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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to SS. 240.14a-11(c) or SS. 240.14a-12
Winthrop California Investors Limited Partnership
(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement it other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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1. Title of each class of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value of transaction:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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4. Date Filed:
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WINTHROP FINANCIAL ASSOCIATES
FIVE CAMBRIDGE CENTER
9TH FLOOR
CAMBRIDGE, MASSACHUSETTS 02142
TO THE LIMITED PARTNERS OF
WINTHROP CALIFORNIA INVESTORS LIMITED PARTNERSHIP
July 18, 2000
Dear Limited Partner:
We are pleased to provide you with the enclosed Consent Solicitation
Statement. The Statement contains information about the potential sale of your
partnership's 99% general partnership interest in an operating partnership, Crow
Winthrop Operating Partnership. The operating partnership owns a 10% membership
interest in Jamboree LLC which in turn owns an approximately 1.6 million square
foot office facility in Irvine California. Your partnership recently received an
unsolicited inquiry from a third party seeking to acquire your partnership's
interest in Jamboree. While your partnership has engaged in preliminary
discussions with the third party, an offer for your partnership's interest has
not been received. Under the terms of your partnership's limited partnership
agreement, the consent of holders of a majority of the limited partnership
interests is required for your partnership to sell its interest in the operating
partnership. Accordingly, we are seeking your consent to a sale of your
partnership's interest in the operating partnership for a purchase price of not
less than $3,750,000. Alternatively, your partnership may sell the operating
partnership's membership interest in Jamboree with the consent of the other
member of Jamboree. Consent of limited partners is not required for a sale of
the membership interest in Jamboree. However, your general partners do not
intend to sell the membership interest in Jamboree unless your partnership
receives net proceeds of at least $3,750,000 from the sale.
Your general partners believe that the sale of your partnership's
interest in the operating partnership for a purchase price of at least
$3,750,000 is in the best interests of the limited partners and your partnership
and recommend you vote "YES" in favor of the sale.
The enclosed Statement includes a complete discussion of the proposal.
We urge you to read the enclosed Statement carefully and to return your signed
Consent Form as quickly as possible. A postage-paid return envelope has been
included for your convenience. Consent forms must be received by August 17,
2000.
If you have any questions about the enclosed material, please call us
at 617-234-3000.
Very truly yours,
WINTHROP FINANCIAL ASSOCIATES,
A LIMITED PARTNERSHIP
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WINTHROP CALIFORNIA INVESTORS LIMITED PARTNERSHIP
FIVE CAMBRIDGE CENTER
9TH FLOOR
CAMBRIDGE, MASSACHUSETTS 02142
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CONSENT SOLICITATION STATEMENT
DATED: JULY 18, 2000
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This Statement is furnished by the general partners of your
partnership, Winthrop California Investors Limited Partnership, a Delaware
limited partnership. We are soliciting your consent to a proposal authorizing
your partnership to sell its 99% general partnership interest in an operating
partnership, Crow Winthrop Operating Partnership.
Under the terms of your partnership's limited partnership agreement,
the consent of holders of a majority of the limited partnership interests is
required for your partnership to sell its interest in the operating partnership.
Accordingly, we are seeking your consent to a sale of your partnership's
interest in the operating partnership for a purchase price of at least
$3,750,000.
Approval of the proposal requires the consent of limited partners
owning more than 50% of the outstanding limited partnership units. There are
presently outstanding 3,500 units. Under the partnership agreement, limited
partners will be deemed to have consented to the proposal unless prior to the
close of business on August 17, 2000 holders of more than 1,750 units submit
consents disapproving the proposal. Affiliates of your general partners who
beneficially own an aggregate of 1,610.88 units or approximately 46% of the
total units intend to vote in favor of the proposal. Limited partners of record
as of the close of business on July 17, 2000 are entitled to vote on the
proposal.
Your general partners believe that adoption of the proposal is in the
best interests of your partnership and its limited partners and recommend that
you vote "yes" in favor of the proposal.
IMPORTANT
Your consent is important. Please read this Statement carefully and
then complete, sign and date the enclosed consent form and return it in a
self-addressed, postage-paid envelope. Any consent form that is not returned or
that is signed and does not specifically approve or disapprove the proposal will
effectively be treated as approving the proposal.
To be counted, the consent form must be received on or before 12:00
midnight Boston time on August 17, 2000. A consent may be revoked by written
notice received on or before the expiration of the time for responding.
The principal executive offices of your partnership and its general
partners are located at Five Cambridge Center, 9th Floor, Cambridge,
Massachusetts 02142. The approximate date on which this Statement and the
enclosed consent form were first sent or given to limited partners was July 18,
2000.
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PLEASE CALL YOUR GENERAL PARTNERS AT (617) 234-3000
WITH ANY QUESTIONS RELATING TO THIS PROPOSAL.
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THE PROPOSAL
Your partnership recently received an unsolicited inquiry from Sutter
Capital Management LLC, an unaffiliated third party, seeking to acquire your
partnership's interest in Jamboree LLC. While your partnership has engaged in
preliminary discussions with Sutter, an offer for your partnership's interest
has not been received.
Jamboree owns and operates an office facility in Orange County,
California. Your partnership owns a 99% general partnership interest in Crow
Winthrop Operating Partnership which in turn owns a 10% membership interest in
Jamboree. The sale of your partnership's interest in Jamboree could be
accomplished by either the sale of your partnership's 99% general partnership
interest in the operating partnership or the sale of the operating partnership's
10% membership interest in Jamboree. The consent of limited partners is not
required for the sale of the membership interest but is required for the sale of
the general partnership interest. However, the sale of the membership interest
requires the consent of the other member of Jamboree which has not yet been
obtained.
The proposal authorizes your partnership to sell its general
partnership interest in the operating partnership for a purchase price of not
less than $3,750,000. If an offer is received from Sutter Capital Management or
any other party for your partnership's general partnership interest, your
partnership will be required to offer Crow Irvine #2, the limited partner of the
operating partnership, the opportunity to acquire the interest on the same terms
as the offer. The general partners may also elect to sell the operating
partnership's membership interest in Jamboree if the required consent of
Jamboree's other member is obtained. However, the general partners do not intend
to sell the membership interest in Jamboree unless your partnership receives net
proceeds of at least $3,750,000 from the sale.
In addition to its interest in the operating partnership, your
partnership also owns a 25% limited partnership interest in a development
partnership, Crow Winthrop Development Limited Partnership. The development
partnership owns approximately 90 acres of land surrounding the office facility
owned by Jamboree. Your partnership and the development partnership's general
partner, who is also the limited partner of the operating partnership, have had
continuing and acrimonious disputes resulting in extensive litigation regarding
the development partnership. In light of these ongoing disputes your partnership
believes that irreconcilable differences between your partnership and the
development partnership's general partner prevent the development partnership
from achieving its purposes. Accordingly, your partnership determined that, in
order to protect and maximize the value of its investment in the development
partnership, it should exercise its rights under the buy/sell provisions of the
partnership agreement of the development partnership. An exercise by your
partnership of the buy/sell provisions would result in your partnership's
acquiring the interest of the general partner of the development partnership or
selling its interest in the development partnership. Under the terms of your
partnership agreement, the consent of limited partners was required for your
partnership to sell its interest in the development partnership but was not
required for the acquisition of the interest of the general partner of the
development partnership. In March 2000 the general partners of your partnership
solicited the consent of limited partners to a sale of your partnership's
interest in the development partnership pursuant to the exercise of the buy/sell
provisions. In April 2000, the limited partners of your partnership consented to
the sale of your partnership's interest in the development partnership provided
your partnership received net proceeds of at least $6,500,000
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for its interest in the development partnership. Thereafter, your partnership
exercised its rights under the buy/sell provisions of the development
partnership. On April 7, 2000, the general partner of the development
partnership commenced an action against your partnership in the California
Superior Court seeking a declaration that your partnership did not have the
right to exercise the buy/sell provisions . Your partnership believes that it
had the right to exercise the buy/sell provisions and is actively opposing the
action brought by the general partner of the development partnership. A decision
has not yet been rendered in the action.
Under the partnership agreement proceeds distributed by your
partnership from the sale of its general partnership interest in the operating
partnership are required to be allocated between the limited and general
partners in accordance with their respective capital account balances
attributable to the operating partnership at the time of the distribution. Based
upon capital balances in effect as of December 31, 1999, 91.6653% of sales
distributions would be allocated to the limited partners and 8.3347% of sales
distributions would be allocated to the general partners. Accordingly, if
$3,750,000 of sales proceeds were distributed, approximately $982 per unit would
be distributed to limited partners and $312,551 would be distributed to the
general partners. However, your general partners currently anticipate that all
or a substantial part of any sales proceeds may be reserved for future
contingencies, including the purchase of the interest of the general partner of
the development partnership described above.
Limited partners may realize taxable income as a result of a sale of
your partnership's general partnership interest in the operating partnership or
the operating partnership's membership interest in Jamboree and, as discussed
above, may not receive any distributions from the partnership. A more complete
discussion of the income tax consequences of a sale is contained under "Certain
Federal Income Tax Consequences."
DEEMED CONSENT TO THE PROPOSAL
Approval of the proposal requires the consent of limited partners
owning more than 50% of the outstanding units. There are presently outstanding
3,500 units. Under the partnership agreement, limited partners will be deemed to
have consented to the proposal unless prior to 12:00 midnight on August 17, 2000
holders of at least 1,750 units submit consents disapproving the proposal.
Affiliates of your general partners who beneficially own an aggregate of
1,610.88 units intend to vote in favor of the proposal. Limited partners of
record as of the close of business on July 17, 2000 are entitled to vote on the
proposal.
Your general partners believe that adoption of the proposal is in the
bet interests of your partnership and its limited partners and recommend that
you vote "yes" in favor of the proposal.
YOUR PARTNERSHIP
GENERAL
Your partnership was originally organized on January 24, 1985 under the
laws of the State of Maryland. On October 16, 1985, your partnership was
reorganized as a Delaware limited partnership in accordance with the provisions
of the Delaware Revised Uniform Limited Partnership Act. The general partners of
your partnership are Three Winthrop Properties, Inc. and Winthrop Financial
Associates, A Limited Partnership.
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Your partnership owns (i) a 99% general partnership interest in the
operating partnership, (ii) a 25% limited partnership interest in the
development partnership and (iii) a 99% limited partnership interest in Winthrop
California Management Limited Partnership, a Maryland limited partnership ("WC
Management").
THE OPERATING PARTNERSHIP
The operating partnership was originally organized to acquire, own and
operate a headquarters office facility known as the Fluor Corporation World
Headquarters Facility in Irvine (Orange County), California. For various reasons
including the vacating of the facility by Fluor Corporation, the operating
partnership was unable to meet its debt obligations. The operating partnership
successfully negotiated a workout with the holder of its mortgage indebtedness
pursuant to which the operating partnership filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Court on March 28, 1997. Pursuant to
a June 27, 1997 plan of reorganization, the operating partnership contributed
all of its assets and liabilities, including all of its right, title and
interest in the headquarters facility and $500,000 of unencumbered cash, to
Jamboree, a newly formed Delaware limited liability company, in exchange for a
10% ownership interest in Jamboree. In addition, Jamboree paid your partnership
a $500,000 fee in connection with the plan. The other member of Jamboree is
Jamboree Office REIT, Inc. which owns a 90% interest in Jamboree. Jamboree
Office REIT was a newly formed real estate investment trust, the initial
stockholders of which were the former holders of the mortgage indebtedness of
the operating partnership.
Jamboree is managed by a five person board of member representatives.
One member is designated by the operating partnership and four members are
designated by Jamboree Office REIT. Decisions of the board are generally made by
a majority of the representatives. However, a unanimous vote is required to sell
all or any material portion of the headquarters facility prior to October 2000,
terminate a management agreement with WC Management without cause, file a
voluntary case under the Bankruptcy Code, issue additional membership interests
except in specific circumstances or extend the life of Jamboree past the one
year anniversary of the sale of the headquarters facility. The existence of
Jamboree is scheduled to terminate on the earlier to occur of the one year
anniversary of the sale of the headquarters facility or September 28, 2002.
Until March 27, 2002 the operating partnership has the right to
exchange its interest in Jamboree (subject to certain exceptions) for shares in
Jamboree Office REIT. In general, the operating partnership may exchange its 10%
interest in Jamboree for a fixed number of shares (on a one-for-one basis) in
Jamboree Office REIT, subject to adjustment, equal to 900,000 multiplied by the
operating partnership's then ownership percentage in Jamboree.
The operating partnership also has property appreciation rights which
entitle it to acquire additional equity interests in, or receive cash payments
from, Jamboree Office REIT. In general, the rights entitle the operating
partnership to purchase (i) shares in Jamboree Office REIT representing 10% of
the equity value of Jamboree for a purchase price of $10,888,888.89 in the
aggregate, if the fair market value of all of the issued and outstanding shares
in Jamboree Office REIT equals or exceeds $98 million divided by Jamboree Office
REIT's interest in Jamboree and (ii) shares in Jamboree Office REIT representing
55% of the equity value of Jamboree for a purchase price of $152,777,777.78 in
the aggregate, if the fair market value of the issued and outstanding shares in
Jamboree Office REIT equals or exceeds $125 million divided by
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Jamboree Office REIT's interest in Jamboree. Alternatively, the operating
partnership can purchase such additional shares in Jamboree Office REIT on a
"cashless basis" by surrendering a portion of the shares in Jamboree Office REIT
to be purchased in payment of the applicable purchase price. If the operating
partnership elects to exercise either of the property appreciation rights,
Jamboree Office REIT has the option to deliver to the operating partnership in
lieu of the issuance of shares in Jamboree Office REIT a cash payment equal to
the difference between the then current market value of the shares which would
otherwise be issued and the exercise price for such shares. The fair market
value of the shares in Jamboree Office REIT for the purpose of the property
appreciation rights will be determined by an appraisal process.
The headquarters facility owned by Jamboree consists of eight
buildings; a 10-story tower, a single story concourse and six four-story
buildings, containing, in the aggregate, approximately 1,692,219 rentable square
feet of space and approximately 15 acres of land. The property is located in the
Greater Airport area of Irvine, California and is used principally as various
tenants' corporate headquarters.
The following table sets forth those tenants at the headquarters
facility that occupy 10% or more of the rentable square footage, business
conducted by the tenant, expiration date of the lease term, renewal options and
the 2000 annual rent for the leases:
LEASE RENEWAL 2000 MONTHLY
TENANT/BUSINESS SQUARE FOOTAGE (%) EXPIRATION OPTION (1) BASE RENT
--------------- ------------------ ---------- ---------- ---------
ConAgra, Inc. (2) 390,263 (23.1%) 8/31/10 2-5 yr. (3)
AirTouch Cellular 189,265 (11.18%) 11/30/00 2-5 yr. (4) $246,045
Communications
Services
Denny's Inc. 158,362 (9.36%) 7/24/04 3-5 yr. $214,841
food service
company (5)
Waban, Inc. (6) 57,308 (3.52%) 7/24/04 3-5 yr. $62,035
Home improvement
retailer
Caltrans District 12 208,156 (12.3%) 3/31/11 None $350,973
State transportation
agency
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(1) The first number represents the number of renewal options. The second
number represents the length of each option.
(2) According to tenant's Annual Report on Form 10-K, ConAgra is a
diversified food company that operates across the food chain, from
basic agricultural inputs to production and sale of branded consumer
products.
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(3) Tenant improvements are now under construction. Tenant is not required
to commence paying rent until September 2000 with respect to 262,648
square feet of space and December 1, 2000 with respect to 127,678
square feet of space. Lease provides for the following rental payments:
262,648 SQUARE FEET 127,678 SQUARE FEET
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RENT DATES MONTHLY RATE RENT DATES MONTHLY RATE
---------- ------------ ---------- ------------
9/1/00 to 8/31/01 $422,863 12/1/00 to 8/31/03 $185,133
9/1/01 to 2/28/03 $467,513 9/1/03 to 8/31/05 $203,008
3/1/03 to 8/31/05 $491,152 9/1/05 to 2/29/08 $213,222
9/1/05 to 2/29/08 $514,790 3/1/08 to 8/31/10 $224,713
3/1/08 to 8/31/10 $541,055
(4) Tenant has advised WC Management that it does not intend to exercise
its renewal option.
(5) Tenant has subleased 106,676 square feet of space to Waban and the
remainder of the space to an unaffiliated company.
(6) The space listed is in addition to the space subleased from Denny's,
Inc.
The following table sets forth the occupancy rates for the last five
years and the associated gross rental per square foot amount, as footnoted. At
March 31, 2000, 97% (including the ConAgra lease) at the headquarters facility
was leased under leases with an average rental rate (exclusive of ConAgra) of
$21.50 per square foot.
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PERCENTAGE AVERAGE ANNUAL TOTAL
OCCUPANCY GROSS RENTAL PER SF
YEAR RATE (1) OF OCCUPIED SPACE (2)
---- -------- ---------------------
1995 95.0% 23.08
1996 91.5% 23.34
1997 97.5% 20.51
1998 88.0% 21.33
1999 92.0% 21.50
(1) Occupancy rates are based on December 31 of indicated year and are not
yearly averages.
(2) Calculated using operating revenues, including rent escalations and
other revenues, for the entire year divided by the total square footage
of occupied space (based on the occupancy rates reported in this
table).
The following table sets forth certain information concerning lease
expirations as of January 1, 2000 (assuming no renewals for this property for
the period from January 1, 2000 through December 31, 2009).
NUMBER OF AGGREGATE SF ANNUALIZED PERCENTAGE OF
TENANTS WHOSE COVERED BY RENTALS FOR LEASES TOTAL
LEASES EXPIRE EXPIRING LEASES EXPIRING ($) ANNUALIZED RENTAL
------------- --------------- ------------ -----------------
2000 14 278,295 4,200,666 16.50
2001 7 74,890 1,631,995 5.13
2002 12 73,040 1,575,245 5.21
2003 8 135,883 2,755,273 9.66
2004 6 318,091 6,242,767 25.46
2005 5 78,946 2,017,714 10.04
2006 4 118,397 2,680,240 16.60
2007 0 0 0 0
2008 0 0 0 0
2009 0 0 0 0
In the opinion of the general partners, as of March 31, 2000 the
properties comprising the headquarters facility are adequately covered by
insurance.
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Attached as Exhibit A are the audited financial statements of the
operating partnership as of December 31, 1999 and December 31, 1998.
THE DEVELOPMENT PARTNERSHIP
The development partnership was formed in 1985 for the purpose of
acquiring, owning and developing approximately 122 acres of land surrounding the
headquarters facility in Irvine (Orange County), California and presently owns
approximately 90 acres of land.
During 1997, the development partnership formed Shops at Park Place LLC
for the purpose of owning and operating a retail center. The development
partnership is the managing and sole member/owner of Shops at Park Place LLC.
During 1998, the development partnership formed Park Place Residential Realty
LLC and Park Place Residential Realty-Land LLC, for the purpose of reacquiring
and reselling approximately 32 acres of residential property located in Orange
County, California. The 32 acres were sold in 1998 for a gross sales price of
$50,000,000. In addition, during 1998, the development partnership formed 3121
Michelson Drive LLC and Park Place Hotel Company LLC and, in January 1998 formed
Park Place Parking Company LLC for the purposes of developing, owning and
operating a 150,000 square foot Class A office building, a luxury hotel and
parking structures, respectively. The 1998 financial statements of the
development partnership disclosed that in 1999 Park Place Hotel signed a 20-year
operating agreement with a hotel operator. The development partnership is the
managing and sole member/owner of each of these limited liability companies.
As previously reported, your partnership has had continuing and ongoing
acrimonious disputes with the general partner of the development partnership
resulting in extensive litigation regarding the development partnership. The
claims are currently pending. In order to protect and maximize the value of its
investment in the development partnership, in April 2000 your partnership
exercised its rights under the buy/sell provisions of the partnership agreement
of the development partnership. See "The Proposal" for additional information on
your partnership's exercise of the buy/sell provisions and the pending
litigation relating to that exercise.
WC MANAGEMENT
Your partnership holds a 99% limited partnership interest in WC
Management. WC Management has the right to perform management and leasing
functions at the headquarters facility. WC Management has, in turn, contracted
with Winthrop Management, LLC, an affiliate of your general partners, to provide
such services. WC Management is entitled to receive a fee of 2% of gross
receipts from the headquarters facility. From this amount, WC Management
reimburses Winthrop Management LLC for the compensation paid by Winthrop
Management LLC to certain senior level on-site employees as well as for
accounting and other support functions performed off-site by Winthrop
Management. Additionally, WC Management is entitled to receive incentive fees
based on reductions it is able to achieve, if any, with respect to certain
operating and other expenses. Leasing commission payments, consistent with
prevailing market rates, are paid to WC Management for all third-party leases it
procures for the headquarters facility.
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TRANSACTIONS WITH AFFILIATES
Your partnership paid an affiliate of your general partners a $750,000
annual asset management fee for 1997, 1998 and 1999.
An affiliate of your general partners is the general partner of WC
Management and holds a 1% interest in WC Management. In 1997, 1998 and 1999 the
affiliate received distributions of $16,076, $12,382 and $12,464, respectively,
for its 1% interest.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary is a general discussion of certain federal income
tax consequences of the proposal. This summary is based on the Internal Revenue
Code of 1986, as amended (the "Code"), applicable Treasury regulations
thereunder, administrative rulings, practice and procedures and judicial
authority, all as of the date of this Statement. All of the foregoing are
subject to change, and any such change could affect the continuing accuracy of
this summary. This summary does not discuss all aspects of federal income
taxation that may be relevant to you in light of your specific circumstances or
to certain types of limited partners who or which are subject to special tax
rules (for example, dealers in securities, banks, insurance companies and,
except as discussed below, foreign and tax-exempt investors), nor does it
discuss any aspect of state, local, foreign or other tax laws. YOU SHOULD
CONSULT YOUR OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES, INCLUDING
STATE AND LOCAL TAX CONSEQUENCES, TO YOU OF THE PROPOSAL.
SALE OF OPERATING PARTNERSHIP INTEREST
Your partnership's sale of its interest in the operating partnership
will be a taxable transaction in which your partnership will recognize gain or
loss equal to the difference between (i) your partnership's "amount realized" on
the sale and (ii) its adjusted tax basis in the interest sold. Your
partnership's "amount realized" on the sale will be a sum equal to the cash
price received for its operating partnership interest plus the amount of the
operating partnership's liabilities that are allocable to the interest sold.
Your partnership's adjusted tax basis in its operating partnership interest
generally will be an amount equal to its cash investment in the operating
partnership, increased by its share of the operating partnership's income and
gain and reduced by its share of the operating partnership's losses and
distributions. If you made an election (a "deferral election") to defer
recognizing your share of your partnership's debt discharge income resulting
from the 1997 restructuring of the operating partnership's mortgage indebtedness
(see "YOUR PARTNERSHIP - The Operating Partnership"), then your partnership's
adjusted tax basis in its operating partnership interest also was reduced by the
amount of income you deferred. As a result, both the amount and the character
(as capital or ordinary) of your partnership's taxable gain or loss on the sale
will be different for you than for limited partners who did not make a deferral
election.
Your partnership's taxable gain or loss on the sale of its operating
partnership interest, as well as its taxable income or loss from the operating
partnership up to the date of the sale, will be allocated to the limited
partners in accordance with the provisions of your partnership's limited
partnership agreement. Under the passive activity loss rules (described below),
any tax loss allocated to you on the sale generally could be deducted in full in
the year of sale (subject to any
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other applicable limitations), and any taxable gain allocated to you on the sale
generally could be offset by your unused passive activity losses from your
partnership or other investments.
Based on your general partners' estimate of your partnership's adjusted
tax basis in its operating partnership interest as of December 31, 1999 and
without giving effect to the operating partnership's operations, transactions or
distributions after that date, your general partners estimate that a sale of
your partnership's interest in the operating partnership for a price resulting
in your partnership's receiving net cash proceeds of $3.75 million would result
in a taxable ordinary income gain of $8,204 per unit if you made a deferral
election, or a capital loss of ($13,788) per unit if you did not make a deferral
election. A sale for a price resulting in net cash proceeds of more than $3.75
million would result in a greater taxable gain per unit for limited partners who
made the deferral election, and a lower tax loss per unit for limited partners
who did not make the election. If you made the deferral election and do not have
available passive activity losses from your partnership or other investments,
your tax liability on account of the sale may exceed the distributions (if any)
made to you. See "The Proposal." However, your general partners also estimate,
based on the results of your partnership's operations through December 31, 1999
and without giving effect to your partnership's operations, transactions or
distributions after that date, that if you purchased your units in your
partnership's original offering and made a deferral election, you may have
"suspended" passive activity losses (i.e., tax losses that you could not
previously deduct under the passive activity loss rules described below) from
your partnership of $41,084 per unit if you paid the entire purchase price for
your units at the time of your subscription, or $44,670 per unit if you paid for
your units in installments, in each case subject to reduction to the extent you
utilized such losses to offset passive activity income from other investments.
Your partnership's gain or loss on a sale of its operating partnership
interest generally would be treated as a long-term capital gain or loss.
Accordingly, any tax loss allocated to you on the sale (if you did not make a
deferral election) generally would be treated as a long-term capital loss.
However, if you made a deferral election, any taxable gain allocated to you on
the sale generally would be treated as ordinary income. Under current law,
capital gains and losses of individuals and non-corporate taxpayers are taxed
under tax rules different from the rules applicable to corporations. Long-term
capital gains of individuals and other non-corporate taxpayers are taxed at a
maximum federal income tax rate of 20%; however, gain attributable to
straight-line depreciation deductions is taxed at a federal income tax rate of
25%. The maximum federal income tax rate for other income of such persons is
39.6%. Capital losses can offset only capital gains, except that non-corporate
taxpayers may deduct up to $3,000 of their capital losses for the year in excess
of their total capital gains for the year against their ordinary income. An
individual's long-term capital losses in excess of his long-term capital gains
can offset his short-term capital gains on which he otherwise would be subject
to tax at the same federal income tax rates as his ordinary income. Excess
capital losses generally can be carried forward to succeeding years (a
corporation's carryforward period is five years and a non-corporate taxpayer can
carry forward such losses indefinitely); in addition, corporations, but not
non-corporate taxpayers, are allowed to carry back excess capital losses to the
three preceding taxable years.
Under special tax rules applicable to "passive activity losses," if you
are a non-corporate taxpayer or closely held corporation, you generally cannot
use losses from your partnership to offset your non-passive activity income. As
a result, you may have suspended passive activity losses from your partnership.
Such unused losses could be applied to offset any ordinary income
10
<PAGE>
allocated to you on the sale of your partnership's interest in the operating
partnership. Assuming your partnership sells its entire operating partnership
interest, any loss allocated to you on the sale generally could be deducted by
you in the year of sale (subject to any other applicable limitations).
Any cash distributed to you by your partnership in connection with a
sale of its operating partnership interest will reduce your adjusted tax basis
in your units but will not result in your recognition of additional taxable gain
except if and to the extent that such distributions (and the amount of any
reduction in your share of your partnership's liabilities as a result of the
sale) exceed your adjusted tax basis in your units. Your adjusted tax basis in
your units will be increased by any taxable gain allocated to you on the sale,
and will be reduced by any tax loss allocated to you on the sale. Your general
partners currently do not anticipate that you would recognize any further
taxable gain as a result of receiving cash distributions of the proceeds of a
sale of your partnership's interest in the operating partnership on the terms
described in this Statement if you acquired your units in your partnership's
original offering.
Because the operating partnership's assets are debt-financed, taxable
gain (if any) allocated to you on the sale of your partnership's interest in the
operating partnership may be taxable to you as unrelated business taxable income
even if you are a tax-exempt limited partner. Accordingly, the foregoing
discussion of certain tax consequences of a sale of your partnership's interest
in the operating partnership may be relevant to you, and should be reviewed by
you with your tax advisor. If you are a tax-exempt organization described in
section 501(c)(7), (c)(9), (c)(17) or (c)(20) of the Code, you also should
consult your tax advisor concerning the application of "set aside" and reserve
requirements to any gain that might be allocated to you on account of the sale.
If you are a foreign limited partner, then your partnership generally
would be required to deduct and withhold U.S. income taxes at a rate of 39.6% on
any taxable gain allocated to you on the sale, but generally would not have to
withhold if you are allocated a tax loss on the sale. Amounts withheld would be
creditable against your U.S. federal income tax liability and, if in excess
thereof, a refund could be obtained from the Internal Revenue Service by filing
a U.S. income tax return.
In addition to federal income tax, you may be subject to state and
local taxes on your partnership's sale of its operating partnership interest.
You should consult your own professional tax advisers concerning the state and
local tax consequences to you of such sale.
SALE OF INTEREST IN JAMBOREE
Your general partners estimate that the federal income tax consequences
of a sale of the operating partnership's membership interest in Jamboree for a
price resulting in your partnership's receiving net cash proceeds of $3.5
million should be substantially the same for limited partners in your
partnership as those described above under the subheading "Sale of Operating
Partnership Interest."
11
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding units
owned by each person who is known by your partnership to own beneficially or
exercise voting or dispositive control over more than 5% of the units, by
Winthrop Financial Associates, the managing general partner of your partnership,
and by all directors and executive officers of your general partners as a group
as of July 17, 2000.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
Name and address of Beneficial Amount and nature of Beneficial % of Class
Owner Owner
-------------------------------------------------------------------------------------------
<S> <C> <C>
Quadrangle Associates II LLC (1) 587.88 (3) 16.8
-------------------------------------------------------------------------------------------
WILCAP Limited Partnership (1) 1,000 28.6
-------------------------------------------------------------------------------------------
WILCAP Holdings Limited Partnership (1)(2) 18 *
-------------------------------------------------------------------------------------------
Winthrop Financial Associates, A Limited 5 *
Partnership (1)
-------------------------------------------------------------------------------------------
All directors and executive officers as a __ __
group (five persons)
-------------------------------------------------------------------------------------------
</TABLE>
* Less than one percent
(1) The business address for Quadrangle Associates II LLC, WILCAP Limited
Partnership, WILCAP Holdings Limited Partnership and Winthrop Financial
Associates is Five Cambridge Center, 9th Floor, Cambridge,
Massachusetts 02142.
(2) WILCAP Holdings Limited Partnership is the general partner of WILCAP
Limited Partnership.
(3) 556.88 units were purchased at a price of $5,100 per unit in a tender
offer that closed on February 16, 2000. A total of 31 units were
purchased in April and July 2000 in privately negotiated transactions
at prices of $4,900 per unit and $5,000 per unit.
Your partnership is a limited partnership and has no officers or
directors. Quadrangle Associates II LLC, WILCAP Limited Partnership, WILCAP
Holdings Limited Partnership and Winthrop Financial Associates, A Limited
Partnership, are affiliates of your general partners. All of those entities have
advised your partnership that they intend to vote their units (see chart above)
in favor of the proposal.
GENERAL INFORMATION CONCERNING THE VOTING
Record Date and Voting. Your general partners have fixed July 17, 2000
as the record date for the determination of limited partners entitled to vote on
the proposal. Only holders of record of units at the close of business on the
record date are entitled to notice of and to vote on the proposal. As of the
record date, there were 3,500 units outstanding, which were held by
12
<PAGE>
approximately 1,314 holders of record. Each holder of record of units on the
record date is entitled to cast one vote per unit on the proposal.
Pursuant to Section 5.1 of the partnership agreement, your general
partners are not permitted, without the requisite consent of limited partners,
to sell your partnership's general partnership interest in the operating
partnership. Accordingly, in order for your partnership to pursue the
unsolicited offer it recently received for its interest in the operating
partnership or other offers, your general partners are seeking the requisite
consent of limited partners.
The consent of holders of a majority of the outstanding units is
required to approve the proposal under the provisions of your partnership's
limited partnership agreement. Limited partners will be deemed to have consented
to the proposal unless, prior to 12:00 midnight on August 17, 2000, your
partnership receives consents from holders of at least 1,750 units disapproving
the proposal. Accordingly, if you do not submit a consent, you will be
effectively consenting to the proposal.
Your general partners and their affiliates beneficially own or have the
right to vote, an aggregate of 1,610.88 Units which they intend to vote in favor
of the proposal. Such units represent approximately 46% of the total number of
outstanding Units. See "Security Ownership of Certain Beneficial Owners and
Management".
All consent forms received on or prior to 12:00 midnight on August 17,
2000 and not revoked will be voted in accordance with the instructions indicated
on such consent forms. IF NO INSTRUCTIONS ARE INDICATED OR IF YOU FAIL TO RETURN
YOUR CONSENT FORM, SUCH CONSENT FORM WILL, IN EFFECT, BE DEEMED TO BE A VOTE IN
FAVOR OF THE PROPOSAL.
Revocation of Consents. Any consent form given by a limited partner may
be revoked by the person giving it at any time before 12:00 midnight on August
17, 2000 by (i) delivering to the general partners a written notice of
revocation bearing a later date than the consent form to be revoked; or (ii)
delivering to the general partners a duly executed consent form bearing a later
date. Any written notice of revocation or subsequently executed consent form
should be sent so as to be delivered to your partnership c/o Three Winthrop
Properties, Inc., Five Cambridge Center, 9th Floor, Cambridge, Massachusetts
02142, or hand delivered to your general partners on or before August 17, 2000.
Solicitation. The cost of assembling and mailing the enclosed consent
form, this Statement and other materials that may be sent to limited partners in
connection with this solicitation shall be borne by your partnership. It is
estimated that total expenditures relating to the solicitation made hereby,
including legal fees, printing and mailing fees, will be approximately $20,000.
Certain directors, officers and employees of your general partners may solicit
the execution and return of consent forms by mail, telephone, telegraph and
personal interview. Such directors, officers and employees will not be
additionally compensated, but may be reimbursed for out-of-pocket expenses in
connection with such solicitation.
Dissenters' Rights. There will be no dissenters' rights of appraisal
with respect to the proposal.
* * *
13
<PAGE>
Winthrop Financial Associates, A Limited Partnership
Three Winthrop Properties, Inc.,
as general partners of your partnership
Cambridge, Massachusetts
July 18, 2000
14
<PAGE>
EXHIBIT A
---------
CROW WINTHROP OPERATING PARTNERSHIP
REPORT ON AUDITED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 1998
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Partners of
Crow Winthrop Operating Partnership
In our opinion, the accompanying balance sheets as of December 31, 1999 and
1998, and the related statements of operations, partners' equity (deficit) and
cash flows for the years then ended present fairly, in all material respects,
the financial position of Crow Winthrop Operating Partnership (the
"Partnership") at December 31, 1999 and 1998, and the results of its operations
and its cash flows for the years ended December 31, 1999 and 1998, in conformity
with accounting principles generally accepted in the United States. These
financial statements are the responsibility of the Partnership's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statements presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
PricewaterhouseCoopers LLP
May 24, 2000
A-1
<PAGE>
CROW WINTHROP OPERATING PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
1999 1998
ASSETS
Cash and cash equivalents $ 91,007 $ 216,339
Equity investment in Jamboree LLC 901,972 1,320,073
----------- ------------
Total assets $ 992,979 $ 1,536,412
----------- ------------
LIABILITIES AND PARTNERS' EQUITY
Liabilities
Related party payable $ 9,500 $ 9,500
Accrued liabilities 3,000 -
----------- -------------
Total liabilities $ 12,500 $ 9,500
----------- ------------
Commitments and contingencies
Partners' equity (deficit)
Winthrop California Investors Ltd. Partnership $6,148,367 $ 6,689,336
Crow Irvine #2 (5,167,888) (5,162,424)
----------- ------------
Total partners' equity 980,479 1,526,912
----------- ------------
Total liabilities and partners' equity $ 992,979 $ 1,536,412
----------- ------------
A-2
The accompanying notes are an integral part of these financial statements.
<PAGE>
CROW WINTHROP OPERATING PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
1999 1998
INCOME
Interest income $ 16,094 $ 7,202
------------ ------------
Total income 16,094 7,202
------------ ------------
EXPENSES
General and administrative 32,176 31,000
------------ ------------
Total expenses 32,176 31,000
------------ ------------
Equity in income of Jamboree LLC 369,649 844,528
------------ ------------
Net income $ 353,567 $ 820,730
------------ ------------
A-3
The accompanying notes are an integral part of these financial statements.
<PAGE>
CROW WINTHROP OPERATING PARTNERSHIP
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
WINTHROP
CALIFORNIA
INVESTORS
CROW LIMITED
IRVINE #2 PARTNERSHIP TOTAL
--------- ----------- -----
Balances, December 31, 1997 $(5,170,631) $5,876,813 $ 706,182
Net income 8,207 812,523 820,730
------------- ------------ -------------
Balances, December 31, 1998 (5,162,424) 6,689,336 1,526,912
Net income 3,536 350,031 353,567
Cash distributions to partners (9,000) (891,000) (900,000)
------------- ------------ ------------
Balances, December 31, 1999 $(5,167,888) $6,148,367 $ 980,479
------------- ------------ ------------
A-4
The accompanying notes are an integral part of these financial statements.
<PAGE>
CROW WINTHROP OPERATING PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 353,567 $ 820,730
Adjustments to reconcile net income to net cash
used in operating activities:
Equity in income of Jamboree LLC (369,649) (844,528)
Changes in current assets and liabilities:
Increase in related party payable - 9,500
Increase in accounts payable and accrued liabilities 3,000 -
----------- -----------
Net cash used in operating activities (13,082) (14,298)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Dividends from Jamboree LLC 787,750 230,637
----------- -----------
Net cash provided by investing activties 787,750 230,637
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash distributions to partners (900,000) -
----------- -----------
Net cash used in financing activities (900,000) -
----------- -----------
(Decrease) increase in cash and cash equivalents (125,332) 216,339
Cash and cash equivalents, beginning of period 216,339 -
----------- -----------
Cash and cash equivalents, end of period $ 91,007 $ 216,339
----------- -----------
</TABLE>
A-5
The accompanying notes are an integral part of these financial statements.
<PAGE>
CROW WINTHROP OPERATING PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
1. ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION
Crow Winthrop Operating Partnership (the "Partnership"), was organized
as a general partnership in January 1985 under the Maryland Uniform
General Partnership Act by Winthrop California Investors Limited
Partnership (the "Investor Partnership") and Crow Irvine #2 to acquire,
own and operate the Fluor Corporation World Headquarters Facility (the
"Headquarters Facility") in Irvine (Orange County), California. Crow
Irvine #2 is a California limited partnership consisting of Crow Irvine
#1 as the general partner and Fluor Corporation ("Fluor") as the
limited partner.
On July 30, 1985 (the "Acquisition Date"), the Partnership acquired the
Headquarters Facility from Fluor consisting of approximately 1,606,000
rentable square feet, the underlying land of approximately 14.8 acres
(collectively, the "Property") and all related rights and easements for
a purchase price of $297,789,000.
The purchase price was financed by a $204,000,000 loan provided by
Pacific Mutual Insurance Company (the "Mortgage Lender"),
collateralized by a mortgage on the Headquarters Facility (the
"Mortgage Loan") and contributions from the general partners (Note 3).
In March 1992, the Investor Partnership contributed approximately $4
million in capital contributions to Winthrop California Management
Limited Partnership, a Maryland limited partnership (the "Management
Partnership"), in exchange for its 99% limited partnership interest.
The Management Partnership was organized to assume the management
contract on the Headquarters Facility, and paid $4 million in exchange
for the release of all of the obligations of the Partnership under the
prior contract.
On March 28, 1997, the Partnership filed a petition for relief under
Chapter 11 of the Code in the U.S. Bankruptcy Court for the Central
District of California (the "Bankruptcy Court"). Concurrently
therewith, the Partnership filed a Plan of Reorganization dated March
28, 1997 (as amended on April 28, 1997 and July 23, 1997) (the "Plan").
On September 12, 1997, the Bankruptcy Court entered an order confirming
the Plan and with the satisfaction of certain conditions, the Plan
became effective on October 3, 1997 (the "Effective Date").
Pursuant to the Plan, on the Effective Date, the Partnership was
reorganized as a limited partnership and two new entities were formed:
Jamboree LLC, a Delaware limited liability company ("Jamboree LLC") and
Jamboree Office REIT, Inc., a Maryland corporation ("Jamboree REIT").
All three entities are successor entities to the Partnership. Upon the
formation of Jamboree LLC, the initial Jamboree LLC Units were issued
10% to the Partnership and 90% to Jamboree REIT. Jamboree REIT was
formed for the purpose of owning 90% of Jamboree LLC.
A-6
<PAGE>
CROW WINTHROP OPERATING PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
In accordance with the terms of the general partnership agreement, as
amended, profits and losses of the Partnership are allocated as
follows:
Winthrop California
Investor Limited
Crow Irvine #2 Partnership
---------------------- -------------------
1 percent 99 percent
Available cash flow, as defined, is distributable to partners in the
same proportion as profits and losses.
As a result of the Management Partnership's assumption of the
management contract in March 1992, the Partnership agreement was
amended to give the Investor Partnership the sole right to manage the
business of the Partnership and to convert Crow Irvine #2 to a passive
general partner.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
INCOME TAXES
No provision or benefit has been made for federal, state or local
income taxes in the accompanying financial statements of the
Partnership. The partners are required to report on their individual
income tax returns their allocable share of income, gain, losses,
deductions and credits of the Partnership. The Partnership has elected
to file its tax returns on the accrual basis.
CASH AND CASH EQUIVALENTS
The Partnership classifies highly liquid investments with original
maturities of three months or less as cash and cash equivalents. Cash
and cash equivalents are held in major financial institutions and, at
times, such balances may be in excess of the Federal Deposit Insurance
Corporation insurance limit.
A-7
<PAGE>
CROW WINTHROP OPERATING PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
EQUITY INVESTMENTS
The Partnership accounts for its 10% member interest in Jamboree LLC
under the equity method of accounting. The Partnership assesses whether
there has been a permanent impairment in the value of equity
investments by considering factors such as expected future operating
income, trends and prospects as well as the effects of demand,
competition and other economic factors. Management believes no such
impairment has occurred subsequent to the reorganization.
3. EQUITY INVESTMENT IN JAMBOREE LLC
The Partnership's equity investment in Jamboree LLC at December 31,
1999 and 1998 is as follows:
Balance as of December 31, 1997 $ 706,182
Equity in income of Jamboree LLC 844,528
Dividends received (230,637)
-----------
Balance as of December 31, 1998 1,320,073
Equity in income of Jamboree LLC 369,649
Dividends received (787,750)
-----------
Balance as of December 31, 1999 $ 901,972
-----------
A-8
<PAGE>
CROW WINTHROP OPERATING PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
Condensed balance sheet of Jamboree LLC as of December 31, 1999 and 1998 is as
follows:
<TABLE>
<CAPTION>
1999 1998
(In Thousands)
<S> <C> <C>
ASSETS
Fixed assets $ 100,595 $ 98,155
Cash and cash equivalents 11,816 23,237
Accounts receivable and other assets 6,932 2,509
---------- ----------
$ 119,343 $ 123,901
---------- ----------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Notes payable $ 103,918 $ 104,553
Accounts payable and accrued liabilities 3,960 4,824
Other liabilities 2,351 9,098
---------- ----------
110,224 118,475
---------- ----------
Members' equity
Jamboree Office REIT, Inc. 8,211 4,894
CWOP 902 475(A)
---------- ----------
$ 119,343 $ 123,901
---------- ----------
(A) Reflects dividends declared of approximately $0 and $788,000 as of December
31, 1999 and 1998, respectively (Note 6).
Condensed statements of operations of Jamboree LLC for the years ended December
31, 1999 and 1998 are as follows:
Total revenues 30,324 35,239
Total reimbursable common area expenses (12,570) (13,321)
Total nonreimbursable expenses (2,348) (2,397)
Interest expense (8,722) (8,645)
Depreciation and amortization expense (2,981) (2,417)
---------- ----------
Net income $ 3,703 $ 8,459
---------- ----------
Net income allocated to Jamboree Office REIT, Inc. $ 3,333 $ 7,614
---------- ----------
Net income allocated to CWOP $ 370 $ 845
---------- ----------
</TABLE>
Significant accounting policies used by Jamboree LLC are similar to those used
by the Partnership.
A-9
<PAGE>
CROW WINTHROP OPERATING PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
4. RELATED PARTY TRANSACTIONS
The Partnership has a payable to the Investor Partnership in the amount
of $9,500 in relation to certain costs paid for by the Investor
Partnership on behalf of the Partnership.
5. COMMITMENTS AND CONTINGENCIES
LITIGATION
Jamboree LLC is involved in various lawsuits with Crow Winthrop
Development Limited Partnership ("CWDLP") and other related entities.
These lawsuits relate to, among other things, certain disputed common
area expenses charged to Jamboree LLC, property tax refunds due
Jamboree LLC, and the operation of shared common areas. CWDLP owns and
operates the retail property, certain parking areas and other land
adjacent to the Headquarters Facility. Jamboree LLC's management
believes that the ultimate outcome of all outstanding claims and
pending litigation will not have a material adverse effect on
Jamboree's financial position or its results of operations.
DEVELOPMENT APPROVAL AGREEMENT
Jamboree LLC is the assignee of a certain Development Approval
Agreement ("Agreement") which gives Jamboree LLC certain approval and
other rights related to certain new or proposed development by CWDLP on
land within 200 feet of the Headquarters Facility. CWDLP has filed an
action which, in effect, seeks to limit Jamboree LLC's rights under the
Agreement. Jamboree LLC has filed an action seeking to enforce the
Agreement.
6. DIVIDENDS RECEIVED
During January 1999 and 1998, respectively, the Partnership received
dividends in the amount of approximately $788,000 and $231,000 from
Jamboree LLC which were declared as of December 31, 1998 and 1997,
respectively, but were not recorded by the Partnership until received.
A-10
<PAGE>
WINTHROP CALIFORNIA INVESTORS LIMITED PARTNERSHIP
The undersigned, a holder of limited partnership interests (the
"Units") in Winthrop California Investors Limited Partnership (the
"Partnership"), does hereby vote as follows, with respect to all Units in the
Partnership owned by the undersigned for the proposal more fully described in
the accompanying Consent Solicitation Statement, dated July 18, 2000, receipt of
which is hereby acknowledged.
APPROVAL of the sale of the Partnership's general partnership interest
in Crow Winthrop Operating Partnership.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS CONSENT IS SOLICITED BY WINTHROP FINANCIAL ASSOCIATES, A LIMITED
PARTNERSHIP AND THREE WINTHROP PROPERTIES, INC.., AS GENERAL PARTNERS OF THE
PARTNERSHIP. WHEN THIS PROXY IS PROPERLY EXECUTED, THE UNITS REPRESENTED HEREBY
WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE ON THIS CARD, THIS
CONSENT WILL BE VOTED FOR THE PROPOSAL.
Dated: ,2000
----------------------------
----------------------------------------
----------------------------------------
Signature
----------------------------------------
Signature (if held jointly)
----------------------------------------
----------------------------------------
Please sign exactly as name appears
hereon. When Units are held by joint
tenants, both should sign. When signing
as an attorney, as executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in name by
President or other authorized officer.
If a partnership, please sign in
partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS CONSENT PROMPTLY USING THE ENCLOSED
PRE-PAID ENVELOPE TO: THREE WINTHROP PROPERTIES, INC. IF YOU HAVE ANY QUESTIONS,
PLEASE CALL THE INVESTOR RELATIONS DEPARTMENT AT (617) 234-3000.
