<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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
------------------------
ML MEDIA PARTNERS, L.P.
(NAME OF SUBJECT COMPANY)
SMITHTOWN BAY, LLC
A DELAWARE LIMITED LIABILITY COMPANY
GLOBAL CAPITAL MANAGEMENT, INC.,
A DELAWARE CORPORATION
(BIDDER)
UNITS OF LIMITED PARTNERSHIP INTERESTS
(TITLE OF CLASS OF SECURITIES)
55307J102
(CUSIP Number of Class of Securities)
Thomas A. Schmidt
601 Carlson Parkway - Suite 200
Minnetonka, Minnesota 55305
(612) 476-7200
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
------------------------
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRANSACTION VALUATION* AMOUNT OF FILING FEE
$6,175,000 $1,235.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* FOR PURPOSES OF CALCULATING THE FILING FEE ONLY. THIS CALCULATION ASSUMES
THE PURCHASE OF 6,500 UNITS OF LIMITED PARTNERSHIP INTERESTS ("UNITS") AT
$950 PER UNIT NET IN CASH. THE AMOUNT OF THE FILING FEE, CALCULATED IN
ACCORDANCE WITH REGULATION 0-11 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, EQUALS 1/50 OF ONE PERCENT OF THE VALUE OF UNITS ASSUMED TO BE
PURCHASED.
/ / 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.
<TABLE>
<S> <C> <C> <C>
AMOUNT PREVIOUSLY PAID: NOT APPLICABLE FILING PARTY: NOT APPLICABLE
FORM OF REGISTRATION NO.: NOT APPLICABLE DATE FILED: NOT APPLICABLE
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Page 1 of 7
<PAGE>
CUSIP NO. 55307J102 Page 2 of 7 Pages
<TABLE>
<C> <S>
1. Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Smithtown Bay, LLC
2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) / /
(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
State of Delaware
7. Aggregate Amount Beneficially Owned By Each Reporting Person
11,943
8. Check if the Aggregate in Row (7) Excludes Certain Units (See Instructions) / /
9. Percent of Class Represented by Amount in Row (7)
Approximately 6.4
10. Type of Reporting Persons (See Instructions)
OO
</TABLE>
Page 2 of 7
<PAGE>
CUSIP NO. 55307J102 Page 3 of 7 Pages
<TABLE>
<C> <S>
1. Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
Global Capital Management, Inc.
2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) / /
(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
State of Delaware
7. Aggregate Amount Beneficially Owned By Each Reporting Person
11,943
8. Check if the Aggregate in Row (7) Excludes Certain Units (See Instructions) / /
9. Percent of Class Represented by Amount in Row (7)
Approximately 6.4
10. Type of Reporting Persons (See Instructions)
CO
</TABLE>
Page 3 of 7
<PAGE>
ITEM 1. SECURITY AND SUBJECT COMPANY
(a) The name of the subject company is ML Media Partners, L.P., a Delaware
limited partnership, and the address of its executive offices is World Financial
Center, South Tower, 14th Floor, New York, New York 10080-6114, Telephone (212)
236-6577.
(b) The information set forth in the "Introduction" of the Offer to Purchase
is incorporated herein by reference.
This Schedule 14D-1 relates to a tender offer by Smithtown Bay, LLC, a
Delaware limited liability company ("Purchaser"), to purchase 6,500 Units of
Limited Partnership Interests ("Units") of ML Media Partners, L.P., a Delaware
limited partnership (the "Partnership"), at $950 per Unit, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated January 27, 1999, and the related Agreement of Transfer and Sale
(which together constitute the "Offer"), which are attached to and filed with
this Schedule 14D-1 as Exhibits (a)(1) and (a)(2), respectively, and
incorporated herein by reference.
(c) The information set forth in the "Introduction" and Section 7 ("Purpose
and Effect of the Offer") of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(d) and (g) The information set forth in the "Introduction," Section 11
("Certain Information Concerning the Purchaser"), Section 12 ("Source and Amount
of Funds") and Schedule 1 of the Offer to Purchase is incorporated herein by
reference.
(e)-(f) During the last five years, neither the Purchaser, nor to the best
of their knowledge, any of their respective executive officers and directors
listed in Schedule 1 of the Offer to Purchase (i) has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding any such person was or
is subject to a judgment, decree or final order enjoining future violations of,
or prohibiting activities subject to, federal or state securities laws or
finding any violation of such laws.
(g) The information set forth in Schedule 1 to the Offer to Purchase is
incorporated herein by this reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(a) Not applicable.
(b) The information set forth in Section 9 ("Past Contacts and Negotiations
with General Partners") of the Offer to Purchase is incorporated herein by this
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a) The information set forth in Section 12 ("Source and Amount of Funds")
of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER
(a)-(g) The information set forth in the "Introduction," Section 7 ("Purpose
and Effects of the Offer") and Section 8 ("Future Plans") of the Offer to
Purchase are incorporated herein by reference.
Page 4 of 7
<PAGE>
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a)-(b) The information set forth in the "Introduction" and Section 11
("Certain Information Concerning the Purchaser") of the Offer to Purchase are
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT
COMPANY'S SECURITIES
The information set forth in Section 9 ("Past Contracts and Negotiations
With the General Partner") of the Offer to Purchase is incorporated herein by
reference.
ITEM 8. PERSONS RELATED, EMPLOYED OR TO BE COMPENSATED
The information set forth in the "Introduction" and Section 15 ("Fees and
Expenses") of the Offer to Purchase are incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
The information set forth in Section 11 ("Certain Information Concerning the
Purchaser") and Schedule 2 of the Offer to Purchase is incorporated herein by
this reference.
ITEM 10. ADDITIONAL INFORMATION
(a) The information set forth in Section 9 ("Past Contracts and Negotiations
With the General Partner") of the Offer to Purchase is incorporated herein by
reference.
(b)-(c) The information set forth in the "Introduction," Section 7 ("Purpose
and Effects of the Offer") and Section 14 ("Certain Legal Matters and Regulatory
Approvals") of the Offer to Purchase are incorporated herein by reference.
(d) Not applicable.
(e) Not applicable.
(f) Reference hereby is made to the Offer to Purchase and the related
Agreement of Transfer and Sale, copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively, which are incorporated in their entirety herein
by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
(a)(1) - Offer to Purchase, dated January 27, 1999.
(a)(2) - Agreement of Transfer and Sale.
(a)(3) - Cover Letter, dated January 27, 1999 from Purchaser to Unit Holders
(a)(4) - Summary Publication.
(b) - Not applicable.
(c)(1) - Confidentiality Agreement between Purchaser and the Partnership.
(c)(2) - Agreement between Purchaser and the Partnership regarding Federal Communication Commission
requirements for ownership of Units, and amendment to such Agreement.
(d) - Not applicable.
(e) - Not applicable.
(f) - Not applicable.
</TABLE>
Page 5 of 7
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: January 27, 1999 SMITHTOWN BAY, LLC
By: Global Capital Management, Inc.,
a Delaware corporation,
its Manager
By: /s/ MICHAEL J. FREY
-----------------------------------------
Michael J. Frey, CHIEF EXECUTIVE OFFICER
GLOBAL CAPITAL MANAGEMENT, INC.,
a Delaware corporation
By: /s/ MICHAEL J. FREY
-----------------------------------------
Michael J. Frey, CHIEF EXECUTIVE OFFICER
Page 6 of 7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NUMBER
- ----------- --------------------------------------------------------------------------------------- ---------------
<S> <C> <C>
(a)(1) - Offer to Purchase, dated January 27, 1999.
(a)(2) - Agreement of Transfer and Sale.
(a)(3) - Cover Letter, dated January 27, 1999 from Purchaser to Unit Holders
(a)(4) - Summary Publication.
(b) - Not applicable.
(c)(1) - Confidentiality Agreement between Purchaser and the Partnership.
(c)(2) - Agreement between Purchaser and the Partnership regarding Federal Communication
Commission requirements for ownership of Units, and amendment to such Agreement.
(d) - Not applicable.
(e) - Not applicable.
(f) - Not applicable.
</TABLE>
Page 7 of 7
<PAGE>
OFFER TO PURCHASE FOR CASH
UNITS OF LIMITED PARTNERSHIP INTERESTS
OF
ML MEDIA PARTNERS, L.P.
AT
$950 PER UNIT
BY
SMITHTOWN BAY, LLC
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE
AT 12:00 MIDNIGHT, EASTERN TIME, ON FEBRUARY 26, 1999,
UNLESS THE OFFER IS EXTENDED.
Smithtown Bay, LLC, a Delaware limited liability company (the "Purchaser"),
hereby offers to purchase up to 6,500 units of limited partnership interests
including any rights attributable to claims, damages, recoveries, including
recoveries from any class action lawsuits, and causes of action accruing to the
ownership of such units of limited partnership interests ("Units") of ML Media
Partners, L.P., a Delaware limited partnership (the "Partnership"), at a
purchase price of $950 per Unit, without interest, less the $50 transfer fee
(per transfer, not per Unit) charged by the Partnership and less the amount of
any cash distributions declared or paid, including any return of capital made in
cash with respect to the Units after January 1, 1999 (SEE THE FIRST FACTOR ON
PAGE ONE OF THE INTRODUCTION SECTION) (the "Purchase Price"), upon the terms and
subject to the conditions set forth in this Offer to Purchase (the "Offer to
Purchase") and in the related Agreement of Transfer and Sale, as each may be
supplemented or amended from time to time (which together constitute the
"Offer"). The 6,500 Units sought to be purchased pursuant to the Offer
represent, to the best knowledge of the Purchaser, approximately 3.5% of the
Units outstanding as of the date of the Offer.
THE OFFER TO PURCHASE IS NOT CONDITIONED UPON THE VALID TENDER OF ANY
MINIMUM NUMBER OF UNITS. IF MORE THAN 6,500 UNITS ARE VALIDLY TENDERED AND NOT
WITHDRAWN, THE PURCHASER WILL ACCEPT FOR PURCHASE UP TO 6,500 OF THE TENDERED
UNITS, ON A PRO RATA BASIS, SUBJECT TO THE TERMS AND CONDITIONS HEREIN, SEE
"TENDER OFFER--SECTION 13. CERTAIN CONDITIONS OF THE OFFER."
A HOLDER OF UNITS ("UNIT HOLDER") MAY TENDER ANY OR ALL UNITS OWNED BY SUCH
UNIT HOLDER.
FOR MORE INFORMATION OR FOR FURTHER ASSISTANCE PLEASE CALL:
MAVRICC Management Systems, Inc.
1-800-500-3243
January 27, 1999
<PAGE>
IMPORTANT
Any Unit Holder desiring to tender any or all of his/her Units should
complete and sign the Agreement of Transfer and Sale in accordance with the
instructions in the Agreement of Transfer and Sale and mail or deliver a fully
executed original of the Agreement of Transfer and Sale along with any other
required documents to the Purchaser at the address set forth on the back cover
of this Offer to Purchase, or request his/her broker, dealer, commercial bank,
credit union, trust company or other nominee to effect the transaction on their
behalf.
QUESTIONS OR REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THIS OFFER TO
PURCHASE OR THE AGREEMENT OF TRANSFER AND SALE MAY BE DIRECTED TO MAVRICC
MANAGEMENT SYSTEMS, INC. (THE "DEPOSITARY") BY CALLING THE TOLL-FREE INFORMATION
LINE: 1-800-500-3243.
------------------------
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION OR ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR TO PROVIDE ANY INFORMATION OTHER
THAN AS CONTAINED HEREIN OR IN THE AGREEMENT OF TRANSFER AND SALE. NO SUCH
RECOMMENDATION, INFORMATION OR REPRESENTATION MAY BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
[INTENTIONALLY LEFT BLANK]
(2)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
INTRODUCTION............................................................... 1
OFFER TO PURCHASE.......................................................... 4
Section 1. Terms of the Offer............................................ 4
Section 2. Proration; Acceptance for Payment and Payment for Units....... 4
Section 3. Procedures for Tendering Units................................ 5
Valid Tender.............................................. 5
Backup Federal Income Tax Withholding..................... 5
Tenders by Beneficial Holders............................. 6
Signature Guarantees...................................... 6
ERISA..................................................... 6
Appraisal Rights.......................................... 6
Other Requirements........................................ 6
Determination of Validity; Rejection of Units; Waiver of
Defects; No Obligation to Give Notice of Defects........ 7
Section 4. Withdrawal Rights............................................. 7
Section 5. Extension of Tender Period; Termination; Amendment............ 8
Section 6. Certain Tax Consequences...................................... 8
Section 7. Purpose and Effects of the Offer.............................. 8
Purpose of the Offer...................................... 8
Certain Restrictions on Transfer of Units................. 9
Effect on Trading Market and Price Range of the Units..... 9
Section 8. Future Plans.................................................. 9
Section 9. Past Contacts and Negotiations With General Partner........... 10
Section 10. Certain Information Concerning the Business of the Partnership
and Related Matters........................................... 10
Business.................................................. 10
Selected Financial Data................................... 11
Distributions............................................. 12
Section 11. Certain Information Concerning the Purchaser.................. 12
Section 12. Source of Funds............................................... 13
Section 13. Certain Conditions of the Offer............................... 13
Section 14. Certain Legal Matters and Required Regulatory Approvals....... 14
General................................................... 14
Antitrust................................................. 15
State Takeover Laws....................................... 15
Section 15. Fees and Expenses............................................. 15
Section 16. Miscellaneous................................................. 15
SCHEDULE 1................................................................. S-1-1
SCHEDULE 2................................................................. S-2-1
</TABLE>
(i)
<PAGE>
To the Holders of Units of Limited Partnership Interests
of ML Media Partners, L.P.
INTRODUCTION
Smithtown Bay, LLC, a Delaware limited liability company (the "Purchaser"),
hereby offers to purchase up to 6,500 Units of partnership interests including
any rights attributable to claims, damages, recoveries, including recoveries
from any class action lawsuits, and causes of action accruing to the ownership
of such units of limited partnership interests ("Units") of ML Media Partners,
L.P., a Delaware limited partnership (the "Partnership" or the "Fund"), at a
purchase price of $950 per Unit, without interest, less the $50 transfer fee
(per transfer, not per Unit) charged by the Partnership and less the amount of
any cash distributions declared or paid, including any cash return of capital,
if any, (collectively hereinafter referred to as "Distributions") made or
declared with respect to the Units after January 1, 1999 (SEE THE FIRST FACTOR
SET FORTH BELOW) (the "Purchase Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Agreement of
Transfer and Sale (which together constitute the "Offer"). The 6,500 Units
sought to be purchased pursuant to the Offer represent, to the best knowledge of
the Purchaser, approximately 3.5% of the Units outstanding as of the date of the
Offer.
We encourage you to consider the following factors:
- - Please be aware that on January 4, 1999 the Partnership sold certain of the
assets of the Partnership's radio stations KORG and KEZY-FM to Citicasters,
Co. pursuant to the Asset Purchase Agreement dated September 14, 1998, as
amended (the "Agreement"). The Partnership disclosed in a Form 8-K, dated
January 12, 1999 and filed January 19, 1999 with the Securities and Exchange
Commission ("Commission") that it expected to distribute the proceeds from
the sale of such stations, less amounts held for reserves and $1,000,000
placed into an Indemnity Escrow Account pursuant to the Agreement, to
Unitholders of record as of January 4, 1999, by the end of the first quarter
of 1999. The Partnership did not disclose the amount of the distribution to
be paid, but, PLEASE BE ADVISED THAT THE AMOUNT OF SUCH DISTRIBUTION WILL BE
DEDUCTED FROM THE PURCHASE PRICE.
In addition, the Partnership disclosed in a Form 8-K filed with the
Commission on November 25, 1998 that pursuant to a Stock Purchase Agreement
dated August 11, 1998 with Chancellor Media Corporation (the "Stock
Agreement"), the Partnership sold the stock of its subsidiary which owns
radio station WQAL-FM in Cleveland, Ohio. That sale has not yet been
consummated. HOWEVER, PLEASE BE ADVISED THAT IF SUCH SALE CLOSES PRIOR TO
PURCHASER'S PAYMENT FOR THE UNITS TENDERED TO IT, THE AMOUNT DISTRIBUTED TO
TENDERING UNITHOLDERS OF RECORD ON THE DATE OF SUCH CLOSING WILL BE DEDUCTED
FROM THE PURCHASE PRICE.
- - Holders of Units ("Unit Holders") who tender their Units will be giving up
the opportunity to participate in any future potential benefits represented
by ownership of Units, including, for example, the right to participate in
any future distribution of cash or property, whether from operations, the
proceeds of a sale of the Partnership's assets or in connection with any
future liquidation of the Partnership. However, there is no guarantee of
future results of the Partnership and investment in the Partnership.
- - Although the Purchaser cannot predict the future value of the Partnership's
assets on a per Unit basis, the Purchase Price could differ significantly
from the net proceeds that would be recognized on a per Unit basis from the
sale of the Partnership's assets or that may be realized upon a future
liquidation of the Partnership.
- - The tax consequences of the Offer to a particular Unit Holder may be
different from those of other Unit Holders and we urge you to consult your
own tax advisors in connection with the Offer.
1
<PAGE>
- - Unit Holders should note that the most recent reported trading activity in
the Units occurred in November 1998. The average selling price for Units
reported in the limited and sporadic secondary market during the two-month
period ended November 30, 1998 was $750 encompassing four trades and 80 Units
(as reported by Partnership Spectrum, a third party publication). Such
secondary market selling prices, however, do not take into account
commissions charged by secondary market makers effectuating such sales which
the Purchaser believes, based on a typical ten Unit sales transaction, range
from 5% to 8% of the sales proceeds (which would result in a reduction of the
net proceeds to the seller of approximately $375 to approximately $600).
- - The net asset value of the Units as estimated by the General Partner in its
Interim Report to Unit Holders for the period ended June 26, 1998 ("Interim
Report") is $1,000.00 per Unit. The net asset value does not necessarily
reflect the fair market value of a Unit, which may be higher or lower than
the net asset value depending on several factors.
The General Partner stated in the Interim Report that this estimate does not
give effect to any future costs that may be incurred by the Partnership in
connection with pending litigation and there can be no assurance as to the
amount of the ultimate sale proceeds that will be generated from the sale of
the Partnership's remaining media properties or the net amount that will
ultimately be distributed.
The General Partner also stated in the Interim Report that as previously
communicated, with respect to limited partnerships, Merrill Lynch client
account statements report estimated values provided to Merrill Lynch by
independent valuation services. The estimated values provided by the
independent valuation services on Merrill Lynch account statements and those
provided in the Interim Report by the General Partner may differ, and are
not market values, and you may not be able to sell your Units or realize
either amount upon the sale of such Units. In addition, you may not realize
such estimated values upon the liquidation of the Partnership's remaining
assets.
- - The Purchaser is making the Offer with a view towards making a profit.
Accordingly, there may be a conflict between the desire of the Purchaser to
acquire the Units at a low price and the desire of the Unit Holders to sell
the Units at a high price. No independent person has been retained to
evaluate or render any opinion with respect to the fairness of the $950
Purchase Price and no representation is made as to such fairness. Other
measures of value may be relevant to a Unit Holder and all Unit Holders are
urged to carefully consider all of the information contained in the Offer to
Purchase and Agreement of Transfer and Sale and to consult with their own
advisors (tax, financial or otherwise) in evaluating the terms of the Offer
before deciding whether to tender their Units.
Unit Holders may no longer wish to continue with their investment in the
Partnership and might consider accepting the Offer for one or more of the
following reasons:
- - An established trading market for the Units does not now exist, and it is not
anticipated that such a market will develop in the future. (See the
Partnership's Annual Report on Form 10-K for the fiscal year ended December
26, 1997). Unit Holders who desire resale liquidity may wish to consider the
Offer. The Offer affords a significant number of Unit Holders with an
opportunity to dispose of their Units for cash, which otherwise might not be
available to them. The Purchase Price is not intended to represent either the
fair market value of a Unit or the Partnership's assets on a per Unit basis.
Although there are some limited resale mechanisms available to the Unit
Holders wishing to sell their Units, there is no formal or organized trading
market for the Units.
- - The Offer may be attractive to certain Unit Holders who wish in the future to
avoid the continued additional expense, delay and complication in filing
income tax returns which result from the ownership of the Units.
- - The Offer provides Unit Holders with the opportunity to liquidate their Units
and to reinvest the proceeds in other investments should they desire to do
so.
- - The Offer will provide Unit Holders with an immediate opportunity to
liquidate their investment in the Partnership without the usual transaction
costs associated with secondary market sales.
2
<PAGE>
If you wish to sell some or all of your Units now, please read carefully the
enclosed Offer to Purchase and the Agreement of Transfer and Sale. All you need
to do is complete the Agreement of Transfer and Sale in accordance with the
instructions provided therein, sign where indicated, have your signature
Medallion Guaranteed and return it to the Purchaser, in the pre-addressed return
envelope. If you desire to accept this Offer, please carefully follow the
instructions on the Agreement of Transfer and Sale. Errors will delay and
possibly prevent acceptance of your tender of the Units.
If, prior to the Expiration Date, the Purchaser increases the consideration
offered to Unit Holders pursuant to the Offer, such increased consideration will
be paid with respect to all Units that are purchased pursuant to the Offer,
whether or not such Units were tendered prior to such increase in consideration.
The Offer is being made by the Purchaser as a speculative investment based
upon the belief that the Units represent an attractive investment at the price
offered based upon, in part, the expected liquidation of the Partnership's
assets. The purpose of the Offer is to allow the Purchaser to benefit from any
one combination of the following: (i) any cash distributions from Partnership
operations in the ordinary course of business; (ii) distributions, if any, of
net proceeds from the liquidation of any properties after the Partnership has
satisfied its liabilities; (iii) any cash from any redemption of the Units by
the Partnership; and (iv) sale of the Units.
The Offer is not conditioned upon the valid tender of any minimum number of
the Units. If more than 6,500 Units, are validly tendered and not withdrawn, the
Purchaser will accept up to 6,500 of the tendered Units for purchase on a pro
rata basis, subject to the terms and conditions herein. See "Tender Offer--
Section 13. Certain Conditions of the Offer." The Purchaser expressly reserves
the right to terminate the Offer at anytime and to waive any or all of the
conditions of the Offer, although the Purchaser does not presently intend to
waive any such conditions.
The Partnership is subject to the information and reporting requirements of
the Securities Exchange Act of 1934, as amended ("Exchange Act"), and in
accordance therewith is required to file reports and other information with the
Commission relating to its business, financial condition and other matters. Such
reports and other information are available on the Commission's Electronic Data
Gathering and Retrieval System (EDGAR), at its internet website at
www.sec.gov.com and may be inspected at the public reference facilities
maintained by the Commission at room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and is available for inspection and copying at the
regional offices of the Commission located in Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can also
be obtained from the Public Reference Room of the Commission in Washington, D.C.
at prescribed rates.
The Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1 (including exhibits) pursuant to Rule 14d-3 of the General Rules
and Regulations under the Exchange Act, which provides certain additional
information with respect to the Offer. Such Statements and any amendments
thereto, including exhibits, may be inspected and copies may be obtained from
the Commission in the manner specified above.
According to publicly available information, there were 187,994 Units issued
and outstanding at December 26, 1997, held by approximately 14,298 Unit Holders.
The Purchaser currently owns 11,943 Units which is approximately 6.4% of the
outstanding Units.
Information contained in this Offer to Purchase which relates to, or
represents statements made by the Partnership or the General Partner, has been
derived from information provided in reports and other information filed with
the Commission by the Partnership and General Partner.
Unit Holders are urged to read this Offer to Purchase and the accompanying
Agreement of Transfer and Sale carefully before deciding whether to tender their
Units.
3
<PAGE>
OFFER TO PURCHASE
SECTION 1. TERMS OF THE OFFER. Upon the terms and subject to the conditions
of the Offer, the Purchaser will accept for payment and pay for up to 6,500
Units that are validly tendered on or prior to the Expiration Date and not
withdrawn in accordance with Section 4 of this Offer to Purchase. The term
"Expiration Date" shall mean 12:00 midnight, Eastern Time, on February 26, 1999,
unless and until the Purchaser shall have extended the period of time for which
the Offer is open, in which event the term "Expiration Date" shall mean the
latest date on which the Offer, as so extended by the Purchaser shall expire.
Subject to any approval rights of the General Partner under the terms of the
Partnership Agreement, the Purchaser reserves the right to transfer or assign,
(in whole or in part from time to time), to one or more of the Purchaser's
affiliates, the right to purchase all or any portion of the Units tendered
pursuant to the Offer. Any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer or prejudice the rights of
tendering Unit Holders to receive payment for Units validly tendered and
accepted for payment pursuant to the Offer.
The Offer is conditioned on satisfaction of certain conditions. See "Tender
Offer--Section 13. Certain Conditions of the Offer," which sets forth in full
the conditions of the Offer. The Purchaser reserves the right (but shall not be
obligated), for any reason, or for no reason, to waive any or all of such
conditions or to terminate the offer at any time. If any or all of such
conditions have not been satisfied or waived by the Expiration Date, the
Purchaser reserves the right (but shall not be obligated) to (i) decline to
purchase any of the Units tendered, (ii) terminate the Offer and return all
tendered Units to tendering Unit Holders, (iii) waive all the unsatisfied
conditions and, subject to complying with applicable rules and regulations of
the Commission, purchase all Units validly tendered, (iv) extend the Offer and,
subject to the right of Unit Holders to withdraw Units until the Expiration
Date, retain the Units that have been tendered during the period or periods for
which the Offer is extended or (v) to otherwise amend the Offer.
The Offer to Purchase and the related Agreement of Transfer and Sale are
being mailed at the Purchaser's expense to Unit Holders or beneficial owners of
Units (in case of Individual Retirement Accounts (IRA) and qualified plans).
SECTION 2. PRORATION; ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS. If not
more than 6,500 Units are validly tendered and not properly withdrawn prior to
the Expiration Date the Purchaser, upon the terms and subject to the conditions
of the Offer, will accept for payment all such Units so tendered.
If more than 6,500 Units are validly tendered and not properly withdrawn on
or prior to the Expiration Date, the Purchaser, upon the terms and subject to
the conditions of the Offer, will accept for payment 6,500 Units so tendered, on
a pro rata basis with appropriate adjustments to avoid tenders of fractional
Units and purchases that would violate transfer restrictions contained in the
Partnership's Second Amended and Restated Agreement of Limited Partnership
("Partnership Agreement").
In the event that proration is required, because of the difficulty of
immediately determining the precise number of Units to be accepted, the
Purchaser will announce the final results of proration as soon as practicable,
but in no event later than five to ten business days following the Expiration
Date. Subject to the Purchaser's obligations under Rule 14e-1(c) under the
Exchange Act to pay Unit Holders the Purchase Price in respect of Units tendered
or to return those Units promptly after termination or withdrawal of the Offer,
the Purchaser will not pay for any Units tendered until after the final
proration results have been determined.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment, and will pay for, Units
validly tendered and not withdrawn in accordance with Section 4 below, as
promptly as practicable following the Expiration Date. Upon written notification
by the Partnership that the Units purchased by the Purchaser have been approved
for transfer to it, the Purchaser will pay for the
4
<PAGE>
Units. In all cases, payment for Units purchased pursuant to the Offer will be
made only after the Expiration Date and timely receipt by the Purchaser of a
properly completed and duly executed Agreement of Transfer and Sale and any
other documents required by the Agreement of Transfer and Sale.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) tendered Units when, as and if the Purchaser
gives oral or written notice to the Depositary of the Purchaser's acceptance for
payment of such Units pursuant to the Offer. Upon the terms and subject to the
conditions of the Offer, payment for Units purchased pursuant to the Offer will
in all cases be made by the deposit of the Purchase Price with the Depositary
who will act as agent for the purpose of receiving payment from the Purchaser
and transmitting payment to the tendering Unit Holders. Under no circumstances
will interest be paid on the Purchase Price for any Unit by reason of any delay
in making such payment.
If any tendered Units are not purchased for any reason, the Agreement of
Transfer and Sale with respect to such Units not purchased will be of no force
or effect. If, for any reason whatsoever, acceptance for payment of, or payment
for, any Units tendered pursuant to the Offer is delayed, then, without
prejudice to the Purchaser's rights under Section 13 (but subject to compliance
with Rule 14e-1(c) under the Exchange Act), the Purchaser may retain tendered
Units, subject to any limitations of applicable law, and such Units may not be
withdrawn except to the extent that the tendering Unit Holders are entitled to
withdrawal rights as described in Section 4.
If, prior to the Expiration Date, the Purchaser shall increase the
consideration offered to Unit Holders pursuant to the Offer, such increased
consideration shall be paid for all Units accepted for payment pursuant to the
Offer, whether or not such Units were tendered prior to such increase.
The Purchaser reserves the right to transfer or assign, at any time and from
time to time, in whole or in part, to one or more affiliates or direct or
indirect subsidiaries of the Purchaser, the right to purchase Units tendered
pursuant to the Offer, but no such transfer or assignment will relieve the
Purchaser of its obligations under the Offer or prejudice the rights of
tendering Unit Holders to receive payment for Units validly tendered and
accepted for payment pursuant to the Offer.
SECTION 3. PROCEDURES FOR TENDERING UNITS.
VALID TENDER. For Units to be validly tendered pursuant to the Offer, a
properly completed and duly executed Agreement of Transfer and Sale must be
received by the Purchaser at its address set forth on the back cover of this
Offer to Purchase on or prior to the Expiration Date. A Unit Holder may tender
any or all Units owned by such Unit Holder.
In order for a tendering Unit Holder to participate in the Offer, Units must
be validly tendered and not withdrawn prior to the Expiration Date, which is
12:00 midnight, Eastern Time, on February 26, 1999.
Although the Purchaser has included a pre-addressed envelope with this Offer
for the convenience of Unit Holders, the method of delivery of the Agreement of
Transfer and Sale is at the option and sole risk of the tendering Unit Holder,
and the delivery will be deemed made only when actually received by the
Purchaser. If delivery is by mail, registered mail with return receipt requested
is recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
BACKUP FEDERAL INCOME TAX WITHHOLDING. To prevent the possible application
of backup federal income tax withholding with respect to payment of the Purchase
Price for Units purchased pursuant to the Offer, a tendering Unit Holder must
verify such Unit Holder's correct taxpayer identification number or social
security number, as applicable, and make certain certifications that the Unit
Holder is not subject to backup federal income tax withholding.
The Unit Holder is required to certify in the Agreement of Transfer and
Sale, under penalties of perjury, that (i) the tax identification number shown
on the Agreement of Transfer and Sale is the Unit
5
<PAGE>
Holder's correct taxpayer identification number; and (ii) the Unit Holder is not
subject to backup withholding either because the Unit Holder has not been
notified by the Internal Revenue Service (the "IRS") that the Unit Holder is
subject to backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified the Unit Holder that the Unit Holder is no
longer subject to backup withholding.
The Unit Holder is also required to certify in the Agreement of Transfer and
Sale, under penalties of perjury, that the Unit Holder, if an individual, is not
a nonresident alien for purposes of U.S. income taxation, and if not an
individual, is not a foreign corporation, foreign partnership, foreign trust, or
foreign estate (as those terms are defined in the Internal Revenue Code and
Income Tax Regulations). The Unit Holder understands that this certification may
be disclosed to the IRS by the Purchaser and that any false statements contained
herein could be punished by fine, imprisonment, or both.
TENDERS BY BENEFICIAL HOLDERS. Tenders of Units made by beneficial holders
of Units will be deemed an instruction to brokers, dealers, commercial banks,
trust companies, custodian and similar persons or entities whose names, or the
names of whose nominees, appear as the registered owner of such Units, to tender
such Units on behalf of such beneficial holder. A tender of Units can only be
made by the registered owner of such Units.
SIGNATURE GUARANTEES. The signature(s) on the Agreement of Transfer and
Sale 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 firm of a
registered national securities exchange or a member of the National Association
of Securities Dealers, Inc., as provided in the Agreement of Transfer and Sale.
ERISA. By executing the Agreement of Transfer and Sale, a tendering Unit
Holder represents that either (a) the tendering Unit Holder is not a plan
subject to Title 1 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), or an entity deemed to hold "plan assets" within the
meaning of 29 C.F.R. Section 2510-3-101 of any such plan; or (b) the tender and
acceptance of Units pursuant to the Offer will not result in a nonexempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.
APPRAISAL RIGHTS. Unit Holders will not have any appraisal or dissenter's
rights with respect to or in connection with the Offer.
OTHER REQUIREMENTS. By executing and delivering the Agreement of Transfer
and Sale, a tendering Unit Holder irrevocably appoints the Purchaser and/or
designees of the Purchaser and each of them as such Unit Holder's proxies, with
full power of substitution, in the manner set forth in this Agreement of
Transfer and Sale.
By executing and delivering the Agreement of Transfer and Sale, a tendering
Unit Holder also irrevocably assigns to the Purchaser, and its assigns, all of
the right, title and interest, free and clear of all liens and encumbrances of
any kind, of such Unit Holder in the Partnership with respect to the Units
tendered and purchased pursuant to the Offer, including, without limitation,
such Unit Holder's right, title and interest in and to any and all Distributions
made by the Partnership after January 1, 1999 in respect of the Units tendered
by such Unit Holder and accepted for payment by the Purchaser. The Purchaser
will seek to be admitted to the Partnership as an Assignee and/or a substitute
limited partner upon consummation of the purchase of Unit Holder's Units
pursuant to the Offer and it is the intention of the Unit Holder that upon
consummation of the purchase of Unit Holder's Units pursuant to the Offer that
the Purchaser succeed to the Unit Holder's interest as an assignee and/or a
substitute limited partner of the Partnership in such Unit Holder's place.
By executing an Agreement of Transfer and Sale as set forth above, a
tendering Unit Holder also agrees that notwithstanding any provisions of the
Partnership's Partnership Agreement which provide that
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<PAGE>
any transfer is not effective until a date subsequent to the date of any
transfer of Units under the Offer, the Purchase Price shall be reduced by any
Distributions with respect to the Units after January 1, 1999.
DETERMINATION OF VALIDITY; REJECTION OF UNITS; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the form of documents
and validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Units will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding on all parties. The
Purchaser reserves the absolute right to reject any or all tenders determined by
it not to be in proper form or the acceptance of or payment for which may, in
the opinion of the Purchaser or Purchaser's counsel, be unlawful. The Purchaser
also reserves the absolute right to waive any of the conditions of the Offer or
any defect or irregularity in any tender of Units of any particular Unit Holder
whether or not similar defects or irregularities are waived in the case of other
Unit Holders.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Agreement of Transfer and Sale and the instructions thereto) will
be final and binding. No tender of Units will be deemed to have been validly
made until all defects and irregularities with respect to such tender have been
cured or waived. Neither the Purchaser nor any of its affiliates or assigns, if
any, or any other person will be under any duty to give any notification of any
defects or irregularities in tenders or incur any liability for failure to give
any such notification.
The Purchaser's acceptance for payment of Units tendered pursuant to any of
the procedures described above will constitute a binding agreement between the
tendering Unit Holder and the Purchaser upon the terms and subject to the
conditions of the Offer.
SECTION 4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section
4, tenders of Units made pursuant to the Offer are irrevocable. Units tendered
pursuant to the Offer may be withdrawn at any time on or prior to the Expiration
Date and, unless previously accepted for payment as provided herein, may also be
withdrawn at any time after March 28, 1999 (or such later date as may apply in
case the Offer is extended).
If, for any reason whatsoever, acceptance for payment of any Units tendered
pursuant to the Offer is delayed, or the Purchaser is unable to accept for
payment or pay for Units tendered pursuant to the Offer, then, without prejudice
to the Purchaser's rights set forth herein, the Purchaser may retain tendered
Units and such Units may not be withdrawn, except to the extent that the
tendering Unit Holder is entitled to and duly exercises withdrawal rights as
described in this Section 4. Any such delay will be by an extension of the Offer
to the extent required by law.
In order for a withdrawal to be effective, a written notice of withdrawal
must be timely received by the Depositary at its address set forth on the last
page of this Offer to Purchase. Any such notice of withdrawal must specify the
name of the person who tendered the Units to be withdrawn, with the signature of
such person Medallion guaranteed in the same manner as the signature in the
Agreement of Transfer and Sale, the number of Units to be withdrawn, and (if the
Agreement of Transfer and Sale has been delivered) the name of the Unit Holder
as set forth in the Agreement of Transfer and Sale. Withdrawals of Units may not
be rescinded. Any Units properly withdrawn will be deemed not validly tendered
for purposes of the Offer, but may be retendered at any subsequent time prior to
the Expiration Date by following any of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. Neither the Purchaser
nor any of its affiliates or assigns, if any, or any other person will be under
any duty to give any notification of any defects or irregularities in any notice
of withdrawal or incur any liability for failure to give any such notification.
7
<PAGE>
SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT. The
Purchaser expressly reserves the right, in its sole discretion, at any time and
from time to time, (i) to extend the period of time during which the Offer is
open and thereby delay acceptance for payment of, and the payment for, any Units
by giving oral or written notice of such extension, (ii) to terminate the Offer
at any time from any or no reason and not accept for payment any Units not
theretofore accepted for payment or paid for, by giving oral or written notice
of such termination. (iii) upon the failure to satisfy any of the conditions
specified in Section 13, to delay the acceptance for payment of, or payment for,
any Units not heretofore accepted for payment or paid for, by giving oral or
written notice of such termination or delay, and (iv) to amend the Offer in any
respect (including, without limitation, by increasing or decreasing the
consideration offered or the number of Units being sought in the Offer or both)
by giving oral or written notice of such amendment. Any extension, termination
or amendment will be followed as promptly as practicable by public announcement,
the announcement in the case of an extension to be issued no later than 9:00
a.m., Eastern Time, on the next business day after the previously scheduled
Expiration Date, in accordance with the public announcement requirement of Rule
14e-1(d) under the Exchange Act.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will extend the Offer to the extent required by Rules 14d-4(c) and
14d-6(d) under the Exchange Act. The minimum period during which an offer must
remain open following a material change in the terms of the offer or of
information concerning the offer, other than a change in price or a change in
percentage of securities sought, will depend upon the facts and circumstances,
including the relative materiality of the change in the terms or information.
With respect to a change in price or a change in percentage of securities sought
(other than an increase of not more than 2% of the securities sought), however,
a minimum ten business day period is generally required to allow for adequate
dissemination to security holders and for investor response. As used in this
Offer, "business day" means any day other than a Saturday, Sunday or a federal
holiday, and consists of the time period from 12:01 a.m. through 12:00 midnight,
Eastern Time.
SECTION 6. CERTAIN TAX CONSEQUENCES.
UNIT HOLDERS SHOULD CONSULT THEIR RESPECTIVE TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES TO EACH SUCH UNIT HOLDER OF SELLING UNITS PURSUANT
TO THE OFFER.
SECTION 7. PURPOSE AND EFFECTS OF THE OFFER.
PURPOSE OF THE OFFER. The Purchaser is making the Offer for investment
purposes only (See Section 8--"Future Plans") with a view towards making a
profit. The Purchaser's intent is to acquire the Units at a discount to the
value that the Purchaser might ultimately realize from owning the Units. No
independent person has been retained to evaluate or render any opinion with
respect to the fairness of the $950 Purchase Price and no representation is made
as to such fairness.
The Offer is being made by the Purchaser as a speculative investment based
upon the belief that the Units represent an attractive investment at the price
offered based upon, in part, the remaining assets of the Partnership. The
purpose of the Offer is to allow the Purchaser to benefit from any one
combination of the following: (i) any cash distributions from Partnership
operations in the ordinary course of business; (ii) distributions, if any, of
net proceeds from the liquidation of any properties after the Partnership has
satisfied its liabilities; (iii) any cash from any redemption of the Units by
the Partnership; and (iv) sale of the Units.
The Purchaser established the Purchase Price based on its independent
analysis of the Partnership, its assets, i.e., the media properties, and the
financial condition of the Partnership. The Purchaser derived the Purchase Price
from its analysis of financial and other information contained in
publicly-available information in the Partnership's Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the
Commission, which describe the Partnership's business and assets.
8
<PAGE>
Finally, in determining the Purchase Price, Purchaser considered the recent
trading prices of the Units ($750 per Unit), the General Partner's net asset
valuation of the Units ($1,000 per Unit to which Purchaser applied a 5% discount
rate), and the recent tender offer of another offeror ($750 per Unit), the
proposed sale of the Partnership's assets, the amount of cash evidenced on the
Partnership's September 30, 1998 balance sheet, and other assets and liabilities
on the Partnership's September 30, 1998 balance sheet.
Other measures of value may be relevant to a Unit Holder and all Unit
Holders are urged to carefully consider all of the information contained in the
Offer to Purchase and Agreement of Transfer and Sale and to consult with their
own advisors (tax, financial or otherwise) in evaluating the terms of the Offer
before deciding whether to tender Units. The Offer is being made as a
speculative investment by the Purchaser based on its belief that there is
inherent underlying value in the assets of the Partnership.
CERTAIN RESTRICTIONS ON TRANSFER OF UNITS. The Partnership Agreement
restricts transfers of Units if a transfer, when considered with all other
transfers during the same applicable twelve month period, would cause a
termination of the Partnership for federal or applicable state income tax
purposes (which termination may occur when 40% or more of the Units are
transferred in a twelve month period) or to prevent the Partnership from being
taxed as a partnership for federal income tax purposes, if state Blue Sky laws
would be violated, if prior required government regulatory consent was not
obtained, if transfers were to be made to foreign citizens or if such transfers
would result in ownership of Units which would violate Federal Communications
Commissions Rules and Regulations. In determining the number of Units for which
the Offer is made (representing approximately 3.5% of the outstanding Units),
the Purchaser took these restrictions into account and has conditioned the Offer
on not violating such restriction. See "Tender Offer--Section 13. Certain
Conditions of the Offer." The foregoing are hereafter referred to as the
"Transfer Restrictions."
EFFECT ON TRADING MARKET AND PRICE RANGE OF THE UNITS. If a substantial
number of Units are purchased pursuant to the Offer, the result will be a
reduction in the number of Unit Holders. In the case of certain kinds of equity
securities, a reduction in the number of security-holders might be expected to
result in a reduction in the liquidity and volume of activity in the trading
market for the security. In this case, however, there is a limited trading
market for the Units and, therefore, the Purchaser does not believe a reduction
in the number of Unit Holders will materially further restrict the Unit Holders'
ability to find purchasers for their Units.
The Partnership disclosed in its Annual Report on Form 10-K for the year
ended December 26, 1997 that an established trading market for the Units does
not now exist, and it is not anticipated that such a market will develop in the
future.
The Units are registered under Section 12(g) of the Exchange Act, which
means, among other things, that the Partnership is required to file periodic
reports with the Commission and to comply with the Commission's proxy rules. The
Purchaser does not expect or intend that consummation of the Offer will cause
the Units to cease to be registered under Section 12(g) of the Exchange Act.
Currently, there are approximately 14,298 Unit Holders. If the Units were to be
held by fewer than 300 persons, the Partnership could apply to de-register the
Units under the Exchange Act. Because the Units are widely held, however, the
Purchaser expects that even if it purchases the maximum number of Units in the
Offer, after that purchase the Units will be held of record by substantially
more than 300 persons.
Partnership Spectrum, an industry publication reported that during the
period November 1997 through November 1998 that 24 trades at an average price of
$657 per Unit, encompassing 1,618 Units, took place. Such secondary market
selling prices, however, do not take into account commissions charged by
secondary market makers effectuating such sales which the Purchaser believes,
based on a typical ten Unit sales transaction, range from 5% to 8% of the sales
proceeds.
SECTION 8. FUTURE PLANS. The Purchaser is acquiring the Units pursuant to
the Offer for investment purposes only, does not intend to make any effort to
change current management or operations of the
9
<PAGE>
Partnership and has no current plans for any extraordinary transactions
involving the Partnership. However, the Purchaser and its affiliates may acquire
additional Units through private purchases, one or more future tender offers or
by any other means deemed advisable. Such future purchases will also be for
investment purposes only and may be at prices higher or lower than the Purchase
Price.
SECTION 9. PAST CONTACTS AND NEGOTIATIONS WITH GENERAL PARTNER.
The Purchaser has made four prior tender offers for Units which resulted in
an aggregate purchase of 9,719 Units. As a result of the first offer which
commenced on February 6, 1997 and expired on April 14, 1997, the purchase
acquired 2,030 Units at a price of $410 per Unit. As a result of the second
offer which commenced on April 19, 1997 and expired on May 30, 1997, the
Purchaser acquired 1,978 Units at a price of $500 per Unit. As a result of the
third offer which commenced on October 16, 1997 and expired on November 17,
1997, the Purchaser acquired 3,129 Units at a price of $600 per Unit. As a
result of the fourth tender offer, which commenced on November 27, 1998 and
expired on December 31, 1998, the Purchaser acquired 2,582 Units at a price of
$950 per Unit.
During January 1997, the Purchaser and its representatives had several
discussions with the Partnership's General Partner and its representatives
regarding the obtaining of a list (the "List") of the names, addresses and
number of Units held by the Partnership's Limited Partners. Prior to obtaining
the List, the Purchaser and the Partnership entered into a confidentiality and
standstill letter agreement limiting the amount of Units the Purchaser would
acquire to no more than 5% of the Units and use of the List. In May 1997, the
Purchaser entered into an Agreement with the Partnership restricting the
Purchaser's activities and interests in media properties and insulating the
Purchaser from any direct or indirect involvement in the management or operation
of the Partnership's media related activities. The Purchaser also submitted
information to the Partnership enabling the Partnership to determine that the
Purchaser would be qualified to own Units under the Federal Communications
Commissions ("FCC") rules applicable to the Partnership.
On November 21, 1998, the Partnership agreed to amend the confidentiality
and standstill letter agreement to allow the Purchaser to acquire no more than
10% of the Units.
During the week of January 11, 1999, representatives of the Purchaser
contacted representatives of the Partnership by telephone in an attempt to
obtain an updated list of Unit holders. The Partnership refused to provide such
list to the Purchaser.
SECTION 10. CERTAIN INFORMATION CONCERNING THE BUSINESS OF THE PARTNERSHIP
AND RELATED MATTERS.
BUSINESS. The following information was extracted from the Partnership's
Annual Report on Form 10-K for the year ended December 26, 1997, the Quarterly
Report on Form 10-Q for the nine-month period ended September 25, 1997 and
Current Reports on Form 8-K filed during 1998 (collectively the "Reports"),
which Reports were filed with the Commission. The Purchaser did not prepare any
of the information contained in such reports and extracted in this Offer and the
Purchaser makes no representation as to the accuracy or completeness of such
information.
The Partnership was formed under the Delaware Uniform Limited Partnership
Act on February 1, 1985. The Partnership's business was to acquire, finance,
hold, develop, improve, maintain, operate, lease, sell, exchange, dispose of and
otherwise invest in and deal with media businesses and direct and indirect
interests therein. Media Management Partners (the "General Partner") manages the
Partnership.
The General Partner is not affiliated with the Purchaser. The General
Partner's principal offices are located at World Financial Center, South Tower,
225 Liberty Street, New York, New York 10080. Its telephone number at that
address is (800) 288-3694.
The Partnership reported in its Quarterly Report on Form 10-Q for the
Quarterly Period ended September 25, 1998, as filed with the Commission on
November 9, 1998 (the "3rd Quarter 10-Q") that its
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<PAGE>
assets that are not subject to a current contract for sale consist of a 50%
interest in a joint venture (the "Venture"), which owns 100% of the stock of
Century-ML Cable Corporation ("C-ML Cable"), which owns and operates the two
cable televisions systems in Puerto Rico and an FM (WEBE-FM) and AM (WICC-AM)
radio station combination in Bridgeport, Connecticut.
The 3rd Quarter 10-Q also disclosed that the Partnership had entered into a
Stock Purchase Agreement with Chancellor Media Corporation of Los Angeles,
California to sell its interests in Wincom Broadcasting Corporation ("Wincom"),
a corporation that owns an FM radio station (WQAL-FM) in Cleveland, Ohio and
that the Partnership had entered into an Asset Purchase Agreement with
Citicasters Co. pursuant to which the Partnership agreed to sell substantially
all of its assets used in the operations of radio stations KEZY-FM and KORG (AM)
in Anaheim, California for $30,100,000, subject to a proration of items of
income and expenses as of the closing. The Partnership disclosed in a Form 8-K
filed with the Commission on November 25, 1998 that FCC approval has been
obtained for the sale of WQAL-FM. The Partnership disclosed in a Form 8-K dated
January 12, 1999, filed January 19, 1999 with the Commission, that the sale of
radio stations KEZY-FM and KORE occurred on January 4, 1999.
In June 1998, the Partnership, through the Venture, consummated the sale of
an FM (WFID-FM) and AM (WUNO-AM) radio station combination and a background
music serve in San Juan, Puerto Rico ("C-ML Radio").
The Partnership disclosed in its 3rd Quarter 10-Q that the purported class
action commenced in the New York Supreme Court against, among others, the
Partnership and its General Partner on August 29, 1997 for duplicative fees,
breach of fiduciary duties and breach of the Partnership Agreement, has pending
a motion to dismiss such action filed by the defendants. No ruling has been made
on the motion. The defendants believe that they have meritorious defenses to the
action and deny any wrongdoing with respect to the alleged claims.
The Partnership disclosed in its 3rd Quarter 10-Q "the related claims
against the Partnership for indemnification, other costs and expenses related to
litigation, and the involvement of management, will adversely affect (a) the
timing of the termination of the Partnership, (b) the amount of proceeds which
may be available for distribution, and (c) the timing of the distribution to the
limited partners of the net proceeds from the liquidation of the Partnership's
assets."
Additional information concerning the Partnership, its assets, operations
and management is contained in the other filings with the Commission. Such
reports and filings are available on the Commission's EDGAR system, at its
internet website at www.sec.gov, and are available for inspection at the
Commission's principal office in Washington, D.C. and at its regional offices in
New York, New York and Chicago, Illinois.
SELECTED FINANCIAL DATA. Set forth below is a summary of certain financial
data for the Partnership which has been excerpted from the Partnership's Annual
Report on Form 10-K for the year ended December 26, 1997. The financial
information set forth below is qualified in its entirety by reference to such
Reports and documents filed with the Commission and the financial statements and
related notes contained therein. The Purchaser expressly disclaims any
responsibility for the information contained in these filed Reports and
extracted in this discussion.
11
<PAGE>
The following table sets forth in comparative tabular form a summary of
selected financial data for each of the Partnership's last five full years in
dollars, except for the number of Units.:
YEAR ENDED
<TABLE>
<CAPTION>
12/26/97 12/27/96 12/29/95 12/30/94 12/31/93
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Operating Revenues.................... $ 53,223,983 $ 71,831,996 $ 109,214,031 $ 105,910,208 $ 100,401,671
Gain on Sale of California Cable
Systems............................. -- $ 185,609,191 -- -- --
Gain on Sale of Television Systems.... $ 3,702,725 -- $ 22,796,454 -- --
Net Income (Loss)..................... $ 19,467,688 $ 189,711,304 $ 21,490,240 $ (1,450,756) $ 1,377,340
Net Income (Loss) Per Unit............ $ 102.52 $ 999.04 $ 113,17 $ (7.64) $ 7.25
Number of Units....................... 187,994 187,994 187,994 187,994 187,994
Total Assets.......................... $ 156,646,178 $ 160,994,824 $ 210,198,496 $ 238,330,358 $ 249,851,937
Borrowings............................ $ 54,244,038 $ 60,348,428 $ 182,821,928 $ 218,170,948 $ 232,568,349
</TABLE>
DISTRIBUTIONS. The Partnership distributed $18,800,000 ($100 per Unit) to
Unit Holders in 1997, $108,100,000 ($575) to Unit Holders in 1996 and $7,500,000
($40) to Unit Holders in 1995.
SECTION 11. CERTAIN INFORMATION CONCERNING THE PURCHASER. The Purchaser is
a Delaware limited liability company which was organized for the purpose of
making passive investments and acquiring the Units pursuant to the Offer and the
prior offers (see "Section 9--Past Contracts and Negotiations with General
Partner") The sole Manager of the Purchaser is Global Capital Management, Inc.,
a Delaware corporation ("GCM"), which is controlled by its two officers and
directors, John D. Brandenborg and Michael J. Frey. GCM is engaged in business
to make innovative non-traditional investments in financial instruments. The
Purchaser's and GCM's principal executive offices are at 601 Carlson Parkway,
Suite 200, Minnetonka, Minnesota 55305. The Purchaser's unaudited balance sheet
for the eleven months ended November 30, 1998 is attached hereto as Exhibit 2.
The Purchaser owns 11,943 Units, which is approximately 6.4% of the
outstanding Units.
The Purchaser acquired 9,719 Units in the four tender offers described in
Section 9 above. The Purchaser acquired 1,951 Units in a negotiated private
transaction with a single seller at a price of $680 per Unit in December 1997.
The remaining 273 Units owned by the Purchaser were acquired through a series of
auction transactions on the Chicago Partnership Board more than 60 days prior to
the date of the Offer.
The Purchaser sold five units in a private sale more than 60 days prior to
the date of the Offer.
For certain information concerning the executive officers and directors of
GCM, see Schedule 1 to this Offer to Purchase.
The Purchaser's unaudited balance sheet for the eleven months ended November
30, 1998, is attached hereto as Schedule 2.
Except as otherwise set forth herein, (i) neither the Purchaser nor, to the
best knowledge of the Purchaser, any of the persons listed on Schedule 1 or any
affiliate of the Purchaser beneficially owns or has a right to acquire any
Units, (ii) neither the Purchaser nor, to the best knowledge of the Purchaser,
any of the persons listed on Schedule 1 or any affiliate of the Purchaser or any
director, executive officer or subsidiary of any of the foregoing has effected
any transaction in the Units, (iii) neither the Purchaser nor, to the best
knowledge of the Purchaser, any of the persons listed on Schedule 1 or any
affiliate of the Purchaser has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Partnership, including but not limited to, contracts, arrangements,
understandings or relationships concerning the transfer or voting thereof, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies, consents or
12
<PAGE>
authorizations, (iv) there have been no transactions or business relationships
which would be required to be disclosed under the rules and regulations of the
Commission between the Purchaser, or, to the best knowledge of the Purchaser,
any of the persons listed on Schedule 1 or any affiliate of the Purchaser, on
the one hand, and the Partnership or affiliates, on the other hand, and (v)
there have been no contracts, negotiations or transactions between the Purchaser
or to the best knowledge of the Purchaser, any of the persons listed on Schedule
1 or any affiliate of the Purchaser, on the one hand, and the Partnership or its
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, tender offer or other acquisition of securities, an election or
removal of any general partner or a sale or other transfer of a material amount
of assets.
SECTION 12. SOURCE OF FUNDS. The Purchaser expects that approximately
$6,175,000 (exclusive of fees and expenses) will be required to purchase 6,500
Units (approximately 3.5% of the 187,994 Units outstanding), if tendered. The
Purchaser will obtain all of those funds from its working capital (i.e., cash on
hand). The Purchaser is not a public company and has a net worth in excess of
$45,000,000. The Offer is not contingent on obtaining financing.
SECTION 13. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other
provisions of the Offer, the Purchaser will not be required to accept for
payment or, subject to any applicable rules or regulations of the Commission,
including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered Units promptly after the expiration or
termination of the Offer), to pay for any Units tendered, and may postpone the
acceptance for payment or, subject to the restriction referred to above, payment
for any Units tendered, and may amend or terminate the Offer if (i) the
Purchaser shall not have confirmed to its reasonable satisfaction that, upon
purchase of the Units pursuant to the Offer, the Purchaser will have full rights
to ownership as to all such Units and that the Purchaser will become a
registered owner on the books and records of the Partnership, (ii) the Purchaser
shall not have confirmed to its reasonable satisfaction that, upon the purchase
of the Units pursuant to the Offer, the Transfer Restrictions will have been
satisfied, or (iii) all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
court, administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, necessary for the consummation of the
purchase contemplated by the Offer shall not have been filed, occurred or been
obtained. Furthermore, notwithstanding any other term of the Offer, 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 exist:
(a) the acceptance by the Purchaser of Units tendered and not withdrawn
pursuant to the Offer or the transfer of such Units to the Purchaser violates
restrictions in the Partnership Agreement which prohibit any transfer of Units
which would cause a termination of the Partnership or would cause the
Partnership to be taxed as a "publicly traded partnership" under the Internal
Revenue Code;
(b) there shall have been threatened, instituted or pending any action or
proceeding before any court or governmental agency or other regulatory or
administrative agency or commission or by any other person, challenging the
acquisition of any Units pursuant to the Offer or otherwise directly or
indirectly relating to the Offer, or otherwise, in the judgment of the
Purchaser, adversely affecting the Purchaser or the Partnership;
(c) any statute, rule or regulation shall have been proposed, enacted,
promulgated or deemed applicable to the Offer, or any action or order shall have
been proposed, entered into or taken, by any government, governmental agency, or
other regulatory or administrative agency or authority, which, in the judgment
of the Purchaser, might (i) result in a delay in the ability of the Purchaser or
render the Purchaser unable, to purchase or pay for some or all of the tendered
Units, (ii) make such purchase or payment illegal, or (iii) otherwise adversely
affect the Purchaser or the Partnership;
(d) any change shall have occurred or be threatened in the business,
financial condition, results of operations, tax status or prospects of the
Partnership which, in the judgment of the Purchaser, is or may be
13
<PAGE>
adverse to the Partnership, or the Purchaser shall have become aware of any
facts which, in the judgment of the Purchaser, have or may have adverse
significance with respect to the value of the Units;
(e) there shall have occurred (i) any general suspension of, or limitation
on prices for or trading in, securities in the over-the-counter market or on the
New York Stock Exchange, Inc., (ii) a declaration of a banking moratorium or any
suspension of payment in respect of banks in the United States or any limitation
by federal or state authorities on the extension of credit by lending
institutions or (iii) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the United
States; or, in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(f) a tender or exchange offer for some or all of the Units is made, or
publicly proposed to be made or amended, by another person;
(g) the Partnership shall have (i) issued, or authorized or proposed the
issuance of, any partnership interests of any class, or any securities
convertible into, or rights, warrants or options to acquire, any such interests
or other convertible securities, (ii) issued or authorized or proposed the
issuance of any other securities, in respect of, in lieu of, or in substitution
for, all or any of the presently outstanding Units, (iii) declared or paid any
distribution, OTHER THAN IN CASH, on any of its partnership interests, (iv)
authorized, proposed or announced its intention to propose any merger,
consolidation or business combination transaction, acquisition of assets,
disposition of assets or material change in its capitalization, or any
comparable event not in the ordinary course of business, or (v) proposed or
effected any amendment to the Partnership's Agreement of Limited Partnership;
(h) the failure to occur of any necessary approval or authorization by any
Federal or state authorities necessary to consummation of the Purchaser of all
or any part of the Units to be acquired hereby, which in the sole judgment of
the Purchaser in any such case, and regardless of the circumstances (including
any action of the Purchaser) giving rise thereto, makes it inadvisable to
proceed with such purchase or payment; or
(i) the Purchaser or any of its affiliates and the Partnership shall have
agreed that the Purchaser shall amend or terminate the Offer or postpone the
payment for the Units pursuant thereto.
The foregoing conditions are for the sole benefit of the Purchaser and its
affiliates and may be asserted by the Purchaser regardless of the circumstances
(including, without limitation, any action or inaction by the Purchaser or any
of its affiliates) giving rise to such condition, or may be waived by the
Purchaser, in whole or in part, from time to time in its sole discretion. The
failure by the Purchaser at any time to exercise the foregoing rights will not
be deemed a waiver of such rights, which rights will be deemed to be ongoing and
may be asserted at any time and from time to time. Any determination by the
Purchaser concerning the events described in this Section 13 will be final and
binding upon all parties.
SECTION 14. CERTAIN LEGAL MATTERS AND REQUIRED REGULATORY APPROVALS.
GENERAL. Except as set forth in this Offer to Purchase, based on its review
of publicly available filings by the Partnership with the Commission and other
publicly available information regarding the Partnership, the Purchaser is not
aware of any licenses or regulatory permits that would be material to the
business of the Partnership, taken as a whole, and that might be adversely
affected by the Purchaser's acquisition of Units as contemplated herein, or any
filings, approvals or other actions by or with any domestic, foreign or
governmental authority or administrative or regulatory agency that would be
required prior to the acquisition of Units by the Purchaser pursuant to the
Offer as contemplated herein. Should any such approval or other action be
required, there can be no assurance that any such additional approval or action,
if needed, would be obtained without substantial conditions or that adverse
consequences might not result to the Partnership's business, or that certain
parts of the Partnership's or the Purchaser's business might not have to be
disposed of or held separate or other substantial conditions complied with in
order to obtain such approval. The Purchaser's obligation to purchase and pay
for Units is subject to certain conditions. See "Offer to Purchase--Section 13.
Certain Conditions of the Offer."
14
<PAGE>
ANTITRUST. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the Antitrust Division of
the Department of Justice (the "Antitrust Division") and the FTC and certain
waiting period requirements have been satisfied. The Purchaser does not
currently believe any filing is required under the HSR Act with respect to its
acquisition of Units contemplated by the offer.
Based upon an examination of publicly available information relating to the
business in which the Partnership is engaged, the Purchaser believes that the
acquisition of Units pursuant to the Offer would not violate the antitrust laws.
Nevertheless, there can be no assurance that a challenge to the Offer on
antitrust grounds will not be made, or, if such challenge is made, what the
result will be.
STATE TAKEOVER LAWS. The Purchaser has not attempted to comply with any
state takeover statutes in connection with the Offer. The Purchaser reserves the
right to challenge the validity or applicability of any state law allegedly
applicable to the Offer and nothing in the Offer, nor any action taken in
connection herewith, is intended as a waiver of that right. In the event that
any state takeover statute is found applicable to the Offer, the Purchaser might
be unable to accept for payment or purchase Units tendered pursuant to the Offer
or be delayed in continuing or consummating the Offer. In such case, the
Purchaser may not be obligated to accept for purchase, or pay for, any Units
tendered.
SECTION 15. FEES AND EXPENSES. The Purchaser will pay all expenses of the
Offer, including the fees and expenses of MAVRICC Management Systems, Inc., the
Depositary. The Purchaser will not pay any fees or commissions to any broker,
dealer or other person for soliciting tenders of Units pursuant to the Offer.
Brokers, dealers, commercial banks and trust companies and other nominees, if
any, will, upon request and prior approval of the Purchaser, be reimbursed by
the Purchaser for reasonable and customary clerical and mailing expenses
incurred by them in forwarding materials to their customers.
SECTION 16. MISCELLANEOUS. THE OFFER IS NOT BEING MADE TO (NOR WILL
TEN-DERS BE ACCEPTED FROM OR ON BEHALF OF) UNIT HOLDERS IN ANY JURISDICTION IN
WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN
COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. THE PURCHASER IS NOT AWARE OF ANY
JURISDICTION WITHIN THE UNITED STATES IN WHICH THE MAKING OF THE OFFER OR THE
ACCEPTANCE THEREOF WOULD BE ILLEGAL.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Purchaser will engage one
or more registered brokers or dealers that are licensed under the laws of such
jurisdiction to make the Offer. The Purchaser has filed with the Commission the
Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of the General
Rules and Regulations under the Exchange Act, furnishing certain information
with respect to the Offer, and may file amendments thereto. Such Schedule 14D-1
and any amendments thereto, including exhibits, may be examined and copies may
be obtained from the Commission as set forth above in "Introduction."
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained in this Offer to
Purchase or in the Agreement of Transfer and Sale and, if given or made, any
such information or representation must not be relied upon as having been
authorized. Neither the delivery of the Offer to Purchase nor any purchase
pursuant to the Offer shall, under any circumstances, create any implication
that there has been no change in the affairs of the Purchaser or the Partnership
since the date as of which information is furnished or the date of this Offer to
Purchase.
Smithtown Bay, LLC
January 27, 1999
15
<PAGE>
SCHEDULE 1
INFORMATION REGARDING THE DIRECTORS AND
EXECUTIVE OFFICERS OF GLOBAL CAPITAL MANAGEMENT, INC.
Set forth in the table below are the names of the directors and executive
officers of Global Capital Management, Inc. and their present principal
occupations and five (5) year employment histories. Each individual is a citizen
of the United States and the business address of each person is 601 Carlson
Parkway, Suite 200, Minnetonka, Minnesota 55305.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------- -------------------------------------------------------------------------------------
<S> <C>
John D. Brandenborg John D. Brandenborg has been a Director, President and Treasurer from January 1, 1999
to present and Vice President, Treasurer and a Director of GCM from August 1988 to
December 31, 1998. Mr. Brandenborg was employed by Cargill, Inc. from 1978 to 1988
and was involved in trading of domestic and foreign equity and fixed income
instruments. Mr. Brandenborg served as a Vice President of Cargill Financial Services
Corporation at his departure in 1988. Mr. Brandenborg has a Bachelor of Science
Degree in Accounting from the University of Denver.
Michael J. Frey Michael J. Frey is Chief Executive Officer, Secretary and Director from January 1,
1999 to present and was Secretary, Vice President and a Director of GCM from 1988 to
December 31, 1998. From 1979 to 1988, Mr. Frey was employed by Cargill, Inc. and
traded and supervised trading of domestic and foreign equity and fixed income
instruments. At his departure in 1988, Mr. Frey served as Assistant Vice President of
Cargill Financial Services Corporation. Mr. Frey has a Bachelor of Science Degree in
Business Administration from the University of Minnesota.
GCM is the general partner of EBF & Associates Limited Partnership which is engaged
in business to make innovative non-traditional investments in financial instruments.
</TABLE>
S-1-1
<PAGE>
SCHEDULE 2
BALANCE SHEET OF PURCHASER
The financial information set forth below is taken from the books and
records of Smithtown Bay, LLC, is unaudited and in the opinion of Smithtown Bay,
LLC's management presents a fair statement of the information presented.
SMITHTOWN BAY, LLC
BALANCE SHEET
NOVEMBER 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Cash and Equivalents...................................... $ 9,134,671.93
Securities Owned.......................................... 40,766,499.92
Accounts Receivable/Distributions Receivable.............. 53,985.55
--------------
TOTAL ASSETS........................................ $49,955,157.40
--------------
--------------
LIABILITIES AND MEMBER'S CAPITAL
Liabilities:
Accounts Payable........................................ 747,134.81
--------------
TOTAL LIABILITIES................................... 747,134.81
--------------
Member's Capital:........................................... 49,208,022.59
--------------
TOTAL LIABILITIES AND MEMBER'S CAPITAL...................... $49,955,157.40
--------------
--------------
</TABLE>
S-2-1
<PAGE>
Any questions or requests for assistance or for delivery of additional
copies of this Offer to Purchase or the Agreement of Transfer and Sale may be
directed to the Depositary at the telephone number and address set forth below.
MAVRICC Management Systems, Inc.
Post Office Box 7090
Troy, Michigan 48007-7090
Tele: 1-800-500-3243
<PAGE>
AGREEMENT OF TRANSFER AND SALE
The undersigned (or the nominee of the undersigned) is the owner of the
units of limited partnership interests including any rights attributable to
claims, damages, recoveries, including recoveries from any class action
lawsuits, and causes of action accruing to the ownership of such units of
limited partnership interests ("Units") of ML Media Partners, L.P., a Delaware
limited partnership (the "Partnership"), set forth below on this Agreement of
Transfer and Sale ("Agreement"), and agrees to sell and transfer all of the
undersigned's right, title and interest in the Units to Smithtown Bay, LLC, a
Delaware limited liability company ("Smithtown"), free and clear of all liens
and encumbrances of any kind, on the terms and conditions set forth in
Smithtown's Offer to Purchase dated January 27, 1999, and as set forth below.
Unless otherwise indicated below, the undersigned agrees to sell all (100%) of
the Units the undersigned owns.
1. Notwithstanding any provision to the contrary, the undersigned agrees that
in the event any distribution of cash with respect to the Units or a cash
redemption of the Units, is made or declared (collectively, a "Distribution") by
the Partnership to the undersigned on or after January 1, 1999 with respect to
the Units being sold and transferred to it pursuant to this Agreement, that the
cash price of $950 per Unit to be paid to the undersigned shall be reduced by
the amount of the Distribution per Unit to the undersigned and that the cash
price of $950 per Unit shall also be reduced by the $50 transfer fee (per
transfer, not per Unit) charged by the Partnership. To the extent any
Distribution is made or declared by the Partnership with respect to the Units
for any period on or after January 1, 1999 that is received by the undersigned,
the undersigned understands that the amount of said Distribution will be
deducted from the cash price of $950 per Unit to be paid to the undersigned by
Smithtown, pursuant to the timing set forth in the Offer. To this end, the
undersigned hereby instructs the Partnership to change the address of its
account to: Smithtown Bay, LLC, c/o Global Capital Management, 601 Carlson
Parkway, Suite 200, Minnetonka, Minnesota 55305, or such entity as Smithtown may
designate in its sole discretion.
2. The undersigned (or the nominee of the undersigned) by executing this
Agreement hereby irrevocably constitutes and appoints Smithtown Bay, LLC, a
Delaware limited liability company, and its Manager, Global Capital Management,
Inc., a Delaware corporation, as its true and lawful agent and attorney-in-fact
with respect to the Units with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest) of
the undersigned to (a) execute, swear to, acknowledge, and file any document
providing for or relating to the transfer of the ownership of the Units on the
books of the Partnership; (b) deliver the Units and transfer ownership of the
Units on the books of the Partnership; (c) endorse in favor of Smithtown or any
other payee Smithtown otherwise designates on the undersigned's behalf, any and
all payments payable to the undersigned and received by Smithtown from the
Partnership for any period of time on or after January 1, 1999; and (d) execute
on behalf of the undersigned any applications for transfer and distribution
allocation agreements required by the National Association of Securities
Dealers, Inc.'s Notice to Members 96-14 to give effect to the transaction
contemplated by this Agreement; (e) execute on behalf of the undersigned any
affidavit or other document necessary to indemnify the Partnership if the
certificate evidencing the ownership of the undesigned's Units has been lost,
stolen or destroyed; and (f) receive all benefits and distributions and cause
the Partnership to amend the books and records of the Partnership, including the
undersigned's record account and address, to direct Distributions to Smithtown
Bay and otherwise exercise all rights of beneficial owner of the Units. Neither
Smithtown, nor Global Capital Management, Inc. shall be required to post bond of
any nature in connection with this power of attorney.
3. The undersigned hereby represents and warrants that the Units are being
transferred and sold to Smithtown Bay, free and clear of all liens and
encumbrances of any kind and that it has the authority to execute this Agreement
and that the Partnership may rely on this Agreement and any documents executed
by Smithtown or Global Capital Management, Inc., as the attorney-in-fact for the
undersigned, which is necessary or convenient to carrying out all matters
contemplated by this Agreement.
4. The undersigned (or the nominee of the undersigned) hereby certifies, under
penalty of perjury, that the undersigned's tax identification number or social
security number set forth below is true and correct.
<PAGE>
5. The undersigned (or the nominee of the undersigned) hereby certifies under
penalty of perjury that it is not subject to backup withholding either because
the undersigned has not been notified by the Internal Revenue Service (the
"IRS") that the undersigned is subject to backup withholding as a result of
failure to report all interest or dividends, or the IRS has notified the
undersigned that the undersigned is no longer subject to backup withholding.
6. The undersigned (or the nominee of the undersigned) hereby certifies, under
penalty of perjury, that the undersigned, if an individual, is not a nonresident
alien for purposes of U.S. income taxation, and if not an individual, is not a
foreign corporation, foreign partnership, foreign trust, or foreign estate (as
those terms are defined in the Internal Revenue Code and Income Tax
Regulations). The undersigned understands that this certification may be
disclosed to the IRS by the Purchaser and that any false statements contained
herein could be punished by fine, imprisonment, or both.
7. The undersigned hereby represents and warrants that either (a) the
undersigned is not a plan subject to Title 1 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or an entity deemed to hold "plan
assets" within the meaning of 29 C.F.R. Section 2510-3-101 of any such plan; or
(b) the tender and acceptance of Units pursuant to the Offer will not result in
a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code.
8. / / Yes / / No
I have possession of the certificates evidencing ownership of the Units and
am sending them to Smithtown with this Agreement.
<TABLE>
<S> <C> <C>
- ----------------------------------- ----------------------------------- -----------------------------------
IRA/Pension/Custodial Account # or Printed Name of Unit Holder Signature of Unit Holder
Tax Identification #
- ----------------------------------- ----------------------------------- -----------------------------------
Social Security or Tax ID # Printed Name of Joint Unit Holder Signature of Joint Unit Holder, if
(or IRA/Pension/Custodian Name) any (or IRA/Pension/Custodian
Signature)
- ----------------------------------- -----------------------------------
Home Telephone Number Mailing Address
- ----------------------------------- -----------------------------------
Office Telephone Number City, State, Zip Code
- ----------------------------------- -----------------------------------
No. of Units Sold and Transferred State of Residence
/ / Less than 100% of Units sold MEDALLION GUARANTEE FOR UNIT HOLDER MEDALLION GUARANTEE FOR CUSTODIAN
and transferred (check box if
applicable)
- -----------------------------------
Date
MEDALLION GUARANTEE FOR UNIT HOLDER
</TABLE>
Agreed to and Accepted
Smithtown Bay, LLC
By: Its Manager
Global Capital Management, Inc.
By:
- -----------------------------
<PAGE>
INSTRUCTIONS TO COMPLETE
AGREEMENT OF TRANSFER AND SALE
PLEASE CAREFULLY PROVIDE THE FOLLOWING INFORMATION:
1. Sign Agreement;
2. Have all signatures MEDALLION GUARANTEED. A medallion guarantee can be
obtained through your broker or local financial institution. You may
want to call ahead to confirm that the particular location has the
medallion guarantee. Please remember, a medallion guarantee is not a
notary;
3. Provide your social security or tax identification number;
4. Indicate the number of Units you want to sell and transfer;
5. Date the Agreement;
6. Provide a telephone number and address where you can be reached; and
7. RETURN THE AGREEMENT AND YOUR UNIT CERTIFICATES BY PLACING THEM IN THE
ENVELOPE PROVIDED AND SENDING THEM CERTIFIED MAIL, RETURN RECEIPT
REQUESTED. IF YOU DO NOT HAVE POSSESSION OF YOUR UNIT CERTIFICATES,
PLEASE ENCLOSE A SIGNED LETTER INDICATING YOU NO LONGER HAVE THEM.
IN ADDITION TO THE INFORMATION REQUESTED IN ITEMS 1 TO 7 ABOVE:
IF YOU OWN THE UNITS JOINTLY WITH ANOTHER INDIVIDUAL:
Please have both owners sign the Agreement; both signatures must be Medallion
Guaranteed. If spouse is deceased, please enclose a certified copy of the Death
Certificate along with a Letter Testamentary or Will showing your beneficial
ownership or executor capacity.
IF YOU OWN THE UNITS IN YOUR IRA:
Please provide the name of your custodian and your IRA account number. This
information will be used solely by your custodian (the financial institution
with custody of your account) to make certain that the purchase proceeds are
properly deposited in your account. If your Units are held in an IRA account, in
addition to your signature, the custodian's signature is required on the
Agreement of Transfer and Sale. We will obtain this required signature for you.
IF THE UNITS ARE OWNED IN A TRUST, PROFIT SHARING OR PENSION PLAN:
Attach the first and last pages, as well as the section of the Trust Agreement
showing that the signer has authority to sign the Agreement on behalf of the
Trust or Plan.
IF THE UNITS ARE OWNED IN A CORPORATION:
Attach an original corporate resolution showing that the signer has the
authority to sign the Agreement on behalf of the corporation.
MAIL TO:
Smithtown Bay, LLC
c/o MAVRICC Management Systems, Inc.
Post Office Box 7090
Troy, Michigan 48007-7090
1-800-500-3243
<PAGE>
OFFER TO PURCHASE
UNITS OF
ML MEDIA PARTNERS, L.P.
FOR
$950 PER/UNIT
(Subject to the terms and conditions of the Offer)
SMITHTOWN BAY, LLC
c/o MAVRICC Management Systems, Inc.
Post Office Box 7090
Troy, Michigan 48007-7090
Smithtown Bay, LLC in not an affiliate of the Partnership,
the General Partner of the Partnership or Merrill Lynch.
------------------------
Please read carefully the enclosed Offer to Purchase.
------------------------
To accept the Offer, please carefully follow the enclosed Instructions and
return your duly executed Agreement of Transfer and Sale in the envelope
provided.
If you have any questions or need assistance in completing the Agreement of
Transfer and Sale,
please call the Depositary for the Offer at 1-800-500-3243
January 27, 1999
<PAGE>
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE, NOR A SOLICITATION OF AN
OFFER TO SELL THE SECURITIES. THE OFFER IS MADE ONLY BY THE OFFER TO PURCHASE
AND THE RELATED AGREEMENT OF TRANSFER AND SALE AND IS NOT BEING MADE (NOR WILL
TENDERS BE ACCEPTED FROM) HOLDERS OF UNITS IN ANY JURISDICTION WHICH THE OFFER
OR THE ACCEPTANCE THEREOF WILL NOT BE IN COMPLIANCE WITH THE SECURITIES LAWS OF
SUCH JURISDICTION; IN THOSE JURISDICTIONS WHERE SECURITIES LAWS REQUIRE THE
OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER SHALL BE DEEMED TO BE
MADE ON BEHALF OF THE PURCHASER ONLY BY ONE OR MORE REGISTERED BROKERS OR
DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
NOTICE OF OFFER TO PURCHASE FOR CASH
UP TO 6,500 UNITS OF LIMITED PARTNERSHIP INTERESTS (THE "UNITS")
OF ML MEDIA PARTNERS, L.P. (THE "PARTNERSHIP")
BY SMITHTOWN BAY, LLC, A DELAWARE LIMITED LIABILITY COMPANY
(THE "PURCHASER")
The Purchaser is offering to purchase for cash up to 6,500 Units held by the
Limited Partners of the Partnership (the "Unit Holders") at $950 per Unit upon
the terms and subject to the conditions set forth in the Purchaser's Offer to
Purchase and in the related Agreement of Transfer and Sale (which together
constitute the "Offer" and the "Tender Offer Documents").
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
FRIDAY, FEBRUARY 26, 1999, UNLESS THE OFFER IS EXTENDED.
Funding for the purchase of the Units will be provided through the
Purchaser's existing working capital.
The Offer will expire at 12:00 midnight, Eastern Time on February 26, 1999,
and unless and until the Purchaser, in its sole discretion, shall have extended
the period of time for which the Offer is open (such date and time, as extended
the "Expiration Date").
If the Purchaser makes a material change in the terms of the Offer, or if
they waive a material condition to the Offer, the Purchaser will extend the
Offer and disseminate additional tender offer materials to the extent required
by Rules 14d-4(c) and 14d-6(d) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The minimum period during which an offer must
remain open following any material change in the terms of the Offer, other than
a change in price or a change in percentage of securities sought will depend
upon the facts and circumstances including the materiality of the change with
respect to a change in price or, subject to certain limitations, a change in the
percentage of securities sought. A minimum of ten business days from the date of
such change is generally required to allow for adequate dissemination to Unit
Holders. Accordingly, if prior to the Expiration Date, the Purchaser increases
(other than increases of not more than two percent of the outstanding Units) or
decreases the number of Units being sought, or increases or decreases the
consideration offered pursuant to the Offer, and if the Offer is scheduled to
expire at any time earlier than the period ending on the tenth business day from
the date that notice of such increase or decrease is first published, sent or
given to Unit Holders, the Offer will be extended at least until the expiration
of such tenth business day. For purposes of the Offer, a "business day" means
any day other than a Saturday, Sunday or federal holiday and consists of the
time period from 12:01 a.m. through 12:00 midnight, Eastern Time.
In all cases payment for the Units purchased pursuant to the Offer will be
made only after timely receipt of the Agreement of Transfer and Sale, properly
completed and duly executed, with any required signature guarantees, and any
other documents required by such Agreement of Transfer and Sale.
Tenders of Units made pursuant to the Offer are irrevocable, except that
Unit Holders who tender their Units in response to the Offer will have the right
to withdraw their tendered Units at any time prior to the Expiration Date by
sending a written notice of withdrawal to the Purchaser specifying the name of
<PAGE>
the person who tendered the Units to be withdrawn. In addition, tendered Units
may be withdrawn at any time after March 28, 1999, unless the tender has
theretofore been accepted for payment as provided above.
If tendering Unit Holders tender more than the number of Units that the
Purchaser seeks to purchase pursuant to the Offer, the Purchaser will take into
account the number of Units so tendered and take up and pay for as nearly as may
be pro rata, disregarding fractions, according to the number of Units tendered
by each tendering Unit Holder during the period during which the Offer remains
open.
The terms of the Offer are more fully set forth in the formal Tender Offer
Documents which are available from the Purchaser. The Offer contains terms and
conditions and the information required by Rule 14d-6(e)(l)(vii) under the
Exchange Act which are incorporated herein by reference.
THE TENDER OFFER DOCUMENTS CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE
READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
The Tender Offer Documents may be obtained by written request as set forth
below.
The Tender Offer Documents and, if required, other relevant materials will
be mailed to record holders of Units or persons who are listed as participants
in a clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Units.
FOR COPIES OF THE TENDER OFFER DOCUMENTS CALL THE DEPOSITARY TOLL FREE AT
1-800-500-3243 OR MAKE A WRITTEN REQUEST ADDRESSED TO SMITHTOWN BAY, LLC, C/O
MAVRICC MANAGEMENT SYSTEMS, INC., POST OFFICE BOX 7090, TROY, MICHIGAN
48007-7090.
January 27, 1999
<PAGE>
[LETTERHEAD]
VIA FACSIMILE & OVERNIGHT MAIL
Mr. Thomas Schmidt
c/o Smithtown Bay, LLC
601 Calson Parkway, Suite 200
Minnetonka, MN 55305
Re: ML MEDIA PARTNERS, L.P. AND
ML OKLAHOMA VENTURE PARTNERS, L.P. (THE "FUNDS")
Dear Mr. Schmidt:
Enclosed you will find a revised form of confidentiality agreement in
connection with your requests for lists of the names, addresses and ownership
interests of the limited partners of each of the above-referenced Funds (the
"lists") on behalf of Smithtown Bay, LLC ("Smithtown"). The revised agreements
reflect the changes you and I discussed in telephone conversations this
afternoon.
Kindly sign Page 2 of each of the attached agreements to return them to me
together with two checks--one check for $375 payable to ML Media Management Inc.
and one check for $375 payable to Palmeri Fund Administrators Inc.--to cover the
cost of producing and mailing each list.
If you have any questions, please do not hesitate to contact me.
Very truly yours,
/s/ Anne Julie Ruvane
Anne Julie Ruvane
VICE PRESIDENT & SENIOR COUNSEL
cc: Peter Pancione, Esq.
Philip Mandel, Esq.
David Cohen
Steven N. Baumgarten
Margaret Burke
Rick Palmeri
<PAGE>
Smithtown Bay, LLC ("Smithtown") hereby agrees and acknowledges:
(i) Smithtown hereby acknowledges that the information being provided by ML
Media Management Inc. ("MMLM") pursuant to this Agreement constitutes
confidential and proprietary information of MMLM. Smithtown agrees that any list
of limited partners obtained by it pursuant to this Agreement shall be used
solely for the purpose of contacting limited partners of the Fund to inquire as
to whether they wish to sell their units to Smithtown or its affiliates, and for
no other purpose. Smithtown, its officers, directors, principals, agents and
affiliates will make all reasonable efforts to safeguard such list from
disclosure to third parties, and will not furnish the list or the information
contained therein to any other person or entity. This agreement, including this
paragraph relating to confidentiality and the uses to which the list may be put,
shall be binding upon Smithtown, its officers, directors, principals, agents and
affiliates.
(ii) Smithtown hereby represents that, Smithtown and any person or entity
controlled, managed or advised by it shall not in any manner acquire, attempt to
acquire, or make a proposal to acquire, directly or indirectly, more than a 5%
interest in the Fund through any single offer made to the limited partners.
(iii) Smithtown agrees that any communication with any limited partner
identified on the list being provided to it pursuant to this agreement shall
expressly state that "neither Merrill Lynch & Co., Inc., the General Partner of
the Fund, MMLM, the Fund, nor their respective affiliates or subsidiaries are
parties to this offer." Smithtown shall provide in advance to MMLM, World
Financial Center, South Tower, 23rd Floor, New York, NY 10080-6123, Attention:
Tom Casey (Facsimile 212/236-7360) with a copy of any correspondence that
Smithtown sends to the limited partners of the Fund.
(iv) MMLM will deliver to Smithtown a list of the names and addresses of the
limited partners, and the number of partnership units held by each limited
partner in the Fund. The list will be delivered in ASCII format on 3 1/2 inch
computer disk.
Smithtown Bay, LLC
By: Global Capital Management, Inc.
Signed: /s/ MICHAEL J. FREY
-------------------------------
Title: VICE PRESIDENT Dated: January 24, 1997
--------------------------------- --------------------------------
<PAGE>
AGREEMENT
BETWEEN
ML MEDIA PARTNERS, L.P.
AND
SMITHTOWN BAY, LLC,
A LIMITED PARTNER
WHEREAS, Smithtown Bay, LLC is a limited partner (the "Limited Partner") of
ML Media Partners, L.P. (the "Partnership"); and
WHEREAS, Limited Partner seeks to own or acquire or has acquired through
purchase, assignment or transfer, 1% or more of the Interests in the
Partnership; and
WHEREAS, Section 7.3(A) of the Partnership Agreement provides, among other
things, that no purported sale, assignment or transfer of an Interest to any
person who would own 1% or more of the Interests in the Partnership shall be
permitted, recognized, or effective for any purpose; provided that the General
Partner may permit, in its sole discretion, such sale, assignment or transfer if
such person provides satisfactory assurances to the General Partner that any
interests of such person in media properties would not be attributable to the
Partnership; and
WHEREAS, the Partnership has been advised by the Staff of the Federal
Communications Commission ("AFCC") that limited partners seeking to acquire 1%
or more of the Interests in the Partnership shall be considered to hold
attributable interests in the Partnership unless such limited partners satisfy
the FCC's criteria for insulating limited partners from any direct or indirect
involvement in the management or operation of the media-related activities of
the Partnership.
NOW THEREFORE, the General Partner has determined to permit, recognize or
give effect to certain proposed transfers which would result in the Limited
Partner owning 1% or more of the Interests in the Partnership in consideration,
among other things, of the Limited Partner's agreement to and compliance with
the following terms, condition and assurances concerning such Limited Partner's
interests in media properties and the Limited Partner hereby agrees to and
agrees to comply with each of the following:
1. Limited Partner shall not act as an employee of the Partnership.
2. Limited Partner shall not serve as an independent agent or contractor of
agent with respect to any of the Partnership's media enterprises.
3. Limited Partner shall not communicate with any FCC licensees in which
the Partnership holds an interest or the General Partner on matters
pertaining to the day-to-day operations of any such licensee's business.
4. Limited Partner agrees that General Partner may veto any admissions of
additional general partners proposed by the Limited Partner.
5. Limited Partner shall not be permitted to vote on the removal of the
General Partner, provided, however, that the Limited Partner may vote on
the removal of the General Partner in situations where the General
Partner is subject to bankruptcy proceedings as described in Section
17-402(a)(4)-(5) of the Delaware Revised Uniform Limited Partnership Act
or is adjudicated incompetent by a court of competent jurisdiction.
6. Limited Partner shall not perform any services on behalf of the
Partnership relating to its media activities, with the exception of
making loans, to, or acting as a surety with respect to such business.
7. Limited Partner is expressly prohibited from becoming actively involved
in the management or operation of the media business of the Partnership.
<PAGE>
8. Limited Partner agrees that it will at no time own more than 5% of the
Interests in the Partnership.
9. Limited Partner agrees to provide such additional information and
assurances as the General Partner or the Partnership may request from
time to time and acknowledges that the General Partner shall be entitled
to take any actions provided in Section 7.3, and to redeem such Interests
pursuant to Section 7.4, of the Partnership Agreement, on the basis of
any determination by the General Partner that Limited Partner is or has
become an Ineligible Person as described in Section 7.3 of the
Partnership Agreement or has breached any of the terms of this agreement.
Smithtown Bay, LLC
By: Global Capital Management
its Manager
By: /s/ MICHAEL J. FREY Date: May 23, 1997
-----------------------------
LIMITED PARTNER
Media Management Partners
By: /s/ ROBERT F. AUFENANGER Date: May 28, 1997
-----------------------------
EXECUTIVE VICE PRESIDENT
ML Media Management Inc.
-----------------------------
Print Name
-----------------------------
Title
<PAGE>
[LETTERHEAD]
BY FACSIMILE AND U.S. MAIL
November 24, 1998
Mr. Thomas A. Schmidt
Smithtown Bay, LLC
C/O EBF & Associates
601 Carlson Parkway, Suite 200
Minnetonka, MN 55305
Re: ML MEDIA PARTNERS, L.P. (THE "PARTNERSHIP")--SMITHTOWN BAY, LLC
Dear Mr. Schmidt:
This letter is in response to your letter dated November 20, 1998 regarding the
intention of Smithtown Bay, LLC ("Smithtown") to initiate a registered tender
offer for up to 5% of the outstanding units of limited partnership interest (the
"Units") in the Partnership. In the context of such proposed registered tender
offer you have requested a waiver of certain ownership restrictions contained in
a certain agreement previously entered into between Smithtown and the
Partnership (i.e., letter agreement dated May 23, 1997 (the "Prior Agreement"),
which among other things, limits Smithtown's ownership of Units of the
Partnership to not more than 5% of the outstanding Partnership Units. As we
discussed, based on Smithtown's representation that it currently owns less than
5% of the outstanding Units and that it intends to initiate a registered tender
offer (i.e., in accordance with the Securities Exchange Act of 1934, as amended,
and the rules promulgated thereunder (the "Securities Laws")) for not more than
an additional 5% of the Partnership's Units, and subject to the terms of this
letter and the conditions set forth below, the Partnership will not enforce the
5% ownership limitation (described in paragraph 8 of such Prior Agreement) in
connection with the proposed registered tender offer. The foregoing waiver is
conditioned upon the following: (i) Smithtown's commencement of a registered
tender offer as provided in the Securities Laws within 5 business days of the
date of this letter, with a purchase price per Unit in Smithtown's offer being
an amount in cash in excess of $750 per Unit as of the tender offer date, (ii)
Smithtown's compliance with the Securities Laws, (iii) the satisfaction of the
provisions of the Partnership's Second Amended and Restated Agreement of Limited
Partnership, as amended (the "Partnership Agreement"), including without
limitation, the provisions of Article Seven of the Partnership Agreement, as
determined by the Partnership's general partner in its sole discretion, and (iv)
the number of Units transferred pursuant to the proposed tender offer when taken
together with all other transfers of Units in the Partnership for any tax year
of the Partnership does not exceed the limitations established by the
Partnership to stay within the 5% safe harbor percentage limitation and such
other limitations set forth in the safe harbor provisions of Internal Revenue
Service Notice 88-75. Please be advised, however, that notwithstanding the
foregoing, the Partnership (i) does not waive any of the provisions of or its
rights pursuant to Sections 7.1, 7.3 or 7.4 of the Partnership Agreement, and
the Partnership reserves its right to limit transfers of Units (including Units
transferred pursuant to the proposed tender offer you describe
<PAGE>
Mr. Thomas A. Schmidt
Page 2
November 24, 1998
and other Units) to less than 5% of outstanding Units in any tax year and (ii)
the agreements of Smithtown set forth in paragraphs 1 through 7 and 9 of the
Prior Agreement shall remain in full force and effect.
Please be further aware that this letter does not make any determination in
favor of Smithtown as to whether the transfer of any such Units will be
recognized by the Partnership when and if submitted to the Partnership for
transfer.
Very truly yours,
/s/ ANNE JULIE RUVANE
--------------------------------------
Anne Julie Ruvane
VICE PRESIDENT & SENIOR COUNSEL
