Offer to Purchase for Cash
Up to 40,000 Units of Limited Partnership Interest
in
ANGELES INCOME PROPERTIES, LTD. II,
a California limited partnership
for
$150 Net Per Unit
by
BROAD RIVER PROPERTIES, L.L.C.
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THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK TIME, ON MAY 21, 1998, UNLESS THE OFFER IS EXTENDED.
-------------------------------------------------------------------------------
IMPORTANT
Broad River Properties, L.L.C., a Delaware limited liability company
(the "Purchaser"), is offering to purchase up to 40,000 of the outstanding
units of limited partnership interest ("Units") in Angeles Income Properties,
Ltd. II, a California limited partnership (the "Partnership"), at a purchase
price of $150 per Unit (the "Purchase Price"), net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Assignment of Partnership Interest
(which, together with any supplements or amendments, collectively constitute
the "Offer"). The Purchase Price is subject to adjustment under certain
circumstances, as described herein. Holders of Units (each, a "Limited
Partner") who tender their Units in response to the Offer will not be
obligated to pay any commissions or partnership transfer fees. The Purchaser
is an affiliate of Angeles Realty Corporation II, which is the managing
general partner of the Partnership (the "Managing General Partner").
Limited Partners are urged to consider the following factors:
o The Purchaser and the Managing General Partner are both
affiliates of and controlled by Insignia Properties Trust
("IPT"), which is controlled by Insignia Financial Group,
Inc. ("Insignia"). IPT, through its operating partnership
Insignia Properties, L.P. ("IPLP"), currently owns 3,950 (or
approximately 4.0%) of the outstanding Units.
o The net asset value per Unit most recently estimated by the
Managing General Partner was $241 as of December 31, 1997,
and the net liquidation value per Unit (the "Estimated
Liquidation Value") estimated by the Purchaser (which is an
affiliate of the Managing General Partner) in connection
with the Offer is $240. The Purchaser does not believe,
however, that either the Managing General Partner's net
asset value estimate or the Estimated Liquidation Value
represents a fair estimate of the market value of a Unit,
primarily due to the fact that such estimates do not take
into account timing considerations, market uncertainties and
legal and other expenses that would be incurred in
connection with a liquidation of the Partnership. See
Section 13. Accordingly, the Purchaser does not believe that
such estimates should be viewed as representative of the
amount a Limited Partner can realistically expect to obtain
on a sale of a Unit in the near term.
o The Purchaser will have the right to vote all Units acquired
pursuant to the Offer. Accordingly, if the Purchaser (which
is an affiliate of the Managing General Partner) is
successful in acquiring a significant number of Units, it
will be able to significantly influence all voting decisions
with respect to the Partnership, including decisions
regarding liquidation, amendments to the Limited Partnership
Agreement and removal and replacement of the Managing
General Partner.
o The Purchaser (which is an affiliate of the Managing General
Partner) is making the Offer with a view to making a profit.
Accordingly, there is a conflict between the desire of the
Purchaser (which is an affiliate of the Managing General
Partner) to purchase Units at a low price and the desire of
the Limited Partners to sell their Units at a high price.
THE OFFER IS NOT CONDITIONED ON FINANCING OR UPON ANY MINIMUM
AGGREGATE NUMBER OF UNITS BEING TENDERED.
----------------------------------------
Any Limited Partner desiring to tender Units should complete and sign
the Assignment of Partnership Interest in accordance with the Instructions to
the Assignment of Partnership Interest and mail or deliver the signed
Assignment of Partnership Interest to the Depositary. A Limited Partner may
tender any or all of the Units owned by that Limited Partner; provided,
however, that because of restrictions in the Partnership's Limited Partnership
Agreement, in order for a partial tender to be valid, after a sale of Units
pursuant to the Offer, the tendering Limited Partner must continue to hold a
minimum of ten Units (or, in the case of Limited Partners who hold Units in an
Individual Retirement Account or Xxxxx Plan, at least four Units (except
Limited Partners who reside in New Mexico and Virginia, who must continue to
hold at least five Units)). Tenders of fractional Units will not be permitted,
except by a Limited Partner who is tendering all of the Units owned by that
Limited Partner.
Questions and requests for assistance or for additional copies of
this Offer to Purchase and the Assignment of Partnership Interest may be
directed to the Information Agent at the address and telephone numbers set
forth below and on the back cover of this Offer to Purchase. No soliciting
dealer fees or other payments to brokers for tenders are being paid by the
Purchaser (which is an affiliate of the Managing General Partner).
----------------------------------------
For More Information or for Further Assistance Please Call:
Beacon Hill Partners, Inc.
at
(000) 000-0000
April 24, 1998
TABLE OF CONTENTS
PAGE
INTRODUCTION.................................................................................................... 1
The Purchaser; Affiliation with the Managing General Partner................................................ 1
Some Factors to Be Considered by Limited Partners........................................................... 2
Reasons for and Effects of the Offer........................................................................ 3
Certain Tax Considerations.................................................................................. 4
Originally Anticipated Term of the Partnership; General Policy Regarding
Sales and Refinancings of Partnership Properties; Alternatives..................................... 4
Conditions.................................................................................................. 5
Distributions............................................................................................... 5
Outstanding Units........................................................................................... 5
THE OFFER....................................................................................................... 6
Section 1. Terms of the Offer; Expiration Date; Proration.................................................. 6
Section 2. Acceptance for Payment and Payment for Units.................................................... 7
Section 3. Procedure for Tendering Units................................................................... 7
Valid Tender............................................................................................ 7
Signature Requirements.................................................................................. 8
Delivery of Assignment of Partnership Interest.......................................................... 8
Appointment as Proxy; Power of Attorney................................................................. 8
Assignment of Interest in Future Distributions.......................................................... 9
Determination of Validity; Rejection of Units; Waiver of Defects; No Obligation
to Give Notice of Defects.......................................................................... 9
Backup Federal Income Tax Withholding................................................................... 9
FIRPTA Withholding...................................................................................... 9
Binding Obligation...................................................................................... 9
Section 4. Withdrawal Rights............................................................................... 9
Section 5. Extension of Tender Period; Termination; Amendment.............................................. 10
Section 6. Certain Federal Income Tax Matters.............................................................. 11
General................................................................................................. 11
Gain or Loss Generally.................................................................................. 11
Unrealized Receivables and Certain Inventory............................................................ 12
Passive Activity Loss Limitation........................................................................ 12
Partnership Termination................................................................................. 12
Backup Withholding and FIRPTA Withholding............................................................... 13
Section 7. Effects of the Offer............................................................................ 13
Limitations on Resales.................................................................................. 13
Effect on Trading Market; Registration Under Section 12(g) of the Exchange Act.......................... 13
Control of Limited Partner Voting Decisions by Purchaser; Effect of Relationship
with Managing General Partner...................................................................... 14
Section 8. Future Plans of Insignia, IPT and the Purchaser................................................. 14
Section 9. Certain Information Concerning the Partnership.................................................. 15
General................................................................................................. 15
Originally Anticipated Term of Partnership; Alternatives................................................ 15
General Policy Regarding Sales and Refinancings of Partnership Properties............................... 15
Selected Financial and Property-Related Data............................................................ 16
Cash Distributions History.............................................................................. 19
Operating Budgets of the Partnership.................................................................... 19
Section 10. Conflicts of Interest and Transactions with Affiliates......................................... 20
Conflicts of Interest with Respect to the Offer......................................................... 20
i
Voting by the Purchaser................................................................................. 20
Financing Arrangements.................................................................................. 20
Transactions with Affiliates............................................................................ 21
Section 11. Certain Information Concerning the Purchaser, IPLP, IPT and Insignia........................... 21
The Purchaser........................................................................................... 21
IPT and IPLP............................................................................................ 21
Insignia................................................................................................ 23
Section 12. Source of Funds................................................................................ 25
Section 13. Background of the Offer........................................................................ 26
Affiliation with the Managing General Partner........................................................... 26
Determination of Purchase Price......................................................................... 27
Section 14. Conditions of the Offer........................................................................ 32
Section 15. Certain Legal Matters.......................................................................... 33
General................................................................................................. 33
Antitrust............................................................................................... 33
Margin Requirements..................................................................................... 33
Section 16. Fees and Expenses.............................................................................. 33
Section 17. Miscellaneous.................................................................................. 34
SCHEDULE I - Transactions in the Units Effected by IPLP in the Past 60 Days...........................S-1
SCHEDULE II - Information Regarding the Managers of the Purchaser......................................S-2
SCHEDULE III - Information Regarding the Trustees and Executive Officers of IPT.........................S-3
SCHEDULE IV - Information Regarding the Directors and Executive Officers of Insignia...................S-5
SCHEDULE V - IPT Partnerships.........................................................................S-8
ii
TO THE LIMITED PARTNERS OF
ANGELES INCOME PROPERTIES, LTD. II
INTRODUCTION
Broad River Properties, L.L.C. (the "Purchaser"), which is a Delaware
limited liability company and an affiliate of the Managing General Partner (as
defined below), hereby offers to purchase up to 40,000 Units, representing
approximately 40% of the Units outstanding, in Angeles Income Properties, Ltd.
II, a California limited partnership (the "Partnership"), at a purchase price
of $150 per Unit (the "Purchase Price"), net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in this Offer
to Purchase and in the related Assignment of Partnership Interest (which,
together with any supplements or amendments, collectively constitute the
"Offer"). The Offer is not conditioned on any aggregate minimum number of
Units being tendered. A Limited Partner may tender any or all of the Units
owned by that Limited Partner; provided, however, that because of restrictions
in the Partnership's Limited Partnership Agreement (the "Limited Partnership
Agreement"), in order for a partial tender to be valid, after a sale of Units
pursuant to the Offer, the tendering Limited Partner must continue to hold a
minimum of ten Units (or, in the case of Limited Partners who hold Units in an
Individual Retirement Account ("IRA") or Xxxxx Plan, at least four Units
(except Limited Partners who reside in New Mexico and Virginia, who must
continue to hold at least five Units)). Accordingly, any Limited Partner that
owns ten or fewer Units (or, in the case of Limited Partners who hold Units in
an IRA or Xxxxx Plan, four Units, or five Units in New Mexico and Virginia)
must tender all or none of its Units. Tenders of fractional Units will not be
permitted, except by a Limited Partner who is tendering all of the Units owned
by that Limited Partner. The Purchaser (which is an affiliate of the Managing
General Partner) will pay all charges and expenses of Beacon Hill Partners,
Inc., who will serve as the Purchaser's information agent for the Offer (the
"Information Agent"), and Xxxxxx Trust Company of New York, who will act as
depositary for the Offer (the "Depositary").
The Purchaser; Affiliation with the Managing General Partner. Angeles
Realty Corporation II, which is the managing general partner of the
Partnership (the "Managing General Partner"), is a direct, wholly-owned
subsidiary of Angeles Securitization Corporation ("ASC"), and IAP GP
Corporation ("IAP") owns all of the equity interests in ASC. IAP in turn is a
direct, wholly-owned subsidiary of Insignia Properties Trust, a Maryland real
estate investment trust ("IPT"). The other general partners of the
Partnership, Xxxxxx Accommodation Trust and Xxxxxx Family Partnership, are
prohibited by the Limited Partnership Agreement from participating in the
activities of the Partnership. The Purchaser is a newly-formed, wholly-owned
subsidiary of Insignia Properties, L.P., a Delaware limited partnership
("IPLP"), which is the operating partnership of IPT. IPT is the sole general
partner of IPLP (owning approximately 66% of the total equity interests in
IPLP), and Insignia Financial Group Inc., a Delaware corporation ("Insignia"),
is the sole limited partner of IPLP (owning approximately 34% of the total
equity interests in IPLP). Insignia and its affiliates also own approximately
68% of the outstanding common shares of IPT. For more than the past three
years, Insignia Residential Group, L.P. ("IRG") and Insignia Commercial Group,
Inc. ("ICG"), which are affiliates of Insignia and the Purchaser, have
provided property management services to the Partnership, and Insignia
(directly or through affiliates) has performed asset management, partnership
administration and investor relations services for the Partnership. By reason
of these relationships, the Managing General Partner has conflicts of interest
in considering the Offer. The Managing General Partner has indicated in a
Statement on Schedule 14D-9 (the "Schedule 14D-9") filed with the Securities
and Exchange Commission (the "Commission") that it is remaining neutral and
making no recommendation as to whether Limited Partners should tender their
Units in response to the Offer. LIMITED PARTNERS ARE URGED TO READ THIS OFFER
TO PURCHASE AND THE RELATED MATERIALS AND THE SCHEDULE 14D-9 CAREFULLY AND IN
THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS. See Sections 10
and 13.
Some Factors to Be Considered by Limited Partners. In considering the
Offer, Limited Partners may wish to consider the following factors:
Potential Adverse Aspects of the Offer for Limited Partners
o The Purchaser and the Managing General Partner are both
affiliates of and controlled by IPT, which is controlled by
Insignia. See Sections 11 and 13. The Managing General
Partner has conflicts of interest in considering the Offer,
including (i) as a result of the fact that a sale or
liquidation of the Partnership's assets would result in a
decrease or elimination of the fees paid to the Managing
General Partner and/or its affiliates and (ii) the fact that
as a consequence of the Purchaser's ownership of Units, the
Purchaser (which is an affiliate of the Managing General
Partner) may have incentives to seek to maximize the value
of its ownership of Units, which in turn may result in a
conflict for the Managing General Partner in attempting to
reconcile the interests of the Purchaser (which is an
affiliate of the Managing General Partner) with the
interests of the other Limited Partners. See Section 10.
o The net asset value per Unit most recently estimated by the
Managing General Partner was $241 as of December 31, 1997,
and the net liquidation value per Unit (the "Estimated
Liquidation Value") estimated by the Purchaser (which is an
affiliate of the Managing General Partner) in connection
with the Offer is $240. See Section 13 for a discussion of
why the Purchaser (which is an affiliate of the Managing
General Partner) believes that such estimates are not
necessarily indicative of the fair market value of a Unit.
THE PURCHASER (WHICH IS AN AFFILIATE OF THE MANAGING GENERAL
PARTNER) MAKES NO REPRESENTATION AND EXPRESSES NO OPINION AS
TO THE FAIRNESS OR ADEQUACY OF THE PURCHASE PRICE.
o As with any rational investment decision, the Purchaser
(which is an affiliate of the Managing General Partner) is
making the Offer with a view to making a profit.
Accordingly, there is a conflict between the desire of the
Purchaser (which is an affiliate of the Managing General
Partner) to purchase Units at a low price and the desire of
the Limited Partners to sell their Units at a high price.
o If the Purchaser is successful in acquiring a significant
number of Units pursuant to the Offer, the Purchaser (which
is an affiliate of the Managing General Partner) will have
the right to vote those Units and thereby significantly
influence all voting decisions with respect to the
Partnership, including decisions concerning liquidation,
amendments to the Limited Partnership Agreement and removal
and replacement of the Managing General Partner. This means
that (i) non-tendering Limited Partners could be prevented
from taking action they desire but that IPT (which is an
affiliate of the Managing General Partner) opposes and (ii)
IPT (which is an affiliate of the Managing General Partner)
may be able to take action desired by IPT but opposed by the
non-tendering Limited Partners.
Potentially Beneficial Aspects of the Offer for Limited Partners
o Although there are some limited resale mechanisms available
to Limited Partners wishing to sell their Units, there is no
formal trading market for Units. At present, Limited
Partners may seek to negotiate private sales or sales
through a trading system such as the American Partnership
Board, which publishes sell offers by Limited Partners in
respect of Units. Accordingly, THE OFFER AFFORDS LIMITED
PARTNERS AN OPPORTUNITY TO DISPOSE OF THEIR UNITS FOR CASH
WHICH OTHERWISE MIGHT NOT BE AVAILABLE TO THEM.
2
o THE OFFER MAY BE ATTRACTIVE TO LIMITED PARTNERS WHO HAVE AN
IMMEDIATE NEED FOR CASH. The Purchase Price is approximately
11% greater than the highest reported sales price of any
Unit (excluding Units transferred by Insignia to IPLP)
during the past six months (based on published information
and information provided by the Managing General Partner).
However, reported secondary market sales prices do not take
into account commissions and transfer fees typically payable
by a Limited Partner in connection with a secondary market
sale. Therefore, the actual proceeds received by a Limited
Partner who sells Units in the secondary market are
typically significantly less than the reported sales prices.
o LIMITED PARTNERS WHO SELL UNITS PURSUANT TO THE OFFER WILL
NOT BE CHARGED ANY SALES COMMISSIONS (WHICH GENERALLY RANGE
FROM 3% TO 10% OF THE SALES PRICE) OR PARTNERSHIP TRANSFER
FEES (WHICH ARE TYPICALLY $150 PER TRANSFER). The Purchaser
will pay all transfer fees imposed by the Partnership in
connection with sales of Units pursuant to the Offer.
o Real estate markets in the United States generally have
recovered and experienced an upward trend since the end of
the last recession. That recovery and upward trend might
continue. On the other hand, those markets also may be
adversely affected by a variety of factors, including
possible fluctuations in interest rates, economic slowdowns
and overbuilding. Accordingly, ownership of Units continues
to be a speculative investment. THE OFFER MAY PROVIDE
LIMITED PARTNERS WITH THE OPPORTUNITY TO LIQUIDATE THEIR
INTERESTS IN THE PARTNERSHIP AND REPLACE THEM WITH
INVESTMENTS THAT ARE LESS SPECULATIVE.
o The Offer may be attractive to Limited Partners who wish to
avoid in the future the expenses, delays and complications
in filing personal income tax returns which may be caused by
ownership of Units. In addition, A LIMITED PARTNER WHO SELLS
100% OF ITS UNITS PURSUANT TO THE OFFER WILL NO LONGER BE
SUBJECT TO THE PASSIVE ACTIVITY LOSS LIMITATION WITH RESPECT
TO "SUSPENDED" LOSSES ATTRIBUTABLE TO THOSE UNITS AND,
THEREFORE, WILL BE ABLE TO UTILIZE FULLY ANY SUCH LOSSES.
o The Offer may be attractive to those Limited Partners who
have become disenchanted with real estate investments
generally, and in particular with the perceived illiquidity
of investments made through limited partnerships, because it
may afford an immediate opportunity for those Limited
Partners to liquidate their investments in the Partnership.
On the other hand, Limited Partners who tender their Units
will be giving up the opportunity to participate in any
potential future benefits represented by the ownership of
those Units, including, for example, the right to
participate in any future distributions of cash or property,
whether from operations, the proceeds of a sale or
refinancing of one or more of the Partnership's properties
or in connection with any future liquidation of the
Partnership. Instead, any such distributions of cash or
property with respect to Units tendered in the Offer and
purchased by the Purchaser will be paid to the Purchaser.
The Purchaser (which is an affiliate of the Managing General Partner)
makes no recommendation to any Limited Partner as to whether to tender or
refrain from tendering Units and has been advised by the Managing General
Partner that the Managing General Partner also expects to make no
recommendation. Each Limited Partner must make its own decision, based on the
Limited Partner's particular circumstances, as to whether to tender Units and,
if so, how many Units to tender. Limited Partners should consult with their
respective advisors regarding the financial, tax, legal and other implications
of accepting the Offer. LIMITED PARTNERS ARE URGED TO READ THIS OFFER TO
PURCHASE AND THE RELATED MATERIALS CAREFULLY AND IN THEIR ENTIRETY BEFORE
DECIDING WHETHER TO TENDER THEIR UNITS.
Reasons for and Effects of the Offer. The Purchaser's purpose in
making the Offer is to increase IPT's equity interest in the Partnership,
primarily for investment purposes and with a view to making a profit. Although
the number of Units sought in the Offer will not give the Purchaser (which is
an affiliate of the Managing General Partner) absolute control over the
Partnership, if the Purchaser is successful in acquiring all or a substantial
portion
3
of the Units it is tendering for, it will be in a position to exercise
significant influence over the outcome of any vote by Limited Partners. See
Sections 8, 10 and 13.
Certain Tax Considerations. A sale by a Limited Partner pursuant to
the Offer will result in taxable gain (or loss) equal to the excess (deficit)
of the amount realized by the Limited Partner for the Units sold over such
Limited Partner's adjusted tax basis in those Units. In the case of a Limited
Partner who is an individual and who has held Units since their issuance by
the Partnership, the sale is expected to result in a gain, which may be
taxable as ordinary income, capital gain or gain from real estate depreciation
recapture. Limited Partners who have suspended "passive losses" from the
Partnership or other passive activity investments generally may deduct these
losses up to the amount of gain from the sale. A sale pursuant to the Offer of
all of a Limited Partner's Units will terminate his or her investment in the
Partnership and, commencing with the year following the year of sale, the
Limited Partner will no longer receive Partnership tax information or have to
report the complicated tax information currently required of Limited Partners.
See Section 6.
Originally Anticipated Term of the Partnership; General Policy
Regarding Sales and Refinancings of Partnership Properties; Alternatives.
According to the Partnership's Prospectus dated March 31, 1983, the Managing
General Partner (which at the time was not affiliated with Insignia or IPT)
indicated that prior partnerships sponsored by affiliates of the Managing
General Partner had begun selling their properties "at different time periods"
after their acquisition. The Prospectus further stated, however, that the
Managing General Partner was unable to predict how long the Partnership would
remain invested in the properties, and that the Partnership acquired such
properties for investment rather than resale. In any event, according to the
Prospectus, the Managing General Partner anticipated that a disposition of the
properties would depend on, among other things, the current real estate and
money markets, economic climate and income tax consequences to the Limited
Partners. In general, the Managing General Partner regularly evaluates the
Partnership's properties by considering various factors, such as the
Partnership's financial position and real estate and capital markets
conditions. The Managing General Partner monitors each property's specific
locale and sub-market conditions evaluating current trends, competition, new
construction and economic changes. The Managing General Partner oversees each
asset's operating performance and continuously evaluates the physical
improvement requirements. In addition, the financing structure for each
property, tax implications and the investment climate are all considered. Any
of these factors, and possibly others, could potentially contribute to any
decision by the Managing General Partner to sell, refinance, upgrade with
capital improvements or hold a particular Partnership property. The Purchaser
(which is an affiliate of the Managing General Partner) has been advised that
the Partnership and its affiliates who are involved in the Princeton Golf
Course Joint Venture (the "Joint Venture"), in which the Partnership has a
14.4% interest, presently expect to market for sale the Princeton Xxxxxxx Golf
Course in Princeton, New Jersey sometime during 1998. The Partnership
presently expects that the Princeton Xxxxxxx Golf Course, which is subject to
a first mortgage of approximately $1,567,000, will sell for approximately
$3,500,000. In the event of a sale of the Princeton Xxxxxxx Golf Course, the
Managing General Partner has advised the Purchaser (which is an affiliate of
the Managing General Partner) that it may distribute to Limited Partners the
portion of the net cash proceeds representing the Partnership's interest in
the Joint Venture (after repayment of any outstanding mortgage debt and
payment of other costs of sale) from such sale; however, there can be no
assurance that such sale would in fact occur or as to the amount of cash
proceeds that might result from such sale. Further, no determination has been
made as to whether any net cash proceeds generated by such sale would be
distributed to Limited Partners, which determination will be made at the time
of such sale, and will be based on, among other things, the Partnership's
working capital and reserve requirements at the time. Based on the foregoing
considerations and except for the potential sale of Princeton Xxxxxxx Golf
Course, the Managing General Partner has determined that it is not in the best
interest of Limited Partners to sell or refinance any other Partnership
property at the present time. Under the Limited Partnership Agreement the term
of the Partnership will continue until December 31, 2037, unless sooner
terminated as provided in the Limited Partnership Agreement or by law. Limited
Partners could, as an alternative to tendering their Units, take a variety of
possible actions, including voting to liquidate the Partnership or amending
the Limited Partnership Agreement to authorize Limited Partners to cause the
Partnership to merge with another entity or engage in a "roll-up" or similar
transaction.
4
Conditions. The Offer is not conditioned on any aggregate minimum
number of Units being tendered. Certain other conditions do apply, however.
See Section 14.
Distributions. The Partnership made a cash distribution to Limited
Partners of $9.92 per Unit in June 1997. Prior to that distribution, the last
distribution made by the Partnership was in 1989 ($10.00 per Unit). In total,
original investors in the Partnership have received distributions of only
$232.42 in respect of their original $500 investment made in 1983. See Section
9. The Partnership is currently generating positive cash flow from operations,
and the Purchaser (which is an affiliate of the Managing General Partner)
believes that the Partnership will continue to generate positive cash flow
from operations. The Managing General Partner has advised the Purchaser (which
is an affiliate of the Managing General Partner) that the Managing General
Partner presently expects the Partnership to make a distribution of
approximately $15.00 per Unit sometime during the second quarter of 1998;
however, there can be no assurance that such distribution will be made or as
to the amount or timing of such distribution. The potential for this and other
future distributions was considered by the Purchaser (which is an affiliate of
the Managing General Partner) when establishing the Purchase Price. Limited
Partners who tender their Units in response to the Offer will retain any
distributions made through April 24, 1998, and will be entitled to receive and
retain any subsequent distributions made by the Partnership prior to the date
on which the Purchaser pays for tendered Units pursuant to the Offer, although
any such subsequent distribution will result in a reduction of the Purchase
Price. See Section 1. However, tendering Limited Partners will not be entitled
to receive or retain any distributions in respect of tendered Units which are
made on or after the date on which the Purchaser pays for such Units pursuant
to the Offer, regardless of the fact that the record date (as opposed to the
payment date) for any such distribution may be a date prior to the date of
purchase. See Section 3.
Outstanding Units. According to information supplied by the
Partnership, as of April 1, 1998 there were 99,784 Units issued and
outstanding, which were held of record by 3,883 Limited Partners. IPLP
currently owns 3,950 (representing approximately 4.0%) of the outstanding
Units. See Schedule I to this Offer to Purchase for a list of transactions in
the Units effected by IPLP (other than the inter-company transactions referred
to in Section 13) within the past 60 days.
5
THE OFFER
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE; PRORATION. Upon the
terms and subject to the conditions of the Offer, the Purchaser (which is an
affiliate of the Managing General Partner) will accept for payment (and
thereby purchase) up to 40,000 Units that are validly tendered on or prior to
the Expiration Date and not withdrawn in accordance with the procedures set
forth in Section 4. For purposes of the Offer, the term "Expiration Date"
shall mean 12:00 midnight, New York City time, on May 21, 1998, unless the
Purchaser (which is an affiliate of the Managing General Partner) in its sole
discretion shall have extended the period of time for which the Offer is open,
in which event the term "Expiration Date" shall mean the latest time and date
on which the Offer, as extended by the Purchaser, shall expire. See Section 5
for a description of the Purchaser's right to extend the period of time during
which the Offer is open and to amend or terminate the Offer.
THE PURCHASE PRICE WILL AUTOMATICALLY BE REDUCED BY THE AGGREGATE
AMOUNT OF DISTRIBUTIONS PER UNIT, IF ANY, MADE BY THE PARTNERSHIP TO LIMITED
PARTNERS ON OR AFTER APRIL 24, 1998, AND PRIOR TO THE DATE ON WHICH THE
PURCHASER PAYS FOR UNITS PURCHASED PURSUANT TO THE OFFER.
If, prior to the Expiration Date, the Purchaser (which is an
affiliate of the Managing General Partner) increases the consideration offered
to Limited Partners pursuant to the Offer, the increased consideration will be
paid for all Units accepted for payment pursuant to the Offer, regardless of
whether the Units were tendered prior to the increase in the consideration
offered.
If more than 40,000 Units are validly tendered prior to the
Expiration Date and not properly withdrawn prior to the Expiration Date in
accordance with the procedures specified in Section 4, the Purchaser (which is
an affiliate of the Managing General Partner) will, upon the terms and subject
to the conditions of the Offer, accept for payment and pay for an aggregate of
40,000 of the Units so tendered, pro rata according to the number of Units
validly tendered by each Limited Partner and not properly withdrawn on or
prior to the Expiration Date, with appropriate adjustments to avoid (i)
purchases of fractional Units and (ii) purchases that would violate Section
9.1 of the Limited Partnership Agreement (which generally requires that, in
order for a partial tender to be valid, a Limited Partner continues to hold a
minimum of ten Units (or, in the case of Limited Partners who hold Units in an
IRA or Xxxxx Plan, four Units, other than Limited Partners who reside in New
Mexico and Virginia, who must continue to hold five Units)). If the number of
Units validly tendered and not properly withdrawn on or prior to the
Expiration Date is less than or equal to 40,000 Units, the Purchaser (which is
an affiliate of the Managing General Partner) will purchase all Units so
tendered and not withdrawn, upon the terms and subject to the conditions of
the Offer.
If proration of tendered Units is required, then, subject to the
Purchaser's obligation under Rule 14e-1(c) under the Securities Exchange Act
of 1934 (the "Exchange Act") to pay Limited Partners the Purchase Price in
respect of Units tendered or return those Units promptly after the termination
or withdrawal of the Offer, the Purchaser (which is an affiliate of the
Managing General Partner) does not intend to pay for any Units accepted for
payment pursuant to the Offer until the final proration results are known.
NOTWITHSTANDING ANY SUCH DELAY IN PAYMENT, NO INTEREST WILL BE PAID ON THE
PURCHASE PRICE.
The Offer is conditioned on satisfaction of certain conditions. See
Section 14, which sets forth in full the conditions of the Offer. The
Purchaser (which is an affiliate of the Managing General Partner) reserves the
right (but in no event shall be obligated), in its sole discretion, to waive
any or all of those conditions. If, on or prior to the Expiration Date, any or
all of the conditions have not been satisfied or waived, the Purchaser
reserves the right to (i) decline to purchase any of the Units tendered and
terminate the Offer, (ii) waive all of the unsatisfied conditions and, subject
to complying with applicable rules and regulations of the Commission, purchase
all Units validly tendered, (iii) extend the Offer and, subject to the right
of Limited Partners to withdraw Units until the Expiration Date, retain the
Units that have been tendered during the period or periods for which the Offer
is extended, and/or (iv) amend the Offer.
6
This Offer to Purchase and the related Assignment of Partnership
Interest are being mailed by the Purchaser (which is an affiliate of the
Managing General Partner) to the persons shown by the Partnership's records to
have been Limited Partners or (in the case of Units owned of record by IRAs
and qualified plans) beneficial owners of Units as of April 1, 1998.
SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS. Upon the
terms and subject to the conditions of the Offer, the Purchaser (which is an
affiliate of the Managing General Partner) will accept for payment (and
thereby purchase) and will pay for all Units validly tendered and not
withdrawn in accordance with the procedures specified in Section 4, as
promptly as practicable following the Expiration Date. A tendering beneficial
owner of Units whose Units are owned of record by an IRA or other qualified
plan will not receive direct payment of the Purchase Price; rather, payment
will be made to the custodian of such account or plan. In all cases, payment
for Units purchased pursuant to the Offer will be made only after timely
receipt by the Depositary of a properly completed and duly executed Assignment
of Partnership Interest and any other documents required by the Assignment of
Partnership Interest. See Section 3. UNDER NO CIRCUMSTANCES WILL INTEREST BE
PAID ON THE PURCHASE PRICE BY REASON OF ANY DELAY IN MAKING SUCH PAYMENT.
For purposes of the Offer, the Purchaser (which is an affiliate of
the Managing General Partner) will be deemed to have accepted for payment
pursuant to the Offer, and thereby purchased, validly tendered Units if, as
and when the Purchaser (which is an affiliate of the Managing General Partner)
gives verbal or written notice to the Depositary of the Purchaser's acceptance
of those Units for payment pursuant to the Offer. Upon the terms and subject
to the conditions of the Offer, payment for Units accepted for payment
pursuant to the Offer will be made by deposit of the Purchase Price with the
Depositary, which will act as agent for tendering Limited Partners for the
purpose of receiving payments from the Purchaser and transmitting those
payments to Limited Partners whose Units have been accepted for payment.
If any tendered Units are not purchased for any reason, the
Assignment of Partnership Interest with respect to such Units will be
destroyed by the Purchaser (which is an affiliate of the Managing General
Partner). If for any reason acceptance for payment of, or payment for, any
Units tendered pursuant to the Offer is delayed or the Purchaser is unable to
accept for payment, purchase or pay for Units tendered pursuant to the Offer,
then, without prejudice to the Purchaser's rights under Section 14, the
Depositary may, nevertheless, on behalf of the Purchaser (which is an
affiliate of the Managing General Partner) retain tendered Units, and those
Units may not be withdrawn except to the extent that the tendering Limited
Partners are entitled to withdrawal rights as described in Section 4; subject,
however, to the Purchaser's obligation under Rule 14e-1(c) under the Exchange
Act to pay Limited Partners the Purchase Price in respect of Units tendered or
return those Units promptly after termination or withdrawal of the Offer.
The Purchaser (which is an affiliate of the Managing General Partner)
reserves the right to transfer or assign, in whole or from time to time in
part, to one or more of the Purchaser's affiliates, the right to purchase
Units tendered pursuant to the Offer, but any such transfer or assignment will
not relieve the Purchaser of its obligations under the Offer or prejudice the
rights of tendering Limited Partners to receive payment for Units validly
tendered and accepted for payment pursuant to the Offer.
SECTION 3. PROCEDURE FOR TENDERING UNITS.
Valid Tender. In order for a tendering Limited Partner to participate
in the Offer, its Units must be validly tendered and not withdrawn on or prior
to the Expiration Date. To validly tender Units, a properly completed and duly
executed Assignment of Partnership Interest and any other documents required
by the Assignment of Partnership Interest must be received by the Depositary,
at its address set forth on the back cover of this Offer to Purchase, on or
prior to the Expiration Date. A Limited Partner may tender any or all of the
Units owned by that Limited Partner; provided, however, that because of
restrictions in the Limited Partnership Agreement, in order for a partial
tender to be valid, after a sale of Units pursuant to the Offer, the tendering
Limited Partner must continue to hold a minimum of ten Units (or, in the case
of Limited Partners who hold Units in an IRA or Xxxxx Plan, at least four
Units (except Limited Partners who reside in New Mexico and Virginia, who must
continue to hold at
7
least five Units). Accordingly, any Limited Partner that owns ten or fewer
Units (or, in the case of Limited Partners who hold Units in an IRA or Xxxxx
Plan, four Units, or five Units in New Mexico and Virginia) must tender all or
none of its Units. Tenders of fractional Units will not be permitted, except
by a Limited Partner who is tendering all of the Units owned by that Limited
Partner. No alternative, conditional or contingent tenders will be accepted.
Signature Requirements. If the Assignment of Partnership Interest is
signed by the registered holder of the Units and payment is to be made
directly to that holder, then no signature guarantee is required on the
Assignment of Partnership Interest. Similarly, if the Units are tendered for
the account of a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc. or a commercial
bank, savings bank, credit union, savings and loan association or trust
company having an office, branch or agency in the United States (each an
"Eligible Institution"), no signature guarantee is required on the Assignment
of Partnership Interest. HOWEVER, IN ALL OTHER CASES, ALL SIGNATURES ON THE
ASSIGNMENT OF PARTNERSHIP INTEREST MUST BE GUARANTEED BY AN ELIGIBLE
INSTITUTION. Please contact the Information Agent for assistance in obtaining
a signature guarantee.
Delivery of Assignment of Partnership Interest. The method of
delivery of the Assignment of Partnership Interest and all other required
documents is at the option and risk of the tendering Limited Partner, and
delivery will be deemed made only when actually received by the Depositary. In
all cases, sufficient time should be allowed to assure timely delivery.
Appointment as Proxy; Power of Attorney. By executing an Assignment
of Partnership Interest, a tendering Limited Partner irrevocably appoints the
Purchaser (which is an affiliate of the Managing General Partner), and its
managers and designees as the Limited Partner's proxies, in the manner set
forth in the Assignment of Partnership Interest, each with full power of
substitution, to the full extent of the Limited Partner's rights with respect
to the Units tendered by the Limited Partner and accepted for payment by the
Purchaser (which is an affiliate of the Managing General Partner). Each such
proxy shall be considered coupled with an interest in the tendered Units. Such
appointment will be effective when, and only to the extent that, the Purchaser
(which is an affiliate of the Managing General Partner) accepts the tendered
Units for payment. Upon such acceptance for payment, all prior proxies given
by the Limited Partner with respect to the Units will, without further action,
be revoked, and no subsequent proxies may be given (and if given will not be
effective). The Purchaser (which is an affiliate of the Managing General
Partner) and its managers and designees will, as to those Units, be empowered
to exercise all voting and other rights of the Limited Partner as they in
their sole discretion may deem proper at any meeting of Limited Partners, by
written consent or otherwise. The Purchaser (which is an affiliate of the
Managing General Partner) reserves the right to require that, in order for
Units to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of the Units, the Purchaser must be able to exercise
full voting rights with respect to the Units, including voting at any meeting
of Limited Partners then scheduled or acting by written consent without a
meeting.
By executing an Assignment of Partnership Interest, a tendering
Limited Partner also irrevocably constitutes and appoints the Purchaser and
its managers and designees as the Limited Partner's attorneys-in-fact, each
with full power of substitution, to the full extent of the Limited Partner's
rights with respect to the Units tendered by the Limited Partner and accepted
for payment by the Purchaser. Such appointment will be effective when, and
only to the extent that, the Purchaser accepts the tendered Units for payment.
The tendering Limited Partner agrees not to exercise any rights pertaining to
the tendered Units without the prior consent of the Purchaser. Upon such
acceptance for payment, all prior powers of attorney granted by the Limited
Partner with respect to such Units will, without further action, be revoked,
and no subsequent powers of attorney may be granted (and if granted will not
be effective). Pursuant to such appointment as attorneys-in-fact, the
Purchaser and its managers and designees each will have the power, among other
things, (i) to transfer ownership of such Units on the Partnership books
maintained by the Managing General Partner (and execute and deliver any
accompanying evidences of transfer and authenticity any of them may deem
necessary or appropriate in connection therewith), (ii) upon receipt by the
Depositary (as the tendering Limited Partner's agent) of the Purchase Price,
to become a substituted Limited Partner, to receive any and all distributions
made by the Partnership on or after the date on which the Purchaser
8
purchases such Units, and to receive all benefits and otherwise exercise all
rights of beneficial ownership of such Units in accordance with the terms of
the Offer, (iii) to execute and deliver to the Managing General Partner a
change of address form instructing the Managing General Partner to send any
and all future distributions to which the Purchaser is entitled pursuant to
the terms of the Offer in respect of tendered Units to the address specified
in such form, and (iv) to endorse any check payable to or upon the order of
such Limited Partner representing a distribution to which the Purchaser is
entitled pursuant to the terms of the Offer, in each case in the name and on
behalf of the tendering Limited Partner.
Assignment of Interest in Future Distributions. By executing an
Assignment of Partnership Interest, a tendering Limited Partner irrevocably
assigns to the Purchaser (which is an affiliate of the Managing General
Partner) and its assigns all of the right, title and interest of the Limited
Partner in and to any and all distributions made by the Partnership on or
after the date on which the Purchaser purchases such Units, in respect of the
Units tendered by such Limited Partner and accepted for payment by the
Purchaser, regardless of the fact that the record date for any such
distribution may be a date prior to the date of such purchase. The Purchaser
will seek to be admitted to the Partnership as a substituted Limited Partner
upon consummation of the Offer.
Determination of Validity; Rejection of Units; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Units pursuant to the Offer will be determined by the Purchaser
(which is an affiliate of the Managing General Partner), in its sole
discretion, which determination shall be final and binding. The Purchaser
(which is an affiliate of the Managing General Partner) reserves the absolute
right to reject any or all tenders of any particular Units determined by it
not to be in proper form or if the acceptance of or payment for those Units
may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser
(which is an affiliate of the Managing General Partner) also reserves the
absolute right to waive or amend any of the conditions of the Offer that it is
legally permitted to waive as to the tender of any particular Units and to
waive any defect or irregularity in any tender with respect to any particular
Units of any particular Limited Partner. The Purchaser's interpretation of the
terms and conditions of the Offer (including the Assignment of Partnership
Interest and the Instructions thereto) will be final and binding. No tender of
Units will be deemed to have been validly made until all defects and
irregularities have been cured or waived. None of the Purchaser (which is an
affiliate of the Managing General Partner), the Information Agent, the
Depositary or any other person will be under any duty to give notification of
any defects or irregularities in the tender of any Units or will incur any
liability for failure to give any such notification.
Backup Federal Income Tax Withholding. To prevent the possible
application of backup federal income tax withholding of 31% with respect to
payment of the Purchase Price, each tendering Limited Partner must provide the
Purchaser (which is an affiliate of the Managing General Partner) with the
Limited Partner's correct taxpayer identification number by completing the
Substitute Form W-9 included in the Assignment of Partnership Interest.
See the Instructions to the Assignment of Partnership Interest and Section 6.
FIRPTA Withholding. To prevent the withholding of federal income tax
in an amount equal to 10% of the amount of the Purchase Price plus Partnership
liabilities allocable to each Unit purchased, each tendering Limited Partner
must complete the FIRPTA Affidavit included in the Assignment of Partnership
Interest certifying the Limited Partner's taxpayer identification number and
address and that such Limited Partner is not a foreign person. See the
Instructions to the Assignment of Partnership Interest and Section 6.
Binding Obligation. A tender of Units pursuant to and in accordance
with the procedures described in this Section 3 and the acceptance for payment
of such Units will constitute a binding agreement between the tendering
Limited Partner and the Purchaser (which is an affiliate of the Managing
General Partner) on the terms set forth in this Offer to Purchase and in the
Assignment of Partnership Interest.
SECTION 4. WITHDRAWAL RIGHTS. Tenders of Units pursuant to the Offer
are irrevocable, except that Units tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date and, unless already
accepted for payment as provided in this Offer to Purchase, may also be
withdrawn at any time after June 22, 1998. For withdrawal to be effective, a
written or facsimile transmission notice of withdrawal must be timely received
9
by the Depositary at its address set forth on the back cover of this Offer to
Purchase. Any such notice of withdrawal must specify the name of the person
who tendered the Units to be withdrawn and must be signed by the person(s) who
signed the Assignment of Partnership Interest in the same manner as the
Assignment of Partnership Interest was signed (including signature guarantees
by an Eligible Institution). Units properly withdrawn will be deemed not to be
validly tendered for purposes of the Offer. Withdrawn Units may be
re-tendered, however, by following the procedures described in Section 3 at
any time prior to the Expiration Date.
If payment for Units is delayed for any reason or if the Purchaser
(which is an affiliate of the Managing General Partner) is unable to pay for
Units for any reason, then, without prejudice to the Purchaser's rights under
the Offer, tendered Units may be retained by the Depositary and may not be
withdrawn except to the extent that tendering Limited Partners are entitled to
withdrawal rights as set forth in this Section 4; subject, however, to the
Purchaser's obligation, pursuant to Rule 14e-1(c) under the Exchange Act, to
pay Limited Partners the Purchase Price in respect of Units tendered or return
those Units promptly after termination or withdrawal of the Offer.
All questions as to the validity and form (including time of receipt)
of notices of withdrawal will be determined by the Purchaser (which is an
affiliate of the Managing General Partner), in its sole discretion, which
determination shall be final and binding. None of the Purchaser, the
Information Agent, the Depositary or any other person will be under any duty
to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT. The
Purchaser (which is an affiliate of the Managing General Partner) expressly
reserves the right, in its sole discretion, at any time and from time to time,
(i) to extend the period of time during which the Offer is open and thereby
delay acceptance for payment of, and the payment for, validly tendered Units,
(ii) to terminate the Offer if any condition referred to in Section 14 has not
been satisfied or upon the occurrence of any event specified in Section 14,
(iii) to amend the Offer in any respect (including, without limitation, by
increasing the consideration offered, increasing or decreasing the number of
Units being sought, or both). Notice of any such extension, termination or
amendment will be disseminated promptly to Limited Partners in a manner
reasonably designed to inform Limited Partners of such change in compliance
with Rule 14d-4(c) under the Exchange Act. In the case of an extension of the
Offer, the extension will be followed by a press release or public
announcement which will be issued no later than 9:00 a.m., New York City time,
on the next business day after the then scheduled Expiration Date, in
accordance with Rule 14e-1(d) under the Exchange Act.
If the Purchaser (which is an affiliate of the Managing General
Partner) extends the Offer, or if the Purchaser (whether before or after its
acceptance for payment of Units) is delayed in its payment for Units or is
unable to pay for Units pursuant to the Offer for any reason, then, without
prejudice to the Purchaser's rights under the Offer, the Depositary may retain
tendered Units and those Units may not be withdrawn except to the extent
tendering Limited Partners are entitled to withdrawal rights as described in
Section 4; subject, however, to the Purchaser's obligation, pursuant to Rule
14e-1(c) under the Exchange Act, to pay Limited Partners the Purchase Price in
respect of Units tendered or return those Units promptly after termination or
withdrawal of the Offer.
If the Purchaser (which is an affiliate of the Managing General
Partner) makes a material change in the terms of the Offer or the information
concerning the Offer or waives a material condition of the Offer, the
Purchaser will extend the Offer and disseminate additional tender offer
materials to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act. The minimum period during which an offer must remain open
following a material change in the terms of the offer or information
concerning the offer will depend upon the facts and circumstances, including
the relative materiality of the change in the terms or information. In the
Commission's view, an offer should remain open for a minimum of five business
days from the date the material change is first published, sent or given to
securityholders, and if material changes are made with respect to information
that approaches the significance of price or the percentage of securities
sought, a minimum of ten business days may be required to allow for adequate
dissemination to securityholders and investor response. As used in this Offer
to Purchase, "business day" means any day other than a Saturday, Sunday or a
federal holiday, and consists of the time period from 12:01 a.m. through 12:00
midnight, New York City time.
10
SECTION 6. CERTAIN FEDERAL INCOME TAX MATTERS.
General. The following summary is a general discussion of certain of
the federal income tax consequences of a sale of Units pursuant to the Offer.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), applicable Treasury regulations thereunder, administrative rulings,
practice and procedures and judicial authority, all as of the date of the
Offer. All of the foregoing are subject to change, and any such change could
affect the continuing accuracy of this summary. This summary does not discuss
all aspects of federal income taxation that may be relevant to a particular
Limited Partner in light of such Limited Partner's specific circumstances or
to certain types of Limited Partners subject to special treatment under the
federal income tax laws (for example, foreign persons, dealers in securities,
banks, insurance companies and tax-exempt organizations), nor (except as
otherwise expressly indicated) does it describe any aspect of state, local,
foreign or other tax laws. Sales of Units pursuant to the Offer will be
taxable transactions for federal income tax purposes, and also may be taxable
transactions under applicable state, local, foreign and other tax laws. EACH
LIMITED PARTNER SHOULD CONSULT ITS OWN TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES TO SUCH LIMITED PARTNER OF SELLING UNITS PURSUANT TO THE OFFER.
Gain or Loss Generally. In general, a Limited Partner will recognize
gain or loss on a sale of Units pursuant to the Offer equal to the difference
between (i) the Limited Partner's "amount realized" on the sale and (ii) the
Limited Partner's adjusted tax basis in the Units sold. Generally, a Limited
Partner's adjusted tax basis with respect to a Unit equals its cost, increased
by the amount of income and the amount of Partnership liabilities (as
determined under Code Section 752) allocated to the Unit, and decreased by (i)
any distributions made with respect to such Unit, (ii) the amount of
deductions or losses allocated to the Unit and (iii) any decrease in the
amount of Partnership liabilities (as determined under Code Section 752)
allocated to the Unit. Thus, the amount of a Limited Partner's adjusted tax
basis in tendered Units will vary depending upon the Limited Partner's
particular circumstances. The "amount realized" with respect to a Unit will be
a sum equal to the amount of cash received by the Limited Partner for the Unit
pursuant to the Offer, plus the amount of the Partnership's liabilities
allocable to the Unit (as determined under Code Section 752). Limited Partners
who purchased their interests from the Partnership in the original issuance of
the Units are expected to recognize taxable gain on the sale in an amount in
excess of the Purchase Price.
A portion of the gain or loss recognized by a Limited Partner on a
sale of a Unit pursuant to the Offer generally will be treated as a capital
gain or loss, if (as is generally expected to be the case) the Unit was held
by the Limited Partner as a capital asset. Under the Taxpayer Relief Act of
1997, the capital gains rate for individuals and other non-corporate taxpayers
is reduced to 20% for sales of capital assets after July 28, 1997 if such
assets were held for more than 18 months. However, any gain from the sale of
such assets attributable to the recapture of depreciation with respect to real
property (as defined in Code Section 1250) is taxed at a maximum rate of 25%.
The 28% rate continues to apply to individual and noncorporate taxpayers who
sell a capital asset held for more than one year but not more than 18 months.
Corporate taxpayers are taxed at a maximum marginal rate of 35% for both
capital gains and ordinary income. The maximum marginal federal income tax
rate for ordinary income of individuals and other noncorporate taxpayers is
39.6%. Capital losses are deductible only to the extent of capital gains,
except that, subject to the passive activity loss limitations discussed below,
non-corporate taxpayers may deduct up to $3,000 of capital losses in excess of
the amount of their capital gains against ordinary income. Excess capital
losses generally can be carried forward to succeeding years (a corporation's
carryforward period is five years and a non-corporate taxpayer can carry
forward such losses indefinitely); and a corporation is permitted to carry
back excess capital losses to the three preceding taxable years, provided the
carryback does not increase or produce a net operating loss for any of those
years.
A tendering Limited Partner will be allocated a pro rata share of the
Partnership's taxable income or loss for the year of sale with respect to the
Units sold in accordance with the provisions of the Limited Partnership
Agreement concerning transfers of Units. Such allocation and any cash
distributed by the Partnership to the Limited Partner for that year will
affect the Limited Partner's adjusted tax basis in Units and, therefore, the
amount of such Limited Partner's taxable gain or loss upon a sale of Units
pursuant to the Offer.
11
Unrealized Receivables and Certain Inventory. If any portion of the
amount of gain or loss realized by a Limited Partner is attributable to
"unrealized receivables" (which includes depreciation recapture) or
"substantially appreciated inventory" as defined in Code Section 751, then a
portion of the Limited Partner's gain or loss may be ordinary rather than
capital and, in addition, a portion of such gain may be taxed at the 25% rate
discussed above. A portion, if not all, of the gain upon the sale of Units is
expected to be attributable to unrealized receivables. A Limited Partner who
tenders Units which are purchased pursuant to the Offer must file an
information statement with such Limited Partner's federal income tax return
for the year of the sale which provides the information specified in Treasury
Regulation ss. 1.751-1(a)(3). A selling Limited Partner also must notify the
Partnership of the date of the transfer and the names, addresses and tax
identification numbers of the transferor(s) and transferee within 30 days of
the date of the transfer (or, if earlier, by January 15 of the following
calendar year).
Passive Activity Loss Limitation. Under Code Section 469, a
non-corporate taxpayer or personal service corporation generally can deduct
"passive losses" in any year only to the extent of the person's passive income
for that year. Closely held corporations (other than personal service
corporations) may offset such losses against active income as well as passive
activity income for that year. A substantial portion of any post-1986 losses
of Limited Partners from the Partnership are believed to be passive losses.
Thus, Limited Partners may have "suspended" passive losses from the
Partnership (i.e., post-1986 net taxable losses in excess of statutorily
permitted "phase-in" amounts which have not been used to offset income from
other passive activities or from the Partnership). Substantially all gain or
loss from a sale of Units pursuant to the Offer will be passive income or
loss.
If a Limited Partner sells less than all of its Units pursuant to the
Offer, suspended passive losses, if any (including a portion of any loss
recognized on the sale of Units), can be currently deducted (subject to other
applicable limitations) to the extent of the Limited Partner's passive income
from the Partnership for that year (including any gain recognized on the sale
of Units) plus any other passive income for that year. If, on the other hand,
a Limited Partner sells 100% of its Units pursuant to the Offer, any
"suspended" losses and any losses recognized upon the sale of the Units will
be offset first against any other net passive gain to the Limited Partner from
the sale of the Units and any other net passive activity income from other
passive activity investments, and the balance of any "suspended" net losses
from the Units will no longer be subject to the passive activity loss
limitation and, therefore, will be deductible by such Limited Partner from its
other income (subject to any other applicable limitations), including ordinary
income. If a tendering Limited Partner has suspended passive losses from the
Partnership, such Limited Partner must sell all of its Units to receive these
tax benefits. If more than 40,000 of the outstanding Units are tendered, some
tendering Limited Partners may not be able to sell 100% of their Units
pursuant to the Offer because of proration of the number of Units to be
purchased by the Purchaser. See Section 1.
Partnership Termination. Section 708(b) of the Code provides that a
partnership terminates for income tax purposes if there is a sale or exchange
of 50% or more of the total interest in partnership capital and profits within
a twelve-month period (although successive transfers of the same interest
within a twelve-month period will be treated as a single transfer for this
purpose). In the event of a termination, the Partnership's tax year would
close and the Partnership would be treated for income tax purposes as if it
had contributed all of its assets and liabilities to a "new" partnership in
exchange for an interest in the "new" partnership. The Partnership would then
be treated as making a distribution of the interests in the "new" partnership
to the new partners and the remaining partners, followed by the liquidation of
the Partnership. Because the "new" partnership would be treated as having
acquired its assets on the date of the deemed contribution, a new depreciation
recovery period would begin on such date, the Partnership's annual
depreciation deductions over the next few years would be substantially
reduced, and the Partnership would have greater taxable income (or less tax
loss) than if no tax termination occurred. In addition, depreciation may be
required to be allocated to those Limited Partners that have a higher tax
basis. A tax termination of the Partnership would also terminate any
partnership in which the Partnership holds a majority interest (50% or more).
The Limited Partnership Agreement prohibits transfer of Units if a
transfer, when considered with all other transfers during the same applicable
twelve-month period, would cause a termination of the Partnership for tax
purposes. The Purchaser believes that even if the maximum number of Units is
purchased pursuant to the Offer, those transfers will not cause a tax
termination of the Partnership.
12
Backup Withholding and FIRPTA Withholding. Limited Partners (other
than tax-exempt persons, corporations and certain foreign individuals) who
tender Units may be subject to 31% backup withholding unless those Limited
Partners provide a taxpayer identification number ("TIN") and certify that the
TIN is correct or properly certify that they are awaiting a TIN. A Limited
Partner may avoid backup withholding by properly completing and signing the
Substitute Form W-9 included as part of the Assignment of Partnership
Interest. If a Limited Partner who is subject to backup withholding does not
properly complete and sign the Substitute Form W-9, the Purchaser will
withhold 31% from payments to such Limited Partner.
Xxxx realized by a foreign Limited Partner on the sale of a Unit
pursuant to the Offer will be subject to federal income tax. Under Code
Section 1445, the transferee of an interest held by a foreign person in a
partnership which owns United States real property generally is required to
deduct and withhold a tax equal to 10% of the amount realized on the
disposition. In order to comply with this requirement, the Purchaser will
withhold 10% of the amount realized by a tendering Limited Partner unless the
Limited Partner properly completes and signs the FIRPTA Affidavit included as
part of the Assignment of Partnership Interest certifying the Limited
Partner's TIN and address, and that such Limited Partner is not a foreign
person. Amounts withheld would be creditable against a foreign Limited
Partner's federal income tax liability and, if in excess thereof, a refund
could be obtained from the Internal Revenue Service by filing a U.S. income
tax return.
SECTION 7. EFFECTS OF THE OFFER.
Limitations on Resales. The Limited Partnership Agreement prohibits
transfers of Units if a transfer, when considered with all other transfers
during the same applicable twelve-month period, would cause a termination of
the Partnership for federal income tax purposes. This provision may limit
sales of Units in the secondary market and in private transactions for the
twelve-month period following completion of the Offer. The Managing General
Partner has advised the Purchaser that the Partnership will not process any
requests for recognition of substitution of Limited Partners upon a transfer
of Units during such twelve-month period which the Managing General Partner
believes may cause a tax termination in contravention of the Limited
Partnership Agreement. In determining the number of Units for which the Offer
is made (representing approximately 40% of the outstanding Units if 40,000
Units are tendered), the Purchaser (which is an affiliate of the Managing
General Partner) took this restriction into account so as to permit normal
historical levels of transfers to occur following the transfers of Units
pursuant to the Offer without violating this restriction.
Effect on Trading Market; Registration Under Section 12(g) of the
Exchange Act. If a substantial number of Units are purchased pursuant to the
Offer, the result will be a reduction in the number of Limited Partners. In
the case of certain kinds of equity securities, a reduction in the number of
security-holders might be expected to result in a reduction in the liquidity
and volume of activity in the trading market for the security. In this case,
however, there is no established public trading market for the Units and,
therefore, the Purchaser (which is an affiliate of the Managing General
Partner) does not believe a reduction in the number of Limited Partners will
materially further restrict the Limited Partners' ability to find purchasers
for their Units through secondary market transactions. See Section 13 for
certain limited information regarding recent secondary market sales of the
Units.
The Units are registered under Section 12(g) of the Exchange Act,
which means, among other things, that the Partnership is required to file
periodic reports with the Commission and to comply with the Commission's proxy
rules. The Purchaser (which is an affiliate of the Managing General Partner)
does not expect or intend that consummation of the Offer will cause the Units
to cease to be registered under Section 12(g) of the Exchange Act. If the
Units were to be held by fewer than 300 persons, the Partnership could apply
to de-register the Units under the Exchange Act. Because the Units are widely
held, however, the Purchaser (which is an affiliate of the Managing General
Partner) believes that, even if it purchases the maximum number of Units in
the Offer, after that purchase the Units will be held of record by more than
300 persons.
13
Control of Limited Partner Voting Decisions by Purchaser; Effect of
Relationship with Managing General Partner. The Limited Partnership Agreement
provides that the Managing General Partner has absolute discretion as to
whether to admit an assignee of Units to the Partnership as a substituted
Limited Partner. The Purchaser (which is an affiliate of the Managing General
Partner) will seek to be admitted to the Partnership as a substituted Limited
Partner upon consummation of the Offer and, if admitted, will have the right
to vote each Unit purchased pursuant to the Offer. Even if the Purchaser
(which is an affiliate of the Managing General Partner) is not admitted to the
Partnership as a substituted Limited Partner, however, the Purchaser may have
the right to vote each Unit purchased in the Offer pursuant to the irrevocable
appointment by tendering Limited Partners of the Purchaser and its managers
and designees as proxies with respect to the Units tendered by such Limited
Partners and accepted for payment by the Purchaser. See Section 3. As a
result, the Purchaser (which is an affiliate of the Managing General Partner)
could be in a position to significantly influence all voting decisions with
respect to the Partnership. In general, IPLP and the Purchaser (which are
affiliates of the Managing General Partner) will vote the Units owned by them
in whatever manner they deem to be in the best interests of IPT, which,
because of their relationship with the Managing General Partner, also may be
in the interest of the Managing General Partner, but may not be in the
interest of other Limited Partners. This could (i) prevent non-tendering
Limited Partners from taking action they desire but that IPT opposes and (ii)
enable IPT to take action desired by IPT but opposed by non-tendering Limited
Partners. Under the Limited Partnership Agreement, Limited Partners holding a
majority of the Units are entitled to take action with respect to a variety of
matters including: removal of the Managing General Partner or the other
non-managing general partners and in certain circumstances election of a new
or successor managing general partner or non-managing general partners;
dissolution of the Partnership; and most types of amendments to the Limited
Partnership Agreement.
The Offer will not result in any change in the compensation payable
to the Managing General Partner or its affiliates. However, as a result of the
Offer, the Purchaser (which is an affiliate of the Managing General Partner)
will participate, in its capacity as a Limited Partner, in any subsequent
distributions to Limited Partners to the extent of the Units purchased
pursuant to the Offer.
SECTION 8. FUTURE PLANS OF INSIGNIA, IPT AND THE PURCHASER. IPT,
through the Purchaser (which is an affiliate of the Managing General Partner),
is seeking to acquire Units pursuant to the Offer in order to increase its
equity interest in the Partnership, primarily for investment purposes and with
a view to making a profit. Following the completion of the Offer, IPT and/or
persons related to or affiliated with it may acquire additional Units. Any
such acquisition may be made through private purchases, through one or more
future tender or exchange offers or by any other means deemed advisable. Any
such acquisition may be at a price higher or lower than the price to be paid
for the Units purchased pursuant to the Offer, and may be for cash or other
consideration. Insignia and IPT (which are affiliates of the Managing General
Partner) also may consider disposing of some or all of the Units the Purchaser
acquires pursuant to the Offer, either directly or by a sale or other
disposition of one or more interests in IPT or IPLP, depending among other
things on the requirements from time to time of Insignia, IPT and their
affiliates in light of liquidity, strategic, tax and other considerations.
Other than the potential sale of Princeton Xxxxxxx Golf Course (as
described in Section 9), neither IPT nor the Purchaser (which are affiliates
of the Managing General Partner) has any present plans or intentions with
respect to an extraordinary transaction, such as a merger, reorganization or
liquidation, involving the Partnership or a sale of assets or refinancing of
any of the Partnership's properties. However, IPT and the Purchaser expect
that consistent with the Managing General Partner's fiduciary obligations, the
Managing General Partner will seek and review opportunities (including
opportunities identified by IPT and the Purchaser) to engage in transactions
which could benefit the Partnership, such as sales or refinancings of assets
or a combination of the Partnership with one or more other entities, with the
objective of seeking to maximize returns to Limited Partners.
IPT and the Purchaser (which are affiliates of the Managing General
Partner) have been advised that the possible future transactions the Managing
General Partner expects to consider on behalf of the Partnership include (i)
payment of extraordinary distributions; (ii) refinancing, reducing or
increasing existing indebtedness of the Partnership; (iii) sales of assets,
individually or as part of a complete liquidation; and (iv) mergers or other
consolidation transactions involving the Partnership. Any such merger or
consolidation transaction could involve
14
other limited partnerships in which the Managing General Partner or its
affiliates serve as general partners, or a combination of the Partnership with
one or more existing, publicly traded entities (including, possibly,
affiliates of IPT (which is an affiliate of the Managing General Partner) or
IPT itself), in any of which Limited Partners might receive cash, common stock
or other securities or consideration. There is no assurance, however, as to
when or whether any of the transactions referred to above might occur. If any
such transaction is effected by the Partnership and financial benefits accrue
to the Limited Partners of the Partnership, the Purchaser (and thus IPT) will
participate in those benefits to the extent of its ownership of Units. The
Limited Partnership Agreement prohibits Limited Partners from voting on
actions taken by the Partnership, unless otherwise specifically permitted
therein. Limited Partners may vote on a liquidation, and if the Purchaser is
successful in acquiring a significant number of Units pursuant to the Offer
(or otherwise), IPT will be able to significantly influence the outcome of any
such vote. IPT's primary objective in seeking to acquire the Units through the
Purchaser pursuant to the Offer is not, however, to influence the vote on any
particular transaction, but rather to generate a profit on the investment
represented by those Units.
SECTION 9. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP. Except as
otherwise indicated, information contained in this Section 9 is based upon
documents and reports publicly filed by the Partnership with the Commission.
General. The Partnership was organized on October 12, 1982 under the
laws of the State of California. Its principal executive offices are located
at Xxx Xxxxxxxx Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, and its
telephone number at that address is (000) 000-0000.
The Partnership's primary business is real estate ownership and
related operations. The Partnership was formed for the purpose of making
investments in various types of real properties which offered capital
appreciation and cash distributions to Limited Partners.
The Partnership's investment portfolio currently consists of three
residential apartment complexes and one shopping center, as follows: a
288-unit residential complex in Plainsboro, New Jersey; a 200-unit residential
complex in South Bend, Indiana; a 292-unit residential complex in Raleigh,
North Carolina; and a 169,168 square foot retail complex in Montgomery,
Alabama. In addition, the Partnership owns a 14.4% interest in a joint venture
that owns a golf course in Princeton, New Jersey.
Originally Anticipated Term of Partnership; Alternatives. According
to the Partnership's Prospectus dated March 31, 1983, the Managing General
Partner (which at the time was not affiliated with Insignia or IPT) indicated
that prior partnerships sponsored by affiliates of the Managing General
Partner had begun selling their properties "at different time periods" after
their acquisition. The Prospectus further stated, however, that the Managing
General Partner was unable to predict how long the Partnership would remain
invested in the properties, and that the Partnership acquired such properties
for investment rather than resale. In any event, according to the Prospectus,
the Managing General Partner anticipated that a disposition of the properties
would depend on, among other things, the current real estate and money
markets, economic climate and income tax consequences to the Limited Partners.
Under the Limited Partnership Agreement, the term of the Partnership will
continue until December 31, 2037, unless sooner terminated as provided in the
Limited Partnership Agreement or by law. Limited Partners could, as an
alternative to tendering their Units, take a variety of possible actions
including voting to liquidate the Partnership or amending the Limited
Partnership Agreement to authorize Limited Partners to cause the Partnership
to merge with another entity or engage in a "roll-up" or similar transaction.
General Policy Regarding Sales and Refinancings of Partnership
Properties. In general, the Managing General Partner regularly evaluates the
Partnership's properties by considering various factors, such as the
Partnership's financial position and real estate and capital markets
conditions. The Managing General Partner monitors each property's specific
locale and sub-market conditions evaluating current trends, competition, new
construction and economic changes. The Managing General Partner oversees each
asset's operating performance and continuously evaluates the physical
improvement requirements. In addition, the financing structure for each
property, tax implications and the investment climate are all considered. Any
of these factors, and possibly others,
15
could potentially contribute to any decision by the Managing General Partner
to sell, refinance, upgrade with capital improvements or hold a particular
Partnership property. The Purchaser (which is an affiliate of the Managing
General Partner) has been advised that the Partnership and its affiliates who
are involved in the Joint Venture, in which the Partnership has a 14.4%
interest, presently expect to market for sale the Princeton Xxxxxxx Golf
Course in Princeton, New Jersey sometime during 1998. The Partnership
presently expects that the Princeton Xxxxxxx Golf Course, which is subject to
a first mortgage of approximately $1,567,000, will sell for approximately
$3,500,000. In the event of a sale of the Princeton Xxxxxxx Golf Course, the
Managing General Partner has advised the Purchaser (which is an affiliate of
the Managing General Partner) that it may distribute to Limited Partners the
portion of the net cash proceeds representing the Partnership's interest in
the Joint Venture (after repayment of any outstanding mortgage debt and
payment of other costs of sale) from such sale; however, there can be no
assurance that such sale would in fact occur or as to the amount of cash
proceeds that might result from such sale. Further, no determination has been
made as to whether any net cash proceeds generated by such sale would be
distributed to Limited Partners, which determination will be made at the time
of such sale, and will be based on, among other things, the Partnership's
working capital and reserve requirements at the time. Based on the foregoing
considerations, and except for the potential sale of Princeton Xxxxxxx Golf
Course, there are no other plans to sell or refinance any Partnership property
at the present time.
Selected Financial and Property-Related Data. Set forth below is a
summary of certain financial and statistical information with respect to the
Partnership and its properties, all of which has been excerpted or derived
from the Partnership's Annual Reports on Form 10-KSB for the years ended
December 31, 1997, 1996, 1995, 1994 and 1993. More comprehensive financial and
other information is included in such reports and other documents filed by the
Partnership with the Commission, and the following summary is qualified in its
entirety by reference to such reports and other documents and all the
financial information and related notes contained therein.
ANGELES INCOME PROPERTIES, LTD. II
SELECTED FINANCIAL DATA
(in thousands, except Unit data)
FISCAL YEAR ENDED
DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993
-------------- -------------- -------------- -------------- ---------
Statements of Operations Data:
Rental Income......................... $ 6,807 $ 6,504 $ 6,636 $ 7,440 $ 7,379
Other Income.......................... $ 454 $ 364 $ 293 $ 328 $ 523
Total Revenues..................... $ 7,261 $ 6,868 $ 6,929 $ 7,768 $ 7,902
Income (Loss) from Operations
(before extraordinary item)........ $ 145 $ (97) $ 853 $ (1,714) $ (1,792)
Net Income (Loss)..................... $ 145 $ (270) $ 1,418 $ (1,714) $ (1,907)
Net Income (Loss) per Unit............ $ 1.44 $ (2.68) $ 14.06 $ (16.99) $ (18.88)
AS OF
DECEMBER 31,
-------------------------------------------------------------------------
1997 1996 1995 1994 1993
-------------- -------------- -------------- -------------- ---------
Balance Sheets Data:
Total Assets........................... $ 16,868 $ 17,858 $ 16,371 $ 21,775 $ 23,667
Total Liabilities...................... $ 19,097 $ 19,232 $ 17,474 $ 24,296 $ 24,473
Limited Partners' Equity (Deficit)..... $ (1,767) $ (921) $ (654) $ (2,058) $ (361)
Units Outstanding...................... 99,784 99,784 99,851 99,852 100,000
Book Value per Unit.................... $ (17.71) $ (9.23) $ (6.55) $ (20.61) $ (3.61)
16
Description of Properties. Set forth below is a table showing the
location, the date of purchase, the nature of the Partnership's ownership
interest in and the use of each of the Partnership's properties.
DATE OF
PROPERTY PURCHASE TYPE OF OWNERSHIP USE
------------------------ -------- ----------------------- ----------------------
Atlanta Crossing 09/27/83 100% Leasehold Interest Retail Center
Shopping Center (169,168 sq.ft.)
Montgomery, AL
Deer Creek Apartments 09/28/83 Fee ownership Residential Apartments
Plainsboro, NJ (subject to first mortgage) (288 units)
Georgetown Apartments 11/21/83 Fee ownership Residential Apartments
South Bend, IN (subject to first and second mortgages) (200 units)
Landmark Apartments 12/16/83 Fee ownership Residential Apartments
Raleigh, NC (subject to first mortgage) (292 units)
Princeton Xxxxxxx 07/26/91 Fee ownership(1) Golf Course
Golf Course (subject to first mortgage)
Princeton, NJ
------------
(1) The Partnership owns a 14.4% interest in a joint venture that owns the
Princeton Xxxxxxx Golf Course. The Partnership's investment in the joint
venture is accounted for on the equity method.
Accumulated Depreciation Schedule. Set forth below is a table showing
the gross carrying value, accumulated depreciation and federal tax basis of
each of the Partnership's properties as of December 31, 1997 ($ amounts in
thousands).
GROSS
CARRYING ACCUMULATED FEDERAL
PROPERTY VALUE DEPRECIATION RATE METHOD TAX BASIS
--------------------- ---------- ------------ -------- ------ ------------
Atlanta Crossing
Shopping Center $ 5,232 $ 4,496 5-20 yrs (1) $ 1,682
Deer Creek Apartments 11,322 6,833 5-20 yrs (1) 3,021
Georgetown Apartments 7,236 4,891 5-20 yrs (1) 925
Landmark Apartments 12,010 8,242 5-20 yrs (1) 2,398
------- -------- -------
$ 35,800 $ 24,462 $ 8,026
======== ========== ==========
---------
(1) Straight line and accelerated methods.
17
Schedule of Mortgages. Set forth below is a table showing certain
information regarding the outstanding mortgages encumbering each of the
Partnership's properties as of December 31, 1997 ($ amounts in thousands).
PRINCIPAL PRINCIPAL
BALANCE AT STATED BALANCE
DECEMBER 31, INTEREST PERIOD MATURITY DUE AT
PROPERTY 1997 RATE AMORTIZED DATE MATURITY
---------------------------------- --------------- ----------- ------------ ------------- -----------
Deer Creek Apartments
1st mortgage $ 6,235 7.33% 30 yrs. 11/2003 $ 5,779
Georgetown Apartments
1st mortgage 5,332 7.83% 28.67 yrs. 10/2003 4,806
2nd mortgage 173 7.83% (1) 10/2003 173
Landmark Apartments
1st mortgage 6,532 7.33% 30 yrs. 11/2003 6,054
------- --------
18,272 $ 16,812
========
Less unamortized discounts (75)
------------
TOTALS $ 18,197
============
----------
(1) Interest only payments.
Average Annual Rental Rate and Occupancy. Set forth below is a table
showing the average annual rental rates and occupancy percentages for each of
the Partnership's properties during the past two years.
PROPERTY AVERAGE ANNUAL RENTAL RATE AVERAGE ANNUAL OCCUPANCY
------------------------- --------------------------------- -------------------------
1997 1996 1997 1996
----------- ----------- ---- ----
Atlanta Crossing Shopping
Center(1) $4.46/sq.ft. $4.14/sq.ft. 91% 91%
Deer Creek Apartments $8,698/unit $8,451/unit 96% 95%
Georgetown Apartments $7,378/unit $7,135/unit 97% 97%
Landmark Apartments(2) $8,176/unit $7,748/unit 91% 92%
---------------
(1) The Managing General Partner signed two new leases for 1998 and hopes
to increase occupancy in 1998.
(2) Occupancy at Landmark Apartments remains low as a result of a large
number of three bedroom apartments remaining vacant due to lack of
demand for three bedroom units in this rental market.
Schedule of Real Estate Taxes and Rates. Set forth below is a table
showing the real estate taxes and rates for 1997 for each of the Partnership's
properties.
1997 1997
PROPERTY BILLING RATE
--------------------- ------------ ------
Atlanta Crossing
Shopping Center $ 50,000 3.45%
Deer Creek Apartments $ 263,000 2.45%
Georgetown Apartments $ 128,000* 9.05%
Landmark Apartments $ 119,000 1.22%
------------
* Amount per 1996 xxxxxxxx; tax bills for 1997 not yet received.
18
Other Information. The Partnership is subject to the information
reporting requirements of the Exchange Act and accordingly is required to file
reports and other information with the Commission relating to its business,
financial results and other matters. Such reports and other documents may be
inspected at the Commission's Public Reference Section, Room 1024, 000 Xxxxx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, where copies may be obtained at
prescribed rates, and at the regional offices of the Commission located in the
Citicorp Center, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
and 7 World Trade Center, New York, New York 10048. Copies should be available
by mail upon payment of the Commission's customary charges by writing to the
Commission's principal offices at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000. The Commission also maintains a web site that contains reports, proxy
and other information filed electronically with the Commission, the address of
which is xxxx://xxx.xxx.xxx.
Cash Distributions History. The following table sets forth the cash
distributions to the Limited Partners and the Managing General Partner and the
other general partners made by the Partnership since 1989. The Partnership
made a cash distribution to Limited Partners of $9.92 per Unit in June 1997.
Prior to that distribution, the last distribution made by the Partnership was
in 1989 ($10.00 per Unit). In total, original investors in the Partnership
have received distributions of only $232.42 in respect of their original $500
investment made in 1983.
PER UNIT
DISTRIBUTION TO DISTRIBUTION TO AGGREGATE
YEAR LIMITED PARTNERS(1) GENERAL PARTNERS DISTRIBUTION(2)
---- -------------------- -------------------- ------------------
1998* 0 0 0
1997 $ 9.92 $ 10,000 $ 1,000,000
1996 0 0 0
1995 0 0 0
1994 0 0 0
1993 0 0 0
1992 0 0 0
1991 0 0 0
1990 0 0 0
1989 10.00 10,000 1,010,000
---------------
(1) The amounts shown in this column only reflect actual cash distributions
paid directly to Limited Partners based on the weighted average numbers
of Units outstanding during the applicable year, and do not include
amounts withheld and paid directly to state tax authorities on behalf of
Limited Partners in respect of state income tax obligations.
(2) Pursuant to the Limited Partnership Agreement, cash distributions by the
Partnership generally are allocated 99% to the Limited Partners and 1%
to the Managing General Partner and the other general partners.
* Through April 24, 1998. The Managing General Partner presently expects
the Partnership to make a distribution to Limited Partners of
approximately $15.00 per Unit sometime during the second quarter of 1998.
Operating Budgets of the Partnership. A summary of the fiscal 1997
and 1998 operating budgets and the audited results of operations for fiscal
1997 of the Partnership are set forth in the table below. The budgeted amounts
provided below are figures that were not computed in accordance with generally
accepted accounting principles ("GAAP"). Historically, budgeted operating
results of operations for a particular fiscal year have differed significantly
in certain respects from the audited operating results for that year. In
particular, items that are categorized as capital expenditures for purposes of
preparing the operating budgets are often re-categorized as expenses when the
financial statements are audited and presented in accordance with GAAP.
Therefore, the summary operating budget presented for fiscal 1998 should not
necessarily be considered as indicative of what the audited operating results
for fiscal 1998 will be. Furthermore, any estimate of the future performance
of a business, such as the Partnership's business, is forward-looking and
based on numerous assumptions, some of which inevitably will prove to be
incorrect. For this reason, it is probable that the Partnership's future
operating results will differ from those projected in the operating budget,
and those differences may be material. Therefore, such information should not
be relied on by Limited Partners.
19
FISCAL 1997 FISCAL 1997 FISCAL 1998
BUDGETED AUDITED BUDGETED
------------- ------------- -------------
Total Revenues from Property Operations...................... $ 7,223,000 $ 6,807,000 $ 7,297,000
Total Operating Expenses .................................... $ 3,290,000 $ 3,423,000 $ 3,570,000
Net Operating Income......................................... $ 3,933,000 $ 3,384,000 $ 3,727,000
Capital Expenditures......................................... $ 1,441,000 $ 1,365,000 $ 1,868,000
SECTION 10. CONFLICTS OF INTEREST AND TRANSACTIONS WITH AFFILIATES.
The Managing General Partner and its affiliates have conflicts of interest
with respect to the Offer as set forth below.
Conflicts of Interest with Respect to the Offer. The Managing General
Partner has conflicts of interest with respect to the Offer, including
conflicts resulting from its affiliation with IPT and the Purchaser. The
Managing General Partner also would have a conflict of interest (i) as a
result of the fact that a sale or liquidation of the Partnership's assets
would result in a decrease or elimination of the fees paid to the Managing
General Partner and/or its affiliates and (ii) as a consequence of the
Purchaser's ownership of Units, because the Purchaser (which is an affiliate
of the Managing General Partner) may have incentives to seek to maximize the
value of its ownership of Units, which in turn may result in a conflict for
the Managing General Partner in attempting to reconcile the interests of the
Purchaser (which is an affiliate of the Managing General Partner) with the
interests of the other Limited Partners. In addition, the Purchaser (which is
an affiliate of the Managing General Partner) is making the Offer with a view
to making a profit. Accordingly, there is a conflict between the desire of the
Purchaser (which is an affiliate of the Managing General Partner) to purchase
Units at a low price and the desire of the Limited Partners to sell their
Units at a high price. The Managing General Partner has indicated in the
Schedule 14D-9 that it is remaining neutral and making no recommendation as to
whether Limited Partners should tender their Units pursuant to the Offer.
LIMITED PARTNERS ARE URGED TO READ THIS OFFER TO PURCHASE AND THE SCHEDULE
14D-9 AND THE RELATED MATERIALS CAREFULLY AND IN THEIR ENTIRETY BEFORE
DECIDING WHETHER TO TENDER THEIR UNITS.
Voting by the Purchaser. The Limited Partnership Agreement provides
that the General Partner has absolute discretion as to whether to admit an
assignee of Units to the Partnership as a substituted Limited Partner. The
Purchaser (which is an affiliate of the Managing General Partner) will seek to
be admitted to the Partnership as a substituted Limited Partner upon
consummation of the Offer and, when admitted, will have the right to vote each
Unit purchased pursuant to the Offer. Even if the Purchaser (which is an
affiliate of the Managing General Partner) is not admitted to the Partnership
as a substituted Limited Partner, however, the Purchaser may have the right to
vote each Unit purchased in the Offer pursuant to the irrevocable appointment
by tendering Limited Partners of the Purchaser (which is an affiliate of the
Managing General Partner) and its managers and designees as proxies with
respect to the Units tendered by such Limited Partners and accepted for
payment by the Purchaser. See Section 3. As a result, if the Purchaser (which
is an affiliate of the Managing General Partner) is successful in acquiring a
significant number of Units pursuant to the Offer, the Purchaser will have the
right to vote those Units and thereby significantly influence all voting
decisions with respect to the Partnership. In general, IPLP and the Purchaser
(which are affiliates of the Managing General Partner) will vote the Units
owned by them in whatever manner they deem to be in IPT's best interests,
which, because of their relationship with the Managing General Partner, also
may be in the interest of the Managing General Partner, but may not be in the
interest of other Limited Partners. This could (i) prevent non-tendering
Limited Partners from taking action they desire but that IPT opposes and (ii)
enable IPT to take action desired by IPT but opposed by non-tendering Limited
Partners. Under the Limited Partnership Agreement, Limited Partners holding a
majority of the Units are entitled to take action with respect to a variety of
matters including: removal of the Managing General Partner or the other
non-managing general partners and in certain circumstances election of a new
or successor managing general partner or non-managing general partners;
dissolution of the Partnership; and most types of amendments to the Limited
Partnership Agreement. See Section 7.
Financing Arrangements. The Purchaser (which is an affiliate of the
Managing General Partner) expects to pay for the Units it purchases pursuant
to the Offer with funds provided by IPLP as capital contributions. IPLP in
turn intends to use its cash on hand and, if necessary, funds available to it
under its credit facility (as described in Section 12) to make such
contributions. See Section 12. It is possible, however, that in connection
with its future financing activities, IPT or IPLP may cause or request the
Purchaser (which is an affiliate of the Managing
20
General Partner) to pledge the Units as collateral for loans, or otherwise
agree to terms which provide IPT, IPLP and the Purchaser with incentives to
generate substantial near-term cash flow from the Purchaser's investment in
the Units. This could be the case, for example, if a loan has a "balloon"
maturity after a relatively short time or bears a high or increasing interest
rate. In such a situation, the Managing General Partner may experience a
conflict of interest in seeking to reconcile the best interests of the
Partnership with the need of its affiliates for cash flow from the
Partnership's activities.
Transactions with Affiliates. The Partnership paid IRG and ICG
property management fees for property management services in the amounts of
approximately $335,000, $322,000 and $326,000 for the years ended December 31,
1997, 1996 and 1995, respectively, and has paid IRG and ICG property
management fees equal to $85,398 during the first three months of 1998. The
Partnership reimbursed the Managing General Partner and its affiliates
(including Insignia) for expenses incurred in connection with asset management
and partnership administration services performed by them for the Partnership
for the years ended December 31, 1997, 1996 and 1995 in the amounts of
$229,000, $217,000 and $261,000, respectively, and has reimbursed them for
such services in the amount of $41,563 through March 31, 1998. The
reimbursement amount for the year ended December 31, 1997 includes $54,000
which was paid to an affiliate of the Managing General Partner for costs
incurred in connection with construction oversight services. For the period
January 1, 1996 through August 31, 1997, the Partnership insured its
properties under a master policy through an agency and insurer unaffiliated
with the Managing General Partner. An affiliate of the Managing General
Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the current year's master policy. That agent assumed the financial
obligations to the affiliate of the Managing General Partner who received
payments on these obligations from the agent. Insignia and the Managing
General Partner believe that the aggregate financial benefit derived by
Insignia and its affiliates from such arrangement was immaterial.
SECTION 11. CERTAIN INFORMATION CONCERNING THE PURCHASER, IPLP, IPT
AND INSIGNIA.
The Purchaser. The Purchaser (which is an affiliate of the Managing
General Partner) is a newly-formed entity controlled by IPT and organized for
the purpose of making the Offer. The Purchaser is a wholly-owned subsidiary of
IPLP. The Purchaser (which is an affiliate of the Managing General Partner)
has not engaged in any business activity other than in connection with the
Offer and another tender offer for units of limited partnership interests in
one other partnership being made contemporaneously with the Offer, and has no
significant assets or liabilities at the present time. Upon consummation of
the Offer and such other offer, the Purchaser's only significant assets will
be the Units it acquires pursuant to the Offer and the other limited
partnership units it acquires pursuant to such other offer.
The principal executive offices of the Purchaser (which is an
affiliate of the Managing General Partner) are located at One Insignia
Financial Plaza, P.O. Box 19059, Greenville, South Carolina 29602, and its
telephone number is (000) 000-0000. For certain information concerning the
managers of the Purchaser (which is an affiliate of the Managing General
Partner), see Schedule II to this Offer to Purchase.
IPT and IPLP. IPT was formed by Insignia in May 1996, for the purpose
of acquiring and owning interests in multi-family residential properties,
principally through ownership of limited and general partner interests in real
estate limited partnerships (including the Partnership). IPT has been
organized and operates in a manner that will qualify it to be taxed as a real
estate investment trust ("REIT") under the Code. Substantially all of IPT's
investments are held through IPLP, which is the operating partnership of IPT.
IPT is presently the sole general partner and Insignia is presently the sole
limited partner of IPLP. IPT has engaged Insignia to provide certain
investment banking and related services to IPT and IPLP, including in
connection with the Offer.
Substantially all of IPT's assets consist of (i) interests in
entities which comprise or control the managing general partners of real
estate limited partnerships, including the Partnership (the "IPT
Partnerships"), which interests are held by IPT directly, and (ii) limited
partner interests in the IPT Partnerships, which interests are held through
IPLP. The IPT Partnerships own, in the aggregate, 349 properties containing
approximately 73,000
21
residential apartment units and approximately 5.9 million square feet of
commercial space. See Schedule V for a list of the IPT Partnerships in which
IPT has a material investment.
On July 18, 1997, IPT, Insignia, MAE GP Corporation (which at the
time was an affiliate of IPT but has subsequently been merged into IPT -- see
Section 13) ("MAE GP"), and Angeles Mortgage Investment Trust, an
unincorporated California business trust ("AMIT"), entered into a definitive
merger agreement (the "AMIT Merger Agreement"), pursuant to which AMIT is to
be merged with and into IPT, with IPT being the surviving entity, in a stock
for stock transaction (the "AMIT Merger"). XXXX is a public company whose
Class A shares trade on the American Stock Exchange under the symbol ANM.
Insignia and its affiliates currently own 96,800 (or approximately 3.7%) of
the 2,617,000 outstanding AMIT Class A shares and all of the 1,675,113
outstanding AMIT Class B shares. If the AMIT Merger is consummated, IPT will
become a publicly traded company (IPT presently intends to apply for listing
of its shares on the New York Stock Exchange, which listing would be subject
to completion of the AMIT Merger), and it is anticipated that Insignia and its
affiliates will own approximately 57% of post-merger IPT, the former AMIT
shareholders (other than Insignia and its affiliates) will own approximately
17% of post-merger IPT, and the current unaffiliated shareholders of IPT will
own the remaining 26% of post-merger IPT (see, however, the discussion of the
merger of Insignia and AIMCO in the following subsection of this Section 9
captioned "Insignia"). The XXXX Xxxxxx is expected to be completed in the
second quarter of 1998. However, consummation of the AMIT Merger is subject to
several conditions, including approval of the AMIT Merger Agreement and the
AMIT Merger by the shareholders of AMIT. Accordingly, there can be no
assurance as to when the AMIT Merger will occur, or that it will occur at all.
The principal executive offices of IPT and IPLP are located at One
Insignia Financial Plaza, P.O. Box 19059, Greenville, South Carolina 29602,
and the telephone number of each is (000) 000-0000. For certain information
concerning the trustees and executive officers of IPT, see Schedule III to
this Offer to Purchase. IPLP does not have any officers or employees.
Set forth below is certain consolidated financial information with
respect to IPT and IPLP.
22
INSIGNIA PROPERTIES TRUST
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except share and unit data)
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
---------------- ------------------
(audited) (audited)
Statements of Operations Data:
Revenues................................................................... $ 16,826 $ 9,705
Income Before Extraordinary Item........................................... $ 6,074 $ 3,557
Net Income................................................................. $ 6,004 $ 2,425
Supplemental Data:
Funds From Operations(1)................................................... $ 20,939 $ 12,563
IPT Common Shares Outstanding.............................................. 18,573,151 11,168,036
IPLP Units Outstanding..................................................... 9,415,947 8,399,499
---------- ----------
IPT Common Shares and IPLP Units Outstanding(2)............................ 27,989,098 19,567,535
========== ==========
Balance Sheets Data:
Cash....................................................................... $ 37,432 $ 4,928
Investments in IPT Partnerships(3)......................................... $ 159,469 $ 118,741
Long-Term Debt............................................................. $ 19,300 $ 19,730
Shareholders' Equity(4).................................................... $ 200,659 $ 121,068
(1) Funds from Operations represent income or loss from real estate
operations, which is net income or loss in accordance with GAAP, excluding
gains or losses from debt restructuring or sales of property, plus
depreciation and provision for impairment.
(2) Assumes all outstanding IPLP units are exchanged for IPT Common Shares.
(3) As of December 31, 1997, represented IPT's investment in 28 of the 36 IPT
Partnerships which IPT accounts for using the equity method. Of the
remaining eight IPT Partnerships, IPT accounts for seven using the cost
method and one using the consolidation method.
(4) Includes Insignia's minority interest in IPLP.
Insignia. Insignia is a fully integrated real estate services
organization. Insignia is the largest manager of multi-family residential
properties in the United States and is among the largest managers of
commercial properties. Insignia's real estate services include property
management, providing all of the day-to-day services necessary to operate a
property, whether residential or commercial; asset management, including
long-term financial planning, monitoring and implementing capital improvement
plans, and development and execution of refinancings and dispositions; real
estate leasing and brokerage; maintenance and construction services; marketing
and advertising; investor reporting and accounting; and investment banking,
including assistance in workouts and restructurings, mergers and acquisitions,
and debt and equity securitizations.
Insignia provides property and/or asset management services for
approximately 2,700 properties, which include approximately 280,000
residential units (including cooperative and condominium units), and in excess
of 160 million square feet of retail, commercial and industrial space, located
in over 500 cities in 48 states, Italy and the United Kingdom. Insignia
currently provides partnership administration services to approximately 900
limited partnerships having approximately 350,000 limited partners. Insignia
is a public company whose stock is traded on the New York Stock Exchange under
the symbol IFS.
On March 17, 1998, Insignia, Insignia/ESG, Inc. (which is a
wholly-owned subsidiary of Insignia), Apartment Investment and Management
Company, a Maryland corporation ("AIMCO"), and AIMCO Properties, L.P., a
Delaware limited partnership of which AIMCO is the sole general partner,
entered into a definitive merger agreement (the "AIMCO Merger Agreement"),
pursuant to which Insignia is to be merged with and into AIMCO, with AIMCO as
the surviving corporation (the "AIMCO Merger"). AIMCO is a public REIT whose
Class A shares trade on the New York Stock Exchange under the symbol AIV. The
AIMCO Merger is expected to be completed in the third quarter of 1998.
However, consummation of the AIMCO Merger is subject to certain conditions,
23
including the approval of the shareholders of Insignia. Accordingly, there can
be no assurance as to when the AIMCO Merger will occur, or that it will occur
at all.
Assuming the AIMCO Merger is consummated, AIMCO will succeed to
Insignia's ownership of IPT and IPLP, and thus IPT (and the Partnership) will
thereafter be controlled by AIMCO. In addition, AIMCO is required pursuant to
the AIMCO Merger Agreement to acquire all of the outstanding shares of IPT not
owned by Insignia by causing IPT to merge with and into AIMCO (or a subsidiary
of AIMCO) as soon as practicable after the consummation of the AIMCO Merger
(but not before August 15, 1998), in which event IPT would cease to exist as a
separate entity and AIMCO would effectively own all of the Units acquired by
the Purchaser pursuant to the Offer.
Insignia is subject to the information and reporting requirements of
the Exchange Act and in accordance therewith is required to file periodic
reports, proxy statements and other information with the Commission relating
to its business, financial condition and other matters. Certain information,
as of particular dates, concerning Insignia's business, principal properties,
capital structure, material pending legal proceedings, operating results,
financial condition, directors and officers (including their remuneration and
stock options granted to them), the principal holders of Insignia's
securities, any material interests of such persons in transactions with
Insignia and certain other matters is required to be disclosed in proxy
statements and annual reports distributed to Insignia's shareholders and filed
with the Commission. Such reports, proxy statements and other information may
be inspected and copied at the Commission's public reference facilities and
should also be available for inspection in the same manner as set forth with
respect to the Partnership in Section 9.
Insignia's principal executive offices are located at Xxx Xxxxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, and its telephone number is
(000) 000-0000. For certain information concerning the directors and executive
officers of Insignia, see Schedule IV to this Offer to Purchase.
Set forth below is certain consolidated financial information with
respect to Insignia and its consolidated subsidiaries for its fiscal years
ended December 31, 1997, 1996 and 1995. More comprehensive financial and other
information is included in Insignia's Annual Report on Form 10-K for the year
ended December 31, 1997 (including management's discussion and analysis of
financial condition and results of operations) and in other reports and
documents filed by Insignia with the Commission. The financial information set
forth below is qualified in its entirety by reference to such reports and
documents filed with the Commission and the financial statements and related
notes contained therein. These reports and other documents may be examined and
copies thereof may be obtained in the manner set forth above.
24
INSIGNIA FINANCIAL GROUP, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except per share data)
YEAR ENDED
DECEMBER 31,
-------------------------------------
1997 1996 1995
---------- ---------- ----------
Statements of Operations Data:
Total Revenues.................................. $ 400,843 $ 227,074 $ 123,032
Income Before Taxes and Extraordinary Item...... $ 17,055 $ 14,946 $ 10,093
Net Income...................................... $ 10,233 $ 8,564 $ 5,806
Fully Diluted Earnings Per Share................ $ 0.32 $ 0.26 $ 0.20
AS OF
DECEMBER 31,
-------------------------------------
1997 1996 1995
----------- ------------ -----------
Balance Sheets Data:
Cash and Cash Equivalents....................... $ 88,847 $ 54,614 $ 49,846
Receivables..................................... $ 122,180 $ 46,040 $ 26,445
Total Assets................................ $ 800,223 $ 492,402 $ 245,409
Accounts Payable................................ $ 13,705 $ 1,711 $ 1,497
Commissions Payable............................. $ 51,285 $ 18,736 $ 602
Accrued and Sundry Liabilities.................. $ 102,009 $ 40,741 $ 25,619
Long-Term Debt.................................. $ 189,704 $ 69,140 $ 42,996
Total Liabilities........................... $ 356,703 $ 130,328 $ 70,714
Redeemable Convertible Preferred Stock.......... -- -- $ 15,000
Redeemable Convertible Preferred Securities
of Subsidiary Trust......................... $ 144,065 $ 144,169 --
Minority Interest in Consolidated Subsidiaries.. $ 61,546 -- $ 2,682
Shareholders' Equity........................ $ 237,909 $ 217,905 $ 157,013
Except as otherwise set forth herein and in Schedule I, none of the
Purchaser (which is an affiliate of the Managing General Partner), IPLP, IPT,
Insignia or, to the best of the Purchaser's knowledge, any of the persons
listed on Schedules II, III or IV hereto, or any affiliate of the foregoing,
(i) beneficially owns or has a right to acquire any Units, (ii) has effected
any transaction in the Units in the last 60 days, or (iii) has any contract,
arrangement, understanding or relationship with any other person with respect
to any securities of the Partnership, including, but not limited to,
contracts, arrangements, understandings or relationships concerning the
transfer or voting thereof, joint ventures, loan or option arrangements, puts
or calls, guarantees of loans, guarantees against loss or the giving or
withholding of proxies. Xxxxxx X. Xxxxxx, who is the Chairman of the Board,
Chief Executive Officer and President of Insignia and a trustee of IPT,
beneficially owns approximately 28% of Insignia's outstanding common stock
and, as a result, may be deemed to beneficially own the Units owned by IPLP.
SECTION 12. SOURCE OF FUNDS. The Purchaser (which is an affiliate of
the Managing General Partner) expects that approximately $6,500,000 will be
required to purchase 40,000 Units, if tendered, and to pay related fees and
expenses. The Purchaser (which is an affiliate of the Managing General
Partner) expects to obtain all of those funds from IPLP, which in turn intends
to use its cash on hand and borrowings from its credit facility with a
commercial bank and financial institution. The Purchaser has not conditioned
the Offer on obtaining financing.
The following is a summary description of the existing credit
facility (the "Facility") provided for the benefit of IPLP pursuant to the
Credit Agreement, dated as of December 30, 1997 (the "Credit Agreement"),
among IPLP, as borrower, Xxxxxx Commercial Paper, Inc., as syndication agent,
First Union National Bank, as administrative agent and the lenders from time
to time parties thereto (the "Lenders"). This summary description does not
purport to be complete and is qualified in its entirety by reference to the
Credit Agreement, a copy of
25
which has been filed as an exhibit to the Purchaser's Tender Offer Statement
on Schedule 14D-1 filed with the Commission.
Pursuant to the Credit Agreement, the Lenders have made available
to IPLP a revolving credit facility of up to $50.0 million at any one time
outstanding. Loans under the Facility (the "Loans") may be utilized to finance
certain permitted investments and refinance certain investments made prior to
the date of the Credit Agreement. The Facility matures in a single installment
on December 30, 2000.
Loans bear interest, at IPLP's election, (i) at a rate equal to the
higher of (a) the rate announced from time to time by First Union National
Bank as its base lending rate or (b) the daily effective federal funds rate as
quoted by First Union National Bank; or (ii) at rates based on the London
interbank offered rate, as adjusted for certain reserve and other requirements
applicable to lenders, for one-, two-, three- or six-month periods plus an
interest margin of 2.50%. As of the date hereof, IPT has no outstanding
indebtedness under the Facility.
IPT is obligated to pay a commitment fee at a rate of 0.25% per annum
on the undrawn portion of the Facility. Such commitment fee is payable
quarterly in arrears and calculated based on the actual number of days elapsed
over a 365-day year.
The Loans are subject to mandatory prepayment only to the extent that
the aggregate outstanding principal amount of the Loans on any day exceeds the
amount of the Facility then in effect. Voluntary prepayments of the Loans and
voluntary reductions of the Facility are permitted in whole or in part at the
option of IPLP, in minimum principal amounts, without premium or penalty,
subject to reimbursement of certain of the Lenders' costs under certain
conditions.
IPLP's obligations under the Facility have been guaranteed by IPT and
such guaranty is secured by a first priority pledge of and security interest
in the capital stock or other equity interests held by IPT in each of the
subsidiaries of IPT which directly or indirectly, owns or controls the general
partner interest (including an interest in the Managing General Partner) in
any Real Estate Entity (as defined below) in which IPLP, directly or
indirectly owns a limited partner interest (including the Partnership). In
addition, the Facility is secured by a first priority pledge of and security
interest in all limited partnership interests from time to time owned by IPLP
and the equity interests from time to time held by IPLP in any subsidiary of
IPLP which itself owns limited partnership interests. The Credit Agreement
defines a "Real Estate Entity" as any limited partnership, limited liability
company, corporation or other entity which has as its principal business the
ownership of real property or debt secured by real property. Thus, the IPT
Partnerships (including the Partnership) constitute Real Estate Entities for
purposes of the Credit Agreement.
The Facility contains representations and warranties, conditions
precedent, covenants, events of default and other provisions customarily found
in similar transactions.
SECTION 13. BACKGROUND OF THE OFFER.
Affiliation with the Managing General Partner. The Managing General
Partner (which also serves as the general partner of ten other affiliated
public real estate limited partnerships) is a direct, wholly-owned subsidiary
of Angeles Securitization Corporation ("ASC"), which in turn is a direct,
wholly-owned subsidiary of IAP GP Corporation ("IAP"), which in turn is a
direct, wholly-owned subsidiary of IPT. ASC acquired all of the outstanding
stock of the Managing General Partner in November 1992 from Angeles Real
Estate Corporation, which in turn was a wholly-owned subsidiary of Angeles
Corporation. At the time of such acquisition, IAP and ASC were (and thus the
Managing General Partner became) wholly-owned subsidiaries of MAE GP.
Effective March 7, 1998, MAE GP was merged with and into IPT, with IPT being
the surviving entity (the "MAE GP Merger"). As a result of the MAE GP Merger,
IAP, ASC and the Managing General Partner are now wholly-owned subsidiaries of
IPT and the Partnership is controlled by IPT. In connection with the MAE GP
Merger, effective February 17, 1998, Insignia contributed 3,845 Units owned by
it and its subsidiaries (representing all Units then owned by such entities)
to IPLP in exchange for additional units of partnership interest in IPLP.
26
Determination of Purchase Price. In establishing the Purchase Price,
the Purchaser (which is an affiliate of the Managing General Partner) reviewed
certain publicly available information and certain information made available
to it by the Managing General Partner and its other affiliates, including
among other things: (i) the Limited Partnership Agreement, as amended to date;
(ii) the Partnership's Annual Report on Form 10-KSB for the year ended
December 31, 1997; (iii) unaudited results of operations of the Partnership's
properties for the 1997 fiscal year and to date in 1998; (iv) the operating
budgets prepared by IRG and ICG with respect to the Partnership's properties
for the year ending December 31, 1998; (v) independent appraisals of the
Partnership's wholly-owned properties; and (vi) other information obtained by
IRG, ICG, Insignia and other affiliates in their capacities as providers of
property management, asset management and partnership administration services
to the Partnership. The Purchaser's determination of the Purchase Price was
based on its review and analysis of the foregoing information, the other
financial information and analyses concerning the Partnership summarized
below. In determining the Purchase Price, the Purchaser did not rely upon any
material, non-public information concerning the Partnership not summarized
below or elsewhere in this Offer to Purchase.
Trading History of Units. Secondary market sales activity for the
Units, including privately negotiated sales, has been limited and sporadic.
According to information obtained from the Managing General Partner, from
January 1, 1996 to March 31, 1998 an aggregate of 14,484 Units (representing
less than 14.6% of the total outstanding Units) was transferred (excluding the
Units transferred by Insignia to IPLP in February 1998) in sale transactions.
Set forth in the table below are the high and low sales prices of Units for
the quarterly periods from January 1, 1996 to March 31, 1998, as reported by
the Managing General Partner and by The Partnership Spectrum, which is an
independent, third-party source. The gross sales prices reported by The
Partnership Spectrum do not necessarily reflect the net sales proceeds
received by sellers of Units, which typically are reduced by commissions and
other secondary market transaction costs to amounts less than the reported
prices; thus the Purchaser does not know whether the information compiled by
The Partnership Spectrum is accurate or complete. The transfer paperwork
submitted to the Managing General Partner often does not include the requested
price information or contains conflicting information as to the actual sales
price; accordingly, Limited Partners should not rely upon this information as
being completely accurate.
27
ANGELES INCOME PROPERTIES, LTD. II
REPORTED SALES PRICES OF PARTNERSHIP UNITS
AS REPORTED BY AS REPORTED BY
THE MANAGING GENERAL PARTNER(A) THE PARTNERSHIP SPECTRUM(B)
--------------------------------- -----------------------------
LOW SALES HIGH SALES LOW SALES HIGH SALES
PRICE PRICE PRICE PRICE
PER UNIT PER UNIT PER UNIT PER UNIT
---------------- --------------- ------------ --------------
Fiscal Year Ended December 31, 1998:
First Quarter..................................... $99 $135 $80 $126
Fiscal Year Ended December 31, 1997:
Fourth Quarter.................................... 76 135 118 135
Third Quarter ................................... 30 142 115 145
Second Quarter.................................... 30 127 110 141
First Quarter .................................... 30 125 110 135
Fiscal Year Ended December 31, 1996:
Fourth Quarter ................................... 30 122 100 127
Third Quarter..................................... 24 140 80 122
Second Quarter.................................... 30 65 71 112
First Quarter..................................... 15 62 76 110
--------------
(a) Although the Managing General Partner requests and records information on
the prices at which Units are sold, it does not regularly receive or
maintain information regarding the bid or asked quotations of secondary
market makers, if any. The Managing General Partner processes transfers
of Units 12 times per year - on the first day of each month. The prices
in the table are based solely on information provided to the Managing
General Partner by sellers and buyers of Units transferred in sale
transactions (i.e., excluding transactions believed to result from the
death of a Limited Partner, rollover to an IRA account, establishment of
a trust, trustee to trustee transfers, termination of a benefit plan,
distributions from a qualified or non-qualified plan, uniform gifts,
abandonment of Units or similar non-sale transactions).
(b) The gross sales prices reported by The Partnership Spectrum do not
necessarily reflect the net sales proceeds received by sellers of Units,
which typically are reduced by commissions and other secondary market
transaction costs to amounts less than the reported prices. The Purchaser
(which is an affiliate of the Managing General Partner) does not know
whether the information compiled by The Partnership Spectrum is accurate
or complete.
The Purchaser (which is an affiliate of the Managing General Partner)
believes that, although secondary market sales information probably is not a
reliable measure of value because of the limited and inefficient nature of the
market for Units, this information may be relevant to a Limited Partner's
decision as to whether to tender its Units pursuant to the Offer. At present,
privately negotiated sales and sales through intermediaries (e.g., through the
trading system operated by American Partnership Board, which publishes sell
offers by holders of Units) are the only means available to a Limited Partner
to liquidate an investment in Units (other than the Offer) because the Units
are not listed or traded on any exchange or quoted on NASDAQ.
Managing General Partner's Annual Estimates of Net Asset Value. The
Managing General Partner prepares annual estimates of the Partnership's net
asset value per Unit. The Managing General Partner's three most recent
estimates of the Partnership's net asset value per Unit were $241, $220 and
$184 per Unit as of December 31, 1997, 1996 and 1995, respectively. The
Managing General Partner estimates net asset value based on a hypothetical
sale of all of the Partnership's properties and the distribution to the
Limited Partners and the Managing General Partner of the gross proceeds of
such sales, net of related indebtedness, together with the Partnership's cash,
proceeds from temporary investments, and all other assets that are believed to
have liquidation value, after provision in full for all of the Partnership's
other known liabilities. The net asset value estimates prepared by the
Managing General Partner do not take into account (i) timing considerations or
(ii) costs associated with winding up the Partnership. Therefore, the
Purchaser believes that the Managing General Partner's estimates of net asset
value per Unit do not necessarily represent either the fair market value of a
Unit or the amount a Limited Partner reasonably could expect to receive if the
Partnership's properties were sold and the Partnership was liquidated. For
this reason, the Purchaser considered the Managing General Partner's net asset
value estimates to be less meaningful in determining the Purchase Price than
the pro forma liquidation analysis described below.
28
Estimate of Net Asset Value in Connection with the MAE GP Merger. In
connection with the MAE GP Merger (as described in Section 11), IPT estimated
the net asset value of a Unit (as of December 31, 1997) to be $213.00. This
net asset value estimate was based on a hypothetical sale of all of the
Partnership's properties and the distribution to the Limited Partners and the
Managing General Partner of the gross proceeds of such sales, net of related
indebtedness, together with the Partnership's cash, proceeds from temporary
investments, and all other assets that are believed to have liquidation value,
after provision in full for all of the Partnership's other known liabilities.
This net asset value estimate did not take into account (i) timing
considerations or (ii) costs associated with winding up the Partnership.
Therefore, the Purchaser believes that IPT's estimate of the net asset value
of a Unit prepared in connection with the MAE GP Merger does not necessarily
represent either the fair market value of a Unit or the amount a Limited
Partner reasonably could expect to receive if the Partnership's properties
were sold and the Partnership was liquidated. For this reason, the Purchaser
considered such net asset value estimate to be less meaningful in determining
the Purchase Price than the pro forma liquidation analysis described below.
Appraisals. Each of the Partnership's wholly-owned properties have
been appraised annually by an independent, third party appraiser (Xxxxxxx
Tener Real Estate Services, Inc. ("KTR") in the case of the 1998 appraisals)
in connection with the requirement contained in the Limited Partnership
Agreement that the Managing General Partner prepare an annual estimate of the
net asset value of a Unit based on such third party appraisals. The Purchaser
(which is an affiliate of the Managing General Partner) has been advised that
the most recent appraisals of the Partnership's properties were performed
during the first quarter of 1998. According to the appraisal reports, the
scope of the appraisals included an inspection of each property and an
analysis of the respective surrounding markets. KTR relied principally on the
income capitalization approach to valuation and secondarily on the sales
comparison approach, and represented that its report was prepared in
accordance with the Code of Professional Ethics and Standards of Professional
Appraisal Practice of the Appraisal Institute and the Uniform Standards of
Professional Appraisal Practice, and in compliance with the Appraisal
Standards set forth in the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 (known as "FIRREA"). The estimated market values of
the fee simple estate of each of the properties specified in the appraisal
reports for 1996, 1997 and 1998 for the Partnership's properties are set forth
in the table below, and copies of the summaries of the 1998 appraisals have
been filed as exhibits to the Purchaser's Tender Offer Statement on Schedule
14D-1 filed with the Commission.
PROPERTY NAME 1998 1997 1996
------------------------------------------ ------------------- -------------------- ----------------
Deer Creek Apartments $ 12,200,000 $ 12,000,000 $ 11,000,000
Georgetown Apartments $ 8,500,000 $ 7,500,000 $ 7,200,000
Landmark Apartments $ 13,500,000 $ 13,300,000 $ 11,500,000
Atlanta Crossing Shopping Center $ 5,100,000 $ 4,700,000 $ 4,750,000
------------- ---------------- ----------------
AGGREGATE APPRAISED VALUE $ 39,300,000 $ 37,500,000 $ 34,450,000
============= ================ ================
Purchaser's Estimate of Gross Real Estate Value. In estimating the
gross real estate value of the Partnership's properties, the Purchaser (which
is an affiliate of the Managing General Partner) relied on the appraised
values described above in determining the estimated values of the
Partnership's wholly-owned properties. The Purchaser (which is an affiliate of
the Managing General Partner) reviewed the capitalization rates and the
analysis of operations utilized by KTR in preparing its estimates of the
values of the Partnership's wholly-owned properties, and based on that review,
the Purchaser determined that those capitalization rates were within a range
of reasonableness. Working backwards from the appraised value of each
property, the Purchaser (which is an affiliate of the Managing General
Partner) calculated the implied gross rent multiplier for each of the
Partnership's wholly-owned properties, and determined that the multiplier for
each property was within a range of reasonableness. The Purchaser (which is an
affiliate of the Managing General Partner) also calculated, based on the
appraised value of each of the Partnership's wholly-owned properties, the
implied cost per apartment unit, and determined that those costs were within a
range of reasonableness.
The Purchaser valued the Partnership's interest in the Princeton
Xxxxxxx Golf Course based on the methodology described below.
29
PRINCETON XXXXXXX GOLF COURSE. The Purchaser (which is an affiliate
of the Managing General Partner) and its affiliates are not primarily involved
in golf course ownership and/or operations. In addition, golf courses
traditionally are not valued using the capitalization of income method, which
is the primary valuation method used by the Purchaser in valuing the
Partnership's properties. The Managing General Partner has advised the
Purchaser of its receipt of numerous indications of interest in purchasing the
property (including from the unaffiliated manager of the property), and that
such interested parties have suggested purchase prices of approximately
$3,500,000 for the property. The Purchaser therefore has used this number in
its valuation of the property. The Purchaser then estimated the portion of the
gross real estate value attributable to the Partnership, based on the
Partnership's 14.4% interest in the Joint Venture which owns the property,
resulting in a valuation of $504,000.
Based on the estimates of the gross values of the Partnership's
properties described above, the Purchaser estimated that the current aggregate
gross real estate value of the Partnership's properties is $39,804,000 (the
"Gross Real Estate Value Estimate"). In relying upon the appraised values of
the Partnership's wholly-owned properties, the Purchaser considered the
factors described above as well as other unquantifiable factors such as the
Purchaser's knowledge of expenses relating to operating properties in the
relative markets in which the Partnership's wholly-owned properties are
located and its experience in the real estate markets in general. The
Purchaser concluded that the appraised values of the Partnership's
wholly-owned properties are reasonable estimates of the gross fair values of
the Partnership's wholly-owned properties.
Although there are several other methods of estimating the value of
real estate of this type, the Purchaser believes that this approach represents
a reasonable method of estimating the aggregate gross real estate value of the
Partnership's properties (without taking into account the costs of disposing
of the properties), subject to the substantial uncertainties inherent in any
estimate of value. An appraisal is an estimate or opinion of value and cannot
be relied upon as a precise measure of value or worth. All of the assumptions
and limiting conditions as well as the analysis and methodology included in
the appraisal report are an integral part of the value conclusion. The amount
which could be realized on a sale of any of the Partnership's wholly-owned
properties may be substantially more or less than its appraised value. The
Purchaser did not solicit any offers or inquiries from prospective buyers of
the Partnership's properties.
Purchaser's Pro Forma Estimate of Net Liquidation Value per Unit. The
Purchaser is offering to purchase Units, which are a relatively illiquid
investment, and is not offering to purchase the Partnership's underlying
assets or assume any of its liabilities. Consequently, the Purchaser does not
believe that the per-Unit amount which might be distributed to Limited
Partners following a future sale of all the Partnership's properties
necessarily reflects the present fair value of a Unit. Conversely, the
realizable value of the Partnership's assets clearly is a relevant factor in
determining the price a prudent purchaser would offer for Units. In
considering this factor, the Purchaser made a pro forma calculation of the
amount each Limited Partner might receive in a theoretical orderly liquidation
of the Partnership (which may not be realistically possible, particularly in
the near term, due to real estate market conditions, the general difficulty of
disposing of real estate in a short period of time, and other general economic
factors), based on the Gross Real Estate Value Estimate (as described above)
and the other considerations described below. The Purchaser based its pro
forma liquidation analysis on the Gross Real Estate Value Estimate (and thus
in large part on the appraised values of the Partnership's wholly-owned
properties described above) as opposed to the values estimated by IPT in
connection with the MAE GP Merger or by the Managing General Partner (each, as
described above), because the Purchaser believes that the Gross Real Estate
Value Estimate represents the best estimate, based on currently available
information, of the values of the Partnership's properties.
In estimating the pro forma net liquidation value per Unit, the
Purchaser adjusted its Gross Real Estate Value Estimate of $39,804,000 to
reflect the Partnership's other assets and liabilities (excluding prepaid and
deferred expenses and security deposits). Specifically, the Purchaser added
the amounts of cash, accounts receivable and escrow deposits shown on the
Partnership's unaudited balance sheet at March 31, 1998 ($5,222,807), and
subtracted the mortgage debt encumbering the Partnership's wholly-owed
properties ($18,148,764) and all other liabilities shown on that balance sheet
($789,107). In addition, the Purchaser valued its 14.4% interest in the
Princeton Xxxxxxx Golf Course based on the Joint Venture's unaudited balance
sheet at March 31, 1998. The Purchaser
30
estimated the amount of cash, accounts receivable and escrow deposits
reflected on that balance sheet ($272,622) and subtracted the mortgage debt
encumbering the Joint Venture's property ($1,567,301) and all other
liabilities shown on that balance sheet ($835,984). The Purchaser then
multiplied the result (-$2,130,663) by its 14.4% interest in the Joint
Venture, and subtracted such amount ($306,815) from the adjusted Gross Real
Estate Value Estimate as well. The Purchaser then deducted from that amount
$1,592,160, representing a reserve equal to 4% of the Gross Real Estate Value
Estimate (which represents the Purchaser's estimate of the probable costs of
brokerage commissions, real estate transfer taxes and other disposition
expenses). The result, $24,189,961, represents the Purchaser's pro forma
estimate of the aggregate net liquidation proceeds (before provision for the
costs described in the following sentence) which could be realized on an
orderly liquidation of the Partnership, based on the assumptions implicit in
the calculations described above. The Purchaser did not, however, deduct any
amounts in respect of the legal and other costs which the Purchaser expects
would be incurred in a liquidation, including costs of negotiating purchase
and sale contracts, possibly conducting a consent solicitation in order to
obtain the Limited Partners' approvals for the sales as may be required by the
Limited Partnership Agreement, and winding up the Partnership, because of the
difficulty of estimating those amounts.
To complete its pro forma estimate of the amount of the theoretical
liquidation proceeds that would be distributable per Unit, the Purchaser then
deducted 1%, which would be the percentage allocable to the Managing General
Partner in respect of its non-subordinated interest in the Partnership, and
the remaining $23,948,061 was then divided by the 99,784 Units reported as
outstanding by the Managing General Partner as of April 1, 1998. The resulting
estimated pro forma liquidation value was $240 per Unit (the "Estimated
Liquidation Value"), before provision for the legal and other costs of
liquidating the Partnership described in the last sentence of the preceding
paragraph.
The Purchaser's pro forma liquidation analysis described above is
merely theoretical and does not itself reflect the value of the Units because
(i) there is no assurance that any such liquidation in fact will occur in the
foreseeable future and (ii) any liquidation in which the estimated fair market
values described above might be realized would take an extended period of time
(at least a year, and quite possibly significantly longer), during which time
the Partnership and its partners would continue to be exposed to the risk of
fluctuations in asset values because of changing market conditions and other
factors. For any property sales in which the Partnership is required to
indemnify the buyer for matters arising after the closing, a portion of the
sales proceeds could be held by the Partnership until all possible claims were
satisfied, further extending the delay in the receipt by the Limited Partners
of liquidation proceeds. In light of these factors, the Purchaser (which is an
affiliate of the Managing General Partner) believes the actual current value
of the Units is substantially less than its estimate of the Estimated
Liquidation Value. Conversely, there is a substantial possibility that the
per-Unit value realized in an orderly liquidation could be greater than the
Estimated Liquidation Value. A reduction in either operating expenses or
capital expenditures from the levels reflected in the property operating
statements for the year ended December 31, 1997 would result in a higher
liquidation value under the method described above. Similarly, a higher
liquidation value would result if a buyer applied lower capitalization rates
(reflecting a willingness to accept a lower rate of return on its investment)
to the applicable net operating income generated by the Partnership's
properties than the capitalization rates applied by the Purchaser. For
example, a 5% increase or decrease in the value of the Partnership's
properties would produce a corresponding increase or decrease in the Estimated
Liquidation Value of approximately $19 per Unit. Furthermore, the analysis
described above is based on a series of assumptions, some of which may not be
correct. Accordingly, this analysis should be viewed merely as indicative of
the Purchaser's approach to valuing Units and not as any way predictive of the
likely result of any future transactions.
Litigation. On March 24, 1998, certain persons claiming to own
limited partner interests in certain limited partnerships (including the
Partnership) whose general partners (the "General Partners") are affiliates of
Insignia (the "Partnerships") filed a purported class and derivative action in
California Superior Court in the County of San Mateo (the "Complaint") against
Insignia, the General Partners (including the Managing General Partner),
certain persons and entities who purportedly formerly controlled the General
Partners, and additional entities affiliated with and individuals who are
officers, directors and/or principals of several of the defendants. The
complaint contains allegations that, among other things, (i) the defendants
breached their fiduciary duties to the plaintiffs by selling or agreeing to
sell their "fiduciary positions" as stockholders, officers and directors of
the General Partners for a profit
31
and retaining said profit rather than distributing it to the plaintiffs; (ii)
the defendants breached their fiduciary duties by mismanaging the Partnerships
and misappropriating the assets of the Partnerships by (a) manipulating the
operations of the Partnerships to depress the trading price of limited
partnership units (the "Units") of the Partnerships; (b) coercing and
fraudulently inducing unitholders to sell Units to certain of the defendants
at depressed prices; and (c) using the voting control obtained by purchasing
Units at depressed prices to entrench certain of the defendants' positions of
control over the Partnerships; and (iii) the defendants breached their
fiduciary duties to the plaintiffs by (a) selling assets of the Partnerships
such as mailing lists of unitholders; and (b) causing the General Partners to
enter into exclusive arrangements with their affiliates to sell goods and
services to the General Partners, the unitholders and tenants of Partnership
properties. The complaint also alleges that the foregoing allegations
constitute violations of various California securities, corporate and
partnership statutes, as well as conversion and common law fraud. The
complaint seeks unspecified compensatory and punitive damages, an injunction
blocking the sale of control of the General Partners to AIMCO and a court
order directing the defendants to discharge their fiduciary duties to the
plaintiffs. As of the date of this Offer to Purchase, defendants have not
served or filed a reply to the complaint. IPT and Insignia believe that the
allegations contained in the Complaint are without merit and intend to
vigorously contest the plaintiffs' action.
SECTION 14. CONDITIONS OF THE OFFER. Notwithstanding any other term
of the Offer, the Purchaser (which is an affiliate of the Managing General
Partner) will not be required to accept for payment or to pay for any Units
tendered if all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by,
any court, administrative agency or commission or other governmental authority
or instrumentality, domestic or foreign, necessary for the consummation of the
transactions contemplated by the Offer shall not have been filed, occurred or
been obtained prior to the Expiration Date. Furthermore, notwithstanding any
other term of the Offer and in addition to the Purchaser's right to withdraw
the Offer at any time before the Expiration Date, the Purchaser (which is an
affiliate of the Managing General Partner) will not be required to accept for
payment or pay for any Units not theretofore accepted for payment or paid for
and may terminate or amend the Offer as to such Units if, at any time on or
after the date of the Offer and before the Expiration Date, any of the
following conditions exists:
(a) a preliminary or permanent injunction or other order of any
federal or state court, government or governmental authority or agency shall
have been issued and shall remain in effect which (i) makes illegal, delays or
otherwise directly or indirectly restrains or prohibits the making of the
Offer or the acceptance for payment, purchase of or payment for any Units by
the Purchaser (which is an affiliate of the Managing General Partner), (ii)
imposes or confirms limitations on the ability of the Purchaser effectively to
exercise full rights of ownership of any Units, including without limitation
the right to vote any Units acquired by the Purchaser pursuant to the Offer or
otherwise on all matters properly presented to the Partnership's Limited
Partners, (iii) requires divestiture by the Purchaser of any Units, (iv)
causes any material diminution of the benefits to be derived by the Purchaser
as a result of the transactions contemplated by the Offer, or (v) might
materially adversely affect the business, properties, assets, liabilities,
financial condition, operations, results of operations or prospects of the
Purchaser or the Partnership;
(b) there shall be any action taken, or any statute, rule, regulation
or order proposed, enacted, enforced, promulgated, issued or deemed applicable
to the Offer by any federal or state court, government or governmental
authority or agency, which might, directly or indirectly, result in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;
(c) any change or development shall have occurred or been threatened
since the date of the Offer to Purchase, in the business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects of the Partnership, which is or may be materially adverse to the
Partnership, or the Purchaser (which is an affiliate of the Managing General
Partner) shall have become aware of any fact that does or may have a material
adverse effect on the value of the Units;
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market in the United States, (ii) a
32
declaration of a banking moratorium or any suspension of payments in respect
of banks in the United States, (iii) any limitation by any governmental
authority on, or other event which might affect, the extension of credit by
lending institutions or result in any imposition of currency controls in the
United States, (iv) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the United
States, (v) a material change in United States or other currency exchange
rates or a suspension of, or imposition of a limitation on, the markets
thereof, or (vi) in the case of any of the foregoing existing at the time of
the commencement of the Offer, a material acceleration or worsening thereof;
or
(e) it shall have been publicly disclosed or the Purchaser (which is
an affiliate of the Managing General Partner) shall have otherwise learned
that (i) more than ten percent of the outstanding Units have been or are
proposed to be acquired by another person (including a "group" within the
meaning of Section 13(d)(3) of the Exchange Act), or (ii) any person or group
that prior to such date had filed a Statement with the Commission pursuant to
Section 13(d) or (g) of the Exchange Act has increased or proposes to increase
the number of Units beneficially owned by such person or group as disclosed in
such Statement by two percent or more of the outstanding Units.
The foregoing conditions are for the sole benefit of the Purchaser
(which is an affiliate of the Managing General Partner) and may be asserted by
the Purchaser regardless of the circumstances giving rise to such conditions
or may be waived by the Purchaser in whole or in part at any time and from
time to time in its sole discretion. Any determination by the Purchaser (which
is an affiliate of the Managing General Partner) concerning the events
described above will be final and binding upon all parties.
SECTION 15. CERTAIN LEGAL MATTERS.
General. The Purchaser (which is an affiliate of the Managing General
Partner) is not aware of any filings, approvals or other actions by any
domestic or foreign governmental or administrative agency that would be
required prior to the acquisition of Units by the Purchaser (which is an
affiliate of the Managing General Partner) pursuant to the Offer, other than
the filing of a Tender Offer Statement on Schedule 14D-1 with the Commission
(which has already been filed) and any required amendments thereto. Should any
such approval or other action be required, it is the Purchaser's present
intention that such additional approval or action would be sought. Although
there is no present intent to delay the purchase of Units tendered pursuant to
the Offer pending receipt of any such additional approval or the taking of any
such action, there can be no assurance that any such additional approval or
action, if needed, would be obtained without substantial conditions or that
adverse consequences might not result to the Partnership's business, or that
certain parts of the Partnership's business might not have to be disposed of
or other substantial conditions complied with in order to obtain such approval
or action, any of which could cause the Purchaser (which is an affiliate of
the Managing General Partner) to elect to terminate the Offer without
purchasing Units thereunder.
Antitrust. The Purchaser (which is an affiliate of the Managing
General Partner) does not believe that the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, is applicable to the acquisition of
Units contemplated by the Offer.
Margin Requirements. The Units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, those regulations generally are not applicable to the Offer.
SECTION 16. FEES AND EXPENSES. Except as set forth in this Section
16, the Purchaser (which is an affiliate of the Managing General Partner) will
not pay any fees or commissions to any broker, dealer or other person for
soliciting tenders of Units pursuant to the Offer. The Purchaser (which is an
affiliate of the Managing General Partner) has retained Beacon Hill Partners,
Inc. to act as Information Agent and Xxxxxx Trust Company of New York to act
as Depositary in connection with the Offer. The Purchaser (which is an
affiliate of the Managing General Partner) will pay the Information Agent and
the Depositary reasonable and customary compensation for their respective
services in connection with the Offer, plus reimbursement for out-of-pocket
expenses, and has
33
agreed to indemnify the Information Agent and the Depositary against certain
liabilities and expenses in connection therewith, including liabilities under
the federal securities laws. The Purchaser (which is an affiliate of the
Managing General Partner) will also pay all costs and expenses of printing and
mailing the Offer and its legal fees and expenses.
SECTION 17. MISCELLANEOUS. The Purchaser (which is an affiliate of
the Managing General Partner) is not aware of any jurisdiction in which the
making of the Offer is not in compliance with applicable law. If the Purchaser
(which is an affiliate of the Managing General Partner) becomes aware of any
jurisdiction in which the making of the Offer would not be in compliance with
applicable law, the Purchaser will make a good faith effort to comply with any
such law. If, after such good faith effort, the Purchaser (which is an
affiliate of the Managing General Partner) cannot comply with any such law,
the Offer will not be made to (nor will tenders be accepted from or on behalf
of) Limited Partners residing in such jurisdiction. In those jurisdictions
whose securities or blue sky laws require the Offer to be made by a licensed
broker or dealer, the Offer will be deemed to be made on behalf of the
Purchaser (which is an affiliate of the Managing General Partner) by one or
more registered brokers or dealers licensed under the laws of that
jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser (which is an affiliate of the
Managing General Partner) not contained in this Offer to Purchase or in the
Assignment of Partnership Interest and, if given or made, such information or
representation must not be relied upon as having been authorized.
The Purchaser (which is an affiliate of the Managing General
Partner), IPLP, IPT and Insignia have filed with the Commission a Tender Offer
Statement on Schedule 14D-1, pursuant to Rule 14d-3 under the Exchange Act,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto. The Schedule 14D-1 and any amendments thereto,
including exhibits, may be inspected and copies may be obtained at the same
places and in the same manner as set forth in Section 9 (except that they will
not be available at the regional offices of the Commission).
BROAD RIVER PROPERTIES, L.L.C.
APRIL 24, 1998
34
SCHEDULE I
TRANSACTIONS IN THE UNITS
EFFECTED BY IPLP IN THE PAST 60 DAYS
Number of Price
DATE Units Purchased Per Unit
---- --------------- --------
3/13/98 10 $135
3/13/98 30 135
3/13/98 15 135
3/13/98 10 135
3/13/98 20 135
3/26/98 20 135
S-1
SCHEDULE II
INFORMATION REGARDING THE MANAGERS OF THE PURCHASER
Set forth in the table below are the name and the present principal
occupations or employment and the name, principal business and address of any
corporation or other organization in which such occupation or employment is
conducted, and the five-year employment history of each of the managers of the
Purchaser. Each person identified below is employed by Xxxxxxxx and is a
United States citizen. The principal business address of the Purchaser and,
unless otherwise indicated, the business address of each person identified
below, is One Insignia Financial Plaza, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000.
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx has been a Manager of the Purchaser since its inception in
000 Xxxx Xxxxxx April 1998. For additional information regarding Xx. Xxxxx, see Schedule
Suite 3401 III.
New York, NY 10152
Xxxxxx X. XxXxx Xxxxxx X. XxXxx has been a Manager of the Purchaser since its inception in
April 1998, Assistant Secretary of Insignia since April 30, 1997 and Associate
General Counsel of Insignia since July 1996. Prior to June 1996, Xx. XxXxx'x
principal occupation was as an attorney with the law firm of Xxxxxx & Bird
LLP, Atlanta, Georgia.
Xxxxxx Xxxxxx Xxxxxx Xxxxxx has been a Manager of the Purchaser since its inception in April
1998. For additional information regarding Xx. Xxxxxx, see Schedules III and
IV.
S-2
SCHEDULE III
INFORMATION REGARDING THE
TRUSTEES AND EXECUTIVE OFFICERS OF IPT
Set forth in the table below are the name and the present principal
occupations or employment and the name, principal business and address of any
corporation or other organization in which such occupation or employment is
conducted, and the five-year employment history of each of the trustees and
executive officers of IPT. Each person identified below is employed by
Xxxxxxxx and is a United States citizen. The principal business address of IPT
and, unless otherwise indicated, the business address of each person
identified below, is One Insignia Financial Plaza, Greenville, South Carolina
29602. Trustees are identified by an asterisk.
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------
Xxxxxx X. Xxxxxx* Xxxxxx X. Xxxxxx has served as a Trustee of IPT and as
Chairman of the Board of Trustees and Chief Executive
Officer of IPT since December 1996. For additional
information regarding Xx. Xxxxxx, see Schedule IV.
Xxxxx X. Xxxxx* Xxxxx X. Xxxxx has served as a Trustee of IPT since its
inception in May 1996, and has served as President of
IPT since December 1996. For additional information
regarding Xx. Xxxxx, see Schedule IV.
Xxxxx X. Xxxxxxxx* Xxxxx X. Xxxxxxxx has served as a Trustee of IPT since December
102 Woodmont Boulevard 1996. Xx. Xxxxxxxx has also served as an Executive Managing
Suite 400 Director of IPT since December 1996. For additional information
Nashville, TN 37205 regarding Xx. Xxxxxxxx, see Schedule IV.
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx has served as a Senior Vice President of IPT
000 Xxxx Xxxxxx since August 1997, and has served as Secretary of IPT since
Suite 3401 January 1998. From June until August 1997, Xx. Xxxxx served as
New York, NY 10152 a Vice President of IPT. Since April 1997, Xx. Xxxxx'x principal
occupation has been to serve as a Senior Vice President --
Investment Banking of Insignia. Prior to April 1997,
Xx. Xxxxx'x principal occupation was as an attorney
with the law firm of Xxxxxx & Xxxxx, New York, New York.
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx has served as the Controller of IPT since August
1997. Since April 1995, Mr. Xxxxx' principal occupation has been
to serve as an accountant with Insignia. Prior to April 1995, Mr.
Xxxxx' principal occupation was as a senior auditor with the
accounting firm of Ernst & Young LLP.
Xxxxxxx X. Xxxxxxx, Xx. Xxxxxxx X. Xxxxxxx, Xx. has served as a Senior Vice President of
IPT since August 1997, and served as Vice President and Director
of Operations of IPT from December 1996 until August 1997.
Xx. Xxxxxxx'x principal employment has been with Insignia for
more than the past five years. From January 1994 to September
1997, Xx. Xxxxxxx served as Managing Director-- Partnership
Administration of Insignia.
S-3
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------
Xxxxxx Xxxxxx Xxxxxx Xxxxxx has served as Vice President and Treasurer of
IPT since December 1996. Xx. Xxxxxx served as a Vice
President of IPT from December 1996 until August 1997
and as Chief Financial Officer of IPT from May 1996
until December 1996. For additional information
regarding Xx. Xxxxxx, see Schedule IV.
Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx has served as Chief Operating Officer of
IPT since May 1997. Since August 1994, Xx. Xxxxxx'x
principal occupation has been to serve as President of
the various corporate general partners of partnerships
controlled by Metropolitan Asset Enhancement, L.P.,
which is an affiliate of Insignia.
S-4
SCHEDULE IV
INFORMATION REGARDING THE
DIRECTORS AND EXECUTIVE OFFICERS OF INSIGNIA
Set forth in the table below are the name and the present principal
occupations or employment and the name, principal business and address of any
corporation or other organization in which such occupation or employment is
conducted, and the five-year employment history of each of the directors and
executive officers of Insignia. Unless otherwise indicated, each person
identified below is employed by Insignia and is a United States citizen. The
principal business address of Insignia and, unless otherwise indicated, the
business address of each person identified below, is One Insignia Financial
Plaza, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000. Directors are identified by an
asterisk.
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------
Xxxxxx X. Xxxxxx* Xxxxxx X. Xxxxxx has been a Director of Insignia since its inception
in July 1990. Xx. Xxxxxx has been Chairman and Chief Executive Officer
of Insignia since January 1991 and President since May 1995. Xx. Xxxxxx
has also been President of Metropolitan Asset Group, Ltd. ("MAG"), a
real estate investment banking firm, since 1983.
Xxxxxx X. Xxxxxxx* Xxxxxx X. Xxxxxxx has been a Director of Insignia since May 1996. For
0000 Xxxxx Xxxxxx Xxxxx more than the past five years, Xx. Xxxxxxx'x principal occupation has
Santa Fe, NM 87501 been as a General Partner of First Security Company II, L.P., an
investment advisory firm.
Xxxxx X. Xxxxxx* Xxxxx X. Xxxxxx has been a Director of Insignia since August 1993. Mr.
000 Xxxx Xxxxxx Xxxxxx is the retired Chairman of the Board and Chief Executive Officer of
New York, NY 10021 Xxxxxxxxx'x Inc., a real estate company. He also serves as a director of Refac
Technology Development Corporation, Noodle Kiddoodle, and Containerways
International Ltd.
Xxxxxx X. Xxxx* Xxxxxx X. Xxxx has been a Director of Insignia since August 1993. Since
000 Xxxx 00xx Xxxxxx February 1996, Xx. Xxxx has been a partner in the law firm of Akin, Gump,
New York, NY 10019 Xxxxxxx, Xxxxx & Xxxx, which represents Insignia and certain of its affiliates
from time to time. From January 1991 to February 1996, Xx. Xxxx was a
partner in the law firm LeBoeuf, Lamb, Xxxxxx & XxxXxx.
Xxxxxxx X. Xxxxxxxx* Xxxxxxx X. Xxxxxxxx has been a Director of Insignia since August 1993.
000 Xxxx 00xx Xxxxxx For more than the past five years, Xx. Xxxxxxxx'x principal occupation
New York, NY 10022 has been as a self-employed consultant in the real estate business,
including ownership, management and lending.
Xxxx Xxxxxx* Xxxx Xxxxxx has been a Director of Insignia since August 1993. For more
000 X. Xxxx Xxxxxx than the past five years, Xx. Xxxxxx'x principal occupation has been to
Greenville, SC 29601 serve as Chairman of the Board and Chief Executive Officer of RSI Holdings,
a company which distributes outdoor equipment. Xx. Xxxxxx is also a director
of The Liberty Corporation, NationsBank Corporation, Emergent Group, Inc.,
Delta Woodside Industries, Inc., Duke Power Company, and Textile Hall Corporation.
S-5
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------
Xxxxx X. Aston Xxxxx X. Aston's principal employment has been with Insignia for more than the
past five years. Xx. Xxxxx currently serves as Chief Financial Officer of
Insignia (since August 1996), with the Office of the Chairman (since July 1994)
and Executive Managing Director of Investment Banking of Insignia (since
January 1991).
Xxxxxx X. Xxxxxx Xxxxxx Xxxxxx has been a Senior Vice President -- Human Resources of
Insignia since August 1997. Prior to August 1997, Xx. Xxxxxx'x principal
employment for more than the prior five years was as Director -- Human
Resources of E&Y Xxxxxxx Xxxxxxxxx Real Estate Group, New York, New York.
Xxxxx X. Xxxxxxxx Xxxxx X. Xxxxxxxx'x principal employment has been with Insignia for more
000 Xxxxxxxx Xxxxxxxxx than the past five years. Xx. Xxxxxxxx currently serves as an Executive
Suite 400 Managing Director of Insignia (since July 1994) and as President of Insignia
Nashville, TN 37205 Financial Services, a division of Insignia (since July 1994).
Xxxx X. Xxxxxxx Xxxx X. Xxxxxxx has been General Counsel and Secretary of Insignia since
000 Xxxx Xxxxxx March 1998. Prior to that time, Xx. Xxxxxxx'x principal occupation was as a
New York, NY 10166 partner with the law firm of Nixon, Hargrave, Devans & Xxxxx, LLP, New
York, New York.
Xxxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxx'x principal employment has been with Insignia for more
000 Xxxx Xxxxxx than the past five years. Xx. Xxxxxxxx currently serves as a Managing
New York, NY 10166 Director -- Investment Banking of Insignia (since July 1994).
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx has been with the Office of the Chairman of Insignia and
000 Xxxx Xxxxxx has been Chairman of Insignia/ESG, Inc. since July 1996. Prior to July 1996,
New York, NY 10166 Xx. Xxxxxx'x principal employment for more than the prior five years was as
a founder and Chairman of Xxxxxx X. Xxxxxx Company, Incorporated ("ESG"), a
commercial property management and brokerage firm located in New York, New York
that was acquired by Insignia in June 1996.
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx'x principal employment has been with Insignia for more than
the past five years. Xx. Xxxxxxx currently serves as a Senior Vice President of
Insignia (since July 1994) and as Chief Information Officer of Insignia (since
January 1991).
Xxxx Xxxxxxx Xxxx Xxxxxxx has been an Executive Managing Director of Insignia since
909 Third Avenue September 1995 and President of Insignia Residential Group since September
New York, NY 10022 1997. Xx. Xxxxxxx has also served as President of Insignia Management
Services -- New York, Inc., a subsidiary of Insignia, since September 1995.
Prior to September 1995, Xx. Xxxxxxx'x principal occupation was to serve as
President and Chief Executive Officer of Xxxxxxx Company, Inc., a residential
property management firm located in New York, New York which Insignia
acquired in September 1995.
Xxxxxx Xxxx Xxxxxx Xxxx has been a Senior Vice President -- Finance of Insignia since
January 1997 and Controller of Insignia since June 1994. Prior to June 1994,
Xx. Xxxx was Senior Vice President and Controller of The First Savings
Bank, FSB located in Greenville, South Carolina.
S-6
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx'x principal employment has been with Insignia for more than
the past five years. Xx. Xxxxxx currently serves as Chief Operating Officer of
Insignia Residential Group (since January 1997).
Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx has been a Managing Director of Insignia since June 1996,
000 Xxxx Xxxxxx President of Insignia Commercial Group since January 1997 and President of
New York, NY 10166 Insignia/ESG, Inc. since June 1996. From February 1992 until July 1996,
Xx. Xxxxxx'x principal employment was as President of ESG. Xx. Xxxxxx
currently serves as a Director of Liberty Property Trust and Tower Realty, Inc.
Xxxxxx Xxxxxx Xxxxxx Xxxxxx'x principal employment has been with Insignia for more than the
past five years. Xx. Xxxxxx currently serves as Chief Operating Officer (since
August1996) and Treasurer (since January 1992) of Insignia. Xx. Xxxxxx has also
served as the Chief Financial Officer and Controller of MAG since September 1990.
Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx'x principal employment has been with Realty One, Inc., a
6000 Rockside Xxxxx wholly-owned subsidiary of Insignia ("Realty One"), for more than the past
Blvd. five years. Xx. Xxxxx currently serves as a Director and Chief Executive
Cleveland, OH 44131 Officer of Realty One (since October 1997).
Xxxxxxx X. Xxxxxxx Xx. Xxxxxxx currently serves as a Director and Chief Operating Officer of
6000 Rockside Xxxxx Realty One (since October 1997). From 1994 to 1997, Xx. Xxxxxxx was the
Blvd. President of Realty One. Prior to 1994, Xx. Xxxxxxx was the Chief Financial
Cleveland, OH 44131 Officer and Executive Vice President of Xxxxxxxx, Inc., a full service
advertising agency.
Xxxx X.X. Xxxxxxxxx Xxxx X.X. Xxxxxxxxx'x principal employment has been with Xxxxxxx Xxxxx for
Berkeley Square House more than the past five years. Xx. Xxxxxxxxx currently serves as a Managing
London W1X 6AN Director of Insignia for Xxxxxxx Xxxxx (since Insignia's acquisition of Xxxxxxx
Xxxxxxx Xxxxx in 1998) and has been a director of Xxxxxxx Xxxxx since its inception in
1997.
Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx'x principal employment has been with Xxxxxxx Xxxxx for more
Berkeley Square House than the past five years. Xx. Xxxxxxxx currently serves as Chief Executive
London W1X 6AN Officer of Xxxxxxx Xxxxx (since Insignia's acquisition of Xxxxxxx Xxxxx in 1998).
Xxxxxxx
Xxxxxx X.X. Xxxxxxx Xxxxxx Xxxxxxx'x principal employment has been with Xxxxxxx Xxxxx Group
Berkeley Square House Limited, a wholly-owned U.K. subsidiary of Insignia ("Xxxxxxx Xxxxx"), for
London W1X 6AN more than the past five years. Xx. Xxxxxxx currently serves as Chairman of England
Xxxxxxx Xxxxx (since Insignia's acquisition of Xxxxxxx Xxxxx in 1998).
S-7
SCHEDULE V
IPT PARTNERSHIPS
Consolidated Capital Growth Fund
Consolidated Capital Institutional Properties
Consolidated Capital Institutional Properties/2
Consolidated Capital Institutional Properties/3
Consolidated Capital Properties III
Consolidated Capital Properties IV
Consolidated Capital Properties V
Consolidated Capital Properties VI
Johnstown/Consolidated Income Partners
Multi-Benefit Realty Fund 87-1
Shelter Properties I Limited Partnership
Shelter Properties II Limited Partnership
Shelter Properties III Limited Partnership
Shelter Properties IV Limited Partnership
Shelter Properties V Limited Partnership
Shelter Properties VI Limited Partnership
Shelter Properties VII Limited Partnership
National Property Investors III
National Property Investors 4
National Property Investors 5
National Property Investors 6
National Property Investors 7
National Property Investors 8
Century Properties Fund XIV
Century Properties Fund XV
Century Properties Fund XVI
Century Properties Fund XVII
Century Properties Fund XVIII
Century Properties Fund XIX
Century Properties Growth Fund XXII
Fox Strategic Housing Income Partners
Davidson Growth Plus, X.X.
Xxxxxxxx Diversified Real Estate II, X.X.
Xxxxxxxx Income Real Estate, L.P.
HCW Pension Real Estate Fund
Angeles Income Properties, Ltd. II
Angeles Income Properties, Ltd. IV
Angeles Income Properties, Ltd. 6
Angeles Opportunity Properties, Ltd.
Angeles Partners IX
Angeles Partners XII
S-8
Manually signed facsimile copies of the Assignment of Partnership
Interest will be accepted. The Assignment of Partnership Interest and any
other required documents should be sent or delivered by each Limited Partner
or such Limited Partner's broker, dealer, bank, trust company or other nominee
to the Depositary as set forth below.
The Depositary for the Offer is:
XXXXXX TRUST COMPANY OF NEW YORK
By Mail: By Facsimile: To Confirm: By Hand/Overnight Delivery:
Wall Street Station (000) 000-0000 (212) 701-0000 Xxxx Xxxxxx Plaza
P.O. Box 0000 00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000 Xxx Xxxx, Xxx Xxxx 00000
Questions and requests for assistance or for additional copies of
this Offer to Purchase and the Assignment of Partnership Interest may be
directed to the Information Agent at its telephone number and address listed
below. You may also contact your broker, dealer, bank, trust company or other
nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
(Toll Free)
(000) 000-0000
(Call Collect)
