<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
Winthrop Growth Investors 1 Limited Partnership
(Name of Subject Company)
Winthrop Growth Investors 1 Limited Partnership
(Name of Person Filing Statement)
Unit of Limited Partnership Interest
(Title of Class of Securities)
None
(CUSIP Number of Class of Securities)
Richard McCready
First Winthrop Corporation
One International Place
12th Floor
Boston, Massachusetts 02110
(617) 330-8600
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of the Person(s) filing Statement)
Copy to:
David J. Heymann
Post & Heymann, LLP
100 Jericho Quadrangle
Jericho, New York 11753
(516) 681-3636
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Item 1. Security and Subject Company
The name of the subject partnership is Winthrop Growth Investors 1
Limited Partnership, a Massachusetts limited partnership (the "Partnership"),
and the address of its principal executive offices is One International Place,
12th Floor, Boston, Massachusetts 02110. The title of the class of equity
securities to which this Statement relates is Units of Limited Partnership
Interest in the Partnership ("Units").
Item 2. Tender Offer of the Bidder
This Statement relates to the tender offer of LON-WGI Associates
L.L.C., a Delaware limited liability company (the "Purchaser"), to purchase up
to 11,000 outstanding Units at a purchase price equal to $275.00 per Unit less
the amount of any distributions made by the Partnership between February 6, 1997
and the date of payment of the purchase price by the Purchaser, pursuant to the
terms and conditions of an Offer to Purchase dated February 6, 1997, and the
related Letter of Transmittal (together, the "Offer"). In this regard,
Unitholders should note that the Partnership anticipates making a distribution
to Unitholders of approximately $2.16 per Unit in late February 1997. The Offer
is being made pursuant to a tender offer statement on Schedule 14D-1 dated
February 6, 1997.
The address of the executive offices of the Purchaser is One
International Place, Boston, Massachusetts 02110.
Item 3. Identity and Background
(a) The name and business address of the Partnership, which is the
person filing this Statement, are set forth in Item 1 above.
(b) The Purchaser is affiliated with Two Winthrop Properties, Inc., the
managing general partner of the Partnership (the "Managing General Partner"),
and Linnaeus-Lexington Associates Limited Partnership, a general partner of
the Partnership.
Certain Relationships. The General Partners receive no less than a 1%
allocation of the Partnership's profits and losses. In addition, subject to
receipt by Unitholders of certain priority distributions, the General Partners
are entitled to receive up to 10% of distributable cash from operations and 15%
of distributions of sale or refinancing proceeds. The Managing General Partner
and its affiliates are also entitled to be reimbursed for certain
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expenses and to receive fees pursuant to the terms of the Partnership Agreement
of the Partnership. For information as to the amounts paid to the Managing
General Partner and its affiliates during the last three fiscal years and the
nine months ended September 30, 1996 see Note 4 to the Financial Statements of
the Partnership in the Form 10-K of the Partnership for the fiscal year ended
December 31, 1995 and Note 4 to the Financial Statements of the Partnership in
the Form 10-QSB of the Partnership for the quarterly period ended September 30,
1996.
Item 4. The Solicitation or Recommendation
Because of the conflict of interest inherent in the fact that the
General Partners are, as described above, affiliates of the Purchaser, the
Partnership is making no recommendation and is remaining neutral as to whether
Unitholders should tender their Units pursuant to the Offer.
Item 5. Persons Retained, Employed or to be Compensated
Neither the Partnership nor any person acting on its behalf has or
currently intends to employ, retain or compensate any person or class of persons
to make solicitations or recommendations to Unitholders on its behalf concerning
the Offer.
Item 6. Recent Transactions and Intent with Respect to Securities.
(a) None
(b) Neither the Partnership nor any executive officer,
director, affiliate or subsidiary of the Partnership owns any Units.
Item 7. Certain Negotiations and Transactions by the Subject Company
(a) (b) Except as may otherwise be provided herein, no negotiation is
being undertaken or is underway by the Partnership, nor are there any
transactions, board resolutions of the Managing General Partner, agreements in
principle or signed contracts, in response to the Offer which relates to or
would result in: (1) an extraordinary transaction such as a merger or
reorganization, involving the Partnership or its subsidiaries; (2) a purchase,
sale or transfer of a material amount of assets by the Partnership or its
subsidiaries; (3) a tender offer for or other acquisition of securities by or of
the Partnership; or (4) any material change in the present capitalization or
dividend policy of the Partnership.
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Item 8. Additional Information to be Furnished
None.
Item 9. Material to be Filed as Exhibits
The following Exhibits are filed herewith:
Exhibit (a)(i) - Offer to Purchase of the Purchaser dated
February 6, 1997
Exhibit (a)(ii) - Cover Letter to Unitholders from the
Partnership dated February 6, 1997
Exhibit (b) - None
Exhibit (c)(i) - Note 4 to the financial statements of the
Partnership included in the Form 10-K of the
Partnership for the fiscal year ended December
31, 1995.
Exhibit (c)(ii) - Note 4 to the financial statements of the
Partnership included in the Form 10-QSB of the
Partnership for the quarterly period ended
September 30, 1996.
SIGNATURE
After reasonable 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.
WINTHROP GROWTH INVESTORS 1
LIMITED PARTNERSHIP
By: Two Winthrop Properties, Inc.
Managing General Partner
Date: February 6, 1997 By: /s/ Richard McCready
--------------------
Richard McCready
Chief Operating Officer
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Offer to Purchase for Cash
Up to 11,000 Units
of Limited Partnership Interest
(and assignee interests therein)
of
WINTHROP GROWTH INVESTORS 1
LIMITED PARTNERSHIP
for
$275 Net Per Unit
by
LON-WGI ASSOCIATES L.L.C.
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MARCH 7, 1997, UNLESS EXTENDED.
LON-WGI Associates L.L.C., a Delaware limited liability company (the
"Purchaser"), hereby offers to purchase up to 11,000 of the outstanding Units of
Limited Partnership Interest (and assignee interests therein) ("Units") of
Winthrop Growth Investors 1 Limited Partnership, a Massachusetts limited
partnership (the "Partnership"), at a purchase price (the "Purchase Price")
equal to $275 per Unit less the amount of any distributions made by the
Partnership between the date hereof (the "Offer Date") and the date of payment
of the Purchase Price by the Purchaser, net to the seller in cash, without
interest, upon the terms set forth in this Offer to Purchase (the "Offer to
Purchase") and in the related Letter of Transmittal, as each may be supplemented
or amended from time to time (which together constitute the "Offer"). HOLDERS OF
UNITS ("UNITHOLDERS") WHO TENDER THEIR UNITS WILL NOT BE OBLIGATED TO PAY ANY
COMMISSIONS OR PARTNERSHIP TRANSFER FEES, WHICH COMMISSIONS AND FEES WILL BE
BORNE BY THE PURCHASER. The 11,000 Units sought pursuant to the Offer represent
approximately 47.5% of the total Units outstanding as of December 31, 1996.
The Purchaser is an affiliate of Two Winthrop Properties, Inc. and
Linnaeus-Lexington Associates Limited Partnership, the general partners of the
Partnership (together, the "General Partners").
Before tendering, Unitholders are urged to consider the following
factors:
o In establishing the Purchase Price for the Offer, the Purchaser (which
is an affiliate of the General Partners) estimated the liquidation
value of the Partnership's assets as of December 31, 1996 at $288 per
Unit (the "Estimated Liquidation Value"). (See "THE TENDER OFFER -
Section 13. Purchase Price Considerations".) The Partnership, however,
is not required to liquidate until December 2003, and the General
Partners do not otherwise have any present plans or intentions to sell
the Partnership's real estate property and liquidate the Partnership.
The Partnership and the General Partner have from time to time
estimated a higher value for the Units using economic assumptions
different than the assumptions used in determining the Estimated
Liquidation Value. (See "THE TENDER OFFER -
Section 13. Purchase Price Considerations" for a discussion of such
other valuations.)
o The Purchaser (which is an affiliate of the General Partners) will
reduce the Purchase Price by the amount of any distributions made by
the Partnership between the Offer Date and the date of payment of the
Purchase Price under the Offer. In that regard, Unitholders should note
that the Partnership currently anticipates making a distribution of
approximately $2.16 per Unit in late February 1997.
o Unitholders who tender their Units will be giving up the opportunity to
participate in any future benefits represented by the ownership of such
Units, including (other than as discussed above) the right to receive
any future distributions by the Partnership.
(continued on next page)
------------------------------------------------
If you have any questions or need additional information, you may
contact The Swenson Group, L.L.C., the Information Agent for the Offer (the
"Information Agent"), at:
The Swenson Group, L.L.C.
(800) 914-7896
February 6, 1997
<PAGE>
(continued from cover page)
o The Purchaser (which is an affiliate of the General Partners) is making
the Offer with a view to making a profit. Accordingly, in establishing
the Purchase Price, the Purchaser was motivated to set the lowest price
for the Units which might be acceptable to Unitholders consistent with
the Purchaser's objectives. Such objectives and motivations may
conflict with the interest of Unitholders in receiving the highest
price for their Units. No independent person has been retained to
evaluate or render any opinion with respect to the fairness of the
Purchase Price and no representation is made by the Purchaser, the
General Partners or any affiliate of the Purchaser or the General
Partners as to such fairness.
o The Purchaser and the General Partners are affiliated and, accordingly,
certain conflicts of interest with respect to the Offer may exist for
the General Partners. Because of the affiliation between the Purchaser
and the General Partners, the Partnership has advised the Purchaser
that it makes no recommendation and is remaining neutral as to whether
a Unitholder should tender its Units in the Offer.
o Depending upon the number of Units tendered pursuant to the Offer, the
Purchaser (which is an affiliate of the General Partners) could be in a
position to significantly influence all Partnership decisions on which
Unitholders may vote, including decisions regarding removal of the
General Partners, sales of assets and liquidation. (See "THE TENDER
OFFER - Section 7. Effects of the Offer".) This means that (i)
non-tendering Unitholders could be prevented from taking action they
desire but that the Purchaser opposes and (ii) the Purchaser may be
able to take action desired by the Purchaser but opposed by the
non-tendering Unitholders.
o Depending upon the number of Units tendered pursuant to the Offer,
consummation of the Offer may increase the risk of a tax termination
occurring as a result of transfers of Units in the secondary market or
otherwise during the twelve month period following completion of the
Offer. (See "THE TENDER OFFER - Section 7. Effects of the Offer".)
o The original anticipated holding period of the Partnership's properties
was five to seven years following acquisition (with such acquisition
dates ranging from August 1984 to February 1986). Unitholders could, as
an alternative to tendering their Units, propose that a variety of
possible actions be put to a vote of Unitholders, including liquidation
of the Partnership or removal and replacement of the General Partner.
The Offer is not conditioned upon any minimum number of Units being
tendered. If more than the number of Units sought pursuant to the Offer are
validly tendered and not withdrawn, the Purchaser will accept for purchase such
total number of Units sought, on a pro rata basis, subject to the terms and
conditions herein.
The Purchaser expressly reserves the right, in its sole discretion, at
any time and from time to time, (i) to extend the period of time during which
the Offer is open and thereby delay acceptance for payment of, and the payment
for, any Units, (ii) to terminate the Offer and not accept for payment any Units
not theretofore accepted for payment or paid for, (iii) upon the occurrence of
any of the conditions specified in Section 14 of this Offer to Purchase, to
delay the acceptance for payment of, or payment for, any Units not theretofore
accepted for payment or paid for, and (iv) to amend the Offer in any respect
(including, without limitation, by increasing the consideration offered,
increasing or decreasing the number of Units being sought, or both). Notice of
any such termination or amendment will promptly be disseminated to Unitholders
in a manner reasonably designed to inform Unitholders of such change in
compliance with Rule 14d-4(c) under the Securities Exchange Act of 1934 (the
"Exchange Act"). In the case of an extension of the Offer, such extension will
be followed by a press release or public announcement which will be issued no
later than 9:00 a.m., New York City time, on the next business day after the
scheduled Expiration Date, in accordance with Rule 14e-1(d) under the Exchange
Act.
Unitholders are urged to read this Offer to Purchase and the
accompanying Letter of Transmittal carefully before deciding whether to tender
their Units. Any Unitholder desiring to tender Units should complete and sign
the Letter of Transmittal (or a facsimile thereof) and mail or deliver the
signed Letter of Transmittal to The Swenson Group, L.L.C., the Depositary for
the Offer (the "Depositary"), at the following address:
THE SWENSON GROUP, L.L.C.
By U.S. Mail: 167 Milk Street, #421
Boston, Massachusetts 02109-4315
By Hand Attention: Special Projects Department
or Overnight Delivery: One International Place, 12th Floor
Boston, Massachusetts 02110
By Facsimile: (617) 330-7969
If you have any questions or if you need assistance in completion of
the Letter Of Transmittal, you may contact the Information Agent by calling:
(800) 914-7896
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION.................................................................................. 1
THE TENDER OFFER.............................................................................. 3
Section 1. Terms of the Offer....................................................... 3
Section 2. Proration; Acceptance for Payment and Payment for Units.................. 3
Section 3. Procedures for Tendering Units........................................... 4
Section 4. Withdrawal Rights........................................................ 5
Section 5. Extension of Tender Period; Termination; Amendment....................... 5
Section 6. Certain Federal Income Tax Consequences.................................. 6
Section 7. Effects of the Offer..................................................... 8
Section 8. Future Plans............................................................. 8
Section 9. Certain Information Concerning the Partnership........................... 9
Section 10. Conflicts of Interest and Transactions with Affiliates.................. 11
Section 11. Certain Information Concerning the Purchaser............................ 12
Section 12. Source of Funds......................................................... 12
Section 13. Purchase Price Considerations........................................... 12
Section 14. Conditions of the Offer................................................. 15
Section 15. Certain Legal Matters................................................... 16
Section 16. Fees and Expenses....................................................... 16
Section 17. Miscellaneous........................................................... 17
Appendix A Glossary
Schedule 1 Information With Respect to the Executive Officers
and Directors of AP GP Win Master, Inc.
</TABLE>
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To the Holders of Units of Limited Partnership Interest of
Winthrop Growth Investors 1 Limited Partnership
INTRODUCTION
The Purchaser hereby offers to purchase up to 11,000 of the outstanding
Units for $275 per Unit less the amount of any distributions made by the
Partnership between the Offer Date and the date of payment of the Purchase Price
by the Purchaser, net to the seller in cash, without interest, upon the terms
set forth in this Offer to Purchase and in the related Letter of Transmittal, as
each may be supplemented or amended from time to time.
UNITHOLDERS WHO TENDER THEIR UNITS WILL NOT BE OBLIGATED TO PAY ANY COMMISSIONS
OR PARTNERSHIP TRANSFER FEES, WHICH COMMISSIONS AND FEES WILL BE BORNE BY THE
PURCHASER. The Purchaser is an affiliate of the General Partners.
The Purchase Price was determined as a result of the Purchaser's own
independent analysis. No independent person has been retained to evaluate or
render any opinion with respect to the fairness of the Purchase Price.
Unitholders are urged to consider carefully all of the information contained
herein before accepting the Offer. (See "THE TENDER OFFER - Section 13. Purchase
Price Considerations".)
Before tendering, Unitholders are urged to consider the following
factors:
o In establishing the Purchase Price for the Offer, the Purchaser (which
is an affiliate of the General Partner) estimated the liquidation value
of the Partnership's assets as of December 31, 1996 at $288 per Unit.
(See "THE TENDER OFFER - Section 13. Purchase Price Considerations".)
The Partnership, however, is not required to liquidate until December
2003, and the General Partners do not otherwise have any present plans
or intentions to sell the Partnership's real estate property and
liquidate the Partnership. The Partnership and the General Partner have
from time to time estimated a higher value for the Units using
economic assumptions different than the assumptions used in determining
the Estimated Liquidation Value. (See "THE TENDER OFFER - Section 13.
Purchase Price Considerations" for a discussion of such other
valuations.)
o The Purchaser (which is an affiliate of the General Partners) will
reduce the Purchase Price by the amount of any distributions made by
the Partnership between the Offer Date and the date of payment of the
Purchase Price under the Offer. In that regard, Unitholders should note
that the Partnership currently anticipates making a distribution of
approximately $2.16 per Unit in late February 1997.
o Unitholders who tender their Units will be giving up the opportunity to
participate in any future benefits represented by the ownership of such
Units, including (other than as discussed above) the right to receive
any future distributions by the Partnership.
o The Purchaser (which is an affiliate of the General Partners) is making
the Offer with a view to making a profit. Accordingly, in establishing
the Purchase Price, the Purchaser was motivated to set the lowest price
for the Units which might be acceptable to Unitholders consistent with
the Purchaser's objectives. Such objectives and motivations may
conflict with the interest of Unitholders in receiving the highest
price for their Units. No independent person has been retained to
evaluate or render any opinion with respect to the fairness of the
Purchase Price and no representation is made by the Purchaser, the
General Partners or any affiliate of the Purchaser or the General
Partners as to such fairness.
o The Purchaser and the General Partners are affiliated and, accordingly,
certain conflicts of interest with respect to the Offer may exist for
the General Partners. Because of the affiliations between the Purchaser
and the General Partners, the Partnership has advised the Purchaser
that it makes no recommendation and is remaining neutral as to whether
a Unitholder should tender Units in the Offer.
o Depending upon the number of Units tendered pursuant to the Offer, the
Purchaser (which is an affiliate of the General Partners) could be in a
position to significantly influence all Partnership decisions on which
Unitholders may vote, including decisions regarding removal of the
General Partners, merger, sales of assets and liquidation. (See "THE
TENDER OFFER - Section 7. Effects of the Offer".) This means that (i)
non- tendering Unitholders could be prevented from taking action they
desire but that the Purchaser opposes and (ii) the Purchaser may be
able to take action desired by the Purchaser but opposed by the
non-tendering Unitholders.
o Depending upon the number of Units tendered pursuant to the Offer,
consummation of the Offer may increase the risk of a tax termination
occurring as a result of transfers of Units in the secondary market or
otherwise during the twelve month period following completion of the
Offer. (See "THE TENDER OFFER - Section 7. Effects of the Offer".)
<PAGE>
o The original anticipated holding period of the Partnership's properties
was five to seven years following acquisition (with such acquisition
dates ranging from August 1984 to February 1986). Unitholders could, as
an alternative to tendering their Units, propose that a variety of
possible actions be put to a vote of Unitholders, including liquidation
of the Partnership or removal and replacement of the General Partner.
Unitholders who desire liquidity may wish to consider the Offer.
However, each Unitholder must make his or her own decision based upon such
Unitholder's particular circumstances, including the Unitholder's own financial
needs, other investment opportunities and tax position. Each Unitholder should
consult with his or her own advisors, tax, financial or otherwise, in evaluating
the terms of and whether to tender Units pursuant to the Offer.
The Offer will provide Unitholders with an opportunity to liquidate
their investment without the usual transaction costs associated with market
sales. Unitholders may no longer wish to continue with their investment in the
Partnership for a number of reasons, including:
o The absence of a formal trading market for the Units.
o The Offer will provide Unitholders with an immediate opportunity to
liquidate their investment in the Partnership without the usual
transaction costs associated with market sales or partnership transfer
fees.
o A taxable Unitholder who acquired his Units in the original offering
and who sells all his Units pursuant to the Offer generally will
realize a tax benefit estimated by the Purchaser to range from $131.21
per Unit to $139.33 per Unit, depending on the Unitholder's date of
admission to the Partnership, based on the results of Partnership
operations through December 31, 1995 (and without giving effect to
Partnership operations or distributions since that time) and assuming
that the Unitholder has not previously utilized any suspended passive
activity losses from the Partnership and is subject to federal income
tax at a rate of 39.6% on ordinary income. (See "THE TENDER OFFER -
Section 6. Certain Federal Income Tax Consequences".)
o General disenchantment with real estate investments, particularly
long-term investments in limited partnerships.
o By selling their Units in the Offer, Unitholders avoid the continuing
administrative costs (such as accounting, tax reporting, limited
partner reporting and public company reporting requirements) and
resultant indirect negative financial impact on the value of the Units
of a publicly registered limited partnership and eliminate the delays
and complications in preparing and filing personal income tax returns
which may result from an investment in the Units.
The Offer is not conditioned upon any minimum number of Units being
tendered. If more than the number of Units sought pursuant to the Offer are
validly tendered and not withdrawn, the Purchaser will accept for purchase such
total number of Units sought on a pro rata basis subject to the terms and
conditions herein.
According to information supplied by the Partnership, there are 23,139
Units issued and outstanding held by 1,320 Unitholders. The Purchaser and its
affiliates own 5 Units in the aggregate, constituting less than 1% of the Units
outstanding.
Certain information contained in this Offer to Purchase which relates
to the Partnership, or represents statements made by the General Partners, has
been derived from information provided to the Purchaser by the General Partners.
Unitholders are urged to read this Offer to Purchase and the
accompanying Letter of Transmittal carefully before deciding whether to tender
their Units.
If you have any questions or if you need assistance in completion of
the Letter Of Transmittal, you may contact the Information Agent by calling
(800) 914-7896.
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THE TENDER OFFER
Section 1. Terms of the Offer. Upon the terms of the Offer, the
Purchaser will pay for Units validly tendered on or prior to the Expiration Date
and not withdrawn in accordance with Section 4 of this Offer to Purchase. The
term "Expiration Date" shall mean 12:00 Midnight, New York City time, on March
7, 1997, unless the Purchaser extends the period of time during which the Offer
is open. In the event the Offer is extended, the term "Expiration Date" shall
mean the latest time and date on which the Offer, as extended by the Purchaser,
shall expire.
IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER SHALL INCREASE THE
PURCHASE PRICE OFFERED TO UNITHOLDERS, SUCH INCREASED PURCHASE PRICE 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 Offer is conditioned on satisfaction of certain conditions. See
Section 14, which sets forth in full the conditions of the Offer. The Purchaser
reserves the right (but shall not be obligated), in its sole discretion, to
waive any or all of such conditions. If, on or prior to the Expiration Date, any
or all of such conditions have not been satisfied or waived, the Purchaser may
(i) decline to purchase any of the Units tendered, terminate the Offer and
return all tendered Units to tendering Unitholders, (ii) waive all the
unsatisfied conditions and, subject to complying with applicable rules and
regulations of the Securities and Exchange Commission (the "Commission"),
purchase all Units validly tendered, (iii) extend the Offer and, subject to the
right of Unitholders to withdraw Units until the Expiration Date, cause the
Depositary to retain the Units that have been tendered during the period or
periods for which the Offer is extended, or (iv) amend the Offer, including by
increasing the Purchase Price.
Section 2. Proration; Acceptance for Payment and Payment for Units. If
the number of Units validly tendered on or prior to the Expiration Date and not
withdrawn is equal to or less than the total number of Units sought pursuant to
the Offer, the Purchaser will accept for payment, subject to the terms and
conditions of the Offer, all Units so tendered. If the number of Units validly
tendered on or prior to the Expiration Date and not withdrawn exceeds the total
number of Units sought pursuant to the Offer, the Purchaser will accept for
payment, subject to the terms and conditions of the Offer, the total number of
Units sought pursuant to the Offer on a pro rata basis (with such adjustments to
avoid purchase of fractional Units).
Subject to the terms and conditions of the Offer, the Purchaser will
pay for Units validly tendered and not withdrawn in accordance with Section 4 as
promptly as practicable following the Expiration Date. In all cases, the
Purchase Price will be paid only after timely receipt by the Depositary of a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), and any other documents required by the Letter of Transmittal. (See
"Section 3. Procedures for Tendering Units".)
For purposes of the Offer, the Purchaser shall be deemed to have
accepted for payment tendered Units when, as and if the Purchaser gives oral or
written notice to the Depositary of the Purchaser's acceptance for payment of
such Units pursuant to the Offer. Upon the terms and subject to the conditions
of the Offer, payment for Units tendered and accepted for payment pursuant to
the Offer will in all cases be made by deposit of the Purchase Price with the
Depositary, which will act as agent for the tendering Unitholders for the
purpose of receiving payment from the Purchaser and transmitting payment to
tendering Unitholders. 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 purchased for any reason, the Letter of
Transmittal with respect to such Units will be destroyed by the Purchaser. If
for any reason acceptance for payment of, or payment for, any Units tendered
pursuant to the Offer is delayed or the Purchaser is unable to accept for
payment, purchase or pay for Units tendered pursuant to the Offer, then, without
prejudice to the Purchaser's rights under Section 14, the Purchaser may cause
the Depositary to retain tendered Units and such Units may not be withdrawn
except to the extent that the tendering Unitholders are entitled to withdrawal
rights as described in Section 4; provided, however, that the Purchaser is
required, pursuant to Rule 14e-1(c) under the Exchange Act, to pay Unitholders
the Purchase Price in respect of Units tendered or return such Units promptly
after termination or withdrawal of the Offer.
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Section 3. Procedures for Tendering Units.
Valid Tender. To validly tender Units, a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof) and any other documents
required by the Letter of Transmittal, must be received by the Purchaser on or
prior to the Expiration Date. In order to comply with certain restrictions on
transfers in the Partnership Agreement, a tender which would result in the
tendering Unitholder owning less than ten Units will not be effective.
Signature Requirements. If the Letter of Transmittal is signed by the
registered holder of the Units and payment is to be made directly to that
holder, then no notarization or signature guarantee is required on the Letter of
Transmittal. Similarly, if the Units are tendered for the account of a member
firm of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank, savings bank,
credit union, savings and loan association or trust company having an office,
branch or agency in the United States (each an "Eligible Institution"), no
notarization or signature guarantee is required on the Letter of Transmittal.
However, in all other cases, all signatures on the Letter of Transmittal must
either be notarized or guaranteed by an Eligible Institution.
In order for a tendering Unitholder to participate in the Offer, Units
must be validly tendered and not withdrawn on or prior to the Expiration Date,
which is 12:00 Midnight, New York City time, on March 7, 1997, unless extended.
The method of delivery of the Letter of Transmittal and all other
required documents is at the option and risk of the tendering Unitholder and
delivery will be deemed made only when actually received by the Depositary.
Backup Federal Income Tax Withholding. To prevent the possible
application of backup federal income tax withholding with respect to payment of
the Purchase Price, a tendering Unitholder must provide the Purchaser with such
Unitholder's correct taxpayer identification number by completing the Substitute
Form W-9 included in the Letter of Transmittal. (See the Instructions to the
Letter of Transmittal and "Section 6. Certain Federal Income Tax Consequences".)
In addition, if a tendering Unitholder does not provide his correct taxpayer
identification number, an additional $50 will be deducted from the Purchase
Price to pay the penalty imposed on the Purchaser by the Internal Revenue
Service for failing to provide a taxpayer identification number.
FIRPTA Withholding. To prevent the withholding of federal income tax in
an amount equal to 10% of the sum of the Purchase Price plus the amount of
Partnership liabilities allocable to each Unit purchased, each Unitholder must
complete the FIRPTA Affidavit included in the Letter of Transmittal certifying
such Unitholder's taxpayer identification number and address and that the
Unitholder is not a foreign person. (See the Instructions to the Letter of
Transmittal and "Section 6. Certain Federal Income Tax Consequences".)
Other Requirements. By executing a Letter of Transmittal, a tendering
Unitholder irrevocably appoints the designees of the Purchaser as such
Unitholder's proxies, in the manner set forth in the Letter of Transmittal, each
with full power of substitution, to the full extent of such Unitholder's rights
with respect to the Units tendered by such Unitholder and accepted for payment
and purchased by the Purchaser. Such appointment will be effective when, and
only to the extent that, the Purchaser accepts such Units for payment. Upon such
acceptance for payment, all prior proxies given by such Unitholder with respect
to such Units will, without further action, be revoked, and no subsequent
proxies may be given (and if given will not be effective). The designees of the
Purchaser will, as to such Units, be empowered to exercise all voting and other
rights of such Unitholder as they in their sole discretion may deem proper at
any meeting of Unitholders, by written consent or otherwise. The Purchaser
reserves the right to require that, in order for Units to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of such Units,
the Purchaser must be able to exercise full voting rights with respect to such
Units, including voting at any meeting of Unitholders then scheduled. In
addition, by executing a Letter of Transmittal, a Unitholder also assigns to the
Purchaser all of the Unitholder's rights to receive distributions from the
Partnership with respect to Units which are accepted for payment and purchased
pursuant to the Offer, other than distributions made between the Offer Date and
the date of payment of the Purchase Price by the Purchaser.
4
<PAGE>
Determination of Validity; Rejection of Units; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Units pursuant to the procedures described above will be determined by the
Purchaser, in its sole discretion, which determination shall be final and
binding. The Purchaser reserves the absolute right to reject any or all tenders
if not in proper form or if the acceptance of, or payment for, the Units
tendered may, in the opinion of the Purchaser's counsel, be unlawful. The
Purchaser also reserves the right to waive any defect or irregularity in any
tender with respect to any particular Units of any particular Unitholder, and
the Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the Instructions thereto) will be final
and binding. Neither the Purchaser, the Depositary nor any other person will be
under any duty to give notification of any defects or irregularities in the
tender of any Units or will incur any liability for failure to give any such
notification.
A tender of Units pursuant to any of the procedures described above
will constitute a binding agreement between the tendering Unitholder and the
Purchaser on the terms set forth in the Offer.
Section 4. Withdrawal Rights. Except as otherwise provided in this
Section 4, all tenders of Units pursuant to the Offer are irrevocable, provided
that Units tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date and, unless already accepted for payment as provided in this
Offer to Purchase, may also be withdrawn at any time after April 6, 1997.
For withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at the address
set forth on the back cover of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Units to be
withdrawn and must be signed by the person(s) who signed the Letter of
Transmittal in the same manner as the Letter of Transmittal was signed.
If purchase of, or payment for, Units is delayed for any reason or if
the Purchaser is unable to purchase or pay for Units for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Purchaser may
cause the Depositary to retain tendered Units and such Units may not be
withdrawn except to the extent that tendering Unitholders are entitled to
withdrawal rights as set forth in this Section 4; provided, however, that the
Purchaser is required, pursuant to Rule 14e-1(c) under the Exchange Act, to pay
Unitholders the Purchase Price in respect of Units tendered or return such Units
promptly after termination or withdrawal of the Offer.
Any Units properly withdrawn will be deemed not to be validly tendered
for purposes of the Offer. Withdrawn Units may be re-tendered, however, by
following any of the procedures described in Section 3 at any time prior to the
Expiration Date.
Section 5. Extension of Tender Period; Termination; Amendment. The
Purchaser expressly reserves the right, in its sole discretion, at any time and
from time to time, (i) to extend the period of time during which the Offer is
open and thereby delay acceptance for payment of, and the payment for, any
Units, (ii) to terminate the Offer and not accept for payment any Units not
already accepted for payment or paid for, (iii) upon the occurrence of any of
the conditions specified in Section 14, to delay the acceptance for payment of,
or payment for, any Units not already accepted for payment or paid for, and (iv)
to amend the Offer in any respect (including, without limitation, by increasing
the consideration offered, increasing or decreasing the number of Units being
sought, or both). Notice of any such termination or amendment will promptly be
disseminated to Unitholders in a manner reasonably designed to inform
Unitholders of such change in compliance with Rule 14d-4(c) under the Exchange
Act. In the case of an extension of the Offer, such extension will be followed
by a press release or public announcement which will be issued no later than
9:00 a.m., New York City time, on the next business day after the scheduled
Expiration Date, in accordance with Rule 14e-1(d) under the Exchange Act.
If the Purchaser extends the Offer, or if the Purchaser (whether before
or after its acceptance for payment of Units) is delayed in its payment for
Units or is unable to pay for Units pursuant to the Offer for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Purchaser may
cause the Depositary to retain tendered Units and such Units may not be
withdrawn except to the extent tendering Unitholders are entitled to withdrawal
rights as described in Section 4; provided, however, that the Purchaser is
required, pursuant to Rule 14e-1(c) under
5
<PAGE>
the Exchange Act, to pay Unitholders the Purchase Price in respect of Units
tendered or return such Units promptly after termination or withdrawal of the
Offer.
If the Purchaser makes a material change in the terms of the Offer or
the information concerning the Offer or waives a material condition of the
Offer, the Purchaser will extend the Offer and disseminate additional tender
offer materials to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act. The minimum period during which an offer must remain open
following a material change in the terms of the offer or information concerning
the offer will depend upon the facts and circumstances, including the relative
materiality of the change in the terms or information. In the Commission's view,
an offer should remain open for a minimum of five business days from the date
the material change is first published, sent or given to securityholders, and if
material changes are made with respect to information that approaches the
significance of price or the percentage of securities sought, a minimum of ten
business days may be required to allow for adequate dissemination to
securityholders and for investor response. As used in this Offer to Purchase,
"business day" means any day other than a Saturday, Sunday or a federal holiday,
and consists of the time period from 12:01 a.m. through 12:00 Midnight, New York
City time.
Section 6. Certain Federal Income Tax Consequences. The following
summary is a general discussion of certain federal income tax consequences of a
sale of Units pursuant to the Offer. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), applicable Treasury Regulations
thereunder, administrative rulings, practice and procedures and judicial
authority as of the date of the Offer. All of the foregoing are subject to
change, and any such change could affect the continuing accuracy of this
summary. This summary does not discuss all aspects of federal income taxation
that may be relevant to a particular Unitholder in light of such Unitholder's
specific circumstances or to certain types of Unitholders subject to special
treatment under the federal income tax laws (for example, foreign persons,
dealers in securities, banks, insurance companies and certain types of
tax-exempt organizations), nor does it discuss any aspect of state, local,
foreign or other tax laws. Sales of Units pursuant to the Offer will be taxable
transactions for federal income tax purposes, and may also be taxable
transactions under applicable state, local, foreign and other tax laws. EACH
UNITHOLDER SHOULD CONSULT HIS OR ITS TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES TO SUCH UNITHOLDER OF SELLING UNITS PURSUANT TO THE OFFER.
A taxable Unitholder will recognize gain or loss on a sale of Units
pursuant to the Offer equal to the difference between (i) the Unitholder's
"amount realized" on the sale and (ii) the Unitholder's adjusted tax basis in
the Units sold. The amount of a Unitholder's adjusted tax basis in Units sold
pursuant to the Offer will vary depending upon the Unitholder's particular
circumstances. The "amount realized" with respect to a Unit sold pursuant to the
Offer will be a sum equal to the amount of cash received by the Unitholder for
the Unit plus the amount of Partnership liabilities allocable to the Unit (as
determined under Code Section 752).
A tendering Limited Partner will be allocated Partnership taxable
income or loss with respect to the Units sold in accordance with the provisions
of the Partnership Agreement concerning transfers of Units. Such allocation and
any cash distributions made by the Partnership to or for the benefit of a
Unitholder will affect the Unitholder's adjusted tax basis in his Units and,
therefore, the amount of such Unitholder's taxable gain or loss on a sale of
Units pursuant to this Offer. In this regard, tendering Unitholders will be
allocated a share of the Partnership's taxable income or loss with respect to
Units sold pursuant to the Offer in accordance with the provisions of the
Partnership Agreement concerning transfers of Units.
Based on the results of Partnership operations through December 31,
1995, and without giving effect to Partnership operations, transactions or
distributions since that time, it is estimated that, depending on a Unitholder's
date of entry into the Partnership, a taxable Unitholder who sells Units
pursuant to the Offer that were acquired by such Unitholder at the time of the
Partnership's original offering of Units will recognize a gain for federal
income tax purposes of between $66 per Unit (for Units purchased in October,
1984) and $37 per Unit (for Units purchased in December, 1984). It also is
estimated that a Unitholder who acquired his Units at the time of the
Partnership's original offering of Units has "suspended" passive activity losses
(i.e., net taxable losses in excess of statutorily provided "phase-in" amounts)
from the Partnership of up to $378 per Unit. (The amount of the suspended
passive activity losses available to a Unitholder is subject to reduction to the
extent such losses were utilized by such Unitholder to offset passive activity
income from other investments.) Under the passive activity loss rules (discussed
6
<PAGE>
below), such Unitholder's unused suspended passive activity losses from the
Partnership generally should be deductible by the Unitholder from his other
income in the year of sale (subject to any other applicable limitations) if the
Unitholder sells all his Units. (If the Unitholder sells less than all of his
Units, such Unitholder generally will be able to deduct only part of his
suspended passive activity losses from the Partnership in the year of sale
(subject to any other applicable limitations), in an amount equal to his taxable
gain on the sale of his Units.) Assuming that the Unitholder has not previously
utilized his suspended passive activity losses from the Partnership, and is
subject to federal income tax at a rate of 28% on long-term capital gain and
39.6% on other income, the Purchaser estimates that such Unitholder will incur
federal income tax on the sale of between approximately $18.48 per Unit sold
(for Units purchased in October, 1984) and $10.36 per Unit sold (for Units
purchased in December, 1984), but will realize a federal income tax benefit of
approximately $149.69 per Unit sold attributable to the deduction of suspended
passive activity losses from the Partnership against ordinary income, resulting
in a net federal income tax benefit of between $131.21 per Unit sold (for Units
purchased in October, 1984) and $139.33 per Unit sold (for Units purchased in
December, 1984).
The gain or loss recognized by a Unitholder on a sale of a Unit
pursuant to the Offer generally will be treated as a capital gain or loss if the
Unit was held by the Unitholder as a capital asset. (The portion of a
Unitholder's gain on the sale that is attributable to "unrealized receivables"
(which include depreciation recapture) as defined in Code Section 751, however,
would be treated as ordinary income rather than capital gain.) Such capital gain
or loss will be treated as long-term capital gain or loss if the tendering
Unitholder's holding period for the Unit exceeds one year. Under current law,
long-term capital gains of individuals and other non-corporate taxpayers are
taxed at a maximum marginal federal income tax rate of 28%, whereas the maximum
marginal federal income tax rate for other income of such persons is 39.6%.
Capital losses are deductible only to the extent of capital gains, except that
non-corporate taxpayers may deduct up to $3,000 of capital losses in excess of
the amount of their capital gains against ordinary income. Excess capital losses
generally can be carried forward to succeeding years (a corpora- tion's
carryforward period is five years and a non-corporate taxpayer can carry forward
such losses indefinitely); in addition, corporations, but not non-corporate
taxpayers, are allowed to carry back excess capital losses to the three
preceding taxable years.
Under Code Section 469, a non-corporate taxpayer or personal service
corporation can deduct passive activity losses in any year only to the extent of
such person's passive activity income for such year, and closely held
corporations may not offset such losses against so-called "portfolio" income.
Gain or loss recognized upon a sale of a Unit pursuant to the Offer by a
Unitholder who or which is subject to the passive activity loss limitation
generally would be treated as passive activity income or loss. Any unused
suspended passive activity losses from the Partnership, as well as any loss
recognized on a sale of Units pursuant to the Offer, generally could be deducted
against a Unitholder's other income in the year of sale (subject to any other
applicable limitations) provided the Unitholder sells all his Units. If a
Unitholder is unable to sell all of his Units pursuant to the Offer, then such
losses could not be deducted under the passive activity loss rules (except to
the extent of the Unitholder's passive activity income from the Partnership or
other sources) until the Unitholder's remaining Units are sold. (See "Section 7.
Effects of the Offer".)
A tax-exempt Unitholder may realize unrelated business taxable income
("UBTI") upon a sale of Units pursuant to the Offer to the extent that the
Partnership's properties are subject to "acquisition indebtedness" (as defined
in the Code) or if such Units were acquired with acquisition indebtedness. Such
UBTI generally may be offset by the Unitholder's net operating loss carryover,
if any, as determined for UBTI purposes, subject to applicable limitations.
A taxable Unitholder (other than corporations and certain foreign
individuals) who tenders Units may be subject to 31% backup withholding unless
the Unitholder provides a taxpayer identification number ("TIN") and certifies
that the TIN is correct or properly certifies that he is awaiting a TIN. A
Unitholder may avoid backup withholding by properly completing and signing the
Substitute Form W-9 included as part of the Letter of Transmittal. If a
Unitholder who is subject to backup withholding does not properly complete and
sign the Substitute Form W-9, the Purchaser will withhold 31% (and, if the
Unitholder fails to provide his taxpayer identification number, an additional
$50) from payments to such Unitholder.
7
<PAGE>
Gain realized by a foreign Unitholder on a sale of a Unit pursuant to
the Offer will be subject to federal income tax. Under Section 1445 of the Code,
the transferee of a partnership interest held by a foreign person is generally
required to deduct and withhold a tax equal to 10% of the amount realized on the
disposition. The Purchaser will withhold 10% of the amount realized by a
tendering Unitholder from the Purchase Price payable to such Unitholder unless
the Unitholder properly completes and signs the FIRPTA Affidavit included as
part of the Letter of Transmittal certifying the Unitholder's TIN, that such
Unitholder is not a foreign person and the Unitholder's address. Amounts
withheld would be creditable against a foreign Unitholder's federal income tax
liability and, if in excess thereof, a refund could be obtained from the
Internal Revenue Service by filing a U.S. income tax return.
Section 7. Effects of the Offer.
Limitations on Resales. Section 708(b) of the Code provides that if
within any 12-month period 50% or more of the total interests in Partnership
capital and profits are sold or exchanged, a termination of the Partnership
would occur for federal income tax purposes. Depending upon the number of Units
tendered pursuant to the Offer, the risk of a tax termination occurring as a
result of transfers of Units on the secondary market or otherwise during the
twelve-month period following completion of the Offer will be increased. Under
current income tax regulations (to which prospective changes have been proposed
that would ameliorate some, but not all, of the following adverse results), the
effect of a tax termination on non-tendering Unitholders and tendering
Unitholders who retain Units generally would be adverse, including a lengthening
of the period of time over which the Partnership recognizes depreciation
deductions for tax purposes, changes in the tax basis of the Partnership's
assets, possible recognition of taxable gain resulting from any deemed cash
distribution in excess of such Unitholder's tax basis in his Units, and a
"bunching" of income for Unitholders (who are not individuals) whose taxable
year is not the calendar year.
Effect on Trading Market. There is no established public trading market
for the Units and, therefore, a reduction in the number of Unitholders should
not materially further restrict the Unitholders' ability to find purchasers for
their Units.
Control of all Unitholder Voting Decisions by Purchaser. The Purchaser
will have the right to vote each Unit purchased pursuant to the Offer. Depending
on the number of Units purchased pursuant to the Offer, the Purchaser could be
in a position to significantly influence all voting decisions with respect to
the Partnership. Accordingly, the Purchaser could (i) prevent non-tendering
Unitholders from taking action they desire but that the Purchaser opposes and
(ii) take action desired by the Purchaser but opposed by non-tendering
Unitholders. Under the Partnership Agreement, Unitholders holding a majority of
the Units are entitled to take action with respect to a variety of matters,
including: removal of the General Partners; dissolution of the Partnership; the
sale of all or substantially all of the Partnership's properties; and most types
of amendments to the Partnership Agreement. When voting on such matters, the
Purchaser will vote Units owned and acquired by it in its interest, which,
because of its affiliation with the General Partners, may also be in the
interest of the General Partners.
The Units are registered under the Exchange Act, which requires, among
other things, that the Partnership furnish certain information to its
Unitholders and to the Commission and comply with the Commission's proxy rules
in connection with meetings of, and solicitation of consents from, Unitholders.
The Purchaser does not believe that the purchase of Units pursuant to the Offer
will result in the Units becoming eligible for deregistration under Section
12(g) of the Exchange Act.
Section 8. Future Plans. The Offer is being made for investment
purposes and with a view to making a profit. Following the completion of the
Offer, the Purchaser may acquire additional Units. Any such acquisition may be
made through private purchases or by any other means deemed advisable. Any such
acquisition may be at a price higher or lower than the price to be paid for the
Units purchased pursuant to the Offer. Neither the Purchaser nor the General
Partners have any present plans or intentions with respect to a merger,
reorganization or liquidation of the Partnership, a sale of assets or
refinancing of any of the Partnership's properties or a change in the
management, capitalization or distribution policy of the Partnership. However,
the Purchaser believes that consistent with their fiduciary obligations the
General Partners will continue to seek to maximize returns to investors in the
Units.
8
<PAGE>
Section 9. Certain Information Concerning the Partnership. Information
included herein concerning the Partnership is derived from the Partnership's
publicly-filed reports. Additional financial and other information concerning
the Partnership is contained in the Partnership's Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and other filings with the Commission. Such
reports and other documents may be examined and copies may be obtained from the
offices of the Commission at 450 Fifth Street, N.W., Washington, D.C 20549, and
at the regional offices of the Commission located in the Northwestern Atrium
Center, 500 Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World
Trade Center, New York, New York 10048. Copies should be available by mail upon
payment of the Commission's customary charges by writing to the Commission's
principal offices at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Purchaser disclaims any responsibility for the information included in such
reports and extracted in this Offer to Purchase.
The Partnership was organized on June 20, 1983 under the laws of the
Commonwealth of Massachusetts. Its principal executive offices are located at
One International Place, Boston, Massachusetts 02110. Its telephone number is
(617) 330-8600. The Partnership's only business is to own and lease
income-producing residential, commercial and industrial properties. The original
anticipated holding period of the Partnership's properties was five to seven
years following acquisition (with such acquisition dates ranging from August
1984 to February 1986).
In July 1995, Apollo Real Estate Investment Fund, L.P. ("Apollo Fund
I") acquired indirect ownership and control of the General Partner. See the
Partnership's Form 10-K for the year ended December 31, 1995 for additional
information with respect to this transaction. The General Partner is currently
indirectly owned and controlled by Apollo Fund I and Apollo Real Estate
Investment Fund II, L.P. ("Apollo Fund II"). Apollo Fund I and Apollo Fund II
are private real estate investment funds organized in 1993 and 1996,
respectively, to make direct and indirect investments in real estate assets,
joint ventures and operating companies. Apollo Real Estate Advisors, L.P.
("AREA") and its affiliate, Apollo Real Estate Advisers II, L.P. ("AREA II"),
serve as the respective general partners of Apollo Fund I and Apollo Fund II.
Apollo Fund II is an affiliate of the Purchaser.
Properties.
A description of the properties which the Partnership owns is as
follows. The Sunflower Apts. and Stratford Place Apts. properties are owned by
limited partnerships in which the Partnership owns a 99% interest and a 99.98%
interest, respectively, and the Meadow Woods Apts. property is owned by a
general partnership in which the Partnership owns a 99.99% interest. The
Stratford Village Apts. property is owned directly by the Partnership.
<TABLE>
<CAPTION>
Partnership 9/30/96
No. of Acquisition Acquisition Mortgage Interest Maturity
Property Name Location Units Date Cost Balance Rate Date
- ------------- --------------- --------- ----------- -------------- -------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Sunflower Dallas, TX 248 8/31/84 $8,144,484 $2,685,594 7.46% 2/11/26
Apts.
Meadow Woods Jacksonville, FL 356 12/3/84 $10,921,719 $4,194,955 10.00% 12/1/00
Apts.
Stratford Place Gaithersburg, 350 12/18/85 $14,150,612 $9,643,348 8.23% 7/01/06
Apts. MD
Stratford Montgomery, AL 224 2/28/86 $8,557,307 $5,257,287 7.72% 11/1/24
Village Apts.
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,178 $41,774,122 $21,781,184
====================================================================================================================================
</TABLE>
9
<PAGE>
Occupancy.
The following chart sets forth the occupancy and average rent per
apartment unit for the years ended December 31, 1996, 1995, 1994, 1993, 1992 and
1991:
<TABLE>
<CAPTION>
Sunflower Meadow Wood Stratford Place Stratford Village
-------------------------- ------------------------- ------------------------ ------------------------
Average Average Average Average
Year Occupancy Rent/unit Occupancy Rent/unit Occupancy Rent/unit Occupancy Rent/unit
- ------ ------------ ----------- ----------- ---------- ----------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1991 95.3% $355/mo 92.2% $426/mo 95.1% $588/mo 94.7% $445/mo
1992 91.9% $371/mo 86.8% $436/mo 91.4% $610/mo 96.0% $457/mo
1993 88.2% $387/mo 91.8% $448/mo 94.5% $620/mo 97.5% $477/mo
1994 91.1% $401/mo 88.4% $457/mo 92.1% $634/mo 93.3% $518/mo
1995 87.9% $420/mo 89.9% $468/mo 95.6% $640/mo 89.5% $541/mo
1996 93.3% $431/mo 87.7% $488/mo 95.1% $645/mo 90.3% $557/mo
</TABLE>
Real Estate and Accumulated Depreciation.
Set forth below is the carrying value and accumulated depreciation of the
Partnership's Properties as of September 30, 1996.
<TABLE>
<CAPTION>
Buildings,
Description and Outstanding Improvements & Accumulated Depreciable
Ownership Encumbrance Land Personal Property Total Depreciation Life
- ------------------ ---------------- -------------- ----------------- --------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
The Sunflower $2,685,594 $1,624,345 $6,561,866 $8,186,211 $5,121,041 5-25 Yrs
Apartments, Dallas,
TX - 99%
Meadow Wood $4,194,955 $689,883 $10,397,605 $11,087,488 $4,912,996 5-25 Yrs
Apartments,
Jacksonville, FL -
99.99%
Stratford Place $9,643,348 $1,368,000 $12,867,691 $14,235,691 $5,756,145 5-25 Yrs
Apartments,
Gaithersburg, MD -
99.98%
Stratford Village $5,257,287 $333,141 $8,284,851 $8,617,992 $3,742,610 7-25 Yrs
Apartments,
Montgomery, AL -
100%
--------------------------------------------------------------------------------------------------------------
$21,781,184 $4,015,369 $38,112,013 $42,127,382 $19,532,792
==============================================================================================================
</TABLE>
The total cost of land, buildings, improvements and personal property
net of accumulated depreciation at December 31, 1995 for federal income tax
purposes is $18,858,086.
10
<PAGE>
Selected Financial Data.
The following is a summary of certain financial data for the
Partnership for the periods indicated.
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30, For the Year Ended or as of December 31,
--------------------------- ------------------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Rental Income $ 4,837,373 $ 4,783,619 $ 6,389,445 $ 6,118,605 $ 6,206,712 $ 5,896,067 $ 5,909,583
Income from short-term
Investments $ 55,701 $ 34,337 $ 62,914 $ 64,797 $ 83,073 $ 90,572 $ 131,581
Other Income $ 220,856 $ 203,866 $ 302,456 $ 265,873 $ 219,853 $ 247,178 $ 277,236
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Income $ 5,113,930 $ 5,021,822 $ 6,754,817 $ 6,449,275 $ 6,509,638 $ 6,233,817 $ 6,318,400
========== ========== ========== ========== ========== ========== ==========
Total Expenses $ 5,808,583 $ 5,455,024 $ 7,065,946 $ 7,223,037 $ 9,431,805 $ 7,312,562 $ 7,072,300
========== ========== ========== ========== ========== ========== ==========
Net Loss $ (694,653) $ (433,202) $ (311,129) $ (773,762) $(2,922,167) $(1,078,745) $ (753,900)
========== ========== ========== ========== ========== ========== ==========
Net Loss per Unit $ (27.01) $ (16.85) $ (12.10) $ (30.10) $ (113.61) $ (41.94) $ (29.31)
========== ========== ========== ========== ========== ========== ==========
Total Assets $27,590,459 $26,658,046 $26,483,003 $27,511,241 $30,361,979 $33,717,221 $35,234,914
Mortgage Notes
Payable $21,781,184 $20,245,494 $20,081,080 $20,711,814 $22,599,665 $22,788,736 $22,938,375
Total cash
distributions per
Unit, including,
with respect to
full years, amounts
distribute after
year end with
respect to
the year: $ 6.48 $ 4.32 $ 6.48 $ 8.64 $ 8.64 $ 15.12 $ 21.06
</TABLE>
Section 10. Conflicts of Interest and Transactions with Affiliates. The
General Partner, the Purchaser and their affiliates have conflicts of interest
with respect to the Offer as set forth below.
Conflicts of Interest With Respect to the Offer. The General Partner
has a conflict of interest with respect to the Offer, including as a result of
its affiliation with the Purchaser. (See "Section 11. Certain Information
Concerning the Purchaser".)
Voting by the Purchaser. As a result of the Offer, the Purchaser may be
in a position to significantly influence all Partnership decisions on which
Unitholders may vote. This means that (i) non-tendering Unitholders could be
prevented from taking action they desire but that the Purchaser opposes and (ii)
the Purchaser may be able to take action desired by the Purchaser but opposed by
the non-tendering Unitholders. (See "Section 7. Effects of the Offer".)
Transactions with Affiliates. Property management services for the
Partnership are performed by Winthrop Management, an affiliate of the General
Partner. In consideration of such services, the Partnership pays Winthrop
Management a 5% management fee based on gross rental collections. The total
management fee paid by the Partnership for the years ended December 31, 1995,
1994 and 1993 and the nine months ended September 30, 1996 was $329,814,
$316,494, $315,588 and $248,877, respectively.
See "Section 9. Certain Information Concerning the Partnership" for
information with regard to a recent change in control of the General Partner.
11
<PAGE>
Section 11. Certain Information Concerning the Purchaser. The Purchaser
is a newly-formed Delaware limited liability company. The members of the
Purchaser are AP GP Win Master, L.P. ("Win Master"), a Delaware limited
partnership, the general partner of which is AP GP Win Master, Inc. ("Win Master
GP"), a wholly-owned subsidiary of Apollo Fund II, and AP Wem Associates L.P.
("Wem Associates"), a Delaware limited partnership, the general partner of which
is Win Master. The address of the principal office of the Purchaser is One
International Place, Boston, Massachusetts 02110. Members of the General
Partners' senior management may be afforded the opportunity to purchase limited
partnership interests in Wem Associates.
Apollo Real Estate Capital Advisors II, Inc. ("Advisors") is the
general partner of AREA II, the general partner of Apollo Fund II. Since its
inception, the directors of Advisors have been Leon D. Black and John J. Hannan,
who were founding principals of Apollo Advisors, L.P., the managing general
partner of Apollo Investment Fund, L.P., AIF II, L.P. and Apollo Investment Fund
III, L.P., private securities investment funds, and together with William L.
Mack, of AREA and AREA II. Mr. Mack has been the President and Managing Partner
of the Mack Organization, a national owner and developer of and investor in
office and industrial buildings as well as other commercial properties
principally in the New York/New Jersey metropolitan area as well as throughout
the United States since 1963. The address of the principal office of Advisors,
AREA II, Apollo Fund II, Win Master and Wem Associates, and the business address
of Messrs. Black, Hannan and Mack, is c/o Apollo Real Estate Advisors, L.P.,
1301 Avenue of the Americas, New York, New York 10019.
For certain information concerning the executive officers and directors
of Win Master GP, see Schedule 1 to this Offer to Purchase.
Except as otherwise set forth herein, (i) neither the Purchaser, Win
Master GP, Advisors, to the best of Purchaser's knowledge, the persons listed on
Schedule 1, nor any affiliate of the foregoing beneficially owns or has a right
to acquire any Units, (ii) neither the Purchaser, Win Master GP, Advisors, to
the best of Purchaser's knowledge, the persons listed on Schedule 1, nor any
affiliate thereof or director, executive officer or subsidiary of Win Master GP
or Advisors has effected any transaction in the Units within the past 60 days,
(iii) neither the Purchaser, Win Master GP, Advisors, to the best of Purchaser's
knowledge, any of the persons listed on Schedule 1, nor any director or
executive officer of Win Master GP or Advisors, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Partnership, including, but not limited to, contracts,
arrangements, understandings or relationships concerning the transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies, (iv)
there have been no transactions or business relationships which would be
required to be disclosed under the rules and regulations of the Commission
between any of the Purchaser, Win Master GP, Advisors, or, to the best of
Purchaser's knowledge, the persons listed on Schedule 1, on the one hand, and
the Partnership or its affiliates, on the other hand, and (v) there have been no
contracts, negotiations or transactions between the Purchaser, Win Master GP,
Advisors, or, to the best of Purchaser's knowledge, the persons listed on
Schedule 1, on the one hand, and the Partnership or its affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
The Purchaser acquired the five Units owned by it from an affiliate on
January 1, 1997 for a purchase price of $275 per Unit.
Section 12. Source of Funds. A maximum of $3,025,000 (exclusive of fees
and expenses) would be required to purchase the Units sought pursuant to the
Offer, if tendered. The Purchaser presently contemplates that it will obtain all
of such funds (plus amounts to pay fees and expenses) from capital contributions
from its members who have an aggregate net worth substantially in excess of the
amount required to purchase the Units.
Section 13. Purchase Price Considerations.
The Purchaser has set the Purchase Price at $275 net per Unit. The
Purchaser established the Purchase Price by analyzing a number of quantitative
and qualitative factors including: (i) the Estimated Liquidation Value; (ii) the
lack of liquidity of an investment in the Partnership; (iii) the costs to the
Purchaser associated with acquiring the
12
<PAGE>
Units; and (iv) the administrative costs of continuing to own the Partnership's
assets through a publicly registered limited partnership.
Secondary market sales activity for the units, including privately
negotiated sales, has been limited. Between October 1, 1996 and November 30,
1996, there have been only two reported trades in the secondary market in which
a total of 125 Units traded at $356.80 per Unit. The Partnership's Form 10-K for
the year ended December 31, 1995 states that "[t]here is no active market for
the Units [and] [t]rading in the Units is sporadic and occurs solely through
private transactions." At present, privately negotiated sales and sales through
intermediaries (e.g., through the trading system operated by Chicago Partnership
Board, Inc., which publishes sell offers by holders of Units) are the only means
available to a Unitholder to liquidate an investment in Units (other than the
Offer) because the Units are not listed or traded on any exchange or quoted on
any NASDAQ list or system.
The Purchaser is offering to purchase Units which are a relatively
illiquid investment and is not offering to purchase the Partnership's underlying
assets. Consequently, the Purchaser does not believe that the underlying asset
value of the Partnership is determinative in arriving at the Purchase Price.
Nevertheless, using the capitalization of income approach, the Purchaser derived
an estimated liquidation value for the Partnership's assets. In determining the
Estimated Liquidation Value, the Purchaser first calculated the "Adjusted Value"
of each of the Partnership's properties. The Adjusted Value was calculated by
reducing a property's net operating income ("NOI") (which was based on unaudited
actual property revenues and expenses during the year ended December 31, 1996)
by $400 per apartment unit ($450 per apartment unit for the Stratford Place
Apts. property), an amount customarily reserved for capital expenditures at the
properties (the "Reserve"). This amount was then divided by a 10.25%
capitalization rate (the "Cap Rate") to determine the property's Adjusted Value.
The Purchaser believes that the Replacement Reserve and Cap Rate
utilized by it are within a range of reserves and capitalization rates currently
employed in the marketplace. The utilization of different reserves and
capitalization rates could also be appropriate. In this regard, Unitholders
should be aware that the use of lower reserves and/or capitalization rates or an
increase in NOI would result in higher Adjusted Values for the Partnership's
properties. Further, Unitholders should understand that while the Purchaser
employed the following method of determining the Estimated Liquidation Value,
there may be alternative valuation methods that would yield differing values.
The following table illustrates the method used by the Purchaser to
determine the Adjusted Value of the properties.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Property NOI Replacement Reserve Adjusted Value
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Meadow Wood Apts. $ 619,751 $ 142,400 $ 4,657,083
- -----------------------------------------------------------------------------------------------------------------------------
Stratford Place Apts. 1,324,360 157,500 11,384,000
- -----------------------------------------------------------------------------------------------------------------------------
Stratford Village Apts. 823,911 89,600 7,164,010
- -----------------------------------------------------------------------------------------------------------------------------
Sunflower Apts. 435,746 99,200 3,283,376
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL $3,203,768 $488,700 $26,488,468
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
To determine the Estimated Liquidation Value of the Partnership's
assets, the Purchaser then (i) added to the aggregate Adjusted Value the net
amount of current assets and liabilities of the Partnership at December 31,
1996, which net amount equaled $2,394,504 and (ii) subtracted the $21,563,415 of
long-term debt of the Partnership outstanding at December 31, 1996, and
estimated Partnership liquidation costs of $666,212 (approximately 2.5% of the
Property's Adjusted Value). The resulting Estimated Liquidation Value of the
Partnership's assets is $6,657,345 or approximately $288 per Unit.
The Purchaser believes that realization of the Estimated Liquidation
Value by the Partnership may be impacted by factors generally affecting the sale
of real estate, including market conditions at the time of sale. The
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<PAGE>
Partnership is not required to liquidate until December 2003, and the General
Partners do not otherwise have any present plan or intentions to sell or
refinance any of the Partnership's properties. Unitholders should note, however,
that in connection with the January 1996 refinancing of the Sunflower Apts.
property and the May 1996 refinancing of the Stratford Place Apts. property, the
respective lenders obtained appraisals of such properties which indicated
appraised values of $4,700,000 and $12,700,000, respectively (as compared to
$3,508,322 and $11,260,449 Adjusted Values for such properties, respectively).
Such appraised values were derived in part by application by the respective
appraisers of a 10% capitalization rate for the Sunflower Apts. property and a
9.5% capitalization rate for the Stratford Place Apts. property.
The Partnership has informed the Purchaser that it periodically is
requested to give a Limited Partner an estimated valuation of the Units in
connection with various matters affecting the Limited Partner. The Partnership
has informed the Purchaser that the most recent estimated valuation given was
$350 per Unit, which valuation was given as of November 11, 1996. Such estimated
valuation was based, among other things, on an assumed liquidation of the
Partnership (based upon 1995 operating results, the then existing capital
structure and application of a 20% discount factor to reflect the illiquidity of
an investment in the Units.
Unitholders should note that the Partnership Agreement of the
Partnership provides that upon dissolution of the Partnership subsequent to the
sale of all of the Partnership's properties, the General Partners are required
to contribute capital to the Partnership in an amount equal to the least of (i)
the deficiency in their capital account, (ii) 1.01% of the total capital
contributions made by the Unitholders and (iii) the deficit in a hypothetical
capital account of the General Partners assuming the General Partners had only
an aggregate of 1% of each material item of Partnership income, gain, loss,
deduction or credit at all times. Through ownership of Units by the Purchaser,
the potential liability of the General Partners is effectively reduced. Although
there was a deficit in the capital account of the General Partners of $1,508,918
as of December 31, 1995 (equal to approximately $65.21 per Unit), such amount is
subject to future reduction through allocation of a portion of the taxable gain,
if any, that results from any sale of the Partnership's properties.
Consequently, the ultimate amount, if any, of the deficit and the date on which
it would be paid are indeterminable. Accordingly, the Purchaser has attributed
no value to this obligation in establishing the Purchase Price.
In August 1995, an analysis was prepared by former employees of the
General Partners in connection with a possible tender offer for Units being
considered at such time. The analysis included projected distributions of cash
flow to Unitholders over a five-year projection period, as well as the amount
Unitholders would receive if the Partnership was liquidated at the end of such
projection period. For purposes of the analysis, the Partnership's NOI was
assumed to increase by 4% per year during each year of the projection period. In
estimating sales proceeds to be received at the end of the projection period, a
10% capitalization rate and $250 per apartment unit replacement reserve were
used. Based on the assumptions used in the analysis, the Partnership would make
distributions of cash flow of approximately $50 per Unit, $60 per Unit, $64 per
Unit, $69 per Unit and $75 per Unit during 1995, 1996, 1997, 1998 and 1999,
respectively, and distribute sales proceeds of approximately $952 per Unit at
the end of 1999. Unitholders should note that such amounts do not reflect the
present value of the amounts projected to be received under the analysis, but
rather the amounts which would be received by a Unitholder over time, assuming
the Unitholder continued to hold his Unit over the projection period. In
addition, although the analysis assumes a 4% annually compounded growth rate and
$250 replacement reserve, such growth and reserves historically have not been
achieved. Moreover, projected NOI for the first two years of the projection
period exceeded actual NOI for such years by approximately $300,000 in the
aggregate (nearly 20% higher than actual operating results). The Partnership was
able to actually distribute only $8.64 per Unit during each of the first two
years of the projection period as compared to the $50 per Unit and $60 per Unit
projected for such years in the analysis. Finally, Unitholders should also note
that the Partnership is not required to liquidate until 2003 and the General
Partners do not otherwise have any present plan or intention to sell or
refinance any of the Partnership's properties. Furthermore, the foregoing
analysis was prepared prior to the 1996 refinancing of two of the Partnership's
properties and accordingly does not give effect to such refinancing.
The Purchase Price represents the price at which the Purchaser is
willing to purchase Units. No independent person has been retained to evaluate
or render any opinion with respect to the fairness of the Purchase Price and no
representation is made by the Purchaser, the General Partners or any affiliate
of the Purchaser or the General Partners
14
<PAGE>
as to such fairness. The Purchaser did not attempt to obtain current independent
valuations or appraisals of the Properties and other assets owned by the
Partnership, and other than the appraisals discussed above, neither the
Purchaser nor the General Partners are aware of any such valuation or appraisal.
As indicated above, the Purchaser does not believe that such valuations or
appraisals should be determinative as to the Purchaser's establishment of the
Purchase Price. Other measures of the value of the Units may be relevant to
Unitholders. Unitholders are urged to consider carefully all of the information
contained herein and consult with their own advisors, tax, financial or
otherwise, in evaluating the terms of the Offer before deciding whether to
tender Units.
Section 14. Conditions of the Offer. Notwithstanding any other term of
the Offer, the Purchaser shall not be required to accept for payment or to pay
for any Units tendered if all authorizations, consents, orders or approvals of,
or declarations or filings with, or expirations of waiting periods imposed by,
any court, administrative agency or commission or other governmental authority
or instrumentality, domestic or foreign, necessary for the consummation of the
transactions contemplated by the Offer shall not have been filed, occurred or
been obtained. Furthermore, notwithstanding any other term of the Offer, the
Purchaser shall not be required to accept for payment or pay for any Units not
theretofore accepted for payment or paid for and may terminate or amend the
Offer as to such Units if, at any time on or after the date of the Offer and
before the acceptance of such Units for payment or the payment therefor, or the
later thereof, as applicable and as determined by the Purchaser, any of the
following conditions exists:
(a) a preliminary or permanent injunction or other order of
any federal or state court, government or governmental authority or
agency shall have been issued and shall remain in effect which (i)
makes illegal, delays or otherwise directly or indirectly restrains or
prohibits the making of the Offer or the acceptance for payment of or
payment for any Units by the Purchaser, (ii) imposes or confirms
limitations on the ability of the Purchaser effectively to exercise
full rights of ownership of any Units, including, without limitation,
the right to vote any Units acquired by the Purchaser pursuant to the
Offer or otherwise on all matters properly presented to the
Partnership's Unitholders, (iii) requires divestiture by the Purchaser
of any Units, (iv) causes any material diminution of the benefits to be
derived by the Purchaser as a result of the transactions contemplated
by the Offer, or (v) might materially adversely affect the business,
properties, assets, liabilities, financial condition, operations,
results of operations or prospects of the Purchaser or the Partnership;
(b) there shall be any action taken, or any statute, rule,
regulation or order proposed, enacted, enforced, promulgated, issued or
deemed applicable to the Offer by any federal or state court,
government or governmental authority or agency, which might, directly
or indirectly, result in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above;
(c) any change or development shall have occurred or been
threatened since the date hereof, in the business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects of the Partnership, which, in the reasonable judgment of the
Purchaser, is or may be materially adverse to the Partnership, or the
Purchaser shall have become aware of any fact that, in the reasonable
judgment of the Purchaser, does or may have a material adverse effect
on the value of the Units;
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) any limitation
by any governmental authority on, or other event which might affect,
the extension of credit by lending institutions or result in any
imposition of currency controls in the United States, (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States, (v) a material change in United States or other currency
exchange rates or a suspension of a limitation on the markets thereof,
or (vi) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening
thereof;
(e) there shall have been threatened, instituted or pending
any action or proceeding before any court or government agency or other
regulatory or administrative agency or commission or by any other
15
<PAGE>
person challenging the acquisition of any Units pursuant to the Offer,
or otherwise directly or indirectly relating to the Offer, or
otherwise, in the reasonable judgment of the Purchaser, adversely
affecting the Purchaser or the Partnership; and
(f) the Partnership shall have (1) issued, or authorized or
proposed the issuance of, any partnership interests of any class, or
any securities convertible into, or rights, warrants or options to
acquire, any such interests or other convertible securities, (2) issued
or authorized or proposed the issuance of any other securities in
respect of, in lieu of, or in substitution for, all or any of the
presently outstanding Units, (3) refinanced any of the Partnership's
properties, other than in the ordinary course of the Partnership's
business and consistent with the past practice, (4) declared or paid
any distribution, other than in cash and consistent with past practice,
on any of its partnership interests, or (5) the Partnership or the
General Partner shall have authorized, proposed or announced its
intention to propose any merger, consolidation or business combination
transaction, acquisition of assets, disposition of assets or material
change in its capitalization, or any comparable event not in the
ordinary course of business and consistent with past practice.
The foregoing conditions are for the sole benefit of the Purchaser and
may be asserted by the Purchaser regardless of the circumstances giving rise to
such conditions or may be waived by the Purchaser in whole or in part at any
time and from time to time in its sole discretion. Any determination by the
Purchaser concerning the events described above will be final and binding upon
all parties. Notwithstanding anything to the contrary set forth in this Section
14, all conditions set forth in this Section 14 must be satisfied or waived
prior to the Expiration Date.
Section 15. Certain Legal Matters.
General. Except as set forth in this Section 15, the Purchaser is not
aware of any filings, approvals or other actions by any domestic or foreign
governmental or administrative agency that would be required prior to the
acquisition of Units by the Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is the Purchaser's present intention
that such additional approval or action would be sought. While there is no
present intent to delay the purchase of Units tendered pursuant to the Offer
pending receipt of any such additional approval or the taking of any such
action, there can be no assurance that any such additional approval or action,
if needed, would be obtained without substantial conditions or that adverse
consequences might not result to the Partnership's business, or that certain
parts of the Partnership's business might not have to be disposed of or held
separate or other substantial conditions complied with in order to obtain such
approval or action, any of which could cause the Purchaser to elect to terminate
the Offer without purchasing Units thereunder. The Purchaser's obligation to
purchase and pay for Units is subject to certain conditions, including
conditions related to the legal matters discussed in this Section 15.
Antitrust. The Purchaser does not believe that the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, is applicable to the acquisition
of Units contemplated by the Offer.
Margin Requirements. The Units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, such regulations are not applicable to the Offer.
State Takeover Laws. A number of states have adopted anti-takeover laws
which purport, to varying degrees, to be applicable to attempts to acquire
securities of corporations which are incorporated in such states or which have
substantial assets, securityholders, principal executive offices or principal
places of business therein. Although the Purchaser has not attempted to comply
with any state anti-takeover statutes in connection with the Offer, the
Purchaser reserves the right to challenge the validity or applicability of any
state law allegedly applicable to the Offer and nothing in this Offer to
Purchase nor any action taken in connection herewith is intended as a waiver of
such right. If any state anti-takeover statute is applicable to the Offer, the
Purchaser might be unable to accept for payment or purchase Units tendered
pursuant to the Offer or be delayed in continuing or consummating the Offer. In
such case, the Purchaser may not be obligated to accept for purchase or pay for
any Units tendered.
Section 16. Fees and Expenses. Except as set forth in this Section
16, the Purchaser will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Units pursuant to the Offer. The
16
<PAGE>
Purchaser has retained The Swenson Group, L.L.C. to act as Information
Agent and Depositary in connection with the Offer. The Purchaser will pay The
Swenson Group, L.L.C. reasonable and customary compensation for its services in
connection with the Offer, plus reimbursement for out-of-pocket expenses. The
Purchaser will also pay all costs and expenses of printing and mailing the Offer
and its legal fees and expenses.
Section 17. Miscellaneous. The Purchaser is not aware of any
jurisdiction in which the making of the Offer is not in compliance with
applicable law. If the Purchaser becomes aware of any jurisdiction in which the
making of the Offer would not be in compliance with applicable law, the
Purchaser will make a good faith effort to comply with any such law. If, after
such good faith effort, the Purchaser cannot comply with any such law, the Offer
will not be made to (nor will tenders be accepted from or on behalf of) the
holders of Units residing in such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained herein or in the Letter
of Transmittal and, if given or made, such information or representation must
not be relied upon as having been authorized.
The Purchaser has filed with the Commission a Schedule 14D-1, pursuant
to Rule 14d-3 under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. The Schedule 14D-1
and any amendments thereto, including exhibits, may be inspected and copies may
be obtained at the same places and in the same manner as set forth in Section 9
hereof (except that they will not be available at the regional offices of the
Commission).
LON-WGI ASSOCIATES L.L.C.
February 6, 1997
17
<PAGE>
Appendix A
GLOSSARY
Advisors: Apollo Real Estate Capital Advisors II, Inc.
Apollo Fund I: Apollo Real Estate Investment Fund, L.P.
Apollo Fund II: Apollo Real Estate Investment Fund II, L.P.
AREA: Apollo Real Estate Advisors, L.P.
AREA II: Apollo Real Estate Advisors II, L.P.
Business Day: Any day other than Saturday, Sunday or a federal holiday, and
consists of the time period from 12:01 a.m. through 12:00 Midnight, New York
City time
Cap Rate: the 10.25% capitalization rate used in calculating the Liquidation
Value
Code: The Internal Revenue Code of 1986, as amended
Commission: The Securities and Exchange Commission
Depositary: The Swenson Group, L.L.C., an affiliate of the Purchaser
Eligible Institution: A member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank, savings bank, credit union, savings and loan association or
trust company having an office, branch or agency in the United States
Estimated Liquidation Value: The Purchaser's estimate of the liquidation value
of the Partnership's assets as of December 31, 1996, as determined in Section 13
of the Offer to Purchase
Exchange Act: Securities Exchange Act of 1934, as amended
Expiration Date: 12:00 Midnight, New York City Time on March 7, 1997, unless and
as extended
General Partners: Two Winthrop Properties, Inc., together with
Linnaeus-Lexington Associates Limited Partnership, the general partners of the
Partnership.
Information Agent: The Swenson Group, L.L.C., an affiliate of the Purchaser
NOI: Net Operating Income
Offer: This offer of the Purchaser set forth in this Offer to Purchase and the
related Letter of Transmittal, as each may be supplemented or amended from time
to time
Offer to Purchase: This Offer of the Purchaser, dated February 6, 1997.
Partnership: Winthrop Growth Investors 1 Limited Partnership, a Massachusetts
limited partnership
Purchase Price: The amount of cash paid to each Unitholder for each Unit
tendered upon consummation of the Offer
Purchaser: LON-WGI Associates L.L.C.
Reserve: $400 per apartment unit (or $450 per apartment unit for the Stratford
Place Apts. property)
TIN: Taxpayer identification number
Unitholders: Holders of Units
Units: Limited partnership interests or assignee interests of the Partnership
Win Master GP: AP GP Win Master, Inc.
<PAGE>
Schedule 1
INFORMATION WITH RESPECT TO THE EXECUTIVE
OFFICERS AND DIRECTORS OF WIN MASTER GP
Set forth below is the name, current business address, present principal
occupation, and employment history for at least the past five years of each
director and executive officer of Win Master GP. Each person listed below is a
citizen of the United States.
Present Principal Occupation or Employment; Material Occupation,
Position, Office or Employment for the Past Five Years
Michael D. Weiner. Mr. Weiner has been an officer and director of Win Master GP
since November, 1996 and an officer of Advisors since its inception. Since 1993,
Mr. Weiner has been associated with AREA and since May 1996 with AREA II which
respectively act as managing general partner of Apollo I and Apollo II. In
addition, since 1992, Mr. Weiner has been associated with Apollo Advisors, L.P.,
which, together with an affiliate, serves as the managing general partner of
Apollo Investment Fund, L.P., AIF II, L.P. and Apollo Investment Fund III, L.P.,
private securities investment funds. From prior to 1992, Mr. Weiner was a
partner of the national law firm of Morgan, Lewis & Bockius. Mr. Weiner is also
a director of Applause, Inc., Capital Apartment Properties, Inc., Continental
Graphics Holdings, Inc., Converse, Inc., The Florsheim Shoe Company, Inc. and
Furniture Brands International, Inc. Mr. Weiner's business address is 1999
Avenue of the Stars, Los Angeles, California 90067-6048.
W. Edward Scheetz. Mr. Scheetz has been an officer and director of Win Master GP
since November, 1996 and an officer of Advisors since its inception. Since 1993,
Mr. Scheetz has been a principal of AREA and since May 1996 of AREA II which
respectively act as managing general partner of Apollo I and Apollo II. From
prior to 1993, Mr. Scheetz was a principal of Trammell Crow Ventures, a national
real estate investment firm. Mr. Scheetz is also a director of Capital Apartment
Properties, Inc., Metropolis Realty Inc., Koger Equity Inc., NextHealth Inc.,
Roland International, Inc., Koll Management Services, Inc. and Western Pacific
Housing Corp. Mr. Scheetz' business address is 1301 Avenue of the Americas, New
York, New York 10019.
Michael L. Ashner. Mr. Ashner has been an officer of Win Master GP since
November, 1996. Since January 1996, Mr. Ashner has also been President and Chief
Executive Officer of Winthrop Financial Associates, A Limited Partnership
("Winthrop"), which is engaged in the real estate investment business. From June
1994 until January 1996, Mr. Ashner was a Director, President and Co-Chairman of
National Property Investors, Inc., a real estate investment firm ("NPI"). Since
1981, Mr. Ashner has also served as President of Exeter Capital Corporation, a
firm which has organized and administered real estate limited partnerships. Mr.
Ashner has substantial investments and manages numerous partnerships and
corporations which own real estate investments. Mr. Ashner's business address is
100 Jericho Quadrangle, Suite 214, Jericho, New York 11753.
Lee S. Neibart. Mr. Neibart has been an officer of Win Master GP since November
1996 and an officer of Advisors since its inception. Since 1993, Mr. Neibart has
been associated with AREA and since May 1996 with AREA II which respectively act
as managing general partner of Apollo I and Apollo Fund II. From prior to 1993,
Mr. Neibart was Executive Vice President and Chief Operating Officer of the
Robert Martin Company, a private real estate development and management firm
based in Westchester County, New York. Mr. Neibart received his MBA degree from
New York University. Mr. Neibart is also a director of Capital Apartment
Properties, Inc., Metropolis Realty Inc., Koger Equity Inc., NextHealth Inc.,
Roland International, Inc. and a past President of the NAIOP in New York. Mr.
Neibart's business address is 1301 Avenue of the Americas, New York, New York
10019.
Peter Braverman. Mr. Braverman has been an officer of the Win Master GP since
November, 1996. Since January 1996, Mr. Braverman has been a Senior Vice
President of Winthrop. From June 1995 until January 1996, Mr. Braverman was a
Vice President of NPI. From June 1991 until March 1994, Mr. Braverman was
President of the Braverman Group, a firm specializing in management consulting
for the real estate and construction industries. From 1988 to 1991, Mr.
Braverman was Vice President and Assistant Secretary of Fischbach Corporation, a
publicly traded, international real estate and construction firm. Mr.
Braverman's business address is 100 Jericho Quadrangle, Suite 214, Jericho, New
York 11753.
<PAGE>
The Letter of Transmittal and any other required documents should be sent or
delivered by each Unitholder or his broker, dealer, commercial bank, trust
company or other nominee to the Depositary at the address set forth below:
THE SWENSON GROUP, L.L.C.
By U.S. Mail: 167 Milk Street, #421
Boston, Massachusetts 02109-4315
By Hand Attention: Special Projects Department
or Overnigh Delivery: One International Place, 12th Floor
Boston, Massachusetts 02110
By Facsimile: (617) 330-7969
For Telephone Information contact the Information Agent at:
(800) 914-7896
Any questions or requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal and other tender offer materials may be
directed to the Purchaser at the telephone number and address listed above. You
may also contact your broker for assistance concerning the Offer.
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Exhibit (a)(ii)
WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP
One International Place
Boston, Massachusetts 02110
February 6, 1996
Dear Limited Partner:
Enclosed is the Schedule 14D-9 which was filed by the Partnership with
the Securities and Exchange Commission in connection with the offer by LON-WGI
Associates L.L.C. (the "Purchaser") to purchase limited partnership units in
Winthrop Growth Investors 1 Limited Partnership (the "Partnership").
The general partners of the Partnership are affiliated with the
Purchaser. Accordingly, the Partnership is remaining neutral as to whether
limited partners should tender their units pursuant to the offer.
Limited Partners are advised to carefully read the enclosed Schedule
14D-9.
WINTHROP GROWTH INVESTORS 1
LIMITED PARTNERSHIP
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Exhibit (c)(i)
Note 4 to the financial statements of the Partnership
included in the Form 10-K of the Partnership
for the fiscal year ended December 31, 1995
4. Transactions with Related Parties
Two Winthrop Properties, Inc. ("Two Winthrop" of the "Managing General
Partner"), Winthrop Securities Co., Inc. ("Winthrop Securities" or the "Selling
Agent") and Winthrop Management are wholly owned subsidiaries of First Winthrop
Corporation which, in turn, is wholly owned by Winthrop Financial Associates, A
Limited Partnership ("WFA"). WFA and its affiliates manage or advise a large
number of partnerships organized to own or operate apartment complexes, as well
as other real estate investments, or to invest in other limited partnerships
that own or operate apartment complexes or other real estate investments.
Winthrop Management is the management agent for all four properties. Pursuant to
each management agreement, the partnerships and trust pay a 5% management fee
based on gross rental collections. The total management fee paid by the
Properties for the years ended December 31, 1995, 1994 and 1993 amount to
$329,814, $316,494 and $315,588, respectively.
Beginning with the quarter in which the Investment Date occurs (February 1986)
and for each quarter thereafter, the general partners generally are entitled to
percentages of cash available for distribution subordinated to a specified
minimum return to the limited partners, as described in the partnership
agreement.
During the liquidation stage of the Partnership, the general partners and their
affiliates are entitled to receive certain distributions, subordinated to a
specified minimum return to the limited partners, as described in the
partnership agreement.
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Exhibit (c)(ii)
Note 4 to the financial statements of the Partnership
included in the Form 10-QSB of the Partnership
for the quarterly period ended September 30, 1996.
4. Related Party Transactions
Winthrop Management, an affiliate of the Managing General Partner, is entitled
to receive 5% of gross receipts from all Partnership properties they manage.
Winthrop Management earned $249,000 and $246,000 for the nine months ended
September 30, 1996 and 1995, respectively.
Winthrop Management received reimbursement of accountable administrative
expenses amounting to approximately $149,000 during the nine months ended
September 30, 1996 which included general and administrative expenses.
