GRAPE INVESTORS, LLC
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June 19, 1997
Mr. a;dkfs Investor ID#: _________
Mrs. a;xxxx
Address
Address;
City, Town
a;ldkf
Dear Limited Partner:
Grape Investors, LLC ("Grape") wishes to inform you that it has supplemented and
amended its offer to purchase Damson Xxxxxxxx Realty Income Fund II Interests
dated April 21, 1998 ("Original Offer") in response to customary review by the
Securities and Exchange Commission ("SEC"). A copy of the Supplement to the
Offer to Purchase dated June 19, 1998 ("Supplement") is enclosed with this
letter. Pursuant to SEC requirements, Xxxxx's offer has been extended to July
8, 1998 ("Expiration Date"). GRAPE'S PURCHASE PRICE PER INTEREST HAS NOT
CHANGED.
Payment for Interests tendered pursuant to the Original Offer or pursuant to the
Supplement dated June 18, 1998 will be made within 10 business days following
the Expiration Date provided Grape has received from you a properly completed
and duly executed Agreement of Sale and assurances from the General Partner that
the Seller's address will be changed to the Purchaser's address pursuant to the
terms of the Offer.
Grape is offering to pay a purchase price of $2,350 for each .01 percent
interest or $450 per Interest (per $1,000 originally invested in the
Partnership) in Damson Xxxxxxxx Realty Income Fund II (the "Partnership").
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According to the records provided to us by the General Partner,
you currently own [XXX]% of the outstanding Interests in
XXXXXX XXXXXXXX REALTY INCOME FUND II
We are offering to purchase Interests for
$[XXX] CASH
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PLEASE REVIEW CAREFULLY THE "SPECIAL FACTORS" SET FORTH ON
THE REVERSE SIDE OF THIS LETTER
AND THE SUPPLEMENT ENCLOSED WITH THIS LETTER.
NO ADDITIONAL PAPERWORK IS REQUIRED FOR THOSE LIMITED PARTNERS
WHO HAVE ALREADY TENDERED
THEIR INTERESTS TO GRAPE AND WISH TO COMPLETE THE TRANSACTION.
If you wish to tender some or all of your Interests and have not already done
so, all you need to do is complete the Agreement of Sale in accordance with the
instructions and return it to Grape in the pre-addressed return envelope.
Please call us at (000) 000-0000 if you have any questions. Thank you for your
consideration of our offer.
GRAPE INVESTORS, LLC
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BEFORE SELLING YOUR INTERESTS TO GRAPE, PLEASE CONSIDER THE FOLLOWING SPECIAL
FACTORS:
* The Partnership's Annual Report for 1997 filed with the SEC on Form
10-K ("10-K") reports net assets in liquidation as of December 31,
1997 of $27,394,000 or $527 per Interest ($1,000 original investment).
The Partnership filed a Form 14D-9 on May 6, 1998 which was amended
with a Form 14D-9/A filed on May 19, 1998 (collectively, the "14D-9")
in which it disclosed that it had accepted an offer on April 30, 1998
to purchase all of the Partnership's Properties for $33,680,000 (the
"Pending Purchase"), subject to the negotiation of a definitive
purchase and sale agreement. The Partnership stated , "Although there
can be no assurance that the proposed sale of the properties will be
completed, if the sale is completed at the stated price, the limited
partners will receive total aggregate sales proceeds of $640 per
$1,000 originally invested in the Partnership."
* No independent person has been retained to evaluate or render any
opinion with respect to the fairness of Grape's offer and no
representation is made as to such fairness or other measures of value
that may be relevant to the Limited Partners. We urge you to consult
your own financial and tax advisors in connection with Xxxxx's offer.
* Although Grape cannot predict the future value of the Partnership
assets on a per Interest basis, the purchase price could differ
significantly from the net proceeds that would be realized from a
current sale of the Properties owned by the Partnership or from that
which may be realized upon future liquidation of the Partnership.
* Grape is making the offer with a view to making a profit.
Accordingly, there is a conflict between Xxxxx's desire to acquire
your Interests at a low price and your desire to sell your Interests
at a high price. Xxxxx's intent is to acquire the Interests at a
discount to the value Grape might ultimately realize from owning the
Interests.
* The tax consequences of the Offer to a particular Limited Partner may
be different from those of other Limited Partners and we urge you to
consult your own tax advisor in connection with the Offer.
* Limited Partners who sell their Interests will be giving up the
opportunity to participate in any future potential benefits
represented by ownership of Interests, including the right to
participate in any future distribution of cash or property.
* If the Purchaser is successful in purchasing more than 5.48 percent
of the outstanding Interests, then, when added to Purchaser's existing
Interests, Purchaser will own more than 10 percent of the outstanding
Interests, which will put Purchaser a position to exert a strong
influence upon the General Partner and the operation of the
Partnership. Purchaser intends to actively encourage the General
Partner to pursue an expeditious negotiation of the purchase and sale
agreement for the Pending Purchase and closing of the sale of the
Partnership Properties, and if the General Partner does not execute a
purchase agreement and complete the closing in a timely manner,
Purchaser will consider taking appropriate action which may include
attempting to replace the General Partner, encouraging a sale of some
or all of the Partnership assets to another purchaser, and potentially
dissolving the Partnership, if such a sale of assets requires a
dissolution of the Partnership in accordance with the Partnership
Agreement.
XXXXXX/XXXXXXXX REALTY INCOME FUND II
AGREEMENT OF SALE
The undersigned Limited Partner (the "Seller") does hereby sell, assign,
transfer, convey and deliver (the "Sale") to Grape Investors, LLC, a Delaware
limited liability company ("Grape" or the "Purchaser"), all of the Seller's
right, title and interest in "Interests" (as defined in the Partnership
Agreement) of Damson / Xxxxxxxx Realty Income Fund II, a Delaware limited
partnership (the "Partnership") being sold pursuant to this Agreement of Sale
("Agreement") and the Offer dated April 21, 1998 (the "Offer") for a purchase
price of $2,350 for each .01 percent interest in the Partnership, without regard
to the record date or whether such distributions are classified as a return on,
or a return of, capital. Included in the definition of "Interests" are any
proceeds which any Seller may receive after February 28, 1998 from the
settlement of any class action lawsuit by the Limited Partners of the
Partnership, which lawsuit relates to the Partnership or its General Partner.
PAYMENT FOR SUCH PURCHASE WILL BE MADE WITHIN 10 BUSINESS DAYS FOLLOWING THE
"EXPIRATION DATE" SET FORTH IN THE OFFER, PROVIDED XXXXX HAS RECEIVED AND
ACCEPTED A PROPERLY COMPLETED AND DULY EXECUTED AGREEMENT OF SALE AND RECEIVED
ASSURANCES FROM THE GENERAL PARTNER THAT THE SELLER'S ADDRESS WILL BE CHANGED TO
THE PURCHASER'S ADDRESS PURSUANT TO THE TERMS AND CONDITIONS OF THE OFFER. IF
MORE THAN 5,000 INTERESTS ARE TENDERED TO GRAPE PRIOR TO GRAPE'S PAYMENT FOR
SUCH INTERESTS, GRAPE WILL ACCEPT UP TO 5,000 INTERESTS ON A PRO RATA BASIS WITH
APPROPRIATE ADJUSTMENTS AS GRAPE DEEMS NECESSARY.
The Seller hereby represents and warrants to the Purchaser that the Seller owns
such Interests and has full power and authority to validly sell, assign,
transfer, convey, and deliver to the Purchaser the Interests, and that when any
such Interests are accepted for payment by the Purchaser, the Purchaser will
acquire good, marketable and unencumbered title thereto, free and clear of all
options, liens, restrictions, charges, encumbrances, conditional sales
agreements, or other obligations relating to the sale or transfer thereof, and
such Interests will not be subject to any adverse claim. The Seller represents
and warrants that the Seller is a "United States person" as defined in Section
7701(a)(30) of the Internal Revenue Code of 1986, as amended, or if the Seller
is not a United States person, the Seller does not own beneficially or of record
more than 5 percent of the outstanding Interests.
Such Sale shall include, without limitation, all rights in, and claims to, any
Partnership profits and losses, cash distributions, voting rights and other
benefits of any nature whatsoever, distributable or allocable to such Interests
under the Partnership's Partnership Agreement. Upon the execution of this
Agreement by the Seller, Purchaser shall have the right to receive all benefits
and cash distributions and otherwise exercise all rights of beneficial ownership
of such Interests.
Seller, upon execution of this Agreement and the mailing of payment by the
Purchaser to Seller, hereby irrevocably constitutes and appoints Purchaser as
its true and lawful agent and attorney-in-fact with respect to Interests with
full power of substitution. This power of attorney is an irrevocable power,
coupled with an interest of the Seller to Purchaser, to (i) execute, swear to,
acknowledge, and file any document relating to the assignment of the Interests
on the books of the Partnership that are maintained with respect to the
Interests and on the Partnership's books maintained by the General Partner of
the Partnership, or amend the books and records of the Partnership as necessary
or appropriate for the assignment of the Interests, (ii) vote or act in such
manner as any such attorney-in-fact shall, in its sole discretion, deem proper
with respect to the Interests, (iii) deliver the Interests and transfer
ownership of the Interests on the books of the Partnership that are maintained
with respect to the Interests and on the Partnership's books, maintained by the
Partnership's General Partner, (iv) endorse on the Seller's behalf any and all
payments received by Purchaser from the Partnership for any period on or after
February 28, 1998, which are made payable to the Seller, in favor of Purchaser,
(v) execute on the Seller's behalf, any applications for transfer and any
distribution agreements required by the National Association of Securities
Dealers, Inc.'s Notice to Members 96-14 to give effect to the transaction
contemplated by this Agreement, and (vi) receive all distributions and amend the
books and records of the Partnership, including Seller's address and records, to
direct all distributions to Purchaser as of the effective date of this
Agreement. Purchaser shall not be required to post bond of any nature in
connection with this power of attorney.
SELLER DOES HEREBY DIRECT AND INSTRUCT THE PARTNERSHIP AND THE GENERAL PARTNER
IMMEDIATELY UPON THEIR RECEIPT OF THIS AGREEMENT OF SALE (i) TO AMEND THE BOOKS
AND RECORDS OF THE PARTNERSHIP TO CHANGE THE SELLER'S ADDRESS OF RECORD FOR
PURPOSES OF MAILING DISTRIBUTIONS TO GRAPE INVESTORS, LLC, C/O XXXXX CAPITAL,
0000 XXXXX XXXXXX XXXXX, XXXXX 000, XXX XXXXX, XXXXXXXXXX 92108, AND; (ii) TO
FORWARD ALL DISTRIBUTIONS AND ALL OTHER INFORMATION RELATING THEREIN TO BE
RECEIVED BY SELLER TO GRAPE INVESTORS, LLC TO THE ADDRESS SET FORTH IN (i)
ABOVE.
Seller does hereby release and discharge the General Partner and their officers,
shareholders, employees and agents from all actions, causes of actions, claims
or demands Seller has, or may have, against the General Partner that result from
the General Partner's reliance on this Agreement or any of the terms and
conditions contained herein. Seller does hereby indemnify and hold harmless the
Partnership from and against all claims, demands, damages, losses, obligations
and responsibilities arising, directly or indirectly, out of a breach of any one
or more representations and warranties set forth herein.
All authority herein conferred or agreed to be conferred shall survive the death
or incapacity of the Seller and any obligations of the Seller shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. THIS AGREEMENT IS IRREVOCABLE AND MAY NOT BE WITHDRAWN FOLLOWING
THE EXPIRATION DATE, BUT MAY BE WITHDRAWN PRIOR THERETO. Upon request, the
Seller will execute and deliver any additional documents deemed by the Purchaser
or the Partnership to be necessary or desirable to complete the assignment,
transfer and purchase of such Interests.
The Seller hereby certifies, under penalties of perjury, that (i) the tax
identification number shown on this form is the Seller's correct Taxpayer
Identification Number; and (ii) Seller is not subject to backup withholding
either because Seller has not been notified by the Internal Revenue Service (the
"IRS") that Seller is subject to backup withholding as a result of failure to
report all interest or dividends, or the IRS has notified Seller that Seller is
no longer subject to backup withholding.
The Seller hereby also certifies, under penalties of perjury, that the Seller,
if an individual, is not a nonresident alien for purposes of U.S. income
taxation, and if not an individual, is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations). The Seller understands that
this certification may be disclosed to the IRS by the Purchaser and that any
false statements contained herein could be punished by fine, imprisonment, or
both.
The undersigned recognizes that, if proration is required pursuant to the terms
of the Offer, the Purchaser will accept for payment from among those Interests
validly tendered on or prior to the Expiration Date and not properly withdrawn,
the maximum number of Interests permitted pursuant to the Offer on a pro rata
basis. The undersigned understands that a tender of Interests to the Purchaser
will constitute a binding agreement between the undersigned and the Purchaser
upon the terms and subject to the conditions of the Offer. The undersigned
recognizes that under certain circumstances set forth in the Offer to Purchase,
the Purchaser may not be required to accept for payment any of the Interests
tendered hereby. In such event, the
XXXXXX/XXXXXXXX REALTY INCOME FUND II
undersigned understands that any Agreement for Interests not accepted for
payment will be destroyed by the Purchaser. This Agreement shall be governed
by and construed in accordance with the laws of the State of California.
Seller waives any claim that California or the Southern District of
California is an inconvenient forum, and waives any right to trial by jury.
The undersigned Seller (including any joint owner(s)) owns and wishes to assign
the number of Interests set forth below. By its own or its Authorized
Signatory's signature below, the Seller hereby assigns its entire right, title
and interest in the Interests to the Purchaser.
By executing this Agreement the Seller hereby acknowledges to the General
Partner that the Seller desires to assign the Seller's Interests referenced
herein and hereby directs the General Partner to take all such actions as are
necessary to accomplish such assignment, and appoints the General Partner the
agent and attorney-in-fact of the Limited Partner, to execute, swear to,
acknowledge and file any document or amend the books and records of the
Partnership as necessary or appropriate for the assignment or the withdrawal of
the Limited Partner.
IN WITNESS WHEREOF the Limited Partner has executed, or caused its Authorized
Signatory to execute, this Agreement.
Print Name of Limited Partner (as it appears on the investment)
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Print Name and Capacity of Authorized Signatory (if other than above)
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Seller's Signature Joint Seller's Signature
MEDALLION GUARANTEE MEDALLION GUARANTEE
(Medallion Guarantee for EACH Seller's (Medallion Guarantee for EACH
signature) Seller's signature)
ACCEPTED:
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Home Telephone Number PURCHASER/GRAPE INVESTORS, LLC
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Office Telephone Number By: Its Manager, Xxxxx Capital,
------------------- LLC
Mailing Address
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City, State, Zip Code By:
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State of Residence Authorized Representative
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Social Security/Tax ID
------------------- No.
Date YOU MUST MAIL EXECUTED ORIGINAL TO
------------------- PURCHASER:
$2,350.00 Sales Price for each .01
------------------- percent interest Grape Investors, LLC
in the Partnership 0000 Xxxxx Xxxxxx Xxxxx,
Xxxxx 000
San Diego, California 92108
Percent Interest to be Sold OR
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/ / Check here if you wish to sell ALL of your Interests
PLEASE CALL US AT (000) 000-0000 IF YOU HAVE ANY QUESTIONS REGARDING
THE SALE OF YOUR INTERESTS.
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INSTRUCTIONS TO COMPLETE AGREEMENT OF SALE
ALL SIGNATURES MUST BE MEDALLION GUARANTEED
BENEFICIAL OWNER OF RECORD SHOULD: DEATH
1. COMPLETE and SIGN Agreement. If any owner is deceased, please
2. Have Signature Medallion Guaranteed enclose a certified copy of Death
by your Bank or Broker. Certificate. If Ownership is OTHER
3. Indicate Number of Interests Owned than Joint Tenants With Right of
and/or To Be Sold. Survivorship, please provide Letter
4. Return Agreement in Envelope Provided. of Testamentary or Administration
current within 60 days showing your
beneficial ownership or executor
capacity (in addition to copy of
Death Certificate).
JOINT OWNERSHIP
Please have ALL owners of record sign CORPORATION
Agreement, and SEPARATELY Medallion Corporate resolution required
Guarantee each signature. showing authorized signatory.
IRA/XXXXX TRUST, PROFIT SHARING OR PENSION
PLAN
1. Beneficial owner must sign Agreement. Please provide title, signature,
2. Provide Custodian information and other applicable pages of Trust
(i.e. Name, Company Name, Agreement showing authorized
Address, Phone No. and Account No.) signatory.
3. Grape will obtain the Medallion
Guarantee of Custodian Signature.
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