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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
DIVALL INSURED INCOME FUND LIMITED PARTNERSHIP
(Name of Subject Company)
U.S. RESTAURANT PROPERTIES, INC.
(Bidder)
LIMITED PARTNERSHIP INTERESTS
(Title of Class of Securities)
255016107
(CUSIP Number of Class of Securities)
ROBERT J. STETSON
U.S. RESTAURANT PROPERTIES, INC.
5310 HARVEST HILL ROAD
SUITE 270
DALLAS, TEXAS 75230
(972) 387-1487
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Bidder)
COPIES TO:
KENNETH L. BETTS
WINSTEAD SECHREST & MINICK P.C.
1201 ELM STREET
SUITE 5400
DALLAS, TEXAS 75270
(214) 745-5400
CALCULATION OF FILING FEE
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Transaction valuation Amount of filing fee
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$7,187,500 $1,438
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|_| Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: Not applicable. Filing Party: Not applicable.
Form or Registration No.: Not applicable. Date Filed: Not applicable.
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CUSIP NO. 255016107
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
U.S. RESTAURANT PROPERTIES, INC.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC; BK
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Maryland
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
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8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* |_|
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
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10 TYPE OF REPORTING PERSON*
CO
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ITEM 1. SECURITY AND SUBJECT COMPANY
(a) The name of the subject entity is Divall Insured Income Fund
Limited Partnership, a Wisconsin limited partnership (the "Partnership"), and
the address of its principal executive offices is 101 West 11th Street, Suite
1110, Kansas City, Missouri 64105.
(b) This Statement relates to the offer by U.S. Restaurant Properties,
Inc., a Maryland corporation ("Bidder"), to purchase a limited number of the
limited partnership interests (the "Interests"), of the Partnership at $575 per
Interest, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase (the "Offer to Purchase") and in
the related Letter of Transmittal, copies of which are attached hereto as
Exhibits (a)(1) and (a)(2) (which are herein collectively referred to as the
"Offer"). The information set forth in the introduction to the Offer to Purchase
(the "Introduction") is incorporated herein by reference.
(c) The information set forth in Section 12 "Determination of Purchase
Price" of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(d) This Statement is filed by Bidder. The information set forth in
the Introduction, Section 9 "Certain Information Concerning the Purchaser" and
Schedule I of the Offer to Purchase is incorporated herein by reference.
(e)-(f) Neither the Bidder nor, to the best knowledge of Bidder, any of
the persons listed in Schedule I of the Offer to Purchase has during the last
five years (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, 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 I of the Offer to Purchase is
incorporated herein by reference.
ITEM 3. PAST CONTRACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(a) The Bidder has not engaged in any transactions, or entered into
agreements or contracts, with the Partnership prior to the date hereof.
(b) The information set forth in the Introduction, Section 9 "Certain
Information Concerning the Purchaser" and Section 11 "Background of the Offer;
Past Contacts, Transactions or Negotiations with the Partnership" of the Offer
to Purchase is incorporated herein by reference.
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ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a)-(b) The information set forth in Section 10 "Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER
(a)-(e) The information set forth in the Introduction, Section 11
"Background of the Offer; Past Contacts, Transactions or Negotiations with the
Partnership", Section 13 "Purpose of the Offer; Plans for the Partnership" and
Section 14 "Dividends and Distributions" of the Offer to Purchase is
incorporated herein by reference.
(f)-(g) The information set forth in Section 7 "Effect of the Offer on
Trading Market; Registration Under Section 12(g) of the Exchange Act" of the
Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a)-(b) The information set forth in the Introduction and Section 9
"Certain Information Concerning the Purchaser" is incorporated herein by
reference. None of the persons listed on Schedule I of the Offer to Purchase
hold any Interests.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES
The information set forth in the Introduction, Section 9 "Certain
Information Concerning the Purchaser", Section 11 "Background of the Offer; Past
Contacts, Transactions or Negotiations with the Partnership" and Section 13
"Purpose of the Offer; Plans for the Partnership" of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The information set forth in Section 18 "Fees and Expenses" of the
Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
The information set forth in Section 9 "Certain Information Concerning
the Purchaser" of the Offer to Purchase is incorporated herein by reference.
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ITEM 10. ADDITIONAL INFORMATION
(a) None.
(b)-(c) The information set forth in Section 16 "Certain Conditions of
the Offer" and Section 16 "Certain Legal Matters; Regulatory Approvals" of the
Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 "Effect of the Offer on
Trading Market; Registration Under Section 12(g) of the Exchange Act" of the
Offer to Purchase is incorporated herein by reference.
(e) The information set forth in Section 17 "Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
(f) The information set forth in the Offer to Purchase and the Letter
of Transmittal is incorporated herein by reference in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
(a)(1) Offer to Purchase dated March 27, 1998.
(a)(2) Letter of Transmittal (including Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9).
(a)(3) Form of Letter to Interest Holders.
(a)(4) Form of Response Card
(b) None.
(c) None.
(d) None.
(e) Not applicable.
(f) None.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: March 27, 1998
U.S. RESTAURANT PROPERTIES, INC.
By: /s/ Robert J. Stetson
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Robert J. Stetson
Chief Executive Officer and
President
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Exhibit (a)(1)
Offer to Purchase dated March 27, 1998
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OFFER TO PURCHASE FOR CASH
OUTSTANDING LIMITED PARTNERSHIP INTERESTS
OF
DIVALL INSURED INCOME FUND LIMITED PARTNERSHIP
AT
$575 NET PER INTEREST
BY
U.S. RESTAURANT PROPERTIES, INC.
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THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 6:00 P.M., DALLAS,
TEXAS TIME, ON JUNE 2, 1998, UNLESS
THE OFFER IS EXTENDED.
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U.S. RESTAURANT PROPERTIES, INC. (THE "PURCHASER") IS OFFERING TO
PURCHASE THE MAXIMUM PERMISSIBLE AMOUNT (AS DEFINED BELOW) OF THE OUTSTANDING
LIMITED PARTNERSHIP INTERESTS (THE "INTERESTS") IN DIVALL INSURED INCOME FUND
LIMITED PARTNERSHIP (THE "PARTNERSHIP") AT THE PURCHASE PRICE OF $575 PER
INTEREST NET TO THE SELLER IN CASH (THE "OFFER"). A LIMITED PARTNER OF THE
PARTNERSHIP (A "LIMITED PARTNER") MAY TENDER ANY AND ALL INTERESTS OWNED BY SUCH
LIMITED PARTNER. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF
INTERESTS BEING TENDERED. IF MORE INTERESTS ARE VALIDLY TENDERED THAN THE NUMBER
OF INTERESTS THAT ARE PERMITTED TO BE TRANSFERRED TO THE PURCHASER (THE "MAXIMUM
PERMISSIBLE AMOUNT") UNDER THE TERMS OF THE PARTNERSHIP'S AGREEMENT OF LIMITED
PARTNERSHIP (THE "PARTNERSHIP AGREEMENT"), THE PURCHASER WILL ACCEPT ONLY SUCH
NUMBER OF INTERESTS AS CAN BE VALIDLY TRANSFERRED TO THE PURCHASER IN ACCORDANCE
WITH THE PARTNERSHIP AGREEMENT, WITH SUCH INTERESTS PURCHASED ON A PRO RATA
BASIS, SUBJECT TO THE TERMS AND CONDITIONS HEREIN.
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IMPORTANT
Any (i) Limited Partner, (ii) beneficial owner (a "Beneficial Owner"),
or (iii) person who has purchased Interests but has not yet been reflected on
the Partnership's books as a transferee of such Interests (an "Assignee"),
desiring to tender Interests should either (a) complete and sign the Letter of
Transmittal, or a facsimile copy thereof, in accordance with the instructions in
the Letter of Transmittal and mail or deliver the Letter of Transmittal, or a
facsimile copy thereof, and any other required documents to American Stock
Transfer & Trust Company (the "Depositary"), at the address or the facsimile
number set forth herein, or (b) request his or her broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for him or her.
Unless the context requires otherwise, references to Limited Partners herein
shall be deemed to also refer to Beneficial Owners and Assignees.
Any questions about the Offer, or any requests for additional copies of
the Offer to Purchase or the Letter of Transmittal, may be directed to the
Information Agent, Christopher Weil & Co., Inc., at (800)478-2605. If you need
assistance in completing the Letter of Transmittal, please call the Depositary,
American Stock Transfer & Trust Company, at (212) 936-5100 or (718) 921-8200.
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March 27, 1998
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In their evaluation of the Offer, Limited Partners should carefully
consider the following:
- - DETERMINATION OF PURCHASE PRICE. The Purchase Price was established by the
Purchaser and is not the result of arm's length negotiation.
- - PURCHASE PRICE MAY NOT REPRESENT LIQUIDATION VALUE. Although the Purchaser
cannot predict the future value of the Partnership's assets on a per
Interest basis, the Purchase Price could be substantially less than the net
proceeds that would be realized on a per Interest basis from a current sale
of the properties or that may be realized upon a future liquidation of the
Partnership.
- - NO RELIANCE ON INDEPENDENT VALUATION OF INTERESTS. The Purchase Price
represents the price the Purchaser is willing to pay for the Interests. No
independent person has been retained to evaluate or render any opinion with
respect to the fairness of the Purchase Price, and no appraisals have been
obtained by the Purchaser of any of the properties owned by the
Partnership.
The Letter of Transmittal and any other required documents should be
sent or delivered by each tendering Limited Partner to the Depositary at the
address, or the facsimile number, set forth below:
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
40 Wall Street
46th Floor
New York, New York 10005
Attention: Reorganization Department
Facsimile Number: Telephone Number:
(718) 234-5001 (212) 936-5100
(718) 921-8200
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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 LETTER OF TRANSMITTAL. NO SUCH
RECOMMENDATION, INFORMATION OR REPRESENTATION MAY BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
EACH LIMITED PARTNER IS URGED TO READ CAREFULLY THE ENTIRE OFFER TO
PURCHASE, THE LETTER OR TRANSMITTAL AND RELATED DOCUMENTS.
For Additional Information Concerning the Offer to Purchase contact:
Christopher Weil & Co., Inc.
6510 Lusk Boulevard, Suite B205
San Diego, California 92121
Telephone: (800) 478-2605
or
U.S. Restaurant Properties, Inc.
5310 Harvest Hill Road
Suite 270
Dallas, Texas 75230
Telephone: (972) 387-1487, extension 18
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TABLE OF CONTENTS
1. Terms of the Offer; Expiration Date...................................... 3
2. Acceptance for Payment and Payment....................................... 3
3. Procedure for Tendering Interests........................................ 5
4. Withdrawal Rights........................................................ 7
5. Certain Tax Consequences................................................. 8
6. Market Price of Interests................................................ 10
7. Effect of the Offer on Trading Market; Registration Under Section
12(g) of the Exchange Act................................................ 11
8. Certain Information Concerning the Partnership........................... 12
9. Certain Information Concerning the Purchaser............................. 14
10. Source and Amount of Funds............................................... 17
11. Background of the Offer; Past Contacts, Transactions or
Negotiations with the Partnership........................................ 17
12. Determination of Purchase Price.......................................... 18
13. Purpose of the Offer; Plans for the Partnership.......................... 18
14. Dividends and Distributions.............................................. 19
15. Extension of Tender Period; Termination; Amendment....................... 19
16. Certain Conditions of the Offer.......................................... 21
17. Certain Legal Matters; Regulatory Approvals.............................. 22
18. Fees and Expenses........................................................ 23
19. Miscellaneous............................................................ 23
Schedule I -Directors and Executive Officers of the Purchaser
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To the Limited Partners of DIVALL INSURED INCOME FUND LIMITED PARTNERSHIP:
U.S. Restaurant Properties, Inc., a Maryland corporation (the
"Purchaser"), hereby offers to purchase the Maximum Permissible Amount (as
defined below) of the outstanding Limited Partnership Interests (the
"Interests") of Divall Insured Income Fund Limited Partnership, a Wisconsin
limited partnership (the "Partnership"), at $575 per Interest (the "Purchase
Price") net to the seller in cash, upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal
(which together constitute the "Offer"). Tendering Limited Partners will not be
obligated to pay brokerage fees or commissions or, except as set forth in the
Letter of Transmittal, transfer taxes on the purchase of Interests pursuant to
the Offer. The Purchase Price will, however, be reduced by the value per
Interest of any distribution of cash or assets of the Partnership made between
the date hereof and the Expiration Date (as hereinafter defined). See Section
14. The Purchaser will pay all charges and expenses of American Stock Transfer &
Trust Company which is acting as the Depositary for the Offer (the "Depositary")
and of Christopher Weil & Co., Inc., which is acting as the Information Agent
for the Offer (the "Information Agent"), incurred in connection with the Offer.
See Section 18.
The purpose of the Offer is to acquire the maximum number of Interests
as are permitted to be transferred to the Purchaser (the "Maximum Permissible
Amount") under the terms and subject to the limitations of the Partnership's
Limited Partnership Agreement (the "Partnership Agreement"). See Section 2.
Following completion of the Offer, the Purchaser intends to continue to acquire
Interests in accordance with the limitations set forth in the Partnership
Agreement and also currently anticipates attempting to acquire additional
Interests sufficient to gain control of the Partnership. If the Purchaser
acquires control of the Partnership, the Purchaser intends to pursue a merger or
similar combination between the Partnership and the Purchaser or an affiliate of
the Purchaser or seek to consummate a sale of the Partnership's assets to the
Purchaser or an affiliate of the Purchaser (collectively, a "Combination
Transaction") at a purchase price per Interest no greater than the Purchase
Price paid pursuant to the Offer. No assurance can be given that the Purchaser
will acquire control of the Partnership or that a Combination Transaction, or
any similar transaction, will be consummated or as to the terms or timing
thereof. See Section 13.
Limited Partners may no longer wish to continue with their investment
in the Partnership for a number of reasons, including, without limitation:
- - Although limited resale mechanisms are available to the Limited Partners
wishing to sell their Interests, there is no formal or organized trading
market for the Interests. The Partnership's Annual Report on Form 10-K for
the year ended December 31, 1996 (the "Partnership 10-K") states: "There is
no public market for the Interests, and it is not anticipated that an
active public market will develop." Accordingly, Limited Partners who
desire resale liquidity may wish to consider the Offer. The Offer affords
the Limited Partners with an opportunity to dispose of their Interests for
cash, which alternative otherwise might not be available to them.
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<PAGE>
- - The Offer will provide Limited Partners with an immediate opportunity to
liquidate their investment in the Partnership without the usual transaction
costs associated with secondary market sales or partnership transfer fees.
- - Although not necessarily an indication of value, the Purchaser believes the
$575 Purchase Price represents a value per Interest commensurate with the
value of the properties owned by the Partnership (the "Properties"). See
Section 12.
- - General disenchantment with long-term investments in limited partnerships
because of, among other things, their illiquidity.
- - The Offer may be attractive to certain Limited Partners who wish in the
future to avoid the continued additional expense, delay and complication in
filing income tax returns which result from an ownership of Interests.
- - The Offer provides Limited Partners with the opportunity to liquidate their
Interests and to reinvest the proceeds in other investments should they
desire to do so.
The Purchaser expressly reserves the right, in its sole discretion and
for any reason, to terminate the Offer at any time and to waive any or all of
the conditions of the Offer, although the Purchaser does not presently intend to
waive any such conditions. See Section 16.
Except as otherwise indicated, information contained in this Offer to
Purchase is based upon documents and reports publicly filed by the Partnership
with the Securities and Exchange Commission (the "Commission"). Although the
Purchaser has no information that any statements contained in this Offer to
Purchase are untrue, the Purchaser is not responsible for the accuracy or
completeness of any information contained in this Offer to Purchase which is
derived from such public documents, or for any failure by the Partnership to
disclose events which may have occurred and may affect the significance or
accuracy of any such information but which are unknown to the Purchaser.
Each Limited Partner must make his or her own decision based on his or
her particular circumstances. Limited Partners should consult with their
respective advisors about the financial, tax, legal and other implications to
them of accepting the Offer. Limited Partners are urged to read this Offer to
Purchase, the related Letter of Transmittal and the other accompanying materials
carefully before deciding whether to tender their Interests.
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THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ IN ITS ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to
the conditions set forth in the Offer, the Purchaser will accept for payment and
pay for all Interests that are validly tendered by the Expiration Date and not
withdrawn as provided in Section 4. The term "Expiration Date" shall mean 6:00
p.m., Dallas, Texas time, on June 2, 1998, unless 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 time and date at which the Offer, as so
extended by the Purchaser, shall expire.
The Purchaser reserves the right, at any time or from time to time, to
extend the period of time during which the Offer is open by giving oral or
written notice of such extension to the Depositary. There can be no assurance
the Purchaser will exercise its right to extend the Offer. During any such
extension, the Depositary may, on behalf of the Purchaser, retain all Interests
tendered, and such Interests may not be withdrawn except as provided in Section
4.
Any such extension, delay, termination or amendment will be followed as
promptly as practicable by a public announcement thereof. Without limiting the
manner in which the Purchaser may choose to make any public announcement, the
Purchaser will have no obligation (except as otherwise required by applicable
law) to publish, advertise or otherwise communicate any such public announcement
other than by making a release to the Dow Jones News Service.
The Offer is subject to certain conditions set forth in Section 16. If
any condition is not satisfied, the Purchaser may (a) subject to certain
exceptions, terminate the Offer and return all tendered Interests to tendering
Limited Partners, (b) extend the Offer and, subject to withdrawal rights as set
forth in Section 4, retain all such Interests until the expiration of the Offer
as so extended, (c) waive such condition, and, subject to any requirement to
extend the period of time during which the Offer is open, purchase Interests
validly tendered by the Expiration Date and not withdrawn, or (d) delay
acceptance for payment or payment for Interests, subject to applicable law,
until satisfaction or waiver of the conditions to the Offer. For a description
of the Purchaser's right to extend the period of time during which the Offer is
open and to amend, delay or terminate the Offer, see Sections 15 and 16.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. The Partnership Agreement
provides that no purported sale, transfer or assignment of an Interest will be
valid unless, among other conditions, the Interest sought to be transferred,
when added to all other Interests transferred within the 12 month period prior
to the subject transfer, totals less than 50% of the total interest in the
Partnership profits and capital and will not otherwise result in a termination
of the Partnership under the Internal Revenue Code or applicable Treasury
Regulations. The Purchaser, upon the terms and subject to the conditions of the
Offer, will accept for payment the Maximum Permissible Amount of Interests
validly tendered prior to the Expiration Date and not withdrawn which shall be
equal to such number of Interests which, when added to all other Interests
transferred within the 12 month period prior to the Expiration Date, total up to
a maximum of
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<PAGE>
49.9% of the Partnership profits and capital. If the number of Interests validly
tendered and not withdrawn prior to the Expiration Date is more than the Maximum
Permissible Amount, the Purchaser, upon the terms and subject to the conditions
of the Offer, will accept for payment only the Maximum Permissible Amount, with
such Interests purchased on a pro rata basis according to the number of
Interests validly tendered and not properly withdrawn by each tendering Limited
Partner prior to the Expiration Date, with adjustments to avoid purchases of
prorated fractional Interests.
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 such
extension or amendment), the Purchaser will purchase, by accepting for payment,
and will pay for, all Interests, up to the Maximum Permissible Amount, validly
tendered by the Expiration Date and not withdrawn in accordance with Section 4
on or prior to the Expiration Date as soon as practicable after the later of (a)
the Expiration Date and (b) the satisfaction or waiver of the conditions set
forth in Section 16. For a description of the Purchaser's right to terminate the
Offer and not accept for payment or pay for Interests or to delay acceptance for
payment or payment for Interests, see Section 15. In all cases, payment for
Interests accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of (a) the Letter of Transmittal properly
completed and duly executed and (b) any other documents required by the Letter
of Transmittal.
If proration of tendered Interests is required, the Purchaser does not
expect to be able to announce the final results of such proration until at least
approximately seven business days after the Expiration Date because of the
difficulty of determining the number of Interests validly tendered and not
withdrawn. Subject to the Company's obligation under Rule 14e-1(c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), to pay
tendering Limited Partners the Purchase Price in respect of Interests tendered
or return those Interests promptly after the termination or withdrawal of the
Offer, the Purchaser does not intend to pay for any Interests accepted for
payment pursuant to the Offer until the final proration results are known. If,
for any reason whatsoever, acceptance for payment of or payment for any
Interests tendered pursuant to the Offer is delayed or the Purchaser is unable
to accept for payment, purchase or pay for Interests tendered pursuant to the
Offer, then, without prejudice to the Purchaser's rights under Section 16, the
Depositary may, nevertheless, on behalf of the Purchaser and subject to Rule
14e-1(c) under the Exchange Act, retain tendered Interests, and such Interests
may not be withdrawn except to the extent that the tendering Limited Partner is
entitled to withdrawal rights as described in Section 4.
For purposes of the Offer, the Purchaser shall be deemed to have
accepted for payment tendered Interests when, as and if the Purchaser gives oral
or written notice to the Depositary of its acceptance of the tenders of such
Interests. No tender of Interests will be deemed to have been validly made until
all defects and irregularities with respect to such tender have been cured or
waived. Payment for Interests accepted for payment pursuant to the Offer will be
made by deposit of the purchase price with the Depositary, which will act as
agent for the tendering Limited Partners for the purpose of receiving payments
from the Purchaser and transmitting such payments to tendering Limited Partners.
For a description of the procedure for tendering Interests pursuant to the
Offer, see Section 3. Accordingly, payment may be made to tendering Limited
Partners at different times if delivery of the Interests and other required
documents occur at
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<PAGE>
different times. Under no circumstances will interest be paid by the Purchaser
on the consideration paid for Interests pursuant to the Offer, regardless of any
delay in making such payment.
Subject to applicable rules of the Commission, the Purchaser expressly
reserves the right to delay acceptance for payment of, or payment for, tendered
Interests pending receipt of any regulatory or governmental approvals specified
in Section 17 "Certain Legal Matters" or pending receipt of any additional
documentation required by the Letter of Transmittal. If any tendered Interests
are not purchased pursuant to the Offer for any reason, the Letter of
Transmittal with respect to such Interests will be destroyed by the Depositary
and any certificates representing Interests will be returned to the tendering
Limited Partner, without expense to the tendering Limited Partner, as promptly
as practicable following the expiration or termination of the Offer.
If the Purchaser increases the consideration to be paid for Interests
pursuant to the Offer, the Purchaser will pay such increased consideration for
all Interests purchased pursuant to the Offer.
The Purchaser reserves the right to transfer or assign, in whole or
from time to time in part, to one or more of its affiliates the right to
purchase Interests tendered pursuant to the Offer, but any such transfer or
assignment will not relieve the Purchaser of its obligations under the Offer or
prejudice the rights of tendering Limited Partners to receive payment for
Interests validly tendered and accepted for payment.
3. PROCEDURE FOR TENDERING INTERESTS. To tender Interests pursuant to
the Offer, a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other documents required by the Letter of Transmittal
must be received by the Depositary at the address or the facsimile number set
forth on the cover of this Offer to Purchase and certificates, if any, for the
Interests to be tendered must be received by the Depositary at such address by
the Expiration Date.
SIGNATURE GUARANTEES. Signatures on a Letter of Transmittal need not be
guaranteed (a) if the Letter of Transmittal is signed by the registered holder
of the Interests tendered therewith and such holder has not completed the box
entitled "Special Mailing Instructions" on the Letter of Transmittal or (b) if
such Interests are tendered for the account of an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal. All signatures on a Letter of
Transmittal which do not fall within one of the categories described above must
be guaranteed by a financial institution (including most banks, savings and
loans associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchanges Medallion Program (an "Eligible
Institution").
METHOD OF DELIVERY. The method of delivery of Interests and all other
required documents is at the option and risk of the tendering Limited Partner.
If certificates for Interests are sent by mail, registered mail with return
receipt requested, properly insured, is recommended.
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<PAGE>
FEDERAL INCOME TAX WITHHOLDING. Under the federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payments made
to certain Limited Partners pursuant to the Offer. In order to avoid such backup
withholding, each tendering Limited Partner must provide the Depositary with
such Limited Partner's correct taxpayer identification number and certify that
such Limited Partner is not subject to such backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal. Further, in order to
avoid withholding of 10% of the amount realized, each Limited Partner must
properly complete the Non-Foreign Tax Affidavit included in the Letter of
Transmittal which certifies that such Limited Partner is not a foreign person as
such term is defined under federal income tax law.
TENDER CONSTITUTES AN AGREEMENT. The tender of Interests will
constitute a binding agreement between the tendering Limited Partner and the
Purchaser upon the terms and subject to the conditions of the Offer.
APPOINTMENT AS PROXY. By executing a Letter of Transmittal, a tendering
Limited Partner irrevocably appoints designees of the Purchaser as such Limited
Partner's proxies in the manner set forth in the Letter of Transmittal to the
full extent of such Limited Partner's rights with respect to the Interests
tendered and accepted for payment by the Purchaser (and any and all other
Interests or other securities issued or issuable in respect of such Interests on
or after the date hereof). All such proxies shall be considered coupled with an
interest in the tendered Interests. Such appointment is effective only upon the
acceptance for payment of such Interests by the Purchaser. Upon such acceptance
for payment, all prior proxies and consents granted by such Limited Partner with
respect to such Interests and other securities will, without further action, be
revoked, and no subsequent proxies may be given nor subsequent written consents
executed by such Limited Partner (and, if given or executed, will not be deemed
to be effective).
POWER OF ATTORNEY. The Purchaser and its designees will, with respect
to the Interests (and any and all other Interests or other securities issued or
issuable in respect of such Interests on or after the date hereof) for which
such appointment is effective, be empowered to exercise all voting and other
rights of such Limited Partner as it in its sole discretion may deem proper
pursuant to the Partnership's Amended Agreement of Limited Partnership, as
amended to date (the "Partnership Agreement"), or otherwise. The Purchaser may
assign any proxy and/or power of attorney to any person with or without
assigning the related Interests with respect to which such proxy and/or power of
attorney was granted. The Purchaser reserves the right to require that, in order
for Interests to be deemed validly tendered, immediately upon the Purchaser's
payment for such Interests, the Purchaser must be able to exercise full voting
rights with respect to such Interests and other securities.
In addition, pursuant to such appointment as attorneys-in-fact, the
Purchaser and its designees each will have the power, among other things, (i) to
seek to transfer ownership of such Interests on the books and records of the
Partnership (and execute and deliver any accompanying evidences of transfer and
authenticity any of them may deem necessary or appropriate in connection
therewith), (ii) to receive any and all distributions made by the Partnership
after the Expiration Date, and to receive all benefits and otherwise exercise
all rights of beneficial ownership of such Interests in accordance with the
terms of the Offer, (iii) to execute and deliver to the Partnership and/or the
General Partner of the Partnership (as the case may be) a change
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<PAGE>
of address form instructing the Partnership to send any and all future
distributions to which the Purchaser is entitled pursuant to the terms of the
Offer in respect of tendered Interests to the address specified in such form,
and (iv) to endorse any check payable to or upon the order of such Limited
Partner representing a distribution, if any, to which the Purchaser is entitled
pursuant to the terms of the Offer, in each case on behalf of the tendering
Limited Partner.
ASSIGNMENT OF ENTIRE INTEREST IN THE PARTNERSHIP. By executing and
delivering the Letter of Transmittal, a tendering Limited Partner irrevocably
assigns to the Purchaser and its assigns all of the, direct and indirect, right,
title and interest of such Limited Partner in the Partnership with respect to
the Interests tendered and accepted for payment pursuant to the Offer including,
without limitation, such Limited Partner's right, title and interest in and to
any and all distributions made by the Partnership after the Expiration Date in
respect of the Interest tendered by such Limited Partner and accepted for
payment by the Purchaser, regardless of any provision to the contrary contained
in the Partnership Agreement. The Purchaser reserves the right to transfer or
assign, in whole or from time to time in part, to any third party, the right to
purchase Interests tendered pursuant to the Offer, together with its rights
under the Letter of Transmittal, but any such transfer or assignment will not
relieve the assigning party of its obligations under the Offer or prejudice the
rights of tendering Limited Partners to receive payment for Interests validly
tendered and accepted for payment pursuant to the Offer.
ASSIGNEE STATUS. Assignees must provide documentation to the Depositary
which demonstrates, to the satisfaction of the Purchaser, such person's status
as an Assignee of an Interest.
DETERMINATION OF VALIDITY; REJECTION OF INTERESTS; WAIVER OF DEFECTS;
NO OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the form of
documents and the validity, eligibility (including time of receipt) and
acceptance for payment of any tender of Interests will be determined by the
Purchaser, in its sole discretion, and such determination shall be final and
binding. The Purchaser reserves the absolute right to reject any or all tenders
of Interests determined by it not to be in proper form or the acceptance for
payment of or payment for which may, in the opinion of the Purchaser's counsel,
be unlawful. The Purchaser also reserves the absolute right to waive any defect
or irregularity in any tender of Interests. None of the Purchaser, the
Information Agent, the Depositary or any other person will be under any duty to
give notification of any defect or irregularity in tenders or incur any
liability for failure to give any such notification.
4. WITHDRAWAL RIGHTS. Tenders of Interests made pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date. Thereafter, such
tenders are irrevocable, except they may be withdrawn after July 2, 1998 unless
previously accepted for payment as provided in this Offer to Purchase. If the
Purchaser extends the period of time during which the Offer is open, is delayed
in accepting for payment or paying for Interests or is unable to accept for
payment or pay for Interests pursuant to the Offer for any reason, then, without
prejudice to the Purchaser's rights under the Offer, the Depositary may, on
behalf of the Purchaser, retain all Interests tendered, and such Interests may
not be withdrawn except as otherwise provided in this Section 4.
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<PAGE>
To be effective, a written, telegraphic or facsimile transmission
notice of withdrawal must be timely received by the Depositary at the address or
the facsimile number set forth on the cover of this Offer to Purchase and must
specify the name of the person who tendered the Interests to be withdrawn and
the number of Interests to be withdrawn and the name of the registered holder of
the Interests, if different from that of a person who tendered such Interests.
If the Interests to be withdrawn have been delivered to the Depositary, a signed
notice of withdrawal with (except in the case of Interests tendered by an
Eligible Institution) signatures guaranteed by an Eligible Institution must be
submitted prior to the release of such Interests. In addition, such notice must
specify the name of the registered holder (if different from that of the
tendering Limited Partner) and the numbers shown on any certificates evidencing
the Interests to be withdrawn. Withdrawals may not be rescinded, and Interests
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Interests may be retendered by again following the
procedures described in Section 3 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt)
of any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. None of the
Purchaser, the Information Agent, the Depositary or any other person will be
under any duty to give notification of any defect or irregularity in any notice
of withdrawal or incur any liability for failure to give any such notification.
5. CERTAIN TAX CONSEQUENCES. The following summary is a general
discussion of certain expected federal income tax consequences of a sale of
Interests pursuant to the Offer. This summary is based on the Internal Revenue
Code of 1986, as amended (the "Code"), applicable Treasury Regulations
thereunder, administrative rulings, practice and procedures and judicial
authority as of the date of the Offer. All of the foregoing are subject to
change, and any such change could affect the continuing accuracy of this
summary. This summary does not discuss all aspects of federal income taxation
that may be relevant to a particular Limited Partner based on such Limited
Partner's specific circumstances or to certain types of Limited Partners subject
to special treatment under the federal income tax laws (for example, foreign
persons, dealers in securities, banks, insurance companies and tax-exempt
entities), nor does it discuss any aspect of state, local, foreign or other tax
laws. Sales of Interests pursuant to the Offer will be taxable transactions for
federal income tax purposes, and may also be taxable transactions under
applicable state, local, foreign and other tax laws. EACH LIMITED PARTNER SHOULD
CONSULT A TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO SUCH LIMITED
PARTNER OF SELLING INTERESTS PURSUANT TO THE OFFER, INCLUDING, WITHOUT
LIMITATION, FEDERAL, STATE AND LOCAL TAX CONSEQUENCES.
TAX CONSEQUENCES TO TENDERING LIMITED PARTNERS. A Limited Partner will
recognize gain or loss on a sale of Interests pursuant to the Offer equal to the
difference between (a) the Limited Partner's "amount realized" on the sale and
(b) the Limited Partner's adjusted tax basis in the Interests sold. The "amount
realized" with respect to an Interest sold pursuant to the Offer will be equal
to the sum of the amount of cash received by the Limited Partner for the
Interest plus the amount of Partnership liabilities allocable to the Interest as
determined under Code Section 752. The amount of a Limited Partner's adjusted
tax basis in Interests sold pursuant to the Offer will vary depending upon the
Limited Partner's particular circumstances, and will be
- 8 -
<PAGE>
adjusted by allocations of Partnership income, gain or loss to a Limited Partner
with respect to such Interests. In this regard, tendering Limited Partners will
be allocated a pro rata share of the Partnership's taxable income or loss with
respect to Interests sold pursuant to the Offer through the effective date of
the sale. Until tendered Interests are accepted for payment, tendering Limited
Partners may be allocated taxable income of the Partnership.
In general, the character (as capital or ordinary) of a Limited
Partner's gain or loss on a sale of an Interest pursuant to the Offer will be
determined by allocating the Limited Partner's amount realized on the sale and
his adjusted tax basis in the Interests sold between "Section 751 items," which
are "inventory items" and "unrealized receivables" (including depreciation
recapture) as defined in Code Section 751, and non-Section 751 items.
A Limited Partner's capital gain or loss on a sale of Interests
pursuant to the Offer will be treated as long-term capital gain or loss if the
Limited Partner's holding period for the Interests exceeds one year. Under
current law, long-term capital gains of individuals and other non-corporate
taxpayers are taxed at a maximum marginal federal income tax rate of 28% for
property held more than one year but not more than 18 months, or 20% for
property held more than 18 months unless the property is certain depreciable
real estate which is taxed at a 25% rate, whereas the maximum marginal federal
income tax rate for other income of such persons is 39.6%. Capital losses are
deductible only to the extent of capital gains, except that non-corporate
taxpayers may deduct up to $3,000 of capital losses in excess of the amount of
their capital gains against ordinary income. Excess capital losses generally can
be carried forward to succeeding years (a corporation's carry forward period is
five years and a non-corporate taxpayer can carry forward such losses
indefinitely). In addition, corporations, but not non-corporate taxpayers, are
allowed to carry back excess capital losses to the three preceding taxable
years.
Under Code Section 469, a non-corporate taxpayer or personal service
corporation can deduct passive activity losses in any year only to the extent of
such person's passive activity income for such year, and closely held
corporations may not offset such losses against so-called "portfolio" income. If
a Limited Partner is subject to these restrictions and has a loss on the sale of
Interests and/or unused tax losses attributable to the Partnership from prior
years, such tax losses will generally become available to offset any taxable
income, provided the Limited Partner sells all his Interests. If the Limited
Partner sells less than all his Interests, then such tax losses may only be used
to offset passive income from other sources until the Limited Partner sells all
of his Interests.
A Limited Partner (other than corporations and certain foreign
individuals) who tenders Interests may be subject to 31% backup withholding
unless the Limited partner provides a taxpayer identification number ("TIN") and
certifies that the TIN is correct or properly certifies that he is awaiting a
TIN. A Limited Partner may avoid backup withholding by properly completing the
Substitute Form W-9 included as part of the Letter of Transmittal. If a Limited
Partner who is subject to backup withholding does not properly complete the
Substitute Form W-9, the Purchaser will withhold 31% from payments to such
Limited Partner and pay it over to the Internal Revenue Service ("IRS"). See
Instruction 8 to the Letter of Transmittal. These withholding requirements are
applicable even if the Limited Partner recognizes a loss with respect to the
sale of his or her Interests.
- 9 -
<PAGE>
Gain realized by a foreign Limited Partner on a sale of an Interest
pursuant to the Offer will be subject to federal income tax. Under Section 1445
of the Code, the transferee of a partnership interest held by a foreign person
is generally required to deduct and withhold a tax equal to 10% of the amount
realized on the disposition. The Purchaser will withhold 10% of the amount
realized (which will include the amount of indebtedness attributable to such
sold Interests) by a tendering Limited Partner from the purchase price payable
to such Limited Partner unless the Limited Partner properly completes the
Non-Foreign Tax Affidavit included as part of the Letter of Transmittal,
certifying the Limited Partner's TIN, that such Limited Partner is not a foreign
person and such Limited Partner's address. Any amounts which are withheld would
be creditable against a foreign Limited Partner's federal income tax liability
and a refund of any excess can be obtained from the IRS by filing a U.S. income
tax return.
TAX CONSEQUENCES TO NON-TENDERING LIMITED PARTNERS. The Purchaser does
not anticipate that a Limited Partner who does not tender his or her Interests
will realize any material tax consequences as a result of the Offer. However, if
the Partnership is subsequently combined with the Purchaser and/or its
subsidiaries in a taxable merger or other transaction, the non-tendering Limited
Partners will experience tax consequences similar to the tax consequences
described above for tendering Limited Partners.
6. MARKET PRICE OF INTERESTS. The Interests are not listed on any
national securities exchange or quoted in the over the counter market. The
Partnership Form 10-K states, "There is no public market for the Interests and
it is not anticipated an active public market will develop." Secondary sales
activity for the Interests has been limited and sporadic. Therefore, a reduction
in the number of holders should not materially further restrict the holders'
ability to find purchasers for their Interests. The Purchaser does not have
information regarding the prices at which all secondary sales transactions in
the Interests have been effectuated. Various organizations offer to purchase and
sell limited partnership interests (such as the Interests) in secondary sales
transactions. Various publications such as The Partnership Spectrum summarize
and report information (on a bimonthly basis) regarding secondary sales
transactions in limited partnership interests (including the Interests),
including the purchase prices at which such secondary sales transactions are
effectuated.
- 10 -
<PAGE>
The information regarding sale transactions in Interests from The
Partnership Spectrum is as follows:
<TABLE>
<CAPTION>
REPORTING PERIOD PER INTEREST TRANSACTION PRICE(1) NO. OF
---------------- --------------------------------- ------
HIGH LOW INTERESTS(2)
--------------- ------------- ------------
<S> <C> <C> <C>
1996
- ----
April 1 - May 30 $496 $493 8
June 1 - July 31 502 475 154
August 1 - September 30 495 460 64
October 1 - November 30 495 450 77
December 1 - January 31, 1997 520 453 14
1997
- ----
December 1, 1996 - January 31, 1997 $520 $453 14
February 1 - March 31 515 483 119
April 1 - May 30 515 470 46
June 1 - July 31 497 470 35
August 1 - September 30 495 450 153
October 1 - November 30 505 449 64
December 1 - January 31, 1998 506 500 35
</TABLE>
- ---------------
(1) Due to commissions and markups, sellers of partnership interests
typically receive less than the amounts paid for partnership interests
as shown above. The Purchaser, however, does not know whether the
transaction prices shown are before or after commissions and markups.
(2) The Purchaser does not know the number of transactions.
In view of the foregoing, the Purchaser believes the Purchase Price
compares favorably with these secondary market prices. In addition, the
Purchaser believes the Purchase Price compares favorably with the estimated
value the Partnership could receive per Interest if it liquidated the
Properties.
The Purchase Price represents the price at which the Purchaser is
willing to purchase Interests. Other measures of the value of the Interests may
be relevant to Limited Partners. Limited Partners are urged to consider
carefully all of the information contained herein and consult with their own
advisors, tax, financial or otherwise, in evaluating the terms of the Offer
before deciding whether to tender Interests.
7. EFFECT OF THE OFFER ON TRADING MARKET; REGISTRATION UNDER SECTION
12(G) OF THE EXCHANGE ACT. If a substantial number of Interests are purchased
pursuant to the Offer, the result will be a reduction in the number of Limited
Partners. In the case of certain kinds of equity securities like the Interests,
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. The Partnership Form 10-K states: "There is no public market for the
Interests and it is not anticipated that an active public market will develop."
Therefore, the Purchaser does
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<PAGE>
not believe a reduction in the number of Limited Partners will materially
further restrict the Limited Partners' ability to find purchasers for their
Interests through secondary market transactions.
The Interests are currently registered under Section 12(g) of the
Exchange Act, which means, among other things, the Partnership is required to
file periodic reports with the Commission and to comply with the Commission's
proxy rules. As a result of the consummation of the Offer, the Interests may be
held by fewer than 300 persons. In such a case, the Partnership may apply to
de-register the Interests under Section 12(g) of the Exchange Act.
INFLUENCE OVER ALL LIMITED PARTNER VOTING DECISIONS BY PURCHASER.
Pursuant to the Partnership Agreement, the Purchaser will have the right to vote
each Interest purchased by it pursuant to the Offer. If the Purchaser is
successful in purchasing the Maximum Permissible Amount of outstanding
Interests, the Purchaser could own up to 49.9% of the outstanding Interests. The
Purchaser could then be in a position to influence decisions of the Partnership
on which Limited Partners are entitled to vote. In general, Limited Partners
cannot participate in the management or control of the Partnership's business,
except insofar as the Limited Partners are entitled to vote as permitted by the
Partnership Agreement. The Purchaser may, upon consummation of the Offer, be
able to directly influence certain matters affecting the governance of the
Partnership, including approving the removal of any General Partner and
proposing and approving a replacement therefor; approving any Combination
Transaction; and most types of amendments to the Partnership Agreement.
8. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP. The Partnership is a
Wisconsin limited partnership with its principal executive offices located at
101 West 11th Street, Suite 1110, Kansas City, Missouri 64105. According to the
Partnership Form 10-K, the Partnership is principally engaged in the business of
owning and operating its investment portfolio (the "Properties") of commercial
real estate. The Properties are leased on a triple net basis to, and operated
by, franchisors or franchisees of national, regional and local retail chains
under long-term leases. The lessees consist of fast-food, family style, and
casual/theme restaurants. At December 31, 1996, the Partnership owned 22
Properties and a parcel of undeveloped land.
Prior to the disposal of the Properties, the Partnership's return on
its investment will be derived principally from rental payments received from
its lessees. Therefore, the Partnership's return on its investment is largely
dependent, among other factors, upon the business success of its lessees. The
business success of the Partnership's individual lessees can be adversely
affected on three general levels. First, the tenants rely heavily on the
management contributions of a few key entrepreneurial owners. The business
operations of such entrepreneurial tenants can be adversely affected by death,
disability or divorce of a key owner, or by such owner's poor business decisions
such as an undercapitalized business expansion. Second, changes in a local
market area can adversely affect a lessee's business operation. A local economy
can suffer a downturn with high unemployment. Neighborhood socioeconomic changes
can affect retail demand at specific sites and traffic patterns may change, or
stronger competitors may enter a market. These and other local market factors
can potentially adversely affect the lessees of Partnership properties. Finally,
despite an individual lessee's solid business plans in a strong
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<PAGE>
local market, the chain concept itself can suffer reversals or changes in
management policy which in turn can affect the profitability of operations for
Partnership properties. Therefore, there can be no assurance that any specific
lessee will have the ability to pay its rent over the entire term of its lease
with the Partnership.
The following summary financial data relating to the Partnership has
been taken or derived in the audited financial statements contained in the
Partnership Form 10-K and the unaudited financial statements contained in the
Partnership Form 10-Q. More comprehensive financial information (including the
notes to the Partnership's financial statements) is included in such Partnership
Form 10-K and Partnership Form 10-Q and the other documents filed by the
Partnership with the Commission, and the financial data set forth below is
qualified in its entirety by reference to such reports and other documents
including the financial statements (and notes thereto) contained therein.
Additional financial and other information concerning the Partnership is
contained in the Partnership Form 10-K and Partnership Form 10-Q and other
filings with the Commission. Such reports and other documents may be examined
and copies may be obtained from the public reference facilities maintained at
the principal offices of the Commission at 450 Fifth Street, N.W., Washington,
DC. 20549, at the regional offices of the Commission located at 7 World Trade
Center, Suite 1300, New York, New York 10048 and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and at the Commission's World Wide Web site at
http://www.sec.gov. Copies are available by mail upon payment of the
Commission's customary charges by writing to the Commission's principal offices
at 450 Fifth Street, NW., Washington, D.C. 20549. The Purchaser disclaims any
responsibility for the information included in such reports and extracted in
this Offer to Purchase.
<TABLE>
<CAPTION>
DIVALL INSURED INCOME FUND LIMITED PARTNERSHIP
SUMMARY FINANCIAL DATA
(In Thousands)
Audited Form 10-K Unaudited
Years Ended December 31, Nine Months Ended
September 30,
------------------------------ ----------------------------
1996 1995 1997 1996
------------- -------------- ------------- -----------
<S> <C> <C> <C> <C>
OPERATING DATA:
Total Revenue.................................... $ 2,534 $ 2,048 $ 1,619 $ 1,939
Net Income....................................... 1,511 1,065 1,052 1,937
</TABLE>
<TABLE>
<CAPTION>
December 31,
------------------------------
1996 1995 September 30, 1997
------------- -------------- ----------------------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total Assets..................................... $ 17,051 $ 17,594 $ 16,761
Total Liabilities................................ 1,538 1,751 1,300
Partners' Capital................................ 15,513 15,843 15,461
</TABLE>
- 13 -
<PAGE>
9. CERTAIN INFORMATION CONCERNING THE PURCHASER. The Purchaser, a fully
integrated, self-administered and self-managed real estate investment trust (a
"REIT"), is one of the largest publicly-traded entities in the United States
dedicated to acquiring, owning, managing and selectively developing restaurant
properties. At December 31, 1997, the Purchaser's portfolio consisted of 591
restaurant properties (the "Properties") diversified geographically in 45 states
and operated by approximately 200 restaurant operators. The USRP Properties are
leased by the Purchaser on a triple net basis primarily to operators of fast
food and casual dining chain restaurants affiliated with national brands such as
Burger King(R), Arby's(R), Dairy Queen(R), Hardee's(R), Chili's(R), Pizza Hut(R)
and Schlotsky's(R) and regional franchises such as Grandy's(R) and Taco
Cabana(R). Triple net leases typically require the tenants to be responsible for
property operating costs, including property taxes, insurance and maintenance.
As of December 31, 1997, over 99% of the USRP Properties were leased pursuant to
leases with an average remaining term (excluding extension options) in excess of
ten years.
The Purchaser has been engaged in the business of owning, managing and
leasing restaurant properties since 1986. Prior to 1994, the Purchaser held a
static portfolio consisting of 123 Burger King(R) restaurant properties. In May
1994, existing management assumed control of the Purchaser and began
implementing a number of new strategies intended to pursue growth. These
strategies have involved the Purchaser in, among other things, acquiring new
properties, enhancing investment returns through merchant banking activities and
developing new co-branded service centers on a selective basis. In addition, the
Purchaser has begun to provide acquisition financing to owners/operators of
restaurant properties and at December 31, 1997 had a security interest in 14
restaurant properties.
The Purchaser's management team, led by Robert J. Stetson and Fred H.
Margolin, consists of seven senior executives with an average of 15 years of
experience in the acquisition, operation, management and financing of chain
restaurants and retail properties.
On October 15, 1997, the Purchaser effected a conversion (the
"Conversion") of U.S. Restaurant Properties Master L.P., a Delaware limited
partnership (the "Predecessor"), into a self-administered and self-managed REIT.
The Conversion was effected through the merger (the "Merger") of USRP
Acquisition, L.P., an indirectly wholly-owned Delaware limited partnership
subsidiary of the Purchaser, with and into the Predecessor. As a result of the
Merger, the Predecessor became a subsidiary of the Purchaser and, at the
effective time of the Merger, all holders of units of beneficial interest (the
"Units") of the Predecessor became stockholders of the Purchaser. On October 16,
1997, the common stock of the Purchaser, in replacement of the Units, commenced
trading on the New York Stock Exchange (the "NYSE") under the symbol "USV."
The Purchaser is a Maryland corporation which has elected to be taxed
as a REIT for federal income tax purposes for the year ending December 31, 1997.
The principal executive offices of the Purchaser are located at 5310 Harvest
Hill Road, Suite 270, Dallas, Texas 75230.
The telephone number is (972) 387-1487.
In connection with the Conversion to a REIT, the Purchaser succeeded to
the business, operations, assets and liabilities of the Predecessor and is the
successor registrant to the
- 14 -
<PAGE>
Predecessor for purposes of the Securities Act of 1933, as amended, and the
Exchange Act. The Purchaser is, and prior to the conversion the Predecessor was,
subject to the informational requirements of the Exchange Act and, in accordance
therewith, the Purchaser files, and prior to the conversion the Predecessor
filed, reports, proxy statements and other information, with the Commission. The
reports, proxy and information statements, all registration statements and
exhibits thereto, and other information filed by the Purchaser and the
Predecessor with the Commission can be inspected and copied at the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at 13th Floor, 7 World Trade Center, New York, New York
10048, and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of the material can be obtained from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. Such reports, proxy statements and other
information may also be obtained from the web site the Commission maintains at
http://www.sec.gov. The reports, proxy and information statements and other
information can also be inspected at the offices of the NYSE, 20 Broad Street,
New York, New York 10005.
- 15 -
<PAGE>
U.S. RESTAURANT PROPERTIES, INC.
SUMMARY FINANCIAL INFORMATION
The following tables sets forth selected summary historical information
for the Purchaser which has been taken or derived from the financial statements
contained in its Annual Report on Form 10-K for the year ended December 31,
1997. More comprehensive financial information is included in that document, and
the financial data set forth below is qualified in its entirety by reference to
such report and other documents including the financial statements and related
notes contained therein. The Purchaser's most recent Form 10-K may be obtained
from the Purchaser at its address listed herein or from the Commission in the
manner described herein. The historical information of the Purchaser may not be
indicative of future operating results of the Purchaser.
U.S. RESTAURANT PROPERTIES, INC.(1)
<TABLE>
<CAPTION>
Years ended December 31,
------------------------
1996 1997
----------- ----------
(in thousands)
<S> <C> <C>
OPERATING DATA:
Total revenues................................................ $ 18,518 $ 35,584
Total expenses................................................ 11,077 25,504
Net income.................................................... 7,473 (9,393)
Net income allocable to Shareholders/Unitholders(2)........... 7,325 (10,261)
BALANCE SHEET DATA:
Total Assets.................................................. $177,418 $359,149
Line of credit and long term debt............................. 69,486 129,196
Capitalized lease obligations................................. 362 170
General partners' capital..................................... 1,163 N/A
Limited partners' capital..................................... 103,120 N/A
Stockholders' equity.......................................... N/A 205,544
</TABLE>
- ------------------------
(1) As described above, on October 15, 1997 the Purchaser effected a
conversion from a Delaware limited partnership into a Maryland
corporation operating as a self-administered and self-managed REIT. The
financial information contained herein has been restated to reflect
this conversion.
(2) Included in 1997 net income is a one-time non-cash accounting charge of
$19 million relating to the termination of the management contract with
the former Managing General Partner of the Predecessor.
- 16 -
<PAGE>
As of the date hereof, the Purchaser owns 15 Interests. Except as
described in this Offer to Purchase, (i) neither the Purchaser nor, to the best
knowledge of the Purchaser, any of the persons listed in Schedule I to this
Offer to Purchase or any associate or majority owned subsidiary of the Purchaser
or any of the persons so listed beneficially owns or has any right to acquire,
directly or indirectly, any Interests and (ii) neither the Purchaser nor, to the
best knowledge of the Purchaser, any of the persons or entities referred to
above nor any director, executive officer or subsidiary of any of the foregoing
has effected any transaction in the Interests during the past sixty days.
Neither the Purchaser nor, to the best knowledge of the Purchaser, any
of the persons listed in Schedule I to this Offer to Purchase has any contract,
arrangement, understanding or relationship with any other person with respect to
any securities of the Partnership, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or voting of
such securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss, guarantees of
profits, division of profits or loss or the giving or withholding of proxies.
Neither the Purchaser nor, to the best knowledge of the Purchaser, any of the
persons listed on Schedule I hereto, has had any business relationship or
transaction with the Partnership or any of its executive officers, directors or
affiliates that is required to be reported under the rules and regulations of
the Commission applicable to the Offer. There have been no contracts,
negotiations or transactions between the Purchaser, or any of its subsidiaries
or, to the best knowledge of the Purchaser, any of the persons listed in
Schedule I to this Offer to Purchase, 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 of
directors or a sale or other transfer of a material amount of assets.
10. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by
the Purchaser to purchase Interests pursuant to the Offer and to pay related
fees and expenses is estimated to be approximately $7,187,500. The Purchaser
will obtain such funds from its general corporate funds or through borrowings
under the Purchaser's existing credit facility or other sources. The Purchaser's
existing credit facility is between Union Bank of Switzerland and the Purchaser.
The interest rate is LIBOR plus 1.5% and the term of the facility is three
years. The credit facility is unsecured. The Purchaser expects to repay all
amounts borrowed, and any accrued interest, with general operating funds or
funds raised through future equity offerings.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR
NEGOTIATIONS WITH THE PARTNERSHIP. In the spring of 1995, the Purchaser
communicated to representatives of the Partnership the Purchaser's interest in
exploring opportunities for collaboration, strategic alliance or some form of
combination between the Purchaser and the Partnership, including the possible
purchase of the Partnership. In late 1996 and early 1997, the Purchaser
expressed an interest in purchasing approximately seven individual properties
from the Partnership or related entities. In January, 1998, the Purchaser
communicated to the General Partner the Purchaser's potential interest in
pursuing an acquisition of the entire Partnership for cash at a price of
approximately $14,975,000, such price representing consideration of $575 per
Interest and approximately $600,000 for all remaining aspects of the
Partnership. The General Partner informed the Purchaser the Partnership was not
for sale.
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<PAGE>
12. DETERMINATION OF PURCHASE PRICE. The Purchase Price has been
established by the Purchaser and is not the result of arm's-length negotiations
between the Purchaser and the Partnership. The Purchaser established the
Purchase Price based on its own independent analysis of the Partnership.
The Purchaser has established the Purchase Price using a liquidation
methodology with the following assumptions: (i) computing the estimated value of
the Partnership by applying the Partnership's net operating income (based on
annualized nine months of operations ended September 30, 1997), a capitalization
rate of 12.2%, (ii) reduced by selling costs of approximately 5% of the
capitalized value, (iii) adding the Partnership's other net assets as of
September 30, 1997 (consisting primarily of cash of $1,229,894, $296,376 of
which is held in an indemnification trust), (iv) deducting notes payable,
distributions payable, accounts payable, security deposits and other amounts
payable, and (v) dividing the result by the number of Interests issued and
outstanding.
13. PURPOSE OF THE OFFER; PLANS FOR THE PARTNERSHIP. The purpose of the
Offer is to acquire the Maximum Permissible Amount of Interests which is
expected to constitute a significant equity interest in the Partnership as a
first step towards acquiring the entire equity interest in the Partnership.
Following completion of the Offer, the Purchaser intends to continue to acquire
Interests in accordance with the limitations set forth in the Partnership
Agreement. The Purchaser may utilize one, or a combination of several,
alternatives to acquire the remaining outstanding Interests in the Partnership.
These alternatives could include, but are not limited to, purchasing additional
Interests in the open market or in privately negotiated transactions in
accordance with the limitations of the Partnership Agreement, seeking to amend
the Partnership Agreement to permit the transfer of a greater number of
Interests at any particular time, seeking to acquire additional Interests in
another tender or exchange offer or otherwise, seeking to merge the Partnership
into the Purchaser or an affiliate thereof, or taking no further action to
acquire additional Interests. Any additional purchases of Interests could be at
a price greater or less than the price to be paid for Interests in the Offer and
could be for cash or other consideration. Alternatively, the Purchaser may sell
or otherwise dispose of any or all Interests acquired pursuant to the Offer or
otherwise. Such transactions may be effected on terms and at prices then
determined by the Purchaser, which may vary from the terms of, and the price
paid for Interests in, the Offer.
Following completion of the Offer, the Purchaser currently anticipates
attempting to acquire additional Interests sufficient to gain control of the
Partnership. If the Purchaser acquires control of the Partnership, the Purchaser
intends to pursue a Combination Transaction at a purchase price per Interest no
greater than the Purchase Price paid pursuant to the Offer. In general, a
Combination Transaction would require approval of the holder of a majority of
the outstanding Interests. In the event the Purchaser, over time, acquires 50.1%
of the outstanding Interests, it will have sufficient Interests to approve such
a transaction without the approval of any other Limited Partners.
The exact timing and details of any Combination Transaction will
necessarily depend upon a variety of factors, including the number of Interests
acquired by the Purchaser pursuant to the Offer. Although the Purchaser
presently intends to propose a Combination Transaction, it is
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<PAGE>
possible that, as a result of substantial delays in its ability to effect such a
transaction, information hereafter obtained by the Purchaser, changes in general
economic or market conditions or in the business of the Partnership or other
presently unforeseen factors, such a transaction may not be so proposed, may be
delayed or abandoned or may be proposed on terms substantially different from
those contained in the Offer. The Purchaser expressly reserves the right not to
propose a Combination Transaction. Neither the Partnership Agreement nor
Wisconsin law provides any right for Limited Partners to have their respective
Interests appraised or redeemed in connection with or as a result of the Offer
or a Combination Transaction. In the event the Purchaser decides not to propose
a Combination Transaction, or proposes a Combination Transaction but cannot
promptly obtain any required approval, the Purchaser will evaluate other
alternatives.
14. DIVIDENDS AND DISTRIBUTIONS. If on or after March 27, 1998, the
Partnership should (a) split, combine or otherwise change the Interests or its
capitalization, (b) acquire or otherwise cause a reduction in the number of
outstanding Interests, or (c) issue or sell any additional Interests other
voting securities or any securities convertible into, or options, rights, or
warrants, conditional or otherwise, to acquire, any of the foregoing, then,
without prejudice to the Purchaser's rights under Section 16, the Purchaser may,
in its sole discretion, make such adjustments in the purchase price and other
terms of the Offer as it deems appropriate.
If, on or after March 27, 1998, the Partnership should declare or pay
any distribution (cash or other property) with respect to the Interests
(including the issuance of additional Interests or other securities or rights to
purchase any securities) that is payable or distributable to Limited Partners of
record on a date prior to the transfer to the name of the Purchaser or its
nominee or transferee on the Partnership's transfer records of the Interests
purchased pursuant to the Offer, then, without prejudice to the Purchaser's
rights under Section 16, (i) the purchase price per Interest payable by the
Purchaser pursuant to the Offer will be reduced to the extent of any such cash
distribution and (ii) the whole of any such non-cash distribution to be received
by the tendering Limited Partners will (A) be received and held by the tendering
Limited Partners for the account of the Purchaser and will be required to be
promptly remitted and transferred by each tendering Limited Partner to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (B) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance and
subject to applicable law, the Purchaser will be entitled to all rights and
privileges as owner of any such non-cash distribution or proceeds thereof and
may withhold the entire purchase price or deduct from the purchase price the
amount or value thereof, as determined by the Purchaser in its sole discretion.
15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT. The Purchaser
reserves the right, at any time or from time to time, in its sole discretion and
regardless of whether or not any of the conditions specified in Section 16 shall
have been satisfied, (a) to extend the period of time during which the Offer is
open by giving oral or written notice of such extension to the Depositary and by
making a public announcement of such extension or (b) to amend the Offer in any
respect by making a public announcement of such amendment. There can be no
assurance that the Purchaser will exercise its right to extend or amend the
Offer.
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<PAGE>
If the Purchaser increases or decreases the consideration to be paid
for Interests pursuant to the Offer and the Offer is scheduled to expire at any
time before the expiration of a period of 10 business days from, and including,
the date that notice of such increase or decrease is first published, sent or
given in the manner specified below, the Offer will be extended until the
expiration of such period of 10 business days. If the Purchaser makes a material
change in the terms of the Offer (other than a change in price) or in the
information concerning the Offer, or waives a material condition of the Offer,
the Purchaser will extend the Offer, if required by applicable law, for a period
sufficient to allow Limited Partners to consider the amended terms of the Offer.
The Commission has stated an offer should remain open for a minimum of five
business days from the date the material change is first published, sent or
given to securityholders, and that if material changes are made with respect to
information that approaches the significance of price, a minimum of 10 business
days may be required to allow adequate dissemination and investor response. The
term "business day" shall mean any day other than Saturday, Sunday or a federal
holiday and shall consist of the time period from 12:01 A.M.
through 12:00 Midnight, Dallas, Texas time.
The Purchaser also reserves the right, in its sole discretion, in the
event any of the conditions specified in Section 16 shall not have been
satisfied and so long as Interests have not previously been accepted for
payment, to delay (except as otherwise required by applicable law) acceptance
for payment of or payment for Interests or to terminate the Offer and not accept
for payment or pay for Interests.
If the Purchaser extends the period of time during which the Offer is
open, is delayed in accepting for payment or paying for Interests or is unable
to accept for payment or pay for Interests pursuant to the Offer for any reason,
then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may, on behalf of the Purchaser, retain all Interests tendered, and
such Interests may not be withdrawn except as otherwise provided in Section 4.
The reservation by the Purchaser of the right to delay acceptance for payment of
or payment for Interests is subject to applicable law, which requires that the
Purchaser pay the consideration offered or return the Interests deposited by or
on behalf of Limited Partners promptly after the termination or withdrawal of
the Offer.
Any extension, termination or amendment of the Offer will be followed
as promptly as practicable by a public announcement thereof. Without limiting
the manner in which the Purchaser may choose to make any public announcement,
the Purchaser will have no obligation (except as otherwise required by
applicable law) to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service. In
the case of an extension of the Offer, the Purchaser will make a public
announcement of such extension no later than 10:00 A.M., Dallas, Texas time, on
the next business day after the previously scheduled Expiration Date.
- 20 -
<PAGE>
16. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other
provision of the Offer, the Purchaser shall not be required to accept for
payment or pay for any Interests, and may terminate the Offer if prior to the
acceptance for payment of Interests, any of the following conditions exist:
(i) there shall be instituted or pending any action or
proceeding by any government or governmental authority or agency,
domestic or foreign, or by any other person, domestic or foreign,
before any court or governmental authority or agency, domestic or
foreign, that has a material likelihood of success, (A) challenging or
seeking to make illegal, to delay materially or otherwise directly or
indirectly to restrain or prohibit the making of the Offer, the
acceptance for payment of or payment for some of or all the Interests
by the Purchaser seeking to obtain material damages or otherwise
directly or indirectly relating to the transactions contemplated by the
Offer, (B) seeking to restrain or prohibit the Purchaser's ownership or
operation (or that of its subsidiaries or affiliates) of all or any
material portion of the business or assets of the Partnership or of the
Purchaser and its subsidiaries or affiliates, taken as a whole, or to
compel the Purchaser or any of its subsidiaries or affiliates to
dispose of or hold separate all or any material portion of the business
or assets of the Partnership or of the Purchaser and its subsidiaries
or affiliates, taken as a whole, (C) seeking to impose or confirm
material limitations on the ability of the Purchaser or any of its
subsidiaries or affiliates effectively to exercise full rights of
ownership of the Interests, including, without limitation, the right to
vote any Interests acquired or owned by the Purchaser or any of its
subsidiaries or affiliates on a matters properly presented to the
Limited Partners, (D) seeking to require divestiture by the Purchaser
or any of its subsidiaries or affiliates of any Interests, or (E) that
otherwise, in the reasonable judgment of the Purchaser, is likely to
materially adversely affect the Partnership or the Purchaser and its
subsidiaries or affiliates, taken as a whole;
(ii) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer, by any court,
government or governmental authority or agency, domestic or foreign
that has a substantial likelihood of resulting in any of the
consequences referred to in clauses (A) through (E) of paragraph (i)
above;
(iii) any material adverse change in the business, assets,
financial condition or results of operations of the Partnership shall
have occurred other than as disclosed to the Purchaser in writing or
there shall be any event occurrence or development of a state of
circumstances or facts which individually or in the aggregate would
reasonably be expected to result in such a material adverse change;
(iv) (A) it shall have been publicly disclosed or the
Purchaser shall have otherwise learned that any person or "group" (as
defined in Section 13(d)(3) of the Exchange Act), other than the
Purchaser or its affiliates or any group of which any of them is a
member, shall have acquired or proposed to acquire beneficial ownership
of more than 10% of any class or series of partnership interests of the
Partnership (including the Interests), through the acquisition of
interests, the formation of a group or otherwise,
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<PAGE>
or shall have been granted any option, right or warrant, conditional or
otherwise, to acquire beneficial ownership of more than 10% of any
class or series of partnership interests of the Partnership (including
the Interests); or (B) any person or group shall have entered into a
definitive agreement or an agreement in principle with the Partnership
with respect to a merger, consolidation or other business combination
with the Partnership; or
(v) the Purchaser, acting in good faith, shall not have
satisfied itself that there exists no potential environmental liability
of the Partnership that has a reasonable prospect individually or in
the aggregate of resulting in a material adverse effect on the business
or operations of the Partnership which liability is not specifically
disclosed in the footnotes to the financial statements in the
Partnership Form 10-Q,
which, in the judgment of the Purchaser in any such case, and regardless of the
circumstances (including any action or omission by the Purchaser) giving rise to
any such condition, makes it inadvisable to proceed with such acceptance for
payment or payment.
The foregoing conditions are for the sole benefit of the Purchaser and
may be asserted by the Purchaser in its sole discretion regardless of the
circumstances (including any action or omission by the Purchaser) giving rise to
any such conditions or may be waived by the Purchaser in its sole discretion in
whole at any time or in part from time to time. The failure by the Purchaser at
any time to exercise its rights under any of the foregoing conditions shall not
be deemed a waiver of any such right; the waiver of any such right with respect
to particular facts and circumstances shall not be deemed a waiver with respect
to any other facts and circumstances; and each such right shall be deemed an
ongoing right which may be asserted at any time or from time to time. Any
determination by the Purchaser concerning the events described in this Section
15 will be final and binding upon all parties.
17. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS. Based on its
examination of publicly available information filed by the Partnership with the
Commission and other publicly available information concerning the Partnership,
the Purchaser is not aware of any license or regulatory permit that appears to
be material to the Partnership's business that might be adversely affected by
the Purchaser's acquisition of Interests as contemplated herein or of any
approval or other action by any government or governmental authority or agency,
domestic or foreign, that would be required for the acquisition or ownership of
Interests by the Purchaser as contemplated herein. Should any such approval or
other action be required, the Purchaser currently contemplates such approval or
other action will be sought. There is, however, no current intent to delay the
purchase of Interests tendered pursuant to the Offer pending the outcome of any
such matter. The Purchaser is unable to predict whether it may determine it is
required to delay the acceptance for payment of or payment for Interests
tendered pursuant to the Offer pending the outcome of any such matter. There can
be no assurance any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or if such approvals were
not obtained or such other actions were not taken adverse consequences might not
result to the Partnership's business or certain parts of the Partnership's
business might not have to be disposed of, any of which could cause the
Purchaser to elect to terminate the Offer without the purchase of Interests
thereunder. The Purchaser's obligation under the Offer to accept for payment and
pay for Interests is subject to certain conditions. See Section 16.
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<PAGE>
18. FEES AND EXPENSES. The Purchaser has retained American Stock
Transfer & Trust Company to act as Depository and Christopher Weil & Co., Inc.
to act as the Information Agent in connection with the Offer. The Information
Agent may contact holders of Interests by mail, telephone, telex, telegraph and
personal interviews and may request brokers, dealers and other nominee Limited
Partners to forward materials relating to the Offer to Beneficial Owners. Each
of the Information Agent and the Depositary will receive reasonable and
customary compensation for its services, will be reimbursed for certain
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities in connection therewith, including certain liabilities under the
federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or
dealer or any other person (other than the Information Agent and the Depository)
for soliciting tenders of Interests pursuant to the Offer. Brokers, dealers,
commercial banks and trust companies will, upon request, be reimbursed by the
Purchaser for reasonable and necessary costs and expenses incurred by them in
forwarding materials to their customers.
19. MISCELLANEOUS. The Offer is not being made to, nor will tenders be
accepted from or on behalf of, holders of Interests in any jurisdiction in which
the making of the Offer or acceptance thereof would not be in compliance with
the laws of such jurisdiction. However, the Purchaser may, in its discretion,
take such action as it may deem necessary to make the Offer in any such
jurisdiction and extend the Offer to holders of Interests in such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of the General
Rules and Regulations under the Exchange Act, furnishing certain additional
information with respect to the Offer. The Schedule 14D-1 and any amendments
thereto, including exhibits, may be examined and copies may be obtained from the
offices of the Commission in the manner set forth in Section 9 of this Offer to
Purchase (except that such information will not be available at the regional
offices of the Commission).
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<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
The following table sets forth the name, business address and present
principal occupation or employment, and material occupations, positions, offices
or employments for the past five years of each director and executive officer of
the Purchaser. The business address of each such person is c/o U.S. Restaurant
Properties, Inc., 5310 Harvest Hill Road, Suite 270, Dallas, Texas 75230 and
each such person is a United States citizen. Each of the persons listed below is
a director of the Purchaser.
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME EMPLOYMENT HISTORY
------ ------------------------------
Robert J. Stetson Mr. Stetson has been the Chief Executive Officer and
President and a director of the Company since its
formation in January 1997. Since May 1994, Mr. Stetson
has been Chief Executive Officer and President and a
director of QSV. From 1987 until 1992, Mr. Stetson
served as the Chief Financial Officer and later
President-Retail Division of Burger King Corporation
and Chief Financial Officer and later Chief Executive
Officer of Pearle Vision. As Chief Financial Officer
of Burger King Corporation, Mr. Stetson was
responsible for managing more than 950 restaurants
that Burger King Corporation leased to tenants. Prior
to 1987, Mt. Stetson served in several positions with
PepsiCo Inc. an its subsidiaries, including Chief
Financial Officer of Pizza Hut, Inc. Since 1978,
Mr. Stetson has been primarily engaged in restaurant
chain management, including the acquisition and
management of restaurant properties. Mr. Stetson
received a bachelor of arts degree from Harvard
College and an MBA from Harvard Business School.
Mr. Stetson is 47 years old.
Fred H. Margolin Mr. Margolin has been the Chairman of the Board,
Treasurer, Secretary and a director of the Company
since its formation in January 1997. Since May 1994,
Mr. Margolin has been the Chairman of the Board of
Directors, Treasurer and Secretary of QSV. In 1977,
Mr. Margolin founded Intercon General Agency, a
national general insurance agency specializing in the
development and marketing of insurance products for
financial institutions. Mr. Margolin served as the
Chief Executive Officer of Intercon General Agency
from its inception until its sale to a public company
in 1982 after having developed it into a national
presence. In 1989, Mr. Margolin founded and became
the President of American Eagle Premium Finance
Company. From 1982 through 1992, Mr. Margolin
developed and then leased or sold shopping centers
having an aggregate cost of approximately $50,000,000
as well as developing land and purchasing residential
properties. Mr. Margolin received a Bachelor of
Science degree from the Wharton School of the
University of Pennsylvania and an M.B.A. from Harvard
Business School. Mr. Margolin is 47 years old.
Gerald A. Graham Mr. Graham is a director of the Company and a member
of the Audit Committee. Mr. Graham is a professor and
the Dean of the Barton School of Business at Wichita
State University. Mr. Graham is 59 years old.
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<PAGE>
David K. Rolph Mr. Rolph is a director of the Company. Mr. Rolph is
the President of the Tex-Mex restaurant chain,
"Carlos O'Kelly's" and the Vice President of Sasnak
Management Corp., a restaurant management company,
positions he has held for the past five years.
Mr. Rolph is 48 years old.
Darrel L. Rolph Mr. Rolph is a director of the Company. Mr. Rolph is
the Secretary of "Carlos O'Kelly's" and the President
of the Sasnak Management Corp., a restaurant
management company, positions he has held for the
past five years. Mr. Rolph is 59 years old.
Eugene G. Taper Mr. Taper is a director of the Company and a member
of the Audit Committee. Mr. Taper is a certified
public accountant and a business consultant, since
1993. Prior to 1993, Mr. Taper was a partner of
Deloitte & Touche LLP, an international public
accounting firm. Mr. Taper is 59 years old.
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<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The
Letter of Transmittal and certificates for Interests, if any, and any other
required documents should be sent to the Depositary at the address or the
facsimile number set forth below:
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
40 Wall Street
46th Floor
New York, New York 10005
Attention: Reorganization Department
Facsimile Number: Telephone Number:
(718) 234-5001 (212) 936-5100
(718) 921-8200
Questions or requests for assistance or additional copies of this Offer
to Purchase and the Letter of Transmittal may be directed to the Information
Agent at the address and telephone number set forth below:
CHRISTOPHER WEIL & CO., INC.
6510 Lusk Boulevard, Suite B205
San Diego, California 92121
(619) 597-6610
(800) 478-2605
Limited Partners may also contact their broker, dealer, commercial bank or trust
company for assistance concerning the Offer.
<PAGE>
Exhibit (a)(2)
Letter of Transmittal (including Guidelines for Certification of
Taxpayer Identification
Number on Substitute Form W-9)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER LIMITED PARTNERSHIP INTERESTS
OF
DIVALL INSURED INCOME FUND LIMITED PARTNERSHIP
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 27, 1998
BY
U.S. RESTAURANT PROPERTIES, INC.HIP
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THE OFFER WILL EXPIRE AT 6:00 P.M., DALLAS, TEXAS TIME, ON JUNE 2, 1998, UNLESS
EXTENDED (THE "EXPIRATION DATE"). TENDERED INTERESTS MAY BE WITHDRAWN AT
ANY TIME PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
This Letter of Transmittal is to be executed and returned to American Stock
Transfer & Trust Company (the "Depositary") at the address or the facsimile
number listed below:
AMERICAN STOCK TRANSFER & TRUST COMPANY
40 Wall Street, 46th Floor
New York, New York 10005
Attention: Reorganization Department
Facsimile Transmission Number: Telephone Numbers:
(718) 234-5001 (212) 936-5100
(718) 921-8200
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
AND NON-FOREIGN TAX AFFIDAVIT PROVIDED BELOW.
THE INSTRUMENTS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by Limited Partners of
Divall Insured Income Fund Limited Partnership (the "Partnership") and forwarded
together with certificates, if any (the "Interest Certificates"), evidencing
limited partnership interests (the "Interests") in the Partnership pursuant to
the tender procedures described in "Procedure for Tendering Interests" of the
Offer to Purchase (as defined below).
ANY QUESTIONS ABOUT THE OFFER, OR ANY REQUESTS FOR ADDITIONAL COPIES OF
THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL, MAY BE DIRECTED TO THE
INFORMATION AGENT, CHRISTOPHER WEIL & CO., INC. AT (800) 478-2605. IF YOU NEED
ASSISTANCE IN COMPLETING THE LETTER OF TRANSMITTAL, PLEASE CALL THE DEPOSITORY,
AMERICAN STOCK TRANSFER & TRUST COMPANY, AT (212) 936-5100 OR (718) 921-8200.
<PAGE>
List below the Interests that are to be tendered pursuant to this
Letter of Transmittal. If the space below is inadequate, list the information
requested below on a separate signed schedule and affix the list to this Letter
of Transmittal.
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DESCRIPTION OF INTERESTS TENDERED
- --------------------------------------------------------------------------------
Interest
Name(s) and Address(es) of Holder(s) Certificate Number of Interests
(Please fill in, if blank) Number(s) Tendered(1)
(if applicable)
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------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
- --------------------------------------------------------------------------------
Total Number of Interests Tendered
- --------------------------------------------------------------------------------
(1) Unless otherwise indicated in this column, it will be assumed that all
Interests held by the registered holder are being tendered.
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NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
2
<PAGE>
To: U.S. Restaurant Properties, Inc. (the "Purchaser")
Upon the terms and subject to the conditions of the Offer (as defined
below), the undersigned hereby tenders to the Purchaser the above-described
Interests, pursuant to the Purchaser's offer to purchase certain of the issued
and outstanding Interests at a purchase price of $575 per Interest, net to the
seller in cash (the "Purchase Price"), subject to adjustment as provided in the
Offer to Purchase (as defined below), without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated March 27,
1998 (the "Offer to Purchase") and this Letter of Transmittal (the "Letter of
Transmittal," which, together with the Offer to Purchase and any supplements,
modifications or amendments thereto, constitute the "Offer"), all as more fully
described in the Offer to Purchase. LIMITED PARTNERS WHO TENDER THEIR INTERESTS
WILL NOT BE OBLIGATED TO PAY ANY COMMISSIONS OR PARTNERSHIP TRANSFER FEES.
Receipt of the Offer to Purchase is hereby acknowledged. Capitalized terms used
but not defined herein have the respective meanings ascribed to them in the
Offer to Purchase.
Subject to, and effective upon, acceptance for payment of the Interests
tendered hereby in accordance with the terms and subject to the conditions of
the Offer, the undersigned hereby sells, assigns, transfers, conveys and
delivers to the Purchaser, all of the direct and indirect, right, title and
interest of such Limited Partner in and to such Interests tendered hereby and
accepted for payment pursuant to the Offer and any and all distributions made by
the Partnership after the Expiration Date in respect of the Interests tendered
by such Limited Partner and accepted for payment by the Purchaser, regardless of
any provision to the contrary contained in the Partnership Agreement. The
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to any third party, the right to purchase Interests tendered
pursuant to the Offer, together with its rights under the Letter of Transmittal,
but any such transfer or assignment will not relieve the assigning party of its
obligations under the Offer or prejudice the rights of tendering Limited
Partners to receive payment for Interests validly tendered and accepted for
payment pursuant to the Offer.
The undersigned hereby represents that the undersigned (a) has received
and reviewed the Offer to Purchase and (b) has full power and authority to sell,
assign, transfer, convey and deliver the Interests tendered hereby (and any and
all non-cash distributions, other Interests or securities issued or issuable in
respect thereof on or after the date hereof) and that when the same are accepted
for payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances, and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment, transfer, conveyance and delivery of the
Interests tendered hereby and any and all non-cash distributions, other
Interests or other securities issued or issuable in respect of such Interests on
or after the date hereof. In addition, the undersigned shall promptly remit and
transfer to the Depositary for the account of the Purchaser any and all non-cash
distributions, other Interests or other securities issued to the undersigned on
or after the date hereof in respect of the Interests tendered hereby,
accompanied by appropriate documentation of transfer, and pending such
remittance or appropriate assurance thereof, the Purchaser shall be entitled to
all rights and privileges as owner of any such non-cash distributions, other
Interests or other securities and may withhold the entire consideration or
deduct from the consideration the amount of value thereof as determined by the
Purchaser, in its sole discretion.
The undersigned hereby irrevocably appoints the Purchaser and the
designees of the Purchaser and each of them as such the undersigned's proxies,
each with full power of substitution, to the full extent of the undersigned's
rights with respect to the Interests tendered by the undersigned and accepted
for payment by the Purchaser (and with respect to any and all other Interests or
other securities issued or issuable in
3
<PAGE>
respect of such Interests on or after the date hereof). All such proxies shall
be considered irrevocable and coupled with an interest in the tendered
Interests. Such appointment will be effective when, and only to the extent that,
the Purchaser accepts such Interests for payment. Upon such acceptance for
payment, all prior proxies given by the undersigned with respect to such
Interests (and such other Interests and securities) will be revoked without
further action, and no subsequent proxies may be given nor any subsequent
written consents executed (and, if given or executed, will not be deemed
effective). The Purchaser and its designees will, with respect to the Interests
(and such other Interests and securities) for which such appointment is
effective, be empowered to exercise all voting and other rights of the
undersigned as they in their sole discretion may deem proper pursuant to the
Agreement of Limited Partnership of the Partnership, as amended to date (the
"Partnership Agreement"), or otherwise. The Purchaser may assign such proxy to
any person with or without assigning the related Interests with respect to which
such proxy was granted. The Purchaser reserves the right to require that, in
order for Interests to be deemed validly tendered, immediately upon the
Purchaser's payment for such Interests, the Purchaser must be able to exercise
full voting rights with respect to such Interests and other securities,
including voting at any meeting of Limited Partners.
The undersigned hereby irrevocably constitutes and appoints the
Purchaser and its designees as the undersigned's attorneys-in-fact, each with
full power of substitution, to the extent of the undersigned's rights with
respect to the Interests tendered by the undersigned and accepted for payment by
the Purchaser. Such appointment will be effective when, and only to the extent
that, the Purchaser accepts the tendered Interests for payment. Upon such
acceptance for payment, all prior powers of attorney granted by the undersigned
with respect to such Interests will, without further action, be revoked, and no
subsequent powers of attorney may be granted (and if granted will not be
effective). Pursuant to such appointment as attorneys-in-fact, the Purchaser and
its designees each will have the power, among other things, (i) to seek to
transfer ownership of such Interests on the books and records of the Partnership
maintained by the General Partner of the Partnership (and execute and deliver
any accompanying evidences of transfer and authenticity any of them may deem
necessary or appropriate in connection therewith), (ii) to receive any and all
distributions made by the Partnership after the Expiration Date, and to receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Interests in accordance with the terms of the Offer, (iii) to execute and
deliver to the Partnership and/or the General Partner of the Partnership (as the
case may be) a change of address form instructing the Partnership to send any
and all future distributions to which the Purchaser is entitled pursuant to the
terms of the Offer in respect of tendered Interests to the address specified in
such form, and (iv) to endorse any check payable to or upon the order of such
Limited Partner representing a distribution, if any, to which the Purchaser is
entitled pursuant to the terms of the Offer, in each case on behalf of the
undersigned. If legal title to the Interests is held through an IRA or KEOGH or
similar account, the undersigned understands that this Letter of Transmittal
must be signed by the custodian of such IRA or KEOGH account and the Limited
Partner hereby authorizes and directs the custodian of such IRA or KEOGH to
confirm this Letter of Transmittal. This power of attorney shall not be effected
by the subsequent mental disability of the undersigned, and the Purchaser shall
not be required to post bond of any nature in connection with this power of
attorney. The Purchaser may assign such power of attorney to any person with or
without assigning the related Interests with respect to which such power of
attorney was granted.
By executing this Letter of Transmittal, the undersigned represents
that either (a) the undersigned is not a plan subject to Title I 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. ss.2510.3-101) of any
such plan or (b) the tender and acceptance of Interests pursuant to the Offer
will not result in a nonexempt prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code.
4
<PAGE>
By executing this Letter of Transmittal, the undersigned represents
this transfer has not been effected through an established securities market or
through a broker-dealer or matching agent which makes a market in Interests to
sell or exchange their Interests through a public means of obtaining or
providing information of offers to buy, sell or exchange Interests.
The Offer is subject to a number of conditions, each of which may be
waived or modified by the Purchaser, in whole or in part, at any time and from
time to time, as described in the Offer to Purchase under the caption "Certain
Conditions of the Offer." The undersigned recognizes that as a result of such
conditions the Purchaser may not be required to accept the Interests properly
tendered hereby. In such event, the tendered Interests not accepted for payment
will be returned to the undersigned without cost to the undersigned as soon as
practicable at the address shown below the undersigned's signature(s).
5
<PAGE>
- --------------------------------------------------------------------------------
SIGNATURES
HOLDERS OF INTERESTS
SIGN HERE
IMPORTANT: COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 IN
THIS LETTER OF TRANSMITTAL
The undersigned tenders Interests in the Offer on the terms described above:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature(s) of Holder(s) of Interests)
Date: , 1998
---------------------------------------
(Must be signed by the Limited Partner(s) exactly as name(s) appear(s)
on certificate(s) representing the Interests or on a security position listing
or by person(s) authorized to become Limited Partner(s) by certificates and
documents transmitted herewith. If signature is by attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or other person
acting in a fiduciary or representative capacity, please provide the following
information and see Instruction 5.)
Capacity (Full Title):
----------------------------------------------------------
Name(s):
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Type or Print)
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
-------------------------------------------------
Tax Identification or Social Security No.:
--------------------------------------
GUARANTEE OF SIGNATURE(S)
(If required -- see Instructions 1 and 5)
- --------------------------------------------------------------------------------
(Authorized Signature)
Name:
---------------------------------------------------------------------------
(Please Type or Print)
- --------------------------------------------------------------------------------
(Title)
- --------------------------------------------------------------------------------
(Name of Firm)
- --------------------------------------------------------------------------------
(Address -- Include Zip Code)
- --------------------------------------------------------------------------------
(Area Code and Telephone Number)
Date:
------------------------------------
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL MAILING INSTRUCTIONS:
To be completed only if payment is to be issued to the registered Holder(s) but
mailed to other than the address of record.
Mail payment to:
Name:
---------------------------------------------------------------
(Must be same as registered Holder(s))
Address:
---------------------------------------------------------------
(Please print)
---------------------------------------------------------------
- --------------------------------------------------------------------------------
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Signatures on this Letter of Transmittal
need not be guaranteed if the Interests tendered hereby are tendered (a) by the
registered holder(s) (the "Holder"), or (b) for the account of a firm that is a
member of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank trust company
having an office in the United States (each, an "Eligible Institution"). In all
other cases, all signatures on this Letter of Transmittal must be guaranteed by
an Eligible Institution. Persons who are Beneficial Owners of Interests and who
seek to tender Interests should (i) contact the Holder of such Interests and
instruct such Holder to tender on his behalf, (ii) obtain and include with this
Letter of Transmittal Interest Certificates, if any, properly endorsed for
transfer by the Holder, with signatures on the endorsement guaranteed by an
Eligible Institution, or (iii) effect a record transfer of such Interests from
the Holder to such Beneficial Owner and comply with the requirements applicable
to Holders for tendering Interests on or prior to the Expiration Date. See
Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be
completed by Limited Partners and forwarded, together with Interest
Certificates, if any, to the Depositary. For a Limited Partner to properly
tender Interest pursuant to the Offer, a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof), together with any signature
guarantees and any other documents required by these Instructions, must be
received by the Depositary at the address, or at the facsimile number, set forth
herein on or prior to the Expiration Date.
THE METHOD OF DELIVERY OF INTEREST CERTIFICATES, IF ANY, THIS LETTER OF
TRANSMITTAL, REQUIRED SIGNATURE GUARANTEES AND ANY OTHER REQUIRED DOCUMENTS IS
AT THE OPTION AND RISK OF THE TENDERING LIMITED PARTNER AND DELIVERY WILL BE
DEEMED MADE WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
All tendering Limited Partners, by execution of this Letter of
Transmittal waive any right to any notice of the acceptance of their Interests
for payment.
3. WITHDRAWAL OF TENDERS. Tenders of Interests may be withdrawn at any
time until the Expiration Date. Tendered Interests may not be withdrawn on or
after the Expiration Date, unless the Offer is terminated without any Interests
being accepted for payment thereunder. In the event of such termination, such
Interests will be returned to the tendering Limited Partner as promptly as
practicable.
Any Limited Partner who has tendered Interests or who succeeds to the
record ownership of Interests in respect of which such tenders have previously
been given may withdraw such Interests on or prior to the Expiration Date by
delivery of a written notice of withdrawal subject to the limitations described
herein. To be effective, a written or facsimile transmission notice of
withdrawal of a tender must (i) be received by the Depositary, at the address or
facsimile number specified in this Letter of Transmittal on or before the
Expiration Date, (ii) specify the name of the Limited Partner to be withdrawn,
(iii) contain the description of the Interests to be withdrawn, the certificate
numbers shown on the particular Interest Certificates, if any, representing such
Interests and the number of Interests to be withdrawn, and (iv) be signed by the
holder of such Interests in the same manner as the original signature on the
Letter of Transmittal (including any required signature guarantees). If the
Interests to be withdrawn have been delivered or otherwise identified to the
Depositary, a signed notice of withdrawal is effective immediately upon receipt
by the Depositary of written or facsimile transmission of the notice of
withdrawal even if physical release is not yet effected. A withdrawal of
Interests can only be accomplished in accordance with the foregoing procedures.
Except as set forth in the Offer to Purchase, no Limited Partner may withdraw
tendered Interests following the Expiration Date.
All questions as to the validity, form and eligibility (including the
time of receipt) of notices of withdrawal will be determined by the Purchaser,
whose determination will be final and binding on all parties. A purported notice
8
<PAGE>
of withdrawal that is not received by the Depositary in a timely fashion will
not be effective to withdraw tendered Interests. Any tendered Interests that are
not accepted for payment will be returned to the holder thereof without cost to
such holder as soon as practicable following the Expiration Date.
A withdrawal of a tender of Interests may not be rescinded and any
Interests properly withdrawn will not be deemed to be validly tendered for
purposes of the Offer and the Purchase Price will not be paid with respect
thereto. However, withdrawn Interests may be retendered by repeating the
procedures described in Instruction 2 above at any time on or prior to the
Expiration Date.
4. PARTIAL TENDERS. If less than the entire number of Interests held of
record by a Limited Partner is tendered, the tendering Limited Partner should
fill in the applicable principal amount of the Interests that are to be tendered
in the box entitled "Description of Interests Tendered." The entire number of
Interests held of record by a Limited Partner will be deemed to have been
tendered unless otherwise indicated.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL; ENDORSEMENTS. If this
Letter of Transmittal is signed by the Holder(s) of the Interests tendered
hereby, the signature(s) must correspond exactly with the Holder's registration.
If any of the Interests tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal. If any
tendered Interests are registered in different names it will be necessary to
complete, sign and submit as many separate Letters of Transmittal as there are
different registrations.
If this Letter of Transmittal or any certificates are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted, unless waived by the
Purchaser.
If this Letter of Transmittal is signed by a person other than the
registered Holder, such as an attorney-in-fact, executor, administrator,
trustee, guardian, officer of a corporation or other person acting in a
fiduciary or representative capacity, such signatures must be guaranteed by an
Eligible Institution.
6. TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any transfer taxes with respect to the
transfer and sale of Interests to it or its order pursuant to the Offer. If the
Interests are to be registered in the name of any person other than the
Holder(s), the amount of any transfer taxes (whether imposed on the Holder(s) or
such other person) payable on account of the transfer to such person will be
deducted from the Purchase Price paid pursuant to the Offer unless satisfactory
evidence of the payment of such taxes or exemption therefrom is submitted.
7. WAIVER OF CONDITIONS. To the extent permitted by applicable law, the
Purchaser reserves the right to waive any and all conditions to the Offer and
accept for payment any Interests tendered.
8. TAX IDENTIFICATION NUMBER AND BACKUP WITHHOLDING. Federal income tax
law generally requires that a Limited Partner whose tendered Interests are
accepted for payment, or an Assignee (in either case, the "Payee"), provide the
Purchaser (the "Payor"), with his or her correct Taxpayer Identification Number
("TIN"), which, in the case of a Payee who is an individual, is his or her
social security number. If the Payor is not provided with the correct TIN or an
adequate basis for an exemption, such Payee may be subject to a $50 penalty
imposed by the Internal Revenue Service and backup withholding in an amount
equal to 31% of the Purchase Price paid pursuant to the Offer. If withholding
results in an overpayment of taxes, a refund may be obtained.
To prevent backup withholding, each Payee must provide his correct TIN
by completing the "Substitute Form W-9" set forth herein, certifying that the
TIN provided is correct (or that such Payee is awaiting a TIN) and that (i) the
Payee is exempt from backup withholding, (ii) the Payee has not been notified by
the Internal Revenue
9
<PAGE>
Service that he is subject to backup withholding as a result of a failure to
report all interest or dividends, or (iii) the Internal Revenue Service has
notified the Payee that he is no longer subject to backup withholding.
If the Payee does not have a TIN, such Payee should consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 (the "W-9 Guidelines") for instructions on applying for a
TIN, write "Applied For" in the space for the TIN in Part I of the Substitute
Form W-9, and sign and date the Substitute Form W-9 and the Certificate of
Awaiting Taxpayer Identification Number set forth herein. Note: Writing "Applied
For" on the form means that the Payee has already applied for a TIN or that such
Payee intends to apply for one in the near future.
If the Interests are held in more than one name or are not in the name
of the actual owner, consult the W-9 Guidelines for information on which TIN to
report.
Exempt Payees (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. To prevent possible erroneous backup withholding, an exempt Payee
should write "Exempt" in Part 2 of Substitute Form W-9. See the W-9 Guidelines
for additional instructions. In order for a nonresident alien or foreign entity
to qualify as exempt, such person must submit a completed Form W-8, "Certificate
of Foreign Status." Such form may be obtained from the Payor.
9. NON-FOREIGN TAX STATUS. Federal income tax law generally provides
that a transferee of a U.S. real property interest, including the Interests,
must withhold tax at a 10% rate if the transferor is a foreign person. To verify
that such withholding will not be required, a tendering Limited Partner must
certify as to its tax status by completing the "Non-Foreign Tax Affidavit" set
forth herein, certifying that the Limited Partner is not a foreign corporation,
foreign partnership, foreign trust, or foreign estate (as those terms are
defined under federal income tax law).
10. MUTILATED, LOST, STOLEN OR DESTROYED SECURITIES. Any Limited
Partner whose Interest Certificates, if any, have been mutilated, lost, stolen
or destroyed should contact the Administrative Agent/Depositary at the address
indicated hereon for further instructions.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for
assistance or additional copies of the Offer to Purchase and this Letter of
Transmittal may be directed to the Information Agent at its address set forth
below or from the tendering Limited Partner's broker, dealer, commercial bank or
trust company. Additional copies of the Offer to Purchase, this Letter of
Transmittal and the W-9 Guidelines may be obtained from the Information Agent.
THE INFORMATION AGENT IS:
CHRISTOPHER WEIL & CO., INC.
6510 LUSK BOULEVARD, SUITE B205
SAN DIEGO, CALIFORNIA 92121
(619) 597-6610
(800) 478-2605
IMPORTANT: THIS LETTER OF TRANSMITTAL, TOGETHER WITH CERTIFICATES, IF
ANY, FOR ANY TENDERED INTERESTS, WITH ANY REQUIRED SIGNATURE GUARANTEES AND ALL
OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE
EXPIRATION DATE, AT THE ADDRESS, OR THE FACSIMILE NUMBER, LISTED ON THE FRONT
COVER OF THIS LETTER OF TRANSMITTAL.
10
<PAGE>
TO BE COMPLETED BY ALL PAYEES
(See Instruction 9)
- --------------------------------------------------------------------------------
PAYOR'S NAME: U.S. RESTAURANT PROPERTIES, INC.
- --------------------------------------------------------------------------------
SUBSTITUTE Name
------------------------------------------
Form W-9 Address
---------------------------------------
(Number and Street)
Department of the ---------------------------------------
Treasury (City) (State) (Zip Code)
Internal Revenue ----------------------------------------------
Service Part 1-- PLEASE PROVIDE TIN
YOUR TIN IN THE BOX AT ------------------
RIGHT AND CERTIFY BY (Social Security
SIGNING AND DATING Number or Employer
BELOW Identification
Payor's Request for Number)
Taxpayer ----------------------------------------------
Identification Number Part 2-- FOR PAYEES EXEMPT FROM BACKUP
(TIN) and WITHHOLDING PLEASE WRITE "EXEMPT" HERE
Certification
(SEE INSTRUCTIONS)
----------------------------
----------------------------------------------
Part 3-- CERTIFICATION UNDER PENALTIES OF
PERJURY, I CERTIFY THAT (1) The number shown
on this form is my correct TIN (or I am
waiting for a number to be issued to me), and
(2) I am not subject to backup withholding
because: (a) I am exempt from backup
withholding, or (b) I have not been notified
by the Internal Revenue Service (the "IRS")
that I am subject to backup withholding as a
result of a failure to report all interest or
dividends or (c) the IRS has notified me that
I am no longer subject to backup withholding.
SIGNATURE DATE
---------------------- ----------
- --------------------------------------------------------------------------------
You must cross out Part 2 above if you have been notified by the IRS
that you are currently subject to backup withholding because of underreporting
interest or dividends on your tax return.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR"
IN PART 1 OF THE SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and that I have mailed or delivered an application to
receive a taxpayer identification number of the appropriate Internal Revenue
Service Center or Social Security Administration Office (or I intend to mail or
deliver an application in the near future). I understand that if I do not
provide a taxpayer identification number to the Payor, the Payor is required to
withhold 31 percent of all cash payments made to me until I provide a number.
SIGNATURE DATE
------------------------------------------ ------------------------
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31 PERCENT OF THE PURCHASE PRICE. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
11
<PAGE>
- --------------------------------------------------------------------------------
NON-FOREIGN TAX AFFIDAVIT
- --------------------------------------------------------------------------------
Section 1445 of the Internal Revenue Code provides that a transferee of
a U.S. real property interest, including the Interests, must withhold tax if the
transferor is a foreign person. To inform the Purchaser that withholding of tax
is not required upon the disposition of the undersigned's Interests, the
undersigned hereby certifies:
1. The undersigned is not a foreign person, foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined
in the Internal Revenue Code and Income Tax Regulations);
2. The undersigned's U.S. tax identification number is
; and
------------------------
3. The undersigned's address is .
----------------------------------------------
The undersigned understands that this certification may be disclosed to
the Internal Revenue Service by the Purchaser and that any false statement
contained herein could be punished by fine, imprisonment or both.
Under penalties of perjury, I declare I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete, and I further declare that I have authority to sign this document.
Dated this day of , 1998.
------- --------------
SIGNATURE:
----------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN WITHHOLDING
OF 10% OF THE AMOUNT REALIZED.
- --------------------------------------------------------------------------------
12
<PAGE>
Exhibit (a)(3)
Form of Letter to Interest Holders
<PAGE>
================================================================================
IF YOU HAVE ANY QUESTIONS ABOUT THIS OFFER, PLEASE CALL THE INFORMATION AGENT,
CHRISTOPHER WEIL & CO., INC., AT (800) 478-2605 OR U.S. RESTAURANT PROPERTIES,
INC.'S INVESTOR SERVICES DEPARTMENT AT (972) 387-1487. IF YOU NEED HELP IN
COMPLETING THE LETTER OF TRANSMITTAL, PLEASE CALL THE DEPOSITARY, AMERICAN STOCK
TRANSFER & TRUST COMPANY, AT (212) 936-5100.
================================================================================
March 27, 1998
RE:TENDER OFFER FOR INTERESTS IN DIVALL INSURED INCOME FUND LIMITED PARTNERSHIP
Dear Limited Partner:
U.S. Restaurant Properties, Inc. (the "Company") is offering to
purchase a limited number of the issued and outstanding limited partnership
interests (the "Interests") in Divall Insured Income Fund Limited Partnership
(the "Partnership") at a cash price per Interest of $575 (the "Offer"). There
will be no commissions or fees paid by you associated with the sale. The Offer
is not conditioned upon a minimum number of Interests being tendered.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION OR ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR TO PROVIDE ANY INFORMATION OTHER THAN
THAT CONTAINED IN THE OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. NO SUCH
RECOMMENDATION, INFORMATION OR REPRESENTATION MAY BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
The Company has enclosed an Offer to Purchase and Letter of Transmittal
which together describe the terms of the Offer. The Company urges you to read
both the Offer to Purchase and the Letter of Transmittal carefully. If you wish
to sell your Interests, please complete the enclosed Letter of Transmittal and
return it in accordance with the instructions provided. Unless extended, the
Offer will expire on June 2, 1998.
We thank you for your prompt attention to this matter.
Very truly yours,
U.S. RESTAURANT PROPERTIES, INC.
By:
-------------------------------
Robert J. Stetson
President and Chief Executive Officer
<PAGE>
Exhibit (a)(4)
Form of Response Card
<PAGE>
March 27, 1998
RE: TENDER OFFER FOR UNITS OF DIVALL INSURED INCOME FUND LIMITED PARTNERSHIP
Dear Unitholder:
As a Unitholder of Divall Insured Income Fund Limited Partnership (the
"Partnership"), U.S. Restaurant Properties, Inc. ("USRP") mailed to you an Offer
to Purchase dated March 27, 1998 pursuant to which USRP is offering to purchase
for cash limited partnership units of the Partnership.
Your telephone number is not part of our records. We would like to
answer any questions you may have regarding the Offer to Purchase and could do
so if you would either:
1. Provide us with your telephone number and a convenient time to contact you
by filling in and returning this card to USRP, or
2. Call Christopher Weil & Company, Inc., the company retained by USRP to
assist limited partners in understanding the Offer to Purchase, at (800)
478-2605.
Thank you for your prompt attention to this matter.
Very truly yours,
U.S. RESTAURANT PROPERTIES, INC.
By:
-----------------------------
Robert J. Stetson
President and Chief Executive Officer
Please return to: U.S. Restaurant Properties, Inc.
5310 Harvest Hill Road
Suite 250
Dallas, Texas 75230
- -------------------------------------- -------------------------------------
Name and address of registered holder Telephone number
-------------------------------------
-------------------------------------
Covenient time to contact
- -------------------------------------- -------------------------------------
