OFFER TO PURCHASE FOR CASH 1,400,000 CLASS A UNITS OF KAISER VENTURES LLC AT $0.50 PER UNIT by: SCM Special Fund, LLC, MPF Flagship Fund 13, LLC; MPF DeWaay Premier Fund 4, LLC; MPF Flagship Fund 10, LLC; MPF Special Fund 8, LLC; MPF Senior Note...

OFFER TO
PURCHASE FOR CASH 1,400,000
CLASS A
UNITS OF KAISER VENTURES LLC
AT
$0.50
PER UNIT
by:
SCM
Special Fund, LLC, MPF Flagship Fund 13, LLC; MPF DeWaay Premier Fund 4, LLC;
MPF Flagship Fund 10, LLC; MPF Special Fund 8, LLC; MPF Senior Note Program II,
LP
 (collectively
the “Purchasers”)

THE
OFFER, WITHDRAWAL RIGHTS, AND PRORATION PERIOD WILL EXPIRE AT 11:59 P.M.,
PACIFIC TIME, ON OCTOBER 30, 2008, UNLESS THE OFFER IS EXTENDED.

The
Purchasers hereby seek to acquire 1,400,000 Class A Units (the “Units”) in
KAISER VENTURES LLC (the “Company”).  The Purchasers are not
affiliated with the Company or its Board of Managers.  The Company is
managed by its Board of Managers (the “Board of Managers”). The Purchasers
hereby offer to purchase 1,400,000 Units at a purchase price equal to $0.50 per
Unit, less the amount of any distributions declared or made with respect
to the Units between September 19, 2008 and October 30, 2008, or such other date
to which this offer may be extended (the “Expiration Date”), in cash, without
interest, upon the terms and subject to the conditions set forth in this offer
to purchase (the “Offer to Purchase”) and in the related Letter of Transmittal,
as each may be supplemented or amended from time to time (which together
constitute the “Offer”).  As noted above, the Offer price would be
subject to reduction for distributions made or declared prior to the Expiration
Date.  Any distributions made or declared after the Expiration Date
would, by the terms of the Offer and as set forth in the Letter of Transmittal,
be assigned by tendering Unit holders to the Purchasers.

Tender of
Units will include the tender of any and all securities into which the Units may
be converted and any securities distributed with respect to the Units from and
after the Offer Date.  The Company had 3,404 holders of record owning
an aggregate of 7,190,806 units as of August 1, 2008, according to its Quarterly
Report on form 10-Q and the Annual Report on Form 10-K for the periods ending
June 30, 2008, and December 31, 2007, respectively.  The Purchasers
and their affiliates currently beneficially own 0 Units, or 0.0% of the
outstanding Units.  The 1,400,000 Units subject to the Offer
constitute 19.47% of the outstanding Units.  Consummation of the
Offer, if all Units sought are tendered, would require payment by the Purchasers
of up to $700,000 in aggregate purchase price, which the Purchasers intend to
fund out of their current working capital.

Holders
of Units (“Unit holders”) are urged to consider the following
factors:


      
          
             
      

            ·

            There
      have been no tender offers for this security since the Company’s
      inception.  Our offer
      provides you with the opportunity to receive a guaranteed amount of money
      in a specified time period.  The Board of Managers has given no
      indication when the Company will be
liquidating.

          

    


      
          
             
      

            ·

            The
      Company has NEVER paid a
distribution!

          

    


      
          
             
      

            ·

            The
      tax year in which you sell your Units will be the final
      year for which you will be obligated to file
      a K-1 for the Company with your tax return.  This may
      represent a reduction in costs associated with filing complicated tax
      returns.  Your decision to sell may have other favorable or
      unfavorable tax consequences and potential sellers should consult their
      individual tax advisers.

          

    


      
          
             
      

            ·

            Unit
      holders who tender their Units will give up the opportunity to participate
      in any future benefits from the ownership of Units, including potential
      future distributions by the Company from property operations or
      dispositions, and the purchase price per Unit payable to a tendering Unit
      holder by the Purchasers may be less than the total amount which might
      otherwise be received by the Unit holder with respect to the Unit over the
      remaining term of the Company.

          

    


      
          
             
      

            ·

            The
      Purchasers are making the Offer for investment purposes and with the
      intention of making a profit from the ownership of the
      Units.  In establishing the purchase price of $0.50 per Unit,
      the Purchasers are motivated to establish the lowest price which might be
      acceptable to Unit holders consistent with the Purchasers’
      objectives.  There is no public market for the Units, and
      neither the Unit holders nor the Purchasers have any accurate means for
      determining the actual present value of the Units.  Although
      there can be no certainty as to the actual present value of the Units, the
      Purchasers have estimated, solely for the purposes of determining an
      acceptable Offer price, that the Company could have an estimated
      liquidation value of approximately $3.10 per Unit.  It should be
      noted, however, that the Purchasers have not made an independent appraisal
      of the Units or the Company’s properties, and are not qualified to
      appraise real estate.  Furthermore, there can be no assurance as
      to the timing or amount of any future Company distributions, and there
      cannot be any assurance that the Purchasers’ estimate accurately reflects
      an approximate value of the Units or that the actual amounts which may be
      realized by holders for the Units may not vary substantially from this
      estimate.

          

    


      
          
             
      

            ·

            The
      Depositary, XxxXxxxxx Xxxxxxxxx Xxxxxx, XX, is an affiliate of certain of
      the Purchasers.  No independent party will hold securities
      tendered until the offer closes and payment is made.  Because
      there is no independent intermediary to hold the Purchasers’ funds and
      tendered securities, the Purchasers may have access to the securities
      before all conditions to the Offer have been satisfied and selling Unit
      holders have been paid; however, neither the Depositary nor the Purchasers
      has any rights with respect to the Units prior to the Expiration Date and
      acceptance by the Purchasers for payment.  Further, by tendering
      your Units, you are agreeing to arbitrate any disputes that may arise
      between you and the Purchasers or the Depositary, to subject yourself to
      personal jurisdiction in California, and that the prevailing party in any
      such action will be entitled to recover attorney fees and
      costs.

          

    


      
          
             
      

            ·

            The
      Offer allows Unitholders the option to sell 'All or None' of their Units,
      thereby allowing Unitholders the option to avoid proration if more than
      1,400,000 Units are tendered. See Section 2—Acceptance for Payment and
      Payment for Units; Proration and Section 4—Withdrawal Rights; Automatic
      Withdrawal Option. The Purchasers may accept only a portion of the Units
      tendered by a Unitholder if a total of more than 1,400,000 Units are
      tendered and the Unitholder does not select the 'All or None'
      option.

          

    

THE OFFER
TO PURCHASE IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF UNITS BEING
TENDERED.  IF MORE THAN 1,400,000 UNITS ARE VALIDLY TENDERED AND NOT
WITHDRAWN, THE PURCHASERS WILL ACCEPT FOR PURCHASE 1,400,000 UNITS FROM
TENDERING UNITHOLDERS (WHO DO NOT ELECT THE 'ALL OR NONE' OPTION) ON A PRO RATA
BASIS, SUBJECT TO THE TERMS AND CONDITIONS HEREIN.  A UNIT HOLDER MAY
TENDER ANY OR ALL UNITS OWNED BY SUCH UNIT HOLDER.

The
Purchasers expressly reserve the right, in their 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, any
Units, subject to the restriction below, (ii) upon the occurrence of any of the
conditions specified in Section 13 of this Offer to Purchase prior to the
Expiration Date, to terminate the Offer and not accept for payment any Units,
and (iii) to amend the Offer in any respect prior to the Expiration
Date.  Notice of any such extension, termination, or amendment will
promptly be disseminated to Unit holders in a manner reasonably designed to
inform Unit holders of such change in compliance with Rule 14d-4(c) under the
Securities Exchange Act of 1934 (the “Exchange Act”).  In the case of
an extension of the Offer, such extension will be followed by a press release or
public announcement which will be issued no later than 9:00 a.m., Eastern Time,
on the next business day after the scheduled Expiration Date, in accordance with
Rule 14e-1(d) under the Exchange Act.

IMPORTANT

Any Unit
holder desiring to tender any or all of such Unit holder’s Units should complete
and sign the Letter of Transmittal (a copy of which is enclosed with this Offer
to Purchase) in accordance with the instructions in the Letter of Transmittal
and mail, deliver or telecopy the Letter of Transmittal and any other required
documents to XxxXxxxxx Xxxxxxxxx Xxxxxx, XX (the “Depositary”), an affiliate of
the Purchasers, at the address or facsimile number set forth below.

XxxXxxxxx
Xxxxxxxxx Xxxxxx, XX
0000
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000
Telephone:
000-000-0000; Facsimile: 000-000-0000
E-Mail
Address: xxxxxx@xxxx.xxx

Questions
or requests for assistance or additional copies of this Offer to Purchase or the
Letter of Transmittal may be directed to the Purchasers at 0-000-000-0000.
___________________________

NO PERSON
HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION OR ANY REPRESENTATION ON BEHALF
OF THE PURCHASERS OR TO PROVIDE ANY INFORMATION OTHER THAN AS CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. NO SUCH RECOMMENDATION, INFORMATION OR
REPRESENTATION MAY BE RELIED UPON AS HAVING BEEN AUTHORIZED.
___________________________

The
Company is subject to the information and reporting requirements of the Exchange
Act and in accordance therewith is required to file reports and other
information with the Securities and Exchange Commission (“Commission”) relating
to its business, financial condition and other matters.  Such reports
and other information are available on the Commission’s electronic data
gathering and retrieval (XXXXX) system, at its internet web site at xxx.xxx.xxx, may be
inspected at the public reference facilities maintained by the Commission at 000
X Xxxxxx, XX, Xxxx 0000, Xxxxxxxxxx, X.X. 00000.  Copies of such
material can also be obtained from the Public Reference Room of the Commission
in Washington, D.C. at prescribed rates.

 
 

          
        
 


The
Purchasers have filed with the Commission a Tender Offer Statement on Schedule
TO (including exhibits) pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, furnishing certain additional information
with respect to the Offer.  Such statement and any amendments thereto,
including exhibits, may be inspected and copies may be obtained from the offices
of the Commission in the manner specified above.



                    TABLE OF
CONTENTS




      
          
             
      
            Page

          

            SUMMARY
      TERM SHEET

            4

          

            INTRODUCTION

            7

          

            TENDER
      OFFER

            10

          

            Section
      1.  Terms of the Offer

            10

          

            Section
      2. Acceptance for Payment and Payment for Units;Proration.

            10

          

            Section
      3. Procedures for Tendering Units.

            11

          

            Section
      4. Withdrawal Rights.

            12

          

            Section
      5. Extension of Tender Period; Termination; Amendment.

            12

          

            Section
      6. Material Federal Income Tax Consequences.

            13

          

            Section
      7. Effects of the Offer.

            14

          

            Section
      8.  Future Plans.

            15

          

            Section
      9. The Business of the Company.

            16

          

            Section
      10. Conflicts of Interest.

            16

          

            Section
      11. Certain Information Concerning the Purchasers.

            16

          

            Section
      12. Source of Funds.

            16

          

            Section
      13. Conditions of the Offer.

            17

          

            Section
      14. Certain Legal Matters.

            17

          

            Section
      15. Fees and Expenses.

            18

          

            Section
      16. Miscellaneous.

            18

          

            SCHEDULE
      I

            19

          

    



 
 

          
        
 

SUMMARY
TERM SHEET

The
Purchasers are offering to purchase up to 1,400,000 Units for $0.50 per Unit in
cash. The following are some of the questions that you, as a Unit holder of the
Company, may have and answers to those questions. The information in this
summary is not complete, and we urge you to carefully read the remainder of this
Offer to Purchase and the accompanying Letter of Transmittal.

WHO IS
OFFERING TO BUY MY SECURITIES?

The offer
to purchase your Units is being made jointly by SCM Special Fund, LLC, MPF
Flagship Fund 13, LLC; MPF DeWaay Premier Fund 4, LLC; MPF Flagship Fund 10,
LLC; MPF Special Fund 8, LLC; MPF Senior Note Program II, LP.  Each of
the entity Purchasers is a real estate investment fund managed or advised by
XxxXxxxxx Xxxxxxxxx Xxxxxx, XX, a private, independent real estate investment
firm or its affiliate Xxxxxx Capital Management, LLC.  None of these
entities is affiliated with the Company or its Board of Managers.

WHAT ARE
THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?

We are
seeking to purchase up to 1,400,000 Class A Units, which are the “Units” issued
to investors in the Company.

HOW MUCH
ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?

We are
offering to pay $0.50 per Unit, net to you in cash, less the amount of any
distributions declared or made with respect to the Units between September 19,
2008, and the date the Offer expires.  The Offer price would be
reduced by the amount of distributions made or declared prior to the Expiration
Date.  Any distributions made or declared after the Expiration Date
would, by the terms of the Offer and as set forth in the Letter of Transmittal,
be assigned by tendering Unit holders to the Purchasers.  If you
tender your Units to us in the Offer, you will not have to pay brokerage fees or
similar expenses.

DO YOU
HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?

If the
total amount of Units sought is purchased, the Purchasers’ capital commitment
will be approximately $700,000.  The Purchasers have an aggregate of
approximately $22 million in total assets at their disposal to fund payment to
selling Unit holders.  The Purchasers currently have sufficient funded
capital to fund all of their commitments under this Offer and all other tender
offers they may be presently making.

IS THE
FINANCIAL CONDITION OF THE BIDDERS RELEVANT TO MY DECISION ON WHETHER TO TENDER
IN THE OFFER?

Because
this is a cash offer that is not conditioned on financing being available, and
the Purchasers have more than adequate resources and no intention to take
control of the Company, other information concerning the Purchasers’ financial
condition would seem to have little relevance to your decision.

HOW LONG
DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?

You will
have at least until 11:59 p.m., Pacific Time, on October 30, 2008, to decide
whether to tender your Units in the Offer.

WILL ALL
OF THE UNITS I TENDER BE ACCEPTED BY THE PURCHASERS?

The
Purchasers desire to purchase up to 1,400,000 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 1,400,000, we will purchase all Units so tendered
and not withdrawn, upon the terms and subject to the conditions of the Offer.
However, if more than 1,400,000 Units are so tendered and not withdrawn, we will
accept for payment and pay for 1,400,000 Units so tendered, pro rata according
to the number of Units so tendered, adjusted by rounding down to the nearest
whole number of Units tendered by each Unit holder to avoid purchases of
fractional Units, as appropriate.  However, you have the option to
sell ‘All or None’ of your Units by checking the appropriate box on the Letter
of Transmittal.  If you check that box, we will not purchase your
Units if more than 1,400,000 Units are tendered, and you will be deemed to
automatically withdraw your tender. See Section 2. Acceptance for Payment and
Payment for Units; Proration and Section 4.  Withdrawal
Rights.

CAN THE
OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?

The Offer
can be extended in our discretion.


 
 

          
        
 

HOW WILL
I BE NOTIFIED IF THE OFFER IS EXTENDED?

If we
extend the offer, we will make a public announcement of the extension, not later
than 9:00 a.m., Eastern Time, on the day after the day on which the Offer was
scheduled to expire. You can check our website at xxx.xxxx.xxx (click on MPF
Tenders) to see if it has been extended, or check the SEC’s XXXXX
database.

WHAT ARE
THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?

There are
no conditions to the offer based on a minimum number of Units tendered, the
availability of financing, or the success of the offer.  However, we
may not be obligated to purchase any Units if certain conditions occur, such as
legal or government actions which would prohibit the
purchase.  Furthermore, we are not obligated to purchase any Units
which are validly tendered if, among other things, there is a material adverse
change in the Company or its business.  Please see the discussion in
Section 13, Conditions of the Offer, for a description of all
conditions.  Further, by tendering your Units, you are agreeing to
arbitrate any disputes that may arise between you and the Purchasers or the
Depositary, to subject yourself to personal jurisdiction in California, and that
the prevailing party in any such action will be entitled to recover attorney
fees and costs.

WHEN WILL
YOU PAY ME FOR THE UNITS I TENDER?

Upon the
Expiration of the Offer and our acceptance of the Units you tender, we will pay
you upon confirmation that the Company will either transfer the Units or
recognize the change of address for distributions and correspondence on the
Units.

HOW DO I
TENDER MY UNITS?

To tender
your Units, you must deliver a completed Letter of Transmittal, to the
Depositary at: XxxXxxxxx Xxxxxxxxx Xxxxxx, XX, 0000 Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx 00000 (Telephone: 000-000-0000; Facsimile Transmission:
925-631-9119), no later than the time the Offer expires.

UNTIL
WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED UNITS?

You can
withdraw previously tendered Units at any time until the Offer has expired and,
if we have not agreed to accept your Units for payment by November 18, 2008, you
can withdraw them at any time after such time until we do accept your Units for
payment.

HOW DO I
WITHDRAW PREVIOUSLY TENDERED UNITS?

To
withdraw Units, you must deliver a written notice of withdrawal, or a facsimile
of one, with the required information to the Depositary while you still have the
right to withdraw the Units.

WHAT DOES
THE COMPANY’S BOARD OF MANAGERS THINK OF THE OFFER?

The
Purchasers have not sought the approval or disapproval of the Board of
Managers.  The Board of Managers may be expected to respond with the
Company’s position on the offer in the next two weeks.

WILL THE
COMPANY CONTINUE AS A PUBLIC COMPANY?

The
Company reported 3,404 holders of its outstanding Units as of the date of its
most recent annual report.  If the total number of Unit holders is
below 300, the Company can elect to discontinue its status as a public reporting
company.  Accordingly, it is possible that the Offer could result in
the total number of Unit holders falling below the 300 holder
level.  However, there has never been a public trading market for the
Units and none is expected to develop, so the Company’s status as a public
company will not affect a trading market in the Units.  A change in
the Company’s status as a public company could reduce the information available
to Unit holders about the Company in the event the information required by the
Operating Agreement is not as extensive as that provided in reports required to
be filed by public companies under applicable rules of the Securities and
Exchange Commission.  Further, such potential deregistration would
result in the loss of the other protections afforded by
registration.

IF I
DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY UNITS?

The
Purchasers do not anticipate that Units held by non-tendering Unit holders will
be affected by the completion of the offer.

 
 

          
        
 

WHAT ARE
THE PURCHASERS’ FUTURE INTENTIONS CONCERNING THE COMPANY?

The
Purchasers have no present intention to seek control of the Company or to change
the management or operations of the Company.  The Purchasers do not
have any present intention to take action in connection with the liquidation of
the Company or with any extraordinary transaction concerning the Company or its
assets.  Although the Purchasers do not have any present intention to
take any action with respect to management or control of the Company, the
Purchasers reserve the right, at an appropriate time, to exercise their rights
as members to vote on matters subject to a member vote, including any vote
affecting the sale of the Company’s assets and the liquidation and dissolution
of the Company.  Thus, if the Purchasers purchase over 50% of the
outstanding Units of the Company (pursuant to this and any other tender offers
and other purchases), they will be in a position to control the Company by
virtue of being able to remove and replace the Board of Managers, to cause the
Company to sell its assets, and to liquidate the Company.

WHAT IS
THE MARKET VALUE OF MY UNITS?

The Units
do not have a readily ascertainable market value, and neither the Unit holders
nor the Purchasers have any accurate means for determining the actual present
value of the Units. According to the Company, “The Class A Units are not traded
on an established securities market and are not readily tradable on a secondary
market or the substantial equivalent thereof.” (Annual Report on Form 10-K for
the period ending December 31, 2007, respectively).  The Purchasers’
review of independent secondary market reporting publications such as The Xxxxxxx Report
and The Direct
Investments Spectrum (formerly The Partnership
Spectrum), reported no trading prices on secondary markets during the 2nd
Quarter 2008 and no trading prices on secondary markets in March/April 2008,
respectively.  The Company has stated that fewer than 10,000 Units
were sold in 2007 at an average price of $0.80 per Unit in 2007.  The
information published by these independent sources is believed to be the product
of their private market research and does not constitute the comprehensive
transaction reporting of a securities exchange.  Accordingly, the
Purchasers do not know whether the foregoing information is accurate or
complete.  The Purchasers are unaware of any other recent trading
prices.    Although there can be no certainty as to the
actual present value of the Units, the Purchasers have estimated, solely for the
purposes of determining an acceptable Offer price, that the Company could have
an estimated liquidation value of approximately $3.10 per Unit, or
higher.  It should be noted, that the Purchasers have not made an
independent appraisal of the Units or the Company’s properties, and are not
qualified to appraise real estate. Accordingly, there can be no assurance that
this estimate accurately reflects an approximate value of the Units or that the
actual amounts which may be realized by Unit holders for the Units may not vary
substantially from this estimate.

TO WHOM
CAN I TALK IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?

You can
call XxxXxxxxx Xxxxxxxxx Xxxxxx, XX, toll-free, at
000-000-0000.

 
 

          
        
 

To
the Unit holders of KAISER VENTURES LLC:

INTRODUCTION

The Purchasers hereby offer to purchase
1,400,000 Units at a purchase price of $0.50 per Unit (“Offer Price”), less the
amount of any distributions declared or paid with respect to the Units between
September 19, 2008, and the Expiration Date, in cash, without interest, upon the
terms and subject to the conditions set forth in the Offer.  The
Purchasers are unaware of any distributions declared or paid since September 19,
2008.  Unit holders who tender their Units will not be obligated to
pay any Company transfer fees, or any other fees, expenses or commissions in
connection with the tender of Units.  The Purchasers will pay all such
costs and all charges and expenses of the Depositary, an affiliate of certain of
the Purchasers, as depositary in connection with the Offer.

For further information concerning the
Purchasers, see Section 11 below and Schedule I.  None of the
Purchasers or the Depositary is affiliated with the Company or the Board of
Managers.  The address of the Company’s principal executive offices is
0000 X. Xxxxxx Xxxxxx Xxxx. Suite 480, Ontario, CA 91764, and its phone number
is (000) 000-0000

Unit
holders are urged to consider the following factors:


      
          
             
      

            ·

            There
      have been no tender offers for this security since the Company’s
      inception.  Our offer
      provides you with the opportunity to receive a guaranteed amount of money
      in a specified time period.  The Board of Managers has given no
      indication when the Company will be
liquidating.

          

    


      
          
             
      

            ·

            The
      Company has NEVER paid a
distribution!

          

    


      
          
             
      

            ·

            The
      tax year in which you sell your Units will be the final
      year for which you will be obligated to file
      a K-1 for the Company with your tax return.  This may
      represent a reduction in costs associated with filing complicated tax
      returns.  Your decision to sell may have other favorable or
      unfavorable tax consequences and potential sellers should consult their
      individual tax advisers.

          

    


      
          
             
      

            ·

            The
      Offer will provide Unit holders with an opportunity to liquidate their
      investment without the usual transaction costs associated with market
      sales.  Unit holders may have a more immediate need to use the
      cash now tied up in an investment in the Units and may wish to sell them
      to the Purchasers.

          

    


      
          
             
      

            ·

            Unit
      holders who tender their Units will give up the opportunity to participate
      in any future benefits from the ownership of Units, including potential
      future distributions by the Company from property dispositions or
      operations from future development, if any, and the purchase price per
      Unit payable to a tendering Unit holder by the Purchasers may be less than
      the total amount which might otherwise be received by the Unit holder with
      respect to the Unit over the remaining term of the
  Company.

          

    


      
          
             
      

            ·

            The
      Purchasers are making the Offer for investment purposes and with the
      intention of making a profit from the ownership of the
      Units.  In establishing the purchase price of $0.50 per Unit,
      the Purchasers are motivated to establish the lowest price which might be
      acceptable to Unit holders consistent with the Purchasers’
      objectives.  There is no public market for the Units, and
      neither the Unit holders nor the Purchasers have any accurate means for
      determining the actual present value of the Units.  Although
      there can be no certainty as to the actual present value of the Units, the
      Purchasers have estimated, solely for the purposes of determining an
      acceptable Offer price, that the Company could have an estimated
      liquidation value of approximately $3.10 per Unit.  It should be
      noted, however, that the Purchasers have not made an independent appraisal
      of the Units or the Company’s properties, and are not qualified to
      appraise real estate. There can be no assurance as to the timing or amount
      of any future Company distributions, and there can be no assurance that
      the Purchasers’ estimate accurately reflects an approximate value of the
      Units or that the actual amounts which may be realized by holders for the
      Units may not vary substantially from this
  estimate.

          

    


      
          
             
      

            ·

            The
      Depositary, XxxXxxxxx Xxxxxxxxx Xxxxxx, XX, is an affiliate of certain of
      the Purchasers.  No independent party will hold securities
      tendered until the offer closes and payment is made.  Because
      there is no independent intermediary to hold the Purchasers’ funds and
      tendered securities, the Purchasers may have access to the securities
      before all conditions to the Offer have been satisfied and selling Unit
      holders have been paid; however, neither the Depositary nor the Purchasers
      has any rights with respect to the Units prior to the Expiration Date and
      acceptance by the Purchasers for payment.    Further,
      by tendering your Units, you are agreeing to arbitrate any disputes that
      may arise between you and the Purchasers or the Depositary, to subject
      yourself to personal jurisdiction in California, and that the prevailing
      party in any such action will be entitled to recover attorney fees and
      costs.

          

    

      
          
             
      

            ·

          

    
The Offer
allows Unitholders the option to sell 'All or None' of their Units, thereby
allowing Unitholders the option to avoid proration if more than 1,400,000 Units
are tendered. See Section 2—Acceptance for Payment and Payment for Units;
Proration and Section 4—Withdrawal Rights; Automatic Withdrawal Option. The
Purchasers may accept only a portion of the Units tendered by a Unitholder if a
total of more than 1,400,000 Units are tendered and the Unitholder does not
select the 'All or None' option.

Establishment of the Offer
Price

The Purchasers have set the Offer Price
at $0.50 per Unit, less the amount of any distributions declared or made with
respect to the Units between September 19, 2008 and the Expiration
Date.  In determining the Offer Price, the Purchasers analyzed a
number of quantitative and qualitative factors, including: (i) the lack of a
secondary market for resales of the Units and the resulting lack of liquidity of
an investment in the Company; (ii) the estimated value of the Company’s real
estate assets; and (iii) the costs to the Purchasers associated with acquiring
the Units.

The Company made the following
statements in its Quarterly Report on form 10-Q and the Annual Report on Form
10-K for the periods ending June 30, 2008, and December 31, 2007, respectively:
“The Class A Units are not traded on an established securities market and are
not readily tradable on a secondary market or the substantial equivalent
thereof.” The lack of any public market for the sale of Units means that Unit
holders have limited alternatives if they seek to sell their
Units.  As a result of such limited alternatives for Unit holders, the
Purchasers may not need to offer as high a price for the Units as they would
otherwise.  On the other hand, the Purchasers take a greater risk in
establishing a purchase price as there is no prevailing market price to be used
for reference and the Purchasers themselves will have limited liquidity for the
Units upon consummation of the purchase.  The Purchasers’ review of
independent secondary market reporting publications such as Xxxxxxx Report and
The Direct Investments
Spectrum (formerly The Partnership
Spectrum), reported no trading prices on secondary markets during the 2nd
Quarter 2008 and no trading prices on secondary markets in March/April 2008,
respectively. The Company has stated that fewer than 10,000 Units were sold in
2007 at an average price of $0.80 per Unit in 2007.  The information
published by these independent sources is believed to be the product of their
private market research and does not constitute the comprehensive transaction
reporting of a securities exchange.  Accordingly, the Purchasers do
not know whether the foregoing information is accurate or complete.

The Purchasers are offering to purchase
Units which are an illiquid investment and are not offering to purchase the
Company’s underlying assets.  The Purchasers’ valuation is based upon
the discounted book value of the assets of the Company, but such assets may not
be liquidated for an indefinite period of time.  Accordingly, the
discounted book value of the Company is only one factor used by the Purchasers
in arriving at the Offer Price.  However, in the absence of trading
price information, the Purchasers’ estimate of the discounted book value of the
Company may be relevant to Unit holders’ review of the Offer Price. Using
publicly available information concerning the Company contained in the Company’s
Quarterly Report on form 10-Q and the Annual Report on Form 10-K for the periods
ending June 30, 2008, and December 31, 2007, respectively and the quarterly
reports for the quarters ended March 31, 2007, June 30, 2007, and September 30,
2007, the Purchasers derived an estimated discounted book value for the
Units.  The Purchasers are not qualified as real estate appraisers and
have relied solely on publicly available information in making their estimate of
the book value of the Company’s assets.  The Purchasers’ estimated
value of Company assets was calculated solely for purposes of formulating their
offer and cannot be relied upon as representing an amount which might actually
be realized upon a liquidation of the Company’s assets, whether now or at any
time in the future.

In determining their estimated value of
the Units, the Purchasers calculated the Companys book value (calculated as
total assets less total liabilities).  The Purchasers then applied a
discount rate of 85% to the book value due to the nature of the assets held by
the Company to derive the “Adjusted Book Value.”  The Adjusted Book
Value was then divided by the current number of Units outstanding after taking
into consideration the anticipated effects of the Class B units upon the Company
to derive a value of the Units.  Total assets and liabilities were
obtained from the Company’s Form 10-Q for the second quarter ended June 30, 2008
(available on the Commission’s XXXXX system, at its internet web site at
xxx.xxx.xxx, and available for inspection at the Commission’s principal office
in Washington, D.C.).

The Purchasers believe that the book
value discount rate utilized is within a range of discount rates currently
employed in the marketplace for properties of similar type, age, and
quality.  The utilization of different discount rates, however, could
also be appropriate.  In this regard, Unit holders should be aware
that the use of higher discount rate would result in a higher Adjusted Book
Value per Unit.  The resulting Estimated Liquidation Value of the
Company’s assets was approximately $3.10 per Unit.  The Purchasers
emphasize that this value was calculated by them solely for purposes of
selecting an Offer Price.  There can be no assurance as to the actual
liquidation value of Company assets or as to the amount or timing of
distributions of liquidation proceeds which may be received by Unit
holders.  The Company has not announced any pending offer to purchase
its assets.  Accordingly, there can be no assurance as to the
availability or timing of any liquidation proceeds.  Details on our
analysis of the Estimated Valuation per Unit based upon this information is
given below:


      
          
            Total
      assets

            $53,451,000

          

            Less:
      total liabilities

            (11,681,000)

          

            Equals:
      book value

            41,770,000

          

            Percentage
      of estimated net valuation allocated to holders of units based upon
      subordinated Class B unit  participation

            98%

          

            Estimated
      valuation of your Company before discount rate

            $40,934,600

          

            Divided
      by:  1 + Discount Rate (85%)

            1.85

          

            Estimated
      net valuation of your Company

            $22,126,810

          

            Total
      number of units

            7,190,806

          

            Estimated
      valuation per unit

            $3.10

          

    

The Offer Price represents the price at
which the Purchasers are willing to purchase Units.  The Purchasers
arrived at the $0.50 Offer Price by applying a discount rate to their
calculations of book value to determine the Estimated Liquidation Value of the
Company.  The Purchasers apply such a discount with the intention of
making a profit by holding on to the Units until the Company is liquidated,
hopefully at close to the full Estimated Liquidation Value.  No
independent person has been retained to evaluate or render any opinion with
respect to the fairness of the Offer Price and no representation is made by the
Purchasers or any affiliate of the Purchasers as to such
fairness.  Other measures of the value of the Units may be relevant to
Unit holders.  Unit holders are urged to consider carefully all of the
information contained herein and consult with their own advisers, tax, financial
or otherwise, in evaluating the terms of the Offer before deciding whether to
tender Units.

The Offer is not made with any current
view toward or plan or purpose of acquiring Units in a series of successive and
periodic offers.  Nevertheless, the Purchasers reserve the right to
gauge the response to this solicitation, and, if not successful in purchasing
1,400,000 Units pursuant to this Offer, may consider future
offers.  Factors affecting the Purchasers’ future interest in
acquiring additional Units include, but are not limited to, the relative success
of the current Offer, any increase or decrease in the availability of capital
for investment by the Purchasers and their investment fund affiliates, the
current diversification and performance of each affiliated fund’s portfolio of
real estate interests, the development of any public market in the Units or
actions by unrelated parties to tender for or purchase Units, the status of and
changes and trends in the Company’s operations, announcement of pending property
sales and the proposed terms of sales, and local and national real estate and
financial market developments and trends.

General Background
Information

Certain information contained in this
Offer to Purchase which relates to, or represents, statements made by the
Company or the Board of Managers, has been derived from information provided in
reports filed by the Company with the Securities and Exchange
Commission.

Tendering Unit holders will not be
obligated to pay transfer fees, brokerage fees, or commissions on the sale of
the Units to the Purchasers pursuant to the Offer.  The Purchasers
will pay all charges and expenses incurred in connection with the
Offer.  The Purchasers desire to purchase up to 1,400,000
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 1,400,000,
we will purchase all Units so tendered and not withdrawn, upon the terms and
subject to the conditions of the Offer. However, if more than 1,400,000 Units
are so tendered and not withdrawn, we will accept for payment and pay for
1,400,000 Units so tendered, pro rata according to the number of Units so
tendered, adjusted by rounding down to the nearest whole number of Units
tendered by each Unit holder to avoid purchases of fractional Units, as
appropriate.  However, you have the option to sell ‘All or None’ of
your Units by checking the appropriate box on the Letter of
Transmittal.  If you check that box, we will only purchase your Units
if we can purchase all of your Units; otherwise, you will be deemed to
automatically withdraw your tender. See Section 2. Acceptance for Payment and
Payment for Units; Proration and Section 4.  Withdrawal
Rights.

If, prior to the Expiration Date, the
Purchasers increase the consideration offered to Unit holders pursuant to the
Offer, such increased consideration will be paid with respect to all Units that
are purchased pursuant to the Offer, whether or not such Units were tendered
prior to such increase in consideration.

 
 

          
        
 


Unit holders are urged to read this
Offer to Purchase and the accompanying Letter of Transmittal carefully before
deciding whether to tender their Units.

TENDER
OFFER

Section 1.  Terms of the
Offer.  Upon the terms and subject to the conditions of the
Offer, the Purchasers will accept for payment and pay for Units validly tendered
on or prior to the Expiration Date and not withdrawn in accordance with Section
4 of this Offer to Purchase.  The term “Expiration Date” shall mean
11:59 p.m., Pacific Time, on October 30, 2008, unless and until the Purchasers
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 so extended by the Purchasers, shall expire.

The Offer is conditioned on
satisfaction of certain conditions.  See Section 13, which sets forth
in full the conditions of the Offer.  The Purchasers reserve the right
(but shall not be obligated), in their sole discretion and for any reason, to
waive any or all of such conditions.  If, by the Expiration Date, any
or all of such conditions have not been satisfied or waived, the Purchasers
reserve the right (but shall not be obligated) to (i) decline to purchase any of
the Units tendered, terminate the Offer and return all tendered Units to
tendering Unit holders, (ii) waive all 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
Unit holders 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
or (iv) to amend the Offer.  Notwithstanding the foregoing, upon the
expiration of the Offer, if all conditions are either satisfied or waived, the
Purchasers will promptly pay for all validly tendered Units upon confirmation
that the Company will either transfer the Units or recognize the change of
address for distributions and correspondence on the Units, and the Purchasers do
not intend to imply that the foregoing rights of the Purchasers would permit the
Purchasers to delay payment for validly tendered Units following
expiration.

The Purchasers do not anticipate and
have no reason to believe that any condition or event will occur that would
prevent the Purchasers from purchasing tendered Units as offered
herein.

Further, by tendering your Units, you
are agreeing to arbitrate any disputes that may arise between you and the
Purchasers or the Depositary, to subject yourself to personal jurisdiction in
California, and that the prevailing party in any such action will be entitled to
recover attorney fees and costs.  However, by so doing, you are not
waiving any of your rights under the federal securities laws or any rule or
regulation thereunder.

Section 2. Acceptance for Payment and
Payment for Units Acceptance for Payment and Payment for Units;
Proration. Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of any
extension or amendment), the Purchasers will accept for payment, and will pay
for, Units validly tendered and not withdrawn in accordance with Section 4,
promptly following the Expiration Date and upon confirmation that the Company
will either transfer the Units or recognize the change of address for
distributions and correspondence on the Units.  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 Letter of
Transmittal (or facsimile thereof) and any other documents required by the
Letter of Transmittal.

The Purchasers desire to purchase up to
1,400,000 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
1,400,000, we will purchase all Units so tendered and not withdrawn, upon the
terms and subject to the conditions of the Offer. However, if more than
1,400,000 Units are so tendered and not withdrawn, we will accept for payment
and pay for 1,400,000 Units so tendered, pro rata according to the number of
Units so tendered, adjusted by rounding down to the nearest whole number of
Units tendered by each Unit holder to avoid purchases of fractional Units, as
appropriate.

In the event that proration is
required, because of the difficulty of immediately determining the precise
number of Units to be accepted, the Purchasers will announce the final results
of proration as soon as practicable, but in no event later than five business
days following the Expiration Date.  The Purchasers will not pay for
any Units tendered until after the final proration factor has been
determined.

Unitholders may indicate, by checking a
box on the Letter of Transmittal (the 'All or None' Box), that they only wish to
sell their Units if they will be able to sell all of their Units, without any
proration. See Section 4—Withdrawal Rights. If more than 1,400,000 Units have
been properly tendered without checking the All or None Box, then the above
description of proration will apply only to tenders of such Units that do not
have the All or None Box checked.

For purposes of the Offer, the
Purchasers shall be deemed to have accepted for payment (and thereby purchased)
tendered Units when, as and if the Purchasers give oral or written notice to the
Depositary of the Purchasers’ acceptance for payment of such Units pursuant to
the Offer.  Upon the terms and subject to the conditions of the Offer,
payment for Units

 
 

          
        
 

purchased
pursuant to the Offer will in all cases be made by deposit of the Offer Price
with the Depositary, which will act as agent for the tendering Unit holders for
the purpose of receiving payment from the Purchasers and transmitting payment to
tendering Unit holders.

Under no circumstances will interest be
paid on the Offer Price by reason of any delay in making such
payment.

If any tendered Units are not purchased
for any reason (other than due to proration as described above), the Letter of
Transmittal with respect to such Units not purchased will be of no force or
effect.  If, for any reason whatsoever, acceptance for payment of, or
payment for, any Units tendered pursuant to the Offer is delayed or the
Purchasers are unable to accept for payment, purchase or pay for Units tendered
pursuant to the Offer, then, without prejudice to the Purchasers’ rights under
Section 13, the Depositary may, nevertheless, on behalf of the Purchasers,
retain tendered Units and such Units may not be withdrawn (but subject to
compliance with Rule 14e-1(c) under the Exchange Act, which requires that the
Purchasers pay the consideration offered or return the Units deposited by or on
behalf of the Unit holder promptly after the termination or withdrawal of a
tender offer), except to the extent that the tendering Unit holders are entitled
to withdrawal rights as described in Section 4.

If, prior to the Expiration Date, the
Purchasers shall increase the consideration offered to Unit holders pursuant to
the Offer, such increased consideration shall be paid for all Units accepted for
payment pursuant to the Offer, whether or not such Units were tendered prior to
such increase.

Section
3. Procedures for Tendering Units.

Valid Tender.  For
Units to be validly tendered pursuant to the Offer, a properly completed and
duly executed Letter of Transmittal (a copy of which is enclosed with this Offer
to Purchase with any other documents required by the Letter of Transmittal 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 Unit holder
may tender any or all Units owned by such Unit holder.

In
order for a tendering Unit holder to participate in the Offer, Units must be
validly tendered and not withdrawn prior to the Expiration Date, which is 11:59
p.m., Pacific Time, on October 30, 2008, or such date to which the Offer may be
extended.

The
method of delivery of the Letter of Transmittal and all other required documents
is at the option and risk of the tendering Unit holder and delivery will be
deemed made only when actually received by the Depositary.

Backup Federal Income Tax
Withholding.  To prevent the possible application of 31% backup
federal income tax withholding with respect to payment of the Offer Price for
Units purchased pursuant to the Offer, a tendering Unit holder must provide the
Depositary with such Unit holder’s correct taxpayer identification number and
make certain certifications that such Unit holder is not subject to backup
federal income tax withholding.  Each tendering Unit holder must
insert in the Letter of Transmittal the Unit holder’s taxpayer identification
number or social security number in the space provided on the front of the
Letter of Transmittal.  The Letter of Transmittal also includes a
substitute Form W-9, which contains the certifications referred to
above.  (See the Instructions to the Letter of
Transmittal.)

FIRPTA
Withholding.  To prevent the withholding of federal income tax
in an amount equal to 10% of the sum of the Offer Price plus the amount of
Company liabilities allocable to each Unit tendered, each Unit holder must
complete the FIRPTA Affidavit included in the Letter of Transmittal certifying
such Unit holder’s taxpayer identification number and address and that the Unit
holder is not a foreign person.  (See the Instructions to the Letter
of Transmittal and “Section 6. Certain Federal Income Tax
Consequences.”)

Other
Requirements.  By executing a Letter of Transmittal as set
forth above, a tendering Unit holder irrevocably appoints the designees of the
Purchasers as such Unit holder’s proxies, in the manner set forth in the Letter
of Transmittal, each with full power of substitution, to the full extent of such
Unit holder’s rights with respect to the Units tendered by such Unit holder and
accepted for payment by the Purchasers.  Such appointment will be
effective when, and only to the extent that, the Purchasers accept such Units
for payment.  Upon such acceptance for payment, all prior proxies
given by such Unit holder with respect to such Units will, without further
action, be revoked, and no subsequent proxies may be given (and if given will
not be effective).  The designees of the Purchasers will, with respect
to such Units, be empowered to exercise all voting and other rights of such Unit
holder as they in their sole discretion may deem proper at any meeting of Unit
holders, by written consent or otherwise.  In addition, by executing a
Letter of Transmittal, a Unit holder also assigns to the Purchasers all of the
Unit holder’s rights to receive distributions from the Company with respect to
Units which are accepted for payment and purchased pursuant to the Offer, other
than those distributions declared or paid during the period commencing on the
Offer Date and terminating on the Expiration Date.

 
 

          
        
 

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 procedures described above will be determined by the Purchasers,
in their sole discretion, which determination shall be final and
binding.  The Purchasers reserve the absolute right to reject any or
all tenders if not in proper form or if the acceptance of, or payment for, the
absolute right to reject any or all tenders if not in proper form or if the
acceptance of, or payment for, the Units tendered may, in the opinion of the
Purchasers’ counsel, be unlawful. The Purchasers also reserve the right to waive
any defect or irregularity in any tender with respect to any particular Units of
any particular Unit holder, and the Purchasers’ interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
Instructions thereto) will be final and binding.  Neither the
Purchasers, the Depositary, nor 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.

A tender
of Units pursuant to any of the procedures described above will constitute a
binding agreement between the tendering Unit holder and the Purchasers upon the
terms and subject to the conditions of the Offer, including the tendering Unit
holder’s representation and warranty that (i) such Unit holder owns the Units
being tendered within the meaning of Rule 14e-4 under the Exchange Act and (ii)
the tender of such Unit complies with Rule 14e-4.  Rule 14e-4
requires, in general, that a tendering security holder actually be able to
deliver the security subject to the tender offer, and is of concern particularly
to any Unit holders who have granted options to sell or purchase the Units, hold
option rights to acquire such securities, maintain “short” positions in the
Units (i.e.,
have borrowed the Units) or have loaned the Units to a short seller. Because of
the nature of limited liability company interests, the Purchasers believe it is
unlikely that any option trading or short selling activity exists with respect
to the Units. In any event, a Unit holder will be deemed to tender Units in
compliance with Rule 14e-4 and the Offer if the holder is the record owner of
the Units and the holder (i) delivers the Units pursuant to the terms of the
Offer, (ii) causes such delivery to be made, (iii) guarantees such delivery,
(iv) causes a guaranty of such delivery, or (v) uses any other method permitted
in the Offer (such as facsimile delivery of the Transmittal
Letter).

Section 4. Withdrawal
Rights.  Except as otherwise provided in this Section 4, all
tenders of Units pursuant to the Offer are irrevocable, provided that Units
tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment as provided in this
Offer to Purchase, may also be withdrawn at any time on or after November 18,
2008.

For withdrawal to be effective a
written or facsimile transmission notice of withdrawal must be timely received
by the Depositary at the address or the facsimile number set forth in the
attached Letter of Transmittal.  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 Letter of Transmittal in the same
manner as the Letter of Transmittal was signed.

If purchase of, or payment for, Units
is delayed for any reason or if the Purchasers are unable to purchase or pay for
Units for any reason, then, without prejudice to the Purchasers’ rights under
the Offer, tendered Units may be retained by the Depositary on behalf of the
Purchasers and may not be withdrawn except to the extent that tendering Unit
holders are entitled to withdrawal rights as set forth in this Section 4,
subject to Rule 14e-1(c) under the Exchange Act, which provides that no person
who makes a tender offer shall fail to pay the consideration offered or return
the securities deposited by or on behalf of security holders promptly after the
termination or withdrawal of the tender offer.

All questions as to the form and
validity (including time of receipt) of notices of withdrawal will be determined
by the Purchasers, in their sole discretion, which determination shall be final
and binding.  Neither the Purchasers, nor the Depositary, nor any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or will incur any liability for
failure to give any such notification.

Any 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.

Automatic Withdrawal Option.
Unitholders may indicate, by checking a box on the Letter of Transmittal (the
'All or None Box'), that they only wish to sell their Units if they will be able
to sell all of their Units, without any proration. If at any time during the day
of the Expiration Date more than 1,400,000 Units have been properly tendered,
unless the Purchaser amends the Offer to increase the number of Units to be
purchased, the Purchaser will deem all Units from Unitholders that checked the
All or None Box to be withdrawn and not validly tendered for purposes of the
Offer. Neither the Purchaser nor any other person will be under any duty to give
any notice that such automatic withdrawal will occur.  Unitholders may
change their election whether or not to check the All or None Box at any time on
or prior to the Expiration Date by submitting a new Letter of Transmittal with
their preferred election, in the manner described in Section 3
herein.

Section 5. Extension of Tender
Period; Termination; Amendment.  The Purchasers expressly
reserve the right, in their 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, any Units by giving oral
or written notice of such extension to the Depositary,

 
 

          
        
 

(ii) upon
the occurrence or failure to occur of any of the conditions specified in Section
13, to terminate the Offer and not accept for payment any Units by giving oral
or written notice of such termination to the Depositary, and (iii) to amend the
Offer in any respect (including, without limitation, by increasing or decreasing
the consideration offered or the number of Units being sought in the Offer or
both or changing the type of consideration) by giving oral or written notice of
such amendment to the Depositary prior to the Expiration Date.  Any
extension, termination, or amendment will be followed as promptly as practicable
by public announcement, the announcement in the case of an extension to be
issued no later than 9:00 a.m., Eastern Time, on the next business day after the
previously scheduled Expiration Date, in accordance with the public announcement
requirement of Rule 14d-4(c) under the Exchange Act.  Without limiting
the manner in which the Purchasers may choose to make any public announcement,
except as provided by applicable law (including Rule 14d-4(c) under the Exchange
Act), the Purchasers will have no obligation to publish, advertise, or otherwise
communicate any such public announcement, other than by issuing a press
release.  The Purchasers may also be required by applicable law to
disseminate to Unit holders certain information concerning the extensions of the
Offer and any material changes in the terms of the Offer.  The
Purchasers will not provide a subsequent offering period following the
Expiration Date.

If the Purchasers extend the Offer, or
if the Purchasers (whether before or after its acceptance for payment of Units)
are delayed in their payment for Units or are unable to pay for Units pursuant
to the Offer for any reason, then, without prejudice to the Purchasers’ rights
under the Offer, the Depositary may retain tendered Units on behalf of the
Purchasers, and such Units may be withdrawn to the extent tendering Unit holders
are entitled to withdrawal rights as described in Section 4 (generally, if
notice of withdrawal is given to the Depositary prior to the Expiration
Date).  However, the ability of the Purchasers to delay payment for
Units that the Purchasers have accepted for payment is limited by Rule 14e-1
under the Exchange Act, which requires that the Purchasers pay the consideration
offered or return the securities deposited by or on behalf of holders of
securities promptly after the termination or withdrawal of the Offer, except
that the Purchasers may delay payment until they receive confirmation that the
Company will either transfer the Units or recognize the change of address for
distributions and correspondence on the Units.

If the Purchasers make a material
change in the terms of the Offer or the information concerning the Offer or
waive a material condition of the Offer, the Purchasers will extend the Offer to
the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 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, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances, including the relative
materiality of the change in the terms or information.  With respect
to a change in price or a change in percentage of securities sought (other than
an increase of not more than 2% of the securities sought), however, a minimum
ten business day period is generally required to allow for adequate
dissemination to security holders and for 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 midnight, Pacific Time.  Any material change in the terms of
the Offer will be published, sent, or given to you in a manner reasonably
designed to inform you of such change; in most cases we will mail you
supplemental materials.

Section 6. Material Federal Income
Tax Consequences.  THE FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW
DOES NOT PURPORT TO ADDRESS ALL ASPECTS OF TAXATION THAT MAY BE RELEVANT TO A
PARTICULAR UNIT HOLDER.  For example, this discussion does not
address the effect of any applicable foreign, state, local or other tax laws
other than federal income tax laws.  Certain Unit holders (including
trusts, foreign persons, tax-exempt organizations or corporations subject to
special rules, such as life insurance companies or S corporations) may be
subject to special rules not discussed below.  This discussion is
based on the Internal Revenue Code of 1986, as amended (the “Code”), existing
regulations, court decisions and Internal Revenue Service (“IRS”) rulings and
other pronouncements.  EACH UNIT HOLDER TENDERING UNITS
SHOULD CONSULT SUCH UNIT HOLDER’S OWN TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES TO SUCH UNIT HOLDER OF ACCEPTING THE OFFER, INCLUDING THE
APPLICATION OF THE ALTERNATIVE MINIMUM TAX AND FEDERAL, FOREIGN, STATE, LOCAL
AND OTHER TAX LAWS.

The following discussion is based on
the assumption that the Company is treated as a partnership for federal income
tax purposes and is not a “publicly traded partnership” as that term is defined
in the Code.  Certain partnerships are classified as “publicly traded
partnerships” and, subject to certain exceptions, are taxed as corporations for
federal income tax purposes. A partnership is a publicly traded partnership if
the partnership interests are traded on an established securities market or
readily tradable on a secondary market (or the substantial equivalent of a
secondary market).  The Units are not traded on an established
securities market.  In the unlikely event that the Company becomes a
“publicly traded partnership” and is not excepted from federal income tax, there
would be several adverse tax consequences to the Unit holders.  For
instance, the Company would be regarded as having transferred all of its assets
(subject to all of its liabilities) to a newly-formed corporation in exchange
for stock which would be deemed distributed to the Unit holders in liquidation
of their interests in the Company.  In addition, if the Company is
deemed to be a “publicly traded partnership,” then special rules under Code
Section 469 govern the treatment of losses and income of the
Company.  We cannot assure you that the Company will not be treated as
a publicly traded partnership because the IRS could determine that the Units are
readily traded on a secondary market by virtue of the fact that there have been
some tender offers and auction trades of Units, however unlikely
and

 
 

          
        
 

inconsistent
with the Code that would be.

Gain or Loss.  A
taxable Unit holder will recognize a gain or loss on the sale of such Unit
holder’s Units in an amount equal to the difference between (i) the amount
realized by such Unit holder on the sale and (ii) such Unit holder’s adjusted
tax basis in the Units sold.  The amount realized by a Unit holder
will include the Unit holder’s share of the Company’s liabilities, if any (as
determined under Code section 752 and the regulations thereunder).  If
the Unit holder reports a loss on the sale, such loss generally could not be
currently deducted by such Unit holder except against such Unit holder’s capital
gains from other investments.  In addition, such loss would be treated
as a passive activity loss.  (See “Suspended Passive Activity Losses”
below.)

The adjusted tax basis in the Units of
a Unit holder will depend upon individual circumstances.  (See also
“Partnership Allocations in Year of Sale” below.)  Each Unit holder
who plans to tender hereunder should consult with the Unit holder’s own tax
advisor as to the Unit holder’s adjusted tax basis in the Unit holder’s Units
and the resulting tax consequences of a sale.

If any portion of the amount realized
by a Unit holder is attributable to such Unit holder’s share of “unrealized
receivables” or “substantially appreciated inventory items” as defined in Code
section 751, a corresponding portion of such Unit holder’s gain or loss will be
treated as ordinary gain or loss.  It is possible that the basis
allocation rules of Code Section 751 may result in a Unit holder’s recognizing
ordinary income with respect to the portion of the Unit holder’s amount realized
on the sale of a Unit that is attributable to such items while recognizing a
capital loss with respect to the remainder of the Unit.

A tax-exempt Unit holder (other than an
organization described in Code Section 501(c)(7) (social club), 501(c)(9)
(voluntary employee benefit association), 501(c)(17) (supplementary unemployment
benefit trust), or 501(c)(20) (qualified group legal services plan)) should not
be required to recognize unrelated trade or business income upon the sale of its
Units pursuant to the Offer, assuming that such Unit holder does not hold its
Units as a “dealer” and has not acquired such Units with debt financed
proceeds.

Partnership Allocations in Year of
Sale.  A tendering Unit holder will be allocated the Unit
holder’s pro rata share of the annual taxable income and losses from the Company
with respect to the Units sold for the period through the date of sale, even
though such Unit holder will assign to the Purchasers their rights to receive
certain cash distributions with respect to such Units.  Such
allocations and any Company distributions for such period would affect a Unit
holder’s adjusted tax basis in the tendered Units and, therefore, the amount of
gain or loss recognized by the Unit holder on the sale of the
Units.

Possible Tax
Termination.  The Code provides that if 50% or more of the
capital and profits interests in a partnership are sold or exchanged within a
single 12-month period, such partnership generally will terminate for federal
income tax purposes.  It is possible that the Company could terminate
for federal income tax purposes as a result of consummation of the Offer
(although the Operating Agreement of the Company prevents transfers of Units
that would cause such a termination).  A tax termination of the
Company could have an effect on a corporate or other non-individual Unit holder
whose tax year is not the calendar year, as such a Unit holder might recognize
more than one year’s Company tax items in one tax return, thus accelerating by a
fraction of a year the effects from such items.

Suspended “Passive Activity
Losses”.  A Unit holder who sells all of the Unit holder’s
Units would be able to deduct “suspended” passive activity losses from the
Company, if any, in the year of sale free of the passive activity loss
limitation.  As a Member of the Company, which was engaged in real
estate activities, the ability of a Unit holder, who or which is subject to the
passive activity loss rules, to claim tax losses from the Company was
limited.  Upon sale of all of the Unit holder’s Units, such Unit
holder would be able to use any “suspended” passive activity losses first
against gain, if any, on sale of the Unit holder’s Units and then against income
from any other source.

Foreign Unit
holders.  Xxxx realized by a foreign Unit holder on a sale of a
Unit pursuant to the Offer will be subject to federal income
tax.  Under Section 1445 of the Code, the transferee of a partnership
interest held by a foreign person is generally required to deduct and withhold a
tax equal to 10% of the amount realized on the disposition.  The
Purchasers will withhold 10% of the amount realized by a tendering Unit holder
from the purchase price payment to be made to such Unit holder unless the Unit
holder properly completes and signs the FIRPTA Affidavit included as part of the
Letter of Transmittal certifying the Unit holder’s TIN, that such Unit holder is
not a foreign person and the Unit holder’s address.  Amounts withheld
would be creditable against a foreign Unit holder’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 Purchasers do not believe the provisions of the
Operating Agreement should restrict transfers of Units pursuant to the Offer,
although no more than 50% of the Units may be transferred in any 12-month
period.  This limitation will not affect the tender of Units under
this Offer because, subject to the terms of the Offer, we will pay for
the

 
 

          
        
 

Units
upon confirmation that the Company will either transfer the Units or recognize
the change of address for distributions and correspondence on the Units, and,
under the terms of the Letter of Transmittal, we will take a power of attorney
over your Units that will permit us to change the address to which distributions
are sent.  We will then wait to transfer the Units tendered until the
Company can effect the transfer of record title in accordance with the Operating
Agreement.

Effect on Trading
Market.  If a substantial number of Units are purchased
pursuant to the Offer the result would be a reduction in the number of Unit
holders.  Reducing the number of security holders in certain kinds of
equity securities might be expected to result in a reduction in the liquidity
and volume of activity in the trading market for the security. However, there is
no established public trading market for the Units and none is expected to
develop.  Therefore, the Purchasers do not believe a reduction in the
number of Unit holders will materially further restrict the Unit holders’
ability to find purchasers for their Units through secondary market
transactions.

Voting Power of
Purchasers.  If the Purchasers acquire a significant number of
the Units sought hereunder could give the Purchasers a controlling voting
interest in matters subject to a Member vote. The Company does not hold annual
meetings to elect directors, but has stated that it would do so every two
years.  However, it failed to hold an election in June 2008 as
anticipated.  Votes of Unit holders would only be solicited, if ever,
for matters affecting the fundamental structure of the Company, such as the sale
of the properties and termination of the Company, and the affirmative vote of
more than 50% of the outstanding Units (not a mere quorum) is required to effect
action.  The Purchasers and their affiliates do not intend to call for
any such vote in the foreseeable future.  A Unit holder who tenders
Units to the Purchasers grants a proxy to the Purchasers as of the date of
acceptance of the tender, granting the Purchasers the right to vote such Units
in their sole discretion as to any matters for which the Company has established
a record date prior to the time such.  Units are transferred by the
Company to the Purchasers.  The Purchasers reserve the right to
exercise any and all rights they might hold in the event that any vote is called
by the Board of Managers, or if, in the future, changes in circumstances would
dictate that they or other members exercise their right to call a vote. Thus, if
the Purchasers purchase over 50% of the outstanding Units of the Company
(pursuant to this and any other tender offers and other purchases), they will be
in a position to control the Company by virtue of being able to remove and
replace the Board of Managers, to cause the Company to sell its assets, and to
liquidate the Company.

Other Potential
Effects.  The Units are registered under the Exchange Act,
which requires, among other things that the Company furnish certain information
to its Unit holders and to the Commission and comply with the Commission’s proxy
rules in connection with meetings of, and solicitation of consents from, Unit
holders.  Registration and reporting requirements could be terminated
by the Company if the number of record holders falls below 300, or below 500 if
the Company’s total assets are below $10 million for three consecutive preceding
fiscal years.  The Company reported a total of 3,404 members as of its
most recent fiscal year end, but the Purchasers are offering to purchase up to
1,400,000 Units.  Accordingly, it is possible that the Offer could
result in the total number of Unit holders falling below the foregoing 300
holder level.  As disclosed by the Company in its public reports,
however, there has never been a public trading market for the Units and none is
expected to develop, so the Company’s status as a public company will not affect
a trading market in the Units.  A change in the Company’s status as a
public company could reduce the information available to Unit holders about the
Company in the event the information required by the Operating Agreement is not
as extensive as that provided in reports required to be filed by public
companies under applicable rules of the Securities and Exchange
Commission.

Section 8.  Future
Plans.  Following the completion of the Offer, the Purchasers,
or their affiliates, may acquire additional Units.  Any such
acquisitions may be made through private purchases, one or more future tender
offers or by any other means deemed advisable or appropriate.  Any
such acquisitions may be at a consideration higher or lower than the
consideration to be paid for the Units purchased pursuant to the
Offer.  The Purchasers are seeking to purchase a total of 1,400,000
Units.  If the Purchasers acquire fewer than 1,400,000 Units pursuant
to the Offer, the Purchasers may seek to make further purchases on the open
market at prevailing prices, or solicit Units pursuant to one or more future
tender offers at the same price, a higher price or, if the Company’s
circumstances change, at a lower price.  Alternatively, the Purchasers
may discontinue any further purchases of Units after termination of the Offer,
regardless of the number of Units purchased.  The Offer is not made
with any current view toward or plan or purpose of acquiring Units in a series
of successive and periodic offers.  Nevertheless, as noted above, the
Purchasers reserve the right to gauge the response to this solicitation, and, if
not successful in purchasing 1,400,000 Units in this Offer, may consider future
offers.  Factors affecting the Purchasers’ future interest in
acquiring additional Units include, but are not limited to, the relative success
of the current Offer, any increase or decrease in the availability of capital
for investment by the Purchasers and their investment fund affiliates, the
current diversification and performance of each affiliated fund’s portfolio of
real estate interests, the development of any public market in the Units or
actions by unrelated parties to tender for or purchase Units, the status of and
changes and trends in the Company’s operations, announcement of pending property
sales and the proposed terms of sales, and local and national real estate and
financial market developments and trends.

           The
Purchasers are acquiring the Units pursuant to the Offer solely for investment
purposes. The Purchasers have no present intention to seek control of the
Company or to change the management or operations of the Company.  The
Purchasers do not have any present intention to take any action in connection
with the liquidation of the Company.  The

 
 

          
        
 

Purchasers
nevertheless reserve the right, at an appropriate time, to exercise their rights
as members to vote on matters subject to a member vote, including, but not
limited to, any vote to affecting the sale of the Company’s properties and the
liquidation and dissolution of the Company.  Except as expressly set
forth herein, the Purchasers have no present intention to seek control of the
Company, to cause the Company to engage in any extraordinary transaction, to
cause any purchase, sale or transfer of a material amount of the assets of any
Company, to make any change in the distribution policies, indebtedness or
capitalization of any Company or to change the structure, management or
operations of the Company, the listing status of the Units or the reporting
requirements of the Company.  However, if the Purchasers purchase over
50% of the outstanding Units of the Company (pursuant to this and any other
tender offers and other purchases), they will be in a position to control the
Company by virtue of being able to remove and replace the Board of Managers, to
cause the Company to sell its assets, and to liquidate the Company.

Section 9. The Business of the
Company.  For information about the Company, please refer to
the annual report prepared by the Company which was sent to you earlier,
particularly Item 2 of Form 10-K, the Quarterly Reports on Form
10-Q,  and any other materials sent to you by the
Company.  These documents contain updated information concerning the
Company, including detailed information regarding the properties owned,
including mortgages, rental rates, operations, management, and taxes. In
addition, the Company is subject to the information and reporting requirements
of the Exchange Act and information about the Company can be obtained on the
Commission’s XXXXX system, at its internet web site at xxx.xxx.xxx, and are
available for inspection at the Commission’s principal office in Washington,
D.C.

Section 10. Conflicts of
Interest.  The Depositary is affiliated with certain
Purchasers. Therefore, by virtue of this affiliation, the Depositary may have
inherent conflicts of interest in acting as Depositary for the
Offer.  The Depositary’s role is administrative only, however, and any
conflict of interest should not be deemed material to Unit holders.

Section 11. Certain Information
Concerning the Purchasers.  The Purchasers are SCM Special
Fund, LLC, MPF Flagship Fund 13, LLC; MPF DeWaay Premier Fund 4, LLC; MPF
Flagship Fund 10, LLC; MPF Special Fund 8, LLC; MPF Senior Note Program II,
LP.  For information concerning the Purchasers and their respective
principals, please refer to Schedule I attached hereto. The principal business
of each of the Purchasers is investment in securities, particularly real
estate-based securities.  The principal business address of each of
the Purchasers is 0000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000.

The Purchasers have made binding
commitments to contribute and have available sufficient amounts of capital
necessary to fund the acquisition of all Units subject to the Offer, the
expenses to be incurred in connection with the Offer, and all other anticipated
costs of the Purchasers.  The Purchasers are not public companies and
have not prepared audited financial statements or financial statements prepared
in accordance with generally accepted accounting
principles.  XxxXxxxxx Xxxxxxxxx Xxxxxx, XX and its affiliates have
been in the business of purchasing illiquid real estate securities, both in open
market transactions and by means of tender offers, since 1982 and have acquired
more than $170 million in such securities for affiliated portfolios during the
last ten years.  The Purchasers have aggregate assets that are more
than sufficient to fund their collective obligation to purchase Units in this
Offer and any other outstanding tender offers.

Except as
otherwise set forth herein, (i) neither the Purchasers nor, to the best
knowledge of the Purchasers, the persons listed on Schedule I nor any affiliate
of the Purchasers beneficially owns or has a right to acquire any Units, (ii)
neither the Purchasers nor, to the best knowledge of the Purchasers, the persons
listed on Schedule I nor any affiliate of the Purchasers, or any director,
executive officer or subsidiary of any of the foregoing has effected any
transaction in the Units within the past 60 days, (iii) neither the Purchasers
nor, to the best knowledge of the Purchasers, the persons listed on Schedule I
nor any affiliate of the Purchasers has any contract, arrangement, understanding
or relationship with any other person with respect to any securities of the
Company, 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, consents or authorizations, (iv)
there have been no transactions or business relationships which would be
required to be disclosed under the rules and regulations of the Commission
between any of the Purchasers or, to the best knowledge of the Purchasers, the
persons listed on Schedule I, or any affiliate of the Purchasers on the one
hand, and the Company or its affiliates, on the other hand, (v) there have been
no contracts, negotiations or transactions between the Purchasers, or to the
best knowledge of the Purchasers any affiliate of the Purchasers on the one
hand, the persons listed on Schedule I, and the Company or its affiliates, on
the other hand, concerning a merger, consolidation or acquisition, tender offer
or other acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets, (vi) no person listed on Schedule I has
been convicted in a criminal proceeding during the past five years (excluding
traffic violations or similar misdemeanors), and (vii) no person listed on
Schedule I has been a party to any judicial or administrative proceeding during
the past five years (except for matters dismissed without sanction or
settlement) that resulted in a judgment, decree, or final order enjoining the
person from future violations of, or prohibiting activities subject to, federal
or state securities laws, or a finding of any violation of federal or state
securities laws. .

Section 12. Source of
Funds.  The Purchasers expect that approximately $700,000 would
be required to purchase 1,400,000 Units, if tendered, and an additional $20,000
may be required to pay related fees and expenses.  The Purchasers
anticipate funding all of the purchase price and related expenses through their
existing capital and assets.  The cash and liquid
securities

 
 

          
        
 

necessary
to complete the entire purchase are readily available and are committed to that
purpose.  Accordingly, there are no financing arrangements to fall
through and no alternative financing plans.

Section 13. Conditions of the
Offer.  Notwithstanding any other term of the Offer, the
Purchasers shall not be required to accept for payment or to pay for any Units
tendered unless all authorizations or approvals of, or expirations of waiting
periods imposed by, any court, administrative agency or other governmental
authority necessary for the consummation of the transactions contemplated by the
Offer shall have been obtained or occurred on or before the Expiration
Date.  As of the Offer Date, the Purchasers are unaware of any such
required authorizations, approvals, or waiting periods relating to this
Offer.

The Purchasers shall not be required to
accept for payment or pay for any Units 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 of
or payment for any Units by the Purchasers, (ii) imposes or confirms limitations
on the ability of the Purchasers effectively to exercise full rights of
ownership of any Units, including, without limitation, the right to vote any
Units acquired by the Purchasers pursuant to the Offer or otherwise on all
matters properly presented to the Company’s Unit holders, (iii) requires
divestiture by the Purchasers of any Units, (iv) causes any material diminution
of the benefits to be derived by the Purchasers as a result of the transactions
contemplated by the Offer (see the discussion of such benefits in the Summary
Term Sheet and Introduction sections of the Offer to Purchase) or (v) materially
adversely affect the business, properties, assets, liabilities, financial
condition, operations, results of operations or prospects of the Purchasers or
the Company, in the reasonable judgment of the Purchasers;

(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, other than the
application of the waiting period provisions of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, which will, 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 hereof, in the
business, properties, assets, liabilities, financial condition, operations,
results of operations or prospects of the Company, which, in the reasonable
judgment of the Purchasers, is or will be materially adverse to the Company, or
the Purchasers shall have become aware of any fact that, in the reasonable
judgment of the Purchasers, does or will 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 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 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 Purchasers shall have otherwise learned that (i) more
than fifty 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 Sections 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 Purchasers and may be asserted by the Purchasers or may be
waived by the Purchasers in whole or in part at any time and from time to time
prior to the Expiration Date in their sole exercise of reasonable discretion,
and the Offer will remain open for a period of at least five business days
following any such waiver of a material condition.  However, if we
waive a certain condition for one tendering Unitholder, we will waive that
condition for all Unitholders tendering Units.  Any determination by
the Purchasers concerning the events described above will be final and binding
upon all parties, subject, of course, to the parties’ ability to seek review of
any contested determination by an arbitrator pursuant to Section
16.

Section
14. Certain Legal Matters.

General.  Except as
set forth in this Section 14, the Purchasers are 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 Purchasers pursuant to the
Offer.  Should any such approval or other action be required, it is
the Purchasers’ present intention that such additional approval or action would
be sought.  While 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
Company’s business, or that certain parts of the Company’s business might not
have to be disposed of or held separate or other substantial conditions complied
with in order to obtain such approval or action, any of which could cause the
Purchasers to elect to terminate the Offer without purchasing Units
thereunder.  The Purchasers’ obligation to purchase and pay for Units
is subject to certain conditions, including conditions related to the legal
matters discussed in this Section 14.

Antitrust.  The
Purchasers do not believe that the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, is applicable to the acquisition of Units pursuant to 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, such regulations are not applicable to the Offer.

State Takeover
Laws.  A number of states have adopted anti-takeover laws which
purport, to varying degrees, to be applicable to attempts to acquire securities
of corporations which are incorporated in such states or which have substantial
assets, security holders, principal executive offices or principal places of
business therein.  These laws are directed at the acquisition of
corporations and not partnerships or limited liability companies.  The
Purchasers, therefore, do not believe that any anti-takeover laws apply to the
transactions contemplated by the Offer.

Although
the Purchasers have not attempted to comply with any state anti-takeover
statutes in connection with the Offer, the Purchasers reserve the right to
challenge the validity or applicability of any state law allegedly applicable to
the Offer and nothing in this Offer nor any action taken in connection herewith
is intended as a waiver of such right.  If any state anti-takeover
statute is applicable to the Offer, the Purchasers might be unable to accept for
payment or purchase Units tendered pursuant to the Offer or be delayed in
continuing or consummating the Offer.  In such case, the Purchasers
may not be obligated to accept for purchase or pay for any Units
tendered.

Section 15. Fees and
Expenses.  The Purchasers have retained XxxXxxxxx Xxxxxxxxx
Xxxxxx, XX, an affiliate of certain Purchasers, to act as Depositary in
connection with the Offer.  The Purchasers will pay the Depositary
reasonable and customary compensation for its services in connection with the
Offer, plus reimbursement for out-of-pocket expenses, and will indemnify the
Depositary against certain liabilities and expenses in connection therewith,
including liabilities under the federal securities laws.  The
Purchasers will also pay all costs and expenses of printing, publication and
mailing of the Offer and all costs of transfer.

Section 16.
Miscellaneous.  THE OFFER IS NOT BEING MADE TO (NOR WILL
TENDERS BE ACCEPTED FROM OR ON BEHALF OF) UNIT HOLDERS IN ANY JURISDICTION IN
WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN
COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.  THE PURCHASERS ARE NOT
AWARE OF ANY JURISDICTION WITHIN THE UNITED STATES IN WHICH THE MAKING OF THE
OFFER OR THE ACCEPTANCE THEREOF WOULD BE ILLEGAL.

No person
has been authorized to give any information or to make any representation on
behalf of the Purchasers not contained herein or in the Letter of Transmittal
and, if given or made, such information or representation must not be relied
upon as having been authorized.

Further,
by tendering your Units, you are agreeing to arbitrate any disputes that may
arise between you and the Purchasers or the Depositary, to subject yourself to
personal jurisdiction in California, and that the prevailing party in any such
action will be entitled to recover attorney fees and costs.

September
19, 2008

SCM
Special Fund, LLC, MPF Flagship Fund 13, LLC; MPF DeWaay Premier Fund 4, LLC;
MPF Flagship Fund 10, LLC; MPF Special Fund 8, LLC; MPF Senior Note Program II,
LP

 
 

          
        
 

SCHEDULE
I

THE
PURCHASERS AND THEIR RESPECTIVE PRINCIPALS

The Purchasers are (150,000
units).  Each of the entity Purchasers is organized as a limited
liability company or limited partnership.  The Manager of each of the
limited liability company Purchasers and the general partner of each of the
limited partnership Purchasers is XxxXxxxxx Xxxxxxxxx Xxxxxx, XX or its
affiliate Xxxxxx Capital Management, LLC.  The names of the directors
and executive officers of XxxXxxxxx Xxxxxxxxx Xxxxxx, XX are set forth
below.  Xxxxxx Capital Management, LLC is wholly owned by MPF
Advisers, LP, an affiliate of XxxXxxxxx Xxxxxxxxx Xxxxxx, XX.  The
Purchasers have jointly made the offer and are jointly and severally liable for
satisfying its terms.  Other than the foregoing, the Purchasers’
relationship consists of an informal agreement to share the costs associated
with making the offer and to allocate any resulting purchases of Units among
them in such manner and proportions as they may determine in the
future.  Each of the entities is organized in
California.  The Purchasers intend, if the Offer is fully subscribed,
to allocate the Units among themselves as follows:  SCM Special Fund,
LLC (150,000 units), MPF Flagship Fund 13, LLC (300,000 units); MPF DeWaay
Premier Fund 4, LLC (200,000 units); MPF Flagship Fund 10,
LLC  (300,000 units); MPF Special Fund 8, LLC (300,000 units); MPF
Senior Note Program II, LP. (150,000 units)  We will determine
modifications to this allocation based upon the number of Units
tendered.  Priority is given to Purchasers which already hold Units,
then to Purchasers which raised capital first, then to the remaining Purchasers
in equal shares.  Units will be allocated according to this priority
until the maximum number of Units listed above are allocated to Purchasers
within a given priority, then Units will be allocated similarly among Purchasers
in the next level of priority, until all Units are allocated.

XxxXxxxxx Xxxxxxxxx Xxxxxx,
XX

The names
of the directors and executive officers of XxxXxxxxx Xxxxxxxxx Xxxxxx, XX are
set forth below.  Each individual is a citizen of the United States of
America.  The principal business address of XxxXxxxxx Xxxxxxxxx
Xxxxxx, XX, each Purchaser, and each individual is 0000 Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx 00000, and the business telephone number for each is
000-000-0000.  The general partner is BC-GP, Inc., a California
corporation owned by the limited partners.

X.X. Xxxxxxxxx is
President and a director of XxxXxxxxx Xxxxxxxxx Xxxxxx, XX, which acts as
manager and general partner of a number of real estate investment vehicles, and
has served in those positions since January 1989.  In 1981, Xx.
Xxxxxxxxx founded Xxxxxxxxx Financial Services, Inc. (now MPF Advisers, LP), a
registered investment adviser (“MPFA”), with Xxxxxxxx X. Xxxxxxxxx, as a
financial planning firm, and he has served as its President since that
date.  Xx. Xxxxxxxxx founded Xxxxxxxxx Real Estate Services, a
licensed California Real Estate Broker, in 1982.  As President of
MPFA, Xx. Xxxxxxxxx is responsible for all investment counseling
activities.  He supervises the analysis of investment opportunities
for the clients of the firm.  Xx. Xxxxxxxxx previously served as
president of Host Funding, Inc., an owner of lodging properties, from December
1999 through 2003.  Xx. Xxxxxxxxx is also an officer and controlling
shareholder of Cal-Kan, Inc., a closely held real estate investment
company.  Xx. Xxxxxxxxx, through his affiliates, manages a number of
investment and real estate companies.

Xxxxxxxx X. Xxxxxxxxx
is a director of XxxXxxxxx Xxxxxxxxx Xxxxxx, XX and has served in that capacity
since January 1989.  In 1981, Xx. Xxxxxxxxx and X.X. Xxxxxxxxx
established MPFA.  She has served as Chair of the Board and Secretary
of MPFA since that date.  Her responsibilities with MPFA include
oversight of administrative matters and monitoring of past projects underwritten
by MPFA.  Since October 1990, Xx. Xxxxxxxxx has been responsible for
the day-to-day operations of two nursing homes and over 200
employees.

Xxxx X. Xxxxxx became
senior vice president and a director of XxxXxxxxx Xxxxxxxxx Xxxxxx, XX in May
2000.  Since 2004 he has been a director and vice president of
MPFA.  Prior to becoming senior vice president, from August 1998 to
April 2000, he was with XxxXxxxxx Xxxxxxxxx Xxxxxx, XX as a portfolio manager
and research analyst.  From December 1999 to 2003, Xx. Xxxxxx served
as an officer and director of Host Funding, Inc.  Prior to joining
XxxXxxxxx Xxxxxxxxx Xxxxxx, XX, from May 1996 to July 1998, Xx. Xxxxxx ran the
over-the-counter trading desk for North Coast Securities Corp. (previously
Xxxxxx Xxxxxx Capital Group) with responsibility for both the proprietary and
retail trading desks.  Xx. Xxxxxx was also the registered options
principal and registered municipal bond principal for North Coast Securities, a
registered broker dealer.  Xx. Xxxxxx was formerly a NASD-registered
options principal and registered bond principal, and he held his NASD Series 7,
general securities license (now inactive).  Xx. Xxxxxx has also spent
time working on the floor of the New York Stock Exchange as a trading clerk and
on the floor of the Pacific Stock Exchange in San Francisco as an assistant
specialist for LIT America.

Xxxx Xxxxxxxxx is
senior vice president, general counsel, and a director of the XxxXxxxxx
Xxxxxxxxx Xxxxxx, XX   Since 2004 he has been a director and vice
president of MPFA.  Prior to joining XxxXxxxxx Xxxxxxxxx Xxxxxx, XX in
July 2003, he was a securities and corporate finance attorney with the national
law firm of Xxxxx Xxxxxx Xxxxxxxx LLP from August 2000 to January
2003.  From August 1997 to May 2000 he attended the University of
Michigan Law School, where he graduated magna cum laude with a Juris
Doctor Degree. Prior to law school, Xxxx Xxxxxxxxx taught physics, chemistry,
and math at the high school level for three years, from June 1994 to June
1997.  He graduated with high distinction and
Phi Beta Kappa from the
University of California at Berkeley with a Bachelor of Arts Degree in Political
Science.  He also has prior experience in sales, retail, and
banking.

Xxxxxxxxx Xxxxxxx is
senior vice president of XxxXxxxxx Xxxxxxxxx Xxxxxx, XX and MPFA and is
responsible for the day-to-day management of research and securities purchases
and sales on behalf of the entities managed by XxxXxxxxx Xxxxxxxxx Xxxxxx,
XX  Xx. Xxxxxxx has served in that position since January 1997; from
January 1994 until her promotion to vice president, she was a research analyst
with XxxXxxxxx Xxxxxxxxx Xxxxxx, XX  She joined XxxXxxxxx Xxxxxxxxx
Xxxxxx, XX as an administrative assistant in July 1990. Xx. Xxxxxxx received her
Bachelor of Arts degree in Management from Saint Mary’s College of California in
May 2005, her Master of Science in Financial Analysis and Investment Management
from Saint Mary’s College of California in October 2006, and her Master of
Business Administration degree from Saint Mary’s College of California in June
2008.

Xxxxxx X. Xxxxx is
senior vice president and a director of MPFA and XxxXxxxxx Xxxxxxxxx Xxxxxx, XX
and served as an officer and director of Sutter Holding Company, Inc. from March
2002 to October 2006.  Xx. Xxxxx received his Bachelor’s degree in
economics from the University of California at Los Angeles in
1992.  He worked for Xxxxxx Brothers, Inc. in equity sales and trading
during 1993 and 1994.  From October 1994 to June, 1996 he worked for
XxxXxxxxx Xxxxxxxxx, Inc. as a securities research analyst.  Xx. Xxxxx
became a Chartered Financial Analyst in 1996, and received his Master of
Business Administration degree from Cornell University in 1998.  In
July of 1998 he began buying and selling securities for his own account and
those of the entities he controlled, and he was principally engaged in that
activity until May 2005, when he rejoined MPFA.  Xx. Xxxxx was a
registered representative of North Coast Securities from 1994 through
1997.


Xxxxxx
Xxxx

Xxxxxx
Xxxx, a California attorney, has been working during the last five years
analyzing investments on behalf of the Xxxxx X. Xxxx Foundation, a charitable
foundation for which he is the Treasurer.   The business address
of the Foundation is 00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx,
Xxxxxxxxxx  00000.  Mr. Xxxx is a U.S.
citizen.  In addition, he has participated in starting a number of
business ventures, including T/O devices and an import/export
company.
Document Metadata

Table of Contents

OFFER TO PURCHASE FOR CASH 1,400,000 CLASS A UNITS OF KAISER VENTURES LLC AT $0.50 PER UNIT by: SCM Special Fund, LLC, MPF Flagship Fund 13, LLC; MPF DeWaay Premier Fund 4, LLC; MPF Flagship Fund 10, LLC; MPF Special Fund 8, LLC; MPF Senior Note...

Document Metadata

	Page
SUMMARY TERM SHEET	4
INTRODUCTION	7
TENDER OFFER	10
Section 1. Terms of the Offer	10
Section 2. Acceptance for Payment and Payment for Units;Proration.	10
Section 3. Procedures for Tendering Units.	11
Section 4. Withdrawal Rights.	12
Section 5. Extension of Tender Period; Termination; Amendment.	12
Section 6. Material Federal Income Tax Consequences.	13
Section 7. Effects of the Offer.	14
Section 8. Future Plans.	15
Section 9. The Business of the Company.	16
Section 10. Conflicts of Interest.	16
Section 11. Certain Information Concerning the Purchasers.	16
Section 12. Source of Funds.	16
Section 13. Conditions of the Offer.	17
Section 14. Certain Legal Matters.	17
Section 15. Fees and Expenses.	18
Section 16. Miscellaneous.	18
SCHEDULE I	19
Total assets	$53,451,000
Less: total liabilities	(11,681,000)
Equals: book value	41,770,000
Percentage of estimated net valuation allocated to holders of units based upon subordinated Class B unit participation	98%
Estimated valuation of your Company before discount rate	$40,934,600
Divided by: 1 + Discount Rate (85%)	1.85
Estimated net valuation of your Company	$22,126,810
Total number of units	7,190,806
Estimated valuation per unit	$3.10