SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934
SIERRA PACIFIC DEVELOPMENT FUND,
A California Limited Partnership
(Name of the Issuer)
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JOHN N. GALARDI
(Name of Person Filing Statement)
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LIMITED PARTNERSHIP UNITS
(Title of Class of Securities)
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N/A
(CUSIP Number of Class of Securities)
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HOWARD F. HART
HUGHES HUBBARD & REED LLP
350 SOUTH GRAND AVENUE, 36TH FLOOR
LOS ANGELES, CALIFORNIA 90071
(213) 613-2800
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Person Filing Statement)
October 17, 1997
(Date Information Statement First Published, Sent or Given to Security Holders)
This statement is filed in connection with (check the appropriate box):
a. / / The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under
the Securities Exchange Act of 1934.
b. / / The filing of a registration statement under the Securities Act of
1933
c. /X/ A tender offer.
d. / / None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: / /
<PAGE>
<TABLE>
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Calculation of Filing Fee
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Transaction Valuation* Amount of Filing Fee
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<S> <C>
$550,000 $110.00
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</TABLE>
* Determined pursuant to Rule 0-11(b)(1). Assumes the purchase of 20,000 Units
at $27.50 per Unit.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Not applicable
Form or Registration No: Not applicable
Filing Party: Not applicable
Date Filed: Not applicable
<PAGE>
This Rule 13e-3 Transaction Statement (this "Transaction Statement") of
John N. Galardi ("Galardi") relates to an offer by Galardi to purchase any and
all of the outstanding limited partnership units (the "Units") of Sierra Pacific
Development Fund, a California limited partnership (the "Company"), upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
October 17, 1997 (the "Offer to Purchase"), and the related Letter of
Transmittal (which together constitute the "Offer"). This Transaction Statement
is intended to satisfy the reporting requirements of Section 13(e) of the
Securities Exchange Act of 1934, as amended (the "Act"). The information in the
Offer to Purchase and the Letter of Transmittal, copies of which are attached
hereto as Exhibits (d)(1) and (d)(2), respectively, including all annexes,
appendices and exhibits thereto, is hereby expressly incorporated herein by
reference and the responses to each item in this Transaction Statement are
qualified in their entirety by the information contained in the Offer to
Purchase and the Letter of Transmittal.
The cross-reference sheet below is being supplied pursuant to General
Instruction F to Schedule 13e-3 and shows the location in the Schedule 14D-1
Tender Offer Statement (the "Tender Offer Statement") filed by Galardi with the
Securities and Exchange Commission contemporaneously herewith of the information
required to be included in response to the items of this Transaction Statement.
The information in the Tender Offer Statement, a copy of which is attached
hereto as Exhibit (d)(3), including all annexes, appendices and exhibits
thereto, is hereby expressly incorporated herein by reference and the responses
to each item in this Transaction Statement are qualified in their entirety by
the information contained in the Tender Offer Statement.
<PAGE>
<TABLE>
<CAPTION>
CROSS REFERENCE SHEET TO SCHEDULE 14D-1 TENDER OFFER STATEMENT
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ITEM IN SCHEDULE 13E-3 LOCATION IN TENDER OFFER STATEMENT
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<S> <C>
Item 1(a) - (c) Item 1 of the Tender Offer Statement
Item 1(d) Not included in the Tender Offer Statement
Item 1(e)*
Item 1(f) Item 3 of the Tender Offer Statement and
Item 6 of the Tender Offer Statement
Item 2(a) - (g) Item 2 of the Tender Offer Statement
Item 3(a) - (b) Item 3 of the Tender Offer Statement and
Item 6 of the Tender Offer Statement
Item 4(a) Item 1 of the Tender Offer Statement
Item 4(b)*
Item 5(a) - (g) Item 5 of the Tender Offer Statement
Item 6(a) Item 4 of the Tender Offer Statement
Item 6(b) Item 8 of the Tender Offer Statement
Item 6(c)*
Item 6(d)*
Item 7(a) Item 5 of the Tender Offer Statement
Item 7(b)*
Item 7(c) Not included in the Tender Offer Statement
Item 8(a) - (b) Not included in the Tender Offer Statement
Item 8(c) - (d) Item 10(b) of the Tender Offer Statement
Item 8(e) Not included in the Tender Offer Statement
Item 8(f)*
<PAGE>
Item 9(a) Item 10(b) of the Tender Offer Statement
Item 9(b) - (c)*
Item 10(a) Item 6 of the Tender Offer Statement
Item 10(b) Items 3 and 6 of the Tender Offer Statement
Item 11 Item 3 of the Tender Offer Statement
Item 12(a) - (b) Item 5 of the Tender Offer Statement
Item 13(a) Item 10(b) of the Tender Offer Statement
Item 13(b) Not included in the Tender Offer Statement
Item 13(c)*
Item 14(a) Not included in the Tender Offer Statement
Item 14(b)*
Item 15(a) - (b) Item 8 of the Tender Offer Statement
Item 16*
Item 17(a) - (c)*
Item 17(d) Item 11 of the Tender Offer Statement
Item 17(e) - (f)*
</TABLE>
* The Item is inapplicable or the answer thereto is in the negative.
<PAGE>
RULE 13E-3 TRANSACTION STATEMENT
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) The name of the issuer is Sierra Pacific Development Fund, a California
limited partnership (the "Company"), and the address of its principal executive
offices is 5850 San Felipe, Suite 500, Houston, Texas 77057.
(b) This Schedule relates to the offer by John N. Galardi (the "Bidder") to
purchase any and all of the Company's outstanding Limited Partnership Units (the
"Units"), at $27.50 per Unit, net to the seller in cash, all upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October 17,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer"), copies of which are attached hereto as
Exhibits (d)(1) and (d)(2), respectively. As of September 30, 1997, the Company
had issued and outstanding 29,354 Units and there were approximately 2,177
holders of record of the Units.
(c) The information set forth on the cover page and under "Introduction"
and "Special Factors - Price Range of Shares; Distributions; Trading Volume" in
Section 9 of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth under "Special Factors - Purpose of the
Offer" in Section 1 of the Offer to Purchase is incorporated herein by
reference.
(e) Not applicable.
(f) The information set forth under "Special Factors - Past Contacts,
Transactions or Negotiations; Transactions and Agreements Concerning the Units"
and "Special Factors - Interest in Units" in Sections 12 and 13, respectively,
of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (f) The information set forth under "Special Factors - Certain
Information Regarding the Offeror" in Section 10 of the Offer to Purchase is
incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a) - (b) The information set forth under "Special Factors - Past
Contracts, Transactions or Negotiations; Transactions and Agreements Concerning
the Units" in Section 12 of the Offer to Purchase is incorporated herein by
reference
<PAGE>
ITEM 4. TERMS OF THE TRANSACTION
(a) The information set forth on the cover page and under "Introduction"
and "Special Factors - Certain Conditions of the Offer" in Section 8 of the
Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a) - (g) The information set forth under "Special Factors - Purpose of the
Offer" in Section 1 of the Offer to Purchase is incorporated herein by
reference.
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth under "Special Factors - Source and Amount of
Funds" in Section 11 of the Offer to Purchase is incorporated herein by
reference.
(b) The information set forth under "Special Factors - Persons Retained;
Fees and Expenses" in Section 15 of the Offer to Purchase is incorporated herein
by reference.
(c) Not applicable.
(d) Not applicable.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) The information set forth under "Special Factors - Purpose of the
Offer" in Section 1 of the Offer to Purchase is incorporated herein by
reference.
(b) Not applicable.
(c) The information set forth under "Special Factors - Purpose of the
Offer" in Section 1 of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth under "Special Factors - Purpose of the
Offer" and "Special Factors - Certain Federal Income Tax Consequences" in
Sections 1 and 2, respectively, of the Offer to Purchase is incorporated herein
by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION
(a) - (e) The information set forth under "Special Factors - Fairness of
the Transaction; Reports, Opinions, Appraisals and Certain Negotiations; No
Approvals Required; No Appraisal Rights" and "Special Factors - Price Range of
Units; Distributions; Trading Volume" in Sections 3 and 9, respectively, of the
Offer to Purchase is incorporated herein by reference.
(f) Not applicable.
<PAGE>
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS
(a) The information set forth under "Special Factors - Fairness of the
Transaction; Reports, Opinions, Appraisals and Certain Negotiations; No
Approvals Required; No Appraisal Rights" in Section 3 of the Offer to Purchase
is incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER
(a) - (b) The information set forth under "Special Factors - Interest in
Units" in Section 13 of the Offer to Purchase is incorporated herein by
reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.
The information set forth under "Special Factors - Past Contacts,
Transactions or Negotiations; Transactions and Agreements Concerning the Units"
in Section 12 of the Offer to Purchase is incorporated herein by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION
(a) - (b) The information set forth under "Introduction" in the Offer to
Purchase is incorporated herein by reference.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION
(a) - (b) The information set forth under "Special Factors - Fairness of
the Transaction; Reports, Opinions, Appraisals and Certain Negotiations; No
Approvals Required; No Appraisal Rights" in Section 3 of the Offer to Purchase
is incorporated herein by reference
(c) Not applicable.
ITEM 14. FINANCIAL INFORMATION
(a) The information set forth in the Partnership's Annual Report on Form
10-K for the year ended December 31, 1996; the Partnership's Annual Report on
Form 10-K for the year ended December 31, 1995; and the Partnership's Quarterly
reports on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997 is
incorporated herein by reference.
(b) Not applicable.
<PAGE>
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED
(a) - (b) The information set forth under "Introduction" and "Special
Factors - Persons Retained; Fees and Expenses" in Section 15 of the Offer to
Purchase is incorporated herein by reference.
ITEM 16. ADDITIONAL INFORMATION.
Not applicable.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d)(1) Form of Offer to Purchase, dated October 17, 1997.
(d)(2) Form of Letter of Transmittal with Substitute Form W-9.
(d)(3) Instructions for the Requester of Form W-9.
(d)(4) Tender Offer Statement on Schedule 14D-1, dated October 17, 1997.
(e) Not applicable.
(f) Not applicable.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
JOHN N. GALARDI
By: /s/ JOHN N. GALARDI
---------------------------------
Name: John N. Galardi
Dated: October 17, 1997
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
(d)(1) Form of Offer to Purchase, dated October 17, 1997.
(d)(2) Form of Letter of Transmittal with Substitute Form W-9.
(d)(3) Instructions for the Requester of Form W-9.
(d)(4) Tender Offer Statement on Schedule 14D-1, dated October 17, 1997.
</TABLE>
SIERRA PACIFIC DEVELOPMENT FUND
A CALIFORNIA LIMITED PARTNERSHIP
OFFER TO PURCHASE FOR CASH
ANY AND ALL LIMITED PARTNERSHIP UNITS
AT $27.50 NET PER UNIT
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
PACIFIC TIME, ON MONDAY, NOVEMBER 17, 1997, UNLESS THE OFFER IS EXTENDED.
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John N. Galardi (the "Offeror"), is offering to purchase any and all the
Limited Partnership Units ("Units") of Sierra Pacific Development Fund, a
California Limited Partnership (the "Partnership"), at $27.50 per Unit, net to
the seller in cash, on the terms and subject to the conditions set forth herein
and in the related Letter of Transmittal (which together constitute the
"Offer").
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THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 8.
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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.
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NEITHER THE PARTNERSHIP NOR ITS GENERAL PARTNER OR ANY OF THE GENERAL PARTNER'S
DIRECTORS OR EXECUTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY LIMITED
PARTNER AS TO WHETHER TO TENDER ANY UNITS. EACH LIMITED PARTNER MUST MAKE
HIS OR HER OWN DECISION AS TO WHETHER TO TENDER UNITS AND, IF SO, HOW MANY
UNITS TO TENDER. NO DIRECTOR OR EXECUTIVE OFFICER OF THE GENERAL
PARTNER OR ANY OF ITS AFFILIATES INTENDS TO TENDER SHARES
PURSUANT TO THE OFFER.
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IMPORTANT
Any Limited Partner desiring to tender all or any portion of his or her
Units should complete and sign the Letter of Transmittal or a photocopy thereof
in accordance with the instructions in the Letter of Transmittal, mail or
deliver it and any other required documents to the Offeror at the Partnership.
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NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
THE PARTNERSHIP AS TO WHETHER LIMITED PARTNERS SHOULD TENDER UNITS PURSUANT TO
THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH
INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE PARTNERSHIP.
October 17, 1997
<PAGE>
TO THE HOLDERS OF LIMITED PARTNERSHIP UNITS OF
SIERRA PACIFIC DEVELOPMENT FUND,
A CALIFORNIA LIMITED PARTNERSHIP:
INTRODUCTION
John N. Galardi (the "Offeror") is offering to purchase any and all of the
Limited Partnership Units ("Units") of Sierra Pacific Development Fund, a
California Limited Partnership (the "Partnership"), at $27.50 per Unit (the
"Purchase Price"), net to the seller in cash, on the terms and subject to the
conditions set forth herein and in the related Letter of Transmittal (which
together constitute the "Offer"). Galardi is the owner of 50% of the outstanding
capital and voting stock of CGS Real Estate Company, Inc., of which S-P
Properties, Inc., the General Partner of the Partnership, is a wholly-owned
subsidiary. The address of the principal executive offices of the Partnership is
5850 San Felipe, Suite 500, Houston, Texas 77057, and its telephone number is
(713) 706-2671.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF UNITS BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 8.
Tendering Limited Partners will not be obligated to pay brokerage
commissions, solicitation fees, transfer fees or transfer taxes on the purchase
of Units by the Offeror. HOWEVER, ANY TENDERING LIMITED PARTNER WHO FAILS TO
COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO A REQUIRED FEDERAL INCOME TAX BACKUP WITHHOLDING
OF 31% OF THE GROSS PAYMENTS PAYABLE TO SUCH LIMITED PARTNER PURSUANT TO THE
OFFER.
NEITHER THE PARTNERSHIP NOR ITS GENERAL PARTNER NOR ANY OF THE GENERAL
PARTNER'S DIRECTORS OR EXECUTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY
LIMITED PARTNER AS TO WHETHER TO TENDER ANY UNITS. EACH LIMITED PARTNER MUST
MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER UNITS AND, IF SO, HOW MANY
UNITS TO TENDER. THE OFFEROR HAS BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE
OFFICER OF THE GENERAL PARTNER OR ANY OF ITS AFFILIATES INTENDS TO TENDER UNITS
PURSUANT TO THE OFFER.
As of September 30, 1997, the Partnership had issued and outstanding 29,354
Units. As of September 30, 1997, there were approximately 2,177 Limited
Partners. The Units are not currently registered for trading on any exchange.
<PAGE>
SPECIAL FACTORS
1. PURPOSE OF THE OFFER
The Offeror is making the Offer because it believes that the purchase of
the Units at this time pursuant to the Offer is economically attractive to the
Offeror, and at the same time Limited Partners who require or desire liquidity
are being afforded the opportunity to receive cash for their Units. Each Limited
Partner has the opportunity to make an individual decision on whether or not to
tender Units pursuant to the Offer.
Following the consummation of the Offer, except as discussed below, it is
expected that the business and operations of the Partnership will be continued
by the Partnership substantially as they are currently being conducted. The
Partnership has informed the Offeror that, except as discussed below, it has no
plans or proposals which relate to or would result in: (a) the acquisition by
any person of additional securities of the Partnership or the disposition of
securities of the Partnership; (b) an extraordinary transaction, such as a
merger, reorganization or liquidation, involving the Partnership; (c) a sale or
transfer of a material amount of assets of the Partnership; (d) any change in
the present management of the Partnership; (e) any material change in the
present distribution policy or capitalization or indebtedness of the
Partnership; or (f) any other material change in the Partnership's structure or
business. Except as discussed below, the Offeror has no plans or proposals which
relate to or would result in: (a) the acquisition by any person of additional
securities of the Partnership or the disposition of securities of the
Partnership; (b) an extraordinary transaction, such as a merger, reorganization
or liquidation, involving the Partnership; (c) a sale or transfer of a material
amount of assets of the Partnership; (d) any change in the present management of
the Partnership; (e) any material change in the present distribution policy or
capitalization or indebtedness of the Partnership; or (f) any other material
change in the Partnership's structure or business. An affiliate of the Offeror
(and the Partnership) is considering an initial public offering of the
affiliate's securities, and the affiliate may wish to acquire all or part of the
Partnership and/or all or part of its assets, subsequent to the affiliate's
initial public offering. However, there can be no assurance that any such
initial public offer will occur and there can be no assurance that such
affiliate will attempt to acquire any portion of the Partnership or its assets.
Additionally, the Partnership is considering other possible sales or
dispositions of the Partnership's properties.
The Offeror's purchase of Units pursuant to the Offer will reduce the
number of Limited Partners and the number of Units that might otherwise trade,
and depending on the number of Units so purchased, could adversely affect the
liquidity and market value of the remaining Units held by the public, although
there is currently no established trading market for the Units.
The Units are currently registered under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Registration of the Units under the
Exchange Act may be terminated upon application of the Partnership to the
Securities and Exchange Commission (the "Commission") if the Units are held by
fewer than 300 Limited Partners. It is possible that the number of Limited
Partners will be reduced below 300 by reason of the Offer and termination of
registration of the Units under the Exchange Act would substantially reduce the
information required to be furnished by the Partnership to holders of the Units
and would make certain provisions of the Exchange Act, such as the requirements
<PAGE>
of Rule 13e-3 thereunder with respect to "going private" transactions, no longer
applicable in respect of the Partnership.
The Partnership has paid no dividends with respect to the Units since
January 1, 1992 and there are currently no plans to pay any dividends with
respect to the Units. Neither the Partnership nor the Offeror has made any
public offering of Units since January 1, 1994 nor has either the Partnership or
the Offeror purchased any Units since January 1, 1995.
Following the expiration of the Offer, the Offeror may, in its sole
discretion, determine to purchase any remaining Units through privately
negotiated transactions, open market purchases or otherwise, on such terms and
at such prices as the Offeror may determine from time to time, the terms of
which purchases or offers could differ from those of the Offer, except that the
Offeror will not make any such purchases of Units until the expiration of at
least ten business days after the termination of the Offer. Any possible future
purchases of Units by the Offeror will depend on many factors.
Purchases of Units by the Offeror will, in addition to the effects
described above, have the effect of increasing the Offeror's interest in the
Partnership's net book value and net earnings.
2. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The sale of Units by a Limited Partner pursuant to the Offer will be
treated for federal income tax purposes as a taxable sale of such tendered
Units. However, the specific federal income tax consequences to a Limited
Partner resulting from a sale of Units will depend on a number of factors
related to such Limited Partner's individual tax situation, including such
Limited Partner's adjusted basis in his or her Units, whether such Limited
Partner is subject to the limitation on utilization of "passive activity
losses," whether such Limited Partner has suspended "passive activity losses"
attributable to his or her ownership of Units, whether such Limited Partner
disposes of all of his or her Units pursuant to the Offer (which would generally
allow such Limited Partner to utilize in the year of sale any suspended "passive
activity losses" attributable to his or her ownership of Units) and whether such
Limited Partner would be able to utilize currently any capital losses resulting
from the sale of such Units pursuant to the Offer. The Company expects that a
Limited Partner who acquired his or her Units in the original offering and who
sells Units pursuant to the Offer will generally recognize an ordinary loss of
approximately $13 per Unit attributable to Partnership operations for 1997
through the estimated date of sale and a capital loss attributable to the sale
of his or her Units equal to the sum of (i) approximately $27 per Unit and (ii)
such Limited Partner's distributive share per Unit of syndication expenses of
the Partnership (generally costs incurred by Partnership's in connection with
the sale of Units in the original offering). Although the Partnership was unable
to claim syndication expenses as a deductible expense for federal income tax
purposes, each Limited Partner who acquired his or her Units in the original
offering continues to have his or her share of such expenses reflected in the
adjusted basis of his or her Units. The federal income tax impact could be
significantly different, however, for a Limited Partner who acquired his or her
Units after the original offering. To the extent that a Limited Partner who is
subject to the "passive activity loss" restrictions has not previously utilized
<PAGE>
such losses to offset passive activity income from other sources (and sells all
of his or her Units), such suspended losses will generally become available to
such Limited Partner in the year of sale. Any capital loss recognized by a
Limited Partner from the sale of Units may be applied to offset capital gains
from other sources. In addition, capital losses in excess of capital gains may
be used to offset up to $3,000 of ordinary income in any taxable year ($1,500
for a married individual filing a separate return). Any capital losses that are
not used currently may be carried forward and used in subsequent years (subject
to the same limitations).
THE FOREGOING TAX DISCUSSION IS INTENDED FOR GENERAL INFORMATIONAL PURPOSES
ONLY. THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY DEPENDING
UPON, AMONG OTHER THINGS, THE PARTICULAR TAX CIRCUMSTANCES OF THE TENDERING
LIMITED PARTNER. NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR
FOREIGN TAX CONSEQUENCES OF A SALE OF UNITS PURSUANT TO THE OFFER. EACH LIMITED
PARTNER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISER TO DETERMINE THE
PARTICULAR FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF A SALE OF UNITS
PURSUANT TO THE OFFER.
3. FAIRNESS OF THE TRANSACTION; REPORTS, OPINIONS, APPRAISALS AND CERTAIN
NEGOTIATIONS; NO APPROVALS REQUIRED; NO APPRAISAL RIGHTS
The Offeror reasonably believes that the terms of the Offer are fair to
unaffiliated Limited Partners for the following reasons: (i) the Purchase Price
reflects an approximately 10% premium over the most recently reported third
party trading price of the Units and the trading price trend of the Units,<F1>
and (ii) the Partnership is not currently making any distributions and the Offer
provides a mechanism whereby Limited Partners who desire liquidity are being
afforded the opportunity to receive cash for their Units. Although the Purchase
Price is less than $55.97, the per Unit partners' equity stated in the
Partnership's 10-Q for the quarter ended June 30, 1997, the Offeror believes
that the Purchase Price accurately reflects a premium over the actual going
concern value and the liquidation value of the Partnership. However, since
January 1, 1995, the Offeror has not sought or obtained any report, appraisal or
opinion with respect to the value of the Units and neither the Partnership nor
is the Offeror aware of any such report, appraisal or opinion that may have
prepared by any other person. Additionally, neither the Partnership nor is the
Offeror aware of any other firm offers made by any person unaffiliated with the
Partnership during the preceding eighteen months (i) for the merger or
___________________
<F1>Determined on the basis of the trades reported in THE PARTNERSHIP SPECTRUM,
as discussed in more detail in Section 9 below.
<PAGE>
consolidation of the Partnership with such person, (ii) for the sale or other
transfer of all or any substantial part of the assets of the Partnership or
(iii) for Units which would enable the holder of the Units to exercise control
of the Partnership.
The Offeror understands that an offer was made by KM Investments, LLC. on
September 23, 1997 to purchase up to 4.9% of the outstanding Units at a price of
$21.00 per Unit, reduced, however, by the amount of any transfer fees imposed in
connection with the transfer of Units. The Offeror, as part of the Offer, will
be responsible for the payment of any registration and transfer fees or taxes.
The Offeror is not aware of any license or regulatory permit that appears
to be material to the Partnership's business that might be adversely affected by
its acquisition of Units as contemplated in the Offer or of any approval or
other action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
Offeror's acquisition or ownership of Units pursuant to the Offer. Should any
such approval or other action be required, the Offeror currently contemplates
that it will seek such approval or other action.
There is no vote of Limited Partners required in connection with the Offer
and there are no appraisal rights available to Limited Partners in connection
with the Offer. The General Partner of the Partnership has informed the Offeror
that the Partnership has not retained, and does not intend to retain, an
unaffiliated representative to act solely on behalf of unaffiliated Limited
Partners or to prepare a report or an opinion with respect to the fairness of
the Offer.
4. NUMBER OF UNITS; EXPIRATION DATE; EXTENSION OF THE OFFER
On the terms and subject to the conditions described herein and in the
Letter of Transmittal, the Offeror will purchase any and all Units that are
validly tendered on or prior to the Expiration Date (and not properly withdrawn
in accordance with Section 6) at the Purchase Price. The later of 5:00 p.m.,
Pacific time, on Monday, November 17, 1997, or the latest time and date to which
the Offer is extended, is referred to herein as the "Expiration Date." The Offer
is not conditioned on any minimum number of Shares being tendered.
If (i) the Offeror increases or decreases the price to be paid for Units or
decreases the number of Units being sought and (ii) the Offer is scheduled to
expire at any time earlier than the expiration of a period ending on the tenth
business day from, and including, the date that notice of such increase or
decrease is first published, sent or given in the manner described in Section
14, the Offer will be extended until the expiration of ten business days from
the date of publication of such notice.
The Offeror also expressly reserves the right, in its sole discretion, at
any time or from time to time, to extend the period of time during which the
Offer is open by giving oral or written notice of such extension to the
Partnership and making a public announcement thereof. See Section 14. There can
be no assurance, however, that the Offeror will exercise its right to extend the
Offer.
<PAGE>
For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time.
Copies of this Offer to Purchase and the Letter of Transmittal are being
mailed to Limited Partners.
5. PROCEDURE FOR TENDERING UNITS.
PROPER TENDER OF UNITS. To tender Units validly pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal or photocopy thereof,
together with any required signature guarantees and any other documents required
by the Letter of Transmittal, must be received by the Partnership at the address
set forth in the "Introduction" of this Offer to Purchase.
FEDERAL BACKUP WITHHOLDING. TO AVOID FEDERAL INCOME TAX BACKUP WITHHOLDING
EQUAL TO 31% OF THE GROSS PAYMENTS MADE PURSUANT TO THE OFFER, EACH TENDERING
LIMITED PARTNER MUST NOTIFY THE PARTNERSHIP OF SUCH LIMITED PARTNER'S CORRECT
TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY PROPERLY
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL.
FOREIGN LIMITED PARTNERS MAY BE REQUIRED TO SUBMIT A PROPERLY COMPLETED FORM
W-8, CERTIFYING NON-UNITED STATES STATUS, IN ORDER TO AVOID BACKUP WITHHOLDING.
IN ADDITION, FOREIGN STOCKHOLDERS MAY BE SUBJECT TO 30% (OR LOWER TREATY RATE)
WITHHOLDING ON GROSS PAYMENTS RECEIVED PURSUANT TO THE OFFER. FOR A DISCUSSION
OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES TO TENDERING LIMITED PARTNERS, SEE
SECTION 2. EACH LIMITED PARTNER IS URGED TO CONSULT WITH HIS OR HER OWN TAX
ADVISER.
DETERMINATIONS OF VALIDITY. All questions as to the Purchase Price, the
form of documents and the validity, eligibility (including time of receipt) and
acceptance for payment of any tender of Units will be determined by the Offeror,
in its sole discretion, and its determination shall be final and binding. The
Offeror reserves the absolute right to reject any or all tenders of Units that
it determines are not in proper form or the acceptance for payment of or payment
for Units that may, in the opinion of the Offeror's counsel, be unlawful. The
Offeror also reserves the absolute right to waive any defect or irregularity in
any tender of Units. Neither the Offeror, the Partnership, or any other person
will be under any duty to give notice of any defect or irregularity in tenders,
nor shall any of them incur any liability for failure to give any such notice.
RULE 14E-4. It is a violation of Rule 14e-4 promulgated under the Exchange
Act for a person to tender Units for his or her own account unless the person so
tendering (i) has a net long position equal to or greater than the amount of
Units tendered and (ii) will cause such Units to be delivered in accordance with
the terms of the Offer. The tender of Units pursuant to the procedures described
above will constitute the tendering Limited Partner's representation and
warranty that (i) such Limited Partner has a net long position in the Units
being tendered within the meaning of Rule 14e-4 promulgated under the Exchange
Act, and (ii) the tender of such Units complies with Rule 14e-4. The Offeror's
acceptance for payment of Units tendered pursuant to the Offer will constitute a
<PAGE>
binding agreement between the tendering Limited Partner and the Offeror on the
terms and subject to the conditions of the Offer.
6. WITHDRAWAL RIGHTS
Tenders of Units made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after November 17, 1997, unless theretofore accepted
for payment as provided in this Offer to Purchase. If the Offeror extends the
period of time during which the Offer is open, is delayed in accepting for
payment or paying for Units or is unable to accept for payment or pay for Units
pursuant to the Offer for any reason, then, without prejudice to the Offeror's
rights under the Offer, the Partnership may, on behalf of the Offeror, retain
all Units tendered, and such Units may not be withdrawn except as otherwise
provided in this Section 6, subject to Rule 14e-1(c) under the Exchange Act,
which provides that the person making the tender offer shall either pay the
consideration offered, or return the tendered securities promptly after the
termination or withdrawal of the tender offer.
To be effective, a written or facsimile transmission notice of withdrawal
must be timely received by the Partnership at its address set forth in this
Offer to Purchase and must specify the name of the person who tendered the Units
to be withdrawn and the number of Units to be withdrawn. Withdrawals may not be
rescinded, and Units withdrawn will thereafter be deemed not validly tendered
for purposes of the Offer. However, withdrawn Units may be retendered by again
following the procedures described in Section 5 at any time prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Offeror, in its sole
discretion, which determination shall be final and binding. Neither of the
Offeror, the Partnership, nor any other person will be under any duty to give
notification of any defect or irregularity in any notice of withdrawal or incur
any liability for failure to give any such notification.
7. PAYMENT OF PURCHASE PRICE.
On 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 Offeror will accept for payment, and will pay for, Units validly
tendered and not withdrawn in accordance with the Offer, as promptly as
practicable following the Expiration Date. In all cases, payment for Units
purchased pursuant to the Offer will be made only after timely receipt by the
Partnership of a properly completed and duly executed Letter of Transmittal and
any other documents required by the Letter of Transmittal.
For purposes of the Offer, the Offeror shall be deemed to have accepted for
payment (and thereby purchased) tendered Units when, as and if the Offeror gives
oral or written notice to the Partnership of the Offeror's acceptance for
payment of such Units pursuant to the Offer. On the terms and subject to the
conditions of the Offer, payment for Units purchased pursuant to the Offer will
<PAGE>
in all cases be made by deposit of the Purchase Price with the Partnership,
which will act as agent for the tendering Limited Partners for the purpose of
receiving payment from the Offeror and transmitting payment to tendering Limited
Partners. Under no circumstances will interest be paid on the Purchase Price by
reason of any delay in making such payment.
If any tendered Units are not accepted for payment pursuant to the terms
and conditions of the Offer, the Letter of Transmittal with respect to such
Units not purchased will be destroyed by the Partnership. If, for any reason
whatsoever, acceptance for payment of, or payment for, any Units tendered
pursuant to the Offer is delayed or the Offeror is unable to accept for payment,
purchase or pay for Units tendered pursuant to the Offer, then, without
prejudice to the Offeror's rights under the Offer (but subject to compliance
with Rule 14e-1(c) under the Exchange Act), the Partnership may, nevertheless,
on behalf of the Offeror, retain tendered Units, subject to any limitations of
applicable law, and such Units may not be withdrawn, except to the extent that
the tendering Limited Partners are entitled to withdrawal rights as described in
the Offer.
If, prior to the Expiration Date, the Offeror shall increase the
consideration offered to Limited Partners 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.
The Offeror reserves the right to transfer or assign, at any time and from
time to time, in whole or in part, to one or more affiliates, the right to
purchase Units tendered pursuant to the Offer, but no such transfer or
assignment will relieve the Offeror of its obligations under the Offer or
prejudice the rights of tendering Limited Partners to receive payments for Units
validly tendered and accepted for payment pursuant to the Offer.
8. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, the Offeror will not be
required to accept for payment or pay for any Units tendered, and may terminate
or amend the Offer or may postpone (subject to the requirements of the Exchange
Act for prompt payment for or return of Units) the acceptance for payment of or
payment for Units tendered, if at any time on or after October 17, 1997, and
before acceptance for payment of or payment for any such Units, any of the
following events shall have occurred (or shall have been determined by the
Offeror in its sole judgment to have occurred) regardless of the circumstances
giving rise thereto (including any action or omission to act by the Offeror):
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, or before any court, authority, agency or tribunal
that (i) challenges or seeks to challenge the acquisition of Units pursuant
to the Offer or otherwise in any manner relates to or affects the Offer or
(ii) in the sole judgment of the Offeror, could materially and adversely
affect the business, condition (financial or other), income, operations or
<PAGE>
prospects of the Partnership, or otherwise materially impair in any way the
contemplated future conduct of the business of the Partnership or
materially impair the contemplated benefits of the Offer to the Offeror;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, withdrawn or abrogated or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought, promulgated,
enacted, entered, amended, enforced or deemed to be applicable to the Offer
or the Partnership, by any legislative body, court, authority, agency or
tribunal which, in the Offeror's sole judgment, would or might directly or
indirectly (i) make the acceptance for payment of, or payment for, some or
all of the Units illegal or otherwise restrict or prohibit consummation of
the Offer, (ii) delay or restrict the ability of the Offeror, or render the
Offeror unable, to accept for payment or pay for some or all of the Units,
(iii) imposes or seeks to impose limitations on the ability of the Offeror
to acquire or hold or to exercise full rights of ownership of the Units,
(iv) materially impair the contemplated benefits of the Offer to the
Offeror or (v) materially affect the business, condition (financial or
other), income, operations or prospects of the Partnership, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Partnership;
(c) it shall have been publicly disclosed or the Offeror shall have
learned that any person or "group" (within the meaning of Section 13(d)(3)
of the Exchange Act) has acquired or proposes to acquire beneficial
ownership of more than 5% of the outstanding 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, (ii) any significant decline in
the general level of market prices of equity securities in the United
States or abroad, (iii) any change in the general political, market,
economic or financial condition in the United States or abroad that could
have a material adverse effect on the Partnership's business, condition
(financial or other), income, operations or prospects, (iv) the declaration
of a banking moratorium or any suspension of payments in respect of banks
in the United States or any limitation on, or any event which, in the
Offeror's sole judgment, might affect, the extension of credit by lending
institutions in the United States, (v) the commencement of a war, armed
hostilities or other international or national crisis directly or
indirectly involving the United States or (vi) in the case of any of the
foregoing existing at the time of the commencement of the Offer, in the
Offeror's sole judgment, a material acceleration or worsening thereof;
(e) a tender or exchange offer with respect to some or all of the
Units (other than the Offer) or a merger, acquisition or other business
combination proposal for the Partnership, shall have been proposed,
announced or made;
(f) there shall have occurred any event or events that have resulted,
or may in the sole judgment of the Offeror result, in an actual or
threatened change in the business, condition (financial or other), income,
<PAGE>
operations, stock ownership or prospects of the Partnership; or materially
impair the contemplated benefits of the Offer;
(g) there shall have occurred any decline in the S&P Composite 500
Stock Index by an amount in excess of 15% measured from the close of
business on October 16, 1997; or
(h) the Offeror shall not have received the approval of the
Partnership to the assignment to the Offeror of the Units tendered pursuant
to the Offer;
and, in the sole judgment of the Offeror, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance for
payment or payment.
Any of the foregoing conditions may be waived by the Offeror, in whole or
in part, at any time and from time to time in its sole discretion. The failure
by the Offeror at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time. Any determination
by the Offeror concerning the events described above will be final and binding
on all parties.
9. PRICE RANGE OF UNITS; DISTRIBUTIONS; TRADING VOLUME
The Units are not listed on any national securities exchange or quoted in
the over-the-counter market, and there is no established public trading market
for the Units. Secondary sales activity for the Units has been extremely limited
and sporadic. The Partnership monitors transfers of the Units because the
admission of the transferee as a substitute limited partner requires the consent
of the General Partner under the Partnership Agreement. However, neither the
Partnership nor the Offeror has information regarding the prices at which all
secondary sales transactions in the Units have been effectuated. Various
organizations offer to purchase and sell limited partnership interests (such as
the Units) in secondary sales transactions. Various publications such as The
Partnership Spectrum summarize and report information (on a monthly, bimonthly
or less frequent basis) regarding secondary sales transactions in limited
partnership interests (including the Units), including the prices at which such
secondary sales transactions are effectuated.
The Offeror has been informed that the Partnership estimates, based solely
on the transfer records of the Partnership, that the number of Units transferred
in sales transactions (I.E., excluding transactions believed to be between
related parties, family members or the same beneficial owner) was as follows:
<TABLE>
<CAPTION>
Number of Total Percentage of Number of
YEAR UNITS TRANSFERRED UNITS OUTSTANDING TRANSACTIONS
---- ----------------- ----------------- ------------
<S> <C> <C> <C>
1995 272 0.93% 4
1996 926 3.15% 39
1997 (through 407 1.39% 53
September 30)
</TABLE>
<PAGE>
The information set forth below is extracted from sections of the
September/October 1996, November/December, 1996, January/February, 1997,
March/April, 1997, May/June, 1007 and July/August, 1997 issues of The
Partnership Spectrum (the "Partnership Spectrum") captioned "Secondary
Spectrum." The Partnership Spectrum, a periodical published by Partnership
Profiles, Inc., summarizes secondary market prices for public limited
partnerships based on actual transactions during the reporting periods listed on
the tables below. The following secondary-market firms provided high and low
price data to The Partnership Spectrum for some or all of the reporting periods:
American Partnership Services - (800) 736-9797/(801) 756-1166, Chicago
Partnership Board - (800) 272-6273/(312) 332-4100, Cuyler & Associates - (800)
274-9991/(602) 596-0120, DCC Securities - (800) 945-0440/(212) 370-1090, Fox &
Henry/Secondary Income Funds (800) 578-6289/(708) 325-4445, Frain Asset
Management - (800) 654-6110, Laidlaw Equities, Inc.. - (212) 628-3174,
MacKenzie-Patterson Securities - (800) 854-8357/(510) 631-9100, Nationwide
Partnership Marketplace - (800) 969-8996/(415) 456-8825, Pacific Partnership
Group - (800) 727-7244/(602) 957-3050, Partnership Service Network - (800)
483-0776/(818) 591-3707, Raymond James & Associates - (800) 248-8863/(813)
573-3800 and Securities Service Network. - (800) 700-7998/(407) 496-5387.
IN EVALUATING WHETHER OR NOT TO TENDER THEIR UNITS IN THE OFFER, LIMITED
PARTNERS MAY WISH TO CONTACT THESE FIRMS OR OTHER FIRMS INVOLVED IN SECONDARY
SALES OF INTERESTS IN LIMITED PARTNERSHIPS.
The information regarding sale transactions in Units from the Partnership
Spectrum is as follows:
<TABLE>
<CAPTION>
REPORTING PERIOD PER UNIT TRANSACTION PRICE NO. OF UNITS
---------------- -------------------------- ------------
<S> <C> <C>
September/October 1996 $35.00 80
November/December 1996 $56.00 25
January/February 1997 N/A None
March/April 1997 N/A None
May/June 1997 N/A None
July/August 1997 N/A None
</TABLE>
The information from The Partnership Spectrum contained above is provided
without verification by the Offeror and is subject to the following
qualifications in The Partnership Spectrum: "Limited partnership investments are
generally illiquid, long-term investments. Sellers of such investments are often
considered distressed for various reasons and find it necessary to accepted
<PAGE>
discounted sales prices. As a result, the above price information may not
reflect the intrinsic valued of a limited partnership interest. In some cases,
discounts from original purchase prices result from a partnership having already
liquidated, financed or refinanced a portion of its investment portfolio."
Transaction data has been provided by the firms listed above and has not been
verified by The Partnership Spectrum.
10. CERTAIN INFORMATION CONCERNING THE OFFEROR
John N. Galardi, the Offeror, is the owner of 50% of the outstanding
capital and voting stock and a director of CGS Real Estate Company, Inc., of
which S-P Properties, Inc., the General Partner of the Partnership, is a
wholly-owned subsidiary. The Offeror is the Chairman and founder of Galardi
Group, Inc., a privately held operation encompassing more than 500 restaurants,
including Wienershcnitzel, the largest privately held hot dog chain in the
United States. The Offeror's business address is 4440 Von Karman, Suite 200,
Newport Beach, California 92660. During the past five years, the Offeror has
also served on the board of directors of American Franchise Group located in
Fort Lauderdale, Florida. The Offeror is a citizen of the United States.
During the past five years, the Offeror has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors), nor
has the Offeror been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
11. SOURCE AND AMOUNT OF FUNDS
Assuming that the Offeror purchases 20,000 Units pursuant to the Offer at
the Purchase Price, the total amount required by the Offeror to purchase such
Units will be approximately $550,000, exclusive of fees and other expenses. The
source of these funds will be the Offeror's personal funds.
12. PAST CONTRACTS, TRANSACTIONS OR NEGOTIATIONS; TRANSACTIONS AND AGREEMENTS
CONCERNING THE UNITS.
The Offeror has not been a party to any contract, transaction or
negotiation since January 1, 1995 with the Partnership where the aggregate
amount of such transaction was not less than 1% of the Partnership's
consolidated revenues. Except as disclosed herein in connection with the Offer,
the Offeror has not been a party to contacts, negotiations or transactions with
the Partnership concerning a merger, consolidation or acquisition of the
Partnership; a tender offer or acquisition of securities of the Partnership, an
election of a new general partner of the Partnership, or a sale or other
transfer of a material amount of assets of the Partnership. Additionally, the
Offeror is not a party to any contract, arrangement, understanding or
relationship, directly or indirectly, with any other person with respect to any
securities of the Partnership, has not been a party to any contract, transaction
or negotiation with any person with respect to the Units, including any
<PAGE>
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any Units, joint ventures, loan or option arrangements, puts or
calls, guaranties of loans, guaranties of loans, guaranties against loss or the
giving or withholding of proxies, consents or authorizations and is not aware of
any contacts or negotiations between the Partnership and any of its affiliates,
or between the Partnership (including its affiliates) and any person not
affiliated with the Partnership concerning a merger, consolidation or
acquisition of the Partnership; a tender offer or acquisition of securities of
the Partnership, an election of a new general partner of the Partnership, or a
sale or other transfer of a material amount of assets of the Partnership.
Schedule A hereto sets forth the number of Units purchased by the Offeror
or other affiliates of the Partnership (including the directors of the General
Partner) since January 1, 1995, the range of prices paid for such Units and the
average purchase price paid for each quarterly period since January 1, 1995.
13. INTEREST IN UNITS
The Offeror beneficially owns no Units. Except as disclosed in Schedule A,
neither the Partnership, the Offeror nor any person affiliated with either the
Partnership or the Offeror has engaged in any transactions with respect to the
Units within the 60 days immediately preceding the date of the Offer.
14. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS.
The Offeror expressly reserves the right, in its sole discretion and at any
time or from time to time, to extend the period of time during which the Offer
is open by giving oral or written notice of such extension to the Partnership.
There can be no assurance, however, that the Offeror will exercise its right to
extend the Offer. During any such extension, all Units previously tendered will
remain subject to the Offer, except to the extent that such Units may be
withdrawn as set forth in Section 7. The Offeror also expressly reserves the
right, in its sole discretion, (i) to terminate the Offer and not accept for
payment any Units not theretofore accepted for payment or, subject to Rule
14e-1(c) under the Exchange Act, which requires the Offeror either to pay the
consideration offered or to return the Units tendered promptly after the
termination or withdrawal of the Offer, to postpone payment for Units upon the
occurrence of any of the conditions specified in Section 9 hereof by giving oral
or written notice of such termination to the Partnership and making a public
announcement thereof and (ii) at any time or from time to time, to amend the
Offer in any respect. Amendments to the Offer may be effected by public
announcement. Without limiting the manner in which the Offeror may choose to
make public announcement of any termination or amendment, the Offeror shall have
no obligation (except as otherwise required by applicable law) to publish,
advertise or otherwise communicate any such public announcement, other than by
making a release to the Dow Jones News Service, except in the case of an
announcement of an extension of the Offer, in which case the Offeror shall have
no obligation to publish, advertise or otherwise communicate such announcement
other than by issuing a notice of such extension by press release or other
public announcement, which notice shall be issued no later than 9:00 a.m.,
Pacific time, on the next business day after the previously scheduled Expiration
<PAGE>
Date. Material changes to information previously provided to Limited Partners in
this Offer or in documents furnished subsequent thereto will be disseminated to
Limited Partners in compliance with Rule 14d-6(d) promulgated under the Exchange
Act.
If the Offeror materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Offeror will extend the Offer to the extent required by Rules 14d-6(d) and Rule
14e-1(a) under the Exchange Act. Those rules require that the minimum period
during which an offer must remain open following material changes in the terms
of the offer or information concerning the offer (other than a change in price,
change in dealer's soliciting fee or change in percentage of securities sought)
will depend on the facts and circumstances, including the relative materiality
of such terms or information. In a published release, the Commission has stated
that in its view, an offer should remain open for a minimum of five business
days from the date that notice of such a material change is first published,
sent or given. The Offer will continue or be extended for at least ten business
days from the time the Offeror publishes, sends or gives to holders of Units a
notice that it will (a) increase or decrease the price it will pay for Units or
(b) decrease the number of Units it seeks.
15. PERSONS RETAINED; FEES AND EXPENSES.
The Offeror has retained the Partnership to act as the tender agent as in
connection with the Offer. The Partnership will receive reasonable compensation
for its services and will also be reimbursed for certain out-of-pocket expenses.
The Offeror has agreed to indemnify the Partnership against certain liabilities,
including certain liabilities under the federal securities laws, in connection
with the Offer. The Partnership has not been retained to, and will not, make
solicitations or recommendations in connection with the Offer.
The Offeror does not otherwise intend to retain the services of any
officer, employee or class of employees of the Partnership in connection with
the Offer. Similarly, the Offeror does not intend to use any corporate asset of
the Partnership in connection with the conduct or consummation of the Offer.
The Offeror will not pay any solicitation fees to any broker, dealer, bank,
trust Offeror or other person for any Units purchased in connection with the
Offer. The Offeror will reimburse such persons for customary handling and
mailing expenses incurred in connection with the Offer.
The Offeror will pay all transfer fees or transfer taxes, if any, payable
on account of the acquisition of the Units by the Offeror pursuant to the Offer.
The expenses incurred, or estimated to be incurred, by the Offeror in
connection with the Offer are set forth below. The Offeror will be responsible
for paying all such expenses.
<TABLE>
<CAPTION>
<S> <C>
Printing and Mailing Fees...................................... $ 5,000
Filing Fees.................................................... 110
Legal, Accounting and Miscellaneous............................ 5,000
Total......................................................... $ 10,110
</TABLE>
<PAGE>
16. MISCELLANEOUS.
The Partnership is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports and other information
with the Commission relating to its business, financial condition and other
matters. The Offeror has filed a Rule 13e-3 Transaction Statement on Schedule
13e-3 and a Transaction Statement on Tender Offer Statement on Schedule 14D-1
with the Commission, which includes certain additional information relating to
the Offer. Such reports, as well as such other material, may be inspected and
copies may be obtained at the Commission's Public Reference Section at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection and copying at the regional offices of
the Commission located at 7 World Trade Center, 13th Floor, New York, New York
10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained by mail, upon payment of
the Commission's customary fees, from the Commission's Public Reference Section
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission maintains a Web site that contains reports, proxy and information
statements and other materials that are filed through the Commission's
Electronic Data Gathering, Analysis, and Retrieval system. This Web site can be
accessed at http://www.sec.gov. The Offeror's Schedule 13e-3 and Schedule 14D-1
may not be available at the Commission's regional offices.
The Offer is being made to all Limited Partners. The Offeror is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If the Offeror becomes aware
of any valid state statute prohibiting the making of the Offer, the Offeror will
make a good faith effort to comply with such statute. If, after such good faith
effort, the Offeror cannot comply with such statute, the Offer will not be made
to, nor will tenders be accepted from or on behalf of, holders of Units in such
state.
October 17, 1997 JOHN N. GALARDI
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Period Number of Units Purchased by Range of Prices Average
Affiliates of the Partnership Paid Purchase
Price
<S> <C> <C> <C>
1/1/95 to 3/31/95 None N/A N/A
4/1/95 to 6/30/95 78 $10.00 per unit $10.00
7/1/95 to 9/30/95 4 $10.00 per unit $10.00
10/1/95 to 12/31/95 50 $20.00 per unit $20.00
1/1/96 to 3/31/96 292 $10.00 to $25.00 $15.16
per unit
4/1/96 to 6/30/96 130 $10.00 to $15.00 $12.55
per unit
7/1/96 to 9/30/96 160 $10.00 per unit $10.00
10/1/96 to 12/31/96 84 $20.00 per unit $20.00
1/1/97 to 3/31/97 54 $20.00 per unit $20.00
4/1/97 to 6/30/97 50 $20.00 per unit $20.00
7/1/97 to present 282 $20.00 to $25.00 $23.81
per unit
</TABLE>
LETTER OF TRANSMITTAL
TO PURCHASE LIMITED PARTNERSHIP UNITS
OF
SIERRA PACIFIC DEVELOPMENT FUND,
A CALIFORNIA LIMITED PARTNERSHIP
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED OCTOBER 17, 1997
OF JOHN N. GALARDI
------------------------------------------------------------------------------
| DESCRIPTION OF LIMITED PARTNERSHIP UNITS ("UNITS") TENDERED |
| |
|NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) UNITS TENDERED |
| |
| __________________________* |
| |
| * Unless otherwise indicated, it|
| will be assumed that all Units|
| held by the registered holder are|
| being tendered. See Instruction 3.|
------------------------------------------------------------------------------
------------------------------------------------------------------------------
| THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., PACIFIC TIME, ON |
| MONDAY, NOVEMBER 17, 1997, UNLESS THE OFFER IS EXTENDED. |
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To: Sierra Pacific Development Fund (the "Partnership")
<TABLE>
<CAPTION>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
<S> <C> <C>
Sierra Pacific Development Fund Sierra Pacific Development Fund Sierra Pacific Development Fund
2424 S.E. Bristol Street, No. 200 Facsimile: (714) 225-7570 2424 S.E. Bristol Street, Suite 200
Newport Beach, California 92660 Telephone: (714) 225-7500 Newport Beach, California 92660
CONFIRM BY TELEPHONE:
(714) 225-7500
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE
LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THE LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to John N. Galardi, an individual (the
"Bidder"), the above-described Limited Partnership Units (the "Units") for
Sierra Pacific Development Fund (the "Partnership") pursuant to the Bidder's
offer to purchase at a price per Unit of $27.50, net to the seller in cash, on
the terms and subject to the conditions set forth in the Offer to Purchase,
dated October 17, 1997 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together constitute the
"Offer").
Subject to, and effective upon, acceptance for payment of and payment for
the Units tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Bidder all
right, title and interest in and to all the Units that are being tendered
hereby (and any and all other Units or other securities issued or issuable in
respect thereof on or after October 17, 1997 (collectively, "Distributions"))
and constitutes and appoints the Partnership the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Units and all
Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) transfer
ownership of such Units and all Distributions to or upon the order of the
Bidder, (b) present such Units and all Distributions for registration and
transfer on the books of the Partnership and (c) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Units and all
Distributions, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned (i)
has received and reviewed the Offer to Purchase and (ii) has full power and
authority to tender, sell, assign and transfer the Units tendered hereby and
all Distributions and that, when and to the extent the same are accepted for
payment by the Bidder, the Bidder will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver
any additional documents deemed by the Partnership or the Bidder to be
necessary or desirable to complete the sale, assignment and transfer of the
Units tendered hereby and all Distributions.
The undersigned (i) has been advised that the Bidder is the owner of 50%
of the outstanding capital and voting stock and a director of CGS Real Estate
Company, Inc., of which S-P Properties, Inc., the General Partner of the
Partnership, is a wholly-owned subsidiary, and that the General Partner of the
Partnership makes no recommendation as to whether or not the undersigned
should tender his or her Units in the Offer and (ii) has made his or her own
decision to tender the Units.
The undersigned understands that, notwithstanding any other provisions of
the Offer and subject to the applicable rules of the Securities and Exchange
Commission, the Bidder will not be required to accept for payment or pay for
<PAGE>
any Units tendered, and may terminate or amend the Offer or may postpone the
acceptance for payment of or payment for Units tendered, if at any time on or
after October 17, 1997, and before acceptance for payment of or payment for
any such Units, any of the following events shall have occurred (or shall have
been determined by the Bidder in its sole judgment to have occurred)
regardless of the circumstances giving rise thereto (including any action or
omission to act by the Bidder):
(a) there shall have been threatened, instituted or pending any
action or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, or before any court, authority, agency or tribunal
that (i) challenges or seeks to challenge the acquisition of Units
pursuant to the Offer or otherwise in any manner relates to or affects
the Offer or (ii) in the sole judgment of the Bidder, could materially
and adversely affect the business, condition (financial or other),
income, operations or prospects of the Partnership, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Partnership or materially impair the contemplated
benefits of the Offer to the Bidder;
(b) there shall have been any action threatened, pending or taken,
or approval withheld, withdrawn or abrogated or any statute, rule,
regulation, judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or the Partnership, by any legislative body,
court, authority, agency or tribunal which, in the Bidder's sole
judgment, would or might directly or indirectly (i) make the acceptance
for payment of, or payment for, some or all of the Units illegal or
otherwise restrict or prohibit consummation of the Offer, (ii) delay or
restrict the ability of the Bidder, or render the Bidder unable, to
accept for payment or pay for some or all of the Units, (iii) imposes or
seeks to impose limitations on the ability of the Bidder to acquire or
hold or to exercise full rights of ownership of the Units, (iv)
materially impair the contemplated benefits of the Offer to the Bidder or
(v) materially affect the business, condition (financial or other),
income, operations or prospects of the Partnership, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Partnership;
(c) it shall have been publicly disclosed or the Bidder shall have
learned that any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) has acquired or proposes to acquire
beneficial ownership of more than 5% of the outstanding 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, (ii) any significant decline
in the general level of market prices of equity securities in the United
States or abroad, (iii) any change in the general political, market,
economic or financial condition in the United States or abroad that could
have a material adverse effect on the Partnership's business, condition
(financial or other), income, operations or prospects, (iv) the
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or any limitation on, or any event
<PAGE>
which, in the Bidder's sole judgment, might affect, the extension of
credit by lending institutions in the United States, (v) the commencement
of a war, armed hostilities or other international or national crisis
directly or indirectly involving the United States or (vi) in the case of
any of the foregoing existing at the time of the commencement of the
Offer, in the Bidder's sole judgment, a material acceleration or
worsening thereof;
(e) a tender or exchange offer with respect to some or all of the
Units (other than the Offer) or a merger, acquisition or other business
combination proposal for the Partnership, shall have been proposed,
announced or made;
(f) there shall have occurred any event or events that have
resulted, or may in the sole judgment of the Bidder result, in an actual
or threatened change in the business, condition (financial or other),
income, operations, stock ownership or prospects of the Partnership; or
materially impair the contemplated benefits of the Offer;
(g) there shall have occurred any decline in the S&P Composite 500
Stock Index by an amount in excess of 15% measured from the close of
business on October 16, 1997; or
(h) the Offeror shall not have received the approval of the
Partnership to the assignment to the Offeror of the Units tendered
pursuant to the Offer;
and, in the sole judgment of the Bidder, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance
for payment or payment. Any of the foregoing conditions may be waived by the
Bidder, in whole or in part, at any time and from time to time in its sole
discretion. The failure by the Bidder at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by the Bidder concerning the events
described above will be final and binding on all parties.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the undersigned, and
any obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. Except as
stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Units pursuant to any one of
the procedures described in the Offer to Purchase and in the instructions
hereto will constitute the undersigned's acceptance of the terms and
conditions of the Offer, including the undersigned's representation and
warranty that (i) the undersigned has a net long position in the Units being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (ii) the tender of such Units complies
with Rule 14e-4. The Bidder's acceptance for payment of Units tendered
pursuant to the Offer will constitute a binding agreement between the
undersigned and the Bidder upon the terms and subject to the conditions of the
Offer.
<PAGE>
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Units purchased in the name(s)
of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail the check for the Purchase Price of any
Units purchased to the undersigned at the address shown below the
undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the Purchase Price of any Units purchased and mail said check to
the person(s) so indicated. The undersigned recognizes that the Bidder has no
obligation, pursuant to the "Special Payment Instructions," to transfer any
Units from the name of the registered holder(s) thereof if the Bidder does not
accept for payment any of the Units so tendered.
<PAGE>
----------------------------------- -----------------------------------
| SPECIAL PAYMENT INSTRUCTIONS | | SPECIAL DELIVERY INSTRUCTIONS |
| (SEE INSTRUCTIONS 4, 5 AND 6) | | SEE INSTRUCTIONS 4, 5 AND 6) |
| | | |
| | | |
| To be completed ONLY if the| | To be completed ONLY if the|
|check for the Purchase Price of| |check for the Purchase Price of|
|Units purchased is to be issued in| |Units purchased is to be mailed to|
|the name of someone other than the| |someone other than the undersigned|
|undersigned. | |or to the undersigned at an address|
| | |undersigned'd signature(s). |
| | | |
| | | |
|Issue check to: | | |
| | | |
|Name_______________________________| |Mail check to: |
| | | |
| _______________________________| |Name_______________________________|
| (Please Print) | | |
| | | _______________________________|
|Address____________________________| | (Please Print) |
| | | |
| _______________________________| |Address____________________________|
| (Include Zip Code) | | |
| | | ____________________________|
| _______________________________| | (Include Zip Code) |
| (Taxpayer Identification or | | |
| Social Security No.) | | |
----------------------------------- -----------------------------------
<PAGE>
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| SIGN HERE |
| (PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW) |
| |
| |
| __________________________________________________________________________ |
| Signature(s) of Owner(s) |
| |
| __________________________________________________________________________ |
| |
|Dated: _______________, 1997 |
| |
|Name(s)_____________________________________________________________________ |
| |
| __________________________________________________________________________ |
| (Please Print) |
| |
|Capacity (full title)________________________________________________________ |
| |
|Address_____________________________________________________________________ |
| |
| __________________________________________________________________________ |
| |
| __________________________________________________________________________ |
| (Include Zip Code) |
| |
|Area Code and Telephone No._________________________________________________ |
| |
| |
|Must be signed by registered holder(s) exactly as name(s) appear(s) under |
|registration above. If signature is by a trustee, executor, administrator, |
|guardian, attorney-in-fact, officer of a corporation or other person acting |
|in a fiduciary or representative capacity, please set forth full title and see|
|Instruction 4.) |
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<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND UNITS. A properly completed and
duly executed Letter of Transmittal (or facsimile thereof) and any other
documents required by this Letter of Transmittal, must be received by the
Partnership at its addresses set forth on the front page of this Letter of
Transmittal on or prior to the Expiration Date (as defined in the Offer to
Purchase).
THE METHOD OF DELIVERY OF UNITS AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER.
No alternative, conditional or contingent tenders will be accepted. By
executing this Letter of Transmittal (or a facsimile thereof), the tendering
stockholder waives any right to receive any notice of the acceptance for
payment of the Units.
2. INADEQUATE SPACE. If the space provided herein is inadequate, the
number of Units should be listed on a separate schedule attached hereto.
3. PARTIAL TENDERS. If fewer than all the Units held by the registered
holder are to be tendered, fill in the number of Units that are to be tendered
in the box entitled "Number of Units Tendered." All Units held by a registered
holder will be deemed to have been tendered unless otherwise indicted.
4. SIGNATURES ON LETTER OF TRANSMITTAL. If this Letter of Transmittal is
signed by the registered holder(s) of the Units hereby, the signature(s) must
correspond with the holder's registration.
If any of the Units hereby is held of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Units tendered hereby are registered in different names, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations.
If this Letter of Transmittal is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing, and proper evidence satisfactory to the Bidder of the
authority of such person so to act must be submitted.
5. STOCK TRANSFER TAXES. Except as set forth in this Instruction 5, the
Bidder will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Units to it or its order pursuant to the Offer.
If, however, payment of the Purchase Price is to be made to, or Units not
tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s), or if tendered Units are registered in
the name of any person other than the person(s) signing this Letter of
<PAGE>
Transmittal, the amount of any stock transfer taxes (whether imposed on the
registered holder(s), such other person or otherwise) payable on account of
the transfer to such person will be deducted from the Purchase Price unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted.
6. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
Purchase Price of any Units purchased is to be issued in the name of, and /or
any Units not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal or if the check is to be
mailed to someone other than the person(s) signing this Letter of Transmittal
or to an address other than that shown below the signature of the person(s)
signing this Letter of Transmittal, then the boxes captioned "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal should be completed.
7. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or
requests for assistance should be directed to the Bidder at the telephone
number and address provided in the Offer to Purchase. Requests for additional
copies of the Offer to Purchase, this Letter of Transmittal or other tender
offer materials should also be directed to the Bidder and such copies will be
furnished promptly at the Bidder's expense.
8. IRREGULARITIES. All questions as to the Purchase Price, the form of
documents and the validity, eligibility (including time of receipt) and
acceptance of any tender of Units will be determined by the Bidder, in its
sole discretion, and its determination shall be final and binding. The Bidder
reserves the absolute right to reject any or all tenders of Units that it
determines are not in proper form or the acceptance for payment of or payment
for Units that may, in the opinion of the Bidder's counsel, be unlawful. The
Bidder also reserves the absolute right to waive any of the conditions to the
Offer or any defect or irregularity in any tender of Units and the Bidder's
interpretation of the terms and conditions of the Offer (including these
instructions) shall be final and binding. Unless waived, any defects or
irregularities in connection with tenders must be cured within such time as
the Bidder shall determine. None of the Bidder, the Partnership or any other
person shall be under any duty to give notice of any defect or irregularity in
tenders, nor shall any of them incur any liability for failure to give any
such notice. Tenders will not be deemed to have been made until all defects
and irregularities have been cured or waived.
9. IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Units are
accepted for payment is required to provide the Partnership (as payer) with
either such stockholder's correct TIN on Substitute Form W-9 below or in the
case of certain foreign stockholders, a properly completed Form W-8. If such
stockholder is an individual, the TIN is his or her social security number.
For businesses and other entities, the number is the employer identification
number. If the Partnership is not provided with the correct TIN or properly
completed Form W-8, the stockholder may be subject to a $50 penalty imposed by
the Internal Revenue Service. In addition, payments that are made to such
stockholder with respect to Units purchased pursuant to the Offer may be
subject to backup withholding. The Form W-8 can be obtained from the
<PAGE>
Partnership. See the enclosed Instructions for the Requester of Form W-9 for
additional instructions.
If federal income tax backup withholding applies, the Partnership is
required to withhold 31% of any payments made to the stockholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to federal income tax backup withholding will be reduced by
the amount of the tax withheld. If withholding results in an overpayment of
taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a stockholder
with respect to Units purchased pursuant to the Offer, the stockholder is
required to notify the Partnership of his or her correct TIN by completing the
Substitute Form W-9 attached hereto certifying that the TIN provided on
Substitute Form W-9 is correct and that (1) the stockholder has not been
notified by the Internal Revenue Service that he or she is subject to federal
income tax backup withholding as a result of failure to report all interest or
dividends or (2) the Internal Revenue Service has notified the stockholder
that he or she is no longer subject to federal income tax backup withholding.
Foreign stockholders must submit a properly completed Form W-8 in order to
avoid the applicable backup withholding; PROVIDED, HOWEVER, that backup
withholding will not apply to foreign stockholders subject to 30% (or lower
treaty rate) withholding on gross payments received pursuant to the Offer.
WHAT NUMBER TO GIVE THE PARTNERSHIP
The stockholder is required to give the Partnership the social security
number or employer identification number of the registered owner of the Units.
If the Units are in more than one name or are not in the name of the actual
owner, consult the enclosed Instructions for the Requester of Form W-9 for
additional guidance on which number to report.
10. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF)
TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE PARTNERSHIP
ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).
<PAGE>
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|SUBSTITUTE |PART 1-PLEASE PROVIDE |TIN______________________|
| |YOUR TIN IN THE BOX AT | SOCIAL SECURITY NUMBER|
|FORM W-9 |RIGHT AND CERTIFY BY | OR EMPLOYER |
| |SIGNING AND DATING | IDENTIFICATION NUMBER |
| |BELOW. | |
| |--------------------------|-------------------------|
|DEPARTMENT OF THE |NAME (PLEASE PRINT) | PART 2 |
|TREASURY | | |
|INTERNAL REVENUE SERVICE | | |
| |--------------------------| |
| |ADDRESS | Awaiting |
|PAYER'S REQUEST FOR | | TIN |
|TAXPAYER |--------------------------| _ |
|IDENTIFICATION NUMBER |CITY STATE ZIP CODE| |_| |
|CERTIFICATION | | |
| | | |
| |----------------------------------------------------|
| | Part 3--CERTIFICATION-UNDER THE PENALTIES OF |
| | PERJURY, I CERTIFY THAT (1) the number shown on |
| | this form is my correct taxpayer identification |
| | number (or a TIN has not been issued to me but I |
| | have mailed or delivered an application to receive |
| | a TIN or intend to do so in the near future),(2) I |
| | am not subject to backup withholding either because|
| | I have not been notified by the Internal Revenue |
| | Service (the "IRS") that I am subject to backup |
| | withholding as a result of a failure to report all |
| | interest or dividends or the IRS has notified me |
| | that I am no longer subject to backup withholding |
| | and (3) all other information provided on this |
| | form is true, correct and complete. |
| | |
| | SIGNATURE_________________________________________ |
| | DATE_______________ You must cross out item (2) |
| | above if you have been notified by the IRS that |
| | your are currently subject to backup withholding |
| | because of underreporting interest or dividends on |
| | your tax return. |
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NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED INSTRUCTIONS FOR THE REQUESTER OF FORM W-9
FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF
YOU CHECKED THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9.
<PAGE>
------------------------------------------------------------------------------
| CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER |
| |
| I certify under penalties of perjury that a taxpayer identification number|
| has not been issued to me and either (1) I have mailed or delivered an|
| application to receive a taxpayer identification number to the appropriate|
| Internal Revenue Service Center or Social Security Administration Office or|
| (2) I intend to mail or deliver an application in the near future. I|
| understand that if I do not provide a taxpayer identification number by the|
| time of payment, 31% of all payments of the Purchase Price made to me|
| thereafter will be withheld until I provide a number. |
| |
|Signature____________________________________ Date:___________________, 1997|
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Department of the Treasury Internal Revenue Service
Instructions for the Requester of Form W-9 (Rev. December 1996)
Request for Taxpayer Identification Number and Certification
SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE UNLESS OTHERWISE NOTED.
These instructions supplement the instructions on the Form W-9 for the
requester.
CHANGES TO NOTE
INDIVIDUAL TAXPAYER IDENTIFICATION NUMBER (ITIN).--Form W-9 (or an acceptable
substitute) is used by persons required to file information returns with the IRS
to get the payee's correct TIN. For individuals, the TIN is generally a social
security number (SSN).
However, in some cases, individuals who become U.S. resident aliens for tax
purposes are not eligible to obtain an SSN. This includes certain resident
aliens who must receive information returns but who cannot obtain an SSN.
These individuals must apply for an ITIN on Form W-7, Application for IRS
Individual Taxpayer Identification Number, unless they have an application
pending for an SSN. Individuals who have an ITIN must provide it on Form W-9.
TIN APPLIED FOR (60 DAY RULE).--The instructions clarify that the 60-day
exemption from backup withholding upon presentation of an awaiting-TIN
certificate applies only to interest and dividend payments, and certain payments
made with respect to readily tradable instruments. Other payments are subject to
backup withholding.
SUBSTITUTE FORM W-9
You may develop and use your own Form W-9 (a substitute Form W-9) if its content
is substantially similar to the IRS's official Form W-9 and it satisfies certain
certification requirements.
You may incorporate a substitute Form W-9 into other business forms you
customarily use, such as account signature cards, provided the certifications
that (1) the payee's TIN is correct and (2) the payee is not subject to backup
withholding due to failure to report interest and dividend income, shown on the
official Form W-9, are clearly set forth. You may not:
1. Use a substitute Form W-9 that requires the payee, by signing, to agree
to provisions unrelated to the required certifications.
2. Imply that a payee may be subject to backup withholding unless the payee
agrees to provisions on the substitute form that are unrelated to the required
certifications.
A substitute Form W-9 that contains a separate signature line just for the
certifications satisfies the requirement that the certifications be clearly set
forth.
<PAGE>
If a single signature line is used for the required certifications and
other provisions, the certifications must be highlighted, boxed, printed in
bold-face type, or presented in some other manner that causes the language to
stand out from all other information contained on the substitute form.
Additionally, the following statement must be presented in the same manner as in
the preceding sentence and must appear immediately above the single signature
line: "The Internal Revenue Service does not require your consent to any
provision of this document other than the certifications required to avoid
backup withholding."
Generally, the rules concerning the signature on a substitute Form W-9
apply to those completed after 1996. However, the effective date is extended to
July 1, 1997, if the payer:
* Must obtain the approval of a government authority for changes to the
format of its substitute Form W-9, and
* Applied for that approval by September 30, 1996, and
* Thereafter actively pursues that approval.
If you use a substitute form, the instructions do not have to be furnished
to the payee. The payee only needs to be instructed orally or in writing to
strike out the language of the certification that relates to payee
underreporting, if the payee is subject to backup withholding due to notified
payee underreporting. However, you are encouraged to provide instructions
relevant to the account, especially if the payee requests them.
TIN APPLIED FOR
If the payee returns a properly completed Form W-9 with "Applied For" written in
Part I (i.e., an "awaiting TIN" certificate), the payee must give you a TIN
within 60 calendar days to avoid backup withholding. You may use one of the
following rules to backup withholding. You may use one of the following rules to
backup withhold during this 60-day period on reportable interest or dividend
payments and certain payments with respect to readily tradable instruments.
RESERVE RULE.--If a payee withdraws more than $500 at one time during the 60-day
period, you must backup withhold on any reportable payments made during the
period, unless the payee reserves 31% of all reportable payments made to the
account during the period.
ALTERNATIVE RULE (OPTION 1).--You must backup withhold on any reportable
payments if the payee makes a withdrawal from the account after the close of 7
business days after you receive the awaiting-TIN certificate. Treat as
reportable payments all cash withdrawals in an amount up to the reportable
payments made from the day after you receive the awaiting-TIN certificate to the
day of withdrawal.
ALTERNATIVE RULE (OPTION 2).--You must backup withhold on any reportable
payments made to the payee's account, regardless of whether the payee makes any
withdrawals. Backup withholding under this option must begin no later than 7
business days after you receive the awaiting-TIN certificate.
<PAGE>
PAYEES EXEMPT FROM BACKUP WITHHOLDING
You are not required to backup withhold on any payments you make if the payee
is:
1. An organization exempt from tax under section 501(a), an IRA, or a
custodial account under section 403(b)(7), if the account satisfies the
requirements of section 401(f)(2).
2. The United States or any of its agencies or instrumentalities.
3. A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
4. A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
5. An international organization or any of its agencies or
instrumentalities.
OTHER PAYEES THAT MAY BE EXEMPT FROM BACKUP WITHHOLDING INCLUDE:
6. A corporation.
7. A foreign central bank of issue.
8. A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
9. A futures commission merchant registered with the Commodity Futures
Trading Commission.
10. A real estate investment trust.
11. An entity registered at all times during the tax year under the
Investment Company Act of 1940.
12. A common trust fund operated by a bank under section 584(a).
13. A financial institution.
14. A middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
15. A trust exempt from tax under section 664 or described in section 4947.
INTEREST AND DIVIDEND PAYMENTS.--All listed payees are exempt except the payee
in item (9).
<PAGE>
BROKER TRANSACTIONS.--All payees listed in items (1) through (13) are exempt. A
person registered under the Investment Advisors Act of 1940 who regularly acts
as a broker is also exempt.
PAYMENTS SUBJECT TO REPORTING UNDER SECTIONS 6041 AND 6041A.--These payments are
generally exempt from backup withholding only if made to payees listed in items
(1) through (7). However, a corporation (except certain hospitals described in
Regulations section 1.6041-3(c)) that provides medical and health care services,
or bills and collects payments for such services, is not exempt from backup
withholding.
BARTER EXCHANGE TRANSACTIONS AND PATRONAGE DIVIDENDS.--Only payees listed in
items (1) through (5) are exempt from backup withholding on these payments.
PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
Payments that are not subject to information reporting also are not subject to
backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045
6049, 6050A, and 6050N, and their regulations.
DIVIDENDS AND PATRONAGE DIVIDENDS that generally are exempt from backup
withholding include:
* Payments to nonresident aliens subject to withholding under section 1441.
* Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
* Payments of patronage dividends not paid in money.
* Payments made by certain foreign organizations.
* Section 404(k) payments made by an ESOP.
INTEREST PAYMENTS that generally are exempt from backup withholding include:
* Payments of interest on obligations issued by individuals. However, if you
pay $600 or more of interest in the course of your trade or business to a
payee, you must report the payment. Backup withholding applies to the
reportable payment if the payee has not provided a TIN or has provided an
incorrect TIN.
* Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
* Payments described in section 6049(b)(5) to nonresident aliens.
* Payments on tax-free covenant bonds under section 1451.
* Payments made by certain foreign organizations.
<PAGE>
* Mortgage interest paid to you.
OTHER TYPES OF PAYMENTS that generally are exempt from backup withholding
include:
* Wages.
* Distributions from a pension, annuity, profit-sharing or stock bonus plan,
or an IRA.
* Distributions from an owner-employee plan.
* Certain surrenders of life insurance contracts.
* Gambling winnings, if withholding is required under section 3402(q).
However, if withholding is not required under section 3402(q), backup
withholding applies if the payee fails to furnish a TIN.
* Real estate transactions reportable under section 6045.
ADDITIONAL INFORMATION
For more information on backup withholding and your requirements, get Pub. 1679,
A Guide to Backup Withholding, or Pub. 1281, Backup Withholding on Missing and
Incorrect TINs.
JOINT FOREIGN PAYEES
If the first payee listed on an account gives you Form W-8, Certificate of
Foreign Status, or a similar statement signed under penalties of perjury, backup
withholding applies unless:
1. Every joint payee provides the statement regarding foreign status; or
2. Any one of the joint payees who has not established foreign status gives
you a TIN.
If any one of the joint payees who has not established foreign status gives
you a TIN, that number is the TIN that must be used for purposes of backup
withholding and information reporting.
NAMES AND TINS TO USE FOR INFORMATION REPORTING
Show the full name and address as provided on Form W-9 on the information return
filed with the IRS and on the copy furnished to the payee. If you made payments
to more than one payee or the account is in more than one name, enter on the
first name line ONLY the name of the payee whose TIN is shown on the information
return. Show the names of any other individual payees in the area below the
first name line, if desired.
SOLE PROPRIETORS.--You must show the individual's name on the first name line.
On the second name line, you may enter the business name or "doing business as
(DBA)" if provided. You may not enter only the business name. For the TIN, you
<PAGE>
may enter either the individual's SSN or the employer identification number
(EIN) of the business. However, the IRS prefers that you show the SSN.
NOTICES FROM THE IRS
The IRS will send you a notice if the payee's name and TIN on the information
return you filed do not match the IRS's records. You may have to send a "B"
notice to the payee to solicit another TIN. See Pubs. 1679 and 1281 for copies
of the two types of "B" notices.
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
SIERRA PACIFIC DEVELOPMENT FUND,
A California Limited Partnership
(Name of Subject Company)
-------------
JOHN N. GALARDI
(Bidder)
-------------
LIMITED PARTNERSHIP UNITS
(Title of Class of Securities)
-------------
N/A
(CUSIP Number of Class of Securities)
-------------
------------------
----------------
HOWARD F. HART
HUGHES HUBBARD & REED LLP
350 SOUTH GRAND AVENUE, 36TH FLOOR
LOS ANGELES, CALIFORNIA 90071
(213) 613-2800
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Bidder)
October 17, 1997
(Date Tender Offer First Published, Sent or Given to Security Holders)
<TABLE>
<CAPTION>
Calculation of Filing Fee
- --------------------------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee
- --------------------------------------------------------------------------------
<S> <C>
$550,000 $110.00
- --------------------------------------------------------------------------------
</TABLE>
* Determined pursuant to Rule 0-11(b)(1). Assumes the purchase of 20,000
Units at $27.50 per Unit.
<PAGE>
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
<TABLE>
<CAPTION>
<S> <C>
Amount Previously Paid: $110.00 paid contemporaneously with this filing.
Form or Registration No: Rule 13e-3 Transaction Statement on Schedule 13e-3
Filing Party: John N. Galardi
Date Filed: October 17, 1997
</TABLE>
<PAGE>
SCHEDULE 14D-1 TENDER OFFER STATEMENT
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the issuer is Sierra Pacific Development Fund, a California
limited partnership (the "Company"), and the address of its principal executive
offices is 5850 San Felipe, Suite 500, Houston, Texas 77057.
(b) This Schedule relates to the offer by John N. Galardi (the "Bidder") to
purchase any and all of the Company's outstanding Limited Partnership Units (the
"Units"), at $27.50 per Unit, net to the seller in cash, all upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October 17,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer"), copies of which are attached hereto as
Exhibits (d)(1) and (d)(2), respectively. As of September 30, 1997, the Company
had issued and outstanding 29,354 Units and there were approximately 2,177
holders of record of the Units.
(c) The information set forth on the cover page and under "Introduction"
and "Special Factors - Price Range of Shares; Distributions; Trading Volume" in
Section 9 of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (g) The information set forth under "Special Factors - Certain
Information Regarding the Offeror" in Section 10 of the Offer to Purchase is
incorporated herein by reference.
ITEM 3. PAST CONTRACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) - (b) The information set forth under "Special Factors - Past
Contracts, Transactions or Negotiations; Transactions and Agreements Concerning
the Units" in Section 12 of the Offer to Purchase is incorporated herein by
reference
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth under "Special Factors - Source and Amount of
Funds" in Section 11 of the Offer to Purchase is incorporated herein by
reference.
(b) Not applicable.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) - (g) The information set forth under "Special Factors - Purpose of the
Offer" in Section 1 of the Offer to Purchase is incorporated herein by
reference.
<PAGE>
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) - (b) The information set forth under "Special Factors - Interest in
Units" in Section 13 of the Offer to Purchase is incorporated herein by
reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth under "Special Factors - Past Contracts,
Transactions or Negotiations; Transactions and Agreements Concerning the Units"
in Section 12 of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth under "Introduction" and "Special Factors -
Persons Retained; Fees and Expenses" in Section 15 of the Offer to Purchase is
incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth under "Special Factors - Past Contracts,
Transactions or Negotiations; Transactions and Agreements Concerning the Units"
in Section 12 of the Offer to Purchase is incorporated herein by reference.
(b) The information set forth under "Special Factors - Fairness of the
Transaction; Reports, Opinions, Appraisals and Certain Negotiations; No
Approvals Required; No Appraisal Rights" in Section 3 of the Offer to Purchase
is incorporated herein by reference.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase, dated October 17, 1997.
(a)(2) Form of Letter of Transmittal with Substitute Form W-9.
(a)(3) Instructions for the Requester of Form W-9.
(b) Not applicable.
<PAGE>
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
JOHN N. GALARDI
By: /s/ JOHN N. GALARDI
-----------------------------------
Name: John N. Galardi
Dated: October 17, 1997
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
(a)(1) Form of Offer to Purchase, dated October 17, 1997.
(a)(2) Form of Letter of Transmittal with Substitute Form W-9.
(a)(3) Instructions for the Requester of Form W-9.
</TABLE>
<PAGE>
SIERRA PACIFIC DEVELOPMENT FUND
A CALIFORNIA LIMITED PARTNERSHIP
OFFER TO PURCHASE FOR CASH
ANY AND ALL LIMITED PARTNERSHIP UNITS
AT $27.50 NET PER UNIT
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
PACIFIC TIME, ON MONDAY, NOVEMBER 17, 1997, UNLESS THE OFFER IS EXTENDED.
---------------
John N. Galardi (the "Offeror"), is offering to purchase any and all the
Limited Partnership Units ("Units") of Sierra Pacific Development Fund, a
California Limited Partnership (the "Partnership"), at $27.50 per Unit, net to
the seller in cash, on the terms and subject to the conditions set forth herein
and in the related Letter of Transmittal (which together constitute the
"Offer").
---------------
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 8.
---------------
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.
---------------
NEITHER THE PARTNERSHIP NOR ITS GENERAL PARTNER OR ANY OF THE GENERAL PARTNER'S
DIRECTORS OR EXECUTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY LIMITED
PARTNER AS TO WHETHER TO TENDER ANY UNITS. EACH LIMITED PARTNER MUST MAKE
HIS OR HER OWN DECISION AS TO WHETHER TO TENDER UNITS AND, IF SO, HOW MANY
UNITS TO TENDER. NO DIRECTOR OR EXECUTIVE OFFICER OF THE GENERAL
PARTNER OR ANY OF ITS AFFILIATES INTENDS TO TENDER SHARES
PURSUANT TO THE OFFER.
---------------
IMPORTANT
Any Limited Partner desiring to tender all or any portion of his or her
Units should complete and sign the Letter of Transmittal or a photocopy thereof
in accordance with the instructions in the Letter of Transmittal, mail or
deliver it and any other required documents to the Offeror at the Partnership.
---------------
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
THE PARTNERSHIP AS TO WHETHER LIMITED PARTNERS SHOULD TENDER UNITS PURSUANT TO
THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH
INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE PARTNERSHIP.
October 17, 1997
<PAGE>
TO THE HOLDERS OF LIMITED PARTNERSHIP UNITS OF
SIERRA PACIFIC DEVELOPMENT FUND,
A CALIFORNIA LIMITED PARTNERSHIP:
INTRODUCTION
John N. Galardi (the "Offeror") is offering to purchase any and all of the
Limited Partnership Units ("Units") of Sierra Pacific Development Fund, a
California Limited Partnership (the "Partnership"), at $27.50 per Unit (the
"Purchase Price"), net to the seller in cash, on the terms and subject to the
conditions set forth herein and in the related Letter of Transmittal (which
together constitute the "Offer"). Galardi is the owner of 50% of the outstanding
capital and voting stock of CGS Real Estate Company, Inc., of which S-P
Properties, Inc., the General Partner of the Partnership, is a wholly-owned
subsidiary. The address of the principal executive offices of the Partnership is
5850 San Felipe, Suite 500, Houston, Texas 77057, and its telephone number is
(713) 706-2671.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF UNITS BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 8.
Tendering Limited Partners will not be obligated to pay brokerage
commissions, solicitation fees, transfer fees or transfer taxes on the purchase
of Units by the Offeror. HOWEVER, ANY TENDERING LIMITED PARTNER WHO FAILS TO
COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO A REQUIRED FEDERAL INCOME TAX BACKUP WITHHOLDING
OF 31% OF THE GROSS PAYMENTS PAYABLE TO SUCH LIMITED PARTNER PURSUANT TO THE
OFFER.
NEITHER THE PARTNERSHIP NOR ITS GENERAL PARTNER NOR ANY OF THE GENERAL
PARTNER'S DIRECTORS OR EXECUTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY
LIMITED PARTNER AS TO WHETHER TO TENDER ANY UNITS. EACH LIMITED PARTNER MUST
MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER UNITS AND, IF SO, HOW MANY
UNITS TO TENDER. THE OFFEROR HAS BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE
OFFICER OF THE GENERAL PARTNER OR ANY OF ITS AFFILIATES INTENDS TO TENDER UNITS
PURSUANT TO THE OFFER.
As of September 30, 1997, the Partnership had issued and outstanding 29,354
Units. As of September 30, 1997, there were approximately 2,177 Limited
Partners. The Units are not currently registered for trading on any exchange.
<PAGE>
SPECIAL FACTORS
1. PURPOSE OF THE OFFER
The Offeror is making the Offer because it believes that the purchase of
the Units at this time pursuant to the Offer is economically attractive to the
Offeror, and at the same time Limited Partners who require or desire liquidity
are being afforded the opportunity to receive cash for their Units. Each Limited
Partner has the opportunity to make an individual decision on whether or not to
tender Units pursuant to the Offer.
Following the consummation of the Offer, except as discussed below, it is
expected that the business and operations of the Partnership will be continued
by the Partnership substantially as they are currently being conducted. The
Partnership has informed the Offeror that, except as discussed below, it has no
plans or proposals which relate to or would result in: (a) the acquisition by
any person of additional securities of the Partnership or the disposition of
securities of the Partnership; (b) an extraordinary transaction, such as a
merger, reorganization or liquidation, involving the Partnership; (c) a sale or
transfer of a material amount of assets of the Partnership; (d) any change in
the present management of the Partnership; (e) any material change in the
present distribution policy or capitalization or indebtedness of the
Partnership; or (f) any other material change in the Partnership's structure or
business. Except as discussed below, the Offeror has no plans or proposals which
relate to or would result in: (a) the acquisition by any person of additional
securities of the Partnership or the disposition of securities of the
Partnership; (b) an extraordinary transaction, such as a merger, reorganization
or liquidation, involving the Partnership; (c) a sale or transfer of a material
amount of assets of the Partnership; (d) any change in the present management of
the Partnership; (e) any material change in the present distribution policy or
capitalization or indebtedness of the Partnership; or (f) any other material
change in the Partnership's structure or business. An affiliate of the Offeror
(and the Partnership) is considering an initial public offering of the
affiliate's securities, and the affiliate may wish to acquire all or part of the
Partnership and/or all or part of its assets, subsequent to the affiliate's
initial public offering. However, there can be no assurance that any such
initial public offer will occur and there can be no assurance that such
affiliate will attempt to acquire any portion of the Partnership or its assets.
Additionally, the Partnership is considering other possible sales or
dispositions of the Partnership's properties.
The Offeror's purchase of Units pursuant to the Offer will reduce the
number of Limited Partners and the number of Units that might otherwise trade,
and depending on the number of Units so purchased, could adversely affect the
liquidity and market value of the remaining Units held by the public, although
there is currently no established trading market for the Units.
The Units are currently registered under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Registration of the Units under the
Exchange Act may be terminated upon application of the Partnership to the
Securities and Exchange Commission (the "Commission") if the Units are held by
fewer than 300 Limited Partners. It is possible that the number of Limited
Partners will be reduced below 300 by reason of the Offer and termination of
registration of the Units under the Exchange Act would substantially reduce the
information required to be furnished by the Partnership to holders of the Units
and would make certain provisions of the Exchange Act, such as the requirements
<PAGE>
of Rule 13e-3 thereunder with respect to "going private" transactions, no longer
applicable in respect of the Partnership.
The Partnership has paid no dividends with respect to the Units since
January 1, 1992 and there are currently no plans to pay any dividends with
respect to the Units. Neither the Partnership nor the Offeror has made any
public offering of Units since January 1, 1994 nor has either the Partnership or
the Offeror purchased any Units since January 1, 1995.
Following the expiration of the Offer, the Offeror may, in its sole
discretion, determine to purchase any remaining Units through privately
negotiated transactions, open market purchases or otherwise, on such terms and
at such prices as the Offeror may determine from time to time, the terms of
which purchases or offers could differ from those of the Offer, except that the
Offeror will not make any such purchases of Units until the expiration of at
least ten business days after the termination of the Offer. Any possible future
purchases of Units by the Offeror will depend on many factors.
Purchases of Units by the Offeror will, in addition to the effects
described above, have the effect of increasing the Offeror's interest in the
Partnership's net book value and net earnings.
2. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The sale of Units by a Limited Partner pursuant to the Offer will be
treated for federal income tax purposes as a taxable sale of such tendered
Units. However, the specific federal income tax consequences to a Limited
Partner resulting from a sale of Units will depend on a number of factors
related to such Limited Partner's individual tax situation, including such
Limited Partner's adjusted basis in his or her Units, whether such Limited
Partner is subject to the limitation on utilization of "passive activity
losses," whether such Limited Partner has suspended "passive activity losses"
attributable to his or her ownership of Units, whether such Limited Partner
disposes of all of his or her Units pursuant to the Offer (which would generally
allow such Limited Partner to utilize in the year of sale any suspended "passive
activity losses" attributable to his or her ownership of Units) and whether such
Limited Partner would be able to utilize currently any capital losses resulting
from the sale of such Units pursuant to the Offer. The Company expects that a
Limited Partner who acquired his or her Units in the original offering and who
sells Units pursuant to the Offer will generally recognize an ordinary loss of
approximately $13 per Unit attributable to Partnership operations for 1997
through the estimated date of sale and a capital loss attributable to the sale
of his or her Units equal to the sum of (i) approximately $27 per Unit and (ii)
such Limited Partner's distributive share per Unit of syndication expenses of
the Partnership (generally costs incurred by Partnership's in connection with
the sale of Units in the original offering). Although the Partnership was unable
to claim syndication expenses as a deductible expense for federal income tax
purposes, each Limited Partner who acquired his or her Units in the original
offering continues to have his or her share of such expenses reflected in the
adjusted basis of his or her Units. The federal income tax impact could be
significantly different, however, for a Limited Partner who acquired his or her
Units after the original offering. To the extent that a Limited Partner who is
subject to the "passive activity loss" restrictions has not previously utilized
<PAGE>
such losses to offset passive activity income from other sources (and sells all
of his or her Units), such suspended losses will generally become available to
such Limited Partner in the year of sale. Any capital loss recognized by a
Limited Partner from the sale of Units may be applied to offset capital gains
from other sources. In addition, capital losses in excess of capital gains may
be used to offset up to $3,000 of ordinary income in any taxable year ($1,500
for a married individual filing a separate return). Any capital losses that are
not used currently may be carried forward and used in subsequent years (subject
to the same limitations).
THE FOREGOING TAX DISCUSSION IS INTENDED FOR GENERAL INFORMATIONAL PURPOSES
ONLY. THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY DEPENDING
UPON, AMONG OTHER THINGS, THE PARTICULAR TAX CIRCUMSTANCES OF THE TENDERING
LIMITED PARTNER. NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE, LOCAL OR
FOREIGN TAX CONSEQUENCES OF A SALE OF UNITS PURSUANT TO THE OFFER. EACH LIMITED
PARTNER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISER TO DETERMINE THE
PARTICULAR FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF A SALE OF UNITS
PURSUANT TO THE OFFER.
3. FAIRNESS OF THE TRANSACTION; REPORTS, OPINIONS, APPRAISALS AND CERTAIN
NEGOTIATIONS; NO APPROVALS REQUIRED; NO APPRAISAL RIGHTS
The Offeror reasonably believes that the terms of the Offer are fair to
unaffiliated Limited Partners for the following reasons: (i) the Purchase Price
reflects an approximately 10% premium over the most recently reported third
party trading price of the Units and the trading price trend of the Units,<F1>
and (ii) the Partnership is not currently making any distributions and the Offer
provides a mechanism whereby Limited Partners who desire liquidity are being
afforded the opportunity to receive cash for their Units. Although the Purchase
Price is less than $55.97, the per Unit partners' equity stated in the
Partnership's 10-Q for the quarter ended June 30, 1997, the Offeror believes
that the Purchase Price accurately reflects a premium over the actual going
concern value and the liquidation value of the Partnership. However, since
January 1, 1995, the Offeror has not sought or obtained any report, appraisal or
opinion with respect to the value of the Units and neither the Partnership nor
is the Offeror aware of any such report, appraisal or opinion that may have
prepared by any other person. Additionally, neither the Partnership nor is the
Offeror aware of any other firm offers made by any person unaffiliated with the
Partnership during the preceding eighteen months (i) for the merger or
___________________
<F1>Determined on the basis of the trades reported in THE PARTNERSHIP SPECTRUM,
as discussed in more detail in Section 9 below.
<PAGE>
consolidation of the Partnership with such person, (ii) for the sale or other
transfer of all or any substantial part of the assets of the Partnership or
(iii) for Units which would enable the holder of the Units to exercise control
of the Partnership.
The Offeror understands that an offer was made by KM Investments, LLC. on
September 23, 1997 to purchase up to 4.9% of the outstanding Units at a price of
$21.00 per Unit, reduced, however, by the amount of any transfer fees imposed in
connection with the transfer of Units. The Offeror, as part of the Offer, will
be responsible for the payment of any registration and transfer fees or taxes.
The Offeror is not aware of any license or regulatory permit that appears
to be material to the Partnership's business that might be adversely affected by
its acquisition of Units as contemplated in the Offer or of any approval or
other action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
Offeror's acquisition or ownership of Units pursuant to the Offer. Should any
such approval or other action be required, the Offeror currently contemplates
that it will seek such approval or other action.
There is no vote of Limited Partners required in connection with the Offer
and there are no appraisal rights available to Limited Partners in connection
with the Offer. The General Partner of the Partnership has informed the Offeror
that the Partnership has not retained, and does not intend to retain, an
unaffiliated representative to act solely on behalf of unaffiliated Limited
Partners or to prepare a report or an opinion with respect to the fairness of
the Offer.
4. NUMBER OF UNITS; EXPIRATION DATE; EXTENSION OF THE OFFER
On the terms and subject to the conditions described herein and in the
Letter of Transmittal, the Offeror will purchase any and all Units that are
validly tendered on or prior to the Expiration Date (and not properly withdrawn
in accordance with Section 6) at the Purchase Price. The later of 5:00 p.m.,
Pacific time, on Monday, November 17, 1997, or the latest time and date to which
the Offer is extended, is referred to herein as the "Expiration Date." The Offer
is not conditioned on any minimum number of Shares being tendered.
If (i) the Offeror increases or decreases the price to be paid for Units or
decreases the number of Units being sought and (ii) the Offer is scheduled to
expire at any time earlier than the expiration of a period ending on the tenth
business day from, and including, the date that notice of such increase or
decrease is first published, sent or given in the manner described in Section
14, the Offer will be extended until the expiration of ten business days from
the date of publication of such notice.
The Offeror also expressly reserves the right, in its sole discretion, at
any time or from time to time, to extend the period of time during which the
Offer is open by giving oral or written notice of such extension to the
Partnership and making a public announcement thereof. See Section 14. There can
be no assurance, however, that the Offeror will exercise its right to extend the
Offer.
<PAGE>
For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time.
Copies of this Offer to Purchase and the Letter of Transmittal are being
mailed to Limited Partners.
5. PROCEDURE FOR TENDERING UNITS.
PROPER TENDER OF UNITS. To tender Units validly pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal or photocopy thereof,
together with any required signature guarantees and any other documents required
by the Letter of Transmittal, must be received by the Partnership at the address
set forth in the "Introduction" of this Offer to Purchase.
FEDERAL BACKUP WITHHOLDING. TO AVOID FEDERAL INCOME TAX BACKUP WITHHOLDING
EQUAL TO 31% OF THE GROSS PAYMENTS MADE PURSUANT TO THE OFFER, EACH TENDERING
LIMITED PARTNER MUST NOTIFY THE PARTNERSHIP OF SUCH LIMITED PARTNER'S CORRECT
TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY PROPERLY
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL.
FOREIGN LIMITED PARTNERS MAY BE REQUIRED TO SUBMIT A PROPERLY COMPLETED FORM
W-8, CERTIFYING NON-UNITED STATES STATUS, IN ORDER TO AVOID BACKUP WITHHOLDING.
IN ADDITION, FOREIGN STOCKHOLDERS MAY BE SUBJECT TO 30% (OR LOWER TREATY RATE)
WITHHOLDING ON GROSS PAYMENTS RECEIVED PURSUANT TO THE OFFER. FOR A DISCUSSION
OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES TO TENDERING LIMITED PARTNERS, SEE
SECTION 2. EACH LIMITED PARTNER IS URGED TO CONSULT WITH HIS OR HER OWN TAX
ADVISER.
DETERMINATIONS OF VALIDITY. All questions as to the Purchase Price, the
form of documents and the validity, eligibility (including time of receipt) and
acceptance for payment of any tender of Units will be determined by the Offeror,
in its sole discretion, and its determination shall be final and binding. The
Offeror reserves the absolute right to reject any or all tenders of Units that
it determines are not in proper form or the acceptance for payment of or payment
for Units that may, in the opinion of the Offeror's counsel, be unlawful. The
Offeror also reserves the absolute right to waive any defect or irregularity in
any tender of Units. Neither the Offeror, the Partnership, or any other person
will be under any duty to give notice of any defect or irregularity in tenders,
nor shall any of them incur any liability for failure to give any such notice.
RULE 14E-4. It is a violation of Rule 14e-4 promulgated under the Exchange
Act for a person to tender Units for his or her own account unless the person so
tendering (i) has a net long position equal to or greater than the amount of
Units tendered and (ii) will cause such Units to be delivered in accordance with
the terms of the Offer. The tender of Units pursuant to the procedures described
above will constitute the tendering Limited Partner's representation and
warranty that (i) such Limited Partner has a net long position in the Units
being tendered within the meaning of Rule 14e-4 promulgated under the Exchange
Act, and (ii) the tender of such Units complies with Rule 14e-4. The Offeror's
acceptance for payment of Units tendered pursuant to the Offer will constitute a
<PAGE>
binding agreement between the tendering Limited Partner and the Offeror on the
terms and subject to the conditions of the Offer.
6. WITHDRAWAL RIGHTS
Tenders of Units made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after November 17, 1997, unless theretofore accepted
for payment as provided in this Offer to Purchase. If the Offeror extends the
period of time during which the Offer is open, is delayed in accepting for
payment or paying for Units or is unable to accept for payment or pay for Units
pursuant to the Offer for any reason, then, without prejudice to the Offeror's
rights under the Offer, the Partnership may, on behalf of the Offeror, retain
all Units tendered, and such Units may not be withdrawn except as otherwise
provided in this Section 6, subject to Rule 14e-1(c) under the Exchange Act,
which provides that the person making the tender offer shall either pay the
consideration offered, or return the tendered securities promptly after the
termination or withdrawal of the tender offer.
To be effective, a written or facsimile transmission notice of withdrawal
must be timely received by the Partnership at its address set forth in this
Offer to Purchase and must specify the name of the person who tendered the Units
to be withdrawn and the number of Units to be withdrawn. Withdrawals may not be
rescinded, and Units withdrawn will thereafter be deemed not validly tendered
for purposes of the Offer. However, withdrawn Units may be retendered by again
following the procedures described in Section 5 at any time prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Offeror, in its sole
discretion, which determination shall be final and binding. Neither of the
Offeror, the Partnership, nor any other person will be under any duty to give
notification of any defect or irregularity in any notice of withdrawal or incur
any liability for failure to give any such notification.
7. PAYMENT OF PURCHASE PRICE.
On 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 Offeror will accept for payment, and will pay for, Units validly
tendered and not withdrawn in accordance with the Offer, as promptly as
practicable following the Expiration Date. In all cases, payment for Units
purchased pursuant to the Offer will be made only after timely receipt by the
Partnership of a properly completed and duly executed Letter of Transmittal and
any other documents required by the Letter of Transmittal.
For purposes of the Offer, the Offeror shall be deemed to have accepted for
payment (and thereby purchased) tendered Units when, as and if the Offeror gives
oral or written notice to the Partnership of the Offeror's acceptance for
payment of such Units pursuant to the Offer. On the terms and subject to the
conditions of the Offer, payment for Units purchased pursuant to the Offer will
<PAGE>
in all cases be made by deposit of the Purchase Price with the Partnership,
which will act as agent for the tendering Limited Partners for the purpose of
receiving payment from the Offeror and transmitting payment to tendering Limited
Partners. Under no circumstances will interest be paid on the Purchase Price by
reason of any delay in making such payment.
If any tendered Units are not accepted for payment pursuant to the terms
and conditions of the Offer, the Letter of Transmittal with respect to such
Units not purchased will be destroyed by the Partnership. If, for any reason
whatsoever, acceptance for payment of, or payment for, any Units tendered
pursuant to the Offer is delayed or the Offeror is unable to accept for payment,
purchase or pay for Units tendered pursuant to the Offer, then, without
prejudice to the Offeror's rights under the Offer (but subject to compliance
with Rule 14e-1(c) under the Exchange Act), the Partnership may, nevertheless,
on behalf of the Offeror, retain tendered Units, subject to any limitations of
applicable law, and such Units may not be withdrawn, except to the extent that
the tendering Limited Partners are entitled to withdrawal rights as described in
the Offer.
If, prior to the Expiration Date, the Offeror shall increase the
consideration offered to Limited Partners 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.
The Offeror reserves the right to transfer or assign, at any time and from
time to time, in whole or in part, to one or more affiliates, the right to
purchase Units tendered pursuant to the Offer, but no such transfer or
assignment will relieve the Offeror of its obligations under the Offer or
prejudice the rights of tendering Limited Partners to receive payments for Units
validly tendered and accepted for payment pursuant to the Offer.
8. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, the Offeror will not be
required to accept for payment or pay for any Units tendered, and may terminate
or amend the Offer or may postpone (subject to the requirements of the Exchange
Act for prompt payment for or return of Units) the acceptance for payment of or
payment for Units tendered, if at any time on or after October 17, 1997, and
before acceptance for payment of or payment for any such Units, any of the
following events shall have occurred (or shall have been determined by the
Offeror in its sole judgment to have occurred) regardless of the circumstances
giving rise thereto (including any action or omission to act by the Offeror):
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, or before any court, authority, agency or tribunal
that (i) challenges or seeks to challenge the acquisition of Units pursuant
to the Offer or otherwise in any manner relates to or affects the Offer or
(ii) in the sole judgment of the Offeror, could materially and adversely
affect the business, condition (financial or other), income, operations or
<PAGE>
prospects of the Partnership, or otherwise materially impair in any way the
contemplated future conduct of the business of the Partnership or
materially impair the contemplated benefits of the Offer to the Offeror;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, withdrawn or abrogated or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought, promulgated,
enacted, entered, amended, enforced or deemed to be applicable to the Offer
or the Partnership, by any legislative body, court, authority, agency or
tribunal which, in the Offeror's sole judgment, would or might directly or
indirectly (i) make the acceptance for payment of, or payment for, some or
all of the Units illegal or otherwise restrict or prohibit consummation of
the Offer, (ii) delay or restrict the ability of the Offeror, or render the
Offeror unable, to accept for payment or pay for some or all of the Units,
(iii) imposes or seeks to impose limitations on the ability of the Offeror
to acquire or hold or to exercise full rights of ownership of the Units,
(iv) materially impair the contemplated benefits of the Offer to the
Offeror or (v) materially affect the business, condition (financial or
other), income, operations or prospects of the Partnership, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Partnership;
(c) it shall have been publicly disclosed or the Offeror shall have
learned that any person or "group" (within the meaning of Section 13(d)(3)
of the Exchange Act) has acquired or proposes to acquire beneficial
ownership of more than 5% of the outstanding 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, (ii) any significant decline in
the general level of market prices of equity securities in the United
States or abroad, (iii) any change in the general political, market,
economic or financial condition in the United States or abroad that could
have a material adverse effect on the Partnership's business, condition
(financial or other), income, operations or prospects, (iv) the declaration
of a banking moratorium or any suspension of payments in respect of banks
in the United States or any limitation on, or any event which, in the
Offeror's sole judgment, might affect, the extension of credit by lending
institutions in the United States, (v) the commencement of a war, armed
hostilities or other international or national crisis directly or
indirectly involving the United States or (vi) in the case of any of the
foregoing existing at the time of the commencement of the Offer, in the
Offeror's sole judgment, a material acceleration or worsening thereof;
(e) a tender or exchange offer with respect to some or all of the
Units (other than the Offer) or a merger, acquisition or other business
combination proposal for the Partnership, shall have been proposed,
announced or made;
(f) there shall have occurred any event or events that have resulted,
or may in the sole judgment of the Offeror result, in an actual or
threatened change in the business, condition (financial or other), income,
<PAGE>
operations, stock ownership or prospects of the Partnership; or materially
impair the contemplated benefits of the Offer;
(g) there shall have occurred any decline in the S&P Composite 500
Stock Index by an amount in excess of 15% measured from the close of
business on October 16, 1997; or
(h) the Offeror shall not have received the approval of the
Partnership to the assignment to the Offeror of the Units tendered pursuant
to the Offer;
and, in the sole judgment of the Offeror, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance for
payment or payment.
Any of the foregoing conditions may be waived by the Offeror, in whole or
in part, at any time and from time to time in its sole discretion. The failure
by the Offeror at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time. Any determination
by the Offeror concerning the events described above will be final and binding
on all parties.
9. PRICE RANGE OF UNITS; DISTRIBUTIONS; TRADING VOLUME
The Units are not listed on any national securities exchange or quoted in
the over-the-counter market, and there is no established public trading market
for the Units. Secondary sales activity for the Units has been extremely limited
and sporadic. The Partnership monitors transfers of the Units because the
admission of the transferee as a substitute limited partner requires the consent
of the General Partner under the Partnership Agreement. However, neither the
Partnership nor the Offeror has information regarding the prices at which all
secondary sales transactions in the Units have been effectuated. Various
organizations offer to purchase and sell limited partnership interests (such as
the Units) in secondary sales transactions. Various publications such as The
Partnership Spectrum summarize and report information (on a monthly, bimonthly
or less frequent basis) regarding secondary sales transactions in limited
partnership interests (including the Units), including the prices at which such
secondary sales transactions are effectuated.
The Offeror has been informed that the Partnership estimates, based solely
on the transfer records of the Partnership, that the number of Units transferred
in sales transactions (I.E., excluding transactions believed to be between
related parties, family members or the same beneficial owner) was as follows:
<TABLE>
<CAPTION>
Number of Total Percentage of Number of
YEAR UNITS TRANSFERRED UNITS OUTSTANDING TRANSACTIONS
---- ----------------- ----------------- ------------
<S> <C> <C> <C>
1995 272 0.93% 4
1996 926 3.15% 39
1997 (through 407 1.39% 53
September 30)
</TABLE>
<PAGE>
The information set forth below is extracted from sections of the
September/October 1996, November/December, 1996, January/February, 1997,
March/April, 1997, May/June, 1007 and July/August, 1997 issues of The
Partnership Spectrum (the "Partnership Spectrum") captioned "Secondary
Spectrum." The Partnership Spectrum, a periodical published by Partnership
Profiles, Inc., summarizes secondary market prices for public limited
partnerships based on actual transactions during the reporting periods listed on
the tables below. The following secondary-market firms provided high and low
price data to The Partnership Spectrum for some or all of the reporting periods:
American Partnership Services - (800) 736-9797/(801) 756-1166, Chicago
Partnership Board - (800) 272-6273/(312) 332-4100, Cuyler & Associates - (800)
274-9991/(602) 596-0120, DCC Securities - (800) 945-0440/(212) 370-1090, Fox &
Henry/Secondary Income Funds (800) 578-6289/(708) 325-4445, Frain Asset
Management - (800) 654-6110, Laidlaw Equities, Inc.. - (212) 628-3174,
MacKenzie-Patterson Securities - (800) 854-8357/(510) 631-9100, Nationwide
Partnership Marketplace - (800) 969-8996/(415) 456-8825, Pacific Partnership
Group - (800) 727-7244/(602) 957-3050, Partnership Service Network - (800)
483-0776/(818) 591-3707, Raymond James & Associates - (800) 248-8863/(813)
573-3800 and Securities Service Network. - (800) 700-7998/(407) 496-5387.
IN EVALUATING WHETHER OR NOT TO TENDER THEIR UNITS IN THE OFFER, LIMITED
PARTNERS MAY WISH TO CONTACT THESE FIRMS OR OTHER FIRMS INVOLVED IN SECONDARY
SALES OF INTERESTS IN LIMITED PARTNERSHIPS.
The information regarding sale transactions in Units from the Partnership
Spectrum is as follows:
<TABLE>
<CAPTION>
REPORTING PERIOD PER UNIT TRANSACTION PRICE NO. OF UNITS
---------------- -------------------------- ------------
<S> <C> <C>
September/October 1996 $35.00 80
November/December 1996 $56.00 25
January/February 1997 N/A None
March/April 1997 N/A None
May/June 1997 N/A None
July/August 1997 N/A None
</TABLE>
The information from The Partnership Spectrum contained above is provided
without verification by the Offeror and is subject to the following
qualifications in The Partnership Spectrum: "Limited partnership investments are
generally illiquid, long-term investments. Sellers of such investments are often
considered distressed for various reasons and find it necessary to accepted
<PAGE>
discounted sales prices. As a result, the above price information may not
reflect the intrinsic valued of a limited partnership interest. In some cases,
discounts from original purchase prices result from a partnership having already
liquidated, financed or refinanced a portion of its investment portfolio."
Transaction data has been provided by the firms listed above and has not been
verified by The Partnership Spectrum.
10. CERTAIN INFORMATION CONCERNING THE OFFEROR
John N. Galardi, the Offeror, is the owner of 50% of the outstanding
capital and voting stock and a director of CGS Real Estate Company, Inc., of
which S-P Properties, Inc., the General Partner of the Partnership, is a
wholly-owned subsidiary. The Offeror is the Chairman and founder of Galardi
Group, Inc., a privately held operation encompassing more than 500 restaurants,
including Wienershcnitzel, the largest privately held hot dog chain in the
United States. The Offeror's business address is 4440 Von Karman, Suite 200,
Newport Beach, California 92660. During the past five years, the Offeror has
also served on the board of directors of American Franchise Group located in
Fort Lauderdale, Florida. The Offeror is a citizen of the United States.
During the past five years, the Offeror has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors), nor
has the Offeror been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
11. SOURCE AND AMOUNT OF FUNDS
Assuming that the Offeror purchases 20,000 Units pursuant to the Offer at
the Purchase Price, the total amount required by the Offeror to purchase such
Units will be approximately $550,000, exclusive of fees and other expenses. The
source of these funds will be the Offeror's personal funds.
12. PAST CONTRACTS, TRANSACTIONS OR NEGOTIATIONS; TRANSACTIONS AND AGREEMENTS
CONCERNING THE UNITS.
The Offeror has not been a party to any contract, transaction or
negotiation since January 1, 1995 with the Partnership where the aggregate
amount of such transaction was not less than 1% of the Partnership's
consolidated revenues. Except as disclosed herein in connection with the Offer,
the Offeror has not been a party to contacts, negotiations or transactions with
the Partnership concerning a merger, consolidation or acquisition of the
Partnership; a tender offer or acquisition of securities of the Partnership, an
election of a new general partner of the Partnership, or a sale or other
transfer of a material amount of assets of the Partnership. Additionally, the
Offeror is not a party to any contract, arrangement, understanding or
relationship, directly or indirectly, with any other person with respect to any
securities of the Partnership, has not been a party to any contract, transaction
or negotiation with any person with respect to the Units, including any
<PAGE>
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any Units, joint ventures, loan or option arrangements, puts or
calls, guaranties of loans, guaranties of loans, guaranties against loss or the
giving or withholding of proxies, consents or authorizations and is not aware of
any contacts or negotiations between the Partnership and any of its affiliates,
or between the Partnership (including its affiliates) and any person not
affiliated with the Partnership concerning a merger, consolidation or
acquisition of the Partnership; a tender offer or acquisition of securities of
the Partnership, an election of a new general partner of the Partnership, or a
sale or other transfer of a material amount of assets of the Partnership.
Schedule A hereto sets forth the number of Units purchased by the Offeror
or other affiliates of the Partnership (including the directors of the General
Partner) since January 1, 1995, the range of prices paid for such Units and the
average purchase price paid for each quarterly period since January 1, 1995.
13. INTEREST IN UNITS
The Offeror beneficially owns no Units. Except as disclosed in Schedule A,
neither the Partnership, the Offeror nor any person affiliated with either the
Partnership or the Offeror has engaged in any transactions with respect to the
Units within the 60 days immediately preceding the date of the Offer.
14. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS.
The Offeror expressly reserves the right, in its sole discretion and at any
time or from time to time, to extend the period of time during which the Offer
is open by giving oral or written notice of such extension to the Partnership.
There can be no assurance, however, that the Offeror will exercise its right to
extend the Offer. During any such extension, all Units previously tendered will
remain subject to the Offer, except to the extent that such Units may be
withdrawn as set forth in Section 7. The Offeror also expressly reserves the
right, in its sole discretion, (i) to terminate the Offer and not accept for
payment any Units not theretofore accepted for payment or, subject to Rule
14e-1(c) under the Exchange Act, which requires the Offeror either to pay the
consideration offered or to return the Units tendered promptly after the
termination or withdrawal of the Offer, to postpone payment for Units upon the
occurrence of any of the conditions specified in Section 9 hereof by giving oral
or written notice of such termination to the Partnership and making a public
announcement thereof and (ii) at any time or from time to time, to amend the
Offer in any respect. Amendments to the Offer may be effected by public
announcement. Without limiting the manner in which the Offeror may choose to
make public announcement of any termination or amendment, the Offeror shall have
no obligation (except as otherwise required by applicable law) to publish,
advertise or otherwise communicate any such public announcement, other than by
making a release to the Dow Jones News Service, except in the case of an
announcement of an extension of the Offer, in which case the Offeror shall have
no obligation to publish, advertise or otherwise communicate such announcement
other than by issuing a notice of such extension by press release or other
public announcement, which notice shall be issued no later than 9:00 a.m.,
Pacific time, on the next business day after the previously scheduled Expiration
<PAGE>
Date. Material changes to information previously provided to Limited Partners in
this Offer or in documents furnished subsequent thereto will be disseminated to
Limited Partners in compliance with Rule 14d-6(d) promulgated under the Exchange
Act.
If the Offeror materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Offeror will extend the Offer to the extent required by Rules 14d-6(d) and Rule
14e-1(a) under the Exchange Act. Those rules require that the minimum period
during which an offer must remain open following material changes in the terms
of the offer or information concerning the offer (other than a change in price,
change in dealer's soliciting fee or change in percentage of securities sought)
will depend on the facts and circumstances, including the relative materiality
of such terms or information. In a published release, the Commission has stated
that in its view, an offer should remain open for a minimum of five business
days from the date that notice of such a material change is first published,
sent or given. The Offer will continue or be extended for at least ten business
days from the time the Offeror publishes, sends or gives to holders of Units a
notice that it will (a) increase or decrease the price it will pay for Units or
(b) decrease the number of Units it seeks.
15. PERSONS RETAINED; FEES AND EXPENSES.
The Offeror has retained the Partnership to act as the tender agent as in
connection with the Offer. The Partnership will receive reasonable compensation
for its services and will also be reimbursed for certain out-of-pocket expenses.
The Offeror has agreed to indemnify the Partnership against certain liabilities,
including certain liabilities under the federal securities laws, in connection
with the Offer. The Partnership has not been retained to, and will not, make
solicitations or recommendations in connection with the Offer.
The Offeror does not otherwise intend to retain the services of any
officer, employee or class of employees of the Partnership in connection with
the Offer. Similarly, the Offeror does not intend to use any corporate asset of
the Partnership in connection with the conduct or consummation of the Offer.
The Offeror will not pay any solicitation fees to any broker, dealer, bank,
trust Offeror or other person for any Units purchased in connection with the
Offer. The Offeror will reimburse such persons for customary handling and
mailing expenses incurred in connection with the Offer.
The Offeror will pay all transfer fees or transfer taxes, if any, payable
on account of the acquisition of the Units by the Offeror pursuant to the Offer.
The expenses incurred, or estimated to be incurred, by the Offeror in
connection with the Offer are set forth below. The Offeror will be responsible
for paying all such expenses.
<TABLE>
<CAPTION>
<S> <C>
Printing and Mailing Fees...................................... $ 5,000
Filing Fees.................................................... 110
Legal, Accounting and Miscellaneous............................ 5,000
Total......................................................... $ 10,110
</TABLE>
<PAGE>
16. MISCELLANEOUS.
The Partnership is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports and other information
with the Commission relating to its business, financial condition and other
matters. The Offeror has filed a Rule 13e-3 Transaction Statement on Schedule
13e-3 and a Transaction Statement on Tender Offer Statement on Schedule 14D-1
with the Commission, which includes certain additional information relating to
the Offer. Such reports, as well as such other material, may be inspected and
copies may be obtained at the Commission's Public Reference Section at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection and copying at the regional offices of
the Commission located at 7 World Trade Center, 13th Floor, New York, New York
10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained by mail, upon payment of
the Commission's customary fees, from the Commission's Public Reference Section
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission maintains a Web site that contains reports, proxy and information
statements and other materials that are filed through the Commission's
Electronic Data Gathering, Analysis, and Retrieval system. This Web site can be
accessed at http://www.sec.gov. The Offeror's Schedule 13e-3 and Schedule 14D-1
may not be available at the Commission's regional offices.
The Offer is being made to all Limited Partners. The Offeror is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If the Offeror becomes aware
of any valid state statute prohibiting the making of the Offer, the Offeror will
make a good faith effort to comply with such statute. If, after such good faith
effort, the Offeror cannot comply with such statute, the Offer will not be made
to, nor will tenders be accepted from or on behalf of, holders of Units in such
state.
October 17, 1997 JOHN N. GALARDI
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Period Number of Units Purchased by Range of Prices Average
Affiliates of the Partnership Paid Purchase
Price
<S> <C> <C> <C>
1/1/95 to 3/31/95 None N/A N/A
4/1/95 to 6/30/95 78 $10.00 per unit $10.00
7/1/95 to 9/30/95 4 $10.00 per unit $10.00
10/1/95 to 12/31/95 50 $20.00 per unit $20.00
1/1/96 to 3/31/96 292 $10.00 to $25.00 $15.16
per unit
4/1/96 to 6/30/96 130 $10.00 to $15.00 $12.55
per unit
7/1/96 to 9/30/96 160 $10.00 per unit $10.00
10/1/96 to 12/31/96 84 $20.00 per unit $20.00
1/1/97 to 3/31/97 54 $20.00 per unit $20.00
4/1/97 to 6/30/97 50 $20.00 per unit $20.00
7/1/97 to present 282 $20.00 to $25.00 $23.81
per unit
</TABLE>
<PAGE>
LETTER OF TRANSMITTAL
TO PURCHASE LIMITED PARTNERSHIP UNITS
OF
SIERRA PACIFIC DEVELOPMENT FUND,
A CALIFORNIA LIMITED PARTNERSHIP
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED OCTOBER 17, 1997
OF JOHN N. GALARDI
------------------------------------------------------------------------------
| DESCRIPTION OF LIMITED PARTNERSHIP UNITS ("UNITS") TENDERED |
| |
|NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) UNITS TENDERED |
| |
| __________________________* |
| |
| * Unless otherwise indicated, it|
| will be assumed that all Units|
| held by the registered holder are|
| being tendered. See Instruction 3.|
------------------------------------------------------------------------------
------------------------------------------------------------------------------
| THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., PACIFIC TIME, ON |
| MONDAY, NOVEMBER 17, 1997, UNLESS THE OFFER IS EXTENDED. |
------------------------------------------------------------------------------
To: Sierra Pacific Development Fund (the "Partnership")
<TABLE>
<CAPTION>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
<S> <C> <C>
Sierra Pacific Development Fund Sierra Pacific Development Fund Sierra Pacific Development Fund
2424 S.E. Bristol Street, No. 200 Facsimile: (714) 225-7570 2424 S.E. Bristol Street, Suite 200
Newport Beach, California 92660 Telephone: (714) 225-7500 Newport Beach, California 92660
CONFIRM BY TELEPHONE:
(714) 225-7500
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE
LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THE LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to John N. Galardi, an individual (the
"Bidder"), the above-described Limited Partnership Units (the "Units") for
Sierra Pacific Development Fund (the "Partnership") pursuant to the Bidder's
offer to purchase at a price per Unit of $27.50, net to the seller in cash, on
the terms and subject to the conditions set forth in the Offer to Purchase,
dated October 17, 1997 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together constitute the
"Offer").
Subject to, and effective upon, acceptance for payment of and payment for
the Units tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Bidder all
right, title and interest in and to all the Units that are being tendered
hereby (and any and all other Units or other securities issued or issuable in
respect thereof on or after October 17, 1997 (collectively, "Distributions"))
and constitutes and appoints the Partnership the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Units and all
Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) transfer
ownership of such Units and all Distributions to or upon the order of the
Bidder, (b) present such Units and all Distributions for registration and
transfer on the books of the Partnership and (c) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Units and all
Distributions, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned (i)
has received and reviewed the Offer to Purchase and (ii) has full power and
authority to tender, sell, assign and transfer the Units tendered hereby and
all Distributions and that, when and to the extent the same are accepted for
payment by the Bidder, the Bidder will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver
any additional documents deemed by the Partnership or the Bidder to be
necessary or desirable to complete the sale, assignment and transfer of the
Units tendered hereby and all Distributions.
The undersigned (i) has been advised that the Bidder is the owner of 50%
of the outstanding capital and voting stock and a director of CGS Real Estate
Company, Inc., of which S-P Properties, Inc., the General Partner of the
Partnership, is a wholly-owned subsidiary, and that the General Partner of the
Partnership makes no recommendation as to whether or not the undersigned
should tender his or her Units in the Offer and (ii) has made his or her own
decision to tender the Units.
The undersigned understands that, notwithstanding any other provisions of
the Offer and subject to the applicable rules of the Securities and Exchange
Commission, the Bidder will not be required to accept for payment or pay for
<PAGE>
any Units tendered, and may terminate or amend the Offer or may postpone the
acceptance for payment of or payment for Units tendered, if at any time on or
after October 17, 1997, and before acceptance for payment of or payment for
any such Units, any of the following events shall have occurred (or shall have
been determined by the Bidder in its sole judgment to have occurred)
regardless of the circumstances giving rise thereto (including any action or
omission to act by the Bidder):
(a) there shall have been threatened, instituted or pending any
action or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, or before any court, authority, agency or tribunal
that (i) challenges or seeks to challenge the acquisition of Units
pursuant to the Offer or otherwise in any manner relates to or affects
the Offer or (ii) in the sole judgment of the Bidder, could materially
and adversely affect the business, condition (financial or other),
income, operations or prospects of the Partnership, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Partnership or materially impair the contemplated
benefits of the Offer to the Bidder;
(b) there shall have been any action threatened, pending or taken,
or approval withheld, withdrawn or abrogated or any statute, rule,
regulation, judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or the Partnership, by any legislative body,
court, authority, agency or tribunal which, in the Bidder's sole
judgment, would or might directly or indirectly (i) make the acceptance
for payment of, or payment for, some or all of the Units illegal or
otherwise restrict or prohibit consummation of the Offer, (ii) delay or
restrict the ability of the Bidder, or render the Bidder unable, to
accept for payment or pay for some or all of the Units, (iii) imposes or
seeks to impose limitations on the ability of the Bidder to acquire or
hold or to exercise full rights of ownership of the Units, (iv)
materially impair the contemplated benefits of the Offer to the Bidder or
(v) materially affect the business, condition (financial or other),
income, operations or prospects of the Partnership, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Partnership;
(c) it shall have been publicly disclosed or the Bidder shall have
learned that any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) has acquired or proposes to acquire
beneficial ownership of more than 5% of the outstanding 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, (ii) any significant decline
in the general level of market prices of equity securities in the United
States or abroad, (iii) any change in the general political, market,
economic or financial condition in the United States or abroad that could
have a material adverse effect on the Partnership's business, condition
(financial or other), income, operations or prospects, (iv) the
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or any limitation on, or any event
<PAGE>
which, in the Bidder's sole judgment, might affect, the extension of
credit by lending institutions in the United States, (v) the commencement
of a war, armed hostilities or other international or national crisis
directly or indirectly involving the United States or (vi) in the case of
any of the foregoing existing at the time of the commencement of the
Offer, in the Bidder's sole judgment, a material acceleration or
worsening thereof;
(e) a tender or exchange offer with respect to some or all of the
Units (other than the Offer) or a merger, acquisition or other business
combination proposal for the Partnership, shall have been proposed,
announced or made;
(f) there shall have occurred any event or events that have
resulted, or may in the sole judgment of the Bidder result, in an actual
or threatened change in the business, condition (financial or other),
income, operations, stock ownership or prospects of the Partnership; or
materially impair the contemplated benefits of the Offer;
(g) there shall have occurred any decline in the S&P Composite 500
Stock Index by an amount in excess of 15% measured from the close of
business on October 16, 1997; or
(h) the Offeror shall not have received the approval of the
Partnership to the assignment to the Offeror of the Units tendered
pursuant to the Offer;
and, in the sole judgment of the Bidder, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance
for payment or payment. Any of the foregoing conditions may be waived by the
Bidder, in whole or in part, at any time and from time to time in its sole
discretion. The failure by the Bidder at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by the Bidder concerning the events
described above will be final and binding on all parties.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the undersigned, and
any obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. Except as
stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Units pursuant to any one of
the procedures described in the Offer to Purchase and in the instructions
hereto will constitute the undersigned's acceptance of the terms and
conditions of the Offer, including the undersigned's representation and
warranty that (i) the undersigned has a net long position in the Units being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (ii) the tender of such Units complies
with Rule 14e-4. The Bidder's acceptance for payment of Units tendered
pursuant to the Offer will constitute a binding agreement between the
undersigned and the Bidder upon the terms and subject to the conditions of the
Offer.
<PAGE>
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Units purchased in the name(s)
of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail the check for the Purchase Price of any
Units purchased to the undersigned at the address shown below the
undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the Purchase Price of any Units purchased and mail said check to
the person(s) so indicated. The undersigned recognizes that the Bidder has no
obligation, pursuant to the "Special Payment Instructions," to transfer any
Units from the name of the registered holder(s) thereof if the Bidder does not
accept for payment any of the Units so tendered.
<PAGE>
----------------------------------- -----------------------------------
| SPECIAL PAYMENT INSTRUCTIONS | | SPECIAL DELIVERY INSTRUCTIONS |
| (SEE INSTRUCTIONS 4, 5 AND 6) | | SEE INSTRUCTIONS 4, 5 AND 6) |
| | | |
| | | |
| To be completed ONLY if the| | To be completed ONLY if the|
|check for the Purchase Price of| |check for the Purchase Price of|
|Units purchased is to be issued in| |Units purchased is to be mailed to|
|the name of someone other than the| |someone other than the undersigned|
|undersigned. | |or to the undersigned at an address|
| | |undersigned'd signature(s). |
| | | |
| | | |
|Issue check to: | | |
| | | |
|Name_______________________________| |Mail check to: |
| | | |
| _______________________________| |Name_______________________________|
| (Please Print) | | |
| | | _______________________________|
|Address____________________________| | (Please Print) |
| | | |
| _______________________________| |Address____________________________|
| (Include Zip Code) | | |
| | | ____________________________|
| _______________________________| | (Include Zip Code) |
| (Taxpayer Identification or | | |
| Social Security No.) | | |
----------------------------------- -----------------------------------
<PAGE>
------------------------------------------------------------------------------
| SIGN HERE |
| (PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW) |
| |
| |
| __________________________________________________________________________ |
| Signature(s) of Owner(s) |
| |
| __________________________________________________________________________ |
| |
|Dated: _______________, 1997 |
| |
|Name(s)_____________________________________________________________________ |
| |
| __________________________________________________________________________ |
| (Please Print) |
| |
|Capacity (full title)________________________________________________________ |
| |
|Address_____________________________________________________________________ |
| |
| __________________________________________________________________________ |
| |
| __________________________________________________________________________ |
| (Include Zip Code) |
| |
|Area Code and Telephone No._________________________________________________ |
| |
| |
|Must be signed by registered holder(s) exactly as name(s) appear(s) under |
|registration above. If signature is by a trustee, executor, administrator, |
|guardian, attorney-in-fact, officer of a corporation or other person acting |
|in a fiduciary or representative capacity, please set forth full title and see|
|Instruction 4.) |
------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND UNITS. A properly completed and
duly executed Letter of Transmittal (or facsimile thereof) and any other
documents required by this Letter of Transmittal, must be received by the
Partnership at its addresses set forth on the front page of this Letter of
Transmittal on or prior to the Expiration Date (as defined in the Offer to
Purchase).
THE METHOD OF DELIVERY OF UNITS AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER.
No alternative, conditional or contingent tenders will be accepted. By
executing this Letter of Transmittal (or a facsimile thereof), the tendering
stockholder waives any right to receive any notice of the acceptance for
payment of the Units.
2. INADEQUATE SPACE. If the space provided herein is inadequate, the
number of Units should be listed on a separate schedule attached hereto.
3. PARTIAL TENDERS. If fewer than all the Units held by the registered
holder are to be tendered, fill in the number of Units that are to be tendered
in the box entitled "Number of Units Tendered." All Units held by a registered
holder will be deemed to have been tendered unless otherwise indicted.
4. SIGNATURES ON LETTER OF TRANSMITTAL. If this Letter of Transmittal is
signed by the registered holder(s) of the Units hereby, the signature(s) must
correspond with the holder's registration.
If any of the Units hereby is held of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Units tendered hereby are registered in different names, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations.
If this Letter of Transmittal is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing, and proper evidence satisfactory to the Bidder of the
authority of such person so to act must be submitted.
5. STOCK TRANSFER TAXES. Except as set forth in this Instruction 5, the
Bidder will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Units to it or its order pursuant to the Offer.
If, however, payment of the Purchase Price is to be made to, or Units not
tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s), or if tendered Units are registered in
the name of any person other than the person(s) signing this Letter of
<PAGE>
Transmittal, the amount of any stock transfer taxes (whether imposed on the
registered holder(s), such other person or otherwise) payable on account of
the transfer to such person will be deducted from the Purchase Price unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted.
6. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
Purchase Price of any Units purchased is to be issued in the name of, and /or
any Units not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal or if the check is to be
mailed to someone other than the person(s) signing this Letter of Transmittal
or to an address other than that shown below the signature of the person(s)
signing this Letter of Transmittal, then the boxes captioned "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal should be completed.
7. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or
requests for assistance should be directed to the Bidder at the telephone
number and address provided in the Offer to Purchase. Requests for additional
copies of the Offer to Purchase, this Letter of Transmittal or other tender
offer materials should also be directed to the Bidder and such copies will be
furnished promptly at the Bidder's expense.
8. IRREGULARITIES. All questions as to the Purchase Price, the form of
documents and the validity, eligibility (including time of receipt) and
acceptance of any tender of Units will be determined by the Bidder, in its
sole discretion, and its determination shall be final and binding. The Bidder
reserves the absolute right to reject any or all tenders of Units that it
determines are not in proper form or the acceptance for payment of or payment
for Units that may, in the opinion of the Bidder's counsel, be unlawful. The
Bidder also reserves the absolute right to waive any of the conditions to the
Offer or any defect or irregularity in any tender of Units and the Bidder's
interpretation of the terms and conditions of the Offer (including these
instructions) shall be final and binding. Unless waived, any defects or
irregularities in connection with tenders must be cured within such time as
the Bidder shall determine. None of the Bidder, the Partnership or any other
person shall be under any duty to give notice of any defect or irregularity in
tenders, nor shall any of them incur any liability for failure to give any
such notice. Tenders will not be deemed to have been made until all defects
and irregularities have been cured or waived.
9. IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Units are
accepted for payment is required to provide the Partnership (as payer) with
either such stockholder's correct TIN on Substitute Form W-9 below or in the
case of certain foreign stockholders, a properly completed Form W-8. If such
stockholder is an individual, the TIN is his or her social security number.
For businesses and other entities, the number is the employer identification
number. If the Partnership is not provided with the correct TIN or properly
completed Form W-8, the stockholder may be subject to a $50 penalty imposed by
the Internal Revenue Service. In addition, payments that are made to such
stockholder with respect to Units purchased pursuant to the Offer may be
subject to backup withholding. The Form W-8 can be obtained from the
<PAGE>
Partnership. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If federal income tax backup withholding applies, the Partnership is
required to withhold 31% of any payments made to the stockholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to federal income tax backup withholding will be reduced by
the amount of the tax withheld. If withholding results in an overpayment of
taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a stockholder
with respect to Units purchased pursuant to the Offer, the stockholder is
required to notify the Partnership of his or her correct TIN by completing the
Substitute Form W-9 attached hereto certifying that the TIN provided on
Substitute Form W-9 is correct and that (1) the stockholder has not been
notified by the Internal Revenue Service that he or she is subject to federal
income tax backup withholding as a result of failure to report all interest or
dividends or (2) the Internal Revenue Service has notified the stockholder
that he or she is no longer subject to federal income tax backup withholding.
Foreign stockholders must submit a properly completed Form W-8 in order to
avoid the applicable backup withholding; PROVIDED, HOWEVER, that backup
withholding will not apply to foreign stockholders subject to 30% (or lower
treaty rate) withholding on gross payments received pursuant to the Offer.
WHAT NUMBER TO GIVE THE PARTNERSHIP
The stockholder is required to give the Partnership the social security
number or employer identification number of the registered owner of the Units.
If the Units are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
10. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF)
TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE PARTNERSHIP
ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).
<PAGE>
------------------------------------------------------------------------------
|SUBSTITUTE |PART 1-PLEASE PROVIDE |TIN______________________|
| |YOUR TIN IN THE BOX AT | SOCIAL SECURITY NUMBER|
|FORM W-9 |RIGHT AND CERTIFY BY | OR EMPLOYER |
| |SIGNING AND DATING | IDENTIFICATION NUMBER |
| |BELOW. | |
| |--------------------------|-------------------------|
|DEPARTMENT OF THE |NAME (PLEASE PRINT) | PART 2 |
|TREASURY | | |
|INTERNAL REVENUE SERVICE | | |
| |--------------------------| |
| |ADDRESS | Awaiting |
|PAYER'S REQUEST FOR | | TIN |
|TAXPAYER |--------------------------| _ |
|IDENTIFICATION NUMBER |CITY STATE ZIP CODE| |_| |
|CERTIFICATION | | |
| | | |
| |----------------------------------------------------|
| | Part 3--CERTIFICATION-UNDER THE PENALTIES OF |
| | PERJURY, I CERTIFY THAT (1) the number shown on |
| | this form is my correct taxpayer identification |
| | number (or a TIN has not been issued to me but I |
| | have mailed or delivered an application to receive |
| | a TIN or intend to do so in the near future),(2) I |
| | am not subject to backup withholding either because|
| | I have not been notified by the Internal Revenue |
| | Service (the "IRS") that I am subject to backup |
| | withholding as a result of a failure to report all |
| | interest or dividends or the IRS has notified me |
| | that I am no longer subject to backup withholding |
| | and (3) all other information provided on this |
| | form is true, correct and complete. |
| | |
| | SIGNATURE_________________________________________ |
| | DATE_______________ You must cross out item (2) |
| | above if you have been notified by the IRS that |
| | your are currently subject to backup withholding |
| | because of underreporting interest or dividends on |
| | your tax return. |
------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9.
<PAGE>
------------------------------------------------------------------------------
| CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER |
| |
| I certify under penalties of perjury that a taxpayer identification number|
| has not been issued to me and either (1) I have mailed or delivered an|
| application to receive a taxpayer identification number to the appropriate|
| Internal Revenue Service Center or Social Security Administration Office or|
| (2) I intend to mail or deliver an application in the near future. I|
| understand that if I do not provide a taxpayer identification number by the|
| time of payment, 31% of all payments of the Purchase Price made to me|
| thereafter will be withheld until I provide a number. |
| |
|Signature____________________________________ Date:___________________, 1997|
------------------------------------------------------------------------------
<PAGE>
Department of the Treasury Internal Revenue Service
Instructions for the Requester of Form W-9 (Rev. December 1996)
Request for Taxpayer Identification Number and Certification
SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE UNLESS OTHERWISE NOTED.
These instructions supplement the instructions on the Form W-9 for the
requester.
CHANGES TO NOTE
INDIVIDUAL TAXPAYER IDENTIFICATION NUMBER (ITIN).--Form W-9 (or an acceptable
substitute) is used by persons required to file information returns with the IRS
to get the payee's correct TIN. For individuals, the TIN is generally a social
security number (SSN).
However, in some cases, individuals who become U.S. resident aliens for tax
purposes are not eligible to obtain an SSN. This includes certain resident
aliens who must receive information returns but who cannot obtain an SSN.
These individuals must apply for an ITIN on Form W-7, Application for IRS
Individual Taxpayer Identification Number, unless they have an application
pending for an SSN. Individuals who have an ITIN must provide it on Form W-9.
TIN APPLIED FOR (60 DAY RULE).--The instructions clarify that the 60-day
exemption from backup withholding upon presentation of an awaiting-TIN
certificate applies only to interest and dividend payments, and certain payments
made with respect to readily tradable instruments. Other payments are subject to
backup withholding.
SUBSTITUTE FORM W-9
You may develop and use your own Form W-9 (a substitute Form W-9) if its content
is substantially similar to the IRS's official Form W-9 and it satisfies certain
certification requirements.
You may incorporate a substitute Form W-9 into other business forms you
customarily use, such as account signature cards, provided the certifications
that (1) the payee's TIN is correct and (2) the payee is not subject to backup
withholding due to failure to report interest and dividend income, shown on the
official Form W-9, are clearly set forth. You may not:
1. Use a substitute Form W-9 that requires the payee, by signing, to agree
to provisions unrelated to the required certifications.
2. Imply that a payee may be subject to backup withholding unless the payee
agrees to provisions on the substitute form that are unrelated to the required
certifications.
A substitute Form W-9 that contains a separate signature line just for the
certifications satisfies the requirement that the certifications be clearly set
forth.
<PAGE>
If a single signature line is used for the required certifications and
other provisions, the certifications must be highlighted, boxed, printed in
bold-face type, or presented in some other manner that causes the language to
stand out from all other information contained on the substitute form.
Additionally, the following statement must be presented in the same manner as in
the preceding sentence and must appear immediately above the single signature
line: "The Internal Revenue Service does not require your consent to any
provision of this document other than the certifications required to avoid
backup withholding."
Generally, the rules concerning the signature on a substitute Form W-9
apply to those completed after 1996. However, the effective date is extended to
July 1, 1997, if the payer:
* Must obtain the approval of a government authority for changes to the
format of its substitute Form W-9, and
* Applied for that approval by September 30, 1996, and
* Thereafter actively pursues that approval.
If you use a substitute form, the instructions do not have to be furnished
to the payee. The payee only needs to be instructed orally or in writing to
strike out the language of the certification that relates to payee
underreporting, if the payee is subject to backup withholding due to notified
payee underreporting. However, you are encouraged to provide instructions
relevant to the account, especially if the payee requests them.
TIN APPLIED FOR
If the payee returns a properly completed Form W-9 with "Applied For" written in
Part I (i.e., an "awaiting TIN" certificate), the payee must give you a TIN
within 60 calendar days to avoid backup withholding. You may use one of the
following rules to backup withholding. You may use one of the following rules to
backup withhold during this 60-day period on reportable interest or dividend
payments and certain payments with respect to readily tradable instruments.
RESERVE RULE.--If a payee withdraws more than $500 at one time during the 60-day
period, you must backup withhold on any reportable payments made during the
period, unless the payee reserves 31% of all reportable payments made to the
account during the period.
ALTERNATIVE RULE (OPTION 1).--You must backup withhold on any reportable
payments if the payee makes a withdrawal from the account after the close of 7
business days after you receive the awaiting-TIN certificate. Treat as
reportable payments all cash withdrawals in an amount up to the reportable
payments made from the day after you receive the awaiting-TIN certificate to the
day of withdrawal.
ALTERNATIVE RULE (OPTION 2).--You must backup withhold on any reportable
payments made to the payee's account, regardless of whether the payee makes any
withdrawals. Backup withholding under this option must begin no later than 7
business days after you receive the awaiting-TIN certificate.
<PAGE>
PAYEES EXEMPT FROM BACKUP WITHHOLDING
You are not required to backup withhold on any payments you make if the payee
is:
1. An organization exempt from tax under section 501(a), an IRA, or a
custodial account under section 403(b)(7), if the account satisfies the
requirements of section 401(f)(2).
2. The United States or any of its agencies or instrumentalities.
3. A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
4. A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
5. An international organization or any of its agencies or
instrumentalities.
OTHER PAYEES THAT MAY BE EXEMPT FROM BACKUP WITHHOLDING INCLUDE:
6. A corporation.
7. A foreign central bank of issue.
8. A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
9. A futures commission merchant registered with the Commodity Futures
Trading Commission.
10. A real estate investment trust.
11. An entity registered at all times during the tax year under the
Investment Company Act of 1940.
12. A common trust fund operated by a bank under section 584(a).
13. A financial institution.
14. A middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
15. A trust exempt from tax under section 664 or described in section 4947.
INTEREST AND DIVIDEND PAYMENTS.--All listed payees are exempt except the payee
in item (9).
<PAGE>
BROKER TRANSACTIONS.--All payees listed in items (1) through (13) are exempt. A
person registered under the Investment Advisors Act of 1940 who regularly acts
as a broker is also exempt.
PAYMENTS SUBJECT TO REPORTING UNDER SECTIONS 6041 AND 6041A.--These payments are
generally exempt from backup withholding only if made to payees listed in items
(1) through (7). However, a corporation (except certain hospitals described in
Regulations section 1.6041-3(c)) that provides medical and health care services,
or bills and collects payments for such services, is not exempt from backup
withholding.
BARTER EXCHANGE TRANSACTIONS AND PATRONAGE DIVIDENDS.--Only payees listed in
items (1) through (5) are exempt from backup withholding on these payments.
PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
Payments that are not subject to information reporting also are not subject to
backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045
6049, 6050A, and 6050N, and their regulations.
DIVIDENDS AND PATRONAGE DIVIDENDS that generally are exempt from backup
withholding include:
* Payments to nonresident aliens subject to withholding under section 1441.
* Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
* Payments of patronage dividends not paid in money.
* Payments made by certain foreign organizations.
* Section 404(k) payments made by an ESOP.
INTEREST PAYMENTS that generally are exempt from backup withholding include:
* Payments of interest on obligations issued by individuals. However, if you
pay $600 or more of interest in the course of your trade or business to a
payee, you must report the payment. Backup withholding applies to the
reportable payment if the payee has not provided a TIN or has provided an
incorrect TIN.
* Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
* Payments described in section 6049(b)(5) to nonresident aliens.
* Payments on tax-free covenant bonds under section 1451.
* Payments made by certain foreign organizations.
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* Mortgage interest paid to you.
OTHER TYPES OF PAYMENTS that generally are exempt from backup withholding
include:
* Wages.
* Distributions from a pension, annuity, profit-sharing or stock bonus plan,
or an IRA.
* Distributions from an owner-employee plan.
* Certain surrenders of life insurance contracts.
* Gambling winnings, if withholding is required under section 3402(q).
However, if withholding is not required under section 3402(q), backup
withholding applies if the payee fails to furnish a TIN.
* Real estate transactions reportable under section 6045.
ADDITIONAL INFORMATION
For more information on backup withholding and your requirements, get Pub. 1679,
A Guide to Backup Withholding, or Pub. 1281, Backup Withholding on Missing and
Incorrect TINs.
JOINT FOREIGN PAYEES
If the first payee listed on an account gives you Form W-8, Certificate of
Foreign Status, or a similar statement signed under penalties of perjury, backup
withholding applies unless:
1. Every joint payee provides the statement regarding foreign status; or
2. Any one of the joint payees who has not established foreign status gives
you a TIN.
If any one of the joint payees who has not established foreign status gives
you a TIN, that number is the TIN that must be used for purposes of backup
withholding and information reporting.
NAMES AND TINS TO USE FOR INFORMATION REPORTING
Show the full name and address as provided on Form W-9 on the information return
filed with the IRS and on the copy furnished to the payee. If you made payments
to more than one payee or the account is in more than one name, enter on the
first name line ONLY the name of the payee whose TIN is shown on the information
return. Show the names of any other individual payees in the area below the
first name line, if desired.
SOLE PROPRIETORS.--You must show the individual's name on the first name line.
On the second name line, you may enter the business name or "doing business as
(DBA)" if provided. You may not enter only the business name. For the TIN, you
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may enter either the individual's SSN or the employer identification number
(EIN) of the business. However, the IRS prefers that you show the SSN.
NOTICES FROM THE IRS
The IRS will send you a notice if the payee's name and TIN on the information
return you filed do not match the IRS's records. You may have to send a "B"
notice to the payee to solicit another TIN. See Pubs. 1679 and 1281 for copies
of the two types of "B" notices.
