<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
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DAMSON/BIRTCHER REALTY INCOME FUND II
(NAME OF SUBJECT COMPANY)
GRAPE INVESTORS, LLC
A DELAWARE LIMITED LIABILITY COMPANY
(BIDDER)
LIMITED PARTNERSHIP INTERESTS
(TITLE OF CLASS OF SECURITIES)
(CUSIP Number of Class of Securities)
Don Augustine, Manager
Arlen Capital Advisors, LLC
1650 Hotel Circle North - Suite 200
San Diego, California 92108
(619) 686-2002
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
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Calculation of Filing Fee
===============================================================================
Transaction Valuation* Amount of Filing Fee
$3,150,000 $630
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* For purposes of calculating the filing fee only. This calculation
assumes the purchase of 10,000 Interests at a purchase price of $1,645
for each .01 percent of Interests in the Partnership.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: Not Applicable Filing Party: Not Applicable
Form of Registration No.: Not Applicable Date Filed: Not Applicable
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Page 1 of 8
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14D-1
CUSIP NO. (None) Page 2 of 8 Pages
===============================================================================
1. Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Grape Investors, LLC - IRS Identification #33-0712011
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2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) / /
(b) / /
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3. SEC Use Only
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4. Sources of Funds (See Instructions)
WC
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e)
or 2(f) / /
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6. Citizenship or Place of Organization
State of Delaware
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7. Aggregate Amount Beneficially Owned By Each Reporting Person
Approximately 3.6 percent of the issued and outstanding Limited Partnership
Interests
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8. Check if the Aggregate in Row (7) Excludes Certain Shares (See
Instructions) / /
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9. Percent of Class Represented by Amount in Row (7)
Less than 3.7 percent of the issued and outstanding Limited Partnership
Interests
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10. Type of Reporting Persons (See Instructions)
OO
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Page 2 of 8
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14D-1
CUSIP NO. (None) Page 3 of 8 Pages
===============================================================================
1. Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Arlen Capital Advisors, LLC - IRS Identification #33-0713478
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2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) / /
(b) / /
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3. SEC Use Only
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4. Sources of Funds (See Instructions)
AF
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e)
or 2(f) / /
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6. Citizenship or Place of Organization
State of California
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7. Aggregate Amount Beneficially Owned By Each Reporting Person
Approximately 3.6 percent of the issued and outstanding Limited Partnership
Interests
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8. Check if the Aggregate in Row (7) Excludes Certain Shares (See
Instructions) / /
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9. Percent of Class Represented by Amount in Row (7)
Less than 3.7 percent of the issued and outstanding Limited Partnership
Interests
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10. Type of Reporting Persons (See Instructions)
OO
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Page 3 of 8
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ITEM 1. SECURITY AND SUBJECT COMPANY
(a) The name of the subject company is Damson/Birtcher Realty Income Fund
II, a Delaware Limited Partnership, and the address of its executive
offices is 27611 La Paz Road, P.O. Box 30009, Laguna Niguel, California
92607-0009.
(b) The information set forth in the "Introduction" of the Offer to
Purchase is incorporated herein by reference.
This Schedule 14D-1 relates to a tender offer by Grape Investors, LLC, a
Delaware limited liability company ("Purchaser"), to purchase up to 10,000
Interests (as hereinafter defined) of Damson/Birtcher Realty Income Fund II,
a Delaware Limited Partnership, (the "Partnership"), at $1,645 for each
.01 percent of Interests, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated June 20, 1997, and the related Agreement of Sale (which
together constitute the "Offer"), which are attached to and filed with this
Schedule 14D-1 as Exhibits (a)(1) and (a)(2), respectively, and incorporated
herein by reference. As used herein, "Interests" means with respect to the
Partnership the Limited Partnership Interests representing the limited
partner interests in the Partnership issued for an original $1,000
investment. This Schedule 14D-1 is being filed on behalf of Purchaser.
(c) The information set forth in the "Introduction" and Section 7
("Purpose and Effect of the Offer - Price Range of the Interests and -
Distributions") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(d) and (g) The information set forth in the "Introduction," Section
11 ("Certain Information Concerning the Purchaser"), Section 12 ("Source and
Amount of Funds") and Schedule 1 of the Offer to Purchase is incorporated
herein by reference.
(e)-(f) During the last five years, neither Purchaser, nor to the best
of their knowledge, any of their respective executive officers and directors
listed in Schedule 1 of the Offer to Purchase (i) has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) was a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding any such person
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
(g) The information set forth in Schedule 1 to the Offer to Purchase is
incorporated herein by this reference.
Page 4 of 8
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ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(a) Not applicable.
(b) The information set forth in Section 9 ("Past Contacts and
Negotiations with General Partners") of the Offer to Purchase is incorporated
herein by this reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a) The information set forth in Section 12 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER
(a)-(g) The information set forth in the "Introduction," Section 7
("Purpose and Effects of the Offer") and Section 8 ("Future Plans") of the
Offer to Purchase are incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a)-(b) The information set forth in the "Introduction" and Section 11
("Certain Information Concerning the Purchaser") of the Offer to Purchase are
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES
Not applicable.
ITEM 8. PERSONS RELATED, EMPLOYED OR TO BE COMPENSATED
The information set forth in the "Introduction" and Section 15 ("Fees and
Expenses") of the Offer to Purchase are incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
Not applicable.
Page 5 of 8
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ITEM 10. ADDITIONAL INFORMATION
(a) Not applicable.
(b)-(c) The information set forth in the "Introduction," Section 7
("Purpose and Effects of the Offer") and Section 14 ("Certain Legal Matters
and Regulatory Approvals") of the Offer to Purchase are incorporated herein
by reference.
(d) Not applicable.
(e) Not applicable.
(f) Reference hereby is made to the Offer to Purchase and the related
Agreement of Sale, copies of which are attached hereto as Exhibits (a)(1) and
(a)(2), respectively, which are incorporated in their entirety herein by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
(a)(1) - Offer to Purchase, dated June 20, 1997.
(a)(2) - Agreement of Sale.
(a)(3) - Cover Letter, dated June 20, 1997, from Purchaser to Limited
Partners.
(b) - Not applicable.
(c) - Not applicable.
(d) - Not applicable.
(e) - Not applicable.
(f) - Not applicable.
Page 6 of 8
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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: June 20, 1997 GRAPE INVESTORS, LLC
By: Arlen Capital Advisors, LLC
its Manager
By: /s/ DON AUGUSTINE
----------------------------
Don Augustine, Manager
Page 7 of 8
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EXHIBIT INDEX
Sequential
Exhibit No. Description Page Number
- ----------- ----------- -----------
(a)(1) - Offer to Purchase, dated June 20, 1997.
(a)(2) - Agreement of Sale.
(a)(3) - Cover Letter, dated June 20, 1997,
from Purchaser to Limited Partners.
(b) - Not applicable.
(c) - Not applicable.
(d) - Not applicable.
(e) - Not applicable.
(f) - Not applicable.
Page 8 of 8
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DAMSON/BIRTCHER REALTY INCOME FUND II
OFFER TO PURCHASE INTERESTS
OF
DAMSON/BIRTCHER REALTY INCOME FUND II
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THIS OFFER WILL EXPIRE AT 12:00 MIDNIGHT, PACIFIC DAYLIGHT TIME,
ON JULY 25, 1997, UNLESS THE OFFER IS EXTENDED.
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Grape Investors, LLC, a Delaware limited liability company ("Grape" or
the "Purchaser"), hereby offers to purchase up to 10,000 Limited Partnership
Interests ("Interests") in Damson/Birtcher Realty Income Fund II, a Delaware
Limited Partnership (the "Partnership"), at a purchase price of $1,645 for
each .01 percent of Interests, net to the seller in cash, without interest,
less the amount of any distributions declared or paid from any source by the
Partnership with respect to the Interests after June 1, 1997 (without regard
to the record date), whether such distributions are classified as a return on
or a return of capital, upon the terms and subject to the conditions set
forth in this Offer to Purchase (the "Offer to Purchase") and in the related
Agreement of Sale, as each may be supplemented or amended from time to time
(which together constitute the "Offer"). The Interests sought to be
purchased pursuant to the Offer represent, to the best knowledge of the
Purchaser, approximately 20 percent of the Interests outstanding as of the
date of the Offer.
GRAPE IS NOT AN AFFILIATE OF THE GENERAL PARTNER OR THE PARTNERSHIP
THE OFFER TO PURCHASE IS NOT CONDITIONED UPON THE VALID TENDER OF ANY
MINIMUM NUMBER OF INTERESTS.
IF MORE THAN 10,000 INTERESTS ARE VALIDLY TENDERED AND NOT WITHDRAWN, THE
PURCHASER WILL ACCEPT FOR PURCHASE UP TO 10,000 INTERESTS, ON A PRO RATA BASIS,
SUBJECT TO THE TERMS AND CONDITIONS HEREIN, SEE "TENDER OFFER - SECTION 13,
CERTAIN CONDITIONS OF THE OFFER."
A LIMITED PARTNER MAY TENDER ANY OR ALL INTERESTS OWNED BY SUCH LIMITED PARTNER.
IMPORTANT
Any Limited Partner desiring to tender (sell) any or all of such Limited
Partner's Interests should complete and sign the Agreement of Sale in
accordance with the instructions in the Agreement of Sale and mail or deliver
the Agreement of Sale and any other required documents to Arlen Capital
Advisors, LLC at the address set forth on the back cover of this Offer to
Purchase, or request his or her broker, dealer, commercial bank, credit
union, trust company or other nominee to effect the transaction for him or
her.
-------------------------------------------------------
THE GENERAL PARTNER HAS NOT ADVISED THE PURCHASER THAT THEY ARE MAKING ANY
RECOMMENDATION TO ANY LIMITED PARTNER AS TO WHETHER OR NOT TO TENDER INTERESTS
PURSUANT TO THE OFFER TO PURCHASE. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY
RECOM-MENDATION OR ANY REPRESENTATION ON BEHALF OF THE PURCHASER OR TO PROVIDE
ANY INFORMATION OTHER THAN AS CONTAINED HEREIN OR IN THE AGREEMENT OF SALE. NO
SUCH RECOMMENDATION, INFORMATION, OR REPRESENTATION MAY BE RELIED UPON AS HAVING
BEEN AUTHORIZED.
QUESTIONS OR REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THIS OFFER TO
PURCHASE OR THE AGREEMENT OF SALE MAY BE DIRECTED TO:
ARLEN CAPITAL ADVISORS
(800) 891-4105
June 20, 1997
<PAGE>
TABLE OF CONTENTS
INTRODUCTION .................................................................1
TENDER OFFER .................................................................3
Section 1. Terms of the Offer ...............................................3
Section 2. Acceptance for Payment and Payment for Interests .................3
Section 3. Procedures for Tendering Interests ...............................3
Section 4. Withdrawal Rights ................................................4
Section 5. Extension of Tender Period; Termination; Amendment ...............5
Section 6. Certain Tax Consequences .........................................5
Section 7. Purpose and Effects of the Offer .................................5
Section 8. Future Plans .....................................................7
Section 9. Past Contacts and Negotiations With General Partner ..............7
Section 10. Certain Information Concerning the Business of
of the Partnership and Related Matters ...................8
Section 11. Certain Information Concerning the Purchaser ....................10
Section 12. Source of Funds .................................................10
Section 13. Certain Conditions of the Offer .................................10
Section 14. Certain Legal Matters and Required Regulatory Approvals .........10
Section 15. Fees and Expenses ...............................................11
Section 16. Miscellaneous ...................................................11
SCHEDULE 1
Information with respect to the Managers of Arlen Capital
Advisors, LLC, the Manager of Purchaser (Grape) ....................S-1
SCHEDULE 2
Properties Owned by the Partnership ................................S-2
(i)
<PAGE>
INTRODUCTION
Grape Investors, LLC, a Delaware limited liability company (the
"Purchaser"), hereby offers to purchase up to 10,000 of the Limited
Partnership Interests (the "Interests") of Damson/Birtcher Realty Income
Fund II, a Delaware Limited Partnership (the "Partnership"), at a purchase
price of $1,645 for each .01 percent of Interests, net to the seller in cash,
without interest, less the amount of any distributions declared or paid from
any source by the Partnership with respect to the Interests after June 1,
1997 (without regard to the record date), whether such distributions are
classified as a return on or a return of capital (the "Purchase Price"), upon
the terms and subject to the conditions set forth in this Offer to Purchase
and in the Agreement of Sale (which together constitute the "Offer"). The
Purchaser will pay all charges and expenses of Arlen Capital Advisors, which
will act as the Information Agent ("Information Agent") in connection with
the Offer. The 10,000 Interests sought to be purchased pursuant to the Offer
represent, to the best knowledge of the Purchaser, approximately 20 percent
of the Interests outstanding as of the date of the Offer.
GRAPE IS NOT AN AFFILIATE OF THE GENERAL PARTNER OR THE PARTNERSHIP
PURCHASE PRICE
When you consider the illiquid market (which is essentially nothing more
than a "matching service" that attempts to bring buyers and sellers
together) the cost of selling commissions, payment of the transfer fee,
your annual cost of tax reporting, and the cost of a trustee if Interests
are held in an IRA or pension plan, the sale of your Interests for cash may
be a good choice for you.
NO SELLING COMMISSION
Interests sold in the informal market "matching service" usually require
payment of a selling commission of the greater of $200 or 10 percent. If
you sell to Grape, you will NOT pay any selling commission.
NO TRANSFER FEE
Grape will be responsible to pay the $25 transfer fee.
PAYMENT OF THE PURCHASE AMOUNT
A cash payment for your Interest will be made to you within 10 business
days following the Expiration Date provided Grape has received from you a
properly completed and duly executed Agreement of Sale.
BEFORE SELLING YOUR INTERESTS TO GRAPE, PLEASE CONSIDER THE FOLLOWING FACTORS:
No independent person has been retained to evaluate or render any
opinion with respect to the fairness of Grape's offer and no
representation is made as to such fairness or other measures of
value that may be relevant to the Limited Partners. We urge you
to consult your own financial and tax advisors in connection with
Grape's offer.
The Partnership's Annual Report for 1996 filed with the SEC on
Form 10-K indicates that the appraised value of the Partnership's
remaining properties have an estimated net asset value of
$31,163,000 or $5,926 per $10,000 of original investor
subscription. (Net asset value represents the appraised value of
the Partnership's properties, cash and all other assets less
secured loans payable and all other liabilities.)
Although Grape cannot predict the future value of the Partnership
assets on a per Interest basis, the purchase price could differ
significantly from the net proceeds that would be realized from a
current sale of the Properties owned by the Partnership or that
may be realized upon future liquidation of the Partnership.
Grape is making the offer with a view to making a profit.
Accordingly, there is a conflict between Grape's desire to
acquire your Interests at a low price and your desire to sell
your Interests at a high price. Grape's intent is to acquire the
Interests at a discount to the value Grape might ultimately
realize from owning the Interests.
The tax consequences of the Offer to a particular Limited Partner
may be different from those of other Limited Partners and we urge
you to consult your own tax advisor in connection with the Offer.
1
<PAGE>
Limited Partners who sell their Interests will be giving up the
opportunity to participate in any future potential benefits
represented by ownership of Interests, including the right to
participate in any future distribution of cash or property.
If the Purchaser is successful in purchasing more than 10 percent
of the outstanding Interests, the Purchaser will be in a position
to exert a strong influence upon the General Partner and the
operation of the Partnership.
The purpose of the Offer is to allow the Purchaser to benefit from any
one or a combination of the following: (i) any cash distributions, whether such
distributions are classified as a return on or a return of capital, from the
operations in the ordinary course of the Partnership; (ii) any distributions of
net proceeds from the sale of assets by the Partnership; (iii) any distributions
of net proceeds from the liquidation of the Partnership; and (iv) any cash from
any redemption of the Interests by the Partnership. The Purchaser does not have
any present plans or intentions with respect to a liquidation, sale of assets or
refinancing of the Partnership's properties.
The Offer is not conditioned upon the valid tender of any minimum number
of the Interests. If more than 10,000 Interests are validly tendered and not
withdrawn, the Purchaser will accept up to 10,000 of the tendered Interests
on a pro rata basis, subject to the terms and conditions herein. See "Tender
Offer--Section 13. Certain Conditions of the Offer." The Purchaser expressly
reserves the right, in its sole discretion and for any reason, to terminate
the Offer at anytime and to waive any or all of the conditions of the Offer,
although the Purchaser does not presently intend to do so.
The Partnership is subject to the information and reporting requirements of
the Securities Exchange Act of 1934, as amended ("Exchange Act"), and in
accordance therewith is required to file reports and other information with the
Commission relating to its business, financial condition and other matters. Such
reports and other information may be inspected at the public reference
facilities maintained by the Securities and Exchange Commission ("Commission")
at room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and is available for inspection and copying at the regional offices of the
Commission located in Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and at 7 World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can also be obtained from the
Public Reference Room of the commission in Washington, D.C. at prescribed rates
or from the Commission's Website at http://www.sec.gov.
The Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1 (including exhibits) pursuant to Rule 14d-3 of the General Rules
and Regulations under the Exchange Act, which provides certain additional
information with respect to the Offer. Such Statements and any amendments
thereto, including exhibits, may be inspected and copies may be obtained from
the Commission in the manner specified above.
According to publicly available information, there were 52,588 Interests
issued and outstanding on February 28, 1997, which were held by 6,693 Limited
Partners. Grape owns approximately 3.6 percent of the outstanding Interests.
Information contained in this Offer to Purchase which relates to, or
represents statements made by the Partnership or the General Partner, has been
derived from information provided in reports and other information filed with
the Commission by the Partnership and General Partner.
Limited Partners are urged to read this Offer to Purchase and the
accompanying Agreement of Sale carefully before deciding whether to tender
(sell) their Interests.
2
<PAGE>
THE OFFER TO PURCHASE INTERESTS
OF
DAMSON/BIRTCHER REALTY INCOME FUND II
SECTION 1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for up to 10,000 Interests that are validly
tendered on or prior to the Expiration Date. The term "Expiration Date"
shall mean 12:00 midnight, Pacific Daylight Time, on July 25, 1997, unless
and until the Purchaser shall have extended the period of time for which the
Offer is open, in which event the term "Expiration Date" shall mean the
latest date on which the Offer, as so extended by the Purchaser, shall expire.
The Offer is conditioned on satisfaction of certain conditions. See "Tender
Offer--Section 13. Certain Conditions of the Offer," which sets forth in full
the conditions of the Offer. The Purchaser will not be required to accept for
payment or to pay for any Interests tendered, and may amend or terminate the
Offer if:
(i) the Purchaser shall not have confirmed to its reasonable satisfaction
that, upon purchase of the Interests, the Purchaser will be entitled to
receive all distributions, from any source, from the Partnership after
June 1, 1997;
(ii) the Agreement of Sale is not properly completed and duly executed.
SECTION 2. PRORATION; ACCEPTANCE FOR PAYMENT AND PAYMENT FOR INTERESTS.
If not more than 10,000 Interests are validly tendered and not properly
withdrawn prior to the Expiration Date, the Purchaser, upon the terms and
subject to the conditions of the Offer, will accept for payment all such
Interests so tendered.
If more than 10,000 Interests are validly tendered and not properly
withdrawn on or prior to the Expiration Date, the Purchaser, upon the terms and
subject to the conditions of the Offer, will accept for payment 10,000 Interests
so tendered, on a pro rata basis, with appropriate adjustments to avoid tenders
of fractional Interests and purchases that would violate the Partnership's
Amended and Restated Agreement of Limited Partnership.
In the event that proration is required, because of the difficulty of
immediately determining the precise number of Interests to be accepted, the
Purchaser will announce the final results of proration as soon as practicable,
but in no event later than five business days following the Expiration Date.
Purchaser will not pay for any Interests tendered until after the final
proration factor has been determined.
If, prior to the Expiration Date, the Purchaser shall increase the
consideration offered to Limited Partners pursuant to the Offer, such increased
consideration shall be paid for all Interests accepted for payment pursuant to
the Offer, whether or not such Interests were tendered prior to such increase.
SECTION 3. PROCEDURES FOR TENDERING INTERESTS.
VALID TENDER. For Interests to be validly tendered pursuant to the Offer, a
properly completed and duly executed Agreement of Sale must be received by Grape
at its address set forth on the back cover of this Offer to Purchase on or prior
to the Expiration Date and not withdrawn by the Expiration Date. A Limited
Partner may tender any or all Interests owned by such Limited Partner.
The delivery of the Agreement of Sale will be deemed made only when
actually received by Grape. Sufficient time should be allowed by Seller to
ensure timely delivery.
BACKUP FEDERAL INCOME TAX WITHHOLDING. A tendering Limited Partner must
verify such Limited Partner's correct taxpayer identification number or social
security number, as applicable, and make certain warranties and representations
that it is not subject to backup federal income tax withholding as set forth in
the Agreement of Sale.
TENDERS BY BENEFICIAL HOLDERS. A tender of Interests can only be made by
the Registered Owner of such Interests, and the party whose name appears as
Registered Owner must tender such Interests on behalf of any beneficial holder,
as set forth in the "Instructions" to the Agreement of Sale.
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1650 Hotel Circle North, Suite 200 - San Diego, California 92108
Ph: (619) 686-2026 - Fax: (619) 686-2056
3
<PAGE>
SIGNATURE GUARANTEES. The signature(s) on the Agreement of Sale must be
guaranteed by a commercial bank, savings bank, credit union, savings and loan
association, or trust company having an office, branch, or agency in the
United States, or a brokerage firm that is a member firm of a registered
national securities exchange or a member of the National Association of
Securities Dealers, Inc., as set forth in the Agreement of Sale.
DETERMINATION OF VALIDITY; REJECTION OF INTERESTS; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the form of
documents and validity, eligibility (including time of receipt), and
acceptance for payment of any tender of Interests will be determined by the
Purchaser, in its sole discretion, which determination will be final and
binding on all parties.
OTHER REQUIREMENTS. By executing and delivering the Agreement of Sale, a
tendering Limited Partner irrevocably appoints the Purchaser as such Limited
Partner's proxy, with full power of substitution. All such proxies are
irrevocable and coupled with an interest in the tendered Interests and
empower the Purchaser to exercise all voting and other rights of such Limited
Partner as they in their sole discretion may deem proper at any meeting of
Limited Partners. The complete terms and conditions of the proxy are set
forth in the Agreement of Sale.
By executing and delivering the Agreement of Sale, a tendering Limited
Partner also irrevocably constitutes and appoints the Purchaser and its
designees as the Limited Partner's attorneys-in-fact. Such appointment will
be effective upon Purchaser's payment for the Interests. The complete terms
and conditions of the Power of Attorney are set forth in the Agreement of
Sale.
By executing and delivering the Agreement of Sale, a tendering Limited
Partner irrevocably assigns to the Purchaser and its assignees all of the
rights, title, and interests of such Limited Partner in the Partnership
including, without limitation, such Limited Partner's rights, title, and
interests in and to any and all distributions made by the Partnership after
the Expiration Date, regardless of the fact that the record date for any such
distribution may be a date prior to the Expiration Date and whether such
distributions are classified as a return on or a return of capital. The
complete terms and conditions of the assignment of the Limited Partner's
right, title and interest are set forth in the Agreement of Sale.
By executing the Agreement of Sale, a tendering Limited Partner
represents that either (a) the tendering Limited Partner is not a plan
subject to Title 1 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), or an entity deemed to hold "plan assets" within the
meaning of 29 C.F.R Section 2510-3-101 of any such plan; or (b) the tender
and acceptance of Interests pursuant to the applicable Offer will not result
in a nonexempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code.
By executing the Agreement of Sale as set forth above, a tendering
Limited Partner also agrees that regardless of any provision in the
Partnership's Partnership Agreement which provides that a transfer is not
effective until a date subsequent to the date of any transfer of Interests
under the Offer, the Purchase Price shall be reduced by any distributions
with respect to the Interests after June 1, 1997, whether such distributions
are classified as a return on or a return of capital.
Limited Partners will not have any appraisal or dissenter's rights with
respect to or in connection with the Offer.
SECTION 4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Interests made
pursuant to the Offer are irrevocable. Interests tendered pursuant to the
Offer may be withdrawn at any time on or prior to the Expiration Date. In
the event the Offer is extended beyond the Expiration Date and beyond August
20, 1997, the Interests tendered may be withdrawn at any time.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Purchaser at
its address set forth on the last page of this Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the
Interests to be withdrawn, and the number of Interests to be withdrawn. Any
Interests properly withdrawn will be deemed not validly tendered for purposes
of the Offer, but may be re-tendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding.
- -------------------------------------------------------------------------------
1650 Hotel Circle North, Suite 200 - San Diego, California 92108
Ph: (619) 686-2026 - Fax: (619) 686-2056
4
<PAGE>
SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT.
The Purchaser expressly reserves the right, in its sole discretion, at
any time (i) to extend the period of time during which the Offer is open;
(ii) to terminate the Offer; (iii) upon the failure of the Seller to satisfy
any of the conditions specified in Section 13, to delay the acceptance for
payment of, or payment for, any Interests; and (iv) to amend the Offer in any
respect (including, without limitation, by increasing or decreasing the
consideration offered). Any extension, termination, or amendment will be
followed as promptly as practicable by public announcement; the announcement
in the case of an extension to be issued no later than 9:00 a.m., Pacific
Time, on the next business day after the previously scheduled Expiration
Date, in accordance with the public announcement requirement of Rule 14e-1(d)
under the Exchange Act.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will extend the Offer to the extent required by Rules 14d-4(c)
and 14d-6(d) under the Exchange Act. The minimum period during which an offer
must remain open following a material change in the terms of the offer or of
information concerning the offer, other than a change in price or a change in
percentage of securities sought, will depend upon the facts and
circumstances, including the relative materiality of the change in the terms
or information. With respect to a change in price or a change in percentage
of securities sought, however, a minimum ten-business-day period is generally
required by Grape to allow for adequate dissemination to security holders and
for investor response. As used in this Offer, "business day" means any day
other than a Saturday, Sunday, or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, Pacific Daylight Time.
SECTION 6. CERTAIN TAX CONSEQUENCES.
LIMITED PARTNERS SHOULD CONSULT THEIR RESPECTIVE TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES TO EACH SUCH LIMITED PARTNER OF SELLING INTERESTS
PURSUANT TO THE OFFER.
SECTION 7. PURPOSE AND EFFECTS OF THE OFFER.
PURPOSE OF THE OFFER. The Purchaser is making the Offer for investment
purposes with a view towards making a profit. The Purchaser's intent is to
acquire the Interests at a discount to the value that the Purchaser might
ultimately realize from owning the Interests. No independent person has been
retained by Grape to evaluate or render any opinion with respect to the
fairness of the Purchase Price and no representation is made as to such
fairness.
The Purchaser established the Purchase Price based on its own independent
analysis of the Partnership, the properties owned by Partnership, the other
assets of the Partnership and the financial condition of the Partnership.
The Purchaser derived the Purchase Price per Interest from its analysis of
financial information from publicly-available information in the Form 10-K
and Form 10-Q, information therein. The Purchaser made numerous assumptions
and certain adjustments to the Partnership's operating statements. Purchaser
engaged an independent accounting firm to determine (from the financial
statements contained in the Partnership's Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q filings with the Securities and Exchange
Commission) the following information: (i) distributions paid by the
Partnership to the Limited Partners from the inception of the Partnership;
(ii) total compensation paid to the General Partner since the inception of
the Partnership; (iii) a liquidation value of the assets of the Partnership
assuming a liquidation at book value as reported in the Partnership's
financial statements. Utilizing this information, the Purchaser performed
its own independent analysis in deriving a Purchase Price for the Interests.
Other measures of value may be relevant to a Limited Partner, and all
Limited Partners are urged to carefully consider all of the information
contained in the Offer to Purchase and Agreement of Sale and to consult with
their own advisors (tax, financial, or otherwise) in evaluating the terms of
the Offer before deciding whether to tender Interests. The Offer is being
made as a speculative investment by the Purchaser based on its belief that
there is inherent underlying value in the assets of the Partnership. The
purpose of the Offer is to allow the Purchaser to benefit to the greatest
extent possible from any one or a combination of the following: (i) any cash
distributions from the operations in the ordinary course of the Partnership;
(ii) any distributions of net proceeds from the sale of assets by the
Partnership; (iii) any distributions of net proceeds from the liquidation of
the Partnership; and (iv) any cash from any redemption of the Interests by
the Partnership.
CERTAIN RESTRICTIONS ON TRANSFER OF INTERESTS. The Partnership Agreement
restricts transfers of Interests if a transfer, when considered with all other
transfers during the same applicable twelve-month period, would cause a
termination of the Partnership, for federal or applicable state income tax
purposes (which termination may occur when 50 percent or more of the Interests
are transferred in a twelve-month period). There is currently no active "market"
for the Interests, such as the New York Stock Exchange, American Stock Exchange
or the NASDAQ; however, there are currently several "matching services" that
match
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potential buyers and sellers of Interests, some of which are conducted in an
"auction" format. The provision in the Partnership Agreement which restricts
transfers of Interests, if invoked by the General Partner, may limit sales of
Interests with the "matching service" in private transactions for the
twelve-month period following completion of the Offer. The Partnership may
not process any requests for recognition of substitution of Limited Partners
upon a transfer of Interests during such twelve-month period which the
General Partner believes may cause a tax termination in contravention of the
Partnership Agreement. In determining the number of Interests for which the
Offer to Purchase is made, the Purchaser took these restrictions into
account. THE PARTNERSHIP AGREEMENT CONTAINS NO RESTRICTION ON THE CHANGE OF
SELLER'S ADDRESS TO PURCHASER'S ADDRESS, NOR DOES IT CONTAIN ANY RESTRICTIONS
TO A PURCHASE OF INTERESTS BECOMING AN "ASSIGNEE OF RECORD" AS COMPARED TO A
SUBSTITUTED LIMITED PARTNER.
EFFECT OF SALES THROUGH "MATCHING SERVICE" AND PRICE RANGE OF THE
INTERESTS. If a substantial number of Interests are purchased pursuant to the
Offer, the result will be a reduction in the number of Limited Partners. In
the case of certain kinds of equity securities, a reduction in the number of
security holders might be expected to result in a reduction in the liquidity
and volume of activity in the trading market for the security. In this case,
however, there is no active trading market for the Interests, but only
several services that "match" buyers and sellers of Interests, typically by
means of an auction, and the Purchaser believes a reduction in the number of
Limited Partners will materially further restrict the Limited Partners'
ability to find purchasers for their Interests.
The successful purchase of more than 6.4 percent of the outstanding
Interests by the Purchaser will cause the Purchaser to own more than 10
percent of the outstanding Interests. The Purchaser may then be in a
position to exert a strong influence upon the General Partner and the
operation of the Partnership.
The Partnership disclosed in its Annual Report on Form 10-K filed with
the Commission for the year ended December 31, 1996, "There is no public
market for the Limited Partnership Interests and a market is not expected to
develop as such Limited Partnership Interests are not publicly traded or
freely transferable."
DISTRIBUTIONS. The Partnership disclosed in its Annual Report on Form
10-K filed with the Commission for the year ended December 31, 1996, and
Quarterly Reports on Form 10-Q for the quarter ending March 31, 1997, that it
made distributions in quarterly installments to its partners for the two
years ended December 31, 1996, and for the three months ending March 31,
1997, as follows:
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Damson/Birtcher Realty Income Fund II
<TABLE>
<CAPTION>
To Limited Partners
Year Ending Distributions Paid Distributions Paid Per $1,000
December 31 to General Partner to Limited Partners Original Investment
----------- ------------------ ------------------- ---------------------
<S> <C> <C> <C>
1995
Regular $ 18,000 $1,828,000 $ 34.99
Special $ $ $
========= ========== ========
Total 1995 Distributions $ 18,000 $1,828,000 $ 34.99
1996
Regular $ 21,000 $2,021,000 $ 38.69
Special $ $ 720,000 $ 13.78
========= ========== ========
Total 1996 Distributions $ 21,000 $2,741,000 $ 52.47
1997 (A)
Regular $ 6,000 $ 600,000 $ 11.48
Special $ $ $
========= ========== ========
Total 1997 Distributions $ 6,000 $ 600,000 $ 11.48
</TABLE>
(A) DISTRIBUTIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997.
The foregoing summary is qualified in its entirety by reference to such
reports and other documents and all of the financial information and related
notes contained therein.
SECTION 8. FUTURE PLANS.
The Purchaser is acquiring the Interests pursuant to the Offer for
investment purposes. However, the Purchaser and its affiliates may acquire
additional Interests through private purchases, one or more future tender
offers, or by any other means deemed advisable. Such future purchases may be at
prices higher or lower than the Purchase Price.
SECTION 9. PAST CONTACTS AND NEGOTIATIONS WITH THE GENERAL PARTNER.
The Purchaser, through an affiliate, by a letter dated April 12, 1996 to
the General Partner of the Partnership requested a list of the names,
addresses, and number of Partnership Interests held by each limited partner
in the Partnership. In a letter dated May 3, 1996, counsel for the Purchaser
requested a response to the April 12, 1996 letter. By a letter dated May 12,
1996, counsel for the Partnership requested clarification as to whether the
Purchaser had a relationship with certain third parties. Counsel for the
Partnership and counsel for the Purchaser had a telephone conversation on May
9, 1996 which was later confirmed by letter, that there was no relationship
between the Purchaser and those certain third parties. As a result, the list
of the Partnership's limited partners was furnished to Purchaser. By letter
dated May 21, 1996, Purchaser requested additional information regarding the
Partnership and certain of its properties. On June 4, 1996, counsel for the
Partnership and counsel for the General Partner discussed the letter. On
June 12, 1996, counsel for the Purchaser made a further request for the
information. On June 12, 1996, counsel for the Partnership sent a letter to
counsel for the Purchaser indicating that certain of the information would be
provided and certain of the information would not be provided.
On June 26, 1996, the Purchaser commenced a limited tender offer, I.E.,
not to exceed 4.9 percent of the outstanding Interests at a price of $890 for
each .01 percent of Interests. As a result of the Purchaser's June 19, 1996
tender offer which terminated on August 2, 1996, when the transfer forms were
submitted to the Partnership's transfer agent to assign and transfer the
Interests purchased by Purchaser, the transfer agent refused to make such
transfers. On August 3, 1996, counsel for the
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Purchaser wrote a letter to the transfer agent demanding that the transfers
be made. On August 5, 1996, the Purchaser sent a letter to the General
Partner requesting that he instruct the transfer agent to approve the
transfers.
During July and August, 1996, conversations regarding the transfer of the
Interests acquired in the tender offer took place between counsel for the
Partnership and counsel for the Purchaser. On August 23, 1996, the Manager
of Purchaser telephoned and left a message for the General Partner of the
Partnership. On August 29, 1996, the General Partner sent a letter to the
Partnership's Manager indicating, among other things, that it would make its
own determination as to whether or not Purchaser would become a substituted
limited partner in the partnership.
On August 28, 1996, Purchaser filed an action entitled GRAPE INVESTORS,
LLC ET AL. V. DAMSON/BIRTCHER PARTNERS, ET AL., in the Superior Court of the
State of California, in the County of Orange, Case No. 768309 (the "Action").
On August 29, 1996, counsel for the Partnership, after a discussion with
counsel for the Purchaser, had sent to him a courtesy copy of the complaint
and motion for preliminary injunction and supporting papers and documents
seeking to have the Interests acquired pursuant to the tender offer
transferred to Purchaser. From September 5, 1996 to September 24, 1996,
correspondence and conversations took place between counsel for the Purchaser
and counsel for the Partnership in an attempt to resolve the Action. On
September 24, 1996, the Action was settled, whereby the Purchaser was
admitted as an assignee (but not as a substituted limited partner) of the
Interests it had acquired in its tender offer in the Partnership. Various
conversations and correspondence between counsel for the Partnership and
counsel for the Purchaser took place between September 24, 1996 and March,
1997, when the Settlement Agreement was finally documented.
On October 3, 1996, Purchaser sent a letter to the Partnership indicating
that they had a potential buyer for the Partnership's property, which letter
was not responded to.
On October 21, 1996, Purchaser commenced a second limited tender offer to
buy additional Interests in the Partnership (which offer was communicated by
letter from Purchaser to the Partnership's General Partner), which offer
expired on November 27, 1996.
On January 23, 1997, counsel for the Purchaser forwarded a letter to
counsel for the Partnership requesting certain information regarding
distributions and the method of payment to Purchaser. Telephone
conversations between those parties also took place regarding that matter and
on January 26, 1997, counsel for the Partnership confirmed the method in
which distributions were to be made to Purchaser.
On May 13, 1997, counsel for the Purchaser by letter to counsel for the
Partnership requested that the Partnership respond to letter from Argent
Ventures, LLC, which response was received. On May 16, 1997, counsel for the
Purchaser requested certain information regarding appraisals of the
Partnership; a follow-up letter on May 28, 1997 was sent to counsel for the
Partnership by counsel for the Purchaser requesting such information. On
June 4, 1997, counsel for the Partnership furnished such information to
counsel for the Purchaser.
SECTION 10. CERTAIN INFORMATION CONCERNING THE BUSINESS OF THE PARTNERSHIP AND
RELATED MATTERS.
The Partnership was organized on November 14, 1985 under the laws of the
State of Delaware. Its principal offices are located at 27611 La Paz
Road, P.O. Box 30009, Laguna Niguel, California 92607-0009. Its telephone
number is (714) 643-7490. The Partnership's primary business is the
operation of income-producing commercial and industrial properties acquired
by the Partnership.
Set forth below is a summary of certain financial information with
respect to the Partnership, which has been excerpted or derived from the
Partnership's Annual Report on Form 10-K for the fiscal year ended December
31, 1996, and the Partnership's Quarterly Reports on Form 10-Q for the three
months ending March 31, 1997. More comprehensive financial and other
information is included in such reports and other documents filed by the
Partnership with the Commission, and the following summary is qualified in
its entirety by reference to such reports and other documents and all the
financial information and related notes contained therein. Such reports and
other documents may be examined and copies may be obtained from the offices
of the Commission at the addresses set forth in the "Introduction." The
Purchaser disclaims any responsibility for the information included in such
reports and documents, and extracted in this Offer to Purchase.
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DAMSON/BIRTCHER REALTY INCOME FUND II
Selected Financial Data
Income Statement Data: Three Months Fiscal Year Fiscal Year
Ended 3/31/97 Ended 12/31/96 Ended 12/31/95
------------- -------------- --------------
Net Revenue $1,177,000 $4,859,000 $4,523,000
Net Income $ 565,000 $1,916,000 $ (575,000)
Net Income per $ 10.63 $36.07 $ (10.81)
$1,000 Original Investment
Balance Sheet Data: As of As of As of
3/31/97 12/31/96 12/31/95
------- -------- --------
Total Assets $28,212,000 $28,212,000 $29,134,000
Total Liabilities $636,000 $636,000 $ 712,000
Limited Partners' Equity $27,746,000 $27,746,000 $28,590,000
--------------------------------------------
Interests Outstanding 52,588 52,588 52,588
Cooper Village Partners (A)
Income Statement Data: Fiscal Year Fiscal Year
Ended 12/31/96 Ended 12/31/95
-------------- --------------
Net Revenue $1,072,000 $1,046,000
Net Income $169,000 $(1,065,000)
Balance Sheet Data: As of As of
12/31/96 12/31/95
-------- --------
Total Assets $6,471,000 $6,919,000
Total Liabilities $ 114,000 $ 111,000
(A) A GENERAL PARTNERSHIP CONSISTING OF THE PARTNERSHIP AND REAL ESTATE
INCOME PARTNERS III, LIMITED PARTNERSHIP, AN AFFILIATED LIMITED PARTNERSHIP.
AT DECEMBER 31, 1996, THE PARTNERSHIP HAD A 58 PERCENT INTEREST IN COOPER
VILLAGE PARTNERS.
For information concerning the properties owned by the Partnership,
please refer to Schedule 2 attached hereto, which is incorporated herein by
reference.
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SECTION 11. CERTAIN INFORMATION CONCERNING THE PURCHASER.
The Purchaser is a Delaware Limited Liability Company which was organized
for the purpose of acquiring the Interests pursuant to the Offer. The
Manager of the Purchaser is Arlen Capital Advisors, a California limited
liability company ("ACA"), which is controlled by its two members, Don
Augustine and Lynn T. Wells. ACA is engaged in financial and business
consulting. The Purchaser's and ACA's offices are located at 1650 Hotel
Circle North, Suite 200, San Diego, California 92108. For certain
information concerning the members of ACA, see Schedule 1 to this Offer to
Purchase.
Except as otherwise set forth herein, (i) neither the Purchaser nor, to
the best knowledge of the Purchaser, any of the persons listed on Schedule 1,
or any affiliate of the Purchaser beneficially owns or has a right to acquire
any Interests other than the approximately 1,880 Interests currently owned by
Grape purchased at an average cost of $170 per Interest; (ii) neither the
Purchaser nor, to the best knowledge of the Purchaser, any of the persons
listed on Schedule 1, or any affiliate of the Purchaser or any member,
director, executive officer, or subsidiary of any of the foregoing has
effected any transaction in the Interests; (iii) neither the Purchaser nor,
to the best knowledge of the Purchaser, any of the persons listed on Schedule
1 or any affiliate of the Purchaser has any contract, arrangement,
understanding, or relationship with any other person with respect to any
securities of the Partnership, including but not limited to, contracts,
arrangements, understandings, or relationships concerning the transfer or
voting thereof, joint ventures, loan or option arrangements, puts or calls,
guarantees of loans, guarantees against loss, or the giving or withholding of
proxies, consents, or authorizations; (iv) there have been no transactions or
business relationships which would be required to be disclosed under the
rules and regulations of the Commission between any of the Purchasers, or, to
the best knowledge of the Purchaser, any of the persons listed on Schedule 1
or any affiliate of the Purchaser, on the one hand, and the Partnership or
affiliates, on the other hand; and (v) there have been no contracts,
negotiations, or transactions between the Purchaser or to the best knowledge
of the Purchaser, any of the persons listed on Schedule 1 or any affiliate of
the Purchaser, on the one hand, and the Partnership or its affiliates, on the
other hand, concerning a merger, consolidation or acquisition, tender offer
(other than as described in Section 10 of this Offer) or other acquisition of
securities, an election or removal of the General Partner, or a sale or other
transfer of a material amount of assets.
SECTION 12. SOURCE OF FUNDS.
The Purchaser expects that approximately $3,150,000 (exclusive of fees
and expenses) will be required to purchase 10,000 Interests (approximately 20
percent of the Interests outstanding), if tendered. The Purchaser will
obtain all of those funds from capital contributions from its members, which
have an aggregate net worth substantially in excess of the amount required to
purchase the Interests.
SECTION 13. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provisions of the Offer, the Purchaser will not
be required to accept for payment or to pay for any Interests tendered, and may
amend or terminate the Offer if:
(i) the Purchaser shall not have confirmed to its reasonable satisfaction
that, upon purchase of the Interests, the Purchaser will be entitled to
receive all Distributions, from any source, from the Partnership after June
1, 1997;
(ii) the Agreement of Sale is not properly completed and duly executed.
The foregoing conditions are for the sole benefit of the Purchaser and
its affiliates and may be asserted by the Purchaser regardless of the
circumstances (including, without limitation, any action or inaction by the
Purchaser or any of its affiliates) giving rise to such condition, or may be
waived by the Purchaser, in whole or in part, from time to time in its sole
discretion. The failure by the Purchaser at any time to exercise the
foregoing rights will not be deemed a waiver of such rights, which rights
will be deemed to be ongoing and may be asserted at any time and from time to
time. Any determination by the Purchaser concerning the events described in
this Section 13 will be final and binding upon all parties.
SECTION 14. CERTAIN LEGAL MATTERS AND REQUIRED REGULATORY APPROVALS.
GENERAL. Except as set forth in this Offer to Purchase, based on its
review of publicly available filings by the Partnership with the Commission
and other publicly available information regarding the Partnership, the
Purchaser is not aware of any licenses or regulatory permits that would be
material to the business of the Partnership, taken as a whole, and that might
be adversely affected by the Purchaser's acquisition of Interests as
contemplated herein, or any filings, approvals, or other actions by or with
any domestic, foreign, or governmental authority or administrative or
regulatory agency that would be required prior
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to the acquisition of Interests by the Purchaser pursuant to the Offer as
contemplated herein. Should any such approval or other action be required,
there can be no assurance that any such additional approval or action, if
needed, would be obtained without substantial conditions or that adverse
consequences might not result to the Partnership's business, or that certain
parts of the Partnership's or the Purchaser's business might not have to be
disposed of or held separate or other substantial conditions complied with in
order to obtain such approval. The Purchaser's obligation to purchase and pay
for Interests is subject to certain conditions. See "Tender Offer-- Section
13. Certain Conditions of the Offer."
ANTITRUST. Under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and the rules and regulations that have
been promulgated thereunder by the Federal Trade Commission (the "FTC"),
certain acquisition transactions may not be consummated until certain
information and documentary material has been furnished for review by the
Antitrust Division of the Department of Justice (the "Antitrust Division")
and the FTC and certain waiting period requirements have been satisfied. The
Purchaser does not currently believe any filing is required under the HSR Act
with respect to its acquisition of Interests contemplated by the Offer.
Based upon an examination of publicly available information relating to
the business in which the Partnership is engaged, the Purchaser believes that
the acquisition of Interests pursuant to the Offer would not violate the
antitrust laws. Nevertheless, there can be no assurance that a challenge to
the Offer on antitrust grounds will not be made, or, if such challenge is
made, what the result will be.
STATE TAKEOVER LAWS. The Purchaser has not attempted to comply with any
state takeover statutes in connection with the Offer. The Purchaser reserves
the right to challenge the validity or applicability of any state law
allegedly applicable to the Offer, and nothing in the Offer, nor any action
taken in connection herewith, is intended as a waiver of that right. In the
event that any state takeover statute is found applicable to the Offer, the
Purchaser might be unable to accept for payment or purchase Interests
tendered pursuant to the Offer or be delayed in continuing or consummating
the Offer. In such case, the Purchaser may not be obligated to accept for
purchase, or pay for, any Interests tendered.
SECTION 15. FEES AND EXPENSES.
Arlen Capital Advisors has been retained by the Purchaser to act as the
Information Agent in connection with the Offer. The Information Agent will
receive reasonable and customary compensation for its services in connection
with the Offer and will be indemnified against certain liabilities and
expenses in connection therewith.
Except as set forth in this Section 15, the Purchaser will not pay any
fees or commissions to any broker, dealer or other person for soliciting
tenders of Interests pursuant to the Offer. Brokers, dealers, commercial
banks, trust companies, and other nominees, if any, will, upon request, be
reimbursed by the Purchaser for customary clerical and mailing expenses
incurred by them in forwarding materials to their customers.
SECTION 16. MISCELLANEOUS.
THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON
BEHALF OF) LIMITED PARTNERS IN ANY JURISDICTION IN WHICH THE MAKING OF THE
OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF
SUCH JURISDICTION. THE PURCHASER IS NOT AWARE OF ANY JURISDICTION WITHIN THE
UNITED STATES IN WHICH THE MAKING OF THE OFFER OF THE ACCEPTANCE THEREOF
WOULD BE ILLEGAL.
In any jurisdiction where the securities, blue sky, or other laws require
the Offer to be made by a licensed broker or dealer, the Purchaser will
withdraw the Offer. The Purchaser has filed with the Commission the Schedule
14D-1, together with exhibits, pursuant to Rule 14d-3 of the General Rules
and Regulations under the Exchange Act, furnishing certain information with
respect to the Offer, and may file amendments thereto. Such Schedule 14D-1
and any amendments thereto, including exhibits, may be examined and copies
may be obtained from the Commission as set forth above in "Introduction."
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No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained in this Offer to
Purchase or in the Agreement of Sale and, if given or made, any such information
or representation must not be relied upon as having been authorized. Neither the
delivery of the Offer to Purchase nor any purchase pursuant to the Offer shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Purchaser or the Partnership since the date as of which
information is furnished or the date of this Offer to Purchase.
GRAPE INVESTORS, LLC.
June 20, 1997
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SCHEDULE 1
INFORMATION REGARDING THE MANAGERS
OF ARLEN CAPITAL ADVISORS, LLC
Set forth in the table below are the names of the members of Arlen Capital
Advisors, LLC and their present principal occupations and five (5) year
employment histories. Each individual is a citizen of the United States and the
business address of each person is 1650 Hotel Circle North, Suite 200, San
Diego, California 92108.
Present Principal Occupation or Employment
Name and Five-Year Employment History
- ------------- --------------------------------
Don Augustine Member and Manager of Arlen Capital Advisors LLC. President
of Arlen Capital Advisors, Inc., a California corporation,
its predecessor entity since 1989.
Lynn T. Wells Member and Manager of Arlen Capital Advisors LLC. Vice
President of Arlen Capital Advisors, Inc., a California
corporation, its predecessor entity since 1989.
Arlen Capital Advisors LLC and its predecessor entity, Arlen Capital
Advisors, Inc. ("ACA"), have been providing business and financial consulting
services since 1989. ACA principals offer an extensive background in the
capital markets, real estate securities, and real estate markets. ACA, has
developed relationships with capital sources who furnish equity and debt for
both public and private transactions. In previous transactions, ACA has
provided, for its clients, consulting services for the following types of
transactions: debt and equity placements for leveraged buy-outs; the making
of tender offers; debt and equity capital for real estate development
projects; structuring of companies to become REITs; and creation of joint
venture partnerships between real estate developers and investors. In
addition, ACA provides financial structuring advice and analyses for
refinancing and financing alternatives for the design and structuring of
joint ventures, limited partnerships (both public and private), and for Real
Estate Investment Trusts.
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SCHEDULE 2
PROPERTIES OWNED BY THE PARTNERSHIP
The following Schedule of Properties owned by the Partnership was
extracted from the Partnership's Annual Report Form 10-K for the year ending
December 31, 1996, as filed with the Securities and Exchange Commission
("Commission").
Property Location Type
- -------- -------- ----
Lakeland Industrial Park Milwaukee, WI Office / Warehouse
Kennedy Corporate Center Palatine, IL Office
Iomega/Northpointe Center Roy, UT Office
Ladera Shopping Center Albuquerque, NM Retail
Creekridge Center Bloomington, MN Office
Cooper Village (A) Mesa, AZ Retail
(A) THE PARTNERSHIP ACQUIRED A 58 PERCENT INTEREST IN COOPER VILLAGE THROUGH A
GENERAL PARTNERSHIP, COOPER VILLAGE PARTNERS.
More comprehensive financial and other information is included in such
report and other documents filed by the Partnership with the Commission, and
the following is qualified by reference to such report and other documents.
Such report and other documents may be examined and copies may be obtained
from the offices of the Commission at the addressees set forth in the
"Introduction" section of the Offer to Purchase. The Purchaser disclaims any
responsibility for the information included in such report and documents, and
extracted in this Schedule 2, as well as any changes which may have taken
place in the information in the report since the date it was issued.
- -------------------------------------------------------------------------------
1650 Hotel Circle North, Suite 200 - San Diego, California 92108
Ph: (619) - 686-2026 - Fax: (619) 686-2056
S-2
<PAGE>
AGREEMENT OF SALE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT
PACIFIC DAYLIGHT TIME, ON JULY 25, 1997 (THE "EXPIRATION DATE") UNLESS THE
OFFER IS EXTENDED.
The undersigned Limited Partner (the "Seller") does hereby tender and sell,
assign, transfer, convey and deliver (the "Sale") to Grape Investors, LLC, a
Delaware limited liability company ("Grape" or the "Purchaser"), upon the
terms and conditions set forth in the Offer to Purchase and this Agreement of
Sale ("Agreement"), which together with any supplements or amendments
collectively constitute the Offer, all of the Seller's right, title and
interest in Interests as that term is defined in the Amended Agreement of
Limited Partnership (the "Partnership Agreement") of Damson/Birtcher Realty
Income Fund II (the "Partnership") being sold pursuant to this Agreement for a
purchase price of $1,645 for each .01 percent of Interests which amount will
be reduced by any and all cash distributions from all sources made by the
Partnership after June 1, 1997, including without limitation those classified
as a return of capital, and until the date that Grape becomes a substituted
Limited Partner as that term is defined in the Partnership Agreement, without
regard to the record date.
A CASH PAYMENT FOR YOUR INTEREST WILL BE MADE TO YOU WITHIN 10 BUSINESS DAYS
FOLLOWING THE EXPIRATION DATE PROVIDED GRAPE HAS RECEIVED FROM YOU A PROPERLY
COMPLETED AND DULY EXECUTED AGREEMENT OF SALE.
The Seller hereby represents and warrants to the Purchaser that the Seller
owns such Interests and has full power and authority to validly sell, assign,
transfer, convey, and deliver to the Purchaser such Interests, and that when
any such Interests are accepted for payment by the Purchaser, the Purchaser
will acquire good, marketable and unencumbered title thereto, free and clear
of all options, liens, restrictions, charges, encumbrances, conditional sales
agreements, or other obligations relating to the sale or transfer thereof, and
such Interests will not be subject to any adverse claim. The Seller further
represents and warrants that the Seller is a "United States person" as defined
in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended, or if
the Seller is not a United States person, the Seller does not own,
beneficially or of record, more than 5 percent of the outstanding Interests.
Such Sale shall include, without limitation, all rights in, and claims to, any
Partnership profits and losses, cash distributions from all sources made after
June 1, 1997, including without limitation those classified as a return of
capital, voting rights and other benefits of any nature whatsoever,
distributable or allocable to such Interests under the Partnership Agreement.
Upon the execution of this Agreement by the Seller, Purchaser shall have the
right to receive all benefits and cash distributions from all sources made by
the Partnership after June 1, 1997, including without limitation those
classified as a return of capital, and otherwise exercise all rights of
beneficial ownership of such Interests.
Seller, by executing this Agreement, hereby irrevocably constitutes and
appoints Purchaser as its true and lawful agent and attorney-in-fact with
respect to the Interests with full power of substitution. This power of
attorney is an irrevocable power, coupled with an interest of the Seller to
Purchaser, to (i) execute, swear to, acknowledge, and file any document
relating to the transfer of the ownership of the Interests on the books of the
Partnership that are maintained with respect to the Interests and on the
Partnership's books maintained by the General Partner of the Partnership, or
amend the books and records of the Partnership as necessary or appropriate for
the withdrawal of the Seller as a Limited Partner of the Partnership, (ii)
vote or act in such manner as any such attorney-in-fact shall, in its sole
discretion, deem proper with respect to the Interests, (iii) deliver the
Interests and transfer ownership of the Interests on the books of the
Partnership that are maintained with respect to the Interests and on the
Partnership's books, maintained by the Partnership's General Partner, (iv)
endorse on the Seller's behalf any and all payments which are made payable to
the Seller, received by Purchaser from the Partnership for any period on or
after June 1, 1997, in favor of Purchaser, (v) execute on the Seller's behalf,
any applications for transfer and any distribution allocation agreements
required by the National Association of Securities Dealers, Inc.'s Notice to
Members 96-14 to give effect to the transaction contemplated by this
Agreement, and (vi) receive all benefits and distribution from all sources,
including without limitation those classified as a return of capital, and
amend the books and records of the Partnership, including Seller's address of
record, to direct distributions from all sources to Purchaser as of the
effective date of this Agreement and otherwise exercise all rights of
beneficial owner of the Interests. Purchaser shall not be required to post
bond of any nature in connection with this power of attorney.
SELLER DOES HEREBY DIRECT AND INSTRUCT THE PARTNERSHIP AND ITS GENERAL PARTNER
IMMEDIATELY UPON THEIR RECEIPT OF THIS AGREEMENT OF SALE (I) TO AMEND THE
BOOKS AND RECORDS OF THE PARTNERSHIP TO CHANGE THE SELLER'S ADDRESS OF RECORD
TO GRAPE INVESTORS, LLC, C/O ARLEN CAPITAL ADVISORS, 1650 HOTEL CIRCLE NORTH,
SUITE 200, SAN DIEGO, CALIFORNIA 92108, AND (II) TO FORWARD ALL DISTRIBUTIONS
FROM ALL SOURCES AND ALL OTHER INFORMATION TO BE RECEIVED BY SELLER TO GRAPE
INVESTORS, LLC TO THE ADDRESS SET FORTH IN (I) ABOVE.
Seller and Purchaser do hereby release and discharge the General Partner and
their affiliates and each of their respective officers, directors,
shareholders, employees, and agents from all actions, causes of actions,
claims or demands Seller has, or may have, against any such person that result
from such party's reliance on this Agreement or any of the terms and
conditions contained herein. Seller and Purchaser do hereby indemnify and hold
harmless the Partnership and the General Partner and their affiliates and each
of their respective officers, directors, shareholders, employees, and agents
from and against all claims, demands, damages, losses, obligations, and
responsibilities arising, directly or indirectly, out of a breach of any one
or more of their respective representations and warranties set forth herein.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the Seller and any obligations of the Seller shall be
binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
<PAGE>
The Seller hereby certifies, under penalties of perjury, that (i) the tax
identification number shown on this form is the Seller's correct Taxpayer
Identification Number; and (ii) Seller is not subject to backup withholding
either because Seller has not been notified by the Internal Revenue Service
(the "IRS") that Seller is subject to backup withholding as a result of
failure to report all interest or dividends, or the IRS has notified Seller
that Seller is no longer subject to backup withholding.
The Seller hereby also certifies, under penalties of perjury, that the Seller,
if an individual, is not a nonresident alien for purposes of U.S. income
taxation, and if not an individual, is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in
the Internal Revenue Code and Income Tax Regulations). The Seller 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.
By executing this Agreement, the undersigned Limited Partner represents that
either (a) the undersigned Limited Partner is not a plan subject to Title 1 of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), or
an entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of any such plan; or (b) the tender and acceptance of Interests
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 recognizes that, if proration is required pursuant to the
terms of the Offer, the Purchaser will accept for payment from among those
Interests validly tendered on or prior to the Expiration Date and not properly
withdrawn, the maximum number of Interests permitted pursuant to the Offer on
a pro rata basis, with adjustments to avoid purchases of certain fractional
Interests and to comply with Section XV of the Partnership Agreement, based
upon the number of Interests validly tendered prior to the Expiration Date and
not properly withdrawn. The undersigned understands that a tender of Interests
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 to Purchase, the Purchaser may not be required to accept for payment any
of the Interests tendered hereby. In such event, the undersigned understands
that any Agreement for Interests not accepted for payment will be destroyed by
the Purchaser. Except as stated in the Offer to Purchase, this tender is
irrevocable, provided that Interests tendered pursuant to the Offer may be
withdrawn at any time prior to the applicable Expiration Date.
This Agreement shall be governed by and construed in accordance with the laws
of the State of California. Seller waives any claim that California or the
Southern District of California is an inconvenient forum, and waives any right
to trial by jury.
The undersigned Seller (including any joint owner(s)) owns and wishes to
assign the number of Interests set forth below. By its own or its Authorized
Signatory's signature below, the Seller hereby assigns its entire right, title
and interest to the Interests to the Purchaser.
By executing this Agreement the Seller hereby acknowledges to the General
Partner that the Seller desires to withdraw as a Limited Partner as to the
Interests referenced herein and hereby directs the General Partner to take all
such actions as are necessary to accomplish such withdrawal, and appoints the
General Partner the agent and attorney-in-fact of the Limited Partner, to
execute, swear to, acknowledge and file any document or amend the books and
records of the Partnership as necessary or appropriate for the withdrawal of
the Limited Partner.
IN WITNESS WHEREOF the Limited Partner has executed, or caused its Authorized
Signatory to execute, this Agreement.
____________________________
Print Seller(s) Name Clearly
____________________________ ____________________________
Seller's Signature Joint Seller's Signature
MEDALLION GUARANTEE MEDALLION GUARANTEE
(Medallion Guarantee for (Medallion Guarantee for
EACH Seller's signature) EACH Seller's signature)
Purchaser/Grape Investors, LLC
By: Its Manager, Arlen Capital
Advisors, LLC
By: ____________________________
Authorized Representative
<PAGE>
INFORMATION & INSTRUCTION PAGE
TO PROPERLY COMPLETE THIS AGREEMENT OF SALE, YOU MUST PROVIDE ALL OF THE
REQUIRED INFORMATION ON THIS PAGE. SEE INSTRUCTIONS TO COMPLETE THE SALES
AGREEMENT.
________________________________ Home Telephone Number
________________________________ Office Telephone Number
________________________________ Mailing Address
________________________________ City, State, Zip Code
________________________________ State of Residence
________________________________ Social Security/Tax ID No.
________________________________ Date
________________________________ Sales Price for Seller Interests being sold
pursuant to this Agreement
/ / Check here if you wish to sell ALL of your Interests
PLEASE CALL US AT (800) 891-4105 IF YOU HAVE ANY QUESTIONS REGARDING
THE SALE OF YOUR INTERESTS.
YOU MUST MAIL EXECUTED ORIGINAL TO PURCHASER
INSTRUCTIONS TO COMPLETE AGREEMENT OF SALE
ALL SIGNATURES MUST BE MEDALLION GUARANTEED
BENEFICIAL OWNER OF RECORD SHOULD:
- ---------------------------------
1. COMPLETE and SIGN Agreement.
2. Medallion Guarantee required.
3. Indicate Number of Interests Owned and/or To Be Sold.
4. Return Agreement in Envelope Provided.
JOINT OWNERSHIP
- ---------------
Please have ALL owners of record sign Agreement, and
SEPARATELY Medallion Guarantee each signature.
IRA/KEOGH
- ---------
1. Beneficial owner must sign Agreement.
2. Provide Custodian information. (i.e. Name, Company
Name, Address, Phone No. and Account No.)
DEATH
- -----
If any owner is deceased, please enclose a certified copy of
Death Certificate. If Ownership is OTHER than Joint Tenants
With Right of Survivorship, please provide Letter of
Testamentary or Administration current within 60 days
showing your beneficial ownership or executor capacity (in
addition to copy of Death Certificate).
CORPORATION
- -----------
Corporate resolution required showing authorized signatory.
TRUST, PROFIT SHARING OR PENSION PLAN
- -------------------------------------
Please provide title, signature, and other applicable pages of
Trust Agreement showing authorized signatory.
