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
(Amendment No. 8)*
-------------------------
HIGH EQUITY PARTNERS L.P. - SERIES 86
(Name of Subject Company [Issuer])
OLYMPIA INVESTORS, L.P.
OLYMPIA-GP, INC.
AMERICAN REAL ESTATE HOLDINGS, L.P.
AMERICAN PROPERTY INVESTORS, INC.
CARL C. ICAHN
MILLENIUM FUNDING CORP.
MILLENIUM FUNDING III CORP.
PRESIDIO CAPITAL CORP.
PRESIDIO HOLDING COMPANY, LLC
NORTHSTAR PRESIDIO MANAGEMENT COMPANY, LLC
NORTHSTAR OPERATING, LLC
NORTHSTAR CAPITAL PARTNERS, LLC
NORTHSTAR CAPITAL HOLDINGS I, LLC
DAVID HAMAMOTO
W. EDWARD SCHEETZ
(Bidders)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
NONE
(CUSIP Number of Class of Securities)
-------------------------
Bonnie D. Podolsky Edward W. Kerson
Gordon Altman Butowsky Proskauer Rose LLP
Weitzen Shalov & Wein 1585 Broadway
114 West 47th Street New York, New York 10036
New York, New York 10036 (212) 969-3000
(212) 626-0800
- -----------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
Calculation of Filing Fee
- -----------------------------------------------------------------
Transaction Amount of
Valuation*<F1>: $7,497,000 Filing Fee: $1,499.40
- -----------------------------------------------------------------
<F1> *For purposes of calculating the filing fee only. This amount assumes
the purchase of 88,200 Units of the subject company for $85.00 per Unit in cash.
- -----------------------------------------------------------------
[X] 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: $3,995 (based upon prior transaction
valuation of $19,975,000, calculated for purposes of the filing
fee, assuming the purchase of 235,000 Units of the subject
company for $85.00 per Unit in cash)
Form or Registration No.: Schedule 14D-1
Filing Party: Olympia Investors, L.P., Olympia-GP, Inc., American
Real Estate Holdings, L.P., American Property Investors, Inc.,
Carl C. Icahn
Dated Filed: March 12, 1998
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosure provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Olympia Investors, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF; 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
N/A
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
10 TYPE OF REPORTING PERSON (See Instructions)
PN
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Olympia-GP, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
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
N/A
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
10 TYPE OF REPORTING PERSON (See Instructions)
CO
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
American Real Estate Holdings, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
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
N/A
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
10 TYPE OF REPORTING PERSON (See Instructions)
PN
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
American Property Investors, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
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
N/A
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
10 TYPE OF REPORTING PERSON (See Instructions)
CO
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Carl C. Icahn
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,657 Units
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0.4%
10 TYPE OF REPORTING PERSON (See Instructions)
IN
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Millenium Funding Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
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
20
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0.0%
10 TYPE OF REPORTING PERSON (See Instructions)
CO
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Millenium Funding III Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
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
44,347
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.5%
10 TYPE OF REPORTING PERSON (See Instructions)
CO
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Presidio Capital Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
44,367
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.5%
10 TYPE OF REPORTING PERSON (See Instructions)
HC
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Presidio Holding Company, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
44,367
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.5%
10 TYPE OF REPORTING PERSON (See Instructions)
HC
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NorthStar Presidio Management Company, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
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
44,367
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.5%
10 TYPE OF REPORTING PERSON (See Instructions)
OO
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NorthStar Operating, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
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
44,367
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.5%
10 TYPE OF REPORTING PERSON (See Instructions)
OO
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NorthStar Capital Partners, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
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
44,367
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.5%
10 TYPE OF REPORTING PERSON (See Instructions)
OO
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NorthStar Capital Holdings I, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
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
44,367
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.5%
10 TYPE OF REPORTING PERSON (See Instructions)
HC
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David Hamamoto
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
44,367
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.5%
10 TYPE OF REPORTING PERSON (See Instructions)
IN
<PAGE>
SCHEDULE 14D-1
(Amendment No. 8)
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
W. Edward Scheetz
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
44,367
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES (See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.5%
10 TYPE OF REPORTING PERSON (See Instructions)
IN
<PAGE>
AMENDMENT NO. 8 TO SCHEDULE 14D-1
This Amendment No. 8 amends and supplements the Tender Offer Statement
on Schedule 14D-1 originally filed with the U.S. Securities and Exchange
Commission on March 12, 1998 (the "Schedule") by Olympia Investors, L.P.,
Olympia-GP Inc., American Real Estate Holdings, L.P., American Property
Investors, Inc. and Carl C. Icahn. All capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to such terms in the Offer to
Purchase dated March 12, 1998 (the "Offer to Purchase") and the Assignment of
Partnership Interest as amended through July 1, 1998 (the "Amended Assignment").
Reference to the "Supplement" in this Amendment No. 8 shall mean the Supplement
to the Offer to Purchase dated July 1, 1998 (the "Supplement"), which Supplement
is filed herewith as Exhibit (a)(10).
Item 1. Security and Subject Company.
The first sentence of Item 1(b) is hereby amended to read in its
entirety as follows:
(b) This Schedule relates to the offer by Olympia Investors, L.P., a
Delaware limited partnership (the "Purchaser"), to purchase up to 88,200 of the
issued and outstanding Units of Limited Partnership Interest ("Units") of the
Partnership at a purchase price of $85.00 per Unit, net to the seller in cash
(the "Purchase Price"), without interest, less the amount of any distributions
declared or made with respect to the Units (other than distributions of Adjusted
Cash from Operations, as defined in the Partnership's partnership agreement)
between March 12, 1998 and the date of payment of the Purchase Price by the
Purchaser, upon the terms and subject to the conditions set forth in the Offer
to Purchase, the Amended Assignment and the Supplement. The Offer to Purchase
was previously filed as Exhibit (a)(1) to this Schedule and the Amended
Assignment and the Supplement are filed herewith as Exhibits (a)(11) and
(a)(10), respectively. Information concerning the number of Units outstanding is
set forth in the "INTRODUCTION" to the Offer to Purchase and is incorporated
herein by reference.
Item 10. Additional Information.
Item 10(f) is hereby amended to read in its entirety as follows:
<PAGE>
(f) Reference is hereby made to the Offer to Purchase, which was
previously filed as Exhibit (a)(1) to this Schedule, and the Supplement,
including the Schedules thereto, and the Amended Assignment, which are filed
herewith as Exhibits (a)(10) and (a)(11), respectively, and which are
incorporated herein in their entirety by reference. In order to correct the
omission of a conformed signature on the EDGAR version of the signature page to
the original Schedule 14D-1, such signature page is hereby amended by replacing
such page with the signature page filed herewith as Exhibit (a)(13), which is
incorporated herein by reference. The information set forth in Exhibit (a)(15)
attached hereto is also incorporated herein by reference.
Item 11. Materials to Be Filed as Exhibits.
The following documents are filed as exhibits to this Amended Schedule
14D-1:
(a)(10) Supplement to Offer to Purchase dated July
1, 1998.
(a)(11) Assignment of Partnership Interest, as
amended through July 1, 1998.
(a)(12) Cover Letter dated July 1, 1998 from Olympia
Investors, L.P. to the holders of the Units.
(a)(13) Replacement Schedule 14D-1 Signature Page.
(a)(14) Amendment No. 2, dated June 29, 1998, to
Agreement dated March 6, 1998, among the
Purchaser, AREH and Presidio.
(a)(15) Press Release, dated July 1, 1998.
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: July 1, 1998
OLYMPIA INVESTORS, L.P. OLYMPIA GP-INC.
By: OLYMPIA GP-INC.,
its general partner By: /s/ Martin Hirsch
---------------------
Name: Martin Hirsch
Title: Vice President
By: /s/ Martin Hirsch
-----------------------
Name: Martin Hirsch
Title: Vice President
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.,
its general partner
By: /s/ Martin Hirsch
-----------------------
Name: Martin Hirsch
Title: Vice President
AMERICAN PROPERTY INVESTORS, INC.
By: /s/ Martin Hirsch
-----------------------
Name: Martin Hirsch
Title: Vice President
/s/ Theodore Altman
------------------------
CARL C. ICAHN
By: Theodore Altman as
Attorney-in-fact
[Signature Page for High Equity Partners, Series 86,
Schedule 14D-1, Amd. No. 8]
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: July 1, 1998
MILLENIUM FUNDING CORP. MILLENIUM FUNDING III CORP.
By: /s/ Allan B. Rothschild By: /s/ Allan B. Rothschild
--------------------- ---------------------
Name: Allan B. Rothschild Name: Allan B. Rothschild
Title: Authorized Signatory Title: Authorized Signatory
PRESIDIO CAPITAL CORP. PRESIDIO HOLDING COMPANY, LLC
By: /s/ Allan B. Rothschild By: /s/ Allan B. Rothschild
--------------------- ---------------------
Name: Allan B. Rothschild Name: Allan B. Rothschild
Title: Authorized Signatory Title: Authorized Signatory
NORTHSTAR PRESIDIO MANAGEMENT NORTHSTAR OPERATING, LLC
COMPANY, LLC
By: /s/ Allan B. Rothschild By: /s/ Allan B. Rothschild
--------------------- ---------------------
Name: Allan B. Rothschild Name: Allan B. Rothschild
Title: Authorized Signatory Title: Authorized Signatory
NORTHSTAR CAPITAL PARTNERS, LLC NORTHSTAR CAPITAL HOLDINGS I,
LLC
By: /s/ Allan B. Rothschild By: /s/ Allan B. Rothschild
--------------------- ---------------------
Name: Allan B. Rothschild Name: Allan B. Rothschild
Title: Authorized Signatory Title: Authorized Signatory
/s/ W. Edward Scheetz /s/ David Hamamoto
------------------------ ------------------------
W. EDWARD SCHEETZ DAVID HAMAMOTO
[Signature Page for High Equity Partners, Series 86, Schedule 14D-
1, Amendment No. 8]
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
(a)(10) Supplement to Offer to Purchase dated July 1, 1998.
(a)(11) Assignment of Partnership Interest, as amended
through July 1, 1998.
(a)(12) Cover Letter dated July 1, 1998 from Olympia
Investors, L.P. to the holders of the Units.
(a)(13) Replacement Schedule 14D-1 Signature Page.
(a)(14) Amendment No. 2, dated June 29, 1998, to Agreement
dated March 6, 1998, among the Purchaser, AREH and
Presidio.
(a)(15) Press Release, dated July 1, 1998.
<PAGE>
Exhibit (a)(10)
SUPPLEMENT
TO THE
OFFER TO PURCHASE FOR CASH
UP TO 235,000 UNITS OF LIMITED PARTNERSHIP INTEREST
IN
HIGH EQUITY PARTNERS L.P. - SERIES 86
FOR
$85.00 NET PER UNIT
BY
OLYMPIA INVESTORS, L.P.
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON FRIDAY, JULY 17, 1998, UNLESS THE OFFER IS EXTENDED.
Olympia Investors, L.P., a Delaware limited partnership (the "Purchaser"),
hereby supplements and amends its offer to purchase up to 235,000 units of
limited partnership interest (the "Units") in High Equity Partners L.P. - Series
86 (the "Partnership"), upon the terms and subject to the conditions set forth
in the Purchaser's Offer to Purchase dated March 12, 1998, as supplemented and
amended by this Supplement dated July 1, 1998 (as it may be further supplemented
or amended from time to time, the "Offer to Purchase") and in the related
Assignment of Partnership Interest, including the Instructions thereto (as it
may be supplemented or amended from time to time, the "Assignment of Partnership
Interest", which, collectively with the Offer to Purchase, constitutes the
"Offer"). Capitalized terms used but not otherwise defined in this Supplement
shall have the meanings set forth in the Offer to Purchase.
1. All references in the Offer to Purchase to the number of Units
sought are hereby amended to reduce such number from 235,000 Units to 88,200
Units. The last sentence of the first paragraph on the front cover page of the
Offer to Purchase is hereby amended and supplemented to read in its entirety as
follows:
The 88,200 Units sought pursuant to the Offer represent approximately
15% of the total Units outstanding as of March 31, 1998.
2. The second paragraph on the front cover page of the Offer to
Purchase and the second paragraph of the "Introduction" to the Offer to Purchase
are each hereby amended and supplemented to read in their entirety as follows:
The Purchaser is not affiliated with Resources High Equity,
Inc., Resources Capital Corp. or Presidio AGP Corp., the general
partners of the Partnership (the "General Partners"). However, the
Purchaser has entered into an agreement (the "Agreement") with Presidio
Capital Corp. ("Presidio"), which indirectly owns all of the issued and
outstanding capital stock of the General Partners, pursuant to which,
among other things and subject to the terms and conditions set forth
therein: (i) the Purchaser has granted Presidio the right to purchase
50% of the Units acquired by the Purchaser pursuant to the Offer and
the Purchaser's offers for Units of two related limited partnerships
(the "Related Partnerships"); (ii) either party can initiate buy/sell
procedures pursuant to which the non-initiating party would be required
to elect either to buy certain Units from the initiating party or to
sell certain Units to the initiating party; (iii) the Purchaser and its
affiliates have agreed that, prior to the Standstill Expiration Date
(generally defined to mean March 6, 2001, although such date may occur
earlier than March 6, 2001 upon the occurrence of certain events
described in the Agreement) they will not: seek the removal of the
General Partners, call
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<PAGE>
any meeting of limited partners or seek to control the management,
policies or affairs of the Partnership or the Related Partnerships,
effect any business combination or other extraordinary transaction with
the Partnership, any Related Partnership or their general partners,
acquire Units other than pursuant to the Offers or acquire properties
or assets of the Partnership or any Related Partnership; (iv) subject
to the amendment described below, the Purchaser and its affiliates have
agreed, prior to the Standstill Expiration Date, to vote their Units in
favor of a proposal, if any, by the General Partners that would result
in Limited Partners receiving securities that are listed on NASDAQ or a
national securities exchange; and (v) Presidio has agreed to cause the
partners of the Partnership and the Related Partnerships to cooperate
to facilitate the Offers. The Agreement has been amended to provide
that the Purchaser and its affiliates will not be obligated to vote
Units, and the Purchaser and its affiliates have determined that they
will not vote Units, in favor of a proposal that is made in
contravention of the undertaking of the General Partners described in
the second paragraph of Section 6 of this Supplement. Section 12
("Background of the Offers") contains a more detailed description of
the Agreement and amendments thereto.
As a result of the Agreement, Presidio, W. Edward Scheetz,
David Hamamoto and NorthStar Capital Partners (who directly or
indirectly control Presidio), Millenium Funding Corp., Millenium
Funding III Corp., Presidio Holding Company, LLC, NorthStar Presidio
Management Company, LLC, NorthStar Operating, LLC and NorthStar Capital
Holdings I, LLC (collectively, the "Presidio Bidders"), may be deemed
to be "co-bidders" with the Purchaser.
3. The text of the second bullet point on the inside front cover page
of the Offer to Purchase and the second bullet point under the heading "Some
Factors To Be Considered By Limited Partners" in the Introduction to the Offer
to Purchase are each hereby amended and supplemented to read in their entirety
as follows:
The Purchase Price of $85.00 per Unit is approximately 65.1% of the
Purchaser's estimate of the net asset value per Unit of $130.56 and
approximately 68.3% of the Purchaser's estimate of liquidation value
per Unit of $124.39 (each of which amounts includes $7.22 per Unit that
the General Partners have disclosed they estimate would be required to
be paid by them to Limited Partners upon liquidation of the
Partnership). See Section 13 ("Purchase Price Considerations").
Schedule III to this Supplement contains information regarding the
General Partners' calculation of Revised Deemed Net Asset Value Per
Unit ($123.34 per Unit) and the May 1998 appraisals of the
Partnership's properties on which such calculation is based.
4. The second sentence of the first paragraph of Section 1 ("Terms of
the Offer; Expiration Date; Proration") of the Offer to Purchase is hereby
amended and supplemented to read in its entirety as follows:
For purposes of the Offer, the term "Expiration Date" shall mean 5:00
p.m., New York City time, on Friday, July 17, 1998, unless the
Purchaser in its sole discretion shall have extended the period of time
for which the Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date on which the Offer, as extended by
the Purchaser, shall expire.
5. Section 3 ("Procedure for Tendering Units") of the Offer to Purchase
is hereby supplemented and amended by adding the following at the end of the
paragraph entitled "Valid Tender":
Anything herein to the contrary notwithstanding, Limited Partners
should furnish Certificates evidencing tendered Units to the Depositary
only if available. It is not necessary to furnish such Certificates in
order for your tender to be valid.
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<PAGE>
6. Section 8 ("Future Plans of the Purchaser") of the Offer to Purchase
is hereby supplemented and amended by adding the following at the end of such
Section:
The Presidio Bidders have furnished the Purchaser with the following
information regarding their plans with respect to the Partnership:
The General Partners are actively considering a variety of
plans to enhance the value and liquidity of the Units. The plans have
included possible conversion of the Partnership into an actively traded
real estate investment trust (a "Reorganization Plan"). Although the
terms of a Reorganization Plan have not been defined, it is the present
intention of the General Partners that, if a Reorganization is
effected, the fees to them and their affiliates from the Partnership
would not increase from their existing level (see Schedule I), and
their equity interest in the Partnership as general partners would not
increase from the existing level. The trading price for the securities
that would be issued in exchange for the Units could be more or less
than the trading price currently available in the secondary market. A
Reorganization Plan would require as a condition to its consummation,
among other things, the approval by holders of a majority of the
outstanding Units. There can be no assurance a Reorganization Plan, or
any other plan, will actually be proposed by the General Partners, or,
if proposed, will be approved by holders of a majority of the
outstanding Units or consummated. However, if a Reorganization Plan is
proposed by the General Partners and subject to the next succeeding
paragraph, the General Partners expect that they and their affiliates
would vote all Units they own at the time in its favor, and that the
Purchaser and its affiliates would vote all Units they own at the time
in its favor. At present, the General Partners and their affiliates
beneficially own, in the aggregate, 7.7% of the outstanding Units, and
the Purchaser has advised that it and its affiliates beneficially own,
in the aggregate, 0.6% of the outstanding Units. If the Purchaser
acquires a substantial number of Units in the Offer, the likelihood of
approval of a Reorganization Plan, if proposed, would be enhanced.
The General Partners have determined that, prior to the first
anniversary of the completion of the Offer, the General Partners and
their affiliates will not solicit approval by the Limited Partners for,
or consummate, a transaction, or series of related transactions,
constituting a "roll-up transaction" (within the meaning of Regulation
S-K, Item 901), other than a conversion of the Partnership into a
stand-alone (i.e., not part of another entity or entities), actively
traded, real estate investment trust pursuant to Section 3(a)(10) of
the Securities Act of 1933, where the terms and conditions of the
transaction, or series of related transactions, including any related
tender offer for Units or any sale or financing of Partnership
properties, are approved, after a hearing upon the fairness of such
terms and conditions at which all Limited Partners have the right to
appear, by the court in connection with a settlement of the litigation
described in paragraph 11 of Schedule III to this Supplement.
Except as set forth herein, the Presidio Bidders do not have
any present plans or proposals which relate to or would result in an
extraordinary transaction, such as a merger, reorganization or
liquidation, involving the Partnership; a sale or transfer of a
material amount of the Partnership's assets; any change in composition
of the Partnership's senior management or personnel or their
compensation; any changes in the Partnership's present capitalization
or distribution policy; or any other material change in the
Partnership's structure or business.
7. Section 9 ("Certain Information Concerning the Partnership") is
hereby supplemented and amended by adding the following at the end of such
Section:
On April 15, and May 15, 1998, respectively, the Partnership
filed with the Commission its Annual Report on Form 10-K for the year
ended December 31, 1997 (the "1997 Form 10-K") and its Quarterly
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<PAGE>
Report on Form 10-Q for the quarter ended March 31, 1998 (the "March 31
Form 10-Q"). The information set forth below has been excerpted from
the 1997 Form 10-K and the March 31 Form 10-Q. More comprehensive
financial and other information is included in the 1997 Form 10-K, the
March 31 Form 10-Q and other documents filed by the Partnership with
the Commission, and the information set forth below is qualified in its
entirety by reference to the 1997 Form 10-K, the March 31 Form 10-Q and
such other documents and all the financial information and related
notes contained therein.
The 1997 Form 10-K reports that, as of and for the year ended
December 31, 1997, the Partnership had: Revenues of $12,199,975; Net
Income of $2,845,625; Net Income Per Unit of $4.60; Distributions Per
Unit of $4.03; and Total Assets of $61,919,546. The 1997 Form 10-K
indicates that Revenues and Net Income for the year ended December 31,
1997 include a $950,691 gain from the sale of 230 East Ohio Street. The
March 31 Form 10-Q reports that, as of and for the quarter ended March
31, 1998, the Partnership had: Revenues of $2,793,235; Net Income of
$824,165; Net Income Per Unit of $1.33; Distributions Per Unit of
$1.15; and Total Assets of $61,915,099.
8. The heading to Section 10 to the Offer to Purchase is hereby
supplemented and amended to read as follows:
SECTION 10. INFORMATION CONCERNING THE PURCHASER, PRESIDIO AND THEIR
AFFILIATES
and the text of Section 10 is hereby supplemented and amended to add the
following at the end of such Section:
Exhibit A to this Supplement contains AREH's unaudited
financial statements for the fiscal year ended December 31, 1997 and
the three months ended March 31, 1998. AREH is not subject to the
periodic reporting requirements of the Exchange Act and does not
prepare audited financial statements in the ordinary course of its
business. Accordingly, such audited financial statements are not
available or obtainable without unreasonable cost or expense.
For certain information furnished by the Presidio Bidders
concerning Presidio and certain of its affiliates, and the executive
officers and directors of Presidio and such affiliates, see Schedule I
to this Supplement.
Schedule II to this Supplement contains information furnished
by the Presidio Bidders about the beneficial ownership of Units by
Presidio and its affiliates, as well as transactions in Units effected
by them since December 31, 1995. Except as otherwise set forth in
Schedule II to this Supplement, (i) neither Presidio, to the best of
Presidio's knowledge, the persons or entities identified on Schedule I
nor any affiliate of the foregoing beneficially owns or has a right to
acquire any Units; (ii) neither Presidio, to the best of Presidio's
knowledge, the persons or entities identified on Schedule I nor any
affiliate of the foregoing, or any director, executive officer or
subsidiary of any of the foregoing, has effected any transaction in the
Units within the past 60 days; (iii) neither Presidio, to the best of
Presidio's knowledge, any of the persons or entities identified on
Schedule I, nor any director or executive officer of any of the
foregoing, has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the
Partnership, including, but not limited to, contracts, arrangements,
understandings or relationships concerning the transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls,
guarantees of loans, guarantees against loss or the giving or
withholding of proxies; (iv) there have been no transactions or
business relationships that would be required to be disclosed under the
rules and regulations of the Commission between Presidio or, to the
best of Presidio's knowledge, the persons or entities identified on
Schedule I, on the one hand, and the Partnership or its other
affiliates, on the other
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<PAGE>
hand; and (v) there have been no contracts, negotiations or
transactions between Presidio or, to the best of Presidio's knowledge,
the persons or entities identified on Schedule I, on the one hand, and
the Partnership or its other affiliates, on the other hand, concerning
a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets.
The General Partners of the Partnership have furnished
Unitholders with a Schedule 14D-9, as amended on May 21 and July 1,
1998 (as amended, the "Schedule 14D-9"), which states that the General
Partners are expressing no opinion and are remaining neutral with
respect to the Offer. Schedule III to this Supplement sets forth
information in Item 4 to the Schedule 14D-9, which sets forth certain
factors the General Partners believe Unitholders should consider in
deciding whether to accept or reject the Offer.
9. The first sentence of Section 11 ("Source of Funds") of the Offer to
Purchase is hereby amended and supplemented to read in its entirety as follows:
The Purchaser expects that approximately $7,497,000 (exclusive of fees
and expenses) will be required to purchase 88,200 Units, if tendered.
10. Section 12 ("Background of the Offer") of the Offer to Purchase is
hereby amended and supplemented by deleting the last sentence of the third
paragraph and adding the following in lieu thereof:
The Partnership obtained new appraisals of its properties in
May 1998 (the "May 1998 Appraisal Information"). Schedule III to this
Supplement contains a description of the May 1998 Appraisal Information
provided by the Presidio Bidders.
On May 20, 1998 the Purchaser, AREH and Presidio amended the
Agreement to provide for cross-indemnification agreements by AREH and
Presidio with respect to certain liabilities under the federal
securities laws relating to information provided in connection with the
Offer and offer for Units of the Related Partnerships concerning
themselves and their respective affiliates who are co-bidders. On June
29, 1998, the Purchaser, AREH and Presidio further amended the
Agreement to provide that the Purchaser and its affiliates will not be
obligated to vote Units, and the Purchaser and its affiliates have
determined that they will not vote Units, in favor of a proposal that
is made in contravention of the undertaking of the General Partners
described in the second paragraph of Section 6 of this Supplement.
11. Section 13 ("Purchase Price Considerations") of the Offer to
Purchase is hereby amended and supplemented as follows:
a. The following is added after the table in the third paragraph of
said Section:
According to THE PARTNERSHIP SPECTRUM, for the two months ended March
31, 1998, a total of 2,640 Units traded at per Unit prices between
$70.00 and $84.03 per Unit with a weighted average of $73.47 per Unit.
Based upon information reported by THE PARTNERSHIP SPECTRUM, the
weighted average price per Unit for the six months ended March 31, 1998
was $71.54.
b. The fourth paragraph of said Section is amended to read in its
entirety as follows:
Paragraph 1 of Schedule III to this Supplement discloses that
the General Partners estimate the "Revised Net Asset Value Per Unit" to
be $123.34. Paragraph 1 states that Revised Net Asset Value Per
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<PAGE>
Unit was determined based upon the May 1998 Appraisal Information and
takes into account the other assets and liabilities of the Partnership
reflected on the Partnership's March 31, 1998 balance sheet.
c. The following sentence is added in lieu of the last sentence of the
fifth paragraph of said Section:
Additional information concerning statements made by the General
Partners of the Partnership concerning their plans for the Partnership
is set forth in Item 6 of this Supplement and in Schedule III hereto.
d. The sixth and seventh paragraphs of said Section are amended and
restated to read in their entirety as follows:
The Purchase Price represents 65.1% of the Purchaser's
estimate of net asset value per Unit ("NAV Estimate") and 68.3% of the
Purchaser's estimate of liquidation value per Unit.
NAV ESTIMATE. The Purchaser's NAV Estimate equals the sum of
(i) the amount that the Limited Partners would receive in connection
with a hypothetical sale of all of the Partnership's properties at
their estimated aggregate value (based upon the May 1998 Appraisal
Information which is described in Schedule III to this Supplement));
(ii) the Partnership's net current assets as of March 31, 1998; and
(iii) an additional $4,246,646 (the "Clawback Amount"), which is the
General Partners' estimate of the amount that the Partnership Agreement
would require the General Partners to pay to the Limited Partners if
the Partnership were liquidated now and realized the values for its
properties reflected in the May 1998 Appraisal Information. The
Purchaser's NAV Estimate does not take into account: (i) real estate
transaction costs that would be incurred on a sale of the Partnership's
properties, such as brokerage commissions and other selling and closing
expenses; (ii) timing considerations; or (iii) costs associated with
winding up the Partnership. The disclosure set forth herein with
respect to the May 1998 Appraisal Information has been derived from
information furnished by the Presidio Bidders for inclusion in this
Supplement and the Schedules hereto and information publicly filed by
the Partnership. Although the Purchaser has no information that any
statements contained herein based upon such May 1998 Appraisal
Information or information publicly filed by the Partnership are
untrue, the Purchaser cannot take responsibility for the accuracy or
completeness of the May 1998 Appraisal Information or such other
information.
e. The second, third and fourth paragraphs following the caption "NAV
Estimate" in said Section are deleted in their entirety.
f. The first two sentences of the paragraph immediately following the
caption "Liquidation Value" in said Section are amended to read in their
entirety as follows:
In estimating liquidation value per Unit, the Purchaser adjusted its
NAV Estimate by deducting a reserve equal to 5% of such NAV Estimate
(net of the Clawback Amount), which represents the Purchaser's estimate
of the costs of brokerage commissions, title costs, legal fees, real
estate transfer taxes and other disposition expenses (but does not
include any estimate of the costs of conducting a consent solicitation
in order to obtain the Limited Partners' approval for property sales,
as may be required by the Partnership Agreement, or of the costs of
winding up the Partnership, because of the difficulty of estimating
those amounts). The result of $124.39 per Unit represents the
Purchaser's estimate of the aggregate net liquidating proceeds payable
to Limited Partners (before provision for the costs described in the
parenthetical to the preceding sentence) that could be realized in an
orderly liquidation of the Partnership, based on the assumptions
implicit in the calculations describe above.
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<PAGE>
12. The second sentence of the introductory paragraph of Section 14
("Conditions of the Offer") of the Offer to Purchase is hereby amended and
supplemented to read in its entirety as follows:
Furthermore, notwithstanding any other term of the Offer and in
addition to the Purchaser's right to withdraw the Offer at any time
before the Expiration Date, the Purchaser will not be required to
accept for payment or pay for any Units not theretofore accepted for
payment or paid for and may terminate or amend the Offer as to such
Units if, at any time on or after the date of the Offer and before the
Expiration Date, any of the following conditions exists:
Olympia Investors, L.P.
July 1, 1998
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<PAGE>
SCHEDULE I
PRESIDIO
The Partnership is one of a series of three public partnerships (the
"HEP Partnerships") that invested in unleveraged commercial real estate in the
period 1985-1989. Subsidiaries of Presidio serve as general partners and hold a
5.0% interest in each of the HEP Partnerships.
The HEP Partnerships and their general partners are subject to a class
action lawsuit alleging, among other things, that the general partners caused a
waste of the HEP Partnerships' assets by collecting management fees in lieu of
pursuing a strategy to maximize the value of the investments owned by the
limited partners; that the general partners breached their duty of loyalty and
due care to the limited partners by expropriating management fees without trying
to run the HEP Partnerships for the purposes for which they are intended; that
the general partners are acting improperly to enrich themselves in their
position of control over the HEP Partnerships and that their actions prevent
non-affiliated entities from making and completing tender offers to purchase
outstanding units of limited partnership interest; that by refusing to seek the
sale of the HEP Partnerships' properties, the general partners have diminished
the value of the limited partners' equity in the HEP Partnerships; that the
general partners have taken heavily overvalued partnership asset management
fees; and that units of limited partnership interest were sold and marketed
through the use of false and misleading statements. The HEP Partnerships and
their general partners believe that each of the claims asserted is meritless and
intend to continue vigorously to defend the action.
See Schedule III.
Presidio and its subsidiaries are managed by NorthStar Presidio
Management Company, LLC ("NP Management") pursuant to a management agreement
dated as of November 4, 1997 (the "Presidio Management Agreement"). Under the
Presidio Management Agreement, NP Management oversees the day-to-day management
of Presidio, and has full discretion and authority, without the need for any
subsequent approval of the board of directors or shareholders of Presidio, or
any subsidiary, except as expressly required by Presidio's organization
instruments, or otherwise required by law, to manage Presidio's assets in such
manner as NP Management considers appropriate, subject to certain restrictions.
Presidio has agreed to pay NP Management a monthly fee of $100,000 in
consideration for its services under the Presidio Management Agreement. NP
Management is required to render its management services at its own expense.
Presidio is responsible for all other expenses relating to its assets,
including, without limitation, services of attorneys, accountants, consultants
and other third party professionals, and other operating expenses, and must
periodically reimburse NP Management for any such expenses advanced by NP
Management.
Under the Presidio Management Agreement, Presidio has agreed to
indemnify NP Management and its affiliates and their respective officers,
directors, partners, employees and agents (including, without limitation,
persons serving as officers of Presidio) from losses, provided, among other
things, that such losses resulted from (i) a mistake of judgment or action or
inaction taken by such person in connection with NP Management's duties under
the Presidio Management Agreement honestly and in good faith that such person
reasonably believed to be in the best interest of Presidio or (ii) the
negligence, dishonesty or bad faith of any agent selected by such person with
reasonable care on behalf of Presidio.
Presidio and two of its non-U.S. subsidiaries, Presidio GP Corp. and
Presidio LP Corp. (collectively, the "BVI Group"), have each entered into
administration agreements (the "Hemisphere Administration Agreements") with
Hemisphere Management (Cayman) Limited ("Hemisphere"), pursuant to which
Hemisphere acts as the BVI Group's offshore administrator. Pursuant to the
Hemisphere Administration Agreements, Hemisphere shall, among
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other things, (i) provide office facilities, personnel and accommodations
required by the BVI Group in the Cayman Islands; (ii) communicate with
shareholders and the general public on the BVI Group's behalf; (iii) maintain
corporate books and records and a shareholder register; (iv) call and hold all
meetings of shareholders and directors; (v) disburse all necessary payments on
behalf of the BVI Group; and (vi) accept subscriptions for shares and make
redemptions and repurchases of shares, in each case subject to the provisions of
the Memorandum and Articles of the respective companies within the BVI Group and
under the supervision of their respective directors and officers. In
consideration for such services, Hemisphere receives a fee of $36,000 per annum
from Presidio and $4,000 from each of Presidio GP Corp. and Presidio LP Corp.
(subject to annual review and reduction in certain circumstances) and
reimbursement of its out-of-pocket expenditures. The Hemisphere Administration
Agreements are effective for successive one-year terms, unless and until
terminated by either party on 30 days' written notice to the other party, or
upon written notice of the occurrence of any breach and a failure to cure such
breach within 10 days thereafter.
The following table sets forth certain information known to Presidio
with respect to beneficial ownership of Presidio as of March 11, 1998 (unless
otherwise noted) by: (i) each person who beneficially owns 5% or more of
Presidio; (ii) the executive officers of Presidio; (iii) each of Presidio's
directors; and (iv) all directors and executive officers as a group. To the
knowledge of Presidio, each such shareholder has sole voting and investment
power as to the shares shown (unless otherwise noted).
All the outstanding shares of Presidio are owned by Presidio Capital
Investment Company, LLC ("PCIC"), a Delaware limited liability company. The
interests in PCIC (and beneficial ownership in Presidio) are held as follows:
<TABLE>
<S> <C>
Percentage Ownership
in PCIC and Percentage
Beneficial Ownership
NAME OF BENEFICIAL OWNER IN PRESIDIO
------------------------ -----------
FIVE PERCENT HOLDERS:
- --------------------
Presidio Holding Company, LLC (1)<F1> 71.93%
AG Presidio Investors, LLC (2)<F2> 14.12%
DK Presidio Investors, LLC (3)<F3> 8.45%
Stonehill Partners, L.P. (4)<F4> 5.50%
</TABLE>
The holdings of the directors and executive officers of Presidio are as follows:
<TABLE>
<S> <C>
DIRECTORS AND EXECUTIVE OFFICERS:
- --------------------------------
Adam Anhang (5)<F5> 0%
Marc Gordon (5)<F5> 0%
David Hamamoto (5)<F5> 71.93%
Charles Humber (5)<F5> 0%
David King (5)<F5> 0%
Gregory Peck (5)<F5> 0%
Kevin Reardon (5)<F5> 0%
Allan Rothschild (5)<F5> 0%
Richard Sabella (5)<F5>(6)<F6> 0%
Lawrence Schachter (5)<F5> 0%
W. Edward Scheetz (5)<F5> 71.93%
</TABLE>
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<TABLE>
<S> <C>
Percentage Ownership
in PCIC and Percentage
Beneficial Ownership
NAME OF BENEFICIAL OWNER IN PRESIDIO
------------------------ -----------
Directors and executive officers as a group (11
individuals) 71.93%
<FN>
<F1>(1) Presidio Holding Company, LLC ("PHC") is a New York limited liability
company that has two members, Polaris Operating LLC ("Polaris"), which
holds a 1% interest, and NorthStar Operating, LLC ("NorthStar"), which
holds a 99% interest. Polaris is a Delaware limited liability company
that has two members, Sextant Operating Corp. ("Sextant"), which holds
a 1% interest, and NorthStar, which holds a 99% interest. Sextant is a
Delaware corporation whose sole shareholder is NorthStar. NorthStar is
a Delaware limited liability company that has two members, NorthStar
Capital Partners ("NCP"), which holds a 99% interest, and NorthStar
Capital Holdings, I, LLC ("NCHI"), which holds a 1% interest. Both NCP
and NCHI are Delaware limited liability companies. NCP has two members,
NCHI, which holds a 74.75% interest, and NorthStar Capital Holdings II,
LLC ("NCHII"), which holds a 25.25% interest. NCHII has three members,
NCHI, which holds a 99% interest, Edward Scheetz, who holds a 0.5%
interest, and David Hamamoto, who holds a 0.5% interest. Mr. Scheetz
and Mr. Hamamoto are U.S. citizens and founding members of NCP. NCHI
has two members, Mr. Scheetz and Mr. Hamamoto, each of whom holds a 50%
interest. The business address of each of PHC, Polaris, NorthStar,
Sextant, NCP, NCHI, NCHII, Mr. Scheetz and Mr. Hamamoto is 527 Madison
Avenue, 16th Floor, New York, New York 10022.
Pursuant to an amended and restated pledge and security agreement (the
"Pledge Agreement") dated March 5, 1998 made by PHC in favor of Credit
Suisse First Boston Mortgage Capital LLC ("CSFB"), PHC pledged all its
membership interests in PCIC to CSFB as security for loans issued under
a loan agreement dated as of February 20, 1998 by and among PHC and
CSFB, as amended March 5, 1998 (the "Loan Agreement"). The Pledge
Agreement and Loan Agreement contain standard default and event of
default provisions, which may at a subsequent date result in a change
of control of PCIC and, therefore, Presidio.
<F2>(2) Each of Angelo, Gordon & Co., L.P., as sole manager of AG Presidio
Investors, LLC, and John M. Angelo and Michael L. Gordon, as general
partners of the general partner of Angelo, Gordon & Co., L.P., may be
deemed to own beneficially the securities beneficially owned by AG
Presidio Investors, LLC. Each of John M. Angelo and Michael L. Gordon
disclaims such beneficial ownership. The business address for such
persons is c/o Angelo, Gordon & Co., L.P., 245 Park Avenue, 26th Floor,
New York, New York 10167.
<F3>(3) M.H. Davidson & Company, as sole manager of DK Presidio Investors, LLC,
may be deemed to own beneficially the securities beneficially owned by
DK Presidio Investors, LLC. The business address for such persons is
c/o M.H. Davidson & Company, 885 Third Avenue, New York, New York
10022.
<F4>(4) Includes shares of PCIC beneficially owned by Stonehill Offshore
Partners Limited and Stonehill Partners, L.P. John A. Motulsky is a
managing general partner of Stonehill Partners, L.P., a managing member
of the investment advisor to Stonehill Offshore Partners Limited and a
general partner of Stonehill Institutional Partners L.P. Mr. Motulsky
disclaims beneficial ownership of the shares held by these entities.
The business address for such persons is c/o Stonehill Investment
Corporation, 110 East 59th Street, New York, New York 10022.
<F5>(5) The business address for such person is 527 Madison Avenue, 16th Floor,
New York, New York 10022.
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<F6>(6) Under his employment agreement, Mr. Sabella was granted options to
purchase up to 2% of the shares of Presidio, subject to certain
adjustments, which options vest ratably over a 24-month period and may
be taken instead by a cash payment equivalent to the difference between
the option price and the fair market value of the shares. None of the
options has been exercised.
</FN>
</TABLE>
THE EXECUTIVE OFFICERS AND DIRECTORS OF
PRESIDIO, PHC, NP MANAGEMENT, POLARIS,
SEXTANT, NORTHSTAR, NCP, NCHI AND NCHII
Set forth below is the name and present principal occupation of each
director and executive officer of Presidio, PHC, NP Management, Polaris,
Sextant, NorthStar, NCP, NCHI and NCHII. Each person listed below is a citizen
of the United States, and his current business address is 527 Madison Avenue,
17th Floor, New York, New York 10022, except for Allan B. Rothschild and
Lawrence R. Schachter, whose current business address is 411 West Putnam Avenue,
Greenwich, Connecticut 06830.
Richard Sabella has been president and a director of Presidio since
November 1997. In addition, Mr. Sabella has been president and chief executive
officer of PHC and NP Management and secretary of Polaris, Sextant, NorthStar,
NCP and NCHI since November 1997. Previously, Mr. Sabella had been the head of
real estate and a partner at the law firm of Cahill, Gordon & Reindel. Mr.
Sabella has also been associated with the law firms of Milgrim, Thomajian,
Jacobs & Lee, P.C. and Cravath, Swaine & Moore.
David King has been executive vice president, assistant treasurer and a
director of Presidio since November 1997. In addition, Mr. King has been chief
operating officer of PHC, NP Management, Polaris, Sextant, NorthStar, NCP and
NCHI since November 1997. Previously, Mr. King had been a senior vice president
of finance at Olympia & York Companies (USA). Prior to joining Olympia & York,
Mr. King worked for Bankers Trust Company in its real estate finance group.
Adam Anhang has been a vice president of Presidio since November 1997.
Previously, Mr. Anhang had worked for the Athena Group's Russia and Former
Soviet Union development team since 1996. Mr. Anhang graduated from the
University of Pennsylvania's Wharton School of Business with a B.S. in economics
with concentrations in finance and real estate.
Charles Humber has been a vice president of Presidio since November
1997. Previously, Mr. Humber had worked for the Real Estate Investment Banking
Group of Merrill Lynch & Co. Inc. since 1996. Mr. Humber graduated from Brown
University with a B.A. in international relations and organizational behavior
and management.
Marc Gordon has been a vice president of Presidio since November 1997.
Previously, Mr. Gordon had been a vice president in the Real Estate Investment
Banking Group at Merrill Lynch & Co. Inc., where he executed corporate finance
and strategic transactions for public and private real estate ownership
companies, including REIT's, real estate service companies, and real estate
intensive operating companies. Prior to joining Merrill Lynch, Mr. Gordon was in
the Real Estate and Banking Group at the law firm of Irell & Manella. Mr. Gordon
graduated from Dartmouth College with an A.B. in economics and also holds a J.D.
from the UCLA School of Law.
Kevin Reardon has been a vice president of Presidio since November,
1997. In addition, Mr. Reardon has been chief financial officer of PHC, NP
Management, Polaris, Sextant, NorthStar, NCP and NCHI, and the sole director of
Sextant, since November 1997. Previously, Mr. Reardon had held the position of
controller at Lazard
I-4
<PAGE>
Freres & Co. LLC Real Estate Investors since 1996. Prior to joining
Lazard Freres, Mr. Reardon was the Director of Finance in charge of European
expansion at the law firm of Dewey Ballantine LLP from 1993 to 1996. Mr.
Reardon, who is a certified public accountant, graduated from Fordham University
with a B.S. in accounting.
Gregory Peck has been assistant secretary of Presidio since November
1997. Previously, Mr. Peck had worked for Morgan Stanley Realty Estate Funds and
Morgan Stanley & Co. Inc.'s Real Estate Investment Banking group from 1996 to
1997. Prior to joining Morgan Stanley, Mr. Peck worked for Lazard Freres & Co.
LLC in the Real Estate Investment Banking group from 1994 to 1996. Mr. Peck
graduated from Columbia College with an A.B. in mathematics and A.B. in
economics.
Allan B. Rothschild has been an executive vice president and the
general counsel of Presidio since November 1997. Previously, Mr. Rothschild had
been senior vice president and general counsel of Newkirk Limited Partnership,
where he managed a large portfolio of net-leased real estate assets. Prior to
joining Newkirk, Mr. Rothschild was associated with the law firm of Proskauer
Rose LLP in its real estate group.
Lawrence R. Schachter has been senior vice president and chief
financial officer of Presidio since January 1998. Previously, Mr. Schachter had
held the position of Controller at CB Commercial/Hampshire, LLC since 1996.
Prior to that, Mr. Schachter was Controller at Goodrich Associates in 1996, and
at Greenthal/Harlan Realty Services Co. from 1992 to 1995. Mr. Schachter, who is
a certified public accountant, graduated from Miami University (Ohio).
W. Edward Scheetz co-founded NCP in July 1997 and has been a director
of Presidio since November 1997. In addition, Mr. Scheetz has been an executive
vice president of PHC, NP Management, Polaris, Sextant, NorthStar, NCP and NCHI
since November 1997. Previously, Mr. Scheetz had been a partner at Apollo Real
Estate Advisors L.P. since 1993. From 1989 to 1993, Mr. Scheetz was a principal
with Trammell Crow Ventures.
David Hamamoto co-founded NCP in July 1997 and has been a director of
Presidio since November 1997. In addition, Mr. Hamamoto has been an executive
vice president of PHC, NP Management, Polaris, Sextant, NorthStar, NCP and NCHI
since November 1997. Previously, Mr. Hamamoto had been a partner and co-head of
the Real Estate Principal Investment Area at Goldman, Sachs & Co., where he
initiated the effort to build a real estate principal investment business in
1988 under the auspices of the Whitehall Funds.
CONTRACTS, AGREEMENTS, ARRANGEMENTS,
UNDERSTANDINGS, AND ACTUAL OR
POTENTIAL CONFLICTS OF INTEREST,
BETWEEN PRESIDIO AND ITS AFFILIATES
(OTHER THAN THE PARTNERSHIP) AND
THE PARTNERSHIP
(b)(i) The general partners responsible for management of the
Partnership's business are Resources High Equity Inc. and Presidio AGP Corp.,
each a Delaware corporation (collectively, the "General Partners"). Except as
described below, there are no material contracts, agreements, arrangements or
understandings or any actual or potential conflicts of interest between the
General Partners or their affiliates and the Partnership, its executive
officers, directors or affiliates.
The Partnership has a property management services agreement with
Resources Supervisory Management Corp. ("Resources Supervisory"), an affiliate
of the General Partners, to perform certain functions relating to the management
of the properties of the Partnership. A portion of the property management fees
are paid to
I-5
<PAGE>
unaffiliated management companies, which perform certain management functions
for certain properties. For the years ended December 31,1997, 1996 and 1995,
Resources Supervisory was entitled to $416,428, $435,467 and $379,720,
respectively, of which $287,466, $254,005 and $196,480 respectively, was paid to
unaffiliated management companies. For the administration of the Partnership,
Resources High Equity Inc., the Managing General Partner, received $200,000 for
each of the years ended December 31, 1997, 1996 and 1995. For managing the
affairs of the Partnership, Resources High Equity Inc. received a partnership
asset management fee of $1,376,011, $1,406,204 and $1,406,204 for the years
ended December 31, 1997, 1996 and 1995, respectively.
The General Partners have been allocated 5% of the net income (losses)
of the Partnership, which amounted to $142,281, $112,226 and ($1,104,245) for
the years ended December 31, 1997, 1996 and 1995, respectively, and received
$124,721, $76,752 and $76,752 as its 5% share of distributions for such
respective periods. During 1997, Wexford Management LLC, formerly an affiliate
of the General Partners, received expense reimbursements of $43,361 for
performing administrative services for the Partnership.
Under the Partnership's partnership agreement, if the compensation paid
to the General Partners and their affiliates over the term of the Partnership
exceeds certain maximum amounts determined by formula under the partnership
agreement, then, in connection with the liquidation of the Partnership, the
General Partners are obligated to repay such excess to the limited partners.
Although such amount can only be determined at the time of liquidation (which is
not required for a number of years), it is estimated that, if the Partnership
were liquidated now and realized the appraised values set forth in Schedule III,
the General Partners would be obligated to pay $4,246,646 to the limited
partners. However, such amount could be reduced in connection with future
Partnership operations. Through ownership of an aggregate of 45,320 Units (I.E.,
7.7% of the outstanding Units) by affiliates of the General Partners (excluding
Units affiliates of the General Partners may acquire from the Purchaser, as
described in the Offer to Purchase, the potential liability of the General
Partners is effectively reduced.
The General Partners are subject to certain conflicts of interest in
connection with the Offer. Under the agreement with the Purchaser described in
the Offer to Purchase, an affiliate of the General Partners has agreed, among
other things, to cooperate, and to cause the General Partners to cooperate, to
facilitate the Offer and to take a neutral stance with respect to the Offer. In
addition, the partnership agreement provides that, without the concurrence of
the General Partners, a majority in interest of the limited partners may vote to
remove the General Partners or amend the partnership agreement (including
amending certain fees and compensation payable or authorized to be payable to
the General Partners or their affiliates); the ownership of a large block of
Units by any person increases the likelihood the General Partners may be removed
or the partnership agreement may be amended, should that person become a limited
partner or otherwise acquire the voting rights of a limited partner. In
addition, since the property management arrangements between affiliates of the
General Partners and the Partnership are terminable, removal of the General
Partners or the amendment of the partnership agreement could result in a
reduction of management fee income from the Partnership to such affiliates. If a
large number of Units are tendered pursuant to the Offer, the likelihood of such
removal or amendment could increase. However, as described in The Offer to
Purchase, the Purchaser has agreed, among other things, (i) subject to certain
terms and conditions, to permit an affiliate of the General Partners to purchase
Units the Purchaser acquires in the Offer and (ii) not to acquire Units, other
than in the Offer, or take certain other action for approximately three years.
Accordingly, during that three-year period, the Purchaser will not be in a
position unilaterally to remove the General Partners or amend the partnership
agreement, and if affiliates of the General Partners acquire Units from the
Purchaser that the Purchaser acquires in the Offer, it may become increasingly
difficult for any other party to acquire a large block of Units and affect
management of the Partnership.
I-6
<PAGE>
SCHEDULE II
(a) Except as set forth below, neither the Partnership nor the
General Partners have effected any transactions in the Units during the past 60
days. Except as set forth below, the General Partners are not aware of any
transactions in the Units during the past 60 days by any of its executive
officers directors, affiliates or subsidiaries.
At present, affiliates of the General Partners
beneficially own an aggregate of 45,320 Units, or 7.7% of the outstanding Units,
all of which are owned directly by wholly-owned subsidiaries of Presidio.
(b) Neither the General Partners nor, to the knowledge of the
General Partners, any of their executive officers, directors, affiliates or
subsidiaries intend to tender Units owned by them to the Purchaser pursuant to
the Offer.
Since May 1996, wholly-owned subsidiaries of Presidio, of
which the General Partners are themselves wholly-owned subsidiaries, purchased
the numbers of Units set forth below at the prices indicated. Each transaction
was effected in a brokerage transaction, except for the transactions on May 14,
1996, November 26, 1996, February 5, 1998 and February 18, 1998, which were
privately negotiated transactions.
<TABLE>
<S> <C> <C> <C>
Date Number of Units Price Per Unit Aggregate Price
5/14/96 20 $45.00 $ 900.00
7/16/96 100 54.63 5,463.20
7/17/96 174 45.72 7,954.41
7/29/96 60 55.00 3,300.00
8/6/96 330 46.13 15,221.25
8/12/96 240 55.13 13,230.00
8/20/96 80 59.00 4,720.00
10/3/96 173 46.13 7,979.63
10/9/96 250 59.00 14,750.00
10/30/96 615 53.30 32,779.50
11/26/96 200 57.50 11,500.00
2/19/97 275 56.38 15,503.13
2/21/97 600 58.43 35,055.00
2/26/97 531 57.00 30,267.00
3/12/97 1,582 57.05 90,253.10
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C> <C> <C>
Date Number of Units Price Per Unit Aggregate Price
3/25/97 421 57.72 24,300.12
4/1/97 320 58.61 18,754.43
4/21/97 186 59.45 11,057.70
6/1/97 380 60.48 22,980.55
6/19/97 736 60.48 44,509.60
7/2/97 1,008 60.48 60,958.80
8/4/97 742 61.50 45,633.00
8/28/97 466 61.50 28,659.00
11/7/97 40 78.00 3,120.00
12/5/97 24 78.00 1,872.00
12/5/97 60 80.67 4,840.00
1/2/98 160 81.00 12,960.00
1/2/98 331 76.88 25,445.63
1/2/98 55 71.75 3,946.25
1/9/98 293 73.29 21,473.24
1/14/98 36 80.00 2,880.00
1/26/98 60 81.00 4,860.00
1/27/98 400 80.00 32,000.00
1/27/98 126 80.34 10,122.50
1/28/98 330 73.29 24,184.88
1/28/98 257 75.08 19,294.28
2/2/98 100 80.00 8,000.00
2/5/98 12,166 100.00 1,216,600.00
2/10/98 20 80.00 1,600.00
2/11/98 550 73.29 40,308.13
2/11/98 152 73.29 11,139.70
2/16/98 408 74.31 30,319.50
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C> <C> <C>
Date Number of Units Price Per Unit Aggregate Price
2/16/98 247 80.85 19,969.95
2/18/98 20,000 113.00
</TABLE>
Of the Units listed above, the 12,166 Units purchased on February 5, 1998 at a
price of $100 per Unit were purchased at a price in excess of the Purchase Price
in the Offer. All of the foregoing purchases of Units were for investment
purposes and with a view to making a profit. Although such purchases were not
intended as steps in furtherance of a Reorganization Plan, the General Partners
believe the effect of such purchases may be to enhance the ability of the
General Partners and their affiliates to control the Partnership and effect a
Reorganization Plan.
II-3
<PAGE>
SCHEDULE III
(a) The General Partners are expressing no opinion and are
remaining neutral with respect to the Offer.
(b) In May 1998, the Partnership obtained new appraisals of
the Partnership's properties (the "New Appraisal Information"), which reflect
appraised values that average approximately 6% greater than those in the
appraisal information the General Partners obtained in the summer of 1997. The
purchase price being offered by the Purchaser is 31% less than $123.34, which is
an amount (the "Revised Deemed Net Asset Value Per Unit") equal to (i) the sum
of the appraised value of the limited partners' share of the Partnership's real
estate assets (based on the New Appraisal Information) plus the Partnership's
net current assets at March 31, 1998 (based on the Partnership's balance sheet
at that date), divided by (ii) the number of outstanding Units at March 31,
1998. However, the Offer provides Unitholders with the immediate opportunity to
liquidate their investment in the Partnership at a price that generally exceeds
recent secondary market selling prices for Units. Certain Unitholders may find
that 31% discount acceptable, if they want the certainty of an immediate cash
purchase in exchange for their Units. Other Unitholders who do not want
immediate cash, however, may prefer to continue to retain their investment in
the Partnership and potentially receive a greater amount for their Units.
Because of differing motivations Unitholders may have, the General Partners are
not making a recommendation and are remaining neutral with respect to the Offer.
See Item 3(b)(i) in the Solicitation/Recommendation Statement on Schedule 14D- 9
originally filed with the Securities and Exchange Commission on March 25, 1998
(the "Original Schedule 14D- 9") regarding certain conflicts of interest to
which the General Partners are subject.
Although the General Partners are not making a recommendation
with respect to the Offer, the General Partners believe Unitholders should
consider, among others, the following factors in deciding whether to accept or
reject the Offer:
1. Although the value of the Units is not certain and there is
no established public trading market for the Units, the Revised Deemed Net Asset
Value Per Unit estimated by the General Partners is $123.34, compared with the
$85.00 per Unit price in the Offer. The Revised Deemed Net Asset Value Per Unit
was determined based on independent third party appraisals obtained by the
Partnership in May 1998, and take into account the other assets and liabilities
of the Partnership reflected on the Partnership's March 31, 1998 balance sheet.
The Revised Deemed Net Asset Value Per Unit does not necessarily reflect the
amount a Unitholder would receive if the Partnership were liquidated, and does
not take into account transaction costs relating to the sale of the
Partnership's properties, which would reduce the amounts available for
distribution. There can be no assurance that the actual value of a Unit was not
more or less than the Revised Deemed Net Asset Value Per Unit, or that the value
of a Unit will not increase or decrease.
The New Appraisal Information was obtained in connection with
the General Partners' consideration of a possible settlement of the California
Action (as defined in paragraph 11 below). The following table sets forth the
market value of each of the Partnership's properties as specified in the New
Appraisal Information. (In the case of joint venture investments, the value
represents the Partnership's proportionate interest in the joint venture. There
is no discount to reflect the fact that certain real estate in which the
Partnership has an interest is held by joint ventures with affiliated
partnerships in which the Partnership itself does not have a controlling
interest or the unilateral power to effect a sale of the entire property.)
III-1
<PAGE>
<TABLE>
<S> <C> <C> <C>
Value of Aggregate Percentage of
Partnership's Appraised Interest of
Property Interest Value Partnership
Century Park I $ 9,500,000 $19,000,000 50.000 %
568 Broadway 12,066,750 31,000,000 38.925
Seattle Tower 5,150,000 10,300,000 50.000
Commonwealth Industrial Park 7,200,000 7,200,000 100.000
Commerce Plaza I 7,600,000 7,600,000 100.000
Melrose Crossing 3,100,000 3,100,000 100.000
Matthews Township Festival 9,600,000 9,600,000 100.000
Sutton Square Shopping Center 10,200,000 10,200,000 100.000
TMR Warehouse 4,441,900 21,500,000 20.660
TOTAL $68,858,650 $119,500,000
</TABLE>
The sum of the appraised value of the Partnership's real
estate plus the Partnership's net current assets at March 31, 1998 equals
$76,341,586, or $123.34 per Unit.
2. 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 American Partnership Board, Inc., which publishes sell offers by
holders of Units) are the only means available to a Unitholder to liquidate an
investment in Units (other than the Offer and other possible tender offers)
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
industry publication, between December 1, 1997 and January 31, 1998, there were
982 Units traded in the secondary market between a high of $95.00 per Unit and a
low of $60.00 per Unit, with a weighted average price of $66.08 per Unit. Such
prices do not take into account commissions and other transactional costs
payable by sellers of Units (which typically range between 8% and 10% of the
reported selling price). In addition, such prices do not reflect the prices per
Unit paid by an affiliate of the General Partners in that period ranging from
$71.75 per Unit to $81.00 per Unit, or the $100.00 per Unit and $113.00 per Unit
paid by an affiliate of the General Partners in mid-February 1998. See Item 6
below.
3. Three tender offers for Units have occurred since 1996.
Each offer has been for fewer than 5% of the outstanding Units. The offer prices
have been $25.00 per Unit (in an April 1996 tender offer), $51.00 per Unit (in a
February 1997 tender offer) and $65.00 per Unit (in a December 1997 tender
offer). These tender offers have afforded only a modest amount of liquidity to
limited partners, and, in each case, the General Partners have recommended that
limited partners reject the offer.
4. In March 1997, KB Realty Advisors, Inc. ("KB") made an
offer, subject to a number of conditions, to purchase all the real estate assets
of all three Partnerships for $141,000,000 in the aggregate. If the offer by KB
had been accepted and the Partnerships had received the $141,000,000, the
General Partners estimate that the Partnership's share of that amount would have
been $55,600,000, and, after payment of taxes and other expenses required to be
borne by the Partnership under the KB offer (estimated at 2% of the purchase
price), the General Partners estimate that the net proceeds of the transaction
that would have been allocable to the
III-2
<PAGE>
Partnerships' limited partners would have been $51,763,000, or $88.03 per Unit.
If, following such a transaction, the Partnership had been liquidated, and the
$4,246,646 the General Partners estimate would have been payable by them to the
limited partners (see Item (b)(i) in Schedule I above) (the "Excess Fee Amount")
had been paid, the General Partners estimate that the limited partners would
have received $106.55 per Unit (including amounts relating to the limited
partners' share of the other net assets of the Partnership). By comparison, the
per Unit price in the Offer is $85.00, and the sum of the Revised Deemed Net
Asset Value Per Unit plus the per Unit value of the Excess Fee Amount is
$130.56.
5. The General Partners are actively considering a variety of
plans to enhance the value and liquidity of the Units. The plans have included
possible conversion of the Partnership into an actively traded real estate
investment trust (a "Reorganization Plan"). Although the terms of a
Reorganization Plan have not been defined, it is the present intention of the
General Partners that, if a Reorganization is effected, the fees to them and
their affiliates from the Partnership would not increase from their existing
level (see Item 3(b)(i) in the Original Schedule 14D-9), and their equity
interest in the Partnership as general partners would not increase from the
existing level. The trading price for the securities that would be issued in
exchange for the Units could be more or less than the trading price currently
available in the secondary market. A Reorganization Plan would require as a
condition to its consummation, among other things, the approval by holders of a
majority of the outstanding Units. There can be no assurance a Reorganization
Plan, or any other plan, will actually be proposed by the General Partners, or,
if proposed, will be approved by holders of a majority of the outstanding Units
or consummated. However, if a Reorganization Plan is proposed by the General
Partners and subject to paragraph 6 below, the General partners expect that they
and their affiliates would vote all Units they own at the time in its favor, and
that the Purchaser and its affiliates would vote all Units they own at the time
in its favor. At present, the General Partners and their affiliates beneficially
own, in the aggregate, 7.7% of the outstanding Units, and the Purchaser has
advised that it and its affiliates beneficially own, in the aggregate, 0.6% of
the outstanding Units. If the Purchaser acquires a substantial number of Units
in the Offer, the likelihood of approval of a Reorganization Plan, if proposed,
would be enhanced.
6. Unitholders who tender their Units will be giving up the
opportunity to participate in any potential benefits represented by ownership of
such Units, including participation in possible future tender offers by the
Purchaser or its affiliates, possible financings of Partnership properties
resulting in possible special distributions by the Partnership, possible
appreciation in the value of the Units and participation in any reorganization
of the Partnership, including the Reorganization Plan, or resolution or
disposition of the litigation described in paragraph 11 below. In that
connection, the General Partners have determined that, prior to the first
anniversary of the completion of the Offer, the General Partners and their
affiliates will not solicit approval by the limited partners for, or consummate,
a transaction, or series of related transactions, constituting a "roll-up
transaction" (within the meaning of Regulation S-K, Item 901), other than a
conversion of the Partnership into a stand-alone (i.e., not part of another
entity or entities), actively traded, real estate investment trust pursuant to
Section 3(a)(10) of the Securities Act of 1933, where the terms and conditions
of the transaction, or series of related transactions, including any related
tender offers for Units or any sale or financing of Partnership properties, are
approved, after a hearing upon the fairness of such terms and conditions at
which all limited partners have the right to appear, by the court in connection
with a settlement of the litigation described in paragraph 11 below.
7. The agreement among the Purchaser and affiliates of the
General Partners described in Item 3 in the Original Schedule 14D-9 (which has
been amended to provide for indemnification by the parties for information
concerning themselves and their respective affiliates in connection with the
Offer and the offers for units of the other HEP Partnerships and to provide that
the Purchaser and its affiliates are not required to vote their Units in favor
of any proposal in contravention of paragraph 6 above) creates certain conflicts
of interest for the General Partners with respect to the Offer.
III-3
<PAGE>
8. Unitholders could, as an alternative to tendering their
Units, propose a variety of possible actions, including liquidation of the
Partnership or removal and replacement of the General Partners.
9. Depending upon the number of Units tendered pursuant to the
Offer and whether the Purchaser or its affiliates, on the one hand, or
affiliates of the General Partners, on the other hand, acquire Units from the
other pursuant to the agreement described in Item 3 in the Original Schedule
14D-9, the Purchaser or its affiliates, on the one hand, or the General Partners
or their affiliates, on the other hand, could be in a stronger position to
influence significantly all Partnership decisions on which Unitholders may vote,
including decisions regarding removal of the General Partners, merger, sales of
assets and liquidation. Accordingly, (i) non-tendering Unitholders could be
prevented from taking action they desire that the Purchaser or the General
Partners, as the case may be, oppose, and (ii) the Purchaser or the General
Partners, as the case may be, may be able to take action opposed by
non-tendering Unitholders.
10. Pursuant to the partnership agreement, transfers of Units
that would cause a termination of the Partnership for federal income tax
purposes (which may occur when 50% or more of the Units are transferred in a
12-month period) are not permitted. Depending upon the number of Units tendered
pursuant to the Offer, sales of Units on the secondary market for the 12-month
period following completion of the Offer may be limited. The Partnership will
not process a request for transfer of Units during that 12-month period, if the
General Partners believe the transfer may cause a tax termination. In
determining the number of Units subject to the Offer, the parties to the
agreement described in Item 3 in the Original Schedule 14D-9 took this
restriction into account to permit historical levels of transfers to occur after
consummation of the Offer without violating this restriction.
11. In May 1993, limited partners in the Partnerships
commenced a class action (the "California Action") on behalf of all investors
against the HEP General Partners and certain related persons and entities
asserting various claims arising from alleged mismanagement of the Partnerships.
On November 30, 1995, the original plaintiffs and intervening plaintiffs filed a
consolidated class and derivative action complaint (the "Consolidated
Complaint") alleging various state law class and derivative claims, including
claims for breach of fiduciary duty; breach of contract; unfair and fraudulent
business practices under California Bus. & Prof. Code ss. 17200; negligence;
dissolution, accounting, receivership and removal of general partner; fraud; and
negligent misrepresentation. The Consolidated Complaint alleges, among other
things, that the HEP General Partners caused a waste of the Partnerships' assets
by collecting management fees in lieu of pursuing a strategy to maximize the
value of the investments owned by the investors in the Partnerships, that the
HEP General Partners breached their duty of loyalty and due care to the
investors by expropriating management fees from the Partnerships without trying
to run the Partnerships for the purposes for which they were intended; that the
HEP General Partners were acting improperly to entrench themselves in their
position of control over the Partnerships and that their actions prevented
non-affiliated entities from making and completing tender offers to purchase HEP
Units; that, by refusing to seek the sale of the Partnerships' properties, the
HEP General Partners diminished the value of the investors' equity in the
Partnerships; that the HEP General Partners took heavily overvalued asset
management fees; and that HEP Units were sold and marketed through the use of
false and misleading statements.
In early 1996, the parties submitted a proposed settlement to
the court (the "Proposed Settlement"), which contemplated a reorganization of
the three Partnerships into a single real estate investment trust, pursuant to
which approximately 85% of the shares of the real estate investment trust would
have been allocated to investors in the aggregate (assuming each of the
Partnerships participated in the reorganization) and approximately 15% of the
shares would have been allocated to the HEP General Partners. As a consequence,
the Proposed Settlement would, among other things, have approximately tripled
the HEP General Partners' equity interests in the Partnerships. In late 1996,
the California Department of Corporations informed the Court of its conclusion
that the Proposed Settlement was unfair, and, in early 1997, the Court declined
to grant final approval of the Proposed
III-4
<PAGE>
Settlement because the Court was not persuaded that the Proposed Settlement was
fair, adequate or reasonable as to the proposed class.
As set forth in Item 5 above, although the General Partners
are actively considering a variety of plans to enhance the value and liquidity
of the Units, including a possible Reorganization Plan, the terms of a
Reorganization Plan have not been defined. Nonetheless, it is the present
intention of the General Partners that, if a Reorganization Plan were to be
pursued, (a) the fees to them and their affiliates would not increase from their
existing level, and (b) unlike the Proposed Settlement, which would, among other
things, have approximately tripled the HEP General Partners' equity interests,
their equity interests as general partners would not increase from the existing
level.
The plaintiffs have filed an amended complaint, which
generally asserts the same claims as the earlier Consolidated Complaint but
contains more detailed factual assertions and eliminates some claims they had
previously asserted. The HEP General Partners believe that the amended complaint
was subject to challenge on legal grounds and filed demurrers and a motion to
strike. In October 1997, the Court granted substantial portions of the HEP
General Partners' motions. Thereafter, the HEP General Partners served answers
denying the allegations and asserting numerous defenses.
The plaintiffs and the HEP General Partners recently have
engaged in discussions relating to a possible settlement of the California
Action, including discussions regarding a possible tender offer by the
Partnership or the General Partners or their affiliates for Units at a price
that may exceed the price in the Offer. There can be no assurance the parties
will enter into a settlement agreement, or that the court will approve any such
settlement agreement.
The HEP General Partners believe each of the claims asserted
is meritless and intend to continue vigorously to defend the California Action.
The partnership agreement provides for indemnification of the General Partner
and their affiliates in certain circumstances. The Partnership has agreed to
reimburse the General Partners for the actual costs incurred in defending the
California Action and the costs of preparing settlement materials. Through
December 31, 1997, the General Partners had billed the Partnership a total of
$1,058,511 for these costs, of which $824,511 was paid in February 1997.
III-5
<PAGE>
EXHIBIT A
AMERICAN REAL ESTATE HOLDINGS, L.P.
BALANCE SHEETS FOR THE PERIODS ENDED
(UNAUDITED) (IN $000S)
<TABLE>
<S> <C> <C>
ASSETS MARCH 31, 1998 DECEMBER 31, 1997
---------------- -----------------
Real estate leased to others:
Accounted for under the financing method $ 258,366 $ 265,657
Accounted for under the operating method
net of accumulated depreciation 119,922 121,595
Operating real estate 4,952 5,002
Construction in progress 1,440 1,249
Cash and cash equivalents 124,391 129,035
Investment in treasury bills 386,884 372,165
Investments in limited partnerships 20,295 22,970
Mortgages and notes receivable 88,302 59,970
Receivables and other assets 7,043 7,837
Debt placement costs, net of accumulated
amortization 1,525 1,473
Property held for sale 4,453 4,164
Intercompany AREP/AREH 10,822 10,811
---------------- -----------------
Total $ 1,028,395 $ 1,001,928
---------------- -----------------
LIABILITIES AND PARTNERS' EQUITY
Mortgages payable $ 165,888 $ 156,433
Senior indebtedness 11,308 11,308
Deferred income 2,791 2,792
Accounts payable and accrued expenses 9,939 10,926
---------------- -----------------
Total liabilities 189,926 181,459
---------------- -----------------
PARTNERS' EQUITY
Limited partners 830,084 811,755
General partner 8,385 8,714
---------------- -----------------
Total partners' equity 838,469 820,469
---------------- -----------------
TOTAL $ 1,028,395 $ 1,001,928
================ =================
</TABLE>
A-1
<PAGE>
AMERICAN REAL ESTATE HOLDINGS, L.P.
STATEMENTS OF EARNINGS FOR THE THREE MONTHS AND YEAR ENDED
(UNAUDITED) (IN $000S)
<TABLE>
<S> <C> <C>
MARCH 31, 1998 DECEMBER 31, 1997
----------------- -----------------
REVENUES:
Interest income on financing leases $ 6,263 $ 25,146
Interest income on treasury bills and other
investments 6,456 16,726
Rental income 4,776 16,617
Hotel operating income 1,242 6,098
Dividend income 2,521 454
Other income 98 5,877
----------------- -----------------
21,356 70,918
----------------- -----------------
EXPENSES:
Interest expense 3,335 13,189
Depreciation and amortization 1,322 5,112
General and administrative expense 889 3,188
Property expenses 916 3,457
Hotel operating expenses 992 4,952
----------------- -----------------
7,454 29,898
----------------- -----------------
Earnings before property and securities
transactions 13,902 41,020
Provision for loss on real estate (452) (1,085)
Gain on sales and disposition of real estate 4,550 16,051
Provision for loss on mortgages receivable -- (9,790)
----------------- -----------------
NET EARNINGS $ 18,000 $ 75,384
================= =================
</TABLE>
A-2
<PAGE>
AMERICAN REAL ESTATE HOLDINGS, L.P.
STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS AND YEAR ENDED
(UNAUDITED) (IN $000S)
<TABLE>
<S> <C> <C>
MARCH 31, 1998 DECEMBER 31, 1997
-------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 18,000 $ 75,384
Adjustments to reconcile earnings to net cash
provided by operating activities:
Depreciation and amortization 1,322 5,112
Amortization of deferred income (1) (26)
Gain on sales and disposition of real estate (4,550) (16,051)
Gain on sale of marketable equity securities (29,188)
Provision for loss on real estate 452 1,085
Provision for loss on mortgages receivable 9,790
Changes in:
Decrease in deferred income (1) (4)
Decrease in receivables and other assets 637 1,188
Decrease in accounts payable and accrued
expenses (1,034) (1,277)
Decrease in intercompany AREP/AREH (9) (1,073)
-------------- -----------------
Net cash provided by operating
activities 14,816 44,940
-------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in mortgages and notes receivable (28,576) (56,345)
Net proceeds from the sale and disposition of real estate 10,035 37,643
Principal payments received on leases accounted for under
the financing method 1,962 7,683
Principal receipts on mortgages receivable 246 332
Capitalized expenditures for real estate (142) (1,836)
Construction in progress (191) (570)
Property acquisitions (83) (63,064)
Disposition of marketable equity securities -- 111,784
Decrease in investment in limited partnership interests 2,676 6,977
Investment in treasury bills (14,719) (372,165)
-------------- -----------------
Net cash used in investment activities (28,792) (329,561)
-------------- -----------------
</TABLE>
A-3
<PAGE>
<TABLE>
<S> <C> <C>
MARCH 31, 1998 DECEMBER 31, 1997
-------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Partners' equity:
Proceeds from rights offering -- 272,330
Expenses of the rights offering -- (267)
Mortgages Payable:
Increase in mortgages payable 11,818 62,623
Periodic principal payments (2,363) (7,578)
Balloon payments -- (6,854)
Debt placement costs (123) (723)
Senior debt principal payment -- (11,308)
-------------- -----------------
Net cash provided by financing activities 9,332 308,223
-------------- -----------------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (4,644) 23,602
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 129,035 105,433
-------------- -----------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 124,391 $ 129,035
============== =================
</TABLE>
A-4
<PAGE>
AMERICAN REAL ESTATE HOLDINGS, L.P.
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
(UNAUDITED) (IN $000S)
<TABLE>
<S> <C> <C> <C>
GENERAL LIMITED
PARTNER'S PARTNERS' TOTAL PARTNERS'
EQUITY EQUITY EQUITY
------------ ----------- ---------------
Balance Dec. 31, 1996 $ 4,967 $ 491,736 $ 496,703
Net earnings 1,500 73,884 75,384
Rights Offering -- 269,607 269,607
Expenses of the Rights Offering (8) (392) (400)
Capital Contribution 2,723 -- 2,723
Sale of marketable equity securities available for sale (468) (23,080) (23,548)
------------ ----------- ---------------
Balance Dec. 31, 1997 8,714 811,755 820,469
Net earnings 358 17,642 18,000
------------ ----------- ---------------
Balance March 31, 1998 $ 9,072 $ 829,397 $ 838,469
============ =========== ===============
</TABLE>
A-5
<PAGE>
Exhibit (a)(11)
ASSIGNMENT OF PARTNERSHIP INTEREST
TO TENDER UNITS OF LIMITED PARTNERSHIP INTEREST
OF
HIGH EQUITY PARTNERS L.P. -- SERIES 86
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 12, 1998
AS AMENDED AND SUPPLEMENTED THROUGH JULY 1, 1998
OF
OLYMPIA INVESTORS, L.P.
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON
JULY 17, 1998, UNLESS THE OFFER IS EXTENDED.
================================================================================
Limited Partners desiring to tender their Units should complete and
sign this Assignment of Partnership Interest, and forward it to the Depositary
at one of the addresses set forth below TOGETHER WITH ALL CERTIFICATES
REPRESENTING THEIR INTERESTS IN UNITS TENDERED ("CERTIFICATES"), IF AVAILABLE.
Instructions for completing this Assignment of Partnership Interest are included
herein, along with a pre-addressed envelope to the Depositary.
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
BY MAIL: TO CONFIRM: BY HAND/OVERNIGHT
DELIVERY:
Wall Street Station (212) 701-7624 Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19th Floor
New York, NY 10005
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN COMPLETING THIS
ASSIGNMENT OF PARTNERSHIP INTEREST, PLEASE CALL THE INFORMATION AGENT, BEACON
HILL PARTNERS, INC. AT (212) 843-8500 (COLLECT) OR (800) 301-8755 (TOLL FREE).
DELIVERY OF THIS ASSIGNMENT OF PARTNERSHIP INTEREST OR ANY OTHER
REQUIRED DOCUMENTS TO AN ADDRESS OTHER THAN THOSE SET FORTH ABOVE DOES NOT
CONSTITUTE VALID DELIVERY.
PLEASE CAREFULLY READ THE ACCOMPANYING INSTRUCTIONS
CAPITALIZED TERMS USED HEREIN AND NOT DEFINED SHALL HAVE THE MEANINGS
GIVEN TO THEM IN THE OLYMPIA INVESTORS, L.P. OFFER TO PURCHASE LIMITED
PARTNERSHIP UNITS OF HIGH EQUITY PARTNERS L.P. -- SERIES 86, DATED MARCH 12,
1998 (AS AMENDED AND SUPPLEMENTED THROUGH JULY 1, 1998, THE "OFFER TO
PURCHASE").
The undersigned hereby tenders to Olympia Investors, L.P., a Delaware
limited partnership (the "Purchaser"), the number of the undersigned's units of
limited partnership interest specified in the signature box (together with the
Certificates, "Units") in High Equity Partners L.P. --Series 86, a Delaware
limited partnership (the "Partnership"), at a price of $85.00 per Unit, net to
the seller in cash, without interest, less the amount of distributions per Unit,
if any (other than distributions of Adjusted Cash from Operations, as defined in
the Partnership Agreement), made by the Partnership from the date of the Offer
to Purchase until the Payment Date, upon the terms and subject to the conditions
set forth in the Offer to Purchase, receipt of which is hereby acknowledged, and
in this Assignment of Partnership Interest (which, together with any supplements
or amendments, collectively constitute the "Offer"). The Purchaser reserves the
right to transfer or assign, in whole or from time to time in part, to one or
more persons, the right to purchase Units tendered pursuant to the Offer, but
any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer or prejudice the rights of tendering Limited
Partners to receive payment for Units validly tendered and accepted for payment
pursuant to the Offer. Limited Partners who tender their Units will not be
obligated to pay any commissions or Partnership transfer fees in connection with
such tender.
The undersigned understands that if more than 88,200 Units are validly
tendered prior to or on the Expiration Date and not properly withdrawn, the
Purchaser will, upon the terms of the Offer, accept for payment from among those
tendered Units 88,200 Units on a pro rata basis based upon the number of the
tendered Units with adjustments to avoid purchases of certain fractional Units
and subject to the transfer requirements of the Partnership Agreement.
Subject to and effective upon acceptance for payment of and payment for
the Units tendered hereby, the undersigned hereby sells, assigns, and transfers
to or upon the order of the Purchaser all right, title, proxy and interest in
and to all of the Units tendered hereby (including the related Certificates),
including, without limitation, all rights in, and claims to, any voting rights,
rights to be substituted as a Limited Partner of the Partnership, Partnership
profits and losses, cash distributions and other benefits of any nature
whatsoever distributable or allocable or otherwise to such tendered Units under
the Partnership Agreement; provided, that if proration of tendered Units is
required as described in Section 1 of the Offer to Purchase, this Assignment of
Partnership Interest shall be effective to transfer to the Purchaser only that
number of the undersigned's Units as is accepted for payment and thereby
purchased by the Purchaser. The undersigned understands that upon acceptance for
payment of and payment for the Units tendered by the undersigned, the Purchaser
will seek admission to the Partnership as a Limited Partner in substitution for
the undersigned as to all Units tendered by the undersigned. If, however,
proration of tendered Units is required and as a result the Purchaser accepts
for payment and thereby purchases less than all of the undersigned's Units
tendered hereby, the undersigned may continue to be a Limited Partner with
respect to Units tendered by the undersigned that are not purchased. By
executing and delivering this Assignment of Partnership Interest, the
undersigned, being a tendering Limited Partner, expressly intends the Purchaser
to become a Limited Partner.
<PAGE>
The undersigned understands and hereby acknowledges and agrees that the
Purchaser shall be entitled to (i) deduct from the Purchase Price all
distributions of cash or other property from the Partnership (other than
distributions of Adjusted Cash from Operations) attributable to the transferred
Units that are made on or after March 12, 1998, without regard to whether the
record date for any such distribution may be a date after or prior to the date
of transfer, and (ii) receive all Partnership distributions after the Payment
Date.
By executing and delivering this Assignment of Partnership Interest, a
tendering Limited Partner irrevocably appoints the Purchaser, its general
partner and any designees of the Purchaser and of each of them as such Limited
Partner's proxies, with full power of substitution, to the full extent of such
Limited Partner's rights with respect to the Units tendered by such Limited
Partner and accepted for payment by the Purchaser including, without limitation,
to deliver such Units and transfer ownership of such Units on the Partnership's
books maintained by the general partners of the Partnership and to become a
substituted Limited Partner and to receive all benefits and otherwise exercise
all rights of beneficial ownership of such Units and as a Limited Partner of the
Partnership, all in accordance with the terms of the Offer. All such proxies
shall be considered irrevocable and coupled with an interest in the tendered
Units. Such appointment will be effective when, and only to the extent that, the
Purchaser accepts such Units for payment. Upon such acceptance for payment
pursuant to the Offer, all prior proxies given by such Limited Partner with
respect to such Units will be revoked without further action, and no subsequent
proxies may be given nor any subsequent written consent executed (and, if given
or executed, will not be deemed effective). The Purchaser, its general partner
and any designees of the Purchaser will, with respect to the Units for which
such appointment is effective, be empowered to exercise all voting and other
rights of such Limited Partner as they in their sole discretion may deem proper
at any meeting of Limited Partners or any adjournment or postponement thereof,
by written consent in lieu of any such meeting or otherwise. The Purchaser may
assign such proxy to any person with or without assigning the related Units with
respect to which such proxy was granted. The Purchaser reserves the right to
require that, in order for a Unit to be deemed validly tendered, immediately
upon the Purchaser's payment for such Unit, the Purchaser must be able to
exercise full voting rights with respect to such Unit and other securities,
including voting at any meeting of Limited Partners.
By executing and delivering the Assignment of Partnership Interest, a
tendering Limited Partner also irrevocably constitutes and appoints the
Purchaser, its general partner and any designees of the Purchaser as the Limited
Partner's attorneys-in-fact, each with full power of substitution to the full
extent of the Limited Partner's rights with respect to the Units tendered by the
Limited Partner and accepted for payment by the Purchaser. Such appointment will
be effective when, and only to the extent that, the Purchaser accepts the
tendered Units for payment. Upon such acceptance for payment, all prior powers
of attorney granted by the Limited Partner with respect to such Units will,
without further action, be revoked, and no subsequent powers of attorney may be
granted (and if granted will not be effective). Pursuant to such appointment as
attorneys-in-fact, the Purchaser, its general partner and any designees of the
Purchaser each will have the power, among other things, (i) to seek to transfer
ownership of such Units on the Partnership's books (and execute and deliver any
accompanying evidences of transfer and authenticity any of them may deem
necessary or appropriate in connection therewith, including, without limitation,
any documents or instruments required to be executed under a "Transferor's
(Seller's) Application for Transfer" created by the NASD, if required), (ii)
upon receipt by the Depositary (as the tendering Limited Partner's agent) of the
Purchase Price, to receive any and all distributions made by the Partnership,
and to receive all benefits and otherwise exercise all rights of beneficial
ownership of such Units in accordance with the terms of the Offer, (iii) to
execute and deliver to the Partnership and/or its general partners a change of
address form instructing the Partnership to send any and all future
distributions to which the Purchaser is entitled pursuant to the terms of the
Offer, in respect of tendered Units to the address specified in such form, and
(iv) to endorse any check payable to or upon the order of such Limited Partner
representing a distribution to which the Purchaser is entitled pursuant to the
terms of the Offer, in each case on behalf of the tendering Limited Partner. If
legal title to the Units is held through an IRA or KEOGH or similar account, the
Limited Partner understands that this Assignment of Partnership Interest must be
signed by the custodian of such IRA or KEOGH and the Limited Partner hereby
authorizes and directs the custodian of such IRA or KEOGH to confirm this
Assignment of Partnership Interest. This Power of Attorney shall not be affected
by the subsequent mental disability of the Limited Partner, and the Purchaser
shall not be required to post bond in any nature in connection with this Power
of Attorney. The Purchaser may assign such Power of Attorney to any person with
or without assigning the related Units with respect to which such Power of
Attorney was granted.
The undersigned hereby represents and warrants that the undersigned
owns the Units tendered hereby and has full power and authority to validly
tender, sell, assign and transfer the Units tendered hereby and that when the
same are accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale or transfer thereof, and such Units will not be
subject to any adverse claims and that the transfer and assignment contemplated
herein are in compliance with all applicable laws and regulations. The
undersigned further represents and warrants that the undersigned is a "United
States person", as defined in section 7701(a)(30) of the Internal Revenue Code
of 1986, as amended (the "Code"), or if the undersigned is not a United States
person, the undersigned does not own beneficially or of record more than 5% of
the outstanding Units. Upon request, the undersigned will execute and deliver
any additional documents deemed by the Depositary or the Purchaser to be
necessary or desirable to complete the assignment, transfer and purchase of
Units tendered hereby and otherwise in order to complete the transactions,
transfers and admissions to the Partnership contemplated herein.
The undersigned understands that a tender of Units pursuant to the
procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer. All
authority herein conferred or agreed to be conferred shall survive the death or
incapacity of the undersigned, and any obligation of the undersigned hereunder
shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
The undersigned recognizes that under certain circumstances set forth
in the Offer to Purchase, the Purchaser may not be required to accept for
payment any of the Units tendered hereby. If any tendered Units are not
purchased for any reason, the Assignment of Partnership Interest shall be
effective to transfer to the Purchaser only that number of Units as is accepted
and thereby purchased by the Purchaser, and the Certificates (or, if necessary,
new certificates) representing such unpurchased Units shall be returned.
Upon acceptance of Units by the Purchaser, the Purchaser agrees to be
bound by all of the terms and provisions of the Partnership Agreement.
<PAGE>
SIGN HERE TO TENDER YOUR UNITS
PLEASE BE SURE TO COMPLETE ALL APPLICABLE BLANKS
By executing this document in the space provided below, the undersigned
hereby: (i) evidences the Limited Partner's agreement to and acceptance of all
of the terms, provisions and matters set forth in this Assignment of Partnership
Interest and in the Offer to Purchase, and (ii) tenders the number of Units
specified below pursuant to the terms of the Offer. The undersigned hereby
acknowledges and certifies, under penalty of perjury, to all of the foregoing
and that the information and representations set forth below and provided in
Boxes A, B and C of this Assignment of Partnership Interest, which have been
duly completed by the undersigned, are true and correct as of the date hereof.
<TABLE>
<S> <C>
X_________________________________________ Address:_____________________________________________
Signature of Limited Partner - Date
- ------------------------------------------ ----------------------------------------------------
Printed Name of Limited Partner (Include Zip Code)
(The address provided above must be the REGISTERED address of the Limited
X_________________________________________ Partner.)
Signature of Limited Partner - Date
Telephone (Day) (_____)_______________________________
- -----------------------------------------
Printed Name of Limited Partner Telephone (Eve) (_____)________________________________
Capacity (Full Title):____________________ Total Number of Number of Units
Units Owned:______________ Tendered:_______________
</TABLE>
GUARANTEE OF SIGNATURE(S)
<TABLE>
<S> <C>
Authorized
Signature:________________________________ Name of Eligible Institution:___________________________________________
Name:_____________________________________ Address:_____________________________________________
Date:_____________________________________ Telephone:(_____)____________________________________
============================================= ================================================================
</TABLE>
TAX CERTIFICATES
BOX A
SUBSTITUTE FORM W-9
(SEE INSTRUCTION 4)
The person signing this Assignment of Partnership Interest hereby certifies
to the Purchaser under penalties of perjury:
Part 1 - The Taxpayer Identification Number (TIN) furnished in the space below
is the correct TIN of the Limited Partner;
TIN: ________________________________
Part 2 - If no TIN is provided in the space above and this box |_| is checked,
the Limited Partner has applied for a TIN, a TIN has not been issued to the
Limited Partner and either (i) the Limited Partner has mailed or delivered an
application to receive a TIN to the appropriate Internal Revenue Service ("IRS")
Center or Social Security Administration office, or (ii) the Limited Partner
intends to mail or deliver an application in the near future and it is
understood that if the Limited Partner does not provide a TIN to the Purchaser
within 60 days, 31% of all reportable payments made to the Limited Partner
thereafter will be withheld until a TIN is provided to the Purchaser; and
Part 3 - Unless this box |_| is checked, the Limited Partner is NOT subject to
backup withholding either because the Limited Partner (i) is exempt from
backholding, (ii) has not been notified by the IRS that the Limited Partner is
subject to backup withholding as a result of a failure to report all interest or
dividends, or (iii) has been notified by the IRS that such Limited Partner is no
longer subject to backup withholding.
================================================================================
BOX B
FIRPTA AFFIDAVIT - CERTIFICATE OF NON-FOREIGN STATUS
Under Section 1445(c)(5) of the Code and Treas. Reg. 1.1445-IIT(d), a
transferee of a U.S. real property interest must withhold tax if the transferor
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 Assignment of Partnership Interest hereby certifies the following
under penalties of perjury:
Part 1 - Unless this box |_| is checked, the Limited Partner is a U.S. citizen
or a resident alien for purposes of U.S. income taxation, and if not an
individual, is NOT a foreign corporation, foreign partnership, foreign trust, or
foreign estate (as those terms are defined in the Code and Income Tax
Regulations);
Part 2 - The name of the Limited Partner is ___________________________________;
Part 3 - The Limited Partner's Social Security Number (for individuals) or
Employer Identification Number (for non-individuals) is
_________________________; and
Part 4 - The Limited Partner's home address (in the case of an individual) or
office address (in the case of an entity) is
- ---------------------------------------------------------------------.
================================================================================
<PAGE>
INSTRUCTIONS FOR COMPLETING
ASSIGNMENT OF PARTNERSHIP INTEREST
FOR
HIGH EQUITY PARTNERS L.P. -- SERIES 86
FORMING PART OF TERMS AND CONDITIONS OF THE OFFER
FOR ASSISTANCE IN COMPLETING THIS ASSIGNMENT OF PARTNERSHIP INTEREST, PLEASE
CALL: BEACON HILL PARTNERS, INC. AT (212) 843-8500 (COLLECT) OR (800) 301-8755
(TOLL FREE).
1. DELIVERY OF ASSIGNMENT OF PARTNERSHIP INTEREST. For convenience in responding
to the Offer, a pre-addressed envelope has been enclosed with the Offer to
Purchase. To ensure the Depositary's receipt of the Assignment of Partnership
Interest along with any and all Certificates, if available, it is suggested that
you use an overnight courier or, if the Assignment of Partnership Interest is to
be delivered by United States mail, that you use certified or registered mail,
return receipt requested. THE METHOD OF DELIVERY OF THE ASSIGNMENT OF
PARTNERSHIP INTEREST AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK
OF THE TENDERING LIMITED PARTNER AND DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE DEPOSITARY. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY.
To be effective, a properly completed and duly executed original
Assignment of Partnership Interest along with any and all Certificates, if
available, any required signature guarantees and any other required documents
must be received by the Depositary at one of its addresses set forth below prior
to 5:00 p.m., New York City time, on July 17, 1998, unless extended (the
"Expiration Date").
By Mail: HARRIS TRUST COMPANY OF NEW YORK
Wall Street Station
P.O. Box 1023
New York, New York 10268-1023
By Hand/Overnight Delivery: HARRIS TRUST COMPANY OF NEW YORK
Receive Window
Wall Street Plaza
88 Pine Street, 19th Floor
New York, New York 10005
To Confirm: (212) 701-7624
PLEASE NOTE THAT A TENDERING BENEFICIAL OWNER OF UNITS WHOSE UNITS ARE
OWNED OF RECORD BY AN IRA OR OTHER QUALIFIED PLAN WILL NOT RECEIVE DIRECT
PAYMENT OF THE PURCHASE PRICE; RATHER, PAYMENT WILL BE MADE TO THE CUSTODIAN OF
SUCH ACCOUNT OR PLAN.
2. SIGNATURES ON ASSIGNMENT OF PARTNERSHIP INTEREST. If the Assignment of
Partnership Interest is signed by the registered holder(s) of the Units tendered
hereby, the signature(s) must correspond exactly with the name(s) as shown on
the records of the Partnership without alteration, enlargement or any change
whatsoever.
If the Assignment of Partnership Interest is signed by trustees,
executors, administrators, guardians, attorneys-in-fact, agents, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Depositary and the Purchaser of their authority so to act must be submitted (see
Instruction 3). With respect to most trusts, generally only the signature of the
named trustee will be required. For Units held in a custodial account for
minors, only the signature of the custodian will be required.
For IRA custodial accounts, the beneficial owner should return the
executed Assignment of Partnership Interest to the Depositary as specified in
Instruction 1 herein. Such Assignment of Partnership Interest will then be
forwarded by the Depositary to the custodian for additional execution. Such
Assignment of Partnership Interest will not be considered duly completed until
after it has been executed by the custodian.
If any tendered Units are registered in different names, it will be
necessary to complete, sign and submit as many separate Assignment of
Partnership Interests as there are different registrations of certificates.
ALL SIGNATURES ON THE ASSIGNMENT OF PARTNERSHIP INTEREST MUST BE
MEDALLION GUARANTEED BY A COMMERCIAL BANK, SAVINGS BANK, CREDIT UNION, SAVINGS
AND LOAN ASSOCIATION OR TRUST COMPANY HAVING AN OFFICE, BRANCH OR AGENCY IN THE
UNITED STATES, A BROKERAGE FIRM THAT IS A MEMBER OF A REGISTERED NATIONAL
SECURITIES EXCHANGE OR MEMBER OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS,
INC. (EACH, AN "ELIGIBLE INSTITUTION").
3. DOCUMENTATION REQUIREMENTS. In addition to information required to be
completed on the Assignment of Partnership Interest, additional documentation
may be required by the Purchaser under certain circumstances including, but not
limited to those listed below. Questions on documentation should be directed to
Beacon Hill Partners, Inc. at (212) 843-8500 (collect) or (800) 301-8755 (toll
free).
DECEASED OWNER (JOINT TENANT) Certified copy of death certificate.
DECEASED OWNER (OTHERS) Certified copy of death certificate (See
also EXECUTOR/ADMINISTRATOR/GUARDIAN below).
<PAGE>
EXECUTOR/ADMINISTRATOR/GUARDIAN (a) Certified copies of court appointment
documents for executor or administrator
dated within 60 days of the date of
execution of the Assignment of
Partnership Interest; and
(b) Copy of applicable provisions of the
will (title page, executor(s)' powers,
asset distribution); OR
(c) Certified copy of estate distribution
documents.
ATTORNEY-IN-FACT Current power of attorney.
CORPORATIONS/PARTNERSHIPS Certified copy of corporate resolution(s)
(with raised corporate seal) or other
evidence of authority to act. A partnership
should furnish copy of its partnership
agreement.
TRUST/PENSION PLANS Copy of cover page of the trust or
pension plan, along with copy of the
section(s) setting forth names and powers of
trustee(s) and any amendments to such
sections or appointment of successor
trustee(s).
ALL SIGNATURES MUST BE MEDALLION GUARANTEED.
4. U.S. PERSONS. A Limited Partner who or which is a United States citizen or a
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 Code and Income Tax Regulations, should follow
the instructions with respect to certifying Boxes A and B.
TAXPAYER IDENTIFICATION NUMBER. To avoid 31% federal income tax
withholding, the Limited Partner or other payee must provide the Depositary with
the Limited Partner's correct TIN in the blanks provided for that purpose in
Boxes A and B. In the case of an individual person, such person's social
security number is his or her TIN.
WHEN DETERMINING THE TIN TO BE FURNISHED, PLEASE NOTE: Individual
accounts should reflect their own TIN; joint accounts should reflect the TIN of
the person whose name appears first; trust accounts should reflect the TIN
assigned to the Trust; custodial accounts for the benefit of minors should
reflect the TIN of the minor; corporations or other businesses should reflect
the TIN assigned to that entity.
SUBSTITUTE FORM W-9 - BOX A. Each tendering Limited Partner is required
to provide the Depositary with a correct TIN on Substitute Form W-9 and to
certify, under penalties of perjury, that (i) the TIN provided on Substitute
Form W-9 is correct (or that such Limited Partner is awaiting a TIN), and (ii)
the Limited Partner either (a) is exempt from backup withholding, (b) has not
been notified by the IRS that the Limited Partner is subject to backup
withholding as a result of a failure to report all interest or dividends, or (c)
has been notified by the IRS that the Limited Partner is no longer subject to
backup withholding. Failure to provide the information on the form may subject
the tendering Limited Partner to 31% federal income tax withholding on the
payments made to the Limited Partner or other payee with respect to Units
purchased pursuant to the Offer.
The box in Box A, Part 2 of the form may be checked if the tendering
Limited Partner has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, backup
withholding, if applicable, will begin 7 days after the Depositary receives an
Awaiting TIN Certification and will continue until the Limited Partner's TIN is
provided to the Depositary. If within 60 days the Depositary receives the
Limited Partner's TIN on a new IRS Form W-9 or copy of the Substitute Form W-9
provided above, the Depositary will return amounts withheld through the date
such IRS Form W-9 or Substitute Form W-9 is received.
DO NOT CHECK THE BOX IN BOX A, PART 3 UNLESS YOU HAVE BEEN NOTIFIED BY
THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING.
FIRPTA AFFIDAVIT - BOX B. To avoid potential withholding of tax
pursuant to Section 1445 of the Code in an amount equal to 10% of the purchase
price for Units purchased pursuant to the Offer, plus the amount of any
liabilities of the Partnership allocable to such Units, each Limited Partner who
or which is a United States person must complete the FIRPTA Affidavit stating,
under penalties of perjury, such Limited Partner's TIN and address, and that
such Limited Partner is not a foreign person. Tax withheld under Section 1445 of
the Code is not an additional tax. If withholding results in an overpayment of
tax, a refund may be obtained from the IRS. CHECK THE BOX IN BOX B, PART 1 ONLY
IF YOU ARE NOT A U.S. PERSON AS DESCRIBED THEREIN.
5. FOREIGN PERSONS. In order for a Limited Partner who is a foreign person
(i.e., not a United States person as defined in Instruction 4 above) to qualify
as exempt from 31% backup withholding, such foreign Limited Partner must
complete and deliver to the Depositary, along with the Assignment of Partnership
Interest, a Substitute Form W-8 which can be obtained from the Information
Agent.
6. CONDITIONAL TENDERS. No alternative, conditional or contingent tenders will
be accepted.
7. NUMBER OF UNITS TENDERED; MINIMUM TENDERS; PARTIAL TENDERS. ASSIGNMENTS OF
PARTNERSHIP INTEREST WHICH HAVE BEEN DULY EXECUTED, BUT WHERE NO INDICATION IS
MARKED IN THE "NUMBER OF UNITS TENDERED" COLUMN IN THE SIGNATURE BOX, SHALL BE
DEEMED TO HAVE TENDERED ALL UNITS PURSUANT TO THE OFFER. ALL UNITS REPRESENTED
BY CERTIFICATES DELIVERED TO THE DEPOSITARY WILL BE DEEMED TO HAVE BEEN TENDERED
UNLESS OTHERWISE INDICATED. If fewer than all the Units evidenced by any
Certificate submitted are to be tendered, new certificate(s) for the remainder
of the Units that were evidenced by the old Certificate(s) will be sent to the
tendering Limited Partner as soon as practicable after the expiration of the
Offer. A Limited Partner may tender any or all of the Units owned by that
Limited Partner, provided, however, in order for the transfer to be valid, a
minimum of 10 Units or, if Units are tendered by an IRA or KEOGH, 4 Units, must
be sold pursuant to the Offer and, provided further, that a Limited Partner must
sell all of his Units if he would otherwise retain less than 10 Units or, in the
case of an IRA or KEOGH, 4 Units (8 Units for residents of Iowa). No fractional
Units will be purchased (except from a Limited Partner who is tendering all of
the Units owned by that Limited
<PAGE>
Partner). All tendering Limited Partners, by execution of the Assignment of
Partnership Interest (or facsimile thereof), waive any right to receive any
notice of the acceptance of their Units for payment.
8. CERTIFICATES. Anything herein to the contrary notwithstanding, Limited
Partners should furnish Certificates evidencing tendered Units to the Depositary
only if available. It is not necessary to furnish such Certificates in order for
your tender to be valid.
9. ASSIGNEE STATUS. Assignees must provide documentation to the Depositary which
demonstrates, to the satisfaction of the Purchaser, such person's status as an
assignee.
10. VALIDITY OF ASSIGNMENT OF PARTNERSHIP INTEREST. All questions as to the
validity, form, eligibility (including time of receipt) and acceptance of
Assignment of Partnership Interest will be determined by the Purchaser and such
determination will be final and binding. The Purchaser's interpretation of the
terms and conditions of the Offer (including these Instructions for the
Assignment of Partnership Interest) also will be final and binding. The
Purchaser will have the right to waive any irregularities or conditions as to
the manner of tendering. And any irregularities in connection with tenders must
be cured within such time as the Purchaser shall determine unless waived by it.
The Assignment of Partnership Interest will not be valid unless and
until any irregularities have been cured or waived. Neither the Purchaser, the
Depositary nor the Information Agent are under any duty to give notification of
any defects in an Assignment of Partnership Interest and will incur no liability
for failure to give such notification.
11. REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions or requests for
assistance may be directed to the Information Agent, Beacon Hill Partners, Inc.
at (212) 843-8500 (collect) or (800) 301-8755 (toll free). Copies of the Offer
to Purchase and the Assignment of Partnership Interest may be obtained from the
Information Agent by calling either number.
12. INADEQUATE SPACE. If the space provided herein is inadequate, additional
information may be provided on a separate schedule signed and attached hereto.
IMPORTANT: A PROPERLY COMPLETED AND DULY EXECUTED ASSIGNMENT OF
PARTNERSHIP INTEREST (ALONG WITH AND ANY AND ALL CERTIFICATES, AND ANY REQUIRED
SIGNATURE GUARANTEES AND ANY OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE
DEPOSITARY ON OR PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON JULY 17, 1998,
UNLESS EXTENDED.
IMPORTANT TAX INFORMATION
Under federal income tax law, in order to prevent backup withholding on
amounts payable to a Limited Partner whose tendered Units are accepted for
payment, such Limited Partner is required to provide the Depositary with such
Limited Partner's correct TIN on Substitute Form W-9 above or otherwise
establish a basis for exemption from backup withholding. If the Depositary is
not provided with the correct TIN, the Limited Partner or other payee may be
subject to penalties imposed by the IRS. In addition, payments that are made to
such Limited Partner or other payee with respect to Units purchased pursuant to
the Offer may be subject to backup withholding.
Certain Limited Partners (including, among others, all corporations and
certain foreign persons) are not subject to these backup withholding and
reporting requirements. Exempt Limited Partners should indicate their exempt
status on Substitute Form W-9. In order for a foreign person to qualify as an
exempt recipient, that Limited Partner must deliver to the Depositary a
Substitute Form W-8, signed under penalties of perjury, attesting to that
Limited Partner's exempt status.
If backup withholding applies, the Depositary is required to withhold
31% of any reportable payments made to the Limited Partner or other payee.
Backup withholding is not an additional tax. Rather, the federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of tax withheld. If withholding results in an overpayment of taxes, a refund may
be obtained from the IRS.
<PAGE>
Exhibit (a)(12)
$85.00 PER UNIT OFFER TO PURCHASE
TO UNITHOLDERS IN HIGH EQUITY PARTNERS L.P. - SERIES 86:
AS YOU KNOW, OLYMPIA INVESTORS, L.P. (THE "PURCHASER") IS
OFFERING TO PURCHASE UNITS OF LIMITED PARTNERSHIP INTEREST ("UNITS") IN HIGH
EQUITY PARTNERS L.P. - SERIES 86 (THE "PARTNERSHIP") FOR A PURCHASE PRICE OF
$85.00 PER UNIT, NET TO THE SELLER IN CASH, WITHOUT INTEREST, LESS THE AMOUNT OF
DISTRIBUTIONS PER UNIT, IF ANY (OTHER THAN DISTRIBUTIONS OF ADJUSTED CASH FROM
OPERATIONS, AS DEFINED IN THE PARTNERSHIP'S PARTNERSHIP AGREEMENT), MADE BY THE
PARTNERSHIP FROM MARCH 12, 1998 UNTIL THE PAYMENT DATE (AS DEFINED IN THE
ORIGINAL OFFER TO PURCHASE DATED MARCH 12, 1998), UPON THE TERMS AND SUBJECT TO
THE CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, AS WELL AS THE SUPPLEMENT,
DATED JULY 1, 1998 AND THE RELATED AMENDED ASSIGNMENT OF PARTNERSHIP INTEREST
INCLUDED IN THIS PACKAGE (WHICH TOGETHER WITH THE OFFER TO PURCHASE CONSTITUTE
THE "OFFER"). THE PURCHASER HAS REDUCED THE MAXIMUM NUMBER OF UNITS IT IS
SEEKING TO PURCHASE IN THE OFFER FROM 235,000 TO 88,200.
The Offer will be effective until 5:00 p.m., New York City
time, on July 17, 1998. The Purchaser anticipates that the Offer will not be
extended beyond July17, 1998. IF YOU HAVE ALREADY TENDERED YOUR UNITS AND HAVE
NOT RECEIVED NOTICE THAT YOUR TENDER IS DEFECTIVE, YOU NEED NOT TAKE ANY FURTHER
ACTION WITH RESPECT TO YOUR TENDER.
This package includes important information concerning the
Purchaser and certain of its affiliates, as well as certain affiliates of the
General Partners of the Partnership, who may be deemed to be "co-bidders" with
the Purchaser in connection with the Offer. Also included are an Amended
Assignment of Partnership Interest and instructions for tendering your Units. IT
IS IMPORTANT THAT YOU TAKE SOME TIME TO READ CAREFULLY THE ORIGINAL OFFER TO
PURCHASE, AS WELL AS THE ENCLOSED SUPPLEMENT, THE AMENDED ASSIGNMENT OF
PARTNERSHIP INTEREST AND OTHER ACCOMPANYING MATERIALS IN ORDER TO EVALUATE THE
OFFER.
Your decision whether to tender Units should be based on your
own particular circumstances, including your judgment of the value of your Units
taking into account their upside potential and risks. You should consult with
your advisors about the financial, tax, legal and other implications to you of
accepting the Offer.
If you would like additional information about the Offer or
need assistance in tendering your Units, you may call Beacon Hill Partners,
Inc., which is acting as Information Agent for the Offer. Informed and courteous
agents are available to assist you.
BEACON HILL PARTNERS, INC.
90 Broad Street
New York, New York 10004
(212) 843-8500 (Collect)
or
(800) 301-8755 (Toll Free)
July 1, 1998 OLYMPIA INVESTORS, L.P.
<PAGE>
Exhibit (a)(13)
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: March 12, 1998
OLYMPIA INVESTORS, L.P. OLYMPIA GP-INC.
By: OLYMPIA GP-INC., By: /s/ Martin L. Hirsch
its general partner --------------------
Name: Martin L. Hirsch
By: /s/ Martin L. Hirsch Title: Vice President
-----------------------
Name: Martin L. Hirsch
Title: Vice President
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.,
its general partner
By: /s/ Martin L. Hirsch
-----------------------
Name: Martin L. Hirsch
Title: Vice President
AMERICAN PROPERTY INVESTORS, INC.
By: /s/ Martin L. Hirsch
-----------------------
Name: Martin L. Hirsch
Title: Vice President
/s/ Carl C. Icahn
------------------------
CARL C. ICAHN
[Signature Page for High Equity Partners L.P. - Series 86, Schedule 14D-1]
<PAGE>
Exhibit (a)(14)
Amendment No. 2
to
Agreement
dated March 6, 1998
This Amendment No. 2 (the "Amendment"), dated as of June 29,
1998, amends the agreement, dated March 6, 1998 (the "Agreement") and as amended
by Amendment No. 1 thereto, dated as of May 20, 1998 ("Amendment No. 1"), among
Presidio Capital Corp., a corporation organized in the British Virgin Islands
("Presidio"), American Real Estate Holdings, L.P., a Delaware limited
partnership ("AREH") and Olympia Investors, L.P., a Delaware limited partnership
("Olympia"). Capitalized terms used herein and not otherwise defined will have
the meanings ascribed to them in the Agreement.
The parties agree as follows:
1. The following proviso is hereby added to the end of Section
5 of the Agreement:
"; provided, however, that AREH shall have no obligation to cause Units
of a Partnership to be voted in favor of any proposal otherwise covered
by this Section 5 if such proposal (a) is made prior to the first
anniversary of the completion of the Offer relating to such Partnership
and (b) relates to a transaction or series of related transactions
constituting a "roll-up transaction" (within the meaning of Regulation
S-K, Item 901), other than a proposal for the conversion of such
Partnership into a stand-alone (i.e., not part of another entity or
entities), actively traded, real estate investment trust pursuant to
Section 3(a)(10) of the Securities Act of 1933, where the terms and
conditions of the transaction, or series of related transactions,
including any related tender offer for Units or any sale or financing
of Partnership properties, are approved, after a hearing upon the
fairness of such terms and conditions at which all limited partners
have the right to appear, by the court in connection with a settlement
of the litigation described in Item 4, paragraph 12 of the Schedules
14D-9 filed by HEP 85 and HEP 88 in connection with the Offers for
Units of those Partnerships and in Item 4, paragraph 11 of the Schedule
14D-9 filed by HEP 86 in connection with the Offer for Units of HEP
86."
.
2. All references in the Agreement and in Amendment No.
<PAGE>
1 to "the agreement" or "this agreement" shall hereinafter be deemed to refer to
the Agreement as amended by Amendment No. 1 and by this Amendment. Except as
expressly amended by Amendment No. 1 and hereby, the Agreement shall remain in
full force and effect as originally executed by the parties.
<PAGE>
3. The provisions of Section 8.3 of the Agreement are
incorporated by reference herein as if fully set forth herein, except that, for
purposes of this Amendment, all references to "the agreement" in said Section
shall be deemed to refer to this Amendment.
4. This Amendment may be executed in counterparts, each of
which shall be considered an original, but both of which together shall
constitute the same instrument.
IN WITNESS WHEREOF, the undersigned have caused this Amendment
to be executed by their duly authorized representatives as of the date first
above written.
PRESIDIO CAPITAL CORP.
By: /S/ ALLAN B. ROTHSCHILD
--------------------------
Allan B. Rothschild
Authorized Signatory
OLYMPIA INVESTORS, L.P.
By: Olympia-GP, Inc.
By: /S/ MARTIN L. HIRSCH
--------------------------
Martin L. Hirsch, Vice President
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: American Property Investors, Inc.
By: /S/ MARTIN L. HIRSCH
--------------------------
Martin L. Hirsch, Vice President
<PAGE>
Exhibit (a)(15)
American Real Estate Partners, L.P.
FOR IMMEDIATE RELEASE
---------------------
Contact: Information Agent:
Beacon Hill Partners, Inc.
(212) 843-8500
TENDER OFFER BY AFFILIATE OF
AMERICAN REAL ESTATE PARTNERS, L.P. EXTENDED
Mount Kisco, N.Y., July 1, 1998 - American Real Estate Partners, L.P. (NYSE:
ACP) announced today that its affiliate, Olympia Investors, L.P., a Delaware
limited partnership, has extended the expiration date of its offers (the
"Offers") to purchase up to approximately 15% of the outstanding Units in each
of Integrated Resources High Equity Partners, Series 85, ("HEP-85"), High Equity
Partners L.P. - Series 86 ("HEP-86") and High Equity Partners L.P. - Series 88
("HEP-88") to 5:00 p.m., New York City time, on Friday, July 17, 1998. As of
June 30, 1998, 26,278 Units in HEP-85, 25,214 Units in HEP-86, and 11,039
Units in HEP-88 had been tendered to the depositary pursuant to the Offers.
American Real Estate Partners, L.P. is a master limited partnership primarily
engaged in acquiring and managing real estate investments, with a primary focus
on office, retail, industrial, hotel and residential properties.
100 South Bedford Road Mount Kisco, NY 10549 914-242-7700 914-
242-9282 (Fax)
<PAGE>
