FORUM GROUP INC
SC 14D1/A, 1995-11-01
SOCIAL SERVICES
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<PAGE>   1


                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                            --------------------


                               SCHEDULE 14D-1
                           TENDER OFFER STATEMENT
    (Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934)
                              (Amendment No. 2)
                                     and
                                 Amendment**
                                     to
                                SCHEDULE 13D

                       FORUM RETIREMENT PARTNERS, L.P.
                          (Name of Subject Company)

                              FORUM GROUP, INC.
                                  (Bidder)

Preferred Depositary Units Representing
 Preferred Limited Partners' Interests                     349 851 105
  (Title of Class of Securities)           (CUSIP Number of Class of Securities)

                            --------------------

                              Dennis L. Lehman
              Senior Vice President and Chief Financial Officer
                              Forum Group, Inc.
                           11320 Random Hills Road
                          Fairfax, Virginia  22030
                               (703) 277-7000

(Name, Address and Telephone Number of Persons Authorized to Receive Notices
        and Communications on Behalf of the Persons Filing Statement)

                                 Copies to:

                          Robert A. Profusek, Esq.
                         Jones, Day, Reavis & Pogue
                            599 Lexington Avenue
                          New York, New York  10022
                               (212) 326-3800


                                      


__________
**       This Schedule constitutes Amendment No. 9 to the Schedule 13D
         originally filed by Forum Group, Inc. on August 24, 1993.
<PAGE>   2

<TABLE>
    <S>  <C>                                                                    <C>
             CUSIP No. 349 851 105                     14D-1                    

=================================================================================================================================
     1   NAME OF REPORTING PERSON
         S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

         Forum Group, Inc.
- ---------------------------------------------------------------------------------------------------------------------------------
     2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                                           (a) [ ]
                                                                                                     (b) [x]
- ---------------------------------------------------------------------------------------------------------------------------------
     3   SEC USE ONLY
- ---------------------------------------------------------------------------------------------------------------------------------
     4   SOURCE OF FUNDS*

         WC
- ---------------------------------------------------------------------------------------------------------------------------------
     5   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
         PURSUANT TO ITEMS 2(e) or 2(f)                                                                  [ ]
- ---------------------------------------------------------------------------------------------------------------------------------
     6   CITIZENSHIP OR PLACE OR ORGANIZATION

         Indiana
- ---------------------------------------------------------------------------------------------------------------------------------
     7   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

         9,427,791
- ---------------------------------------------------------------------------------------------------------------------------------
     8   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES*                           [ ]
- ---------------------------------------------------------------------------------------------------------------------------------
     9   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)

         61.7%
- ---------------------------------------------------------------------------------------------------------------------------------
    10   TYPE OF REPORTING PERSON

         CO
=================================================================================================================================
</TABLE>

                     *SEE INSTRUCTIONS BEFORE FILLING OUT!





                                     -2-
<PAGE>   3
<TABLE>
    <S>  <C>                                                                    <C>                  
             CUSIP No. 349 851 105                     14D-1                    

=================================================================================================================================
     1   NAME OF REPORTING PERSON
         S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

         Forum A/H, Inc.
- ---------------------------------------------------------------------------------------------------------------------------------
     2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                                           (a) [ ]
                                                                                                     (b) [x]
- ---------------------------------------------------------------------------------------------------------------------------------
     3   SEC USE ONLY
- ---------------------------------------------------------------------------------------------------------------------------------
     4   SOURCE OF FUNDS*

         AF WC
- ---------------------------------------------------------------------------------------------------------------------------------
     5   CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
         PURSUANT TO ITEMS 2(e) or 2(f)                                                                  [ ]
- ---------------------------------------------------------------------------------------------------------------------------------
     6   CITIZENSHIP OR PLACE OR ORGANIZATION

         Delaware
- ---------------------------------------------------------------------------------------------------------------------------------
     7   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

         9,427,791
- ---------------------------------------------------------------------------------------------------------------------------------
     8   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES*                           [ ]
- ---------------------------------------------------------------------------------------------------------------------------------
     9   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)

         61.7%
- ---------------------------------------------------------------------------------------------------------------------------------
    10   TYPE OF REPORTING PERSON

         CO
=================================================================================================================================
</TABLE>

                     *SEE INSTRUCTIONS BEFORE FILLING OUT!





                                     -3-
<PAGE>   4
          This Amendment No. 2 supplements and amends the Schedule 14D-1 Tender
Offer Statement and amendment to Schedule 13D, as previously supplemented and
amended (the "Schedule 14D-1"), relating to a tender offer by Forum Group,
Inc., an Indiana corporation (the "Purchaser"), to purchase any and all of the
outstanding preferred depositary units (the "Units") representing preferred
limited partners' interests in Forum Retirement Partners, L.P., a Delaware
limited partnership, at $2.83 per Unit, net to the seller in cash, on the terms
and subject to the conditions set forth in the Purchaser's Offer to Purchase
dated October 2, 1995 (the "Offer to Purchase"), the Supplement dated October
16, 1995 to the Offer to Purchase, the Supplement dated November 1, 1995 (the
"November 1 Supplement") to the Offer to Purchase, and the related Letter of
Transmittal.  A copy of the November 1 Supplement is filed as Exhibit (a)(11)
hereto.

ITEM 3.   PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.

          Item 3 of the Schedule 14D-1 is hereby supplemented and amended by
adding the following:

          (a)-(b)  The information set forth in "Additional Information
Concerning the Background of the Offer" in the November 1 Supplement is
incorporated herein by reference.

ITEM 11.  MATERIAL TO BE FILED AS EXHIBITS.

          Item 11 of the Schedule 14D-1 is hereby supplemented and amended by
adding the following exhibits:

          99.(a)(11)  Supplement dated November 1, 1995 to the Offer to 
                      Purchase dated October 2, 1995





                                     -4-
<PAGE>   5
                                   SIGNATURE


         After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.

Dated:  November 1, 1995
                  
                                    FORUM GROUP, INC.


                                    By           Troy B. Lewis           
                                      ---------------------------------------
                                       Troy B. Lewis,
                                       Attorney-in-Fact*

                                      *Pursuant to a Power of Attorney 
                                       previously filed with the Securities 
                                       and Exchange Commission





                                     -5-
<PAGE>   6
                                   SIGNATURE


         After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.

Dated:  November 1, 1995

                                          FORUM GROUP, INC.


                                          By          Troy B. Lewis           
                                             -----------------------------------
                                              Troy B. Lewis,
                                              Attorney-in-Fact*

                                             *Pursuant to a Power of Attorney 
                                              previously filed with the 
                                              Securities and Exchange Commission





                                     -6-
<PAGE>   7
                              INDEX TO EXHIBITS


<TABLE>
<CAPTION>
                                                                                                    
                                                                                                      
  Exhibits                                                                                          
 ---------                                                                                         
 <S>         <C>                                                                                          
  99.(a)(11)    Supplement dated November 1, 1995 to the Offer to Purchase dated
                October 2, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          

</TABLE>




                                     -7-

<PAGE>   1

                                 Supplement to
                           Offer to Purchase for Cash
               Any and All Outstanding Preferred Depositary Units
               Representing Preferred Limited Partners' Interests
                                       in
                        FORUM RETIREMENT PARTNERS, L.P.
                                       at
                    $2.83 Net Per Preferred Depositary Unit
                                       by
                               FORUM GROUP, INC.

    THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
     CITY TIME, ON FRIDAY, NOVEMBER 10, 1995, UNLESS THE OFFER IS EXTENDED.

         THE BOARD OF DIRECTORS OF THE GENERAL PARTNER OF FORUM RETIREMENT
PARTNERS, L.P. (WITH THE DIRECTOR AFFILIATED WITH THE PURCHASER ABSTAINING),
BASED UPON THE UNANIMOUS RECOMMENDATION OF A SPECIAL COMMITTEE COMPRISED OF THE
INDEPENDENT MEMBERS OF THE BOARD OF DIRECTORS, HAS DETERMINED THAT THE OFFER IS
FAIR TO UNITHOLDERS (OTHER THAN FORUM GROUP, INC. AND ITS AFFILIATES) AND
RECOMMENDS THAT SUCH UNITHOLDERS ACCEPT THE OFFER AND TENDER ALL OF THEIR UNITS
PURSUANT TO THE OFFER.  SEE ITEM 4 OF THE SCHEDULE 14D-9.

         The Offer is not conditioned on any minimum number of Units being
tendered.  The Offer is conditioned on, among other things, (i) the absence of
certain litigation, orders, or other legal matters and (ii) the absence of a
material adverse change (or any development involving a prospective material
adverse change) in the business, financial condition, results of operations, or
prospects of the Partnership.  See "The Offer -- Certain Conditions of the
Offer" in the Offer to Purchase.  The purchase of Units pursuant to the Offer
may result in the delisting of the Units from trading on the American Stock
Exchange and the Partnership no longer filing reports and other information
under the Securities Exchange Act of 1934, as amended, and would reduce the
number of Units that might otherwise trade publicly as well as the number of
Unitholders.  Any of these effects could adversely affect the liquidity or
prices realizable in sales of the Units following the completion of the Offer.
See "Special Factors -- Certain Effects of the Offer" in the Offer to Purchase.

         Procedures for tendering Units are set forth in "The Offer --
Procedures for Tendering Units" in the Offer to Purchase.  Tendering
Unitholders should continue to use the Letter of Transmittal and the Notice of
Guaranteed Delivery previously delivered with the Offer to Purchase.
Unitholders who have already tendered Units using the Letter of Transmittal
need not complete another Letter of Transmittal or take any additional action
for their Units to be tendered pursuant to the Offer.  Upon the acceptance for
payment of Units tendered pursuant to the Offer, each tendering Unitholder will
be deemed to have released the Purchaser, the General Partner, and certain
other persons from any claim based upon the allegations being made against the
Purchaser and the General Partner in certain pending litigation.  Accordingly,
tendering Unitholders may be waiving significant rights.  See "Effect of the
Offer on Certain Litigation".

         Any questions or requests for assistance or additional copies of this
Supplement to Offer to Purchase, the Offer to Purchase, the previous Supplement
to Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery, and other related materials may be directed to the Information Agent
at its address and telephone numbers set forth on the back cover of this
Supplement to Offer to Purchase.


         THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS DOCUMENT.  ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.

November 1, 1995
                    The Information Agent for the Offer is:

                            MACKENZIE PARTNERS, INC.
<PAGE>   2
To the Holders of Preferred Depositary Units
   of Forum Retirement Partners, L.P.:

INTRODUCTION

         The following is certain additional information that supplements the
Offer to Purchase dated October 2, 1995 (the "Offer to Purchase"), as
previously supplemented by a supplement dated October 16, 1995 (the "October 16
Supplement"), of Forum Group, Inc. (the "Purchaser") pursuant to which the
Purchaser is offering to purchase any and all of the outstanding preferred
depositary units (the "Units") representing preferred limited partners'
interests in Forum Retirement Partners, L.P., a Delaware limited partnership
(the "Partnership"), not now beneficially owned by the Purchaser, at $2.83 per
Unit, without interest, net to the seller in cash, on the terms and subject to
the conditions set forth in the Offer to Purchase, the October 16 Supplement,
this Supplement, and the related Letter of Transmittal (which together
constitute the "Offer").  Amendment No. 2 (the "Schedule 14D-9 Amendment") to
the Partnership's Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9"), which contains additional information concerning the Offer,
is being mailed to Unitholders together with this Supplement.

         Except as set forth in this Supplement, the terms and conditions set
forth in the Offer to Purchase, as previously supplemented by the October 16
Supplement, and related Letter of Transmittal remain applicable in all respects
to the Offer, and this Supplement should be read in conjunction with the Offer
to Purchase, the October 16 Supplement, and the related Letter of Transmittal.
Capitalized terms used herein without definition have the meanings ascribed to
such terms in the Offer to Purchase.

ADDITIONAL INFORMATION CONCERNING THE BACKGROUND OF THE OFFER

         As discussed in the Offer to Purchase (see "Special Factors -- Certain
Determinations by the Purchaser"), no person was retained to act as an
unaffiliated representative on behalf of unaffiliated Unitholders for purposes
of negotiating the terms of the Offer and the Purchaser did not obtain any
report, opinion, or appraisal from any outside party relating to the fairness
of the Offer.  However, following the public announcement of the Offer, the
Board of Directors of the General Partner (the "FRI Board") established a
Special Committee comprised of persons not affiliated with the Purchaser and
the Special Committee thereafter retained financial and legal advisors who were
also not affiliated with the Purchaser.  The Special Committee, with the
assistance of its financial and legal advisors, negotiated an increase in the
offer price from $2.50 per Unit as proposed on October 2, 1995 to $2.83 per
Unit as set forth in the October 16 Supplement.  For additional information
with respect to the foregoing, see "Additional Information Concerning the
Background of the Offer" in the October 16 Supplement and Item 4 of the
Schedule 14D-9, which have previously been furnished to Unitholders and filed
with the Commission.

ADDITIONAL INFORMATION CONCERNING THE GENERAL PARTNER

         Annex A hereto sets forth the following information with respect to 
each of the directors and officers of the General Partner:  (i) name; (ii)
business address; (iii) present principal occupation or employment and the
name, principal place of business, and address of any corporation or other
organization in which such employment or occupation is conducted; (iv) material
occupations, positions, offices, or employments during the last five years,
giving the starting and ending dates of each and the name, principal business,
and address of any business corporation or other organization in which such
occupation, position, office, or employment was carried on; and (v)
citizenship.  Except as disclosed in the Offer to Purchase, the October 16
Supplement, or this Supplement, neither the General Partner, nor, to the
knowledge of the Purchaser, any of the persons listed in Annex A hereto, or any
majority owned subsidiary or associate of the General Partner or the persons so
listed, beneficially owns or has a right to acquire any equity securities of
the Partnership, nor has the General Partner, or, to the knowledge of the 
Purchaser, any of the persons listed in Annex A, effected any transactions in
the equity securities of the Partnership which are required to be disclosed
pursuant to the rules and regulations of the Commission.  Except as disclosed
in the Offer to Purchase, the October 16 Supplement, or this Supplement,
neither the General Partner, nor, to the knowledge of the Purchaser, any of the
persons listed in Annex A hereto, has any present or proposed contract,
arrangement, understanding, or relationship with any other person with respect
to any securities of the

        
<PAGE>   3
Partnership, including, but not limited to, any contract, arrangement,
understanding, or relationship concerning the transfer or the voting of any
securities of the Partnership, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss, or the giving or
withholding of proxies.

ADDITIONAL INFORMATION CONCERNING CERTAIN DETERMINATIONS BY THE PURCHASER

         For a discussion of the Purchaser's consideration of the fairness of
the Offer, see "Special Factors -- Certain Determinations by the Purchaser" in
the Offer to Purchase.  For a discussion of the Special Committee's
consideration of these matters, see Item 4 of the Schedule 14D-9.  Additional
information concerning the Special Committee's determination regarding the
fairness of the Offer is set forth in Item 4 of the Schedule 14D-9 Amendment
and is incorporated herein by reference.

         As disclosed in "Certain Information Concerning the Purchaser" in the
Offer to Purchase, during 1994, the Purchaser acquired in privately negotiated
transactions 1,831,644 Units at a purchase price of $3.00 per Unit, or $0.17
per Unit more than the offer price.  The Purchaser did not consider such
purchases to be material to its consideration of the fairness of the Offer
because, among other things, the Purchaser's assumptions relating to the value
of an investment in the Units have changed since the time such purchases were
effected, primarily as a result of the lowering of the Purchaser's assumptions
as to the number of living units that can be added pursuant to the
Partnership's expansion program and the anticipated results of operations of
certain of the Properties.

         As disclosed in "Special Factors -- Certain Determinations by the 
Purchaser" in the Offer to Purchase, since the recapitalization of the
Purchaser in 1993, the Purchaser has performed a number of analyses in addition
to that set forth in the Offer to Purchase with respect to the value of an
investment in the Units.  Such analyses were performed for internal use only
and not with a view to dissemination to Unitholders.  (For a discussion of the
valuation analyses performed by the financial advisor to the Special Committee,
see Item 4 of the Schedule 14D-9.)  In addition, based upon the assumptions as
to the future prospects of the Partnership which the Purchaser believes to be
appropriate (as described in "Special Factors -- Certain Determinations by the
Purchaser" in the Offer to Purchase), none of such analyses resulted in
valuations in excess of those resulting from the valuation analyses set forth
in "Special Factors -- Certain Determinations by the Purchaser" in the Offer to
Purchase or in Item 4 of the Schedule 14D-9.
        
         As discussed in "Interests of Certain Persons in the Offer" in the
Offer to Purchase, deferred management fees are payable to the Purchaser out of
net proceeds from sales and refinancings of the Partnership's RCs ("Capital
Transaction Proceeds") after making distributions of such Capital Transaction
Proceeds in an amount sufficient (i) to meet Limited Partners' income tax
liabilities, (ii) together with all prior distributions of Capital Transaction
Proceeds, to repay Limited Partners' capital contributions, and (iii) together
with all prior distributions of Capital Transaction Proceeds and net cash flow,
to pay a 12% cumulative, simple annual return on the Limited Partners'
respective unrecovered capital contributions.  Assuming that all of the
Partnership's Properties were sold as of June 30, 1995 and that the payment of
the deferred management fees continued to be subordinated to distributions of
the resulting proceeds, a Unitholder who purchased his, her, or its Units at
$12.75 in the initial public offering of the Units would be entitled to receive
approximately $21.15 per Unit (plus amounts required to be distributed in
respect of income tax liabilities) before any proceeds from such sale would be
payable to the Purchaser in respect of deferred management fees.  The foregoing
does not purport to reflect an estimate of the amount that would actually be
realized by Unitholders in the event of an actual sale of the Properties.  The
Purchaser does not believe that the net proceeds from such a sale would be
sufficient to result in a distribution per Unit in an amount in excess of the
per Unit value range set forth in "Special Factors -- Certain Determinations by
the Purchaser" in the Offer to Purchase.  Accordingly, the Purchaser did not
consider the right of Unitholders to receive proceeds from sales of the
Properties prior to the payment of the deferred management fees to be material
to its consideration of the fairness of the Offer.

EFFECT OF THE OFFER ON CERTAIN LITIGATION

         As disclosed in "Special Factors -- Certain Litigation against the
Purchaser and the General Partner" in the Offer to Purchase, the Purchaser and
the General Partner are parties to certain litigation (the "Pending
Litigation") in which Plaintiff has alleged, among other things, breach of the
Partnership Agreement, breach of 





                                      -2-
<PAGE>   4
fiduciary duty, insider trading and oppression of minority Unitholders, and
civil conspiracy.  More specifically, Plaintiff has alleged, among other
things, that (i) the FRI Board is not comprised of a majority of Independent
Directors as required by the Partnership Agreement, (ii) the allegedly improper
composition of the FRI Board is a consequence of actions by the Purchaser,
(iii) the FRI Board has approved and/or acquiesced in 8% management fees being
charged by the Purchaser under the Management Agreement, whereas Plaintiff
alleges that the "industry standard" for such fees is 4%, thereby resulting in
an "overcharge" to the Partnership estimated by Plaintiff at $1.8 million per
annum, beginning in 1994, and (iv) as a consequence of the allegedly improper
composition of the FRI Board, the Purchaser and the General Partner breached
the Partnership Agreement and failed to discharge fiduciary duties.  Upon the
acceptance for payment by the Purchaser of the Units tendered pursuant to the
Offer, each tendering Unitholder will transfer to the Purchaser all of its
right, title, and interest in and to the tendered Units.  Accordingly,
tendering Unitholders will not participate in any future benefit that might
accrue to the holder of the tendered Units as a result of any recovery by the
Partnership in connection with any derivative action brought by Plaintiff or
any other Unitholder on behalf of the Partnership, whether in connection with
the Pending Litigation or otherwise.  In addition, upon the acceptance for
payment by the Purchaser of Units tendered pursuant to the Offer, each
tendering Unitholder will be deemed to have released the Purchaser, the General
Partner, and their respective stockholders, affiliates, directors, officers,
employees, agents, and representatives from any claim, cause of action, or
liability based upon the allegations made in the Pending Litigation, as
described above, or the facts underlying such allegations.  The release set
forth in the Letter of Transmittal previously delivered with the Offer to
Purchase is hereby deemed to be modified so as to be limited to the subject
matter of the Pending Litigation as set forth in the immediately preceding
sentence.  See "The Offer -- Release of Claims" in the Offer to Purchase.  The
foregoing release does not include a release of any claims that tendering
Unitholders might have under federal securities laws.  The Purchaser, based on
the advice and opinion of its counsel, believes that the release deemed to be
given by tendering Unitholders upon acceptance for payment by the Purchaser of
Units tendered pursuant to the Offer will be enforceable.

CERTAIN CONDITIONS TO THE OFFER

         In "The Offer -- Certain Conditions to the Offer" in the Offer to
Purchase, the Purchaser reserved the right, among other things, to terminate
the Offer if in the "sole discretion" of the Purchaser certain events occurred.
The Purchaser hereby amends the Offer to modify that standard to the
Purchaser's "reasonable discretion."

CERTAIN OTHER MATTERS RELEVANT TO THE OFFER

         The Purchaser has filed with the Commission a Tender Offer Statement
on Schedule 14D-1 and has filed with the Commission a Transaction Statement on
Schedule 13E-3, together with exhibits in each case, pursuant to Rules 14d-3
and 13e-3, respectively, under the Exchange Act, furnishing certain additional
information with respect to the Offer. Such Statements and amendments thereto,
including exhibits, may be examined and copies may be obtained at the places
and in a manner set forth under "Certain Information Concerning the
Partnership" in the Offer to Purchase (except they will not be available in the
regional offices of the Commission).


                                        FORUM GROUP, INC.
November 1, 1995





                                      -3-
<PAGE>   5
                                                                         ANNEX A


                    CERTAIN INFORMATION WITH RESPECT TO THE
                 DIRECTORS AND OFFICERS OF THE GENERAL PARTNER

         Certain information with respect to the directors and officers of the
General Partner is set forth below.  Each of the directors and officers of the
General Partner is a United States citizen.

DIRECTORS

         James C. Leslie has been Executive Vice President -- Financial 
Services of The Staubach Company, a commercial real estate services company,
since 1992.  Theretofore, Mr. Leslie served in other capacities with The
Staubach Company. The business address of The Staubach Company, which is also
Mr. Leslie's business address, is 6750 LBJ Freeway, Suite 1100, Dallas, Texas 
75240.
        
         Donald J. McNamara has been the Chairman and Co-Chief Executive
Officer of The Hampstead Group, L.L.C. ("Hampstead"), a privately held
investment company, since 1992.  Theretofore, Mr. McNamara served as President,
Chairman, and Chief Executive Officer of Hampstead.  The principal business
address of Hampstead, which is also Mr. McNamara's business address, is 4200
Texas Commerce Tower West, 2001 Ross Avenue, Dallas, Texas  75201.  See also
Annex D to the Offer to Purchase.

         Mr. McNamara has been the President and Chairman of the Board of the
General Partner since 1993.

         John F. Sexton has been Chairman of Evans - McKinsey & Company, a 
financial consulting company, since 1993.  Theretofore, Mr.  Sexton was Senior
Vice President of Finance of Lomas Financial Corporation, a financial services
company.  The business address of Evans-McKinsey & Company, which is also Mr.
Sexton's business address, is 8214 Westchester, Suite 500, Dallas, Texas 
75225.
        
OFFICERS

         Richard A. Huber is the Secretary of the General Partner and is the
only officer of the General Partner other than Mr. McNamara.  Mr. Huber has
been Vice President - Operations Finance of the Purchaser since 1993.
Theretofore, Mr. Huber was Director-Operations Accounting and Analysis, Senior
Living Services Division of Marriott Corporation, a company which owns and
operates senior living facilities.  The business address of the Purchaser,
which is also Mr. Huber's business address, is 11320 Random Hills Road, Suite
400, Fairfax, Virginia  22030.  See also Annex C to the Offer to Purchase.





                                      A-1
<PAGE>   6
Facsimile copies of the Letter of Transmittal will be accepted.  The Letter of
Transmittal and Depositary Receipts for Units and any other required documents
should be sent by each Unitholder or his broker, dealer, commercial bank, trust
company, or nominee to the Depositary at the address set forth below:



                        The Depositary for the Offer is:

                    AMERICAN STOCK TRANSFER & TRUST COMPANY

                           By Mail, Hand or Overnight
                                    Courier:


                    American Stock Transfer & Trust Company
                           40 Wall Street, 46th Floor
                           New York, New York  10005


                           By Facsimile Transmission:
                                 (718) 234-5001


                 For Information or Confirmation by Telephone:
                                 (718) 921-8200



Any questions or requests for assistance or additional copies of this
Supplement to Offer to Purchase, the Offer to Purchase, the previous Supplement
to Offer to Purchase, the Letter of Transmittal, and the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone numbers and
location listed below.  You may also contact your broker, dealer, commercial
bank, or trust company for assistance concerning this Offer.

                    The Information Agent for the Offer is:

                            MACKENZIE PARTNERS, INC.

                                156 Fifth Avenue
                           New York, New York  10010
                         (212) 929-5500 (call collect)
                                       or
                         Call Toll Free (800) 322-2885


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