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. 1)
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Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CENTURY PROPERTIES FUND XVII
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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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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[ ] Date Filed:
CENTURY PROPERTIES FUND XVII
1873 South Bellaire Street
Denver, Colorado 80222
October __, 1999
Dear Limited Partner:
We are writing to request your consent to an amendment (the
"Amendment") of the Agreement of Limited Partnership of Century Properties
Fund XVII (the "Partnership") to (a) extend the term of the Partnership
from December 31, 2006 to a date in 2020 which is six months and one day
after the last of the 20-year refinancings described herein will initially
be scheduled to mature, and (b) provide for early dissolution of the
Partnership upon (i) the repayment of all indebtedness secured by the
Partnership's real property (unless any new financing requires otherwise)
or (ii) the sale of all or substantially all of the Partnership's assets.
Enclosed for your consideration is a Consent Solicitation Statement, dated
October __, 1999 (the "Solicitation Statement"), and a form of Consent of
Limited Partner (the "Consent Form") for indicating whether or not you wish
to grant your consent to the Amendment. The consent of limited partners who
own more than 50% of all outstanding limited partnership units is required
to approve the Amendment.
The Amendment will enable the Partnership to refinance the
mortgage debt secured by the Cooper's Pond Apartments, the Cherry Creek
Garden Apartments and the Village in the Woods Apartments with new 20-year
loans. The refinancing is expected to result in lower interest costs for
the Partnership and a cash distribution to the unitholders, all as more
fully described in the enclosed Solicitation Statement.
Fox Partners, the managing general partner of the
Partnership, recommends that you consent to the Amendment by completing,
dating and signing the enclosed Consent Form and returning it in the
enclosed pre-addressed, postage-paid envelope.
Your participation is important. Please note that this
solicitation will expire at 5:00 p.m., New York City time, on _________, 1999.
If you have any questions or require any assistance in
completing and returning the Consent Form, please contact our Solicitation
Agent, Corporate Investors Communications, Inc. by mail at P.O. Box 2065,
South Hackensack, New Jersey 07606-2065; by overnight courier service at
111 Commerce Road, Carlstadt, New Jersey 07072-- Attention: Reorganization
Department; by fax at (202) ___-____; or by telephone at ( ) ___ - ____.
Very truly yours,
CENTURY PROPERTIES FUND XVII
By: FOX PARTNERS
Managing General Partner
CENTURY PROPERTIES FUND XVII
1873 SOUTH BELLAIRE STREET
DENVER, COLORADO 80222
CONSENT SOLICITATION STATEMENT
This Consent Solicitation Statement is being furnished to limited
partners (the "Limited Partners") of record as of the close of business on
October __, 1999 (the "Record Date"), of Century Properties Fund XVII, a
California limited partnership (the "Partnership"), in connection with the
solicitation of consents to an amendment (the "Amendment") of the
Partnership's Agreement of Limited Partnership to (a) extend the term of
the Partnership from December 31, 2006 to a date in 2020 which is six
months and one day after the last of the 20-year refinancings described
herein will initially be scheduled to mature, and (b) provide for early
dissolution of the Partnership upon (i) payment of all indebtedness secured
by the Partnership's properties or (ii) a sale of all or substantially all
of the Partnership's assets (unless any new refinancing otherwise
requires).
The Amendment will enable the Partnership to refinance the mortgage
debts secured by the Cooper's Pond Apartments, the Cherry Creek Garden
Apartments and the Village in the Woods Apartments with new 20- year loans
which will bear interest at a rate below that of the current loans (the
"Refinancing"). The Refinancing is expected to result in lower interest
costs for the Partnership and a cash distribution to holders of units of
limited partnership interest (the "Units").
This Consent Solicitation Statement is being solicited by Fox
Partners, the managing general partner of the Partnership (the "General
Partner"), on behalf of the Partnership. This Consent Solicitation
Statement, and the accompanying form of Consent of Limited Partner (the
"Consent Form"), are first being mailed to Limited Partners on or about
October __, 1999.
THE GENERAL PARTNER RECOMMENDS THAT LIMITED PARTNERS CONSENT TO THE
AMENDMENT.
THIS SOLICITATION OF CONSENTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON ____________, 1999 (THE "EXPIRATION DATE").
SEE "RISK FACTORS" BEGINNING ON PAGE 2 OF THIS CONSENT SOLICITATION
STATEMENT FOR A DESCRIPTION OF RISK FACTORS THAT YOU SHOULD CONSIDER IN
CONNECTION WITH THE AMENDMENT, INCLUDING
THE FOLLOWING:
o Although the Partnership's Agreement of Limited Partnership
provides for termination in the year 2006, the prospectus
pursuant to which the Units were sold in 1982 indicated that
the properties owned by the Partnership might be sold within 5
to 8 years of their acquisition if conditions permitted. If the
Amendment is adopted, the properties may not be sold until
2020.
o The General Partner and its affiliates have substantial
conflicts of interest with respect to the Amendment.
Continuation of the Partnership beyond 2006 will result in the
General Partner and its affiliates continuing to receive
management fees from the Partnership. Such fees would not be
payable if the Partnership were liquidated earlier.
Questions and requests for assistance may be directed to the
Solicitation Agent, Corporate Investors Communications, Inc. by mail at
P.O. Box 2065, South Hackensack, New Jersey 07606-2065; by overnight
courier service at 111 Commerce Road, Carlstadt, New Jersey 07072--
Attention: Reorganization Department; by fax at (202) ___-____; or by
telephone at ( ) ___-____.
RISK FACTORS
Before deciding whether or not to consent to the Amendment, you
should consider carefully the following risks:
Continuation of the Partnership; No Time Frame Regarding Sale of
Properties. The General Partner is proposing to continue to operate the
Partnership and not to attempt to liquidate it at the present time. Thus,
the Amendment and the Refinancing does not satisfy any expectation that a
Limited Partner would receive the return of his or her investment in the
Partnership through a sale of any property. It is not known when any
property owned by the Partnership may be sold. There may be no way to
liquidate your investment in the Partnership in the future until properties
are sold. The Amendment could result in continuation of the Partnership
until 2020. The General Partner of the Partnership continually considers
whether a property should be sold or otherwise disposed of after
consideration of the relevant factors, including prevailing economic
conditions, availability of favorable financing and tax considerations,
with a view to achieving maximum capital appreciation for the Partnership.
At the current time, the General Partner believes that a sale of any
property would not be advantageous given market conditions, the condition
of each property and tax considerations. In particular, the General Partner
considered the changes in the local rental market, the potential for
appreciation in the value of each property and the tax consequences to you
and your partners of a sale of a property. The General Partner cannot
predict when any property will be sold or otherwise disposed of.
Conflicts of Interest with Respect to the Solicitation. The General
Partner of the Partnership has fiduciary duties to operate and manage the
Partnership in the best interests of all partners. However, the General
Partner and its affiliates receive fees for managing the Partnership and
its property. Therefore, a conflict of interest exists between the General
Partner and its affiliates regarding continuing the Partnership and
receiving such fees, and the liquidation of the Partnership and the
termination of such fees.
RECORD DATE; CONSENTS REQUIRED
The Partnership has fixed October __, 1999 as the Record Date for
determining limited partners entitled to notice of and to consent to the
Amendment. Only limited partners of record on the Record Date may execute
and deliver a Consent Form. Approval of the Amendment requires the
affirmative consent of Limited Partners who own more than 50% of the
Partnership's outstanding Units. As of the Record Date, there were 75,000
Units issued and outstanding. Accordingly, approval of the Amendment will
require the affirmative consent of Limited Partners who own at least 37,501
Units. The Amendment will become effective on the Expiration Date, provided
consents from Limited Partners owning at least 37,501 Units have been
received.
SOLICITATION OF CONSENTS
Consents will be solicited by mail, telephone, e-mail and in
person. Solicitations may be made by representatives of the General
Partner, none of whom will receive additional compensation for such
solicitations. The cost of preparing, assembling, printing and mailing this
Consent Solicitation Statement and the enclosed Consent Form will be borne
by the Partnership. The Partnership has retained Corporate Investors
Communications, 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.
CONSENT PROCEDURES
LIMITED PARTNERS WHO DESIRE TO CONSENT TO THE AMENDMENT SHOULD DO
SO BY MARKING THE APPROPRIATE BOX ON THE CONSENT FORM INCLUDED HEREWITH,
AND SIGNING, DATING AND DELIVERING THE CONSENT FORM TO THE SOLICITATION
AGENT BY MAIL IN THE SELF-ADDRESSED, POSTAGE-PAID ENVELOPE ENCLOSED FOR
THAT PURPOSE, BY OVERNIGHT COURIER OR BY FACSIMILE AT THE ADDRESS OR
FACSIMILE NUMBER SET FORTH ABOVE AND 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, BUT THE CONSENT FORM IS OTHERWISE PROPERLY COMPLETED AND SIGNED,
THE LIMITED PARTNER WILL BE DEEMED TO HAVE CONSENTED TO THE AMENDMENT.
Consent Forms must be executed in exactly the same manner as the
name(s) in which ownership of the Units is registered. If the 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 Units. All Consent Forms
received by the Solicitation Agent (and not properly revoked) prior to the
Expiration Date will be effective notwithstanding a record transfer of such
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 the
General Partner in its sole discretion, which determination will be
conclusive and binding. The Partnership reserves the right 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 the General Partner determines. Neither the
General Partner nor any of its 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 the General Partner 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, or in a writing delivered to the Solicitation Agent 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 the fax 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
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
NO APPRAISAL RIGHTS
Limited Partners of the Partnership are not entitled to dissenters'
appraisal rights under California law or the Partnership's Agreement of
Limited Partnership in connection with the Amendment.
GENERAL PARTNER'S RECOMMENDATION
The General Partner recommends that Limited Partners consent to the
Amendment. The General Partner believes that the Amendment is in the best
interests of the Partnership and its Limited Partners. In making its
determination, the General Partner considered the terms of the proposed
Refinancing (see "The Refinancing" below) and alternatives to such
Refinancing (see "Alternatives Considered" below).
THE REFINANCING
The Amendment will enable the Partnership to refinance the mortgage
debts secured by the Cooper's Pond Apartments, the Cherry Creek Garden
Apartments and the Village in the Woods Apartments with new 20- year loans.
The Refinancing is expected to result in lower interest costs for the
Partnership and an expected cash distribution to Unitholders.
As of July 31, 1999, the existing mortgage debts relating to
Cooper's Pond Apartments consist of loans with current principal balances
of $3,431,674 and $4,133,695, that bear interest at 8% and 8.5% per year,
and and that mature in 1999 and 2005, all respectively. The existing
mortgage debt relating to the Cherry Creek Garden Apartments consists of a
loan with a current principal balance of $7,362,271, that bears interest at
8.6% per year and matures on December 7, 1999. And, the existing mortgage
debt relating to the Village in the Woods Apartments consists of a loan
with a current principal balance of $12,997,758, that does not bear any
interest, but requires a lumpsum payment on its maturity date of January
24, 2000.
The existing debts would be repaid with the proceeds of three (3)
new loans expected to have original principal amounts of approximately
$8,270,000 for the Cooper's Pond Apartments, $12,800,000 for the Cherry
Creek Garden Apartments and $14,800,000 for the Village in the Woods
Apartments, all to mature in 2019. The new loans are expected to have fixed
interest rate equal to 1.79% plus the rate applicable to a 10-year Treasury
Note at the time the interest rates are fixed. From July 1, 1999 to October
__, 1999, the interest rate applicable to 10-year Treasury Notes has ranged
between 5.53% and ___%, and on October __ , 1999 was %. The exact interest
rate will be determined in the future. The new loans would be non-recourse
(with customary exceptions for fraud, misappropriation of funds and
environmental liability), and would be fully amortized over the 20 year
term. The new loans would have non-funded reserves for taxes, insurance and
replacement reserves. Further, the new loans could be prepaid in full until
90 days prior to the maturity date, upon payment of a prepayment penalty.
For the first 15 years of the loans, the prepayment penalty would be
calculated based on a formula that calculates yield maintenance.
Thereafter, the prepayment penalty would be equal to 1% of the principal
amount outstanding. As a condition to making the new loans, the lender is
requiring that the Partnership's Agreement of Limited Partnership be
amended to extend the term of the Partnership beyond the proposed maturity
date of the new loans. The proceeds from the new loans would be used to
repay the existing mortgage debts and related costs (expected to be
approximately $[7,442,942]), to pay other transaction fees and expenses
associated with the Refinancing (expected to be approximately $[206,750])
and to pay deferred maintenance at the property (estimated to be
approximately $[52,600]). The remainder of the proceeds (estimated to be
approximately $[567,708]) would be distributed to the holders of Units pro
rata, including Units held by the General Partner and its affiliates.
ALTERNATIVES CONSIDERED
The existing mortgage debts secured by the Cooper's Pond Apartments
mature in 1999 and 2005. The existing debts secured by the Cherry Creek
Garden Apartments and the Village in the Woods Apartments mature in 1999
and 2000, respectively. The Partnership does not have sufficient cash on
hand (or other liquid assets) to repay these debts. Consequently, the
General Partner considered two alternatives to the proposed Refinancing:
(i) a refinancing of the debts with new loans with maturity dates prior to
the expiration of the Partnership's current term (December 31, 2006); and
(ii) a sale of the properties.
A refinancing of loans with maturity dates prior to the expiration
of the Partnership's current term (December 31, 2006) would have resulted
in borrowing at a much greater cost. The General Partner believes that
interest rates associated with such loans would be higher than the proposed
loan.
The General Partner also considered a sale of the properties, but
believes that a sale of the properties at the current time would not be
advantageous given market conditions, the condition of the properties and
the tax consequences to limited partners. See "Investment Objectives and
Policies; Sale or Financing of Investments" below. The General Partner
recognized that the proposed Refinancing would not prohibit or unduly
restrict the Partnership's ability to sell the properties in the future
prior to the expiration of the extended term of the Partnership.
INVESTMENT OBJECTIVES AND POLICIES; SALE OR FINANCING OF INVESTMENTS
In general, the General Partner regularly evaluates a sale of the
Partnership's properties by considering various factors, such as the
Partnership's financial position and real estate market conditions. The
General Partner monitors the properties' specific locale and sub-market
conditions (including stability of the surrounding neighborhood) evaluating
current trends, competition, new construction and economic changes. The
General Partner oversees each asset's operating performance and
continuously evaluates the physical improvement requirements. In addition,
the financing structure for each property (including any prepayment
penalties), tax implications, availability of attractive mortgage
financing, and the investment climate are all considered. Any of these
factors, and possibly others, could potentially contribute to any decision
by the General Partner to sell, refinance, upgrade with capital
improvements or retain a particular property. If rental market conditions
improve, the level of distributions might increase over time. It is
possible that the resale market for properties could improve over time,
making a sale of the properties at some point in the future a more viable
option than it is currently. After taking into account the foregoing
considerations, the General Partner is not currently seeking a sale of the
Cooper's Pond Apartments, the Cherry Creek Garden Apartments, the Village
in the Woods Apartments or other properties primarily because it expects
the properties' operating performance to improve in the near term. The
Partnership expects to spend approximately $2,140,000 for capital
improvements at the properties in 1999 to repair and update the properties.
Although there can be no assurance as to future performance, the General
Partner expects these expenditures to improve the desirability of the
properties to tenants. The General Partner does not believe that a sale of
the properties at the present time would adequately reflect the properties'
future prospects. Another significant factor considered by the General
Partner is the likely tax consequences of a sale of the properties for
cash. Such a transaction would likely result in tax liabilities for many
Limited Partners. The General Partner has not received any recent
indication of interest or offers to purchase the properties.
ORIGINALLY ANTICIPATED TERM OF PARTNERSHIP.
The Partnership's prospectus, dated March 29, 1982, pursuant to
which Units were originally sold, indicated that the Partnership was
intended to be self-liquidating and that it was anticipated that the
Partnership's properties would be sold within 5 to 8 years of their
acquisition, provided market conditions permit. The prospectus also
indicated that there could be no assurance that the Partnership would be
able to so liquidate and that, unless sooner terminated as provided in the
Partnership's Agreement of Limited Partnership, the existence of the
Partnership would continue until the year 2006. Under the Partnership's
Agreement of Limited Partnership, the term of the partnership will continue
until December 31, 2006 (six months and (1) day after the date the last of
the Refinancings will be scheduled to mature, if the Amendment is
approved), unless sooner terminated as provided in such Agreement, the
Amendment or by law.
CONFLICTS OF INTERESTS: CERTAIN RELATIONSHIPS
The General Partner has substantial conflicts of interest with
respect to the Amendment. An affiliate of the General Partner manages your
Partnership's properties and receives management fees and reimbursement of
its expenses. In addition, the General Partner receives fees and
reimbursement of its expenses for managing the Partnership. The extension
of the term of the Partnership may result in such fees continuing to be
paid for a longer period than would be the case if the term of the
Partnership expired in 2006. Therefore, the interests of the General
Partner and its affiliates in continuing the Partnership may be different
than those of the Limited Partners who desire to have the Partnership
dissolved and liquidated more quickly. The following table sets forth, for
each of the years indicated, compensation paid by the Partnership to the
General Partner and its affiliates.
Partnership Property
Fees and Management
Year Expenses Fees
- ---- ----------- ----------
1995................................... $162,000 $592,000
1996................................... 166,000 617,000
1997................................... 185,000 645,000
1998................................... 242,000 680,000
The General Partner of the Partnership is a wholly-owned subsidiary
of Apartment Investment and Management Company (" AIMCO"). Because AIMCO
and the Partnership both invest in apartment properties, these properties
may compete with one another for tenants. Furthermore, Limited Partners
should bear in mind that AIMCO may acquire properties in general market
areas where the Partnership's properties are located. It is believed that
this concentration of properties in a general market area will facilitate
overall operations through collective advertising efforts and other
operational efficiencies. In managing AIMCO's properties, AIMCO will
attempt to reduce such conflicts between competing properties by referring
prospective customers to the property considered to be most conveniently
located for the customer's needs.
On June 9, 1999 an affiliate of AIMCO commenced an offer to
purchase 20,860.54 Units, at $448 per Unit. On July 14, 1999, such
affiliate purchased 1,172 Units pursuant to the offer. Although AIMCO and
its affiliates have no current plans to conduct future tender offers for
the Units, their plans may change based on future circumstances, including
the making of offers by parties not affiliated with AIMCO.
FIDUCIARY DUTIES; 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, which 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 because the partner's conduct furthers the partner's
own interest.
Under the Partnership's Agreement of Limited Partnership, the
General Partner has no liability to the Partnership or to any Limited
Partner for any loss suffered by the Partnership which arises out of any
action or inaction of the General Partner, if the General Partner, in good
faith, determined that such course of conduct was in the best interests of
the Partnership, and such course of conduct did not constitute negligence
or misconduct of the General Partner. As a result, Unitholders might have a
more limited right of action in certain circumstances than they would have
in the absence of such a provision in the Partnership's Agreement of
Limited Partnership. The extent of the ability to vary the duty of loyalty
and the duty of care by the provisions in a partnership agreement have not
been resolved by a court of law.
As further provided under the Partnership's Agreement of Limited
Partnership, the Partnership will save harmless and pay all judgments and
claims against the General Partner and its affiliates from any liability,
loss or damage incurred by them or by the Partnership by reason of any act
performed or omitted to be performed by them in connection with the
business of the Partnership, including costs and attorneys' fees and any
amounts expended in the settlement of any claims of liability, loss or
damage; provided that if such liability, loss or claim arises out of any
action or inaction of the General Partner, such course of conduct did not
constitute negligence or misconduct by the General Partner or such other
persons or entities. Further, any such indemnification will be recoverable
only from the assets of the Partnership and not from the assets of the
Limited Partners. All judgments against the Partnership and the General
Partner, wherein the General Partner is entitled to indemnification, must
first be satisfied from Partnership assets before the General Partner is
responsible for these obligations.
Neither the General Partner, nor any affiliate will be indemnified
from any liability, loss or damage incurred by them in connection with (i)
any claim or settlement involving allegations that the securities laws,
including the Securities Act of 1933, were violated by the General Partner
or by any such other person or entity unless: (a) the General Partner or
other persons or entities seeking indemnification are successful in
defending such action; and (b) such indemnification is specifically
approved by a court of law which has been advised as to the current
position of the Securities and Exchange Commission, the California
Commissioner of Corporations, and the Texas Securities Board, regarding
indemnification for violations of securities law or (ii) any liability
imposed by law, including liability for fraud, bad faith or negligence.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following summary of the material U.S. federal income tax
consequences to Limited Partners of the Refinancing is based upon current
U.S. federal tax law which is subject to change, possibly with retroactive
effect. This summary is for general information only and does not address
all aspects of U.S. federal income taxation that may be relevant in the
particular circumstances of each Limited Partner or to Limited Partners
subject to special treatment under Internal Revenue Code (the "Code"). In
addition, this summary does not address any state, local or foreign tax
consequences. No ruling from the Internal Revenue Service ("IRS") will be
requested with respect to the U.S. federal income tax consequences of the
Refinancing and, as such, there can be no assurance that the IRS will agree
with the summary set forth herein.
EACH LIMITED PARTNER IS URGED TO CONSULT ITS TAX ADVISOR REGARDING
THE SPECIFIC TAX CONSEQUENCES OF THE AMENDMENT AND THE REFINANCING,
INCLUDING THE APPLICATION OF FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX
LAWS.
As an initial matter, the extension of the Partnership's term as
provided by the Amendment will not have any tax consequences to Limited
Partners.
In general, the Code provides that an increase in a partner's share
of partnership liabilities is treated as a cash contribution by such
partner to the partnership with a corresponding increase in the partner's
tax basis in its partnership interest. Conversely, to the extent a
partner's share of partnership liabilities is reduced, such reduction is
treated as a distribution of cash by the partnership to the partner with a
corresponding reduction in the partner's tax basis in its partnership
interest. In general, to the extent a partner receives cash distributions
in excess of such partner's tax basis in its partnership interest, taxable
gain is recognized.
As of July 31, 1999, the aggregate balance on the existing loans
was $[7,565,369]. The principal amount of the new loans (part of which will
be used to satisfy the existing loans in full) will be $[8,270,000], or
$[704,631] more than the existing loans. Each Limited Partner's adjusted
tax basis in its Partnership interest will be increased by its pro rata
share of such excess, or approximately $9.40 per Unit. Following the
completion of the Refinancing, the Partnership anticipates making a pro
rata cash distribution of approximately $567,708, or $7.57 per Unit. As
noted above, while this cash distribution will reduce the adjusted tax
basis of the Limited Partners' interests in the Partnership, a Limited
Partner will not recognize taxable gain unless the cash it receives exceeds
its adjusted tax basis. Therefore, the Refinancing and distribution should
not result in the recognition of taxable income to the Limited Partners.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
On October 1, 1998, Insignia Financial Group, Inc. merged into
AIMCO, and on February 26, 1999, Insignia Properties Trust merged into
AIMCO. As a result of these transactions, AIMCO acquired indirect ownership
of the General Partner.
No director or officer of the General Partner owns any Units. The
following table sets forth certain information regarding Units of the
Partnership owned by each person who is known by the Partnership to own
beneficially more than 5% of the Units as of July 30, 1999:
Name and address* of Amount and Nature of
Beneficial Owner Beneficial Owner Percent of Class
-------------------- --------------------- ----------------
AIMCO Properties L.P. 5,166.50 (1) 6.8%
Insignia Properties L.P. 25,833.50 (2) 34.4%
- ----------------------------
* 1873 South Bellaire Street, Denver, Colorado 80222
(1) Includes 3,369.50 Units owned by IPLP Acquisitions I L.L.C., which
is owned by AIMCO Properties, L.P. The Units may be deemed
beneficially owned by AIMCO-GP, Inc. (which is the general partner
of AIMCO Properties, L.P.) and AIMCO (which owns AIMCO-GP, Inc.)
(2) The Units may be deemed beneficially owned by AIMCO/IPT, Inc.
(which is the general partner of Insignia Properties, L.P.) and
AIMCO (which owns AIMCO/IPT, Inc.)
Insignia Properties, L.P. has entered into an agreement under which
it has agreed to vote 25,710.50 of its Units (i) on all matters submitted
by it or its affiliates, in proportion to the votes cast by non-affiliated
Unitholders and (ii) against any increase in compensation payable to the
General Partner or its affiliates.
CENTURY PROPERTIES FUND XVII
By: FOX PARTNERS
Managing General Partner
October ___, 1999
APPENDIX
CENTURY PROPERTIES FUND XVII
1873 South Bellaire Street
Denver, Colorado 80222
CONSENT OF LIMITED PARTNER
The undersigned, a limited partner of Century Properties Fund XVII
(the "Partnership"), and the holder of units (the "Units") of limited
partnership interest in the Partnership, acting with respect to all of the
Units owned by the undersigned, hereby:
[__] Consents [__] Withholds Consent [__] Abstains
with respect to the following Amendments to the Partnership's Agreement of
Limited Partnership:
1. Section 4.3 is amended to read in its entirety as follows: "The
Partnership shall commence on the date of filing of the certificate
of limited partnership and shall continue until _________, 2020*,
unless previously terminated in accordance with the provisions of
this Partnership
Agreement."
2. Section 19 is amended to add the following paragraph: "19.1.5 Six
months and one (1) day after the last indebtedness secured by any
of the Partnership's real property is paid in full (unless any new
financings otherwise requires; or"
3. Section 19 is amended to add the following paragraph: "19.1.6 Sale
of all or substantially all of the Partnership's assets."
IF NO ELECTION IS SPECIFIED, ANY OTHERWISE PROPERLY COMPLETED AND
SIGNED CONSENT FORM WILL BE DEEMED TO BE A CONSENT TO THE AMENDMENT.
The undersigned hereby acknowledges receipt of the Consent
Solicitation Statement, dated October __, 1999. THIS CONSENT IS SOLICITED
ON BEHALF OF CENTURY PROPERTIES FUND XVII, BY FOX PARTNERS, THE
MANAGING GENERAL PARTNER.
A fully completed, signed and dated copy of this Consent Form
should be sent to the Solicitation Agent by mail or overnight courier to
the appropriate address specified below, or by fax to the fax number
specified below, prior to 5:00 p.m., New York City time on ____________,
1999.
Completed and signed consents should be sent to Corporate Investors
Communications, Inc. by mail to P.O. Box 2065, South Hackensack, New Jersey
07606-2065; by overnight courier service to 111 Commerce Road, Carlstadt,
New Jersey 07072--Attention: Reorganization Department; or by fax at ( )
___ - ___.
Dated:____________, 1999 By: _______________________________
_______________________________
Please Print Name
- -----------
* A date that is six months and one (1) day after the date the last of the
Refinancings will initially be scheduled to mature.
If held jointly:
By:________________________________
________________________________
Please Print Name
Please sign exactly as you hold your Partnership Units. 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.
