<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
AMENDMENT NO. 3
TO
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
DAVIDSON DIVERSIFIED REAL ESTATE III, L.P.
(Name of Subject Company)
AIMCO PROPERTIES, L.P.
(Bidder)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
NONE
(CUSIP Number of Class of Securities)
PATRICK J. FOYE
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
1873 SOUTH BELLAIRE STREET, 17TH FLOOR
DENVER, COLORADO 80222
(303) 757-8101
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
COPY TO:
JONATHAN L. FRIEDMAN
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
300 SOUTH GRAND, 34TH FLOOR
LOS ANGELES, CALIFORNIA 90071
(213) 687-5000
------------------------------------
<PAGE> 2
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
Transaction Valuation* $562,084 Amount of Filing Fee: $112.42
- --------------------------------------------------------------------------------
* For purposes of calculating the fee only. This amount assumes the purchase of
437.42 units of limited partnership interest of the subject partnership for
$1,285 per unit. The amount of the filing fee, calculated in accordance with
Section 14(g)(1)(B)(3) and Rule 0-11(d) under the Securities Exchange Act of
1934, as amended, equals 1/50th of one percent of the aggregate of the cash
offered by the bidder.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number or the form or
schedule and the date of its filing.
Amount Previously Paid: $112.42 Filing Parties: AIMCO Properties, L.P.
Form or Registration No.: Schedule 14D-1 Date Filed: August 19, 1999
(Continued on following pages)
Page 1 of 4 Pages
<PAGE> 3
AMENDMENT NO. 3 TO SCHEDULE 14D-1
This Statement (the "Statement") constitutes Amendment No. 3
to the Schedule 14D-1, originally filed August 2, 1999, of AIMCO Properties,
L.P. (the "AIMCO OP"), relating to AIMCO OP's offer to purchase units of limited
partnership interest ("Units") of Davidson Diversified Real Estate III, L.P.
(the "Partnership"). The item numbers and responses thereto are set forth below
in accordance with the requirements of Schedule 14D-1.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated July 30, 1999 (Previously filed).
(a)(2) Letter of Transmittal and related Instructions.
(a)(3) Letter, dated July 30,1999, from AIMCO OP to the Limited
Partners of the Partnership (Previously filed).
(a)(4) Supplement to Offer to Purchase, dated August 13, 1999
(Previously filed).
(a)(5) Supplement to Offer to Purchase, dated August 19, 1999
(Previously filed).
(a)(6) Letter, dated August 19,1999,from AIMCO OP to the Limited
Partners of the Partnership (Previously filed).
(a)(7) Notice of Withdrawal, dated August 19, 1999 (Previously filed).
(a)(8) Supplement to Offer to Purchase, dated September 9, 1999.
(b) Credit Agreement (Secured Revolving Credit Facility), dated as
of August 16, 1999,among AIMCO Properties, L.P., Bank of
America, Bank Boston, N.A., and First Union National Bank.
(Exhibit 10.1 to AIMCO's Current Report on Form 8-K, dated
August 16, 1999, is incorporated herein by this reference.)
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
Page 2 of 4 Pages
<PAGE> 4
SIGNATURE
After due inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: September 9, 1999
AIMCO/IPT, INC.
By: /s/ Patrick J. Foye
-------------------------------------
Executive Vice President
INSIGNIA PROPERTIES, L.P.
By: AIMCO/IPT, INC.
(General Partner)
By: /s/ Patrick J. Foye
-------------------------------------
Executive Vice President
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, INC.
(General Partner)
By: /s/ Patrick J. Foye
-------------------------------------
Executive Vice President
AIMCO-GP, INC.
By: /s/ Patrick J. Foye
-------------------------------------
Executive Vice President
APARTMENT INVESTMENT
AND MANAGEMENT COMPANY
By: /s/ Patrick J. Foye
-------------------------------------
Executive Vice President
Page 3 of 4 Pages
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
(a)(1) Offer to Purchase, dated July 30, 1999 (Previously filed).
(a)(2) Letter of Transmittal and related Instructions.
(a)(3) Letter, dated July 30, 1999, from AIMCO OP to the Limited
Partners of the Partnership (Previously filed).
(a)(4) Supplement to Offer to Purchase, dated August 13, 1999
(Previously filed).
(a)(5) Supplement to Offer to Purchase, dated August 19, 1999
(Previously filed).
(a)(6) Letter, dated August 19, 1999, from AIMCO OP to the Limited
Partners of the Partnership (Previously filed)..
(a)(7) Notice of Withdrawal, dated August 19, 1999 (Previously filed).
(a)(8) Supplement to Offer to Purchase, dated September 9, 1999.
(b) Credit Agreement (Secured Revolving Credit Facility), dated as
of August 16, 1999, among AIMCO Properties, L.P., Bank of
America, Bank Boston, N.A., and First Union National Bank.
(Exhibit 10.1 to AIMCO's Current Report on Form 8-K, dated
August 16, 1999, is incorporated herein by this reference.)
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
Page 4 of 4 Pages
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER UNITS OF LIMITED PARTNERSHIP IN
DAVIDSON DIVERSIFIED REAL ESTATE III (THE "PARTNERSHIP")
PURSUANT TO AN OFFER TO PURCHASE
DATED JULY 30, 1999 (THE "OFFER DATE")
BY
AIMCO PROPERTIES, L.P.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK TIME,
ON SEPTEMBER 16, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE")
- --------------------------------------------------------------------------------
WE ARE OFFERING TO PURCHASE UNITS IN YOUR PARTNERSHIP FOR $1,285 PER UNIT.
The Information Agent for the offer is:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
By Telephone:
TOLL FREE (888) 349-2005
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
DESCRIPTION OF UNITS TENDERED
- ----------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) (Please Units in Davidson Diversified Real Estate III
indicate changes or corrections to the name, address
and tax identification number printed below.)
- ----------------------------------------------------------------------------------------------------------------
1. Total Number 2. Number of 3. Total
of Units Owned Units Tendered Number of
(#) for Cash Units Tendered
(#) (#)
----------------------------------------------------
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
To participate in the offer, you must send a duly completed and executed copy of
this Letter of Transmittal and any other documents required by this Letter of
Transmittal so that such documents are received by River Oaks Partnership
Services, Inc., the Information Agent, on or prior to the Expiration Date,
unless extended. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK, AND DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE INFORMATION AGENT. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. DELIVERY OF
THIS LETTER OF TRANSMITTAL OR ANY OTHER REQUIRED DOCUMENTS TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE VALID DELIVERY.
--------------------------
IF YOU HAVE THE CERTIFICATE ORIGINALLY ISSUED TO REPRESENT YOUR
INTEREST IN THE PARTNERSHIP PLEASE SEND IT TO THE INFORMATION
AGENT WITH THIS LETTER OF TRANSMITTAL.
---------------------------
FOR INFORMATION OR ASSISTANCE IN CONNECTION WITH THE OFFER OR THE
COMPLETION OF THIS LETTER OF TRANSMITTAL, PLEASE CONTACT THE INFORMATION AGENT
AT (888) 349-2005 (TOLL FREE).
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 2, 4 AND 9)
To be completed ONLY if the consideration for the purchase price of
Units accepted for payment is to be issued in the name of someone other than the
undersigned.
[ ] Issue consideration to:
Name
---------------------------------------------------------------------------
(Please Type or Print)
Address
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
(Tax Identification or Social Security No.)
(See Substitute Form W-9)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 2, 4 AND 9)
To be completed ONLY if the consideration for the purchase price of
Units accepted for payment is to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown above.
[ ] Mail consideration to:
Name
---------------------------------------------------------------------------
(Please Type or Print)
Address
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
2
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby acknowledges that he or she has received and reviewed
(i) the Purchaser's Offer to Purchase relating to the offer by AIMCO Properties,
L.P. (the "Purchaser") to purchase Limited Partnership Interests (the "Units")
in the Partnership and (ii) this Letter of Transmittal and the Instructions
hereto, as each may be supplemented or amended from time to time (collectively,
the "Offer").
Upon the terms and subject to the conditions set forth in the Offer to
Purchase, and this Letter of Transmittal, the undersigned hereby tenders to the
Purchaser the Units set forth in the box above entitled "Description of Units
Tendered," including all interests in any limited partnership represented by
such units (collectively, the "Units"), at the price indicated on the Offer to
Purchase, less the amount of distributions, if any, made by the Partnership from
the Offer Date until the Expiration Date (the "Offer Price"), net to the
undersigned in cash, without interest.
Subject to and effective upon acceptance for payment of any of the Units
tendered hereby in accordance with the terms of the Offer, the undersigned
hereby irrevocably sells, assigns, transfers, conveys and delivers to, or upon
the order of, the Purchaser all right, title and interest in and to such Units
tendered hereby that are accepted for payment pursuant to the Offer, including,
without limitation, (i) all of the undersigned's interest in the capital of the
Partnership, and the undersigned's interest in all profits, losses and
distributions of any kind to which the undersigned shall at any time be entitled
in respect of the Units; (ii) all other payments, if any, due or to become due
to the undersigned in respect of the Units, under or arising out of the
agreement of limited partnership of the Partnership (the "Partnership
Agreement"), or any agreement pursuant to which the Units were sold (the
"Purchase Agreement"), whether as contractual obligations, damages, insurance
proceeds, condemnation awards or otherwise; (iii) all of the undersigned's
claims, rights, powers, privileges, authority, options, security interests,
liens and remedies, if any, under or arising out of the Partnership Agreement or
Purchase Agreement or the undersigned's ownership of the Units, including,
without limitation, all voting rights, rights of first offer, first refusal or
similar rights, and rights to be substituted as a limited partner of the
Partnership; and (iv) all present and future claims, if any, of the undersigned
against the Partnership, the other partners of the Partnership, or the general
partner and its affiliates, including the Purchaser, under or arising out of the
Partnership Agreement, the Purchase Agreement, the undersigned's status as a
limited partner, or the terms or conditions of the Offer, for monies loaned or
advanced, for services rendered, for the management of the Partnership or
otherwise.
The undersigned hereby irrevocably constitutes and appoints the Purchaser
and any designees of the Purchaser as the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Units, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to vote or act in such manner as any such attorney
and proxy or substitute shall, in its sole discretion, deem proper with respect
to such Units, to do all such acts and things necessary or expedient to deliver
such Units and transfer ownership of such Units on the partnership books
maintained by the general partner of the Partnership, together with all
accompanying evidence of transfer and authenticity to, or upon the order of, the
Purchaser, to sign any and all documents necessary to authorize the transfer of
the Units to the Purchaser including, without limitation, the "Transferor's
(Seller's) Application for Transfer" created by the National Association of
Securities Dealers, Inc., if required, and upon receipt by the Information Agent
(as the undersigned's agent) of the Offer Price, to become a substitute limited
partner, to receive any and all distributions made by the Partnership from and
after the Expiration Date of the Offer (regardless of the record date for any
such distribution), and to receive all benefits and otherwise exercise all
rights of beneficial ownership of such Units, all in accordance with the terms
of the Offer. This appointment is effective upon the purchase of the Units by
the Purchaser as provided in the Offer and shall be irrevocable for a period of
ten years following the termination of the Offer. Upon the purchase of Units
pursuant to the Offer, all prior proxies and consents given by the undersigned
with respect to such Units will be revoked and no subsequent proxies or consents
may be given (and if given will not be deemed effective).
In addition to and without limiting the generality of the foregoing, the
undersigned hereby irrevocably (i) requests and authorizes (subject to and
effective upon acceptance for payment of any Unit tendered hereby) the
Partnership and its general partners to take any and all actions as may be
required to effect the transfer of the undersigned's Units to the Purchaser (or
its designee) and to admit the Purchaser as a substitute limited partner in the
Partnership under the
3
<PAGE> 4
terms of the Partnership Agreement; (ii) empowers the Purchaser and its agent to
execute and deliver to each general partner a change of address form instructing
the general partner to send any and all future distributions to the address
specified in the form, and to endorse any check payable to or upon the order of
such unitholder representing a distribution to which the Purchaser is entitled
pursuant to the terms of the offer, in each case, in the name and on behalf of
the tendering unitholder; (iii) agrees not to exercise any rights pertaining to
the Units without the prior consent of the Purchaser; and (iv) requests and
consents to the transfer of the Units, to be effective on the books and records
of the Partnership as of the Offer Date.
The undersigned irrevocably constitutes and appoints the Purchaser and
any designees of the Purchaser as the true and lawful agent and attorney-in-fact
of the undersigned with respect to such Units, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to withdraw any or all of such Units that have been previously
tendered in response to any tender or exchange offer provided that the price per
unit being offered by the Purchaser is equal to or higher than the price per
unit being offered in the previous tender or exchange offer. This appointment is
effective immediately and shall continue to be effective unless and until such
Units are withdrawn from the Offer by the undersigned prior to the Expiration
Date.
NOTWITHSTANDING ANY PROVISION IN A PARTNERSHIP AGREEMENT OR ANY PURCHASE
AGREEMENT TO THE CONTRARY, THE UNDERSIGNED HEREBY DIRECTS EACH GENERAL PARTNER
OF THE PARTNERSHIP TO MAKE ALL DISTRIBUTIONS AFTER THE PURCHASER ACCEPTS THE
TENDERED UNITS FOR PAYMENT TO THE PURCHASER OR ITS DESIGNEE. Subject to and
effective upon acceptance for payment of any Unit tendered hereby, the
undersigned hereby requests that the Purchaser be admitted to the Partnership as
a substitute limited partner under the terms of the Partnership Agreement. Upon
request, the undersigned will execute and deliver additional documents deemed by
the Information Agent or the Purchaser to be necessary or desirable to complete
the assignment, transfer and purchase of Units tendered hereby and will hold any
distributions received from the Partnership after the Expiration Date in trust
for the benefit of the Purchaser and, if necessary, will promptly forward to the
Purchaser any such distributions immediately upon receipt. The Purchaser
reserves the right to transfer or assign, in whole or in part, from time to
time, to one or more of its affiliates, the right to purchase Units tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer or prejudice the rights of
tendering unitholders to receive payment for Units validly tendered and accepted
for payment pursuant to the Offer.
By executing this Letter of Transmittal, the undersigned represents that
either (i) the undersigned is not a plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), or an entity deemed
to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101 of any
such plan, or (ii) the tender and acceptance of Units pursuant to the Offer will
not result in a nonexempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code.
The undersigned understands that a tender of Units to the Purchaser will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer. The undersigned recognizes
that under certain circumstances set forth in the Offer, the Purchaser may not
be required to accept for payment any of the Units tendered hereby. In such
event, the undersigned understands that any Letter of Transmittal for Units not
accepted for payment may be destroyed by the Purchaser (or its agent). EXCEPT AS
STATED IN THE OFFER, THIS TENDER IS IRREVOCABLE, PROVIDED THAT UNITS TENDERED
PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE,
OR UNLESS ALREADY ACCEPTED FOR PAYMENT, ANY TIME AFTER 60 DAYS FROM THE OFFER
DATE.
THE UNDERSIGNED HAS BEEN ADVISED THAT THE PURCHASER IS AN AFFILIATE OF THE
GENERAL PARTNER OF THE PARTNERSHIP AND NO SUCH GENERAL PARTNER MAKES ANY
RECOMMENDATION AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING UNITS IN THE
OFFER. THE UNDERSIGNED HAS MADE HIS OR HER OWN DECISION TO TENDER UNITS.
The undersigned hereby represents and warrants for the benefit of the
Partnership and the Purchaser that the undersigned owns the Units tendered
hereby and has full power and authority and has taken all necessary action to
validly tender, sell, assign, transfer, convey and deliver the Units tendered
hereby and that when the same are accepted for payment by the Purchaser, the
Purchaser will acquire good, marketable and unencumbered title thereto, free and
4
<PAGE> 5
clear of all liens, restrictions, charges, encumbrances, conditional sales
agreements or other obligations relating to the sale or transfer thereof, and
such Units will not be subject to any adverse claims and that the transfer and
assignment contemplated herein are in compliance with all applicable laws and
regulations.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligations of the undersigned
shall be binding upon the heirs, personal representatives, trustees in
bankruptcy, legal representatives, and successors and assigns of the
undersigned.
The undersigned further represents and warrants that, to the extent a
certificate evidencing the Units tendered hereby (the "original certificate") is
not delivered by the undersigned together with this Letter of Transmittal, (i)
the undersigned represents and warrants to the Purchaser that the undersigned
has not sold, transferred, conveyed, assigned, pledged, deposited or otherwise
disposed of any portion of the Units, (ii) the undersigned has caused a diligent
search of its records to be taken and has been unable to locate the original
certificate, (iii) if the undersigned shall find or recover the original
certificate evidencing the Units, the undersigned will immediately and without
consideration surrender it to the Purchaser; and (iv) the undersigned shall at
all times indemnify, defend, and save harmless the Purchaser and the
Partnership, its successors, and its assigns from and against any and all
claims, actions, and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages, judgments, costs, charges, counsel
fees, and other expenses of every nature and character by reason of honoring or
refusing to honor the original certificate when presented by or on behalf of a
holder in due course of a holder appearing to or believed by the partnership to
be such, or by issuance or delivery of a replacement certificate, or the making
of any payment, delivery, or credit in respect of the original certificate
without surrender thereof, or in respect of the replacement certificate.
5
<PAGE> 6
================================================================================
SIGNATURE BOX
(SEE INSTRUCTION 2)
- --------------------------------------------------------------------------------
Please sign exactly as your name is printed on the front of this Letter of
Transmittal. For joint owners, each joint owner must sign. (See Instruction 2).
TRUSTEES, EXECUTORS, ADMINISTRATORS, GUARDIANS, ATTORNEYS-IN-FACT, OFFICERS
OF A CORPORATION OR OTHER PERSONS ACTING IN A FIDUCIARY OR REPRESENTATIVE
CAPACITY, PLEASE COMPLETE THIS BOX AND SEE INSTRUCTION 2.
The signatory hereto hereby tenders the Units indicated in this Letter of
Transmittal to the Purchaser pursuant to the terms of the Offer, and certifies
under penalties of perjury that the statements in Box A, Box B and, if
applicable, Box C and Box D are true.
X
--------------------------------------------------------------------------
(Signature of Owner)
X
--------------------------------------------------------------------------
(Signature of Joint Owner)
Name and Capacity (if other than individuals):
-----------------------------
Title:
---------------------------------------------------------------------
Address:
-------------------------------------------------------------------
----------------------------------------------------------------------------
(City) (State) (Zip)
Area Code and Telephone No. (Day):
-----------------------------------------
(Evening):
-------------------------------------
SIGNATURE GUARANTEE (IF REQUIRED)
(SEE INSTRUCTION 2)
Name and Address of Eligible Institution:
---------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Authorized Signature: X
---------------------------------
Name:
---------------------------------------------------
Title: Date:
----------------------------------------- --------------------
================================================================================
6
<PAGE> 7
TAX CERTIFICATIONS
(See Instruction 4)
By signing the Letter of Transmittal in the Signature Box, the
unitholder certifies as true under penalty of perjury, the representations in
Boxes A, B and C below. Please refer to the attached Instructions for completing
this Letter of Transmittal and Boxes A, B and C below.
================================================================================
BOX A
SUBSTITUTE FORM W-9
(SEE INSTRUCTION 4 - BOX A)
- --------------------------------------------------------------------------------
The unitholder hereby certifies the following to the Purchaser under
penalties of perjury:
(i) The Taxpayer Identification No. ("TIN") printed (or corrected) on
the front of this Letter of Transmittal is the correct TIN of the unitholder,
unless the Units are held in an Individual Retirement Account ("IRA"); or if
this box G is checked, the unitholder has applied for a TIN. If the unitholder
has applied for a TIN, a TIN has not been issued to the unitholder, and either
(a) the unitholder has mailed or delivered an application to receive a TIN to
the appropriate IRS Center or Social Security Administration Office, or (b) the
unitholder intends to mail or deliver an application in the near future (it
being understood that if the unitholder does not provide a TIN to the Purchaser,
31% of all reportable payments made to the unitholder will be withheld); and
(ii) Unless this box [ ] is checked, the unitholder is not subject to
backup withholding either because the unitholder: (a) is exempt from backup
withholding; (b) has not been notified by the IRS that the unitholder is subject
to backup withholding as a result of a failure to report all interest or
dividends; or (c) has been notified by the IRS that such unitholder is no longer
subject to backup withholding.
Note: Place an "X" in the box in (ii) above, only if you are unable to
certify that the unitholder is not subject to backup withholding.
================================================================================
================================================================================
BOX B
FIRPTA AFFIDAVIT
(SEE INSTRUCTION 4 - BOX B)
- --------------------------------------------------------------------------------
Under Section 1445(e)(5) of the Internal Revenue Code and Treas. Reg.
1.1445-11T(d), a transferee must withhold tax equal to 10% of the amount
realized with respect to certain transfers of an interest in a partnership if
50% or more of the value of its gross assets consists of U.S. real property
interests and 90% or more of the value of its gross assets consists of U.S. real
property interests plus cash equivalents, and the holder of the partnership
interest is a foreign person. To inform the Purchaser that no withholding is
required with respect to the unitholder's Units in the Partnership, the person
signing this Letter of Transmittal hereby certifies the following under
penalties of perjury:
(i) Unless this box [ ] is checked, the unitholder, if an individual,
is a U.S. citizen or a resident alien for purposes of U.S. income taxation, and
if other than an individual, is not a foreign corporation, foreign partnership,
foreign estate or foreign trust (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);
(ii) The unitholder's U.S. social security number (for individuals) or
employer identification number (for non-individuals) is correct as furnished in
the blank provided for that purpose on the front of the Letter of Transmittal;
(iii) The unitholder's home address (for individuals), or office
address (for non-individuals), is correctly printed (or corrected) on the front
of this Letter of Transmittal.
The person signing this Letter of Transmittal understands that this
certification may be disclosed to the IRS by the Purchaser and that any false
statements contained herein could be punished by fine, imprisonment, or both.
================================================================================
================================================================================
BOX C
SUBSTITUTE FORM W-8
(SEE INSTRUCTION 4 - BOX C)
- --------------------------------------------------------------------------------
By checking this box [ ], the person signing this Letter of Transmittal
hereby certifies under penalties of perjury that the unitholder is an "exempt
foreign person" for purposes of the Backup Withholding rules under the U.S.
Federal income tax laws, because the unitholder has the following
characteristics:
(i) Is a nonresident alien individual or a foreign corporation,
partnership, estate or trust;
(ii) If an individual, has not been and plans not to be present in the
U.S. for a total of 183 days or more during the calendar year; and
(iii) Neither engages, nor plans to engage, in a U.S. trade or business
that has effectively connected gains from transactions with a broker or barter
exchange.
================================================================================
7
<PAGE> 8
INSTRUCTIONS
FOR COMPLETING LETTER OF TRANSMITTAL
1. REQUIREMENTS OF TENDER. To be effective, a duly completed and signed
Letter of Transmittal (or facsimile thereof) and any other required
documents must be received by the Information Agent at one of its
addresses (or its facsimile number) set forth herein before 5:00 p.m.,
New York Time, on the Expiration Date, unless extended. To ensure
receipt of the Letter of Transmittal and any other required documents,
it is suggested that you use overnight courier delivery or, if the
Letter of Transmittal and any other required documents are to be
delivered by United States mail, that you use certified or registered
mail, return receipt requested.
Our records indicate that the undersigned owns the number of
Units set forth in the box above entitled "Description of Units
Tendered" under the column entitled "Total Number of Units
Owned." If you would like to tender only a portion of your
Units, please so indicate in the space provided in the box above
entitled "Description of Units Tendered."
WHEN TENDERING, YOU MUST SEND ALL PAGES OF THE LETTER OF TRANSMITTAL,
INCLUDING TAX CERTIFICATIONS (BOXES A, B, AND C).
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
INFORMATION AGENT. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ASSURE TIMELY DELIVERY.
2. SIGNATURE REQUIREMENTS.
INDIVIDUAL AND JOINT OWNERS -- After carefully reading and completing
the Letter of Transmittal, to tender Units, unitholders must sign at the
"X" in the Signature Box of the Letter of Transmittal. The signature(s)
must correspond exactly with the names printed (or corrected) on the
front of the Letter of Transmittal. If the Letter of Transmittal is
signed by the unitholder (or beneficial owner in the case of an IRA), no
signature guarantee on the Letter of Transmittal is required. If any
tendered Units are registered in the names of two or more joint owners,
all such owners must sign this Letter of Transmittal.
IRAS/ELIGIBLE INSTITUTIONS -- For Units held in an IRA account, the
beneficial owner should sign in the Signature Box and no signature
guarantee is required. Similarly, if Units are tendered for the account
of a member firm of a registered national security exchange, a member
firm 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 signature guarantee
is required.
TRUSTEES, CORPORATIONS, PARTNERSHIP AND FIDUCIARIES -- Trustees,
executors, administrators, guardians, attorneys-in-fact, officers of a
corporation, authorized partners of a partnership or other persons
acting in a fiduciary or representative capacity must sign at the "X" in
the Signature Box and have their signatures guaranteed by an Eligible
Institution by completing the signature guarantee set forth in the
Signature Box of the Letter of Transmittal. If the Letter of Transmittal
is signed by trustees, administrators, guardians, attorneys-in-fact,
officers of a corporation, authorized partners of a partnership or
others acting in a fiduciary or representative capacity, such persons
should, in addition to having their signatures guaranteed, indicate
their title in the Signature Box and must submit proper evidence
satisfactory to the Purchaser of their authority to so act (see
Instruction 3 below).
3. DOCUMENTATION REQUIREMENTS. In addition to the information required to
be completed on the Letter of Transmittal, additional documentation may
be required by the Purchaser under certain circumstances including, but
not limited to, those listed below. Questions on documentation should be
directed to the Information Agent at its telephone number set forth
herein.
8
<PAGE> 9
DECEASED OWNER (JOINT TENANT) -- Copy of death certificate.
DECEASED OWNER (OTHERS) -- Copy of death certificate
(see also Executor/
Administrator/Guardian
below).
EXECUTOR/ADMINISTRATOR/GUARDIAN -- Copy of court appointment
documents for executor or
administrator; and
(a) a copy of applicable
provisions of the will
(title page, executor(s)'
powers, asset
distribution); or
(b) estate distribution
documents.
ATTORNEY-IN-FACT -- Current power of attorney.
CORPORATION/PARTNERSHIP -- Corporate resolution(s) or
other evidence of authority
to act. Partnership should
furnish a copy of the
partnership agreement.
TRUST/PENSION PLANS -- Unless the trustee(s) are
named in the registration,
a copy of the cover page of
the trust or pension plan,
along with a copy of the
section(s) setting forth
names and powers of
trustee(s) and any
amendments to such sections
or appointment of successor
trustee(s).
4. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If consideration is to be
issued in the name of a person other than the person signing the
Signature Box of the Letter of Transmittal or if consideration is to be
sent to someone other than such signer or to an address other than that
set forth on the Letter of Transmittal in the box entitled "Description
of Units Tendered," the appropriate boxes on the Letter of Transmittal
should be completed.
5. TAX CERTIFICATIONS. The unitholder(s) tendering Units to the Purchaser
pursuant to the Offer must furnish the Purchaser with the unitholder(s)'
taxpayer identification number ("TIN") and certify as true, under
penalties of perjury, the representations in Box A, Box B and, if
applicable, Box C. By signing the Signature Box, the unitholder(s)
certifies that the TIN as printed (or corrected) on this Letter of
Transmittal in the box entitled "Description of Units Tendered" and the
representations made in Box A, Box B and, if applicable, Box C, are
correct. See attached Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for guidance in determining
the proper TIN to give the Purchaser.
U.S. PERSONS. A unitholder that is a U.S. citizen or a resident alien
individual, a domestic corporation, a domestic partnership, a domestic
trust or a domestic estate (collectively, "U.S. Persons"), as those
terms are defined in the Code, should follow the instructions below with
respect to certifying Box A and Box B.
BOX A - SUBSTITUTE FORM W-9.
Part (i), Taxpayer Identification Number -- Tendering unitholders must
certify to the Purchaser that the TIN as printed (or corrected) on this
Letter of Transmittal in the box entitled "Description of Units
Tendered" is correct. If a correct TIN is not provided, penalties may be
imposed by the Internal Revenue Service (the "IRS"), in addition to the
unitholder being subject to backup withholding.
Part (ii), Backup Withholding -- In order to avoid 31% Federal income
tax backup withholding, the tendering unitholder must certify, under
penalty of perjury, that such unitholder is not subject to backup
withholding. Certain unitholders (including, among others, all
corporations and certain exempt non-profit organizations) are not
subject to backup withholding. Backup withholding is not an additional
tax. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS. DO NOT CHECK THE BOX IN BOX A, PART (ii), UNLESS
YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP
WITHHOLDING.
When determining the TIN to be furnished, please refer to the following
as a guide:
Individual accounts - should reflect owner's TIN.
Joint accounts - should reflect the TIN of the owner whose name appears
first.
Trust accounts - should reflect the TIN assigned to the trust.
IRA custodial accounts - should reflect the TIN of the custodian (not
necessary to provide).
9
<PAGE> 10
Custodial accounts for the benefit of minors - should reflect the TIN of
the minor.
Corporations, partnership or other business entities - should reflect
the TIN assigned to that entity.
By signing the Signature Box, the unitholder(s) certifies that the TIN
as printed (or corrected) on the front of the Letter of Transmittal is
correct.
BOX B - FIRPTA AFFIDAVIT -- Section 1445 of the Code requires that each
unitholder transferring interests in a partnership with real estate
assets meeting certain criteria certify under penalty of perjury the
representations made in Box B, or be subject to withholding of tax equal
to 10% of the purchase price for interests purchased. Tax withheld under
Section 1445 of the Code is not an additional tax. If withholding
results in an overpayment of tax, a refund may be obtained from the IRS.
PART (i) SHOULD BE CHECKED ONLY IF THE TENDERING UNITHOLDER IS NOT A
U.S. PERSON, AS DESCRIBED THEREIN.
BOX C - FOREIGN PERSONS -- In order for a tendering unitholder who is a
Foreign Person (i.e., not a U.S. Person, as defined above) to qualify as
exempt from 31% backup withholding, such foreign Unitholder must
certify, under penalties of perjury, the statement in Box C of this
Letter of Transmittal, attesting to that Foreign Person's status by
checking the box preceding such statement. UNLESS THE BOX IS CHECKED,
SUCH UNITHOLDER WILL BE SUBJECT TO 31% WITHHOLDING OF TAX.
6. VALIDITY OF LETTER OF TRANSMITTAL. All questions as to the validity,
form, eligibility (including time of receipt) and acceptance of a Letter
of Transmittal and other required documents will be determined by the
Purchaser and such determination will be final and binding. The
Purchaser's interpretation of the terms and conditions of the Offer
(including these Instructions for this Letter of Transmittal) will be
final and binding. The Purchaser will have the right to waive any
irregularities or conditions as to the manner of tendering. Any
irregularities in connection with tenders, unless waived, must be cured
within such time as the Purchaser shall determine. This Letter of
Transmittal will not be valid until any irregularities have been cured
or waived. Neither the Purchaser nor the Information Agent are under any
duty to give notification of defects in a Letter of Transmittal and will
incur no liability for failure to give such notification.
7. ASSIGNEE STATUS. Assignees must provide documentation to the Information
Agent which demonstrates, to the satisfaction of the Purchaser, such
person's status as an assignee.
8. TRANSFER TAXES. The amount of any transfer taxes (whether imposed on the
registered holder or such person) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes or exemption therefrom is
submitted.
10
<PAGE> 11
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER - - Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
GIVE THE
TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF - -
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. An individual account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if combined
funds, the first individual on the account
3. Husband and wife (joint account) The actual owner of the account or, if joint funds,
either person
4. Custodian account of a minor (Uniform Gift to The minor (2)
Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only contributor,
the minor (1)
6. Account in the name of guardian or committee The ward, minor or incompetent person (3)
for a designated ward, minor or
incompetent person (3)
7. a. The usual revocable savings trust The grantor trustee (1)
account (grantor is also trustee)
b. So-called trust account that The actual owner (1)
is not a legal or valid trust under state
law
8. Sole proprietorship account The owner (4)
9. A valid trust, estate or pension trust The legal entity (Do not furnish the identifying
number of the personal representative or trustee
unless the legal entity itself is not designated in the
account title.) (5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name of the The partnership
business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of Agriculture in The public entity
the name of a public entity (such as a State
or local government, school district, or prison)
that receives agricultural program payments
</TABLE>
11
<PAGE> 12
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's or incompetent person's name and furnish such person's
social security number or employer identification number.
(4) Show your individual name. You may also enter your business name. You may
use your social security number or employer identification number.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a) of the Code.
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947 (a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
- A futures commission merchant registered with the Commodity Futures
Trading Commission.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441
of the Code.
- Payments to Partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
12
<PAGE> 13
- Payments made by certain foreign organizations.
- Payments made to an appropriate nominee.
- Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600
or more and is paid in the course of the payer's trade or business and
you have not provided your correct taxpayer identification number to the
payer. Payments of tax exempt interest (including exempt interest
dividends under section 852 of the Code).
- Payments described in section 6049(b)(5) of the Code to nonresident
aliens.
- Payments on tax-free covenant bonds under section 1451 of the Code.
- Payments made by certain foreign organizations.
- Payments of mortgage interest to you.
- Payments made to an appropriate nominee.
Exempt payees described above should file a substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(A),
6045, and 6050A of the Code.
PRIVACY ACT NOTICE - - Section 6109 of the Code requires most recipients of
dividend, interest, or other payments to give correct taxpayer identification
numbers to payers who must report the payments to the IRS. The IRS uses the
numbers for identification purposes. Payers must be given the numbers whether or
not recipients are required to file a tax return. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a correct taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER - - If you
fail to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING - - If
you make a false statement with no reasonable basis that results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION - - Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
13
<PAGE> 14
The Information Agent for the offer is:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
By Telephone:
TOLL FREE (888) 349-2005
</TABLE>
14
<PAGE> 1
SUPPLEMENT TO
OFFER TO PURCHASE BY
AIMCO PROPERTIES, L.P.
OF UP TO 437.42 UNITS OF LIMITED PARTNERSHIP INTEREST OF
DAVIDSON DIVERSIFIED REAL ESTATE III
FOR $1,285 PER UNIT IN CASH
We will only accept a maximum of 437.42 units in response to our offer. If more
units are tendered to us, we will generally accept units on a pro rata basis
according to the number of units tendered by each person.
We will pay for accepted units promptly after expiration of the offer.
Our offer price will be reduced for any distributions made by your partnership
since the date of the Offer to Purchase and prior to the expiration of our
offer.
Our offer and your withdrawal rights will expire at 5:00 p.m., New York City
time, on September 16, 1999, unless we extend the deadline.
YOU WILL NOT PAY ANY PARTNERSHIP TRANSFER FEES IF YOU TENDER YOUR UNITS.
Our offer is not subject to any minimum number of units being tendered.
SEE "RISK FACTORS" BEGINNING ON PAGE 1 OF THE OFFER TO PURCHASE FOR A
DESCRIPTION OF RISK FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH OUR
OFFER, INCLUDING THE FOLLOWING:
o We determined the offer price of $1,285 per unit without any
arms-length negotiations. Accordingly, our offer price may not
reflect the fair market value of your units.
o Your general partner and the property manager of the residential
property are affiliates of ours and, therefore, the general partner
has substantial conflicts of interest with respect to our offer.
o Although your partnership's agreement of limited partnership provides
for termination in the year 2010, the prospectus pursuant to which
the units were sold in 1985 indicated that the properties owned by
your partnership might be sold within 3 to 7 years of their
acquisition if conditions permitted.
o We are making this offer with a view to making a profit and,
therefore, there is a conflict between our desire to purchase your
units at a low price and your desire to sell your units at a high
price.
(continued on next page)
-----------------------------------------------
If you desire to accept our offer, you should complete and sign the
enclosed Letter of Transmittal in accordance with the instructions thereto and
mail or deliver the signed Letter of Transmittal and any other required
documents to River Oaks Partnership Services, Inc., which is acting as
Information Agent in connection with our offer, at one of its addresses set
forth on the back cover of this Supplement. QUESTIONS AND REQUESTS FOR
ASSISTANCE OR FOR ADDITIONAL COPIES OF THE OFFER TO PURCHASE, THIS SUPPLEMENT OR
THE LETTER OF TRANSMITTAL MAY ALSO BE DIRECTED TO THE INFORMATION AGENT AT (888)
349-2005.
September 9, 1999
<PAGE> 2
(continued from cover page)
o Continuation of your partnership will result in our
affiliates continuing to receive management fees from
your partnership. Such fees would not be payable if
your partnership was liquidated.
o It is possible that we may conduct a subsequent offer
at a higher price.
o For any units that we acquire from you, you will not
receive any future distributions from operating cash
flow of your partnership or upon a sale or
refinancing of property owned by your partnership.
o If we acquire a substantial number of units, we will
increase our ability to influence voting decisions
with respect to your partnership and may control such
voting decisions, including but not limited to the
removal of the general partner, most amendments to
the partnership agreement and the sale of all or
substantially all of your partnership's assets.
1
<PAGE> 3
INTRODUCTION
We are offering to purchase up to 437.42 units, representing
approximately 43.25% of the outstanding units of limited partnership interest in
your partnership, for the purchase price of $1,285 per unit, net to the seller
in cash, without interest, less the amount of distributions, if any, made by
your partnership in respect of any unit from July 30, 1999 until the expiration
date. Our offer is made upon the terms and subject to the conditions set forth
in the Offer to Purchase, dated July 30, 1999, a supplement dated August 19,
1999, this Supplement and in the accompany ing letter of transmittal.
Our offer will expire at 5:00 P.M., New York City time, on September
16, 1999, unless extended. If you desire to accept our offer, you must complete
and sign the letter of transmittal in accordance with the instructions contained
therein and forward or hand deliver it, together with any other required
documents, to the Information Agent. You may withdraw your tender of units
pursuant to the offer at any time prior to the expiration date of our offer and,
if we have not accepted such units for payment, on or after September 30, 1999.
Our Offer to Purchase is amended and supplemented as follows:
1. On August 24, 1999, Bond Purchase, L.L.C. ("Bond") amended its
August 10, 1999 tender offer, and thereby offered to purchase up to 45 of the
outstanding units at $1,285 per unit.
2. We will pay any transfer fees imposed for the transfer of units by
your partnership. However, you will have to pay any governmental transfer taxes
that apply to your sale. You will also have to pay any fees or commissions
imposed by your broker in assisting you to tender your units, or by any
custodian or other trustee of any Individual Retirement Account or benefit plan
which is the owner of record of your units. Although the fees charged for
transferring units from an Individual Retirement Account vary, such fees are
typically $25-$50 per transaction. If more units are validly tendered and not
withdrawn in response to our offer than we have indicated we are willing to
purchase, we will accept units pro rata according to the number of units validly
tendered and not withdrawn by each limited partner. Any such proration would
reduce the number of units that we purchase from you, with a correspond ing
reduction in the amount payable to you. Depending on the number of units that
you tender, any fees charged on a per transaction basis could exceed the
aggregate offer price you receive if some of your units are not accepted by us
(as a result of proration or otherwise). We have retained River Oaks Partnership
Services, Inc. to act as the Information Agent in connection with our offer. We
will pay all charges and expenses in connection with the services of the
Information Agent. The offer is not conditioned on any minimum number of units
being tendered. However, certain other conditions do apply. See "The Offer -
Section 17. Conditions of the Offer," in the Offer to Purchase. Under no
circumstances will we be required to accept any unit if the transfer of that
unit to us would be prohibited by the agreement of limited partnership of your
partnership.
3. The following paragraph is added as the last paragraph under "The
Offer-Section 3. Procedure for Tendering Units-Appointment as Proxy; Power of
Attorney:"
If you tender units through the enclosed letter of transmittal you
will irrevocably constitute and appoint us and any of our designees as your true
and lawful agent and attorney-in-fact with respect to such units, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to withdraw any or all of such units that have
been previously tendered in response to any tender or exchange offer provided
that the price per unit we are offering is equal to or higher than the price per
unit being offered in the previous tender or exchange offer. Such appointment is
effective upon the receipt of such letter of transmittal and shall continue to
be effective unless and until you withdraw such units from this offer prior to
the expiration date.
2
<PAGE> 4
4. The offer was previously scheduled to expire on Friday, September
10, 1999. The expiration date has now been extended to 5:00 p.m., New York City
time, on September 16, 1999.
3
<PAGE> 5
The letter of transmittal and any other required documents should be
sent or delivered by each unitholder or such unitholder's broker, dealer, bank,
trust company or other nominee to the Information Agent at one of its addresses
set forth below.
THE INFORMATION AGENT FOR THE OFFER IS:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept Attn.: Reorganization Dept.
For information, please call:
TOLL FREE: (888) 349-2005
</TABLE>
4
<PAGE> 6
