CONCAP EQUITIES, INC.
Tower Two
2000 South Colorado Boulevard
Suite 2 - 1000
Denver, Colorado 80222
To The limited partners of
Johnstown/Consolidated Income Partners
September 15, 2000
Dear Limited Partner:
It is our pleasure to provide you with the enclosed Consent Solicitation
Statement. The Statement contains information relating to an amendment to the
Limited Partnership Agreement of Johnstown/Consolidated Income Partners that
requires the consent of a majority of the limited partners of your partnership.
In general, the amendment, if approved, would:
o Eliminate the requirement for your partnership to maintain reserves
equal to at least $955,458, which amount is equal to 5% of the
limited partners capital contributions less distributions to limited
partners from participating note payments and instead permit your
general partner to determine reasonable reserve requirements of your
partnership.
o Provide your partnership with greater flexibility in making
distributions to limited partners as the working capital reserve
required by your partnership may be reduced.
Concap Equities, Inc., the general partner of your partnership, believes
that the amendment is in the best interests of limited partners and your
partnership and recommends you vote "FOR" of the amendment. In addition,
affiliates of your general partner own approximately 49.07% of the limited
partnership interests in your partnership and have informed your general partner
that they intend to vote "FOR" the amendment. Accordingly, limited partners
holding an additional 0.94% need to vote FOR the amendment in order for it to
pass.
The enclosed Statement includes a complete discussion of the amendment. We
urge you to read the enclosed Statement carefully and to return your signed
Consent Form as quickly as possible. A postage-paid return envelope has been
included for your convenience. Consent Forms must be received by October 16,
2000, unless extended.
If you have any questions about the enclosed material, please call River
Oaks Partnership Services, Inc. at (877) 393-4962.
Very truly yours,
CONCAP EQUITIES, INC.
<PAGE>
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
STATEMENT FURNISHED IN CONNECITON WITH
THE SOLICITATION OF CONSENTS
Dated: September 15, 2000
This Statement is furnished by Concap Equities, Inc., the general partner
of Johnstown/Consolidated Income Partners, a California limited partnership, to
solicit the consent of limited partners of your partnership to an amendment to
the Limited Partnership Agreement of your partnership. The principal executive
offices of your general partner and your partnership are located at Tower Two,
2000 South Colorado Boulevard, Suite 2 - 1000, Denver, Colorado 80222.
The amendment, if adopted, would result in the amendment to your
partnership agreement which, if approved, would:
o Eliminate the restriction set forth in your partnership agreement
for your partnership to maintain a reserve equal to 5% of the
limited partners capital contributions less distributions to limited
partners from participating note payments, which amount is currently
$955,458 and instead permit your general partner to determine
reasonable reserve requirements of your partnership.
o Provide your partnership with greater flexibility in making
distributions to limited partners as the working capital reserve
required by your partnership may be reduced.
Your general partner believes that adoption of the amendment is in the
best interests of your partnership and the limited partners and recommends that
you vote "FOR" in favor of the amendment.
IMPORTANT
Your consent is important. No matter how many units of limited partnership
interest ("Units") in your partnership you own, your general partner recommends
that you vote in favor of approving the amendment by checking the "FOR" box on
the enclosed Consent Form. Affiliates of your general partner currently hold a
total of 63,204 Units representing 49.07% of the total outstanding Units. Such
affiliates have advised your general partner that they intend to vote FOR the
amendment. Accordingly, limited partners holding an additional 0.94% need to
vote FOR the amendment in order for it to pass.
Your Consent Form should be returned promptly. Your completed and signed
Consent Form must be received no later than October 16, 2000, unless such date
is extended as hereinafter provided. A postage-paid return envelope has been
included for your convenience. Any consent form that is not returned or that is
signed and does not specifically approve or disapprove the amendment will
effectively be treated as disapproving the amendment.
<PAGE>
River Oaks Partnership Services, Inc. is assisting your general partner
with the solicitation and may be contacted at (877) 393-4962.
THE AMENDMENT
Your general partner is seeking the consent of the limited partners to
eliminate the restriction set forth in your partnership agreement which requires
that your partnership maintain a reserve of no less than 5% of the of the
limited partners capital contributions less distributions to limited partners
from participating note payments. At present, this amount is equal to $955,458.
In order to effect this amendment, the consent of a majority in interest of the
limited partners is required. Affiliates of your general partner currently hold
a total of 63,204 Units representing 49.07% of the total outstanding Units. Such
affiliates have advised your general partner that they intend to vote FOR the
amendment. Further, any reserve requirements may be limited by the terms of the
loan encumbering your partnership's property from time to time.
Text of the Amendment
Section 6.13 of your partnership agreement currently provides as follows:
"Section 6.13 Reserves. The Partnership shall maintain reasonable
reserves for normal repairs, replacements, working capital and
contingencies in an amount equal to at least five percent (5%) of
Invested Capital. For purposes of this calculation only, Surplus
Funds from the sale of Partnership properties shall be deducted from
Capital Contributions in determining Invested Capital. In the event
expenditures are made from these reserves, operating revenue shall
be allocated to such reserves to the extent necessary to maintain
the foregoing level. The General Partner in its sole discretion may
from time to time maintain working capital reserves of a larger
amount, if deemed necessary for Partnership business."
Your general partner is seeking the consent of the limited partners to
adopt an amendment to Section 6.13 so that it would read in its entirety as
follows:
"Section 6.13 Reserves. The Partnership shall maintain reasonable
reserves for normal working capital and contingencies in an amount
determined from time to time by your general partner in it sole
discretion."
Effects of Amendment if Adopted
If the amendment is adopted, your general partner will have the discretion
to maintain your partnership's reserves at such level as it deems advisable as
compared to a fixed minimum amount. If adopted, your general partner intends to
reduce the current reserve amount from $955,458 to an amount which it believes
is warranted given the anticipated expenses of your partnership. The amount of
any such reduction will be distributed to your partnership's partners
(including, your general partner, to the extent provided in the partnership
agreement, and to affiliates of your general partner who hold Units).
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<PAGE>
Although your general partner has not completed its assessment of the
final reserve amount that it believes your partnership should maintain, your
general partner believes that the existing reserve amount is in excess of the
reserve amount needed by your partnership. This determination was based on a
preliminary review of past capital expenditures made at your partnership's
property, current operating budgets and projected capital improvements required
to be made at your partnership's property in near future.
By eliminating the reserve amount requirement, your partnership will have
greater flexibility when determining whether to make a distribution to its
partners. However, if your partnership's property requires capital expenditures
in excess of those currently anticipated and/or the revenue generated at your
partnership's property were to be significantly reduced, the ability of your
partnership to make such additional capital expenditures as needed or to meet
its debt service obligations would be adversely effected. Your partnership's
property is encumbered by a first mortgage loan that had a principal balance of
$2,325,000 at June 30, 2000, bears interest at a rate of 7.33% per annum,
requires monthly payments of interest only ($14,000), and matures in November
2003 at which time the loan is scheduled to have an outstanding principal
balance of $2,325,000.
Further, your general partner has budgeted approximately $75,000 for
capital improvements at your partnership's property during 2000. As of June 30,
2000, your partnership has completed $29,000 of capital improvements at its
property. As a result of these risks, your general partner has determined to
maintain a current reserve in an amount sufficient to satisfy anticipated
capital expenditures and debt service for the near future.
Effects if Amendment is not Adopted
If the amendment is not adopted, your partnership will continue to be
subject to the reserve restrictions set forth in Section 6.13 of your
partnership agreement. As a result, your partnership will be required to
maintain a reserve equal to 5% of the of the limited partners capital
contributions less distributions to limited partners from participating note
payments. Furthermore, because your partnership will be required to maintain
this reserve, your partnership's ability to make distributions to the limited
partners will continue to be limited.
REQUIREMENTS FOR ADOPTION OF THE AMENDMENTS
Article XVII of your partnership agreement provides that the limited
partners, by vote of more than 50% of the outstanding Units, shall have the
right to amend your partnership agreement. Article XIV of your partnership
agreement provides that your general partner may seek the consent of limited
partners to any amendment to your partnership agreement requiring the vote of
limited partners. Your general partner hereby solicits the consent of limited
partners to amend your partnership agreement in accordance with the terms of the
amendment set forth above under "THE AMENDMENT-Text of the Amendment".
Limited partners at the close of business on September 1, 2000 (the
"Record Date") will be entitled to one vote for each Unit then held. On the
Record Date, there were 128,810 Units outstanding held by 1,486 limited
partners, including 63,204 Units (49.07% of the outstanding Units) owned by
affiliates of your general partner.
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<PAGE>
The amendment will be approved at such time as limited partners holding a
majority of the outstanding Units shall have consented to the amendment but in
no event prior to September 30, 2000. A limited partner must vote all of the
Units held by him in the same way. He cannot vote separate Units held by him in
your partnership in differing ways. A signed Consent Form which is returned
without a vote will be deemed a "FOR" vote.
Each limited partner is requested to complete and execute the enclosed
Consent Form in accordance with the instructions contained therein and to return
the Consent Form in the enclosed, self-addressed, postage pre-paid envelope as
soon as possible, but in no event later than October 16, 2000. Such date may be
extended from time to time in the sole discretion of your general partner until
November 13, 2000.
A Consent Form may only be revoked by delivery to your partnership of a
later-dated Consent Form in the form enclosed or a dated and executed revocation
that specifically refers to the Consent Form to be revoked. To be effective,
such revocation must be received by your partnership prior to the time that
signed unrevoked Consent Forms voting in favor of the amendment and representing
a majority of the Units outstanding have been delivered to your general
partners.
The amendment will apply prospectively from and after the date it becomes
effective. All limited partners will be bound by the amendment, if it becomes
effective, whether or not they vote in favor of the amendment.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding Units owned
by each person who is known by your partnership to own beneficially or exercise
voting or dispositive control over more than 5% of the Units, by Concap
Equities, Inc., the managing general partner of your partnership, and by all
directors and executive officers of your general partners as a group as of June
30, 2000.
--------------------------------------------------------------------------------
Name and address of Amount and nature of
Beneficial Owner Beneficial Owner % of Class
--------------------------------------------------------------------------------
AIMCO Properties, L.P. (1)(2) 36,996.5 28.72%
--------------------------------------------------------------------------------
Insignia Properties, L.P. (1)(2) 12,146.0 9.43%
--------------------------------------------------------------------------------
Madison River Properties, LLC (1)(2) 14,061.5 10.92%
--------------------------------------------------------------------------------
Concap Equities, Inc. (1)(2) -- --
--------------------------------------------------------------------------------
All directors and executive -- --
officers as
a group (five persons)
--------------------------------------------------------------------------------
(1) The business address of AIMCO Properties, L.P. is Tower Two, 2000 South
Colorado Boulevard, Suite 2 - 1000, Denver, Colorado 80222. The business
address for each of Insignia Properties, L.P., Madison River Properties,
LLC and Concap Equities, Inc. is 55 Beattie Place, Greenville, South
Carolina 29602.
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<PAGE>
(2) Based upon information supplied to your partnership by AIMCO Properties,
L.P., Insignia Properties, L.P., Madison River Properties, LLC and Concap
Equities, Inc.
Your partnership is a limited partnership and has no officers or
directors. AIMCO Properties, L.P. is an affiliate of your general partners.
AIMCO Properties, L.P. has advised your partnership that they intend to vote
their Units (see chart above) in favor of the amendment.
MISCELLANEOUS
The cost of mailing, assembling and mailing the enclosed form of Consent,
this Statement and other materials that may be sent to limited partners in
connection with this solicitation shall be borne by your partnership. It is
estimated that total expenditures relating to the solicitation made hereby,
including legal fees, filing fees with the Securities and Exchange Commission,
printing and mailing fees and proxy solicitation fees, will be approximately
$10,000. Certain directors, officers and employees of your general partner may
solicit the execution and return of Consents by mail, telephone, telegraph and
personal interview. Such directors, officers and employees will not be
additionally compensated, but may be reimbursed for out-of-pocket expenses in
connection with such solicitation. In addition, your partnership has retained
the services of River Oaks Partnership Services, Inc. (the "Information Agent"),
an outside solicitation firm, to aid in the solicitation of Consents for an
aggregate fee of $3,000 (which amount is included in the above estimate) plus
out-of-pocket expenses.
For additional information, please contact the Information Agent at (877)
393-4962.
By Order of the Board of Directors of
Concap Equities, Inc., your general
partner of your partnership
Joel F. Bonder, Executive Vice President
and Secretary
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<PAGE>
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
CONSENT
The undersigned, a holder of units (the "Units") of limited partnership in
Johnstown/Consolidated Income Partners, a California limited partnership (the
"Partnership"), does hereby vote, with respect to all Units in the Partnership
owned by the undersigned as follows:
|_| FOR |_| AGAINST |_| ABSTAIN
Approval of the amendment to the Agreement of Limited Partnership of the
Partnership as more particularly described in the accompanying Statement
Furnished in Connection with the Solicitation of Consents dated September 15,
2000, receipt of which is hereby acknowledged by the undersigned, authorizing
amendments to the Partnership Agreement to remove the minimum reserve
requirement as currently set forth in the Partnership Agreement.
THIS CONSENT IS SOLICITED BY JOHNSTOWN/CONSOLIDATED INCOME PARTNERS. WHEN THIS
CONSENT IS PROPERLY EXECUTED, THE UNITS REPRESENTATED HEREBY WILL BE VOTED AS
SPECIFIED. IF NO SPECIFICATION IS MADE ON THIS CARD, THIS CONSENT WILL BE VOTED
FOR THE AMENDMENT.
Dated:____________________________, 2000
________________________________________
Signature
________________________________________
Signature (if held jointly)
________________________________________
Title
Please sign exactly as name appears here
on. When Units are held by joint
tenants, both should sign. When signing
as an attorney, as executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in name by
President or other authorized officer.
If a partner-ship, please sign in
partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS CONSENT PROMPTLY USING THE ENCLOSED
PRE-PAID ENVELOPE TO: River Oaks Partnership Services, Inc., P.O. Box 2065, S.
Hackensack, New Jersey, 07606-2065. If you have any questions, please call the
Information Agent at (877) 393-4962.
YOUR CONSENT MUST BE RECEIVED BY OCTOBER 16, 2000
