UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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 Under Rule 14a-12
SHELTER PROPERTIES I LIMITED PARTNERSHIP
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(Name of Registrant as Specified in Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|_| No fee required.
|X| 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:
Limited Partnership Units
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(2) Aggregate number of securities to which transaction applies:
15,000
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(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):
$14,390,000 is the purchase price for the property to be sold
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(4) Proposed maximum aggregate value of transaction:
$14,390,000
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(5) Total fee paid:
$2,878
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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 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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SHELTER PROPERTIES I LIMITED PARTNERSHIP
CONSENT SOLICITATION STATEMENT
December __, 2005
Dear Limited Partner:
We have entered into an agreement (the "Purchase and Sale Agreement")
with the California State Teachers' Retirement System, a public entity
("Calstrs"), to sell Windsor Hills (the "Property"), one of the two currently
remaining properties owned by Shelter Properties I Limited Partnership, a South
Carolina limited partnership (the "Partnership"), for $14,390,000 (the "Sale").
Upon completion of the Sale, we will pay, or establish appropriate reserves
for, Partnership liabilities and other obligations related to the Property, and
distribute the remaining net sale proceeds to partners. Although the actual
distribution to limited partners may vary, we currently estimate that it will
be approximately $257 per limited partnership unit, based on information
available as of November 30, 2005.
Under the Purchase and Sale Agreement, the purchaser of the Property
will be SH Partners, L.P., a Delaware limited partnership ("SH Partners"),
which is a joint venture between Calstrs (which owns 66.7%) and certain of our
affiliates (which own the remaining 33.3% interest and act as general partner).
Although our affiliates own an interest in SH Partners, by agreement with
Calstrs, our affiliates will not be entitled to receive any distributions or
allocations of gain or loss with respect to SH Partners' investment in the
Property.
We are writing to request your consent to amendments (the
"Amendments") to the Partnership's Amended and Restated Certificate and
Agreement of Limited Partnership, as amended (the "Partnership Agreement") and
the Agreement of Limited Partnership (the "Subsidiary Partnership Agreement")
of Windsor Hills, I, L.P., a Delaware limited partnership (the "Subsidiary
Partnership"), which is 99.9% owned by the Partnership and holds title to the
Property, in order to permit the Sale of the Property to SH Partners.
Under the Partnership Agreement, amendments to the Partnership
Agreement require the approval of limited partners owning more than 50% of the
outstanding limited partnership units (the "Majority Approval"). However,
because an affiliate of ours owns an interest in SH Partners, in order to
authorize the Amendments, we are also seeking consents from limited partners
who hold a majority of the outstanding limited partnership units held by
limited partners other than us and our affiliates (the "Approval of
Unaffiliated Partners"). Under the Purchase and Sale Agreement, if the
Amendments are approved, the Property will be sold to SH Partners. If the
Amendments are not approved, then the Property will not be sold to SH Partners,
but Calstrs will have an option to purchase the Property. Under the Partnership
Agreement and the Subsidiary Partnership Agreement, the Sale of the Property to
Calstrs does not require any approval of limited partners. However, Calstrs
would not be obligated to purchase the Property and, as a result, the Sale
might not occur.
The Sale to SH Partners involves certain risks, including that SH
Partners is an affiliate of ours. As a result, we have a conflict of interest
in connection with the Amendments, and make no recommendation as to whether you
should consent to the Amendments. See "Risk Factors" beginning on page 4 of
this Solicitation Statement for a description of risk factors to consider in
connection with the Sale and the Agreements.
This Consent Solicitation Statement (the "Solicitation Statement") and
the accompanying form of Consent of Limited Partner (the "Consent Form") are
first being mailed on or about December __, 2005, to limited partners of record
as of the close of business on December __, 2005 (the "Record Date").
Your participation is very important. Please review this Solicitation
Statement and return the enclosed Consent Form in accordance with the
instructions in this Solicitation Statement. Please note that this solicitation
will expire at 5:00 P.M., New York City Time, on December __, 2005 (the
"Expiration Date"), unless extended.
If you have any questions or require any assistance in completing and
returning the Consent Form, please contact our Solicitation Agent, The Altman
Group, Inc., by mail at 1200 Wall Street 3rd Floor, Lyndhurst, New Jersey
07071; by overnight courier service at 1275 Valley Brook Avenue, Lyndhurst, New
Jersey 07071; by fax at (201) 460-0050; or by telephone at (800) 217-9608.
Very truly yours,
SHELTER REALTY CORPORATION,
Corporate General Partner
1
DESCRIPTION OF THE TRANSACTION
General
Under the Purchase and Sale Agreement, Windsor Hills I, L.P., a
Delaware limited partnership (the "Subsidiary Partnership"), which is 99.9%
owned by the Partnership, and seven other partnerships (collectively, the
"Sellers") have agreed to sell nine properties (the "Nine Sale Properties"),
including Windsor Hills, for an aggregate net purchase price of $86,820,000
(subject to customary prorations and adjustments), of which $14,390,000 has
been allocated to Windsor Hills. Upon completion of the Sale, we will pay, or
establish appropriate reserves for, Partnership liabilities and other
obligations related to the Property, and distribute the remaining net sale
proceeds to partners. Although the actual distribution to limited partners may
vary, we currently estimate that it will be approximately $257 per limited
partnership unit, based on information available as of November 30, 2005. If
the Amendments are approved, the closing of the Sale to SH Partners is expected
to occur shortly after the expiration of this consent solicitation.
The Purchaser
The purchaser is intended to be SH Partners, a joint venture between
Calstrs (which owns 66.7%) and certain of our affiliates (which own the
remaining 33.3% interest and act as general partner). Calstrs is the largest
teachers' retirement fund in the United States. Calstrs had a total membership
of approximately 755,000 and assets of $128.9 billion as of June 2005. Calstrs'
primary responsibility is to provide retirement related benefits and services
to teachers in public schools from kindergarten through community college.
Calstrs and our affiliates (collectively referred to herein as "Aimco") formed
SH Partners in August 2002 in order to invest in student housing. To date, SH
Partners has invested in seven properties with an aggregate gross property
value of $152 million. By agreement between Calstrs and Aimco, although Aimco
owns a 33.3% interest in SH Partners, in order to fund the purchase of the Nine
Sale Properties, Calstrs will contribute all of the funds necessary for SH
Partners to pay the purchase price and related expenses, and Aimco will not be
entitled to receive any distributions or allocations of gain or loss with
respect to SH Partners' investment in the Nine Sale Properties. Although there
are circumstances in which Aimco could benefit as a result of SH Partners'
investment in the Nine Sale Properties, the intention of Aimco and Calstrs is
that Calstrs receive all of the benefits, and bear all of the burdens, of SH
Partners' investment in the Nine Sale Properties.
The Property
The Subsidiary Partnership has owned and operated the Windsor Hills
Apartments, a 300-unit apartment complex located in Blacksburg, Virginia, since
September 1980. In addition to this Property, the Partnership has only one
remaining property, Quail Hollow Apartments. There is a first mortgage loan on
the Property with an unpaid balance of approximately $5,991,605 (as of November
30, 2005). At the closing of the Sale of the Property, the Partnership will pay
off the loan encumbering the Property with the proceeds from the Sale, and all
lender fees and other costs of such payment-in-full will be deducted from the
purchase price payable to the Partnership, including a prepayment penalty which
we estimate will be approximately $1,233,619.
The Amendments
Section 8.2(z) of the Partnership Agreement prohibits the general
partners of the Partnership from entering into a contract with a general
partner or an affiliate unless it may be terminated by the Partnership without
penalty upon 60 days written notice. Section 8.2(o) of the Subsidiary
Partnership Agreement has the same prohibition with respect to the Subsidiary
Partnership. We are seeking your approval to amend the Partnership Agreement
and the Subsidiary Partnership Agreement so that the Sale of the Property to SH
Partners pursuant to the Purchase and Sale Agreement would not be prohibited by
these provisions. The complete text of the proposed Amendments is attached
hereto as Annex A and Annex B.
As a result of our affiliation with SH Partners, in order to authorize
the Amendments which are necessary to sell the Property to SH Partners, we are
seeking the Approval of Unaffiliated Partners. Under the Purchase and Sale
Agreement, if the Amendments are approved, the Property will be sold to SH
Partners. If the Amendments are not approved, then the Property will not be
sold to SH Partners, but Calstrs will have an option to purchase the Property.
Under the Partnership Agreement and the Subsidiary Partnership Agreement, the
Sale of the Property to Calstrs does not require any approval of limited
partners. However, Calstrs would not be obligated to purchase the Property and,
as a result, the Sale might not occur.
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Estimated Distribution to Limited Partners
Upon completion of the Sale of the Property, after payment of selling
expenses and indebtedness secured by the Property, the Subsidiary Partnership
will distribute the remaining net proceeds from the Sale to its constituent
partners, which will result in 99.99% of such remaining net proceeds being
distributed to the Partnership. The Subsidiary Partnership will then be
dissolved. We will then pay, or establish appropriate reserves for, Partnership
liabilities and other obligations related to the Property, and will distribute
the remaining net sale proceeds to partners. We estimate that the net proceeds
from the Sale that will be available for distribution to limited partners will
be approximately $257 per limited partnership unit. We expect that this
distribution to limited partners will occur within 90 days after the Sale
closes. However, this amount and timing is estimated based on a number of
assumptions. The actual amount and timing of the distribution may be different.
In making our estimate, we used information available as of November 30, 2005
and made other assumptions based on information currently known to us. Of
course, many factors could cause the actual proceeds to limited partners to
vary from this estimate, including delays or unforeseen complications with the
closing, or contingent liabilities of the Partnership. Our estimate of the
distribution to limited partners was calculated as follows:
Estimated Distribution to Limited Partners
(in thousands, except per Unit amounts)
Purchase Price (less capital spending adjustment of $2,000,000) (a) $ 14,390,000
Plus: Cash and cash equivalents 213,432
Plus: Other Partnership assets 105,748
Less: Mortgage debt, including accrued interest (5,991,605)
Less: Prepayment penalty (1,233,619)
Less: Accounts payable, accrued expenses and other liabilities (b) (386,217)
Less: Loans from General partner and/or affiliates (813,984)
Less: Distributions to lower tier general partner (613)
Less: Reserve for Contingencies (491,700)
Less: Closing costs (540,870)
Less: Commission payable to Corporate General Partner (c) (143,900)
Less: Nonresident withholding taxes (545,783)
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TOTAL $ 4,560,888
==============
Net proceeds available for distribution to all partners $ 4,560,888
Percentage of net proceeds allocable to limited partners 85%
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Net proceeds available for distribution to limited partners $ 3,856,502
Total number of limited partnership units 15,000
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Distribution per limited partnership unit $ 257
==============
________________________
(a) The final purchase price is subject to prorations and adjustments.
(b) Includes approximately $30,000 to pay for costs associated with
pending litigation.
(c) Pursuant to the terms of the Partnership Agreement, the Corporate
General Partner is entitled to receive a real estate commission upon
the sale of the Property.
Appraisal Rights
Limited partners of the Partnership are not entitled to dissenters'
appraisal rights under California law or the Partnership Agreement in
connection with the Sale of the Property.
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Regulatory Approvals
Other than the filing and distribution of this Solicitation Statement,
no material governmental filings or approvals are required for the Sale of the
Property.
RISK FACTORS
The following describes risks and disadvantages to you of consenting
to the Amendments. Before deciding whether or not to consent to the Amendments,
you should carefully consider these risks:
LIMITED PARTNERS WILL RECOGNIZE TAXABLE INCOME FROM THE SALE. Limited
partners will recognize taxable gain as a result of the Sale of the Property.
EACH LIMITED PARTNER SHOULD CONSULT AND RELY ON THE LIMITED PARTNER'S TAX
ADVISOR REGARDING THE TAX CONSEQUENCES TO THE LIMITED PARTNER OF THE SALE OF
THE PROPERTY. Cash distributions from the sale may be less than any tax
liability resulting from the taxable gain recognized by each limited partner.
Certain possible tax consequences of the Sale are discussed in more detail
below under "Federal Income Tax Consequences."
WE ARE AFFILIATED WITH SH PARTNERS AND THEREFORE HAVE A CONFLICT OF
INTEREST IN CONNECTION WITH THE PROPOSED SALE TO SH PARTNERS. Our affiliates
(Aimco) own a 33.3% interest in, and act as general partner of, SH Partners. By
agreement between Aimco and Calstrs, Calstrs is responsible for funding all of
the costs for SH Partners to purchase the Property, and is entitled to receive
all distributions and allocations of gain or loss attributable to SH Partners'
investment in the Property. However, through its interest in SH Partners, Aimco
could still benefit as a result of SH Partners' acquisition of the Property.
For example, upon a liquidation of SH Partners, if its assets other than the
Property were insufficient to satisfy all of SH Partners' creditors, proceeds
from a disposition of the Property might be used to pay SH Partners'
liabilities, which could inure to the benefit of Aimco.
WE ARE NOT MAKING A RECOMMENDATION REGARDING THE PROPOSED AMENDMENTS.
We make no recommendation as to whether or not you should consent to the
Amendments. Although we believe the Sale is fair, you must make your own
decision whether to consent to the Amendments, based upon a number of factors,
including several factors that may be personal to you, such as your financial
position, your need or desire for liquidity, your tax position and the tax
consequences to you of the Sale. You are encouraged to carefully review this
Solicitation Statement and any other information available to you and to seek
advice from your independent lawyer, tax advisor and/or financial advisor
before deciding whether to consent to the Amendments.
IF THE AMENDMENTS ARE NOT APPROVED, THE PROPERTY MIGHT NOT BE SOLD. If
the Amendments are not approved, then, under the Purchase and Sale Agreement,
Calstrs will have an option to purchase the Property. Calstrs would not be
obligated to purchase the Property and, as a result, the Sale might not occur.
WE DID NOT MARKET THE PROPERTY TO OTHER PROSPECTIVE PURCHASERS. We
negotiated the purchase price for the Property with Calstrs with a view to
maximizing the proceeds to the Partnership. However, we did not solicit offers
from other prospective purchasers, and it is possible that a higher price might
have been obtained if the Property had been marketed to other parties.
WE HAVE NOT OBTAINED ANY RECENT APPRAISALS OF THE PROPERTY OR ANY
FAIRNESS OPINIONS WITH RESPECT TO THE SALE. In the absence of an appraisal or a
fairness opinion, we could be mistaken in believing that the purchase price for
the Property under the Purchase and Sale Agreement is a fair price. The most
recent appraisal of the Property was done as of May 12, 2003, by American
Appraisal Associates, Inc. ("AAA"), in which AAA determined that the "as is"
market value of Windsor Hills was $12,800,000.
WE AND OUR AFFILIATES WILL RECEIVE CERTAIN BENEFITS FROM THE SALE THAT
OTHER PARTNERS WILL NOT RECEIVE. We and our affiliates hold approximately
$836,522 of Partnership indebtedness, which will be repaid from the Sale
proceeds. Upon completion of the Sale, we will receive a real estate commission
of $143,900. In addition, upon completion of the Sale (whether to SH Partners
or Calstrs), an affiliate of ours is expected to assume responsibility for
managing the Property. In consideration for managing the Property, this
affiliate would receive a management fee equal to 3.65% of gross revenues,
which is less than the property management fee currently paid by the
Partnership to an affiliate of ours, which is 5% of gross revenues.
THE PURCHASE PRICE FOR THE PROPERTY MIGHT HAVE BEEN HIGHER IF IT WAS
NOT SOLD AS PART OF A PORTFOLIO SALE. The purchase price for the Property was
determined by allocating a portion of the aggregate purchase price under the
Purchase and Sale Agreement for all Nine Sale Properties. It is possible that
Calstrs or a different purchaser might have been willing to pay more for the
Property if it was sold by itself.
WE HAD A CONFLICT OF INTEREST IN ALLOCATING THE AGGREGATE PURCHASE
PRICE AMONG THE NINE SALE PROPERTIES. Our affiliates have varying ownership
interests in each of the Nine Sale Properties being sold pursuant to the
Purchase and Sale Agreement. Five of the Nine Sale Properties are wholly owned
by our affiliates. The other four properties, including Windsor
4
Hills, are owned by three partnerships in which our affiliates own between 68%
and 80% of the outstanding limited partnership interests. We and the other
Sellers have allocated the aggregate purchase price among the Nine Sale
Properties based on their relative fair market values. However, our affiliates'
different levels of ownership in the properties created a conflict of interest
in which we have an incentive to ascribe greater value to those properties
which are wholly owned by our affiliates. See "Purchase and Sale Agreement -
Purchase Price."
EVENTS OR CIRCUMSTANCES RELATING TO THE OTHER NINE SALE PROPERTIES MAY
INTERFERE WITH THE SALE OF THE PROPERTY. The Sale of the Property may not occur
if there is a default or failure to satisfy a condition relating to one of the
other Nine Sale Properties. Under the Purchase and Sale Agreement, the
purchaser is not obligated to purchase the Property if certain conditions
relating to any of the other Nine Sale Properties are not satisfied. See
"Purchase and Sale Agreement -- Conditions."
GENERAL PARTNER'S ANALYSIS
We believe that the Sale is fair and in the best interests of the
Partnership and its limited partners. As the general partners of the
Partnership, both Shelter Realty Corporation and AIMCO Properties, L.P. have
approved the Purchase and Sale Agreement. However, as a result of our
affiliation with SH Partners, we make no recommendation as to whether any
individual limited partner should consent to the Amendments to permit the Sale
to SH Partners. In approving the Sale, we considered the risk factors described
above, as well as a number of other factors, including the following:
o The net purchase price for the Property is $14,390,000 (subject to
customary prorations and adjustments).
o Upon completion of the Sale, the net proceeds will be used to pay a
distribution to limited partners, which we estimate will be
approximately $257 per unit, based on information available as of
November 30, 2005.
o There is no established trading market for the limited partnership
units and the Sale would provide immediate liquidity for limited
partners.
o The tax benefits of continued investment in the Property have been
substantially reduced or eliminated for most limited partners due
principally to declining depreciation deductions from the Property.
o The Property was completed in 1970 and, given its age, probably will
require substantial capital expenditures in the future for which
existing reserves may not be adequate.
o Market conditions are currently favorable for selling properties of
this type.
o It may be difficult to find a buyer at a future date or to sell the
Property at as favorable a price in the future.
THE CONSENT SOLICITATION
Approval of the Sale and the Amendments; Consents Required
We are soliciting consents from limited partners to approve Amendments
to the Partnership Agreement and the Subsidiary Partnership Agreement to permit
the Sale of the Property to SH Partners pursuant to the Purchase and Sale
Agreement. In our discretion, we may authorize a reduction of the purchase
price for the Property by up to 10% and authorize any other amendments to the
Purchase and Sale Agreement which, in our opinion, are necessary, appropriate
or desirable in connection with the Sale, and that do not materially and
adversely affect the Partnership.
Under the Purchase and Sale Agreement, if the Amendments are approved,
the Property will be sold to SH Partners. If the Amendments are not approved,
then the Property will not be sold to SH Partners, but Calstrs will have an
option to purchase the Property. Under the Partnership Agreement and the
Subsidiary Partnership Agreement, the Sale of the Property to Calstrs does not
require any approval of limited partners. However, Calstrs would not be
obligated to purchase the Property and, as a result, the Sale might not occur.
Article 16 of the Partnership Agreement provides that an amendment of
the Partnership Agreement requires Majority Approval. However, because an
affiliate of ours owns an interest in SH Partners, in order to authorize the
proposed Amendments, we are also seeking the Approval of Unaffiliated Partners.
Article 14 of the Subsidiary Partnership Agreement provides that it may be
amended at the election of its limited partner, the Partnership.
5
As of December 1, 2005, the Partnership had approximately 329 limited
partners who collectively own 15,000 outstanding limited partnership units.
Each limited partnership unit represents approximately 0.0067% of the
outstanding limited partnership units. Our affiliates currently own 12,023.50
limited partnership units, or 80.16% of the outstanding limited partnership
units. These affiliates will consent to the Sale, thus assuring the Majority
Approval. The consent of owners of at least 1488.55 limited partnership units
that are not owned by our affiliates will be required to obtain the Approval of
Unaffiliated Partners.
Section 8.2(h) of the Partnership Agreement provides that the sale of
substantially all of the properties originally acquired by the Partnership
requires the Majority Approval. Windsor Hills does not represent substantially
all of the properties originally acquired by the Partnership, so the Sale to
Calstrs (which is not affiliated with the general partners) does not require
the approval of any limited partners.
Record Date
The Partnership has fixed December __, 2005 as the Record Date for
determining the limited partners entitled to consent to the Amendments. Only
limited partners of record on the Record Date may execute and deliver a Consent
Form.
Solicitation of Consents
This solicitation is being made by Shelter Realty Corporation, the
corporate general partner, on behalf of the Partnership. Consents will be
solicited by mail, telephone, e-mail and in person. Solicitations may be made
by our representatives, none of whom will receive additional compensation for
such solicitations. The cost of preparing, assembling, printing and mailing
this Solicitation Statement and the enclosed Consent Form will be borne by the
Partnership. We have retained The Altman Group, Inc. to act as its Solicitation
Agent in connection with this consent solicitation. The fees and expenses of
the Solicitation Agent will be paid by the Partnership.
Solicitation Period
The solicitation period will begin upon our mailing of this
Solicitation Statement and end on the Expiration Date, or such later date as we
may indicate by a future written notice of extension of the solicitation
period.
Consent Procedures
Limited partners who desire to consent to the Amendments should do so
by marking the appropriate box on the included Consent Form and by signing,
dating and delivering the Consent Form to the Solicitation Agent by hand, mail,
overnight courier or facsimile at the address or facsimile number set forth on
the Consent Form, all in accordance with the instructions contained herein and
therein.
All Consent Forms that are properly completed, signed and delivered to
the Solicitation Agent and not properly revoked (See "Revocation of
Instructions" below) prior to the Expiration Date, will be given effect in
accordance with the specifications thereof. IF A CONSENT FORM IS DELIVERED AND
NEITHER THE "CONSENTS," THE "WITHHOLDS CONSENT" NOR THE "ABSTAINS" BOX IS
MARKED WITH RESPECT TO THE PROPOSAL, BUT THE CONSENT FORM IS OTHERWISE PROPERLY
COMPLETED AND SIGNED, THE LIMITED PARTNER WILL BE DEEMED TO HAVE CONSENTED TO
THE PROPOSAL.
Consent Forms must be executed in exactly the same manner as the
name(s) in which ownership of the limited partnership units is registered. If
the limited partnership units to which a Consent Form relates are held by two
or more joint holders, all such holders should sign the Consent Form. If a
Consent Form is signed by a trustee, partner, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in
a fiduciary, agency or representative capacity, such person must so indicate
when signing and submit with the Consent Form evidence satisfactory to the
Partnership of authority to execute the Consent Form.
The execution and delivery of a Consent Form will not affect a limited
partner's right to sell or transfer the limited partnership units. All Consent
Forms received by the Solicitation Agent prior to the Expiration Date will be
effective notwithstanding a record transfer of such limited partnership units
subsequent to the Record Date, unless the limited partner revokes such Consent
Form prior to 5:00 p.m., New York City time, on the Expiration Date by
following the procedures set forth under "Revocation of Instructions" below.
All questions as to the validity, form and eligibility (including time
of receipt) regarding consent procedures will be determined by us in our sole
discretion, which determination will be conclusive and binding. The Partnership
reserves the right
6
to reject any or all Consent Forms that are not in proper form. The Partnership
also reserves the right to waive any defects, irregularities or conditions of
delivery as to particular Consent Forms. Unless waived, all such defects or
irregularities in connection with the deliveries of Consent Forms must be cured
within such time as we determine. Neither we nor any of our affiliates or any
other persons shall be under any duty to give any notification of any such
defects, irregularities or waivers, nor shall any of them incur any liability
for failure to give such notification. Deliveries of Consent Forms will not be
deemed to have been made until any irregularities or defects therein have been
cured or waived. The interpretations of the terms and conditions of this
solicitation by us shall be conclusive and binding.
Revocation of Instructions
Any limited partner who has delivered a Consent Form to the
Solicitation Agent may revoke the instructions set forth in such Consent Form
by delivering to the Solicitation Agent a written notice of revocation prior to
5:00 p.m., New York City time, on the Expiration Date. In order to be
effective, a notice of revocation of the instructions set forth in a Consent
Form must (i) contain the name of the person who delivered the Consent Form,
(ii) be in the form of a subsequent Consent Form marked either as "Consents,"
"Withholds Consent" or "Abstains," as the case may be, for either proposal, or
in a writing delivered to us stating that the prior Consent Form is revoked,
(iii) be signed by the limited partner in the same manner as the original
signature on the Consent Form, and (iv) be received by the Solicitation Agent
prior to 5:00 p.m., New York City time, on the Expiration Date at one of its
addresses or facsimile number set forth on the Consent Form. A purported notice
of revocation that lacks any of the required information, is dispatched to an
improper address or telephone number or is not received in a timely manner will
not be effective to revoke the instructions set forth in a Consent Form
previously given. A revocation of the instructions set forth in a Consent Form
can only be accomplished in accordance with the foregoing procedures. NO
LIMITED PARTNER MAY REVOKE THE INSTRUCTIONS SET FORTH IN A CONSENT FORM AFTER
5:00 PM, NEW YORK CITY TIME, ON THE EXPIRATION DATE.
7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
As of the date of this consent solicitation statement, none of our
directors or officers own any limited partnership units. The table below sets
forth certain information regarding limited partnership units of the
Partnership owned by each person or entity who is known by the Partnership to
beneficially own more than 5% of the limited partnership units as of December
1, 2005.
Number of Units Percentage of
Name and Address of Beneficial Owner Beneficially Owned Class
------------------------------------ ------------------ -----
AIMCO IPLP, L.P. (1) 5864.0 39.09%
Stanford Place 3, 4582 S. Ulster St. Parkway, Suite 1100
Denver, CO 80237
AIMCO Properties, L.P. (2) 5014.5 33.44%
Stanford Place 3, 4582 S. Ulster St. Parkway, Suite 1100
Denver, CO 80237
Cooper River Properties LLC (3) 1,145.0 7.63%
Stanford Place 3, 4582 S. Ulster St. Parkway, Suite 1100
Denver, CO 80237
TOTAL 12,023.50 80.16%
______________________
(1) The Units may be deemed beneficially owned by AIMCO/IPT, Inc. (which is the
general partner of AIMCO IPLP, L.P. and owns Shelter Realty Corporation,
the Corporate General Partner of the Partnership) and Apartment Investment
and Management Company (which owns AIMCO/IPT, Inc.).
(2) The Units may be deemed beneficially owned by AIMCO-GP, Inc. (which is the
general partner of AIMCO Properties, L.P.) and Apartment Investment and
Management Company (which owns AIMCO-GP, Inc.).
(3) The Units may be deemed beneficially owned by AIMCO IPLP, L.P. (which owns
Cooper River Properties LLC), AIMCO/IPT, Inc. (which is the general partner
of AIMCO IPLP, L.P. and owns Shelter Realty Corporation, the Corporate
General Partner of the Partnership) and Apartment Investment and Management
Company (which owns AIMCO/IPT, Inc.).
8
PURCHASE AND SALE AGREEMENT
We entered into the Purchase and Sale Agreement with Calstrs and the
other Sellers on November 14, 2005. Under the terms and subject to the
conditions of the Purchase and Sale Agreement, Calstrs has agreed to purchase
the Nine Sale Properties, including Windsor Hills. Under the agreement, Calstrs
must assign its purchase rights to SH Partners. The representations,
warranties, obligations, and covenants of each Seller are individual and
several, and not joint and several, and each Seller is responsible and liable
only for its own property and its own representations, warranties, obligations,
and covenants. The purchaser has agreed to look solely to the applicable Seller
for any amount due hereunder or, obligation owed hereunder. Except for a
property for which the requisite limited partner approval was not obtained, the
Sellers' obligations to sell, and the purchaser's obligations to purchase, the
Nine Sale Properties are not severable, and the Sellers must sell, and the
purchaser must purchase, all of the Nine Sale Properties under the agreement.
The following is a summary of the material terms and provisions of the Purchase
and Sale Agreement.
Purchase Price
The aggregate purchase price for the Nine Sale Properties is
$98,010,000, less a credit for capital needs of $11,190,000, for a net purchase
price of $86,820,000. The portion of this aggregate purchase price that has
been allocated to Windsor Hills is $16,390,000, less a credit for capital needs
of $2,000,000, for a net purchase price of $14,390,000 (the "Sale"). With
respect to each Property, all normal and customarily proratable items,
including, without limitation, rents, operating expenses, personal property
taxes, other operating expenses and fees, will be prorated as of the closing
date, with the applicable Seller being charged or credited, as appropriate, for
all of the same attributable to the period up to the closing date (and credited
for any amounts paid by the applicable Seller attributable to the period on or
after the closing date, if assumed by the purchaser), and the purchaser being
responsible for, and credited or charged, as the case may be, for all of the
same attributable to the period on and after the closing date.
Five of the Nine Sale Properties are wholly owned by our affiliates.
The other four properties, including Windsor Hills, are owned by three
partnerships in which our affiliates own less than 100% of the outstanding
limited partnership interests. We and the other Sellers have allocated the
aggregate purchase price among the Nine Sale Properties based on their relative
fair market values. However, our affiliates' different levels of ownership in
the properties created a conflict of interest in which we have an incentive to
ascribe greater value to those properties which are wholly owned by our
affiliates. Each of the Nine Sale Properties, its owner, our affiliates'
percentage ownership in the owner, and its allocated portion of the aggregate
purchase price (net of all credits for capital needs) is summarized in the
table below:
Percentage
Ownership of
Affiliates of the Allocated Portion of
Property Owner General Partner Purchase Price
-------- ----- --------------- --------------
Windsor Hills Windsor Hills I, L.P. (1) 80.36% $ 14,390,000
Place du Plantier National Property Investors 6 69.23% $ 10,500,000
Fairway View I National Property Investors 6 69.23% $ 7,560,000
Fairway View II National Property Investors 7 70.46% $ 7,750,000
Treehouse II TAHF II Limited Partnership 100% $ 4,810,000
Sunstone Couch-Oxford Associates Limited
Partnership 100% $ 14,175,000
Peppermill Village Peppermill Village-Oxford
Associates L.P. 100% $ 8,505,000
Williamsburg on the Wabash Williamsburg Investors Limited
Partnership 100% $ 17,340,000
Mayfair Village Mayfair Village Limited Partnership 100% $ 1,790,000
(1) Windsor Hills I, L.P. is 99.99% owned by Shelter Properties I Limited Partnership.
The Purchased Assets
Each of the Sellers has agreed to sell all of its interest in and to
the Nine Sale Properties, including the land parcel; all buildings and
improvements located thereon; all equipment and appliances affixed to and used
in connection with the property or any of the improvements; rights, privileges
and easements appurtenant to or used in connection with the property; tangible
9
personal property, equipment and supplies owned by the Seller and located at
the property and used exclusively in connection with the use, operation,
maintenance or repair of all or any portion of the property; and certain
intangible property owned by the Seller and used exclusively in connection with
all or any portion of the property, including, leases, certain service
contracts, property-related files and records, all reports, test results and
environmental assessments, if any, as-built plans, specifications and other
similar documents and materials relating to the use, operation, maintenance,
repair, construction or fabrication of all or any portion of the property,
transferable business licenses, certain architectural, site, landscaping or
other permits, applications, approvals, authorizations and other entitlements
affecting any portion of the property.
Loan Obligations
At the closing, each Seller will use a portion of the purchase price
for its property to pay off all loan obligations encumbering its property. Fees
payable in connection with the payoff of such loans will be paid by the
purchaser but will be deducted from the purchase price otherwise payable to the
Seller.
Limited Partner Approvals
The Subsidiary Partnership, National Property Investors 6 and National
Property Investors 7 have each agreed to use commercially reasonable efforts to
obtain, as soon as practicable, the requisite approvals of their respective
limited partners (or, in the case of the Subsidiary Partnership, the approval
of limited partners of the Partnership) to permit the sale of the four
properties owned by them to SH Partners. If the limited partners of any of
these partnerships fail to approve the transaction, SH Partners may elect to
close on the other Nine Sale Properties, and Calstrs (rather than SH Partners)
may elect to purchase the property for which limited partner approval was not
obtained. If Calstrs does not elect to purchase any such property, the Seller
may either extend the closing date for that property until such approval is
obtained (but not beyond June 30, 2006) or terminate the agreement with respect
to that property.
Closing
The closing of the sale of the five properties that are wholly owned
by our affiliates is expected to occur on or about December 22, 2005. The
closing of the sale of the other four properties, including Windsor Hills, is
expected to take place as soon as practicable after the requisite limited
partner approvals have been obtained.
Representations and Warranties
The agreement contains representations and warranties by the Sellers,
including, without limitation, representations and warranties regarding due
organization; authority and validity of agreements; leases and service
contracts in effect at the properties; violations of law; litigation, zoning;
environmental matters; employees; personal property; and property documents.
Each Seller's aggregate liability for a breach of its representations and
warranties is limited to $500,000, and is limited to claims brought within 12
months after the closing.
The agreement also contains representations and warranties by the
purchaser, including, without limitation, representations and warranties
regarding due organization; authority and validity of agreements; and the
purchaser's status under laws relating to terrorist financing and foreign
assets controls.
Conditions to Closing
The obligation of the purchaser to complete the transactions
contemplated by the agreement is subject to the satisfaction or waiver of the
following conditions:
o the title company shall be prepared and irrevocably committed to issue
an extended coverage owner's policy of title insurance for the
property satisfactory to the purchaser;
o all of the representations and warranties of the Sellers in the
agreement shall be true, correct and complete in all material respects
as of the closing date;
o Sellers shall have complied with and/or performed all of the
obligations, covenants and agreements required on their part to be
complied with or performed pursuant to the agreement;
o the physical condition of the properties shall be substantially the
same as on the inspection date of July 12, 2005, except for reasonable
wear and tear;
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o there shall have been no material adverse change in or addition to the
information or items reviewed and approved by the purchaser prior to
the inspection date;
o no action or proceeding shall have been commenced by or against any
Seller under the federal bankruptcy code or any state law for the
relief of debtors or for the enforcement of the rights of creditors,
and no attachment, execution, lien or levy shall have attached to or
been issued with respect to any Seller's interest in its property or
any portion thereof; and
o the Sellers shall have delivered such documents or instruments as are
required to be delivered by the Sellers pursuant to the agreement,
including deeds, assignments of leases, bills of sale and assignment,
non-foreign affidavits, a guaranty by Apartment Investment and
Management Company, and an amendment to the agreement of limited
partnership of SH Partners.
If any of the purchaser's closing conditions are not fulfilled, the
purchaser may waive the condition and close, without adjustment of the purchase
price, or terminate the agreement.
The obligation of the Sellers to complete the transactions
contemplated by the agreement are subject to the satisfaction or waiver of the
following conditions:
o all of the representations and warranties of the purchaser in the
agreement shall be true, correct and complete in all material respects;
o the purchaser shall have complied with and/or performed all of the
obligations, covenants and agreements required on its part to be
complied with or performed pursuant to the agreement;
o no action or proceeding shall have been commenced by or against the
purchaser under the federal bankruptcy code or any state law for the
relief of debtors or for the enforcement of the rights of creditors;
and
o the purchaser shall have delivered such documents or instruments as
are required to be delivered by the purchaser pursuant to the
agreement, including an amendment to the agreement of limited
partnership of SH Partners, assignments of leases, and bills of sale
and assignment.
If any of the Sellers' closing conditions are not fulfilled, the
Sellers may waive the condition and close, without adjustment of the purchase
price, or terminate the agreement.
Casualty and Condemnation
Prior to the closing, if (i) all or any material portion of any
property is taken by condemnation or eminent domain (or is the subject of a
pending or contemplated taking which has not been consummated), or (ii) any
material damage occurs to any portion of any property as a result of any
earthquake, hurricane, tornado, flood, landslide, fire or other casualty, then
the purchaser will have the option to terminate the agreement within 30 days,
in which case the purchaser and the Sellers will equally share the cancellation
charges of the escrow agent and the title company, if any. The purchaser does
not have a right to terminate the agreement as a result of (i) any taking of
any portion of any property that is not a material portion, or (ii) any damage
or destruction of any portion of any property that does not constitute material
damage. If the purchaser does not elect, or has no right, to terminate the
agreement, the purchaser will be entitled to keep all awards and insurance
proceeds for the condemnation or casualty, and will receive a credit against
the portion of the purchase price applicable to such property for the cost of
any repair and/or restoration not covered by such awards and insurance
proceeds. For this purpose, "material" is defined as having a value in excess
of $350,000.
Ongoing Operations
Until the closing, each Seller has agreed, at its sole cost and
expense, to:
o carry on its business and activities relating to its property,
including leasing, maintenance and operations in the same manner as it
did before entering into the agreement;
o perform all of its obligations under leases and service contracts
applicable to its property and other agreements that may affect its
property;
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o not supplement or amend any existing contract or enter into any new
contract that will be an obligation affecting its property subsequent
to the closing, except leases and other contracts entered into in the
ordinary course of business;
o continue to maintain insurance in accordance with its current business
practices;
o afford the purchaser and its representatives reasonable access to the
property owned by such Seller and to such Seller's books, records and
files relating to such property;
o not voluntarily grant or transfer or permit the grant or transfer of
any interest in the property owned by it, including any air rights;
o promptly advise the purchaser of any litigation or governmental
proceeding to which it becomes a party directly affecting its
property; and
o promptly forward to the purchaser any written notice received by it
from any governmental agency in connection with any actual or alleged
violation of any law or regulation applicable to its property.
Remedies
If closing fails to occur as a result of a default by the purchaser,
then the Sellers, collectively, are entitled to receive, as their sole and
exclusive remedy liquidated damages in the amount of $1,100,000. If closing
fails to occur as a result of a default by any Seller, then the purchaser, as
its sole remedy, may elect to either (i) terminate the agreement, in which
event, the Sellers shall reimburse the purchaser for its reasonable
out-of-pocket costs up to a maximum of $100,000 per property, or (ii) seek
specific performance for the conveyance of the property to the purchaser (but
not damages).
Property Management
At the closing, all existing property management agreements affecting
the Nine Sale Properties will be terminated at Sellers' sole cost and expense,
and the purchaser will enter into a new property management agreement with an
Aimco affiliate as property manager with a management fee of 3.65% of gross
revenues.
Expenses and Closing Costs
Each party will pay its own costs and expenses arising in connection
with the closing (including, without limitation, its own attorneys' and
advisors' fees, charges and disbursements), except the following costs, which
shall be allocated between the parties as follows:
o all documentary transfer, stamp, sales and other taxes related to the
transfer of a property shall be paid (i) for each property located in
Louisiana, by the purchaser, and (ii) for each other property
(including Windsor Hills), by the applicable Seller;
o the escrow agent's escrow fees and costs for each property shall be
paid (i) for each property located in North Carolina or Texas, by the
applicable Seller, and (ii) for each other property (including Windsor
Hills), half by the applicable Seller and half by the purchaser;
o the cost of a survey and its survey certification shall be paid (i)
for each property located in Louisiana or Virginia (including Windsor
Hills), by the purchaser, and (ii) for each other property, by the
applicable Seller;
o the cost of the owner's title policy for each property (and all
permitted endorsements and amendments thereto) shall be paid (i) for
each property located in Louisiana, North Carolina or Virginia
(including Windsor Hills), by the purchaser, and (ii) for each other
property, by the applicable Seller; and
o all recording fees for each property shall be paid by the purchaser.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The tax consequences to you of the Sale of the Property may be
significant. The following discussion briefly summarizes the typical material
aspects of the federal income tax consequences for the limited partners that
should be considered in connection with the Sale; however, the tax
consequences to you could be materially different. EACH LIMITED
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PARTNER SHOULD CONSULT AND MUST RELY UPON HIS, HER OR ITS OWN TAX ADVISOR IN
ORDER TO UNDERSTAND FULLY THE FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND
ESTATE AND GIFT TAX CONSEQUENCES TO HIM, HER OR IT ARISING FROM THE SALE OF THE
PROPERTY.
The discussion is based on current law, which is subject to change
(possibly with retroactive effect), and does not consider state, local and
foreign income tax aspects of the Sale of the Property. For purposes of this tax
discussion, references to "I.R.C. Section" are to sections of the Internal
Revenue Code of 1986, as amended ("I.R.C." or the "Code"). THIS DISCUSSION DOES
NOT ADDRESS SPECIAL CONSIDERATIONS AND RULES APPLICABLE TO LIMITED PARTNERS THAT
ARE TAX-EXEMPT OR FOREIGN ENTITIES.
No ruling will be requested from the Internal Revenue Service on any of
the tax matters discussed herein. The federal income tax consequences to the
limited partners from the Sale of the Property cannot be predicted with absolute
certainty. We cannot assure that the Internal Revenue Service will not audit or
question the treatment of any item discussed herein.
The following discussion assumes that the Partnership will recognize
taxable gain on the Sale of the Property. The following discussion also assumes
that the Partnership is characterized as a partnership for federal income tax
purposes. If the Partnership is treated for federal income tax purposes as an
association, any cash available for distribution after the Sale would be
substantially reduced and the tax consequences would be materially different
than as described below.
TAX CONSEQUENCES IF THE PROPERTY IS SOLD. The Partnership will
recognize taxable gain from the Sale of the Property in an amount equal to the
difference between the Partnership's adjusted tax basis in the Property and the
amount realized. The Partnership's amount realized from the Sale includes the
sum of cash it receives from the purchaser plus the fair market value of any
property it receives other than money. If the purchaser assumes or takes the
Property subject to liabilities that encumber the Property, the face amount of
those liabilities is also included in the Partnership's amount realized as
though the purchaser had made a cash payment to the Partnership in the same
amount. Selling expenses of the Partnership, such as legal fees and title costs,
reduce the Partnership's amount realized with respect to the Sale. Any gain
recognized by the Partnership will be allocated to the partners, including the
limited partners, in accordance with the Partnership Agreement. We estimate that
the Sale of the Property will result in a total gain of approximately $562 per
limited partnership unit, based on information available as of November 30,
2005. This amount is an estimate based on a number of assumptions as discussed
under "Use of Proceeds."
Generally, if a partnership is a "dealer" with respect to a property,
any gain that it recognizes on the sale of that property will be taxed as
ordinary income. Under I.R.C. Section 707, certain related party sales result
in gain being taxed as ordinary income; however, the general partner does not
believe this section would be applicable to this transaction. Alternatively,
any gain in excess of "depreciation recapture gain" (discussed below) and
"unrecaptured I.R.C. Section 1250 gain" (discussed below) generally will be
taxed as gain arising from the sale of property used in the Partnership's trade
or business under I.R.C. Section 1231 ("I.R.C. Section 1231 gain"). Each
limited partner will be allocated its share of the Partnership's I.R.C.
Section 1231 gain. In general, if the combination of all I.R.C. Section 1231
gains and losses of a particular limited partner for a taxable year results in
a net gain, all of such gains and losses will be characterized as long-term
capital gains and losses. If the combination results in a net loss, all of such
gains and losses will be characterized as ordinary gains and losses. However,
notwithstanding the foregoing, net I.R.C. Section 1231 gains will be treated as
ordinary gains to the extent of a limited partner's unrecaptured net I.R.C.
Section 1231 losses for the five most recent prior years. As a result, all or a
portion of any I.R.C. Section 1231 gain from the sale of the Partnership's
property allocated to a limited partner may be treated as ordinary income,
rather than long-term capital gain, if the limited partner has had net I.R.C.
Section 1231 losses in prior years.
Under I.R.C. Section 1245, gain recognized by the Partnership from the
sale of any of its depreciable or amortizable personal property and certain
statutorily designated real property (i.e., "depreciation recapture gain") is
re-characterized as ordinary income and will be allocated to the partners as
such. The amount of the Partnership's depreciation recapture gain equals the
amount by which the lower of (i) the amount realized and (ii) the recomputed
basis (i.e., a property's basis plus all amounts allowed for depreciation) of
the transferred property exceeds that property's adjusted basis.
Generally, under I.R.C. Section 1250, no portion of the gain
recognized by the Partnership upon the disposition of its residential rental
real property is re-characterized as ordinary income because such property is
depreciated using the straight-line method. However, under I.R.C. Section
291(a)(1), a portion of a corporation's capital gain from the disposition of
residential rental real property is re-characterized as ordinary income. The
portion that is re-characterized equals 20% of the excess of the amount that
would have been treated as ordinary income under I.R.C. Section 1245 if the
transferred property were I.R.C. Section 1245 property (which generally would
be all depreciation deductions previously claimed) over the amount
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treated as ordinary income under I.R.C. Section 1250 (calculated without regard
to I.R.C. Section 291(a)(1)). Therefore, under I.R.C. Section 291(a)(1),
corporate limited partners of the Partnership may recognize ordinary income upon
disposition of the Partnership's residential rental real property.
In the case of limited partners of the Partnership that are
individuals, estates or trusts, the application of I.R.C. Section 1250 will not
require those taxpayers to recognize gain taxable as ordinary income; however,
those limited partners may be allocated gain from the Partnership's Sale of the
Property that is taxed as "unrecaptured I.R.C. Section 1250 gain." Unrecaptured
I.R.C. Section 1250 gain is generally equal to the gain on the sale of real
property that is attributable to straight-line depreciation. The maximum federal
tax rate applicable to unrecaptured I.R.C. Section 1250 gain is currently 25%.
In the case of limited partners that are individuals, trusts or
estates, gain from the sale of the Partnership's property that is not taxed as
ordinary income or as unrecaptured I.R.C. Section 1250 gain is generally taxed
at a capital gains tax rate, the current maximum rate of which is 15%. Gain from
the sale of the Partnership's property that is allocated to limited partners
that are corporations is not eligible for preferential capital gains tax rates.
If a limited partner possesses suspended tax losses, tax credits or
other items of tax benefit, such items may be used to reduce any tax liability
that arises with respect to any gain resulting from the sale of the
Partnership's property and allocated to that limited partner. The determination
of whether a limited partner possesses suspended tax losses, tax credits or
other items of tax benefit that may reduce any gain resulting from the sale will
depend upon such limited partner's individual circumstances. Limited partners
are urged to consult with their tax advisors in this regard.
DISTRIBUTIONS OF CASH. A distribution of cash by the Partnership to a
limited partner will be treated as an amount realized from a sale of the limited
partner's interest in the Partnership and will result in taxable gain only to
the extent that the distribution exceeds the limited partner's adjusted tax
basis in his, her or its Partnership interest. Otherwise, distributions will be
tax free, and the limited partner's adjusted tax basis in his Partnership
interest will be decreased, but not below zero.
Generally, any gain recognized by a limited partner arising from a
cash distribution by the Partnership will be capital gain. Nevertheless, to the
extent that a portion of that gain is attributable to "unrealized receivables"
of the Partnership, including depreciation recapture, or to certain inventory
items described in I.R.C. Section 751, such gain will be taxed as ordinary
income.
PROCEEDS AVAILABLE FOR DISTRIBUTION TO THE LIMITED PARTNERS FROM THE
SALE OF THE PROPERTY AFTER REPAYMENT OF THE PARTNERSHIP'S DEBT MAY BE LESS THAN
ANY TAX LIABILITY RESULTING FROM THE GAIN RECOGNIZED BY THE PARTNERSHIP (AS A
RESULT OF THE SALE) THAT IS ALLOCABLE TO THE PARTNERS AND THEIR TAX LIABILITY
RESULTING FROM THE GAIN RECOGNIZED BY THE PARTNERS AS A RESULT OF ANY CASH
DISTRIBUTIONS FROM THE PARTNERSHIP. ACCORDINGLY, LIMITED PARTNERS MAY BE
REQUIRED TO USE FUNDS FROM SOURCES OTHER THAN THE PARTNERSHIP IN ORDER TO PAY
ANY TAX LIABILITIES THAT ARISE AS A RESULT OF THE RECOGNITION GAIN.
TAX CONSEQUENCES IF THE PROPERTY IS NOT SOLD. The Partnership's
current tax basis in the Property is approximately 25% of its original tax
basis in the Property. As a result, it is likely that continued operation of
the Property will generate taxable income to the limited partners, and it is
unlikely that there will be depreciation and other deductions equal to or
greater than the income generated from the Property. In addition, it is
anticipated that there may not be any cash available for distribution since it
is expected that all or substantially all of the Property's cash flow will be
used to service the Partnership's liabilities. Accordingly, limited partners
may be required to use funds from sources other than the Partnership in order
to pay any tax liabilities that arise as a result of the Partnership's
continued operation of the Property. The Partnership also will continue to
incur management fees associated with the Property. If a limited partner
possesses suspended tax losses, tax credits or other items of tax benefit, such
items may potentially be used to reduce any tax liability that arises with
respect to any taxable net income as a result of the continued operation of the
Property by the Partnership. Limited partners are urged to consult their tax
advisors in this regard.
WHERE YOU CAN FIND MORE INFORMATION
The Partnership is subject to the informational requirements of the
Exchange Act and is required to file annual and quarterly reports, proxy
statements and other information with the SEC. You can inspect and copy reports
and other information filed by us with the SEC at the SEC's public reference
facilities maintained by the SEC at One Station Place, 100 F Street, N.E.,
Washington, D.C. 20002. Copies of such material can also be obtained from the
Public Reference Room of the SEC in Washington, D.C. at prescribed rates. The
SEC also maintains a site on the World Wide Web at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC.
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You should only rely on the information provided in this Solicitation
Statement or any supplement. We have not authorized anyone else to provide you
with information. You should not assume that the information in this
Solicitation Statement or any supplement is accurate as of any date other than
the date on the front of this Solicitation Statement or the supplement.
The Partnership's principal executive offices are located at 55
Beattie Place, P.O. Box 1089, Greenville, South Carolina 29602. However,
questions and requests for assistance regarding this Solicitation Statement and
the matters set forth herein may be directed to the Solicitation Agent, The
Altman Group, Inc. by mail at 1275 Valley Brook Avenue, Lyndhurst, New Jersey
07071; by overnight courier service at 1200 Wall Street 3rd Floor, New Jersey
07071; by fax at (201) 460-0050; or by telephone at (800) 217-9608.
15
Annex A
AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP
OF
SHELTER PROPERTIES I LIMITED PARTNERSHIP
This Amendment (the "Amendment") to the Amended and Restated
Certificate and Agreement of Limited Partnership, as amended to date (the
"Partnership Agreement"), of Shelter Properties I Limited Partnership, a South
Carolina limited partnership (the "Partnership"), is made and entered into as
of ________________, by Shelter Realty Corporation, a South Carolina
corporation, as corporate general partner of the Partnership (the "Corporate
General Partner"), and as attorney-in-fact for the limited partners, and AIMCO
Properties, L.P., a Delaware limited partnership, as general partner of the
Partnership (the "General Partner"). Capitalized terms used but not otherwise
defined herein shall have the respective meanings ascribed thereto in the
Partnership Agreement.
WHEREAS, the Corporate General Partner and the General Partner have
approved this Amendment;
WHEREAS, the Limited Partners have approved this Amendment by a
Majority Vote; and
WHEREAS, limited partners that own a majority of the Units owned by
Limited Partners that are not Affiliates of the Corporate General Partner or
the General Partner have approved this Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Section 8.2(z) of the Partnership Agreement is hereby amended to
read in its entirety as follows:
"(z) Permit the Partnership to enter into any contract with a General
Partner or an Affiliate unless the contract provides that it may be terminated
by the Partnership without penalty upon 60 days written notice, other than that
certain Purchase and Sale Agreement and Joint Escrow Instructions, dated as of
November 14, 2005, by and among California State Teachers' Retirement System,
Windsor Hills I, L.P., National Property Investors 6, National Property
Investors 7, TAHF II Limited Partnership, Couch-Oxford Associates Limited
Partnership, Peppermill Village-Oxford Associates, L.P., Williamsburg Investors
Limited Partnership and Mayfair Village Limited Partnership."
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.
SHELTER REALTY CORPORATION, AIMCO PROPERTIES, L.P.,
as Corporate General Partner and as General Partner
as Attorney-in-Fact for
the Limited Partners
By: AIMCO GP, Inc.,
its General Partner
By: By:
----------------------------- ----------------------------
Name: Name:
Title: Title:
A-1
Annex B
AMENDMENT
TO THE
AGREEMENT OF LIMITED PARTNERSHIP
OF
WINDSOR HILLS I, L.P.
This Amendment (the "Amendment") to the Agreement of Limited
Partnership, as amended to date (the "Partnership Agreement"), of Windsor Hills
I, L.P., a Delaware limited partnership (the "Partnership"), is made and
entered into as of ________________, by Shelter I GP Limited Partnership, a
Delaware limited partnership, as general partner of the Partnership (the
"General Partner"), and Shelter Properties I Limited Partnership, a South
Carolina limited partnership (the "Limited Partner"). Capitalized terms used
but not otherwise defined herein shall have the respective meanings ascribed
thereto in the Partnership Agreement.
WHEREAS, the General Partner and the Limited Partner have approved
this Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Section 8.2(o) of the Partnership Agreement is hereby amended to
read in its entirety as follows:
"(o) Permit the Partnership to enter into any contract with the
General Partner or an Affiliate unless the contract provides that it may be
terminated by the Partnership without penalty upon 60 days written notice,
other than that certain Purchase and Sale Agreement and Joint Escrow
Instructions, dated as of November 14, 2005, by and among California State
Teachers' Retirement System, Windsor Hills I, L.P., National Property Investors
6, National Property Investors 7, TAHF II Limited Partnership, Couch-Oxford
Associates Limited Partnership, Peppermill Village-Oxford Associates, L.P.,
Williamsburg Investors Limited Partnership and Mayfair Village Limited
Partnership."
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.
SHELTER I GP LIMITED PARTNERSHIP, SHELTER PROPERTIES I LIMITED
as General Partner PARTNERSHIP,
as Limited Partner
By: Shelter Realty Corporation, By: Shelter Realty Corporation,
its General Partner its General Partner
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
B-1
SHELTER PROPERTIES I LIMITED PARTNERSHIP
CONSENT OF LIMITED PARTNER
This consent is solicited by Shelter Realty Corporation, a South
Carolina corporation and the corporate general partner (the "Corporate General
Partner") of Shelter Properties I Limited Partnership, a South Carolina limited
partnership (the "Partnership")). AS A RESULT OF ITS AFFILIATION WITH SH
PARTNERS, L.P., THE CORPORATE GENERAL PARTNER MAKES NO RECOMMENDATION WITH
RESPECT TO THE PROPOSAL. IF NO ELECTION IS SPECIFIED WITH RESPECT TO PROPOSAL,
ANY OTHERWISE PROPERLY COMPLETED AND SIGNED CONSENT FORM WILL BE DEEMED TO BE A
CONSENT TO THE PROPOSAL.
The undersigned limited partner of the Partnership, acting with
respect to all limited partnership units held of record by the undersigned on
December __, 2005, hereby consents, withholds consent or abstains, with respect
to the proposal specified below and more fully described in the Consent
Solicitation Statement, dated December __, 2005 (the "Solicitation Statement").
All capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed thereto in the Solicitation Statement.
PROPOSAL: Approval of Amendments to the Partnership Agreement and the
Subsidiary Partnership Agreement to permit the Sale of Windsor
Hills Apartments to SH Partners, L.P., an entity in which an
affiliate of the General Partners owns a 33.33% interest and acts
as general partner.
[ ] Consent [ ] Withhold Consent [ ] Abstain
The undersigned hereby constitutes and appoints the Corporate General
Partner of the Partnership as his or her attorney-in-fact for the purposes of
executing any and all documents and taking any and all actions necessary to
implement the actions set forth above. The Corporate General Partner, in its
discretion, may authorize a reduction of the purchase price for the Property by
up to 10% and authorize any other amendments to the Purchase and Sale Agreement
which, in its opinion, are necessary, appropriate or desirable in connection
with the Sale, and that do not materially and adversely affect the Partnership.
Date:
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Type or Print Name of Individual or Entity
By: --------------------------------------
Signature
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Type or Print Name of Person Signing
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Capacity
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Tax Identification or Social Security Number
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Telephone Number
Please sign exactly as you hold your interest in the Partnership. When signing
as an attorney-in-fact, executors, administrator, trustee or guardian, please
give your full title. If an interest is jointly held, each holder should sign.
If a corporation, please sign in full corporate name by a duly authorized
officer. If a partnership, please sign in partnership name by a duly authorized
person.
A fully completed, signed and dated consent form should be sent by hand, by
mail or by overnight courier to The Altman Group, Inc., 1200 Wall Street 3rd
Floor, Lyndhurst, New Jersey 07071 or by fax at (201) 460-0050. The consent
solicitation will expire, and all consent forms must be received by 5:00 p.m.,
New York City time, on December __, 2005, unless extended.