be permitted to
initiate or consent to a sale of a Project or Project Interests at a
price that results in cash proceeds less than the resulting tax liability
to the limited partners. The first Amendment would allow such sales
without the delay and expense of soliciting the consent of limited
partners each time such a sale is proposed. We believe that the vast
majority of potential benefits from investment in the Partnership have
been realized, and that most limited partners are not realizing material
benefits from continuing to own their limited partnership interests. The
Partnership is not currently realizing sufficient cash flow from
operating activities to generate distributions to the limited partners
and does not anticipate realizing sufficient cash flow from future
operating activities to enable it to make distributions to limited
partners. The Partnership realized net losses of approximately $69,000
and $206,000 for the year ended December 31, 2004 and the six months
ended June 30, 2005, respectively. The Partnership realized a net
decrease of approximately $171,000 and a net increase of approximately
$58,000 in cash and cash equivalents for the year ended December 31, 2004
and the six months ended June 30, 2005, respectively. As of June 30,
2005, the Partnership had approximately $113,000 in cash and cash
equivalents, but had approximately $31,000 in accounts payable, $55,000
in loans due to NAPICO and $5.8 million in principal and accrued interest
payable on matured notes. Although we review potential dispositions of
Projects or Project Interests on a case-by-case basis, in light of our
recent losses and the limited cash flow currently generated by the
Projects' operations, we believe that it is in the best interest of the
Partnership and its limited partners to facilitate the disposition of
Projects and Project Interests. Accordingly, the Partnership's current
business strategy is to facilitate the orderly disposition of the
Projects and Project Interests, subject to the consent of general
partners of local limited partnerships where required. We believe that
the proposed Amendments will improve our ability to divest the Projects
and Project Interests more quickly and, as a result, may enable us to
make distributions of net sales proceeds to the limited partners sooner
(and, potentially, in greater amounts) than if the Amendments are not
made. However, we cannot assure you that approval of the Amendments will
result in larger or more rapid distributions to the limited partners.
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o The Amendments will help reduce the risk of foreclosure (and the
consequent forfeiture of Projects or Project Interests) by facilitating
alternative dispositions. All of the Projects are subject to mortgage
loans, and some of the Project Interests serve as collateral for notes
issued by the Partnership or the local limited partnerships. If a Project
or the Project Interests in a Project are foreclosed, they could be
forfeited to the holder(s) of the note in satisfaction of the
indebtedness evidenced by such note. Foreclosure of a Project or the
Project Interests in a Project would eliminate any potential future
returns that the limited partners might receive from continued ownership
or more advantageous dispositions of such Projects or Project Interests.
Additionally, if a Project or Project Interests are foreclosed, limited
partners could recognize a tax liability without any corresponding cash
distribution. Limited partners would often be better off if the Project
or Project Interests were sold to avoid foreclosure, even if the cash
proceeds are less than the limited partners' tax liability associated
with the sale. Such a sale may generate net cash proceeds that the
Partnership could distribute to the limited partners. Such a distribution
would enable the limited partners to partially offset their tax liability
resulting from the sale. The Partnership Agreement currently prohibits
the Partnership from making such a sale to avoid foreclosure. The
Amendments would allow the Partnership to initiate or consent to such
sales. In addition, if a Project is operating at a deficit and is likely
to continue to do so, it may be in the limited partners' best interest
for the Partnership to initiate or consent to the sale of the Project or
related Project Interests, even if the cash proceeds are less than the
limited partners' tax liability associated with the sale. Such a sale
could result in an economic loss for the limited partners, but it could
save the Partnership and limited partners from future losses. The
Partnership Agreement currently prohibits the Partnership from making
such a sale. The Amendments would allow the Partnership to initiate or
consent to such sales.
One Project and the Project Interests in three of the four Projects
have been at risk of foreclosure for several years. The local limited
partnerships that own the Jenny Lind Hall and Cloverdale Projects are
each obligated on a matured purchase money note secured by the
Partnership's interests in these local limited partnerships. The Jenny
Lind Hall note matured in December 1999. The local limited partnership
that owns Jenny Lind Hall has not made the payments due at maturity and,
according to the lender, is in default under the terms of the note. The
matured Jenny Lind Hall note has an aggregate of approximately $4.3
million in unpaid principal and accrued interest as of September 30,
2005. There is substantial doubt that the Jenny Lind Hall partnership's
income from operations will be sufficient to make these payments. As a
result, the Partnership's Project Interests in Jenny Lind Hall have been
at risk of foreclosure for several years. The Cloverdale note matured in
December 2000. The local limited partnership that owns Cloverdale has not
made the payments due at maturity and, according to the lender, is in
default under the terms of the note. The matured Cloverdale note has an
aggregate of over $2.5 million in unpaid principal and accrued interest
as of September 30, 2005. There is substantial doubt that the Cloverdale
partnership's income from operations will be sufficient to make these
payments. As a result, the Partnership's Project Interests in Cloverdale
have been at risk of foreclosure for several years. Cloverdale also
currently operates at a deficit. As a result, there is substantial doubt
about the ability of the local limited partnership that owns Cloverdale
to make payments on the related mortgage debt. If these payments are not
made, Cloverdale could be foreclosed.
The Partnership is obligated on a purchase money note secured by all
of the Partnership's Project Interests in one of the Projects, Plaza
Village. This note matured in 1999. The Partnership has not made the
payments due at maturity and, according to the lender, is in default
under the terms of the note. The matured Plaza Village note has an
aggregate of approximately $3.85 million in unpaid principal and accrued
interest as of September 30, 2005. There is substantial doubt that the
Partnership's income from operations will be sufficient to make these
payments. As a result, the Partnership's Project Interests in Plaza
Village have been at risk of foreclosure for several years. The entity
that owns NAPICO and HPC II has a 15% interest in the Plaza Village note
and is the custodian for the holder of the 85% interest in the Plaza
Village note. As discussed below under "Risks and Disadvantages of the
Amendments," NAPICO and HPC II therefore have a conflict of interest in
determining when and at what price to initiate or consent to the sale of
Plaza Village.
o We believe that current conditions in the real estate markets make this
an opportune time for the Partnership to initiate or consent to
disposition of the Projects or Project Interests. We believe that
property valuations, the current interest rate environment and the
availability of capital for real estate investments may facilitate the
disposition of the Projects or Project Interests more quickly and provide
the Partnership with an opportunity to maximize the value of the Projects
or Project Interests.
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o The second Amendment will enable the Partnership to initiate or consent
to transactions without the delay and expense of soliciting the consent
of limited partners each time a transaction is proposed, even if all the
Projects or Project Interests are ultimately sold, as long as the
disposition of all or substantially all of the Projects or Project
Interests is not made in a series of related transactions. We are not
contemplating a specific transaction pursuant to which all or
substantially all of the Partnership's assets will be sold, nor do we
have any plans for the Partnership to initiate or consent to a
transaction or a series of related transactions that would result in the
sale of all or substantially all of the Partnership's assets. Rather, we
intend to facilitate liquidation of the Partnership's portfolio through
transactions that will be considered on an individual basis, subject to
the consent of general partners of local limited partnerships where
required. A sale of all or substantially all of the assets in a series of
related transactions would still require limited partner approval.
Risks and Disadvantages of the Amendments
The following sets forth the risks and disadvantages of the
Amendments. Before deciding whether to consent to the Amendments, you should
carefully consider these factors.
o The Amendments will permit the general partners to initiate or consent to
a sale of Projects or Project Interests in transactions that result in
tax liabilities to limited partners in excess of the cash proceeds
arising from such disposition. The Partnership Agreement currently
prohibits the Partnership from selling a Project or Project Interest if
the cash proceeds from such sale would be less than the tax liability to
the limited partners associated with such sale. The Amendments would
eliminate this prohibition. Therefore, the general partners could
initiate or consent to a sale of a Project or Project Interest in a
taxable transaction that results in tax liabilities for the limited
partners in excess of any cash proceeds received from the sale or
distributed to the limited partners.
o NAPICO and HPC II, general partners of the Partnership, are controlled by
AIMCO and have a conflict of interest in determining when, and at what
price, to initiate or consent to the sale of a Project or Project
Interest. NAPICO and HPC II, general partners of the Partnership, have
fiduciary duties to the Partnership and its limited partners. The
directors of NAPICO and the directors of HPC II have fiduciary duties to
their respective stockholders. NAPICO and HPC II are each indirectly
owned by Apartment Investment and Management Company ("AIMCO"), an
NYSE-listed real estate investment trust (REIT), and AIMCO Properties,
L.P., the operating partnership through which AIMCO conducts its
operations. The interests of the Partnership's limited partners may
conflict with those of AIMCO. AIMCO regularly reviews its portfolio to
identify properties that do not meet its long-term investment criteria.
As a REIT, AIMCO will not recognize any tax liability in the event of a
sale of a Project or Project Interest. In addition, AIMCO will benefit to
the extent that NAPICO or HPC II receives a disposition fee upon a sale.
AIMCO also has a 15% interest in a matured purchase money note issued by
the Partnership and secured by the Partnership's Project Interests in one
of the Projects, Plaza Village, and is the custodian for the holder of
the 85% interest in this note. As a noteholder, AIMCO could receive all
of the net proceeds from a disposition of Plaza Village. As a result,
there may be a conflict between AIMCO's objectives and the interests of
the Partnership's limited partners.
o The general partners are entitled to receive disposition fees upon a sale
of a Project, which they would not receive in a foreclosure, and
therefore NAPICO and HPC II each has a conflict of interest in
recommending the Amendments. The Partnership Agreement currently
prohibits the Partnership from selling a Project or Project Interest if
the cash proceeds from such sale would be less than the resulting tax
liability to the limited partners, even if such a sale would avoid
foreclosure. The Amendments would permit the general partners to initiate
or consent to such a sale and, therefore, make it easier to achieve a
sale for which the general partners may receive disposition fees. They
would not receive these fees in a foreclosure. As a result, NAPICO and
HPC II each has a conflict of interest in recommending the Amendments.
o Expenses, including disposition fees paid to the general partners, may
consume all or substantially all of the net proceeds from a disposition.
The Partnership Agreement entitles the general partners to receive
disposition fees. No such fees may be paid until the limited partners
have received distributions that add up to the greater of (i) their
aggregate capital contributions or (ii) an amount sufficient to satisfy
the cumulative tax liability of the limited partners resulting from all
sales. However, unpaid disposition fees accrue and may be
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paid on a later disposition. If such accrued fees are ultimately paid on
a later disposition, they could be great enough to consume all of the net
proceeds from such disposition. There is no equivalent limitation on
immediate payment of other Partnership expenses. Therefore, such other
expenses could consume all of the net proceeds from any disposition. The
Amendments would permit sales for proceeds that are less than the tax
liability to limited partners, which may result in sales in which the
expenses consume a greater portion of the proceeds than would have been
the case without the Amendments.
o The Amendments will permit the general partners to initiate or consent to
a sale of all or substantially all of the Partnership's assets without
limited partner approval if the assets are sold in multiple transactions
that do not involve, and are not part of a series of related
transactions. The Partnership Agreement currently requires the approval
of limited partners holding a majority of the limited partner interests
for a sale of all or substantially all of the Partnership's assets. The
Amendments would permit the general partners to initiate or consent to
the sale of a single Project (or Project Interests related to a single
Project) even if it is the last Project owned or represents substantially
all of the Partnership's assets. As a result, the Amendments would permit
the general partners to initiate or consent to transactions that the
limited partners might not have approved.
WE URGE YOU TO CONSULT YOUR TAX ADVISOR REGARDING THE FEDERAL, STATE,
LOCAL AND OTHER TAX CONSEQUENCES TO YOU OF A SALE OR OTHER DISPOSITION OF A
PROJECT OR PROJECT INTERESTS.
RECOMMENDATION OF NAPICO AND HPC II
After taking into account all of the positive and negative factors
discussed above under "THE PROPOSED AMENDMENTS," NAPICO and HPC II believe
that the proposed Amendments are advisable and in the best interest of the
Partnership and its limited partners and recommend that you "CONSENT" to the
Amendments.
NAPICO has notified the Partnership's other general partner, NPIA, of
the proposed Amendments. However, NPIA has not provided a recommendation for
or against the proposed Amendments. If the Amendments are approved by the
limited partners, NAPICO intends to seek NPIA's concurrence and approval and
will not proceed if NPIA fails to approve the Amendments.
FIDUCIARY RESPONSIBILITY; INDEMNIFICATION
California law requires a general partner to adhere to fiduciary duty
standards under which it owes its limited partners a duty of loyalty and a
duty of care. This generally prohibits a general partner from competing with a
partnership in the conduct of the partnership's business on behalf of a party
having an interest adverse to the partnership and requires the general partner
to exercise any right consistent with the obligation of good faith and fair
dealing and free of gross negligence, reckless conduct, intentional misconduct
or known violations of law. A partnership agreement (a) may not eliminate the
duty of loyalty, but, if not manifestly unreasonable, it may either identify
specific activities that do not violate the duty of loyalty or allow for all
of the partners (or some percentage identified in the partnership agreement)
to authorize or ratify, after full disclosure of all material facts, a
specific act or transaction that otherwise would violate that duty and (b) may
contain provisions releasing a partner from liability for actions taken in
good faith and in the honest belief that the actions are in the best interest
of the partnership, while indemnifying the partner against any good faith
belief that he or she has the power to act. Further, a partner does not
violate such duties merely because the partner's conduct furthers the
partner's own interest.
The general partners are accountable to the Partnership and the
limited partners as fiduciaries and consequently are obligated, among other
things, to exercise good faith and fair dealing toward other members of the
Partnership. The Partnership Agreement provides that the general partners and
their officers, directors, employees, agents, affiliates, subsidiaries and
assigns are entitled to be indemnified for any liability, loss or damage
resulting from any act performed or omitted by them in connection with the
business of the Partnership, provided that, if such liability, loss or claim
arises out of any action or inaction of the general partners, the general
partners must have
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determined, in good faith, that such course of conduct was in the best
interests of the Partnership and did not constitute fraud, negligence, breach
of fiduciary duty or willful misconduct by the general partners.
If a claim is made against any of the general partners in connection
with their respective actions on behalf of the Partnership with respect to the
Amendments, it is expected that they will seek to be indemnified by the
Partnership with respect to such claims. A successful claim for
indemnification, including the expenses of defending a claim made, would
reduce the Partnership's assets by the amount paid.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The general partners own all of the outstanding general partnership
interests of the Partnership, which collectively constitute 1% of the total
interests in the Partnership. The Partnership has no directors or executive
officers of its own. NAPICO is a California corporation owned by AIMCO. HPC II
is a Delaware corporation owned by AIMCO. None of the directors or executive
officers of NAPICO or HPC II owns any of the limited partnership interests of
the Partnership. NAPICO holds a 0.45% interest in the Partnership and HPC II
holds a 0.5% interest in the Partnership. NPIA is a California limited
partnership, the general partner of which is Nicholas G. Ciriello. NPIA holds
a 0.05% interest in the Partnership. The following table sets forth certain
information as of March 17, 2005 with respect to the ownership by any person
(including any "group," as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934) known to us to be the beneficial owner of
more than 5% of the limited partnership interests of the Partnership.
Name and Address Number of Units Percent of Class
- ---------------- --------------- ----------------
AIMCO Properties, L.P. (1)................ 580.5 9.51%
4582 South Ulster Street Parkway
Suite 1100
Denver, CO 80237
- -------------------
(1) AIMCO Properties, L.P. is an affiliate of NAPICO.
CONSENT PROCEDURE
Limited Partner Consent
The Partnership Agreement requires the consent of limited partners
holding a majority of the limited partnership interests (a "Majority Consent")
to amend the Partnership Agreement. Under the terms of the Partnership
Agreement, you must be a limited partner or a substituted limited partner to
consent. NAPICO will treat a failure to respond as the equivalent of
concurrence with its recommendation. Therefore, if you do not respond by 5:00
p.m. EST on __________, 2005, you will be deemed to have consented to the
Amendments. If only one of the Amendments is approved, the Partnership
Agreement will be amended to reflect the Amendment that is approved. Each
Amendment is conditioned upon our obtaining a Majority Consent to such
Amendment. Accordingly, if we do not obtain a Majority Consent to any
Amendment, there will be no change in the Partnership Agreement and we will
continue to operate in accordance with the terms of the Partnership Agreement
as it is currently written. In accordance with the terms of the Partnership
Agreement, the Partnership will bear the costs of this consent solicitation.
Consent Procedures
The following is an outline of the procedures to be followed if you
want to consent, or withhold your consent, to the proposed Amendments. A form
of Consent Card is included with this Consent Solicitation Statement. You
should complete this Consent Card in accordance with the instructions
contained in this Consent Solicitation Statement in order to give or withhold
your consent to the proposed Amendments. A failure to respond will be treated
as the equivalent of a consent to the Amendments. These procedures must be
strictly followed in order for the instructions of a limited partner as marked
on such limited partner's consent to be effective:
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1. A limited partner may give or withhold his or her consent by
delivering the Consent Card only during the period commencing upon the date of
delivery of this Consent Solicitation Statement and continuing until 5:00 p.m.
EST on __________, 2005 or such later date as may be determined by NAPICO (the
"Solicitation Period").
2. You must return a properly completed, signed and dated Consent
Card in the enclosed postage-paid envelope. If possible, please also fax it to
The Altman Group at fax number (201) 460-0050.
3. You can revoke a previously given consent by signing a
subsequently dated Consent Card that is properly marked to indicate "WITHHOLD
CONSENT" and delivering it to The Altman Group at any time prior to the end of
the Solicitation Period.
4. A limited partner that fails to return a Consent Card, submits a
signed but unmarked Consent Card, or submits a properly completed, signed and
dated Consent Card marked to indicate "CONSENT" will be deemed to have
consented to the Amendments.
If you have any questions about this consent solicitation, please do
not hesitate to contact The Altman Group, the Partnership's consent
solicitation agent, at (800) 217-9608.
No Dissenters' Rights of Appraisal
Under the Partnership Agreement and California law, limited partners
do not have dissenters' rights of appraisal.
SOLICITATION OF CONSENTS
This consent solicitation is being made by NAPICO and HPC II, general
partners of the Partnership. NAPICO and its officers, directors and employees
may assist in this consent solicitation and in providing information to
limited partners in connection with any questions they may have with respect
to this Consent Solicitation Statement and the consent procedures. We have
retained The Altman Group to assist with the solicitation of consents, as well
as to assist us with communicating with our limited partners with respect to
this solicitation. Approximately five persons will be utilized by The Altman
Group in their efforts. We expect that The Altman Group will solicit consents
by mail, in person, by telephone, by facsimile and/or by e-mail. In addition
to the Partnership's solicitation by mail, and The Altman Group's efforts,
NAPICO may have certain of its officers, directors and employees solicit,
without additional compensation, consents by mail, in person, by telephone, by
facsimile or by e-mail. Although NAPICO does not currently plan to conduct
active solicitation on the Internet, solicitation materials may be made
available on or through NAPICO's website or through the Internet.
The cost of the consent solicitation will be borne by the
Partnership. The Altman Group's estimated fee is $2,500, plus reasonable
out-of-pocket expenses.
The Partnership has agreed to indemnify The Altman Group against
certain liabilities and expenses in connection with its engagement, including
certain liabilities under the federal securities laws. The Partnership's plan
to reimburse The Altman Group for any such liabilities or expenses will not be
submitted to the limited partners for a vote.
PARTNER PROPOSALS
In accordance with the terms of our Partnership Agreement, we do not
have annual meetings. Thus, there is no deadline for submitting partner
proposals as set forth in Rule 14a-5 under the Securities Exchange of 1934.
The limited partners may call a special meeting to vote upon matters permitted
by our Partnership Agreement with the prior consent of at least 10% of the
limited partnership interests.
8
OTHER MATTERS
Disclosure Regarding Forward-Looking Statements
Certain statements made herein contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. Such
statements are indicated by words such as "believes," "intends," "expects,"
"anticipates" and similar words or phrases. Such statements are based on
current expectations and are subject to risks, uncertainties and assumptions.
Should any of these risks or uncertainties materialize, or should the
underlying assumptions prove incorrect, actual results may vary materially
from those anticipated, estimated or projected. Factors that could cause
actual results to differ materially from those in our forward-looking
statements include the ability of the local general partners to sell the
underlying properties on economically advantageous terms, real estate and
general economic conditions in the markets in which the properties are located
and changes in federal and state tax laws that may create tax disadvantages
for certain distributions, some of which may be beyond our control. Given
these uncertainties, limited partners are cautioned not to place undue
reliance on our forward-looking statements.
Where You Can Find More Information
The Partnership files annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC"). You may read and copy any reports, statements or other
information that the Partnership files at the SEC's public reference room at
450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public
reference rooms. The Partnership's public filings are also available to the
public from commercial document retrieval services and at the website
maintained by the SEC at www.sec.gov. Reports, proxy statements and other
information concerning the Partnership also may be inspected at the offices of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The SEC allows the Partnership to incorporate by reference
information into this Consent Solicitation Statement, which means that the
Partnership can disclose important information to you by referring you to
another document filed separately with the SEC. The information incorporated
by reference is deemed to be part of this Consent Solicitation Statement,
except for any information modified or superseded by information contained
directly in the Consent Solicitation Statement or in later filed documents
incorporated by reference into this document. Except as otherwise indicated,
this document incorporates by reference the documents set forth below that the
Partnership has previously filed with the SEC. These documents contain
important information about the Partnership and its financial condition:
o Annual Report of the Partnership on Form 10-KSB for the fiscal year
ended December 31, 2004; and
o Quarterly Reports of the Partnership on Form 10-QSB for the fiscal
quarters ended March 31, 2004 and June 30, 2004.
The Partnership hereby incorporates by reference into this Consent
Solicitation Statement additional documents that the Partnership may file with
the SEC between the date of this Consent Solicitation Statement and the end of
the Solicitation Period. These include periodic reports, such as Annual
Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current Reports
on Form 8-K, as well as proxy statements.
The Partnership may have sent you some of the documents incorporated
by reference, but you can obtain any of them through the Partnership or the
SEC's website described above. Documents incorporated by reference are
available from the Partnership without charge, excluding all exhibits unless
specifically incorporated by reference as exhibits into this Consent
Solicitation Statement.
You may obtain some of the documents about the Partnership at
NAPICO's website, located at www.napico.com, by selecting "Partnership
Financial Information."
The Partnership is not incorporating the contents of the website of
the SEC, the Partnership or any other person into this Consent Solicitation
Statement.
9
You may obtain documents incorporated by reference into this Consent
Solicitation Statement by requesting them in writing from NAPICO at the
following address:
National Partnership Investments Corp.
6100 Center Drive, Suite 800
Los Angeles, CA 90045
Attention: Legal Dept.
Telephone (800) 666-6274
You should rely only on the information contained in, or incorporated
by reference into, this Consent Solicitation Statement. The Partnership has
not authorized anyone to provide you with information that is different from
what is contained in this Consent Solicitation Statement. This Consent
Solicitation Statement is dated __________, 2005. You should not assume that
the information contained in the Consent Solicitation Statement is accurate as
of any date other than that date.
NATIONAL PARTNERSHIP INVESTMENTS CORP.,
HOUSING PROGRAMS CORPORATION II,
General Partners of Housing Programs Limited
__________, 2005
10
ANNEX A
AMENDMENT TO THE RESTATED CERTIFICATE AND AGREEMENT
OF LIMITED PARTNERSHIP OF HOUSING PROGRAMS LIMITED
This Amendment to the Restated Certificate and Agreement of Limited
Partnership, as amended to date (the "Partnership Agreement"), of Housing
Programs Limited, a California limited partnership (the "Partnership"), is
made and entered into as of __________, 2005, by and among National
Partnership Investments Corp., a California corporation ("NAPICO"), as general
partner of the Partnership, National Partnership Investments Associates, a
California limited partnership ("NPIA"), as general partner of the
Partnership, and NAPICO, as attorney-in-fact for the limited partners of the
Partnership.
WHEREAS, NAPICO, NPIA and limited partners owning a majority of the
outstanding limited partnership interests of the Partnership have approved
this Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Section 9.3(d) of the Partnership Agreement is hereby amended to
read in its entirety as follows:
"(d) upon any sale or refinancing, the Partnership
shall not reinvest any proceeds thereof;"
2. Except as specifically amended hereby, the terms, covenants,
provisions and conditions of the Partnership Agreement shall remain unmodified
and continue in full force and effect and, except as amended hereby, all of
the terms, covenants, provisions and conditions of the Agreement are hereby
ratified and confirmed in all respects.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as
of the date first above written.
NATIONAL PARTNERSHIP HOUSING PROGRAMS CORPORATION II,
INVESTMENTS CORP., as General Partner
as General Partner
By: ___________________________________ By: ______________________________
Jeffrey H. Sussman, David Robertson
Senior Vice President, President and CEO
General Counsel and Secretary
NATIONAL PARTNERSHIP NATIONAL PARTNERSHIP
INVESTMENTS ASSOCIATES, INVESTMENTS CORP.,
as General Partner as Attorney-in-Fact for the
Limited Partners
By: ___________________________________ By: ______________________________
Nicholas G. Ciriello, Jeffrey H. Sussman,
General Partner Senior Vice President,
General Counsel and Secretary
A-1
AMENDMENT TO THE RESTATED CERTIFICATE AND AGREEMENT
OF LIMITED PARTNERSHIP OF HOUSING PROGRAMS LIMITED
This Amendment to the Restated Certificate and Agreement of Limited
Partnership, as amended to date (the "Partnership Agreement"), of Housing
Programs Limited, a California limited partnership (the "Partnership"), is
made and entered into as of __________, 2005, by and among National
Partnership Investments Corp., a California corporation ("NAPICO"), as general
partner of the Partnership, National Partnership Investments Associates, a
California limited partnership ("NPIA"), as general partner of the
Partnership, and NAPICO, as attorney-in-fact for the limited partners of the
Partnership.
WHEREAS, NAPICO, NPIA and limited partners owning a majority of the
outstanding limited partnership interests of the Partnership have approved
this Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Section 9.3(t) of the Partnership Agreement is hereby amended to
read in its entirety as follows:
"(t) the Partnership shall not sell all or
substantially all of the Partnership's assets in a single
transaction or a series of related transactions without
obtaining the consent of Limited Partners owning a majority
of the outstanding Limited Partnership Interests; provided,
however, that the foregoing will not apply to a sale of a
single Project (or a sale of Project Interests related to a
single Project) that is not part of a series of related
transactions involving the sale of multiple Projects (or
Project Interests related to multiple Projects) that
constitute all or substantially all of the Projects."
2. Except as specifically amended hereby, the terms, covenants,
provisions and conditions of the Partnership Agreement shall remain unmodified
and continue in full force and effect and, except as amended hereby, all of
the terms, covenants, provisions and conditions of the Agreement are hereby
ratified and confirmed in all respects.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as
of the date first above written.
NATIONAL PARTNERSHIP HOUSING PROGRAMS CORPORATION II,
INVESTMENTS CORP., as General Partner
as General Partner
By: ___________________________________ By: _____________________________
Jeffrey H. Sussman, David Robertson
Senior Vice President, President and CEO
General Counsel and Secretary
NATIONAL PARTNERSHIP NATIONAL PARTNERSHIP
INVESTMENTS ASSOCIATES, INVESTMENTS CORP.,
as General Partner as Attorney-in-Fact for the
Limited Partners
By: ___________________________________ By: _____________________________
Nicholas G. Ciriello, Jeffrey H. Sussman,
General Partner Senior Vice President,
General Counsel and Secretary
A-2
ANNEX B
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, California 90071-3144
__________, 2005
Housing Programs Limited
c/o National Partnership Investments Corp.
6100 Center Drive, Suite 800
Los Angeles, CA 90045
Re: Proposed Amendments to Agreement of Limited Partnership
-------------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Housing Programs
Limited, a California limited partnership formerly known as "Shearson
Lehman/Coast Savings Housing Partners, Limited" (the "Partnership"), in
connection with proposed amendments (the "Proposed Amendments") to the
Restated Certificate and Agreement of Limited Partnership, as amended to date
(the "Partnership Agreement"), of the Partnership. The Proposed Amendments are
attached as Exhibit I hereto. This opinion is being delivered pursuant to
Section 14.1 of the Partnership Agreement.
In our examination we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as facsimile, electronic, certified or
photostatic copies, and the authenticity of the originals of such copies. As
to any facts material to this opinion that we did not independently establish
or verify, we have relied upon statements and representations of the
Partnership and its general partners, officers of such general partners and
other representatives and of public officials, including the facts and
conclusions set forth therein.
In rendering the opinions set forth herein, we have examined
and relied on originals or copies of the following:
(a) the Proposed Amendments;
(b) the Certificate of Limited Partnership of the
Partnership, as amended to date and certified by the Secretary of State of the
State of California;
(c) a certificate, dated __________, 2005, of the Secretary
of State of the State of California, as to the Partnership's existence and
good standing in the State of California; and
(d) the Partnership Agreement, certified by Jeffrey H.
Sussman, the Secretary of National Partnership Investments Corp., a California
corporation ("NAPICO"), general partner of the Partnership;
(e) the Certificate of Limited Partnership of National
Partnership Investments Associates, a California Limited Partnership ("NPIA"),
as filed on February 25, 1980 in the Office of the County Registrar-Recorder
for the County of Los Angeles, California;
B-1
(f) the Certificate of Limited Partnership of NPIA, as filed
on _____, 2005 with, and certified by, the Secretary of State of the State of
California;
(g) the Agreement of Limited Partnership of NPIA, dated as
of February 22, 1980, and the Amendment thereto, dated as of October _____,
2005;
(h) the Agreement of the General Partners, dated as of June
1, 1984, between NAPICO and NPIA (doing business as "Coast Housing Investments
Associates"), certified by Jeffrey H. Sussman, the Secretary of NAPICO;
(i) the certificate of Jeffrey H. Sussman, the Secretary of
NAPICO, dated the date hereof;
(j) resolutions of the Board of Directors of NAPICO, adopted
on __________, 2005, relating to the Proposed Amendments;
(k) resolutions of the Board of Directors of HPC II, adopted
on __________, 2005, relating to the Proposed Amendments;
(l) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
We express no opinion as to the laws of any jurisdiction
other than the Uniform Limited Partnership Act, as in effect in the State of
California, and the California Revised Limited Partnership Act.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that the Proposed Amendments, if duly authorized and approved by NPIA
and the limited partners of the Partnership in accordance with the terms of
the Partnership Agreement, will not contravene any provision of the Uniform
Limited Partnership Act, as in effect in the State of California, or the
California Revised Limited Partnership Act.
In rendering the foregoing opinion, we have assumed, with
your consent, that the Partnership is validly existing and in good standing as
a limited partnership under the laws of the State of California.
This opinion is being furnished only to you in connection
with the Proposed Amendments and is solely for your benefit and is not to be
used, circulated, quoted or otherwise referred to for any other purpose or
relied upon by, or assigned to, any other person or entity for any purpose
without our prior written consent. Notwithstanding the foregoing, you (and
each of your employees, representatives or other agents) may disclose this
opinion (i) to limited partners of the Partnership and (ii) to any and all
persons, without limitation of any kind, to the extent such disclosure may be
relevant to understanding the tax treatment or tax structure of the Proposed
Amendments; provided that any and all such persons to whom you make such
disclosure may not rely upon this opinion unless otherwise permitted hereby.
Very truly yours,
B-2
CONSENT SOLICITED BY
NATIONAL PARTNERSHIP INVESTMENTS CORP.
AND HOUSING PROGRAMS CORPORATION II,
GENERAL PARTNERS OF
HOUSING PROGRAMS LIMITED
NATIONAL PARTNERSHIP INVESTMENTS CORP. AND HOUSING PROGRAMS
CORPORATION II, GENERAL PARTNERS OF THE PARTNERSHIP, RECOMMEND THAT YOU
CONSENT TO EACH OF THE PROPOSALS BELOW.
The undersigned, a limited partner of HOUSING PROGRAMS LIMITED (the
"Partnership"), acting with respect to all of the limited partnership
interests held by the undersigned on the date hereof, hereby consents,
withholds consent or abstains, with respect to the proposals specified below
and more fully described in the Housing Programs Limited Consent Solicitation
Statement dated _____, 2005 (the "Consent Solicitation Statement"). All terms
used but not defined herein shall have the meanings ascribed to such terms in
the Consent Solicitation Statement. A failure to execute and return this
consent card by 5:00 p.m. EST on __________, 2005 will be deemed a consent to
each of the proposals set forth below. A signed but unmarked consent card will
be deemed a consent to each of the proposals set forth below.
- -------------------------------------------------------------------------------
PROPOSAL 1. Amend Section 9.3(d) of the Partnership Agreement, as described in
the Consent Solicitation Statement, to allow the sale of Projects or Project
Interests for less than the amount necessary to cover the resulting tax
liability.
[ ] CONSENT [ ] WITHHOLD CONSENT [ ] ABSTAIN
- -------------------------------------------------------------------------------
PROPOSAL 2. Amend Section 9.3(t) of the Partnership Agreement, as described in
the Consent Solicitation Statement, so that a sale of a single Project (or a
sale of Project Interests related to a single Project) that is not part of a
series of related transactions involving the sale of multiple Projects (or
Project Interests related to multiple Projects) that constitute all or
substantially all of the Projects, does not require limited partner approval,
even if all Projects or Project Interests are ultimately sold.
[ ] CONSENT [ ] WITHHOLD CONSENT [ ] ABSTAIN
- -------------------------------------------------------------------------------
PLEASE SIGN, DATE AND FAX THIS CONSENT CARD TO (201) 460-0050, ATTN: JASON
VINICK, AND MAIL THIS CONSENT CARD TODAY IN THE ENCLOSED POSTAGE PAID
ENVELOPE. IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE, PLEASE CALL THE ALTMAN
GROUP AT (800) 217-9608.
Please sign your name below. If your partnership interests are held jointly,
each limited partner should sign a Consent Card. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by president or
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated: ______________________________
Signature:_________________________ Signature:____________________
Name:______________________________ Name:_________________________
Title:_____________________________ Title:________________________
Telephone Number:__________________