SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------------------
RESOURCES ACCRUED MORTGAGE INVESTORS L.P.-SERIES 86
(Name of Subject Company)
BIGHORN ASSOCIATES LLC
PRESIDIO CAPITAL INVESTMENT COMPANY, LLC
------------------------------------
(Bidders)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
NONE
(Cusip Number of Class of Securities)
------------------------------------
David King
Presidio Capital Investment
Company, LLC
527 Madison Avenue
New York, New York 10022
(212) 319-3400
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
Copy to:
David J. Heymann
Post & Heymann, LLP
100 Jericho Quadrangle
Jericho, New York 11753
(516) 681-3636
------------------------------------
CALCULATION OF FILING FEE
================================================================================
Transaction Valuation*: $3,256,000 Amount of Filing Fee: $651.20
================================================================================
* For purposes of calculating the fee only. This amount assumes the purchase of
148,000 units of limited partnership interest ("Units") of the subject
partnership for $22 per Unit. The amount of the filing fee, calculated in
accordance with Section 14(g)(3) and Rule 0-11(d) under the Securities Exchange
Act of 1934, as amended, equals 1/50th of one percent of the aggregate of the
cash offered by the bidders.
(cover page 1 of 2)
<PAGE>
(cover page 2 of 2)
|_| Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form or
schedule and the date of its filing.
Amount Previously Paid: Not Applicable
Form or Registration No.: Not Applicable
Filing Party: Not Applicable
Date Filed: Not Applicable
<PAGE>
CUSIP No. NONE 14D-1 Page 3
- --------------------------------------------------------------------------------
1. Name of Reporting Persons; I.R.S. Identification Nos. of Above Persons
Bighorn Associates LLC 11-3516771
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a) |_|
(b) |X|
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4 Sources of Funds
WC
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(e) or 2(f) |_|
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
None
- --------------------------------------------------------------------------------
8. Check if the Aggregate Amount in Row 7 Excludes Certain Shares |_|
- --------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row 7
0
- --------------------------------------------------------------------------------
10. Type of Reporting Person
OO
================================================================================
<PAGE>
CUSIP No. NONE 14D-1 Page 4
================================================================================
1. Name of Reporting Persons; I.R.S. Identification Nos. of Above Persons
Presidio Capital Investment Company, LLC
06-1509220
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a) |_|
(b) |X|
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4 Sources of Funds
N/A
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(e) or 2(f) |_|
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
3,199*
- --------------------------------------------------------------------------------
8. Check if the Aggregate Amount in Row 7 Excludes Certain Shares |_|
- --------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row 7
.97%
- --------------------------------------------------------------------------------
10. Type of Reporting Person
CO
================================================================================
* 1,389 units are owned by T-Two Partnership Acquisition Company, L.P. and
1,810 are owned by Presidio Partnership II Corp., both of which are
directly or indirectly 100% owned by Presidio Capital Investment Company,
LLC
<PAGE>
SCHEDULE 14D-1
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Resources Accrued Mortgage
Investors L.P.-Series 86, a Delaware limited partnership (the "Partnership").
The address of the Partnership's principal executive offices is 5 Cambridge
Center, 9th Floor, Cambridge, Massachusetts 02142.
(b) This Statement relates to an offer by Bighorn Associates LLC, a
Delaware limited liability company (the "Purchaser"), to purchase up to 148,000
of the outstanding units of limited partnership interest ("Units") of the
Partnership at a purchase price of $22 per Unit, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase dated
November 17, 1999 (the "Offer to Purchase") and the related Letter of
Transmittal (which, together with any supplements or amendments, collectively
constitute the "Offer"), copies of which are filed as Exhibits (a)(1) and (a)(2)
hereto, respectively. The information set forth in the Offer to Purchase under
"Introduction" and Section 9 ("Certain Information Concerning your Partnership")
is incorporated herein by reference. At September 30, 1999, the Partnership had
330,004 Units outstanding
(c) The information set forth in the Offer to Purchase in Section 13
("Background of the Offer") is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (d), (g) This Statement is being filed by the Purchaser and Presidio
Capital Investment Company, LLC (collectively, the "Bidders"). The information
set forth in the Offer to Purchase under "Introduction," in Section 11 ("Certain
Information Concerning Us") and in Schedule 1 to the Offer to Purchase is
incorporated herein by reference.
(e) - (f) During the last five years, none of the Bidders nor, to the best
of their knowledge, any of the persons listed in Schedule 1 to 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 was or is subject to a judgment,
5
<PAGE>
decree or final order enjoining further violations of or prohibiting activities
subject to federal or state securities laws or finding any violation with
respect to such laws.
(g) Each of the individual listed on Schedule to the Offer to Purchase is
a citizen of the United States
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) - (b) The information set forth in the Offer to Purchase under
"Introduction," in Section 9 ("Certain Information Concerning Your
Partnership"), in Section 10 ("Conflicts of Interest and Transactions with
Affiliates") and in Section 13 ("Background of the Offer") is incorporated
herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in the Offer to Purchase in Section 12
("Source of Funds") is incorporated herein by reference.
(b) - (c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) - (c), (e) The information set forth in the Offer to Purchase under
"Introduction" and in Section 8 ("Future Plans") is incorporated herein by
reference.
(d) Not applicable.
(f) - (g) The information set forth in the Offer to Purchase in Section 7
("Effects of the Offer") is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) - (b) The information set forth in the Offer to Purchase under
"Introduction," and in Section 11 ("Certain Information Concerning Us") is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
6
<PAGE>
The information set forth in the Offer to Purchase under "Introduction,"
in Section 7 ("Effects of the Offer"), Section 10 ("Conflicts of Interest and
Transactions with Affiliates"), Section 11 ("Certain Information Concerning Us")
and Section 13 ("Background of the Offer") is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Offer to Purchase under "Introduction"
and in Section 16 ("Fees and Expenses") is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) - (d) The information set forth in the Offer to Purchase in Section 15
("Certain Legal Matters") is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the related
Letter of Transmittal, copies of which are filed as Exhibits (a)(1) and (a)(2)
hereto, respectively, is incorporated herein by reference in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated November 17, 1999.
(a)(2) Letter of Transmittal and Related Instructions.
(a)(3) Cover Letter, dated November 17, 1999, from the Purchaser to the
Limited Partners of the Partnership.
7
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
BIGHORN ASSOCIATES LLC
By: Presidio Capital Investment
Company, LLC, member
By /s/ David King
-------------------
David King
President
PRESIDIO CAPITAL INVESTMENT
COMPANY, LLC
By /s/ David King
-------------------
David King
President
Dated: November 17, 1999
8
<PAGE>
EXHIBIT INDEX
Exhibit Description
- ------- -----------
(a)(1) Offer to Purchase, dated November 17, 1999.
(a)(2) Letter of Transmittal and Related Instructions.
(a)(3) Cover Letter, dated November 17, 1999, from the Purchaser to the
Limited Partners of the Partnership.
9
Exhibit (a)(1)
November 17, 1999
Offer to Purchase for Cash
Bighorn Associates LLC
is offering to purchase up to 148,000 units of limited partnership interest in
Resources Accrued Mortgage Investors L.P.-Series 86,
a Delaware Limited Partnership,
for $22 per unit in Cash
Our purchase price is $7 per unit more than the purchase price being offered by
Sutter Opportunity Fund LLC and its affiliates in a competing offer and $10.75
more than the purchase price recently offered by Peachtree Partners.
The general partners of your partnership have recommended that you not accept
the Sutter offer.
Depending on your tax circumstances, there may federal income tax benefits
associated with a tender of your units.
Our offer and your withdrawal rights will expire at 12:00 midnight, New York
City time, on December 15 1999, unless we extend the deadline.
We will purchase up to 148,000 (44.85%) of the outstanding units of limited
partnership interests in your partnership. If more units are tendered to us or
if units have been purchased in the competing offers, we will accept units on a
pro rata basis according to the number of units tendered by each person.
We are an affiliate of your general partners and are making this offer with a
view towards making a profit.
You will not pay any fees or commissions if you tender your units.
Our offer is not subject to any minimum number of units being tendered.
See "Risk Factors" beginning on page 1 of this offer to purchase for a
description of risk factors that you should consider in connection with our
offer, including the following:
o We are making our offer to make a return on our investment which may
conflict with your interest in receiving the highest price for your units.
o Our purchase price of $22 is not based on any third party appraisal or
valuation. No independent person has given an opinion on the fairness of
our offer, and no representation is made by us or the general partner of
your partnership on the fairness of our offer.
o If you tender your units you will be giving up future potential benefits
from owning the units, including receiving any future distributions from
your partnership.
o You may receive more value by retaining your units until your partnership
is liquidated rather than by tendering your units to us.
o We are an affiliate of the general partners of your partnership.
Accordingly, there are certain conflicts of interest for the general
partners of your partnership.
o If we acquire a substantial number of units, we will have substantial
influence on voting decisions by your partnership.
To accept our offer, please execute the enclosed letter of transmittal and
return it to River Oaks Partnership Services, Inc., which is acting as
Information Agent and Depositary for our offer, together with any additional
documents required, in the enclosed pre-addressed, postage paid envelope (see
"Procedures for Tendering Units"). If you have already tendered your units in
the offer being made by Sutter Opportunity Fund, LLC and its affiliates (the
"Sutter Offer") and you desire to tender your units to us, our letter of
transmittal provides for a withdrawal of your tender in the Sutter Offer, which
we will in turn forward to MacKenzie Patterson, Inc. Questions and requests for
assistance or for additional copies of this offer to purchase, the letter of
transmittal should be directed to the Information Agent/Depositary at (877)
842-2412.
November 17, 1999
<PAGE>
TABLE OF CONTENTS
Page
----
INTRODUCTION...................................................................1
RISK FACTORS...................................................................1
THE TENDER OFFER...............................................................3
Section 1. Terms of the Offer. .........................................3
Section 2. Proration; Acceptance for Payment and Payment for Units. ....3
Section 3. Procedures for Tendering Units. .............................4
Section 4. Withdrawal Rights. ..........................................5
Section 5. Extension of Tender Period; Termination; Amendment. .........6
Section 6. Certain Federal Income Tax Consequences......................6
Section 7. Effects of the Offer. .......................................8
Section 8. Future Plans. ...............................................8
Section 9. Certain Information Concerning Your Partnership. ............9
Section 10. Conflicts of Interest and Transactions with Affiliates. ....12
Section 11. Certain Information Concerning Us...........................13
Section 12. Source of Funds. ...........................................13
Section 13. Background of the Offer ....................................14
Section 14. Conditions of the Offer ....................................15
Section 15. Certain Legal Matter .......................................16
Section 16. Fees and Expenses ..........................................17
Section 17. Miscellaneous ..............................................17
Schedule 1 Information With Respect to the Executive Officers and
Directors of NorthStar Capital Investment Corp.
(i)
<PAGE>
INTRODUCTION
We are offering to purchase up to 148,000 units, representing
approximately 44.85% of the outstanding units of limited partnership interest in
your partnership, for the purchase price of $22 per unit, net to the seller in
cash, without interest, less any distributions paid after the date hereof and
prior to the expiration date. We are affiliated with your general partners and
our offer is made upon the terms and subject to the conditions set forth in this
offer to purchase and in the accompanying letter of transmittal.
Our offer will expire at 12:00 midnight, New York City time, on December
15, 1999, unless we have extended the period of time during which the offer is
open. If you desire to accept our offer, you must complete and sign the letter
of transmittal in accordance with the instructions and mail the letter of
transmittal and any other required documents to the Information Agent.
Furthermore, if you have previously tendered your units to Sutter Opportunity
Fund LLC and its affiliates pursuant to the Sutter Offer and you desire to
receive the higher price being offered by us, by initialing the appropriate box
on the cover of our letter of transmittal and returning the letter of
transmittal to our Information Agent by the expiration date of the Sutter Offer,
you will withdraw your tender in the Sutter Offer. We will in turn forward the
withdrawal to MacKenzie Patterson, Inc., the depository for the Sutter Offer.
See "The Tender Offer" Section 3, Procedures for Tendering. You may withdraw
your tender of units to us at any time prior to the expiration date of our
offer.
We have been advised by your general partners that your partnership does
not intend to effect any transfers of units pursuant to the recently concluded
Peachtree Partners offer for units in your partnership. Accordingly, if you
tendered your units to Peachtree Partners in its recently concluded tender offer
and desire to obtain the higher price being offered by us, please complete the
enclosed letter of transmittal and return it to our Information Agent. We will
only be able to accept units previously tendered to Peachtree Partners in its
recently concluded offer to the extent that your general partners reject such
transfers.
Our affiliates currently beneficially own 3,199 units representing
approximately 1% of the outstanding units. None of the units owned by our
affiliates will be tendered in the offer.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT, THE
LETTER OF TRANSMITTAL AND OTHER DOCUMENTS THAT WE HAVE REFERRED YOU TO. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT.
RISK FACTORS
Before deciding whether or not to tender any of your units, you should
consider carefully the following risks and disadvantages of the offer:
Offer Price May Not Represent Fair Market Value
There is no established or regular trading market for your units, nor is
there another reliable standard for determining the fair market value of the
units. Our offer price may not reflect the price that you could receive in the
open market for your units which could be higher than our offer price. According
to Partnership Spectrum, an independent industry publication, between June 1,
1999 and July 31, 1999, a limited number of units traded in the informal
secondary market for units at prices ranging from a high of $12.10 per unit to a
low of $10 per unit, with a weighted average price of $10.48 per unit (not
taking into account commissions and other transactional costs).
<PAGE>
Our Estimate of Net Asset Value May Not Properly Reflect Current Market Value
We have estimated that the net asset value of your partnership as of
September 30, 1999 is $24.82 per unit. Our estimate may not reflect the current
market value of your partnership's assets.
Loss of Future Benefits from Your Ownership of Units
If you tender your units in response to our offer you will transfer to us
all right, title and interest in and to all of the units we accept, including
the right to participate in any future potential benefits represented by the
ownership of the units. Accordingly, you will not receive any future potential
benefits from units you sell to us, such as future distributions by your
partnership and the potential for appreciation in the value of the units you
sell to us. In this regard, your general partners have stated that they
currently intend to make a distribution within the next 90 days.
Possible Increase in Control of Your Partnership by Us
Our affiliates currently beneficially own approximately 1% of the
outstanding units. The more units we acquire, the more we are able to influence
limited partner voting decisions of your partnership, including decisions on the
removal of your general partners, amendment of the partnership agreement, the
sale of substantially all of your partnership's assets and the liquidation of
your partnership.
Alternatives to Selling Us Your Units
Your general partners originally anticipated making mortgage loan
investments with terms of ten to twelve years and liquidating your partnership
by December 31, 2001. Instead of selling us your units you and other limited
partners in your partnership could propose alternative actions such as
liquidating your partnership.
Conflicts of Interest
Since our affiliates receive fees for managing and administering your
partnership and its assets, a conflict of interest exists for your general
partners between continuing the partnership and receiving such fees, and
liquidating the partnership.
Sale of Your Units Will Be a Taxable Transaction
A sale of units to us will be a taxable sale. We believe that most
unitholders will realize a tax loss on a sale of units in our offer. Your
after-tax benefit (or cost) from a sale will be based on a number of factors
including your tax basis in the units sold, whether you sell all of your units
and whether (assuming you sell at a loss) you have capital gains against which
to offset your capital loss. We recommend that you consult with your tax advisor
prior to tendering your units to determine your particular tax situation.
Holding Units May Result in Greater Future Value
You might receive more value if you retain your units until your
partnership is liquidated.
Continuation of the Partnership
Your partnership will continue to be operated as it has in the past.
Accordingly, there may be no way to liquidate your investment in the partnership
in the future until the assets are sold and the partnership is liquidated.
2
<PAGE>
THE TENDER OFFER
Section 1. Terms of the Offer. Upon the terms of the offer, we will accept
(and thereby purchase) up to 148,000 units that are validly tendered on or prior
to the expiration date and not withdrawn in accordance with the procedures set
forth in Section 4 of this offer to purchase. For purposes of this offer, the
term "expiration date" shall mean 12:00 Midnight, New York City time, on
December 15, 1999, unless we have extended the period of time during which the
offer is open, in which case the term "expiration date" shall mean the latest
time and date on which the offer, as extended by us, shall expire. See Section 5
of this offer to purchase for a description of our right to extend the period of
time during which the offer is open and to amend or terminate our offer.
Our offer is subject to satisfaction of certain conditions. The offer is
not conditioned upon any minimum amount of units being tendered. See Section 14,
which sets forth in full the conditions of the offer. We reserve the right (but
in no event shall we be obligated), in our sole discretion, to waive any or all
of those conditions. If, on or prior to the expiration date, any or all of such
conditions have not been satisfied or waived, we may (i) decline to purchase any
of the units tendered, terminate the offer and return all tendered units to
tendering limited partners, (ii) waive all the unsatisfied conditions and,
subject to complying with applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), purchase all units validly tendered,
(iii) extend the offer and, subject to the withdrawal rights of limited
partners, cause the Depositary to retain the units that have been tendered
during the period or periods for which the offer is extended, or (iv) amend the
offer.
Section 2. Proration; Acceptance for Payment and Payment for Units. If the
number of units validly tendered on or before the expiration date (and not
properly withdrawn) is 148,000 or less and no units are purchased prior to such
time under the Sutter Offer, we will accept for payment, subject to the terms
and conditions of the offer, all units so tendered. If more than 148,000 units
are validly tendered on or prior to the expiration date (and not properly
withdrawn and no units are purchased prior to such time under the Sutter Offer),
we will accept for payment an aggregate of 148,000 units so tendered on a pro
rata basis according to the number of units validly tendered by each limited
partner (with appropriate adjustments to avoid purchases of fractional units).
If units are purchased under the Sutter Offer prior to the expiration date of
our offer, we will accept for payment to the extent validly tendered (and not
properly withdrawn) a number of units equal to 148,000 less the number of units
so purchased under the Sutter Offer on a pro rata basis according to the number
of units validly tendered by each limited partner (with appropriate adjustments
to avoid purchases of fractional units).
We will pay for up to the maximum number of units validly tendered and not
withdrawn in accordance with Section 4, as promptly as practicable following the
expiration date. In all cases, the payments for units purchased pursuant to the
offer will be made only after timely receipt by our Depositary of a properly
completed and duly executed letter of transmittal (or a facsimile thereof), and
any other documents required pursuant to the terms hereof or by the letter of
transmittal. (See "Section 3. Procedures for Tendering Units".)
For purposes of the offer, we will be deemed to have accepted for payment
pursuant to the offer, and thereby purchased, validly tendered units when, as
and if we give verbal or written notice to our Depositary of our acceptance of
those units for payment pursuant to the offer. Upon the terms and subject to the
conditions of the offer, payment for units tendered and accepted for payment
pursuant to the offer will in all cases be made through our Depositary, which
will act as agent for tendering limited partners for the purpose of receiving
cash payments from us and by transmitting cash payments to tendering limited
partners. Under no circumstances will interest be paid on the offer price by
reason of any delay in making such payment.
If any tendered units are not purchased for any reason, the letter of
transmittal with respect to such units will be destroyed by us and we will
return any certificates representing such units. If, for any reason, acceptance
for payment of, or payment for, any units tendered pursuant to the offer is
delayed or we are unable to accept for payment, purchase or pay for units
tendered pursuant to the offer, then, without prejudice to our rights under
Section 14 of this offer to purchase, we may retain tendered units and those
units may not be withdrawn except to the extent that the tendering limited
partners are entitled to withdrawal rights as described in Section 4 of this
offer to purchase; subject, however, to our obligation under Rule 14e-1(c) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to pay
limited partners the offer price in respect of units tendered or return those
units promptly after termination or withdrawal of the offer.
3
<PAGE>
Section 3. Procedures for Tendering Units.
Valid Tender. To validly tender units, a properly completed and duly
executed letter of transmittal (or a facsimile thereof) and any other documents
required pursuant to the terms hereof or by the letter of transmittal (including
certificates, if any, representing the units being tendered) must be received by
us on or prior to the expiration date. If you do not provide us with the
certificate(s) representing your units which you would like to tender to us, by
signing the letter of transmittal you are certifying that the certificate(s)
representing your units have been lost or misplaced and agreeing to indemnify us
and your partnership in the manner provided for in the letter of transmittal. In
order to comply with certain restrictions on transfer in the partnership
agreement, a tender which would result in the tendering limited partner owning
less than ten units (four units in the case of a limited partner which is an IRA
or Keogh Plan) will not be effective.
Signature Requirements. If the letter of transmittal is signed by the
registered holder of a unit, then no notarization or signature guarantee is
required on the letter of transmittal. Similarly, if a unit is tendered for the
account of a member firm of a registered national securities exchange, a member
of the National Association of Securities Dealers, Inc. or a commercial bank,
savings bank, credit union, savings and loan association or trust company having
an office, branch or agency in the United States (each an "Eligible
Institution"), no notarization or signature guarantee is required on the letter
of transmittal. However, in all other cases, all signatures on the letter of
transmittal must either be notarized or guaranteed by an Eligible Institution.
In order for you to take part in the offer, your units must be validly
tendered and not withdrawn on or prior to the expiration date.
The method of delivery of the letter of transmittal and all other required
documents (including certificates representing the units being tendered) is at
your option and risk of delivery will be deemed made only when actually received
by our Depositary.
Withdrawal of Units Tendered Pursuant to the Sutter Offer. If you have
tendered your units pursuant to the Sutter Offer and you wish to receive a
greater price for your units by tendering your units to us pursuant to this
offer, you must withdraw your tender in the Sutter Offer by following the
procedures set forth below. In order to withdraw your tender in the Sutter
Offer, you must do so in accordance with the applicable procedures set forth in
Section 4 of the Sutter Offer and the related Letter of Transmittal. If you
require assistance in withdrawing your tender, please call our Information Agent
at (877) 842-2412. The Sutter Offer provides, in relevant part:
"For withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at
the address or the facsimile number set forth in the [Letter of
Transmittal attached to the Sutter Offer]. Any such notice of
withdrawal must specify the name of the person who tendered the
Units to be withdrawn and must be signed by the person(s) who signed
the Letter of Transmittal in the same manner as the Letter of
Transmittal was signed."
For your convenience, our letter of transmittal, when properly completed
and timely delivered to our Information Agent, will enable you to withdraw your
tender pursuant to the Sutter Offer. To properly withdraw your tender in the
Sutter Offer, the letter of transmittal or any other appropriate form of "Notice
of Withdrawal" which complies with the withdrawal requirements of Section 4 of
the Sutter Offer should be sent to our Information Agent (in the case of a
letter of transmittal) or MacKenzie Patterson, Inc. (with respect to all other
Notices of Withdrawal) by no later than December 10, 1999, the expiration date
of the Sutter Offer.
Backup Federal Income Tax Withholding. If you tender your units and you
are not a corporation or foreign individual, you may be subject to 31% backup
federal income tax withholding unless you provide us with your correct taxpayer
identification number ("TIN"). To avoid this backup withholding, you should
complete and sign the Substitute Form W-9 included in the letter of transmittal.
If you tender your units and do not complete the Substitute Form W-9, we will be
required to withhold 31% (and if you fail to provide your TIN, an additional $50
or such other amount as may be imposed by law) from the purchase price payment
made to you. See the instructions to the letter of transmittal and "Section 6.
Certain Federal Income Tax Matters."
4
<PAGE>
FIRPTA Withholding. If you are a foreign person and you tender your units,
we will be required, in certain instances, to withhold a tax equal to 10% of the
amount realized on the sale (i.e., the purchase price plus the Partnership
liabilities allocable to each unit sold) unless you complete and sign the FIRPTA
Affidavit included in the letter of transmittal certifying your TIN and your
address and that you are not a foreign person. See the instructions to the
letter of transmittal and "Section 6. Certain Federal Income Tax Matters."
Other Requirements. By executing the letter of transmittal, you are
irrevocably appointing us and our designees, in the manner set forth in the
letter of transmittal, each with full power of substitution, to the full extent
of your rights with respect to the units tendered by you and accepted for
payment and purchased by us. Such appointment will be effective when, and only
to the extent that, we accept the tendered units for payment. Upon such
acceptance for payment, all prior proxies given by you with respect to the units
will, without further action, be revoked, and no subsequent proxies may be given
(and if given will not be effective). We and our designees will, as to those
units, be empowered to exercise all of your voting and other rights as a limited
partner as we in our sole discretion may deem proper at any meeting of limited
partners, by written consent or otherwise. We reserve the right to require that,
in order for units to be deemed validly tendered, immediately upon our
acceptance for payment for the units, we must be able to exercise full voting
rights with respect to the units, including voting at any meeting of limited
partners then scheduled. In addition, by executing the letter of transmittal,
you also assign to us all of your rights to receive distributions from the
partnership with respect to units which we have accepted for payment and
purchased pursuant to the offer. (See "Section 6. Certain Federal Income Tax
Matters".)
Determination of Validity; Rejection of Units; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of units pursuant to our offer will be determined by us, in our sole discretion,
which determination shall be final and binding. We reserve the absolute right to
reject any or all tenders of any particular unit determined by us not to be in
proper form or if the acceptance of, or payment for, that unit may, in the
opinion of our counsel, be unlawful. We also reserve the right to waive any
defect or irregularity in any tender with respect to any particular unit of any
particular limited partner, and our interpretation of the terms and conditions
of the offer (including the letter of transmittal and the instructions thereto)
will be final and binding. Neither us, our Depositary, nor any other person will
be under any duty to give notification of any defects or irregularities in the
tender of any unit or will incur any liability for failure to give any such
notification.
Binding Agreement. A tender of a unit pursuant to any of the procedures
described above and the acceptance for payment of such unit will constitute a
binding agreement between the tendering unitholder and us on the terms set forth
in this offer and the related letter of transmittal.
Section 4. Withdrawal Rights. You may withdraw tendered units at any time
prior to the expiration date and after the 60th day following the date of this
offer to purchase, if the units have not been previously accepted for payment.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by our Depositary at the address
set forth on the back cover of this offer to purchase. Any such notice of
withdrawal must specify the name of the person who tendered, the number of units
to be withdrawn and must be signed by the person(s) who signed the letter of
transmittal in the same manner as the letter of transmittal was signed.
If purchase of, or payment for, a unit is delayed for any reason, or if we
are unable to purchase or pay for a unit for any reason, then, without prejudice
to our rights under the offer, we may cause our Depositary to retain tendered
units and such units may not be withdrawn except to the extent that a tendering
limited partner is entitled to withdrawal rights as set forth in this Section 4;
subject, however, to our obligation, pursuant to Rule 14e-1(c) under the
Exchange Act, to pay the offer price in respect of units tendered or return
those units promptly after termination or withdrawal of the offer.
Any units properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of our offer. However, withdrawn units may be
re-tendered by following any of the procedures described in Section 3 at any
time prior to the expiration date.
5
<PAGE>
Section 5. Extension of Tender Period; Termination; Amendment. We
expressly reserve the right, in our sole discretion, at any time and from time
to time (i) to extend the period of time during which our offer is open and
thereby delay acceptance for payment of, and the payment for, any unit, (ii)
upon the occurrence of any of the conditions specified in Section 14 of this
offer to purchase, to delay the acceptance for payment of, or payment for, any
units not already accepted for payment or paid for and (iii) to amend our offer
in any respect (including, without limitation, by increasing the consideration
offered, increasing or decreasing the number of units being sought, or both).
Notice of an amendment will promptly be disseminated to you in a manner
reasonably designed to inform you of the change in compliance with Rule 14d-4(c)
under the Exchange Act. An extension of the offer will be followed by a press
release or public announcement which will be issued no later than 9:00 a.m., New
York City time, on the next business day after the scheduled expiration date of
our offer, in accordance with Rule 14e-1(d) under the Exchange Act.
If we extend the offer, or if we delay payment for a unit (whether before
or after its acceptance for payment) or are unable to pay for units pursuant to
our offer for any reason, then, without prejudice to our rights under the offer,
we may cause our Depositary to retain tendered units and those units may not be
withdrawn except to the extent tendering limited partners are entitled to
withdrawal rights as described in Section 4; subject, however, to our
obligation, pursuant to Rule 14e-1(c) under the Exchange Act, to pay the offer
price in respect of units tendered or return those units promptly after
termination or withdrawal of the offer.
If we make a material change in the information concerning the offer or if
we waive a material condition to our offer, we will extend the offer and
disseminate additional tender offer materials to the extent required by Rules
14d-4(c) and 14d-6(d) under the Exchange Act. The minimum period during which an
offer must remain open following any material change in the information
concerning the offer will depend upon the facts and circumstances, including the
relative materiality of the change in information. In the Commission's view, an
offer should remain open for a minimum of five business days from the date the
material change is first published, sent or given to securityholders, and if
material changes are made with respect to information that approaches the
significance of price or the percentage of securities sought, a minimum of ten
business days may be required to allow for adequate dissemination to
securityholders and for investor response. As used in this offer to purchase,
"business day" means any day other than a Saturday, Sunday or a federal holiday,
and consists of the time period from 12:01 a.m. through 12:00 Midnight, New York
City time.
Section 6. Certain Federal Income Tax Matters. The following summary is a
general discussion of certain federal income tax considerations that should be
relevant to you in connection with a sale of units in our offer. This summary is
based on the Internal Revenue Code of 1986, as amended (the "Code"), applicable
Treasury regulations thereunder, administrative rulings, practice and procedures
and judicial authority, all as of the date of our offer. All of the foregoing
are subject to change, and any such change could affect the continuing accuracy
of this summary. This summary does not discuss all aspects of federal income
taxation that may be relevant to you in light of your specific circumstances or
to certain types of investors 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. Sales of units pursuant to our offer will be
taxable transactions for federal income tax purposes, and may also be taxable
transactions under applicable state, local, foreign and other tax laws. Your
resulting tax consequences will depend, in part, on your personal tax situation.
YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES,
INCLUDING STATE AND LOCAL TAX CONSEQUENCES, TO YOU OF SELLING UNITS IN OUR
OFFER.
You will recognize gain or loss on a sale of units in our offer equal to
the difference between (i) your "amount realized" on the sale and (ii) your
adjusted tax basis in the units sold. The amount of your adjusted tax basis will
vary depending upon your particular circumstances, but generally will equal your
cash investment in your units, increased by your share of your partnership's
income and gain and decreased by your share of your partnership's losses and
distributions. The "amount realized" with respect to a unit sold will be a sum
equal to the amount of cash received by you for the unit plus the amount of your
partnership's liabilities that are allocable to the unit.
You will be allocated a share of your partnership's taxable income or loss
with respect to the units sold by you in accordance with the provisions of your
partnership's limited partnership agreement concerning transfers of units. Such
allocations and any cash distributed by your partnership to you or for your
benefit will affect your adjusted tax basis in your units and, therefore, your
taxable gain or loss upon a sale of units in our offer. In this regard, if you
tender
6
<PAGE>
your units, you will be allocated a pro rata share of taxable income with
respect to your units sold in our offer through the end of the calendar quarter
in which the units are sold, but we will receive all future distributions made
with respect to your units. The foregoing taxable income will include ordinary
income estimated at $11.19 per unit attributable to your partnership's receipt
in August 1999 of equity participation and other payments as a result of the
sale of an office building in Berkeley, California. See "Section 9. Certain
Information Concerning Your Partnership."
Based on the results of your partnership's operations through December 31,
1998, and without giving effect to your partnership's operations, transactions
or distributions after that date other than the $11.19 per unit of income
described above, we estimate that, depending on your date of entry into your
partnership, if you sell your units in our offer and you purchased your units in
your partnership's original offering, you will realize a loss for federal income
tax purposes of between ($26.69) per unit for units acquired in April 1986 and
($27.61) per unit for units acquired in June 1987. For purposes of the passive
activity loss rules (discussed below), we estimate that such loss is 100%
allocable to your partnership's remaining mortgage loan asset. Based on your
partnership's treatment of its interest income from the mortgage loan as
non-passive activity income, we believe that such loss generally should be
deductible by you in the year of sale free of the passive activity loss
limitation (but subject to any other applicable limitations) even if you are
unable to sell all of your units in our offer.
Your gain or loss on a sale of a unit in our offer generally will be
treated as a capital gain or loss if you held the unit as a capital asset.
(However, the portion of your gain, if any, attributable to inventory or any
other non-capital assets held by your partnership would be taxable as ordinary
income.) Your capital gain or loss will be treated as long-term capital gain or
loss assuming your holding period for the unit exceeds 12 months. 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, their 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 are deductible only to the extent of
capital gains, except that non-corporate taxpayers may deduct up to $3,000 of
capital losses in excess of the amount of their capital gains against 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
would otherwise 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 your losses from your partnership's passive activities to offset your
non-passive activity income. We estimate that 100% of your loss on a sale of
your units in our offer is allocable to your partnership's mortgage loan asset,
and that 100% of such loss should be deductible by you in the year of sale free
of the passive activity loss limitation (based on your partnership's treatment
of its income from this asset as non-passive activity income). In any event, if
you sell all your units in our offer, then your loss on the sale could be
deducted by you in full in the year of sale (subject to any other applicable
limitations).
In order to avoid liability for federal estimated tax penalties, an
individual generally is required to make quarterly estimated tax payments on
account of his annual tax liability. Penalties generally may be avoided by the
individual's paying at least 90% of his taxes due for the current year or a
percentage of his prior year's tax equal to 105% if the preceding tax year is
1998, 106% if the preceding tax year is 1999 or 2000, 112% if the preceding tax
year is 2001 and 110% if the preceding tax year is 2002 or thereafter.
Accordingly, if you are an individual and you elect to pay estimated taxes for
1999 equal to 105% of your tax liability for 1998, you would be able to defer
payment of taxes associated with a sale of your units until April, 2000, whereas
if you elect to pay estimated taxes for 1999 equal to 90% of your estimated tax
liability for 1999, you will have to make quarterly estimated tax payments on
account of your tax liability on a sale of your units in 1999.
If you are a tax-exempt investor, you generally should not realize
unrelated business taxable income upon a sale of your units in our offer
assuming you do not sell your units at a gain (as determined for income tax
purposes). (If you sell your units at a gain, then we estimate that 100% of your
gain would be allocable to your partnership's motel property, and would be
treated as unrelated business taxable income.) However, if you are a tax-exempt
7
<PAGE>
investor described in section 501(c)(7), (c)(9), (c)(17) or (c)(20) of the Code,
you should consult your tax advisor concerning the application of "set aside"
and reserve requirements to a sale of your units.
In addition to federal income tax, you may be subject to state and local
taxes on your gain (if any) on a sale of your units. You should consult with
your own professional tax advisors concerning the state and local tax
consequences of a sale of your units.
Information Reporting, Backup Withholding and FIRPTA. If you sell your
units, you must report the sale by filing a statement with your federal income
tax return for the year of sale. To prevent the possible application of back-up
federal income tax withholding of 31% with respect to the payment of the
purchase price, you will have to provide us with your correct taxpayer
identification number. See the instructions to the letter of transmittal.
If you are a foreign person (as defined in the Code), your gain, if any,
on the sale of your units in our offer will be subject to federal income tax
under the Foreign Investment in Real Property Tax Act, and we will be required
to deduct and withhold 10% of the amount realized by you on the sale. Amounts
withheld would be creditable against your federal income tax liability and, if
in excess thereof, you could obtain a refund from the Internal Revenue Service
by filing a U.S. federal income tax return. See the instructions to the letter
of transmittal.
Section 7. Effects of the Offer.
Limitations on Resales. Under the partnership agreement, transfers of
units which in the opinion of counsel to your partnership would cause a
termination of your partnership for federal income tax purposes (which
termination may occur when 50% or more of the units are transferred in a
twelve-month period) are not permitted. Depending upon the number of units
tendered in our offer and the Sutter Offer, sales of units on the secondary
market for the twelve-month period following completion of our offer may be
limited. The partnership will not process any requests for transfers of units
during such twelve-month period which the general partners of your partnership
believe may cause a tax termination. In determining the number of units subject
to our offer, we took this restriction into account so as to permit historical
levels of transfers to occur after consummation of our offer without violating
this restriction.
Effect on Trading Market. There is no established public trading market
for the units and, therefore, a reduction in the number of limited partners
should not materially further restrict your ability to find purchasers for your
units through secondary market transactions.
Influence on Limited Partner Voting Decisions by Us and our Affiliates. We
will have the right to vote each unit that we purchase in the offer. Depending
on the number of units that we purchase in the offer, we and our affiliates
could be in a position to influence the outcome of voting decisions with respect
to your partnership. Accordingly, we and our affiliates could (i) prevent
non-tendering limited partners from taking action they desire but that we and
our affiliates oppose and (ii) take action desired by us and our affiliates but
opposed by non-tendering limited partners. Under the partnership agreement,
limited partners holding a majority of the units are entitled to take action
with respect to a variety of matters, including: removing your general partners;
dissolving your partnership; selling all or substantially all of your
partnership's assets; effecting material changes in the investment objectives
and policies of your partnership; and causing most types of amendments to the
partnership agreement. When voting on matters, we and our affiliates will vote
units owned and acquired by us, in our interest, which, because of our
affiliation with your general partners, may also be in the interest of your
general partners.
The units are registered under the Exchange Act, which means, among other
things, that your partnership is required to furnish certain information to its
limited partners and to the Commission and comply with the Commission's proxy
rules in connection with meetings of, and solicitation of consents from, limited
partners. Our purchase of units pursuant to the offer will not result in the
units becoming eligible for deregistration under Section 12(g) of the Exchange
Act.
Section 8. Future Plans. We are seeking to acquire units primarily for
investment purposes and with a view to making a profit. Following the completion
of our offer, we and/or persons related to or affiliated with us may acquire
additional units. Any such acquisition may be made through private purchases,
through one or more future tender offers or by any other means deemed advisable.
Any such acquisition may be at a price higher or lower than the price to be paid
for the units in our offer, and may be for cash or other consideration. We also
may
8
<PAGE>
consider disposing of some or all of the units in our offer to persons not yet
determined, which may include our affiliates. There can be no assurance,
however, that we will initiate or complete any subsequent transaction during any
specific time period following the expiration date or at all.
We do not have any present plans or intentions with respect to an
extraordinary transaction, such as a merger, reorganization or liquidation,
involving your partnership or a sale or refinancing of any of your partnership's
properties. However, we expect that consistent with its fiduciary obligations,
the general partner of your partnership will review opportunities presented to
it to engage in transactions which could benefit your partnership, such as sales
or refinancings of assets or a combination of your partnership with one or more
other entities, with the objective of seeking to maximize returns to limited
partners.
Although no distribution has been declared by your partnership, your
partnership has stated in its 10Q for the nine months ended September 30, 1999
that it is anticipated that your partnership will make a distribution from its
current cash reserves within the next 90 days due to your partnership's receipt
in August 1999 of equity participation and other payments as a result of the
sale of an office building in Berkeley, California. See "Section 9. Certain
Information Concerning Your Partnership." Your partnership further states that
it is not presently possible to determine the exact amount of such distribution
at this time as resources will be retained for both anticipated and
unanticipated future partnership needs. In the event that any such distribution
is made prior to the expiration date of our offer, the purchase price will be
reduced by the amount of such distribution.
Section 9. Certain Information Concerning Your Partnership. Information
included herein concerning your partnership is derived from your partnership's
publicly-filed reports. Additional financial and other information concerning
your partnership is contained in your partnership's annual reports on Form 10-K,
quarterly reports on Form 10-Q and other filings with the Commission. Such
reports and other documents may be examined and copies may be obtained from the
offices of the Commission at 450 Fifth Street, N.W., Washington, D.C 20549, and
at the regional offices of the Commission located in the Northwestern Atrium
Center, 500 Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World
Trade Center, New York, New York 10048. Copies should be available by mail upon
payment of the Commission's customary charges by writing to the Commission's
principal offices at 450 Fifth Street, N.W., Washington, D.C. 20549. The
materials may also be reviewed through the Commission's Web site
(http://www.sec.gov).
Your partnership was organized on September 25, 1985 under the laws of the
State of Delaware. Its principal executive offices are located at 5 Cambridge
Center, 9th floor, Cambridge, Massachusetts 02142. Its telephone number is (617)
234-3000. Your partnership was formed for the purpose of investing in "zero
coupon" junior mortgage loans which were secured by real property. Your general
partners originally anticipated making junior loans which would be satisfied
within ten to twelve years after funding.
Presidio Capital Investment Company, LLC, the entity which is our sole
member, and certain of its affiliates and affiliates of your general partners,
have entered into a services agreement with AP-PCC III, L.P. pursuant to which
AP-PCC III, L.P. was retained to provide asset management and investor relation
services to your partnership and other entities affiliated with your
partnership.
As a result of this agreement, AP-PCC III, L.P. has the duty to direct the
day to day affairs of your partnership, including, without limitation, reviewing
and analyzing potential sale, financing or restructuring proposals regarding
your partnership's assets, preparation of all partnership reports, maintaining
partnership records and maintaining bank accounts of your partnership. AP-PCC
III, L.P. is not permitted, however, without the consent of our affiliate
Presidio Capital Corp., or as otherwise required under the terms of your
partnership's agreement of limited partnership to, among other things, cause
your partnership to sell or acquire an asset or file for bankruptcy.
In order to facilitate the provision by AP-PCC III, L.P. of the asset
management services and the investor relation services, effective October 25,
1999, the officers and directors of your managing general partner resigned and
nominees of AP-PCC III, L.P. were elected as the officers and directors of your
managing general partner. AP-PCC III, L.P. is an affiliate of Winthrop Financial
Associates, a Boston based company that provides asset management services,
investor relation services and property management services to over 150 limited
partnerships which own commercial property and other assets.
9
<PAGE>
On October 14, 1999, Allan Rothschild, the then President of your
administrative general partner, received a telephone call from C.E. Patterson,
President of Mackenzie Patterson, Inc., an affiliate of certain purchasers in
the Sutter Offer. During the telephone conversation, Mr. Patterson indicated
that his affiliates were interested in acquiring your partnership, including
your general partners' interest in your partnership. Mr. Rothschild responded
that the general partners' interest was not for sale and that any offer to
acquire your partnership would be evaluated in light of the best interests of
the limited partners.
On October 15, 1999, Mr. Rothschild received a letter from Mr. Patterson
containing an offer to purchase your general partners' interest in your
partnership for $600,000 in conjunction with an offer to purchase all of the
limited partnership interests in your partnership for $12 per unit subject to
possible upward adjustment. Mr. Patterson indicated in his letter that he would
expect the proposed transaction to close in January 2000. Mr. Patterson's letter
also contained an implied threat to proceed on a hostile basis if his "friendly"
approach failed.
Your general partners did not consider the Patterson offer to be in the
best interest of your partnership or its limited partners. Accordingly, neither
Mr. Rothschild nor any other representative of your general partners responded
to the Patterson offer.
On November 3, 1999, your general partners received a letter from counsel
to the purchasers in the Sutter Offer notifying them of the offer by Sutter
Opportunity Fund LLC and its affiliates to purchase units for $15 per unit and
providing a copy of the Sutter Offer offering materials. The letter also
contained a request that your partnership comply with certain provisions of the
Exchange Act by either providing the purchasers in the Sutter Offer with a list
of the name and address of, and the number of units held by, each limited
partner of your partnership, or agreeing to mail the Sutter Offer offering
materials to limited partners.
On November 5, 1999, a representative of your general partners telephoned
a representative of the purchasers in the Sutter Offer and stated that your
partnership would neither provide the requested list of limited partner
information nor agree to mail the Sutter Offer offering materials, and that a
letter from your partnership's legal counsel would be forthcoming.
On November 5, 1999, your partnership's legal counsel mailed a letter
written on behalf of your partnership to a representative of the purchasers in
the Sutter Offer. In the letter counsel indicated that (i) the Sutter Offer was
for the purchase of any and all outstanding units; (ii) your partnership's
agreement of limited partnership prohibited the assignment of units which would
in the opinion of counsel for your partnership result in a termination of your
partnership under the Internal Revenue Code and any such purported assignment
was void and ineffectual, (iii) the Sutter Offer specifically acknowledged that
your partnership could terminate for federal income tax purposes as a result of
the consummation of the Sutter Offer and (iv) the provisions of your
partnership's agreement of limited partnership prevent the Sutter Offer from
being fully consummated in accordance with its terms and, accordingly, your
partnership was not required to comply with the November 3rd request.
On November 12, 1999, the Sutter Offer was amended to reduce the number of
units being sought to 165,001 units and your general partners received a letter
from counsel to the purchasers in the Sutter Offer renewing the request
contained in counsel's November 3rd letter. Your partnership then notified the
purchasers in the Sutter Offer that your partnership had elected to mail the
Sutter Offer offering materials to limited partners.
On November 16, 1999, your partnership sent a letter to limited partners.
In the letter your partnership (i) strongly recommended that limited partners
reject both the Sutter Offer and the offer by Peachtree Partners, (ii) disclosed
that the recommendation was based on your partnership's belief that both the
Sutter offer and the Peachtree offer were being made at prices substantially
below the value of your units, (iii) disclosed that your partnership believed
that the Peachtree offer violated certain provisions of the partnership
agreement and that your partnership would not process any assignment of units
purported to be made under the Peachtree offer, (iv) disclosed that limited
partners would be receiving within the next few days an offer from an affiliate
of the general partners of your partnership to purchase your units at a price
substantially above the price provided for in both the Sutter Offer and the
Peachtree offer and (v) stated because of the affiliation with the general
partners, your partners would be making no recommendation on the affiliate's
offer to purchase your units.
10
<PAGE>
Your Partnership's Current Investments. Your partnership currently holds
(i) a zero-coupon second mortgage loan secured by a 582 unit apartment complex
in Los Angeles, California, and (ii) fee title to a 123 guest room Comfort Inn
located in Richmond, Virginia. In August 1999, an entity in which your
partnership held an equity participation sold its sole asset, a 146,470 office
building in Berkeley, California, to an unaffiliated third party. In connection
with this sale, your partnership received $3,887,555 representing repayment of
an outstanding $550,000 note and its share of participation in sale proceeds.
Also, approximately $218,000 was held back in accordance with the sale agreement
for unanticipated costs related to the sale.
The Second Mortgage Loan. Your partnership is the holder of a second
mortgage loan secured by a 582 unit apartment complex in Los Angeles,
California. This loan, which was restructured in 1997, has a principal balance
of $5,000,000, bears interest at a rate of 7% per annum and matures in February
2017. West Palm Associates ("West Palm"), the obligor under the note, is not
required to make any payments of principal or interest on the note until
maturity. The current balance of the first mortgage encumbering West Palm's
property, which loan is senior to your partnership's loan, is approximately
$38,900,000. The first mortgage loan bears interest at a rate of 9.125% per
annum and matures on April 1, 2006. The first mortgage provides for payments of
interest only in the amount of $295,796 per month through April 2001 and
thereafter payments of principal and interest equal to $329,777 per month. The
scheduled principal balance at maturity of the first mortgage loan is
approximately $36,381,000. The 1988 financial statements of West Palm disclosed
that (i) West Palm has continued to sustain operating losses since emerging from
reorganization proceedings in 1997, (ii) based upon projected cash deficits for
1999, it is questionable whether West Palm will be able to make all of the
scheduled mortgage payments and (iii) this condition indicates that West Palm
may be unable to continue as a going concern.
West Palm has approached your partnership seeking to restructure your
partnership's loan. After a series of negotiations, the current proposal
provides for the loan to be restructured so that your partnership would receive
from the proceeds of a sale of West Palm's property, after satisfaction of all
prior loans, certain expenses and closing costs, an amount equal to the first
$1,200,000 of the remaining sale proceeds, if any, plus 60% of all additional
sales proceeds. Your general partners are evaluating this proposal in light of
the fact that (i) if the first mortgage lender were to foreclose, your
partnership's interest could be extinguished and (ii) your partnership's loan
does not mature until 2017 with no required payments prior to such date. The
main benefit to your partnership of this proposal is that it provides an
incentive to West Palm to seek to dispose of its property currently which could
result in your partnership receiving a return on its loan. As set forth in
Section 10. "Conflicts of Interest and Transactions with Affiliates", affiliates
of the general partners of your partnership hold certain interests in West Palm.
Accordingly, a conflict of interest could arise in connection with the loan
restructuring.
The Motel. On April 1, 1993, your partnership acquired title by
foreclosure and assumed ownership responsibilities of a motel property, the
Richmond Comfort Inn Executive Center, located in Richmond, Virginia. Your
partnership acquired title by foreclosure to this property subject to a first
mortgage. The Comfort Inn is a limited service motel situated on approximately
2.5 acres of land and it contains 123 guest rooms. This property is subject to a
first mortgage loan which had a principal balance of $3,342,756 as of September
30, 1999. The interest rate on the loan is adjustable every five years with a
current interest rate of 8.5% effective through April 2002 and is based on a 2%
premium over the Federal Home Loan Bank of Atlanta Five Year Advance Rate. The
loan presently requires monthly payments of interest and principal aggregating
$33,701. The lender is permitted to accelerate the note at any time on six
months notice. Your partnership has not received a notice of acceleration from
the lender.
Real Estate and Accumulated Depreciation.
Set forth below is a table showing the gross carrying value and
accumulated depreciation and federal tax basis, as of December 31, 1998, of the
motel property owned by your partnership:
Gross Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
- -------- ------------ ------------ ------ ------ ---------
Richmond Comfort Inn $4,539,949 $ 574,571 7/40 yr. S/L $3,965,378
11
<PAGE>
Selected Financial Data.
The following is a summary of certain financial data for your partnership
for the periods indicated. The summary financial information for your
partnership for the years ended 1998, 1997 and 1996 is based on audited
financial statements. The summary financial information for the nine months
ended September 30, 1999 and 1998 is based on unaudited financial statements.
Selected Financial Data
<TABLE>
<CAPTION>
Fiscal Year Ended December 31, Nine Months Ended
September 30,
1998 1997 1996 1999 1998
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Operating Income - Real Estate $ 1,452,505 $ 1,570,960 $ 1,712,325 $ 1,180,681 $ 1,131,445
Mortgage Loan Interest Income 1,341,701 131,471 3,681,789 1,405,993 1,341,701
Short-Term Investment Interest 337,856 424,271 202,876 155,333 288,264
Total Revenues 3,162,173 2,242,929 5,764,309 2,882,262 2,783,430
(Recovery of) Provision for
Loan Losses (1,129,857) 1,736,105 (3,188,383) (2,481,562) (1,050,832)
Total Expenses 648,154 3,468,649 (1,349,607) (1,171,540) 286,531
Net Income (Loss) 2,514,019 (1,225,720) 7,113,916 4,053,802 2,496,899
Net Income (Loss) Per
Unit 7.24 (3.53) 20.48 11.67 7.19
As of December 31, As of September 30
1998 1997 1996 1999 1998
------------ ------------ ------------ ------------ ------------
Balance Sheet Data:
Total Assets $ 8,786,130 $ 13,753,749 $ 19,540,249 $ 11,847,446 $ 8,763,450
Total Liabilities 4,995,624 5,477,262 5,869,570 4,003,138 4,990,064
Partners Equity - (330,004 units
issued and outstanding) 3,790,506 8,276,487 13,670,679 7,844,308 3,773,386
Statements of Cash Flow Data:
Cash and Cash Equivalents 4,639,050 8,273,293 3,769,118 7,656,266 4,649,122
Net Cash provided by
Operating Activities 1,153,989 126,276 207,459 804,802 1,048,819
</TABLE>
Section 10. Conflicts of Interest and Transactions with Affiliates. Your
general partners have certain conflicts of interest with respect to the offer as
set forth below.
Voting by Us and Our Affiliates. As a result of the offer, we and our
affiliates may be in a position to influence the outcome of partnership
decisions on which limited partners may vote. This means that (i) non-tendering
limited partners could be prevented from taking action they desire but that we
and our affiliates oppose and (ii) we and our affiliates may be able to take
action desired by us and our affiliates but opposed by non-tendering limited
partners. (See "Section 7. Effects of the Offer".)
Transactions with Affiliates. Your administrative general partner is
entitled to receive an asset management fee for services rendered in the
administration and management of your partnership's operations equal to 1/4 of
1% per annum of the Net Asset Value of your partnership, as defined in the your
partnership's Limited Partnership Agreement. Payment of the asset management fee
was deferred until commencement of the disposition of your partnership's
mortgage loans, with interest on the amount deferred at 10% per annum,
compounded annually. Your administrative general partner earned $114,114,
including accrued interest of $111,674 for the nine months ended September 30,
1998 while no asset management fee was earned for the nine months ended
September 30, 1999. For the years ended December 31, 1998, 1997 and 1996, your
administrative general partner earned asset management fees of $75,334, $151,989
and $162,567, respectively, including accrued interest of $73,527, $144,758 and
$158,607. In May 1999, your administrative general partner was paid $891,608
representing interest on the
12
<PAGE>
deferred asset management fee. In addition, your administrative general partner
was paid asset management fees of $174,298 in August 1998, $193,426 in May 1997
and $54,134 in July 1997. At September 30, 1999, your partnership owed $460,892
in asset management fees.
Your administrative general partner is also entitled to receive a mortgage
servicing fee at an annual rate of 1/4 of 1% per annum of the principal balance
of your partnership's mortgage loans outstanding from time to time. Payment of
the mortgage servicing fee is deferred until disposition of the applicable
mortgage loan, with interest on the amount deferred at 10% per annum, compounded
annually. Your administrative general partner earned $33,352, including accrued
interest of $10,356 for the nine months ended September 30, 1998, while no
mortgage servicing fee was earned for the nine months ended September 30, 1999.
For the years ended December 31, 1998, 1997 and 1996, your administrative
general partner earned mortgage servicing fees of $33,943, $71,880 and $93,527,
respectively, including accrued interest of $20,378, $42,817 and $28,120. In
addition, your administrative general partner was paid mortgage servicing fees
of $43,528 in August 1998, $381,648 in July 1998, $197,600 in June 1997, $58,900
in May 1997 and $86,827 in June 1996.
In addition, affiliates of your general partners hold a 5% special limited
partnership interest in West Palm and own promissory notes of West Palm which
are secured by an approximately 35.7% limited partner interest in West Palm. To
the extent any amounts are paid to such affiliates on account of the loans
secured by the limited partnership interests, your partnership is entitled to
50% of such amounts.
Section 11. Certain Information Concerning Us. We are Bighorn Associates
LLC, a Delaware limited liability company formed for the purpose of making the
offer. We are wholly-owned by Presidio Capital Investment Company LLC, a
Delaware limited liability company controlled by NorthStar Capital Investment
Corp., a Maryland corporation. Our principal executive office is at 527 Madison
Avenue, New York, New York 10022.
The names, positions and business addresses of the directors and executive
officers of NorthStar Capital Investment Corp., as well as a biographical
summary of the experience of such persons for the past five years or more, are
set forth on Schedule 1 attached hereto and are incorporated herein by
reference.
Except as otherwise set forth herein, (i) neither we, Presidio Capital
Corp., Presidio Capital Investment Company, LLC, NorthStar Capital Investment
Corp. (collectively, the "Presidio Entities") to the best of our knowledge, the
persons listed on Schedule 1, nor any affiliate of the foregoing beneficially
owns or has a right to acquire any units, (ii) neither we, any Presidio Entity,
to the best of our knowledge, the persons listed on Schedule 1, nor any
affiliate thereof or director, executive officer or subsidiary of us or the
Presidio Entities. has effected any transaction in the units within the past 60
days, (iii) neither we, any Presidio Entity, to the best of our knowledge, any
of the persons listed on Schedule 1, nor any director or executive officer of us
or the Presidio Entities, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of your
partnership, including, but not limited to, contracts, arrangements,
understandings or relationships concerning the transfer or voting thereof, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies, (iv) there have
been no transactions or business relationships which would be required to be
disclosed under the rules and regulations of the Commission between us, any
Presidio Entity, or, to the best of our knowledge, the persons listed on
Schedule 1, on the one hand, and your partnership or its affiliates, on the
other hand, and (v) there have been no contracts, negotiations or transactions
between us, any Presidio Entity, or, to the best of our knowledge, the persons
listed on Schedule 1, on the one hand, and your Partnership or its affiliates,
on the other hand, concerning a merger, consolidation or acquisition, tender
offer or other acquisition of securities, an election of directors or a sale or
other transfer of a material amount of assets.
Section 12. Source of Funds. We expect that approximately $3,256,000
(exclusive of fees and expenses) will be required to purchase all of the 148,000
units we are seeking in this offer. We plan to obtain the funds necessary to
consummate the offer (including fees and expenses) from capital contributions
directly or indirectly from Presidio Capital Investment Company, LLC, which has
a net worth substantially greater than the amount required to purchase the
units. (See "THE TENDER OFFER - Section 11. Certain Information Concerning Us".)
13
<PAGE>
Section 13. Background of the Offer.
Establishment of Purchase Price. We are offering to purchase units which
are a relatively illiquid investment and which do not presently generate current
income. We are not offering to purchase your partnership's underlying assets.
Consequently, we do not believe that the underlying asset value of your
partnership is determinative in arriving at the purchase price. Nevertheless, as
set forth below, we have determined an estimated net asset value for your
partnership.
With respect to your partnership's mortgage investment, your partnership
has stated in its Annual Report on Form 10K for the year ended December 31, 1998
that it is unlikely that your partnership will realize any proceeds from this
investment. However, in light of the proposal submitted by West Palm and the
various uncertainties related to the repayment of your partnership's mortgage
investment (see "Section 9"), we have attributed a value of $1,200,000 to your
partnership's mortgage investment.
With respect to your partnership's motel property, we utilized an income
capitalization methodology to determine a liquidation value for the property.
This method involves applying a capitalization rate to the property's net
operating income (revenues less operating expenses). A capitalization rate is a
percentage (rate of return) commonly applied by purchasers of properties to net
operating income to determine the value of income producing real property. We
applied a 12% capitalization rate to the annualized net operating income of the
motel property for the nine months ended September 30, 1999 and then applied a
12% capitalization rate. We then deducted from the resulting amount estimated
costs of selling the motel property (4% of gross property value) as well as the
debt encumbering the motel property at September 30, 1999. Using this
methodology, we derived a value for the motel property of $418,641.
To determine the estimated net asset value of your partnership, we added
to the value we attributed your partnership's mortgage investment and the net
property value of the motel property, the net unencumbered cash of your
partnership at September 30, 1999, which net amount equaled $7,003,678. The
resulting estimated net asset value of your partnership is $8,622,319, or $24.82
per unit (based upon the percentage of proceeds to which limited partners are
entitled to receive). The following chart summarizes our determination of the
estimated net asset value of your partnership.
Estimated Value of Mortgage Investment $ 1,200,000
Estimated Value of Motel Property
1999 Annualized Net Operating Income $ 470,175
Capitalization Rate 12%
Gross Property Value $ 3,918,122
Selling Costs (156,725)
Mortgage Debt at September 30, 1999 ($3,342,756)
Net Property Value $ 418,641
Current Unencumbered Cash Reserves $ 7,003,678
Estimated Net Asset Value $ 8,622,319
Estimated Net Asset Value per Unit $ 24.82
We believe that the above methodology is an appropriate method for
determining the net asset value of your partnership's assets. The utilization of
different valuation methods, capitalization rates or assumptions also could be
appropriate. In this regard, you should be aware that the use of lower discount
rates would result in a higher value. Furthermore, you should understand that
other appropriate valuation methods could yield a higher value.
The purchase price represents the price at which we are willing to
purchase the units. No independent person has been retained to evaluate or
render any opinion on the fairness of the offer price and no representation is
14
<PAGE>
made by us, or the general partner of your partnership as to the fairness of our
offer. We did not, nor did the general partners of your partnership, attempt to
obtain a current independent valuation or appraisal of your partnership's
assets. However, please be advised that in 1998 a draft appraisal on your
partnership's motel property was prepared. This appraisal which assumed a
significant increase in operations from the motel over the prior year's
operations (which increase has not been achieved), valued the motel property at
$4,340,000. You are urged to consider carefully all of the information contained
herein and consult with your own advisors, tax, financial or otherwise, in
evaluating the terms of our offer before deciding whether to tender your units.
Secondary market sales activity for the units, including privately
negotiated sales, has been limited. At present, privately negotiated sales and
sales through intermediaries (e.g., through the trading system operated by
Chicago Partnership Board, Inc., which publishes sell offers by holders of
units) are the only means available to a limited partner to liquidate an
investment in units because the units are not listed or traded on any exchange
or quoted on any NASDAQ list or system. According to Partnership Spectrum, an
independent third party industry publication, between June 1, 1999 and July 31,
1999, there were 26 reported trades in the secondary market (for a total of
2,086 units) which were made at between a high of $12.10 per unit and a low of
$10 per unit, with a weighted average price of $10.48 per unit. These prices do
not take into account commissions and other transactional costs which sellers of
units may be required to pay (which typically range between 8% and 10% of the
reported selling price).
Partnership Makes No Recommendation. Your partnership is making no
recommendation as to whether limited partners should tender their units.
Section 14. Conditions of the Offer. Notwithstanding any other term of our
offer, we shall not be required to accept for payment or to pay for any units
tendered if all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
court, administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, necessary for the consummation of the
transactions contemplated by our offer shall not have been filed, occurred or
been obtained. Furthermore, notwithstanding any other term of our offer, we
shall not be required to accept for payment or pay for any units not theretofore
accepted for payment or paid for and may terminate or amend our offer as to such
units if, at any time on or after the date of our offer and before the
acceptance of such units for payment or the payment therefore, any of the
following conditions exists:
(a) a preliminary or permanent injunction or other order of any
federal or state court, government or governmental authority or agency shall
have been issued and shall remain in effect which (i) makes illegal, delays or
otherwise directly or indirectly restrains or prohibits the making of our offer
or the acceptance for payment of or payment for any units by us, (ii) imposes or
confirms limitations on our ability to effectively exercise full rights of
ownership of any units, including, without limitation, the right to vote any
units acquired by us in our offer or otherwise on all matters properly presented
to your partnership's limited partners, (iii) requires divestiture by us of any
units, (iv) causes any material diminution of the benefits to be derived by us
as a result of the transactions contemplated by our offer, or (v) might
materially adversely affect our or your partnership's business, properties,
assets, liabilities, financial condition, operations, results of operations or
prospects ;
(b) there shall be any action taken, or any statute, rule,
regulation or order proposed, enacted, enforced, promulgated, issued or deemed
applicable to our offer by any federal or state court, government or
governmental authority or agency, which might, directly or indirectly, result in
any of the consequences referred to in clauses (i) through (v) of paragraph (a)
above;
(c) any change or development shall have occurred or been threatened
since the date hereof, in the business, properties, assets, liabilities,
financial condition, operations, results of operations or prospects of your
partnership, which, in our reasonable judgment, is or may be materially adverse
to your partnership, or we shall have become aware of any fact that, in our
reasonable judgment, does or may have a material adverse effect on the value of
the units;
(d) there shall have been threatened, instituted or pending any
action or proceeding before any court or government agency or other regulatory
or administrative agency or commission or by any other person challenging the
acquisition of any units in our offer, or otherwise directly or indirectly
relating to our offer, or otherwise, in our reasonable judgment, adversely
affecting us or your partnership;
15
<PAGE>
(e) your partnership shall have (i) issued, or authorized or
proposed the issuance of, any partnership interests of any class, or any
securities convertible into, or rights, warrants or options to acquire, any such
interests or other convertible securities, (ii) issued or authorized or proposed
the issuance of any other securities, in respect of, in lieu of, or in
substitution for, all or any of the presently outstanding units, (iii)
refinanced any of your partnership's properties, other than in the ordinary
course of your partnership's business and consistent with the past practice,
(iv) declared or paid any distribution, other than in cash and consistent with
past practice, on any of its partnership interests, or (v) your partnership or
the general partner of your partnership shall have authorized, proposed or
announced its intention to propose any merger, consolidation or business
combination transaction, acquisition of assets, disposition of assets or
material change in its capitalization, or any comparable event not in the
ordinary course of business and consistent with past practice; or
(f) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United States, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any limitation by any governmental authority on, or other
event which might affect, the extension of credit by lending institutions or
result in any imposition of currency controls in the United States, (iv) a
commencement of a war or armed hostilities or other national or international
calamity directly or indirectly involving the United States, (v) a material
change in United States or other currency exchange rates or a suspension of a
limitation on the markets thereof, or (vi) in the case of any of the foregoing
existing at the time of the commencement of our offer, a material acceleration
or worsening thereof.
The foregoing conditions are for our sole benefit and may be asserted by
us regardless of the circumstances giving rise to such conditions or may be
waived by us in whole or in part at anytime and from time to time in our sole
discretion. Any determination by us concerning the events described above will
be final and binding upon all parties.
Section 15. Certain Legal Matters.
General. Except as set forth in this Section 15, we are not aware of any
filings, approvals or other actions by any domestic or foreign governmental or
administrative agency that would be required prior to the acquisition of units
by us in our offer. Should any such approval or other action be required, it is
our present intention that such additional approval or action would be sought.
While there is no present intent to delay the purchase of units tendered in our
offer pending receipt of any such additional approval or the taking of any such
action, there can be no assurance that any such additional approval or action,
if needed, would be obtained without substantial conditions or that adverse
consequences might not result to your partnership's business, or that certain
parts of your partnership's business might not have to be disposed of or held
separate or other substantial conditions complied with in order to obtain such
approval or action, any of which could cause us to elect to terminate our offer
without purchasing units hereunder. Our obligation to purchase and pay for units
is subject to certain conditions, including conditions related to the legal
matters discussed in this Section 15.
Antitrust. We do not believe that the Hart-Scott-Rodeo Antitrust
Improvements Act of 1976, as amended, is applicable to the acquisition of units
contemplated by our offer.
Margin Requirements. The units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly such regulations are not applicable to our offer.
State Takeover Laws. A number of states have adopted anti-takeover laws
which purport, to varying degrees, to be applicable to attempts to acquire
securities of corporations which are incorporated in such states or which have
substantial assets, security holders, principal executive offices or principal
places of business therein. Although we have not attempted to comply with any
state anti-takeover statutes in connection with our offer, we reserve the right
to challenge the validity or applicability of any state law allegedly applicable
to our offer and nothing in this offer to purchase nor any action taken in
connection herewith is intended as a waiver of such right. If any state
anti-takeover statute is applicable to our offer, we might be unable to accept
for payment or purchase units tendered in our offer or be delayed in continuing
or consummating our offer. In such case, we may not be obligated to accept for
purchase or pay for any units tendered.
16
<PAGE>
Section 16. Fees and Expenses. Except as set forth in this Section 16, we
will not pay any fees or commissions to any broker, dealer or other person for
soliciting tenders of units in our offer. We have retained River Oaks
Partnership Services, Inc. to act as Information Agent/Depositary in connection
with our offer. We will pay River Oaks Partnership Services, Inc. reasonable and
customary compensation for its respective services in connection with the offer,
plus reimbursement for out-of-pocket expenses. We will also pay all costs and
expenses of printing and mailing our offer and its legal fees and expenses. You
will be responsible for the payment of any fees charged by your broker for
assisting you in tendering your units or any fee charged by a custodian or other
trustee of an Individual Retirement Account or profit sharing plan that is the
record owner of your units.
Section 17. Miscellaneous. We are not aware of any jurisdiction in which
the making of our offer is not in compliance with applicable law. If we become
aware of any jurisdiction in which the making of our offer would not be in
compliance with applicable law, we will make a good faith effort to comply with
any such law. If, after such good faith effort, we cannot comply with any such
law, our offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of units residing in such jurisdiction.
No person has been authorized to give any information or to make any
representation on our behalf not contained herein or in the letter of
transmittal and, if given or made, such information or representation must not
be relied upon as having been authorized.
We have filed with the Commission a Schedule 14D-1, pursuant to Rule 14d-3
under the Exchange Act, furnishing certain additional information with respect
to our offer, and may file amendments thereto. The Schedule 14D-1and any
amendments thereto, including exhibits, may be inspected and copies maybe
obtained at the same places and in the same manner as set forth in Section 9
hereof (except that they will not be available at the regional offices of the
Commission).
Bighorn Associates LLC
November 17, 1999
17
<PAGE>
SCHEDULE 1
INFORMATION WITH RESPECT TO THE EXECUTIVE OFFICERS AND
DIRECTORS OF NORTHSTAR CAPITAL INVESTMENT CORP.
Set forth below is the name, current business address, present principal
occupation, and employment history for at least the past five years of each
director and executive officer of NorthStar Capital Investment Corp. Each person
listed below is a citizen of the United States.
Present Principal Occupation or Employment;
Material Occupation, Position, Office
or Employment for the Past Five Years
Peter W. Ahl, 34, has been a Vice President of NorthStar Capital
Investment Corp. since November 1997. For the previous five years he was a
director in the Alternate Investment Group of AEW Capital Management, L.P. Mr.
Ahl's current business address is 527 Madison Avenue, New York, New York 10022.
Martin L. Edelman, 58, has been a director of NorthStar Capital Investment
Corp. since November 1997. Since 1994, Mr. Edelman has been of counsel to Battle
Fowler LLP, a New York City law firm specializing in real estate and corporate
law. Mr. Edelman is one of the Managing Partners of Chartwell Hotel Associates
(an affiliate of Fisher Brothers, the Getty family and Soros family interests),
and is on the Board of Directors and Executive Committee of Grupo Chartwell de
Mexico, S.A. de C.V. Mr. Edelman is Chairman of the Board at Avis Rent-a-Car,
Inc. and is also a director of Cendant Incorporated, Delancey Estates PLC.,
Acadia Real Estate Trust, and Capital Trust. Mr. Edelman's current business
address is 75 East 55th Street, New York, New York 10022.
Richard Georgi, 36, has been a director of NorthStar Capital Investment
Corp. since June 1999. Currently, Mr. Georgi is a Managing Partner of Soros Real
Estate Partnership and is responsible for the Soros group of funds (including
Quantum Realty Fund) global real estate investments. Prior to joining SREP in
1999, Mr. Georgi spent nine years with Goldman Sachs & Co. in real estate
related businesses, including responsibility for the Real Estate Principal Area
and the Whitehall Real Estate Funds in Europe from 1995 to 1999. Mr. Georgi is a
board member of Europlex, Mapeley and MedGroup. Mr. Georgi's current business
address is 20 St. James Street, London SW2A 1ES.
Marc Gordon, 35, has been a Vice President and Assistant Secretary of
NorthStar Capital Investment Corp. since November 1997. From 1993 to 1997, Mr.
Gordon was Vice President in the real estate investment banking group at Merrill
Lynch. Mr. Gordon's current business address is 527 Madison Avenue, New York,
New York 10022.
David Hamamoto, 40, has been a Co-Chairman of the Board, Co-President and
Co-Chief Executive of NorthStar Capital Investment Corp. since November 1997.
Previously he was a partner and co-head of the Real Estate Principal Investment
Area at Goldman, Sachs & Co. Mr. Hamamoto's current business address is 527
Madison Avenue, New York, New York 10022.
Christopher M. Jeffries, 49, has been a director of NorthStar Capital
Investment Corp. since May 1998. Mr. Jeffries founded Millennium Partners in
1990, a developer of mixed-use urban entertainment and living centers. Mr.
Jeffries' current business address is 1995 Broadway, New York, New York 10023.
David King, 37, has been a Vice President and Assistant Treasurer of
NorthStar Capital Investment Corp. since November 1997. He is also a Vice
President of your general partners. For more than the previous five years he was
a Senior Vice President of Finance at Olympia & York Companies (USA). Mr. King's
current business address is 527 Madison Avenue, New York, New York 10022.
<PAGE>
Martin Lamb, 38, has been a Vice President of NorthStar Capital Investment
Corp. since April 1998. From 1996 until 1998 he was a Senior Vice President with
The Morgan Stanley Real Estate Fund. Prior to that, he served as Vice President
at The Argo Fund, an opportunistic real estate joint venture between affiliates
of J.P. Morgan and The O'Connor Group. Mr. Lamb's current business address is
527 Madison Avenue, New York, New York 10022.
Dallas E. Lucas, 37, has been a director, Vice President, Treasurer and
Chief Financial Officer of NorthStar Capital Investment Corp. since August 1998.
He is also a Vice President of your general partners. From 1994 until August
1998 he was the Chief Financial Officer and Senior Vice President of Crescent
Real Estate Equities Company. Mr. Lucas' current business address is 527 Madison
Avenue, New York, New York 10022.
Richard J. McCready, 41, has been a Vice President and Secretary of
NorthStar Capital Investment Corp. since March 1998. Previously, he was
President, Chief Operating Officer and a director of First Winthrop Corporation.
Mr. McCready's current business address is 527 Madison Avenue, New York, New
York 10022.
W. Edward Scheetz, 34, has been a Co-Chairman of the Board, Co-President
and Co-Chief Executive Officer of NorthStar Capital Investment Corp. since
November 1997. Previously he was a partner at Apollo Real Estate Advisors L.P.
since 1993. Mr. Scheetz' current business address is 527 Madison Avenue, New
York, New York 10022.
Robert Soros has been a director of NorthStar Capital Investment Corp.
since June 1999. Mr. Soros is a partner at Soros Private Equity Partners, an
affiliate of Soros Fund Management LLC, which is responsible for the private
equity and real estate investing for Quantum Group of Funds and Soros Fund
Management Fund LLC. In addition, Mr. Soros oversees various Soros Family
investments. Mr. Soros has been with Soros Fund Management LLC since 1994. Mr.
Soros is a member of the Board of Directors of American Malls International and
MenuDirect Corporation. Mr. Soros' current business address is 888 Seventh
Avenue, 33rd Floor, New York, New York 10106.
<PAGE>
The letter of transmittal and any other required documents should be sent
or delivered by you or your broker, dealer, commercial bank, trust company or
other nominee to the Depositary at the address set forth below:
RIVER OAKS PARTNERSHIP SERVICES, INC.
By Overnight Courier or Hand:
By Mail: 111 Commerce Road
P.O. Box 2065 Carlstadt, N.J. 07072
S. Hackensack, N.J. 07606 Attn.: Reorganization Dept.
By Facsimile: For Information please call:
(201) 460-2889 TOLL FREE (877) 842-2412
If you have any questions or if you need assistance in completion of the
letter of transmittal, you may contact River Oaks Partnership Services, Inc.,
the Information Agent for the offer, by calling:
(877) 842-2412
Exhibit (a)(2)
RESOURCES ACCRUED MORTGAGE INVESTORS L.P.-SERIES 86
LETTER OF TRANSMITTAL
(and Notice of Withdrawal from Sutter Offer)
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
DECEMBER 15, 1999 (the "Expiration Date") UNLESS EXTENDED.
(Please indicate changes or corrections to the name, address and Tax
Identification Number printed above.)
================================================================================
NOTICE OF WITHDRAWAL FROM SUTTER OFFER
IMPORTANT!!!
If you have previously tendered your units of limited partnership interest
in the Partnership (the "Units") pursuant to the Sutter Offer and you wish to
tender your Units to the Purchaser, you must first withdraw such tendered Units
prior to December 10, 1999, the expiration date of the Sutter Offer. In order to
withdraw the Units you have tendered pursuant to the Sutter Offer and tender
your Units to the Purchaser, please initial in the space indicated below, sign
this Letter of Transmittal in the appropriate space on page 3 and return the
Letter of Transmittal to our Information Agent in accordance with the
Instructions set forth on pages 4 and 5.
_________ All units of limited partnership interest of Resources Accrued
(initial) Mortgage Investors L.P. - Series 86 which were previously tendered
by the undersigned to the Sutter Offer are hereby withdrawn in
accordance with Rule 14d-7 promulgated under the Securities Exchange
Act of 1934, as amended.
----------
To participate in the Offer, a duly executed copy of this Letter of
Transmittal and any other documents required by this Letter of Transmittal must
be received by the Purchaser (as defined below) on or prior to the Expiration
Date. Delivery of this Letter of Transmittal or any other required documents to
an address other than as set forth below does not constitute valid delivery. The
method of delivery of all documents is at the election and risk of the tendering
Limited Partner. Please use the pre-addressed, postage paid envelope provided.
This Letter of Transmittal is to be completed by limited partners
("Limited Partners") of Resources Accrued Mortgage Investors L.P.-Series 86 (the
"Partnership") pursuant to the procedures set forth in the Offer to Purchase (as
defined below). Capitalized terms used herein and not defined herein have the
meanings ascribed to such terms in the Offer to Purchase, dated November 17,
1999 (the "Offer to Purchase"), made by Bighorn Associates LLC, a Delaware
limited liability company (the "Purchaser").
PLEASE READ CAREFULLY THE ACCOMPANYING INSRUCTIONS
----------
IF YOU HAVE THE CERTIFICATE ORIGINALLY ISSUED TO REPRESENT YOUR UNITS IN THE
PARTNERSHIP, PLEASE SEND IT TO THE INFORMATION AGENT WITH THIS
LETTER OF TRANSMITTAL
----------
For information or assistance in connection with the offer or the completion
of this Letter of Transmittal and/or the Notice of Withdrawal, please contact
the Information Agent
at (877) 842-2412.
<PAGE>
To: Bighorn Associates LLC
The undersigned hereby tenders all of its units of limited partnership
interest in the Partnership as set forth above (the "Units") to Bighorn
Associates LLC, a Delaware limited liability company (the "Purchaser") for $22
cash per Unit, less any distributions made by the Partnership prior to the date
of payment, upon the terms and subject to the conditions set forth in the Offer
to Purchase, receipt of which is hereby acknowledged, and this Letter of
Transmittal (the "Letter of Transmittal", which, together with the Offer to
Purchase and any supplements, modifications or amendments thereto, constitute
the "Offer").
The undersigned recognizes that, under the circumstances described in the
Offer to Purchase, the Purchaser will accept Units for payment on a pro rata
basis (with adjustments to avoid purchases of certain fractional Units) based
upon the number of Units tendered prior to or on the Expiration Date and not
withdrawn.
Subject to and effective upon acceptance for payment of any Units tendered
hereby in accordance with the terms of the Offer, the undersigned hereby sells,
assigns and transfers to, or upon the order of, the Purchaser all right, title
and interest in and to such Units purchased and requests, authorizes and directs
the General Partner to substitute the Purchaser as a limited partner of the
Partnership in place of the undersigned with respect to such Units. The
undersigned hereby irrevocably constitutes and appoints the Purchaser as the
Limited Partner's proxy and true and lawful agent and attorney-in-fact of the
undersigned with respect to such Units, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest) to deliver such Units and transfer ownership thereof on the
Partnership books maintained by the General Partner, together with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Purchaser and upon payment of the purchase price payable by the Purchaser in
accordance with the terms of the Offer to Purchase in respect of such Units (the
"Purchase Price"), to receive all benefits and otherwise exercise all rights of
beneficial ownership of such Units, including, without limitation, all voting
rights and the right to receive distributions from the Partnership, all in
accordance with the Offer. Subject to and effective upon the purchase of any
Units tendered hereby, the undersigned hereby requests that the Purchaser be
admitted as a "Substitute Limited Partner" under the terms of the Partnership
Agreement of the Partnership. Upon the purchase of such Units pursuant to the
Offer, all prior proxies and consents given by the undersigned with respect
thereto will be revoked and no subsequent proxies or consents may be given (and
if given will not be deemed effective).
The undersigned hereby represents and warrants that the undersigned owns
the Units tendered hereby within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, and has full power and authority to validly
tender, sell, assign and transfer, the Units tendered hereby, and that when any
such Units are accepted for payment by the Purchaser, the Purchaser will acquire
good, marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale or transfer thereof, and such Units will not be
subject to any adverse claim. Upon request, the undersigned will execute and
deliver any additional documents deemed by the Purchaser to be necessary or
desirable to complete the assignment, transfer, or purchase of the Units
tendered hereby.
The undersigned understands that a valid tender of Units to the Purchaser
will constitute a binding agreement 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 accept for payment any
Units tendered hereby. In such event, the undersigned understands that this
Letter of Transmittal will be of no force or effect. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, administrators, executors, successors, assigns
and trustees in bankruptcy and other legal representatives of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned further represents and warrants that, to the extent a
certificate evidencing the Units tendered hereby (the "original certificate") is
not delivered by the undersigned together with this Letter of Transmittal, (i)
the undersigned has not sold, transferred, conveyed, assigned, pledged,
deposited or otherwise disposed of any portion of the Units, (ii) the
undersigned has caused a diligent search of its records to be taken and has been
unable to locate the original certificate, (iii) if the undersigned shall find
or recover the original certificate evidencing the Units, it will immediately
and without consideration surrender it to the Purchaser; and (iv) the
undersigned shall at all times indemnify, defend, and save harmless the
Purchaser and the Partnership (which shall be a third party beneficiary), its
successors, and its assigns from and against any and all claims, actions, and
suits, whether groundless or otherwise, and from and against any and all
liabilities, losses, damages, judgments, costs, charges, counsel fees, and other
expenses of every nature and character by reason of honoring or refusing to
honor the original certificate when presented by or on behalf of a holder in due
course or a holder appearing to or believed by the Partnership to be such, or by
issuance or delivery of a replacement certificate, or the making of any payment,
delivery, or credit in respect of the original certificate without surrender
thereof, or in respect of the replacement certificate.
- --------------------------------------------------------------------------------
FOR INFORMATION AND ASSISTANCE WITH THE OFFER, PLEASE CALL: (877) 842-2412. For
Units to be validly tendered, Limited Partners should complete and sign this
Letter of Transmittal and return it in the self addressed, postage-paid envelope
enclosed, or by Hand or Overnight Delivery to River Oaks Partnership Services,
Inc. at the address set forth on the back cover of this Letter of Transmittal or
by Facsimile to (201) 460-2889.
- --------------------------------------------------------------------------------
<PAGE>
BEFORE SIGNING AND RETURNING THIS LETTER OF TRANSMITTAL,
PLEASE REFER TO THE ACCOMPANYING INSTRUCTIONS
- --------------------------------------------------------------------------------
SIGNATURE BOX (ALL OWNERS)
(See Instructions 1, 3 and 4 as necessary)
Please sign exactly as your name is printed on the front of this Letter of
Transmittal. For joint owners, each owner must sign. (See Instruction 1.)
The signatory hereto hereby tenders the number of Units indicated in this Letter
of Transmittal to the Purchaser pursuant to the terms of the Offer and certifies
under penalties of perjury the statements in Box A, Box B, and, if applicable,
Box C. In addition, to the extent indicated above, the signatory hereto hereby
withdraws the number of Units indicated above from the Sutter Offer.
X____________________________________ X_________________________________
(Signature) (Signature)
Tax I.D. Number X____________________
Name and Capacity (if other than individuals)________________(Title)___________
Address________________________________________________________________________
(city) (state) (zip)
Area Code and Telephone No. ( ) (Day) ( ) (Evening)
------------- -------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BOX A
SUBSTITUTE FORM W-9
(See Instruction 3 - Box A)
The person signing this Letter of Transmittal hereby certifies the following to
the Purchaser of the Units indicated in this Letter of Transmittal under
penalties of perjury:
(i) The Taxpayer Identification Number ("TIN") printed (or
corrected) on the front of this Letter of Transmittal is the correct TIN of the
Limited Partner, or if this box |_| is checked, the Limited Partner has applied
for a TIN. If the Limited Partner has applied for a TIN, a TIN has not been
issued to the Limited Partner, and either: (a) the Limited Partner has mailed or
delivered an application to receive a TIN to the appropriate IRS Center or
Social Security Administration Office, or (b) the Limited Partner intends to
mail or deliver an application in the near future (it being understood that if
the Limited partner does not provide a TIN to the Purchaser within sixty (60)
days, 31% of all reportable payments made to the Limited Partner will be
withheld until the TIN is provided to the Purchaser); and
(ii) Unless this box |_| is checked, the Limited Partner is not
subject to backup withholding either because the Limited Partner: (a) is exempt
from backup withholding, (b) has not been notified by the IRS that the Limited
Partner is no longer subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) has been notified by the IRS that such
Limited Partner is no longer subject to backup withholding.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BOX B
FIRPTA AFFIDAVIT
(See Instruction 3 - Box B)
Under Section 1445(c)(5) of the Internal Revenue Code and Treas.
Reg. 1.1445-11T(d), a transferee must withhold tax equal to 10% of the amount
realized with respect to certain transfers of an interest in a partnership if
50% or more of the value of its gross assets consists of U.S. real property
interests and 90% or more of the value of its gross assets consists of U.S. real
property interest plus cash or cash equivalents, and the holder of the
partnership interest is a foreign person. To inform the Purchaser that no
withholding is required with respect to the Limited Partner's interest in the
Partnership, the person signing this Letter of Transmittal hereby certifies the
following under penalties of perjury:
(i) Unless this box |_| is checked, the Limited Partner, if an
individual, is a U.S. citizen or a resident alien for purposes of U.S. income
taxation, and if other than an individual, is not a foreign corporation, foreign
partnership, foreign estate or foreign trust (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations); (ii) the Limited Partner's
U.S. social security number (for individuals) or employer identification number
(for non-individuals) is correctly printed (or corrected) on the front of this
Letter of Transmittal; and (iii) the Limited Partner's home address (for
individuals), or office address (for non-individuals), is correctly printed (or
corrected) on this Letter of Transmittal. If a corporation, the jurisdiction of
incorporation is ___________.
The person signing this Letter of Transmittal understands that this
certification may be disclosed to the IRS by the Purchaser and that any false
statements contained herein could be punished by fine, imprisonment or both.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BOX C
SUBSTITUTE FORM W-8
(See instruction 4)
By checking this box |_|, the person signing this Letter of
Transmittal hereby certifies under penalties of perjury that the Limited Partner
is an "exempt foreign person" for purposes of the backup withholding rules under
the U.S. federal income tax laws, because the Limited Partner:
(i) Is a nonresident alien individual or a foreign corporation,
partnership, estate or trust;
(ii) If an individual, has not been and plans not to be present in
the U.S. for a total of 183 days or more during the calendar
year; and
(iii) Neither engages, nor plans to engage, in a U.S. trade or
business that has effectively connected gains from
transactions with a broker or barter exchange.
- --------------------------------------------------------------------------------
<PAGE>
The Information Agent for the offer is:
RIVER OAKS PARTNERSHIP SERVICES, INC.
By Overnight Courier or Hand:
By Mail: 111 Commerce Road
P.O. Box 2065 Carlstadt, N.J. 07072
S. Hackensack, N.J. 07606 Attn.: Reorganization Dept.
By Facsimile: For Information please call:
(201) 460-2889 TOLL FREE (877) 842-2412
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. SIGNATURE AND DELIVERY OF REQUIREMENTS
Individual and Joint Owners - Signature Requirements. After carefully
reading and completing this Letter of Transmittal, in order to tender your
Units, Limited Partner(s) must sign at the "X" in the Signature Box. The
signature(s) must correspond exactly with the name printed (or corrected)
on the front of this Letter of Transmittal without any change whatsoever.
Note: For Units held in a custodial account, the beneficial owner should
sign in the Signature Box. If the Units are registered in the names of two
or more joint holders, all such holders must sign this Letter of
Transmittal.
Trustees, Corporations and Fiduciaries - Signature Requirements. Trustees,
executors, administrators, guardians, attorneys-in-fact, officers of a
corporation, authorized partner of a partnership or other persons acting
in a fiduciary or representative capacity must sign at the "X" in the
Signature Box. Signatories should indicate their title when signing and
must submit proper evidence satisfactory to the Purchaser of their
authority to act.
Delivery Requirements. For Units to be validly assigned, a properly
completed and duly executed copy of this Letter of Transmittal, together
with any other documents required by this Letter of Transmittal (including
the original certificate, to the extent in your possession), must be
received by the Purchaser prior to or on the Expiration Date. To ensure
receipt of this Letter of Transmittal, it is suggested that you use
overnight courier delivery or, if this Letter of Transmittal is to be
delivered by U.S. Mail, you use certified or registered mail, return
receipt requested. Facsimiles will be accepted subject to the receipt by
the Purchaser of original documentation. All Letters of Transmittal should
be addressed as follows:
By Mail or Overnight Courier: River Oaks Partnership Services,
Inc. at one of the addresses set
forth on the back cover of this
Letter of Transmittal
By Facsimile: (201) 460-2889
For Additional Information Call: (877) 842-2412
Documentation
Deceased Owner - Copy of Death Certificate.If other
than a Joint Tenant, see also
Executor/Administrator/Guardian
below.
Deceased Owner (Other) - See Executor/Administrator/Guardian
(a) below.
Executor/Administrator
Guardian - (a) Send copy of Court Appointment
Documents; and (b) a copy of
applicable provisions of Will
(Title Page, Executor powers asset
distributions); or (c) Estate
distribution documents.
Attorney-in-fact - Power of Attorney.
Corporate/Partnerships - Resolution(s) of Board of Directors
or other evidence of authority to
so act.
Trust/Pension Plans - Cover pages of the trust or plan,
along with the trustee(s) section
and/or amendments or resolutions of
the above to prove authority to so
act.
<PAGE>
2. TRANSFER TAXES. The Purchaser will pay or cause to be paid all transfer
taxes, if any, payable in respect of Units accepted for payment pursuant
to the Offer.
3. U.S. PERSONS. A Limited Partner who or which is a United States citizen or
resident alien individual, a domestic corporation, a domestic partnership,
a domestic trust or a domestic estate (collectively, "United States
persons") as those terms are defined in the Internal Revenue code and
Income Tax Regulations, should complete the following:
Box A -Substitute Form W-9. In order to avoid 31% federal income tax
backup withholding, the Limited Partner must provide to the Purchaser the
Limited Partner's correct Taxpayer Identification Number ("TIN") and
certify, under penalties of perjury, that such Limited Partner is not
subject to such backup withholding. The TIN that must be provided on the
Substitute W-9 is that of the registered Limited Partner as printed (or
corrected) on the front of this Letter of Transmittal. If a correct TIN is
not provided, penalties may be imposed by the Internal Revenue Service
("IRS"), in addition to the Limited Partner being subject to backup
withholding. Certain Limited Partners (including, among others, all
corporations) are not subject to backup withholding. Backup withholding is
not an additional tax. If withholding results in an overpayment of taxes,
a refund may be obtained from the IRS. NOTE: The correct TIN for an IRA
account is that of the Custodian (not the individual Social Security
number of the beneficial owner).
Box B - FIRPTA Affidavit. To avoid potential withholding of tax pursuant
to section 1445 of the Internal Revenue Code, each Limited Partner who or
which is a United States Person (as defined in Instruction 4 above) must
certify, under penalties of perjury, the Limited Partner's TIN and
address, and that the Limited Partner is not a foreign person. Tax
withheld under Section 1445 of the Internal Revenue Code is not an
additional tax. If withholding results in an overpayment of tax, a refund
may be obtained from the IRS.
4. BOX C - FOREIGN PERSONS. In order for a Limited Partner who is a foreign
person (i.e., not a United States person as defined in 3 above) to qualify
as exempt from 31% backup withholding, such foreign Limited Partner must
certify, under penalties of perjury, the statement in BOX C of this Letter
of Transmittal attesting that foreign person's status by checking the box
preceding such statement. Unless such box is checked, such foreign person
will be subject to withholding tax under Section 3406 of the Code.
5. ADDITIONAL COPIES OF OFFER TO PURCHASE AND LETTER OF TRANSMITTAL. Request
for assistance or additional copies of the Offer to Purchase and this
Letter of Transmittal may be obtained from River Oaks Partnership
Services, Inc. by calling (877) 842-2412.
Exhibit (a)(3)
BIGHORN ASSOCIATES LLC
c/o River Oaks Partnership Services, Inc.
111 Commerce Road
Carlstadt, N.J. 07072
November 17, 1999
Dear Limited Partner:
We are offering to acquire your units of limited partnership interest in
Resources Accrued Mortgage Investors L.P.-Series 86, (your "partnership") for
$22 per Unit in cash. Our offer is $7.00 per unit more than a recently filed
competing offer being made by Sutter Opportunity Fund, LLC and its affiliates
(the "Sutter Offer") and $10.75 per unit more than the purchase price recently
offered by Peachtree Partners in its tender offer. Enclosed for your review and
consideration are documents relating to our Offer to purchase your Units. Our
offer will expire at 12:00 midnight, New York City time on December 15, 1999
(unless extended by us).
The general partners of your partnership are our affiliates. As a result
of this affiliation, your partnership has indicated that it is remaining neutral
and making no recommendation as to whether its limited partners should tender
their Units in response to our Offer. Limited Partners are urged to read our
offer to purchase and the related materials and the enclosed Schedule 14D-9
carefully and in their entirety before deciding whether to tender their units.
HIGHEST OFFER TO DATE. Although not indicative of value, our Purchase
Price is $7.00 per unit greater than the purchase price being paid in the Sutter
Offer. You should evaluate our offer based on your own particular financial
circumstances. We suggest that you review our offer to purchase with your
personal financial and tax advisors.
IF YOU TENDERED YOUR UNITS IN THE SUTTER OFFER, YOU MAY STILL TENDER YOUR
UNITS TO US BY INITIALING THE BOX ON THE COVER OF THE LETTER OF TRANSMITTAL,
SIGNING THE LETTER OF TRANSMITTAL ON PAGE THREE OF THE LETTER OF TRANSMITTAL AND
DELIVERING THE LETTER OF TRANSMITTAL TO OUR DEPOSITORY BY NO LATER THAN DECEMBER
10, 1999, THE EXPIRATION DATE OF THE SUTTER OFFER, UNLESS EXTENDED. IF YOU
TENDERED YOUR UNITS IN THE PEACHTREE PARTNERS OFFER, WE HAVE BEEN ADVISED THAT
YOUR GENERAL PARTNERS WILL NOT RECOGNIZE ANY SUCH TRANSFERS. ACCORDINGLY, TO THE
EXTENT THAT YOUR GENERAL PARTNERS DO NOT RECOGNIZE SUCH TRANSFERS, YOU MAY STILL
TENDER YOUR UNITS TO US BY SIGNING THE ENCLOSED LETTER OF TRANSMITTAL AND
DELIVERING IT TO OUR DEPOSITARY BY THE EXPIRATION DATE OF OUR OFFER
If you have any questions concerning the terms of the offer, or need
assistance in completing the forms necessary to tender your units, please
contact our Information Agent, River Oaks Partnership Services, Inc., at (877)
842-2412.
BIGHORN ASSOCIATES LLC
