OFFER TO PURCHASE INTERESTS
OF
XXXXXX / XXXXXXXX REALTY INCOME FUND II
-------------------------------------------------------
THIS OFFER WILL EXPIRE AT 12:00 MIDNIGHT, PACIFIC TIME,
ON May 22, 1998, UNLESS THE OFFER IS EXTENDED.
-------------------------------------------------------
Grape Investors, LLC, a Delaware limited liability company ("Grape" or the
"Purchaser"), hereby offers to purchase 5,000 Limited Partnership Interests
("Interests") in Damson / Xxxxxxxx Realty Income Fund II, a Delaware Limited
Partnership (the "Partnership"). Included in the definition of "Interests" are
any proceeds which any Seller may receive after February 28, 1998 from the
settlement of any class action lawsuit by the Limited Partners of the
Partnership, which lawsuit relates to the Partnership or its General Partner.
Grape will pay a purchase price of $2,350 for each .01 percent interest in
the Partnership, net to the seller in cash, without interest, less the amount of
any distributions declared or paid from any source by the Partnership with
respect to the Interests after February 28, 1998 (without regard to the record
date), whether such distributions are classified as a return on, or a return of,
capital ("Purchase Price"), upon the terms and subject to the conditions set
forth in this Offer to Purchase (the "Offer to Purchase") and in the Agreement
of Sale, as each may be supplemented or amended from time to time (which
together constitute the "Offer").
The Interests sought to be purchased pursuant to the Offer represent, to
the best knowledge of the Purchaser, approximately 10 percent of Interests
outstanding as of the date of the Offer.
GRAPE IS NOT AN AFFILIATE OF THE GENERAL PARTNER OR THE PARTNERSHIP
THE OFFER TO PURCHASE IS NOT CONDITIONED UPON THE VALID TENDER OF ANY MINIMUM
NUMBER OF INTERESTS.
IF MORE THAN 5,000 INTERESTS ARE VALIDLY TENDERED AND NOT WITHDRAWN, THE
PURCHASER WILL ACCEPT FOR PURCHASE UP TO 5,000 INTERESTS, ON A PRO RATA BASIS,
SUBJECT TO THE TERMS AND CONDITIONS HEREIN, SEE "TENDER OFFER - SECTION 13,
CERTAIN CONDITIONS OF THE OFFER."
A LIMITED PARTNER MAY TENDER ANY OR ALL INTERESTS OWNED BY SUCH LIMITED PARTNER.
IMPORTANT
Any Limited Partner desiring to tender ("Seller") any or all of such
Interests should complete and sign the Agreement of Sale in accordance with the
instructions in the Agreement of Sale and mail or deliver the Agreement of Sale
and any other required documents to Xxxxx Capital, LLC at the address set forth
on the back cover of this Offer to Purchase, or request his or her broker,
dealer, commercial bank, credit union, trust company or other nominee to effect
the transaction for him or her.
------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION OR ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR TO PROVIDE ANY INFORMATION OTHER
THAN AS CONTAINED HEREIN OR IN THE AGREEMENT OF SALE. NO SUCH RECOMMENDATION,
INFORMATION, OR REPRESENTATION MAY BE RELIED UPON AS HAVING BEEN AUTHORIZED.
QUESTIONS OR REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THIS OFFER TO
PURCHASE OR THE AGREEMENT OF SALE MAY BE DIRECTED TO:
XXXXX CAPITAL, LLC
0000 XXXXX XXXXXX XXXXX, XXXXX 000, XXX XXXXX, XX 00000
(000) 000-0000
TABLE OF CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
TENDER OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Section 1. Terms of the Offer. . . . . . . . . . . . . . . . . . . . . . . . . . .3
Section 2. Proration; Acceptance for Payment and Payment for Interests . . . . . .3
Section 3. Procedures for Tendering Interests. . . . . . . . . . . . . . . . . . .3
Section 4. Withdrawal Rights . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Section 5. Extension of Tender Period; Termination; Amendment. . . . . . . . . . .4
Section 6. Certain Tax Consequences. . . . . . . . . . . . . . . . . . . . . . . .5
Section 7. Purpose and Effects of the Offer. . . . . . . . . . . . . . . . . . . .5
Section 8. Future Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Section 9. Past Contacts and Negotiations With General Partner . . . . . . . . . .7
Section 10. Certain Information Concerning the Partnership . . . . . . . . . . . 9
Section 11. Certain Information Concerning the Purchaser. . . . . . . . . . . . . 11
Section 12. Source and Amount of Funds . . . . . . . . . . . . . . . . . . . . . 11
Section 13. Certain Conditions of the Offer . . . . . . . . . . . . . . . . . . . 11
Section 14. Certain Legal Matters and Required Regulatory Approvals.. . . . . . . 12
Section 15. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 16. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SCHEDULE 1
Information with respect to the Managers of Xxxxx Capital, LLC ,
the Manager of Purchaser (Grape) . . . . . . . . . . . . . . . . . . . . . .S-1
SCHEDULE 2
Properties Owned by the Partnership . . . . . . . . . . . . . . . . . . . . .S-2
INTRODUCTION
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According to the records provided to us by the General Partner
you currently own
[XXX]% OF THE OUTSTANDING INTERESTS IN THE PARTNERSHIP
We are offering to purchase your interest in the Partnership for
$[XXX] CASH
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GRAPE IS NOT AN AFFILIATE OF THE GENERAL PARTNER OR THE PARTNERSHIP
BEFORE SELLING YOUR INTERESTS TO GRAPE, PLEASE CONSIDER THE FOLLOWING SPECIAL
FACTORS:
- The Partnership's Annual Report for 1997 filed with the
Securities and Exchange Commission ("SEC") on Form Annual Report
on Form 10-K filed with the SEC ("10-K") reports net assets in
liquidation as of December 31, 1997 of $27,394,000 or $5,268 per
$10,000 of original investor subscription. (Net asset value
represents the appraised value of the Partnership's properties,
cash and all other assets less secured loans payable and all
other liabilities.) Grape's adjusted net asset value reflects
the Partnership's stated net asset value reduced by the
administrative and tender offer costs associated with the Offer.
A 9% discount factor is then applied to the adjusted net asset
value to arrive at Grape's offer price of $2,350 for each .01
percent of interests, which is equal to approximately $4,500 per
$10,000 of original investor subscription.
- No independent person has been retained to evaluate or render any
opinion with respect to the fairness of Grape's offer and no
representation is made as to such fairness or other measures of
value that may be relevant to the Limited Partners. We urge you
to consult your own financial and tax advisors in connection with
Xxxxx's offer.
- Although Grape cannot predict the future value of the Partnership
assets on a per Interest basis, the purchase price could differ
significantly from the net proceeds that would be realized from a
current sale of the Properties owned by the Partnership or from
that which may be realized upon future liquidation of the
Partnership.
- Grape is making the offer with a view to making a profit.
Accordingly, there is a conflict between Xxxxx's desire to
acquire your Interests at a low price and your desire to sell
your Interests at a high price. Xxxxx's intent is to acquire the
Interests at a discount to the value Grape might ultimately
realize from owning the Interests.
- The tax consequences of the Offer to a particular Limited Partner
may be different from those of other Limited Partners and we urge
you to consult your own tax advisor in connection with the Offer.
- Limited Partners who sell their Interests will be giving up the
opportunity to participate in any future potential benefits
represented by ownership of Interests, including the right to
participate in any future distribution of cash or property.
- If the Purchaser is successful in purchasing more than 5.48
percent of the outstanding Interests, then, when added to
Purchaser's existing Interests, Purchaser will own more than 10
percent of the outstanding Interests, which will put Purchaser a
position to exert a strong influence upon the General Partner and
the operation of the Partnership. Purchaser strongly believes
that there are a number of qualified purchasers in the current
market that would purchase 100 percent of the Partnership
properties in a single transaction. Purchaser intends to
actively encourage the General Partner to pursue an expeditious
sale and if the General Partner does not pursue these options,
Purchaser will consider taking appropriate action which may
include attempting to replace the General Partner. (See Section
8 - "Future Plans")
PURCHASE PRICE
When you consider the illiquid market (which is essentially nothing more
than a "matching service" that attempts to bring buyers and sellers
together), the secondary cost of selling commissions, payment of the
transfer fee, your annual cost of tax reporting, and the cost of a trustee
if Interests are held in an IRA or pension plan, the sale of your Interests
for $4,500 cash per original $10,000 investment may be a good choice for
you despite the fact that the net asset value of the Partnership has been
estimated by Grape at $5,173 per original $10,000 investment.
1
NO SELLING COMMISSION
Interests sold in the informal market "matching service" usually require
payment of a selling commission of the greater of $200 or 6 percent. If
you sell to Grape, you will NOT pay any selling commission.
NO TRANSFER FEE
Grape will be responsible for paying the $25 transfer fee.
PAYMENT OF THE PURCHASE AMOUNT
A cash payment for your Interest will be made to you within 10 business
days following the Expiration Date provided Grape has received from you a
properly completed and duly executed Agreement of Sale and assurances from
the General Partner that the Seller's address will be changed to the
Purchaser's address. The Purchasers may accept only a portion of the
Interests tendered by a Seller in the event a total of more than 5,000
Interests are tendered.
The purpose of the Offer is to allow the Purchaser to benefit from any
one or a combination of the following: (i) any cash distributions, whether
such distributions are classified as a return on, or a return of, capital,
from the operations in the ordinary course of the Partnership; (ii) any
distributions of net proceeds from the sale of assets by the Partnership;
(iii) any distributions of net proceeds from the liquidation of the
Partnership; (iv) any cash from any redemption of the Interests by the
Partnership, and (v) any proceeds that may be received from any action
lawsuit by the Limited Partners of the Partnership, which lawsuit relates to
the Partnership or its General Partner. Purchaser intends to actively
encourage the General Partner to pursue an expeditious sale and if the
General Partner does not pursue these options, Purchaser will consider taking
appropriate action which may include attempting to replace the General
Partner. (See Section 8 - "Future Plans").
The Offer is not conditioned upon the valid tender of any minimum number
of the Interests. If more than 5,000 Interests are tendered and not
withdrawn, the Purchaser will accept up to 5,000 of the tendered Interests on
a pro rata basis, subject to the terms and conditions herein. See "Tender
Offer--Section 13. Certain Conditions of the Offer." The Purchaser expressly
reserves the right, in its sole discretion and for any reason, to terminate
the Offer at any time and to waive any or all of the conditions of the Offer,
although the Purchaser does not presently intend to do so.
The Partnership is subject to the information and reporting requirements
of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and in
accordance therewith is required to file reports and other information with
the Securities and Exchange Commission ("SEC") relating to its business,
financial condition and other matters. Such reports and other information may
be inspected at the public reference facilities maintained by the SEC at room
0000, Xxxxxxxxx Xxxxx, 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, and is
available for inspection and copying at the regional offices of the SEC
located in Northwestern Atrium Center, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, and at 7 World Trade Center, 13th Floor, New York,
New York 10048. Copies of such material can also be obtained from the Public
Reference Room of the SEC in Washington, D.C. at prescribed rates or from the
SEC's Website at xxxx://xxx.xxx.xxx.
The Purchaser has filed with the SEC a Tender Offer Statement on Schedule
14D-1 (including exhibits) pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, which provides certain additional
information with respect to the Offer. Such Statements and any amendments
thereto, including exhibits, may be inspected and copies may be obtained from
the SEC in the manner specified above.
According to publicly available information, there were 52,588 Interests
issued and outstanding on December 31, 1997, which were held by 6,092 Limited
Partners. Grape owns approximately 4.52 percent of the outstanding Interests.
Information contained in this Offer to Purchase which relates to, or
represents statements made by, the Partnership or the General Partner, has been
derived from information provided in reports and other information filed with
the SEC by the Partnership and General Partner.
Limited Partners are urged to read this Offer to Purchase and the
accompanying Agreement of Sale carefully before deciding whether to tender
(sell) their Interests.
2
SECTION 1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for up to 5,000 Interests that are validly
tendered on or prior to the Expiration Date. The term "Expiration Date" shall
mean 12:00 midnight, Pacific Time, on May 22, 1998 unless and until the
Purchaser shall have extended the period of time for which the Offer is open, in
which event the term "Expiration Date" shall mean the latest date on which the
Offer, as so extended by the Purchaser, shall expire.
The Offer is conditioned on satisfaction of certain conditions. See
"Tender Offer--Section 13. Certain Conditions of the Offer," which sets forth in
full the conditions of the Offer. Purchaser in its sole discretion, for any
reason, may terminate the offer by providing notice of termination as set forth
in Section 5. The Purchaser will not be required to accept for payment or to pay
for any Interests tendered, and may amend or terminate the Offer if:
(i) the Purchaser shall not have confirmed to its reasonable
satisfaction that, upon purchase of the Interests, the Purchaser
will be entitled to receive all distributions, from any source,
from the Partnership after February 28, 1998 and that the
Partnership will change Seller's address to Purchaser's address;
(ii) the Agreement of Sale is not properly completed and duly executed.
SECTION 2. PRORATION; ACCEPTANCE FOR PAYMENT AND PAYMENT FOR INTERESTS.
If not more than 5,000 Interests are validly tendered and not properly
withdrawn prior to the Expiration Date, the Purchaser, upon the terms and
subject to the conditions of the Offer, will accept for payment all such
Interests so tendered.
If more than 5,000 Interests are validly tendered and not properly
withdrawn on or prior to the Expiration Date, the Purchaser, upon the terms and
subject to the conditions of the Offer, will accept for payment 5,000 Interests
so tendered, on a pro rata basis, with appropriate adjustments to avoid tenders
of fractional Interests and purchases that would violate the Partnership's
Agreement of Limited Partnership.
In the event that proration is required, the Purchaser will determine the
precise number of Interests to be accepted and will announce the final results
of proration as soon as practicable, but in no event later than five business
days following the Expiration Date. Purchaser will not pay for any Interests
tendered until after the final proration factor has been determined.
If, prior to the Expiration Date, the Purchaser shall increase the
consideration offered to Limited Partners pursuant to the Offer, such increased
consideration shall be paid for all Interests accepted for payment pursuant to
the Offer, whether or not such Interests were tendered prior to such increase.
SECTION 3. PROCEDURES FOR TENDERING INTERESTS.
VALID TENDER. For Interests to be validly tendered pursuant to the Offer, a
properly completed and duly executed Agreement of Sale must be received by Grape
at its address set forth on the back cover of this Offer to Purchase on or prior
to the Expiration Date and not withdrawn by the Expiration Date. A Limited
Partner may tender any or all Interests owned by such Limited Partner.
The delivery of the Agreement of Sale will be deemed made only when
actually received by Grape. Sufficient time should be allowed by Seller to
ensure timely delivery.
BACKUP FEDERAL INCOME TAX WITHHOLDING. A tendering Limited Partner must
verify such Limited Partner's correct taxpayer identification number or social
security number, as applicable, and make certain warranties and representations
that it is not subject to backup federal income tax withholding as set forth in
the Agreement of Sale.
TENDERS BY BENEFICIAL HOLDERS. A tender of Interests can only be made by
the Registered Owner of such Interests, and the party whose name appears as
Registered Owner must tender such Interests on behalf of any beneficial holder,
as set forth in the "Instructions" to the Agreement of Sale.
SIGNATURE GUARANTEES. The signature(s) on the Agreement of Sale must be
guaranteed by a commercial bank, savings bank, credit union, savings and loan
association, or trust company having an office, branch, or agency in the United
States, or a brokerage firm that is a member firm of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc., as set forth in the Agreement of Sale.
3
DETERMINATION OF VALIDITY; REJECTION OF INTERESTS; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the form of documents
and validity, eligibility (including time of receipt), and acceptance for
payment of any tender of Interests will be determined by the Purchaser, in its
sole discretion, which determination will be final and binding on all parties.
OTHER REQUIREMENTS. By executing and delivering the Agreement of Sale, a
tendering Limited Partner irrevocably appoints the Purchaser as such Limited
Partner's proxy, with full power of substitution. All such proxies are
irrevocable and coupled with an interest in the tendered Interests and empower
the Purchaser to exercise all voting and other rights of such Limited Partner as
they in their sole discretion may deem proper at any meeting of Limited
Partners. The complete terms and conditions of the proxy are set forth in the
Agreement of Sale.
By executing and delivering the Agreement of Sale, a tendering Limited
Partner also irrevocably constitutes and appoints the Purchaser and its
designees as the Limited Partner's attorneys-in-fact. Such appointment will be
effective upon Purchaser's payment for the Interests. The complete terms and
conditions of the Power of Attorney are set forth in the Agreement of Sale.
By executing and delivering the Agreement of Sale, a tendering Limited
Partner will irrevocably assign to the Purchaser and its assignees all right,
title, and interest that such Limited Partner has to the Interests, including,
without limitation, any and all distributions made by the Partnership after
February 28, 1998, regardless of the fact that the record date for any such
distribution may be a date prior to the Expiration Date and whether such
distributions are classified as a return on, or a return of, capital. The
complete terms and conditions of the assignment of the Limited Partner's
Interests are set forth in the Agreement of Sale.
By executing the Agreement of Sale, a tendering Limited Partner represents
that either (i) the tendering Limited Partner is not a plan subject to Title 1
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), or
an entity deemed to hold "plan assets" within the meaning of 29 C.F.R Section
0000-0-000 of any such plan; or (ii) the tender and acceptance of Interests
pursuant to the applicable Offer will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code.
By executing the Agreement of Sale, a tendering Limited Partner also agrees
that regardless of any provision in the Partnership's Limited Partnership
Agreement which provides that a transfer is not effective until a date
subsequent to the date of any transfer of Interests under the Offer, the
Purchase Price shall be reduced by any distributions with respect to the
Interests after February 28, 1998, whether such distributions are classified as
a return on, or a return of, capital.
Limited Partners will not have any appraisal or dissenter's rights with
respect to or in connection with the Offer.
SECTION 4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Interests made
pursuant to the Offer are irrevocable. Interests tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date. In the event the
Offer is extended beyond the Expiration Date and beyond June 22, 1998, the
Interests tendered may be withdrawn at any time.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal, with signature(s) guaranteed in the same
manner as in Section 3 above, must be timely received by the Purchaser at its
address set forth on the last page of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Interests to be
withdrawn, and the number of Interests to be withdrawn. Any Interests properly
withdrawn will be deemed not validly tendered for purposes of the Offer, but may
be re-tendered at any subsequent time prior to the Expiration Date by following
any of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding.
SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT.
The Purchaser expressly reserves the right, in its sole discretion, at any
time (i) to extend the period of time during which the Offer is open; (ii) to
terminate the Offer; (iii) upon the failure of the Seller to satisfy any of the
conditions specified in Section 13, to delay the acceptance for payment of, or
payment for, any Interests; and (iv) to amend the Offer in any respect
(including, without limitation, by increasing or decreasing the consideration
offered). 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., Pacific Time, on the next
business day after the previously scheduled Expiration Date, in accordance with
the public announcement requirement of Rule 14e-1(d) under the Exchange Act.
4
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will extend the Offer to the extent required by Rules 14d-4(c) and
14d-6(d) under the Exchange Act. The minimum period during which an offer must
remain open following a material change in the terms of the offer or of
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, however, a minimum ten-business-day period is generally required by
Grape to allow for adequate dissemination to security holders and for investor
response. As used in this Offer, "business day" means any day other than a
Saturday, Sunday, or a federal holiday and consists of the time period from
12:01 a.m. through 12:00 midnight, Pacific Time.
SECTION 6. CERTAIN TAX CONSEQUENCES.
LIMITED PARTNERS SHOULD CONSULT THEIR RESPECTIVE TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES TO EACH SUCH LIMITED PARTNER OF SELLING INTERESTS
PURSUANT TO THE OFFER.
SECTION 7. PURPOSE AND EFFECTS OF THE OFFER.
PURPOSE OF THE OFFER. The Purchaser is making the Offer for investment
purposes with a view towards making a profit. The Purchaser's intent is to
acquire the Interests at a discount to the value that the Purchaser might
ultimately realize from owning the Interests. No independent person has been
retained by Grape to evaluate or render any opinion with respect to the fairness
of the Purchase Price and no representation is made as to such fairness.
The Purchaser established the Purchase Price based on its own independent
analysis of the Partnership, which included a valuation of the properties and
other assets owned by the Partnership and by a subjective determination of the
financial condition of the Partnership. The Purchaser derived the Purchase
Price per Interest from its analysis of financial information which was
available from information in the Form Annual Report on Form 10-K filed with the
SEC ("10-K") and the Form Quarterly Report on Form 10-Q ("10-Q"). In
determining the estimated value of the Interests, the Purchaser first calculated
the estimated current value of the Partnership's properties from a net operating
income analysis. In determining the appropriate discount factor to apply to the
Partnership, the Purchaser considered several factors, including: (i) the
illiquid nature of the investment; (ii) the uncertainty as to when the
Partnership's properties will be sold, and how much they will be sold for; and
(iii) the terms and conditions of the Partnership Agreement. Based upon these
factors, the Purchaser believes a discount factor of 9 percent is appropriate
for purposes of determining the Purchaser's offer price. The Purchaser's
resulting estimated current value is $2,350 per .01 percent interests or,
approximately $4,500 per $10,000 of original investor subscription.
5
XXXXXX/XXXXXXXX REALTY INCOME FUND II
STATEMENT OF NET ASSETS IN LIQUIDATION
DECEMBER 31, 1997
ASSETS (Liquidation Basis): NET ASSET VALUE
Net Assets in Liquidation $27,394,000
Properties $23,102,000 Est. Property Disposition Fee(1) 492,300
Investment in Xxxxxx Village Partners 3,640,000 Partnership Equity 26,901,700
Cash and cash equivalents 1,455,000 General Partner's share of
Accounts receivable 121,000 liquidation proceeds 0
Other assets 25,000 Limited Partners share of
Total Assets $28,343,000 liquidation proceeds 26,901,700
Number of Limited Partnership
LIABILITIES (Liquidation Basis): interests at original $10,000 investment 5,200
Net asset value per original $10,000 investment $5,173
----------
Accounts payable and
accrued liabilities 667,000 GRAPE'S OFFER
Accrued expenses for liquidation 282,000 (All figures based on original $10,000 investment)
-----------
Total Liabilities 949,000
Net Asset Value $5,173
Net Assets in Liquidation $27,394,000 Administrative and tender offer costs (2) (192)
----------- Adjusted Net Asset Value $4,981
Discount to value (9%) (481)
Grape's offer price per $10,000
original investment $4,500
----------
(1) The General Partner, in certain circumstances, can earn a Property
Disposition Fee equal to 50%of the competitive real estate commissions that
would be charged by an unaffiliated third party. We have assumed that the
General Partner will earn a 3 percent fee on 4 properties with a fair
market value of $16,410,000.
(2) Assumes a purchase of 2.5 percent of the outstanding Interests in the
Partnership.
CERTAIN RESTRICTIONS ON TRANSFER OF INTERESTS. The Partnership Agreement
restricts the transfer of Interests if a transfer, when considered with all
other transfers during the same applicable twelve-month period, would cause a
termination of the Partnership, for federal or state income tax purposes. THE
PARTNERSHIP AGREEMENT, HOWEVER, CONTAINS NO RESTRICTION ON THE CHANGE OF
SELLER'S ADDRESS TO PURCHASER'S ADDRESS.
EFFECT OF SALES THROUGH "MATCHING SERVICE" AND PRICE RANGE OF THE
INTERESTS. If a substantial number of Interests are purchased pursuant to the
Offer, the result will be a reduction in the number of Limited Partners. In the
case of certain kinds of equity securities, a reduction in the number of
security holders might be expected to result in a reduction in the liquidity and
volume of activity in the trading market for the security. In this case,
however, there is no active trading market for the Interests, but only several
services that "match" buyers and sellers of Interests, typically by means of an
auction, and the Purchaser believes a reduction in the number of Limited
Partners will materially further restrict the Limited Partners' ability to find
purchasers for their Interests.
The successful purchase of more than 5.48 percent of the outstanding
Interests by the Purchaser will cause the Purchaser to own more than 10 percent
of the outstanding Interests. The Purchaser may then be in a position to exert
a strong influence upon the General Partners and the operation of the
Partnership. Purchaser strongly believes that there are a number of qualified
purchasers in the current market that would purchase 100 percent of the
Partnership properties in a single transaction. Purchaser intends to actively
encourage the General Partner to pursue an expeditious sale and if the General
Partner does not pursue these options, Purchaser will consider taking
appropriate action which may include attempting to replace the General Partner.
(See Section 8 - "Future Plans")
6
The Partnership disclosed in its Form 10-K for the year ended December 31,
1997 that, "There is no public market for the Limited Partnership Interests and
a market is not expected to develop as such Limited Partnership Interests are
not publicly traded or freely transferable."
DISTRIBUTIONS. The Partnership disclosed in its Form 10-K filed for the
year ended December 31, 1997, that it made distributions in quarterly
installments to its partners for the three years ended December 31, 1997, and
for the three months ending March 31, 1998, as follows:
To Limited
Partners
Distributions Paid Distributions Paid Per $1,000
Year Ending to General to Limited Original
December 31 Partners Partners Investment
----------- ------------------- ------------------- -------------
1995 $18,000 $1,828,000 $ 34.99
1996 $21,000 $2,021,000 $38.69
Special
Distribution $ -- $720,000 $13.78
--------- ----------
Total 1996 $21,000 $2,741,000 $52.47
Distributions
1997 $6,000(a) $2,382,000 $45.80
1998(b) --(c) 705,000 $13.56
(A) DISTRIBUTIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997.
(B) DISTRIBUTIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998.
(C) NOT DISCLOSED IN THE PARTNERSHIP'S 1997 FORM 10-K.
The foregoing summary is qualified in its entirety by reference to such reports
and other documents and all of the financial information and related notes
contained therein.
SECTION 8. FUTURE PLANS.
The Purchaser is acquiring the Interests pursuant to the Offer for investment
purposes. However, the Purchaser and its affiliates may acquire additional
Interests through private purchases, one or more future tender offers, or by any
other means deemed advisable. Such future purchases may be at prices higher or
lower than the Purchase Price. Purchaser strongly believes that there are a
number of qualified purchasers that would purchase 100 percent of the
Partnership properties in a single transaction. In the current market,
Purchaser believes that the timing is appropriate for a sale of the properties.
Purchaser intends to actively encourage the General Partner to pursue a
potential sale of the Partnership properties in a controlled auction. If the
General Partner does not pursue these options, Xxxxxxxxx is considering taking
appropriate action which may include attempting to assemble a group of 10
percent of the Limited Partners in order to call a meeting of the Limited
Partners to replace the General Partner in order to pursue a sale of the
Partnership properties through a "controlled auction".
SECTION 9. PAST CONTACTS AND NEGOTIATIONS WITH THE GENERAL PARTNER.
The Purchaser, through an affiliate, by a letter dated April 12, 1996 to the
General Partner of the Partnership requested a list of the names, addresses, and
number of Partnership Interests held by each limited partner in the Partnership.
In a letter dated May
7
3, 1996, counsel for the Purchaser requested a response to the April 12, 1996
letter. By a letter dated May 12, 1996, counsel for the Partnership requested
clarification as to whether the Purchaser had a relationship with certain third
parties. Counsel for the Partnership and counsel for the Purchaser had a
telephone conversation on May 9, 1996 which was later confirmed by letter, that
there was no relationship between the Purchaser and those certain third parties.
As a result, the list of the Partnership's limited partners was furnished to
Purchaser. By letter dated May 21, 1996, Xxxxxxxxx requested additional
information regarding the Partnership and certain of its properties. On June 4,
1996, counsel for the Partnership and counsel for the General Partner discussed
the letter. On June 12, 1996, counsel for the Purchaser made a further request
for the information. On June 12, 1996, counsel for the Partnership sent a
letter to counsel for the Purchaser indicating that certain of the information
would be provided and certain of the information would not be provided.
On June 26, 1996, the Purchaser commenced a limited tender offer, I.E., not to
exceed 4.9 percent of the outstanding Interests at a price of $890 for each .01
percent interest in the Partnership. As a result of the Purchaser's June 19,
1996 tender offer which terminated on July 29, 1996, when the transfer forms
were submitted to the Partnership's transfer agent to assign and transfer the
Interests purchased by Xxxxxxxxx, the transfer agent refused to make such
transfers. On August 3, 1996, counsel for the Purchaser wrote a letter to the
transfer agent demanding that the transfers be made. On August 5, 1996, the
Purchaser sent a letter to the General Partner requesting that he instruct the
transfer agent to approve the transfers.
During July and August, 1996, conversations regarding the transfer of the
Interests acquired in the tender offer took place between counsel for the
Partnership and counsel for the Purchaser. On August 23, 1996, the Manager of
Purchaser telephoned and left a message for the General Partner of the
Partnership. On August 29, 1996, the General Partner sent a letter to the
Partnership's Manager indicating, among other things, that it would make its own
determination as to whether or not Purchaser would become a substituted limited
partner in the partnership.
On August 28, 1996, Purchaser filed an action entitled GRAPE INVESTORS, LLC ET
AL. X. XXXXXX/XXXXXXXX PARTNERS, ET AL., in the Superior Court of the State of
California, in the County of Orange, Case No. 768309 (the "Action"). On August
29, 1996, counsel for the Partnership, after a discussion with counsel for the
Purchaser, had sent to him a courtesy copy of the complaint and motion for
preliminary injunction and supporting papers and documents seeking to have the
Interests acquired pursuant to the tender offer transferred to Purchaser. From
September 5, 1996 to September 24, 1996, correspondence and conversations took
place between counsel for the Purchaser and counsel for the Partnership in an
attempt to resolve the Action. On September 24, 1996, the Action was settled,
whereby the Purchaser was admitted as an assignee (but not as a substituted
limited partner) of the Interests it had acquired in its tender offer in the
Partnership. Various conversations and correspondence between counsel for the
Partnership and counsel for the Purchaser took place between September 24, 1996
and March, 1997, when the Settlement Agreement was finally documented.
On October 3, 1996, Xxxxxxxxx sent a letter to the Partnership indicating that
they had a potential buyer for the Partnership's property, which letter was not
responded to.
On October 21, 1996, Xxxxxxxxx commenced a second limited tender offer to buy
additional Interests in the Partnership (which offer was communicated by letter
from Purchaser to the Partnership's General Partner), which offer expired on
November 22, 1996.
On January 23, 1997, counsel for the Purchaser forwarded a letter to counsel for
the Partnership requesting certain information regarding distributions and the
method of payment to Purchaser. Telephone conversations between those parties
also took place regarding that matter and on January 26, 1997, counsel for the
Partnership confirmed the method in which distributions were to be made to
Purchaser.
On May 13, 1997, counsel for the Purchaser by letter to counsel for the
Partnership requested that the Partnership respond to letter from Argent
Ventures, LLC, which response was received. On May 16, 1997, counsel for the
Purchaser requested certain information regarding appraisals of the Partnership;
a follow-up letter on May 28, 1997 was sent to counsel for the Partnership by
counsel for the Purchaser requesting such information. On June 4, 1997, counsel
for the Partnership furnished such information to counsel for the Purchaser.
On June 18, 1997, Purchaser commenced a tender offer registered for 10,000
interests at a purchase price of $1,645 for each .01 percent interest in the
Partnership and amended such tender offer by amendment filed on August 8, 1997.
On October 2, 1997, Purchaser filed an amendment to increase the purchase price
to $2,089 for each .01 percent interest in the Partnership. The Schedule 14D-1
and amendments, and Offer to Purchase are on file with the SEC. Purchaser
acquired a total additional
8
.93 percent interest in the Partnership in the registered tender offer, making
the total interest of Purchaser in the Partnership approximately 4.52 percent.
On December 30, 1997, Xxxxxxxxx sent a letter to General Partner requesting a
meeting to review, among other things, the progress of the Partnership toward
selling the Partnership properties, and indicating that if Purchaser was not
satisfied with the progress being made toward immediate liquidation of the
Partnership, that Xxxxxxxxx intended to contact the other Limited Partners to
assemble a group of Limited Partners with the purpose of calling a meeting to
vote on the replacement of the General Partner to pursue a sale of the
Partnership properties through a controlled auction. On January 9, 1998,
Xxxxxxxxx received a response from the General Partner confirming a meeting on
January 28, 1998.
On January 28, 1998, Xxxxxxxxx met with General Partner to discuss the issues
raised in the Purchaser's December 30, 1997 letter. During the meeting, the
General Partner indicated that it intended to be more communicative in future
public filings with regard to the marketing efforts being made toward a
potential sale of the Partnership properties. The General Partner offered to
disclose information regarding its marketing efforts and appraisals on the
properties to Purchaser if Purchaser agreed to enter into a standstill agreement
which would prohibit Purchaser from acquiring additional Interests in the
Partnership. Xxxxxxxxx declined to enter into the standstill agreement with
General Partner.
SECTION 10. CERTAIN INFORMATION CONCERNING THE BUSINESS OF THE PARTNERSHIP AND
RELATED MATTERS.
The Partnership was organized on May 7, 1984 under the laws of the State of
Delaware. Its principal offices are located at 00000 Xx Xxx Xxxx, X.X. Box
30009, Laguna Niguel, California 00000-0000. Its telephone number is (714)
643-7490. The Partnership's primary business is the operation of
income-producing commercial and industrial properties acquired by the
Partnership.
On February 18, 1997, the General Partner sought consent of the Limited Partners
to dissolve the Partnership and sell and liquidate all of its remaining
properties as soon as practicable. A majority in interest of the Limited
Partners consented by March 14, 1997, and the Partnership adopted a liquidation
basis of accounting. As disclosed in the Partnership's 1997 10-K, the
Partnership is in the process of reviewing and considering offers to liquidate
its portfolio of Properties. For information concerning the properties owned by
the Partnership, please refer to Schedule 2 attached hereto, which is
incorporated herein by reference.
Set forth below is a summary of certain financial information with respect to
the Partnership, which has been excerpted or derived from the Partnership's 1997
Form 10-K, and the Partnership's Quarterly Reports on Form 10-Q for the three
months ending March 31, 1998. More comprehensive financial and other
information is included in such reports and other documents filed by the
Partnership with the SEC, and the following summary is qualified in its entirety
by reference to such reports and other documents and all the financial
information and related notes contained therein. Such reports and other
documents may be examined and copies may be obtained from the offices of the SEC
at the addresses set forth in the "Introduction." The Purchaser disclaims any
responsibility for the information included in such reports and documents, and
extracted in this Offer to Purchase.
9
XXXXXX/XXXXXXXX REALTY INCOME FUND I
Selected Financial Data
Income Statement Data: Three Months Fiscal Year Fiscal Year
Ended 3/31/97 (a) Ended 12/31/96 Ended 12/31/95
----------------- -------------- --------------
Net Revenue $1,177,000 $4,859,000 $4,523,000
Net Income $565,000 $1,916,000 ($575,000)
Net Income per
$1,000 Original Investment $10.63 $36.07 ($10.81)
Balance Sheet Data: As of As of As of
3/31/97 (a) 12/31/96 12/31/95
---------- -------- --------
Total Assets $28,212,000 $28,212,000 $29,134,000
Total Liabilities $636,000 $636,000 $712,000
Limited Partners' Equity $27,746,000 $27,746,000 $28,590,000
----------- ----------- -----------
Interests Outstanding 52,588 52,588 52,588
(A) THE PARTNERSHIP ADOPTED THE LIQUIDATION BASIS OF ACCOUNTING AS OF MARCH 31,
1997.
XXXXXX VILLAGE PARTNERS (A)
Income Statement Data: Fiscal Year Fiscal Year
Ended 12/31/96 Ended 12/31/95
-------------- --------------
Net Revenue $1,072,000 $1,046,000
Net Income $169,000 $(1,065,000)
Balance Sheet Data: As of As of
12/31/96 12/31/95
-------- --------
Total Assets $6,471,000 $6,919,000
Total Liabilities $114,000 $111,000
(A) A GENERAL PARTNERSHIP CONSISTING OF THE PARTNERSHIP AND REAL ESTATE INCOME
PARTNERS III, LIMITED PARTNERSHIP, AN AFFILIATED LIMITED PARTNERSHIP. AT
DECEMBER 31, 1997, THE PARTNERSHIP HAD A 58 PERCENT INTEREST IN XXXXXX VILLAGE
PARTNERS.
10
The following summary of financial data is for the period since the Partnership
adopted the liquidation basis of accounting:
Period from
April 1, 1997
through
December 31, 1997
-----------------
Property Operating Income, $2,304,000
net
Distributions to Partners $1,782,000
Net Assets in Liquidation
at 12/31/97 $27,394,000
________________________________________________________________________________
SECTION 11. CERTAIN INFORMATION CONCERNING THE PURCHASER.
The Purchaser is a Delaware Limited Liability Company which was organized for
the purpose of acquiring the Interests pursuant to the Offer. The Manager of
the Purchaser is Xxxxx Capital, a California limited liability company ("ACL"),
which is controlled by its two members, Xxx Xxxxxxxxx and Xxxx X. Xxxxx. ACL is
engaged in financial and business consulting. The Purchaser's and ACL's offices
are located at 0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000.
For certain information concerning the members of ACL, see Schedule 1 to this
Offer to Purchase.
Except as otherwise set forth herein, (i) neither the Purchaser nor, to the best
knowledge of the Purchaser, any of the persons listed on Schedule 1, or any
affiliate of the Purchaser beneficially owns or has a right to acquire any
Interests; (ii) neither the Purchaser nor, to the best knowledge of the
Purchaser, any of the persons listed on Schedule 1, or any affiliate of the
Purchaser or any member, director, executive officer, or subsidiary of any of
the foregoing has effected any transaction in the Interests; (iii) neither the
Purchaser nor, to the best knowledge of the Purchaser, any of the persons listed
on Schedule 1 or any affiliate of the Purchaser has any contract, arrangement,
understanding, or relationship with any other person with respect to any
securities of the Partnership, including but not limited to, contracts,
arrangements, understandings, or relationships concerning the transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss, or the giving or withholding of proxies,
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 SEC between any of the Purchasers, or, to the best knowledge
of the Purchaser, any of the persons listed on Schedule 1 or any affiliate of
the Purchaser, on the one hand, and the Partnership or affiliates, on the other
hand; and (v) there have been no contracts, negotiations, or transactions
between the Purchaser or to the best knowledge of the Purchaser, any of the
persons listed on Schedule 1 or any affiliate of the Purchaser, on the one hand,
and the Partnership or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer (other than as described in Section 8
of this Offer) or other acquisition of securities, an election or removal of the
General Partner, or a sale or other transfer of a material amount of assets.
SECTION 12. SOURCE AND AMOUNT OF FUNDS.
The Purchaser expects that approximately $2,000,000 (exclusive of fees and
expenses) will be required to purchase 5,000 Interests (approximately 10 percent
of the outstanding Interests), if tendered. The Purchaser will obtain all of
those funds from capital contributions from its members, which have an aggregate
net worth substantially in excess of the amount required to purchase the 5,000
Interests.
SECTION 13. CERTAIN CONDITIONS OF THE OFFER.
Purchaser in its sole discretion, for any reason, may terminate the offer by
providing notice of termination as set forth in Section 5. The Purchaser will
not be required to accept for payment or to pay for any Interests tendered, and
may amend or terminate the Offer if:
11
(i) the Purchaser shall not have confirmed to its reasonable satisfaction that,
upon purchase of the Interests, the Purchaser will be entitled to receive all
distributions, from any source, from the Partnership after February 28, 1998 and
that the Partnership will change Seller's address to Purchaser's address; or
(ii) the Agreement of Sale is not properly completed and duly executed.
The foregoing conditions are for the sole benefit of the Purchaser and its
affiliates and may be asserted by the Purchaser regardless of the circumstances
(including, without limitation, any action or inaction by the Purchaser or any
of its affiliates) giving rise to such condition, or may be waived by the
Purchaser, in whole or in part, from time to time in its sole discretion. The
failure by the Purchaser at any time to exercise the foregoing rights will not
be deemed a waiver of such rights, which rights will be deemed to be ongoing and
may be asserted at any time and from time to time. Any determination by the
Purchaser concerning the events described in this Section 13 will be final and
binding upon all parties.
SECTION 14. CERTAIN LEGAL MATTERS AND REQUIRED REGULATORY APPROVALS.
GENERAL. Except as set forth in this Offer to Purchase, based on its review of
publicly available filings by the Partnership with the SEC and other publicly
available information regarding the Partnership, the Purchaser is not aware of
any licenses or regulatory permits that would be material to the business of the
Partnership, taken as a whole, and that might be adversely affected by the
Purchaser's acquisition of Interests as contemplated herein, or any filings,
approvals, or other actions by or with any domestic, foreign, or governmental
authority or administrative or regulatory agency that would be required prior to
the acquisition of Interests by the Purchaser pursuant to the Offer as
contemplated herein. Should any such approval or other action be required, there
can be no assurance that any such additional approval or action, if needed,
would be obtained without substantial conditions or that adverse consequences
might not result to the Partnership's business, or that certain parts of the
Partnership's or the Purchaser's business might not have to be disposed of or
held separate or other substantial conditions complied with in order to obtain
such approval. The Purchaser's obligation to purchase and pay for Interests is
subject to certain conditions. See "Tender Offer-- Section 13. Certain
Conditions of the Offer."
ANTITRUST. Under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the Antitrust Division of
the Department of Justice (the "Antitrust Division") and the FTC and certain
waiting period requirements have been satisfied. The Purchaser does not
currently believe any filing is required under the HSR Act with respect to its
acquisition of Interests contemplated by the Offer.
Based upon an examination of publicly available information relating to the
business in which the Partnership is engaged, the Purchaser believes that the
acquisition of Interests pursuant to the Offer would not violate the antitrust
laws. Nevertheless, there can be no assurance that a challenge to the Offer on
antitrust grounds will not be made, or, if such challenge is made, what the
result will be.
STATE TAKEOVER LAWS. The Purchaser has not attempted to comply with any state
takeover statutes in connection with the Offer. The Purchaser reserves the right
to challenge the validity or applicability of any state law allegedly applicable
to the Offer, and nothing in the Offer, nor any action taken in connection
herewith, is intended as a waiver of that right. In the event that any state
takeover statute is found applicable to the Offer, the Purchaser might be unable
to accept for payment or purchase Interests tendered pursuant to the Offer or be
delayed in continuing or consummating the Offer. In such case, the Purchaser may
not be obligated to accept for purchase, or pay for, any Interests tendered.
SECTION 15. FEES AND EXPENSES.
Xxxxx Capital has been retained by the Purchaser to act as the Information Agent
in connection with the Offer. The Information Agent will receive reasonable and
customary compensation for its services in connection with the Offer and will be
indemnified against certain liabilities and expenses in connection therewith.
Except as set forth in this Section 15, the Purchaser will not pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
Interests pursuant to the Offer. Brokers, dealers, commercial banks, trust
companies, and other nominees, if any, will, upon request, be reimbursed by the
Purchaser for customary clerical and mailing expenses incurred by them in
forwarding materials to their customers.
12
SECTION 16. MISCELLANEOUS.
THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF
OF) LIMITED PARTNERS 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 PURCHASER IS NOT AWARE OF ANY JURISDICTION WITHIN THE UNITED
STATES IN WHICH THE MAKING OF THE OFFER OF THE ACCEPTANCE THEREOF WOULD BE
ILLEGAL.
In any jurisdiction where the securities, blue sky, or other laws require the
Offer to be made by a licensed broker or dealer, the Purchaser will withdraw the
Offer. The Purchaser has filed with the SEC the Schedule 14D-1, together with
exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, furnishing certain information with respect to the Offer, and may
file amendments thereto. Such Schedule 14D-1 and any amendments thereto,
including exhibits, may be examined and copies may be obtained from the SEC as
set forth above in "Introduction."
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained in this Offer to
Purchase or in the Agreement of Sale and, if given or made, any such information
or representation must not be relied upon as having been authorized. Neither the
delivery of the Offer to Purchase nor any purchase pursuant to the Offer shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Purchaser or the Partnership since the date as of which
information is furnished or the date of this Offer to Purchase.
GRAPE INVESTORS, LLC
0000 XXXXX XXXXXX XXXXX, XXXXX 000, XXX XXXXX, XX 00000
(000) 000-0000
13
SCHEDULE 1
INFORMATION REGARDING THE MANAGERS
OF XXXXX CAPITAL, LLC
Set forth in the table below are the names of the members of Xxxxx Capital,
LLC and their present principal occupations and five (5) year employment
histories. Each individual is a citizen of the United States and the business
address of each person is 0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx,
Xxxxxxxxxx 00000.
Present Principal Occupation or Employment
Name and Five-Year Employment History
Xxx Xxxxxxxxx Member and Manager of Xxxxx Capital LLC. President of Xxxxx
Capital, Inc., a California corporation, its predecessor entity
since 1989.
Xxxx X. Xxxxx Member and Manager of Xxxxx Capital LLC. Vice President of Xxxxx
Capital, Inc., a California corporation, its predecessor entity
since 1989.
Xxxxx Capital LLC and its predecessor entity, Xxxxx Capital, Inc. ("ACL"),
have been providing business and financial consulting services since 1989. ACL
principals offer an extensive background in the capital markets, real estate
securities, and real estate markets. ACL, has developed relationships with
capital sources who furnish equity and debt for both public and private
transactions. In previous transactions, ACL has provided, for its clients,
consulting services for the following types of transactions: debt and equity
placements for leveraged buy-outs; the making of tender offers; debt and equity
capital for real estate development projects; structuring of companies to become
REITs; and creation of joint venture partnerships between real estate developers
and investors. In addition, ACL provides financial structuring advice and
analyses for refinancing and financing alternatives for the design and
structuring of joint ventures, limited partnerships (both public and private),
and for Real Estate Investment Trusts.
S-1
SCHEDULE 2
The following Schedule of Properties owned by the Partnership was extracted from
the Partnership's 1997 Form 10-K filed with the SEC:
Property Location Type
-------- -------- ----
Lakeland Industrial Park Office/Warehouse
Milwaukee, WI
Xxxxxxx Corporate Center Palatine, IL Office
Iomega/Northpointe Center Roy, UT Office
Ladera Shopping Center Albuquerque, NM Retail
Creekridge Center Bloomington, MN Office
Xxxxxx Village (A) Mesa, AZ Office
(A) THE PARTNERSHIP ACQUIRED A 58 PERCENT INTEREST IN XXXXXX VILLAGE THROUGH A
GENERAL PARTNERSHIP, XXXXXX VILLAGE PARTNERS.
More comprehensive financial and other information is included in such
report and other documents filed by the Partnership with the SEC, and the
following is qualified by reference to such report and other documents. Such
report and other documents may be examined and copies may be obtained from the
offices of the SEC at the addressees set forth in the "Introduction" section of
the Offer to Purchase. The Purchaser disclaims any responsibility for the
information included in such report and documents, and extracted in this
Schedule 2, as well as any changes which may have taken place in the information
in the report since the date it was issued.
S-2
