SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
WINDSOR PARK PROPERTIES 4,
a California limited partnership
(Name of Issuer)
N' TANDEM TRUST
WINDSOR PARK PROPERTIES 4,
a California limited partnership
(Name of Person(s) Filing Statement)
Units of Limited Partnership Interest
(Title of Class of Securities)
(CUSIP Number of Class of Securities)
Steven G. Waite
Windsor Park Properties 4
6430 S. Quebec Street
Englewood, CO 80111
303-741-3707
(Name, Address and Telephone number of persons authorized
to receive notices and communications on behalf of
person(s) filing statement)
With copies to:
Jay L. Bernstein, Esq.
Rogers & Wells LLP
200 Park Avenue
New York, New York 10166-0153
(212) 878-8000
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This Statement is filed in connection with (check the appropriate box):
a. |X| The filing of solicitation materials or an
information statement subject to Regulation 14A,
Regulation 14C or Rule 13e-3(C) under the Securities
Exchange Act of 1934.
b. |_| The filing of a registration statement under the Securities
Act Of 1933.
c. |_| A tender offer.
d. |_| None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box "a." above are preliminary
copies: |X|
2
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Calculation of Filing Fee
====================================== ===================================
Transaction Valuation 1 Amount of Filing Fee
- -------------------------------------- -----------------------------------
$11,871,750 $2,374.35
- -------------------------------------- -----------------------------------
====================================== ===================================
|_| 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: Filing party:
Form or registration no.: Date Filed:
This Transaction Statement on Schedule 13E relates to the proposed sale
of the assets of Windsor Park Properties 4, a California limited
partnership (the "Partnership") pursuant to a plan of liquidation (the
"Plan of Liquidation") adopted by the general partners of the partnership
(the "General Partners").
Pursuant to the Plan of Liquidation, the Partnership will sell its
single remaining wholly owned property and its six partial ownership
interests in other properties (together, the "Properties") to N' Tandem
Trust, an unincorporated California business trust ("N' Tandem"), whose
advisory company, The Windsor Corporation, is also the managing general
partner of the partnership (the "Managing General Partner"). Chateau
Communities, Inc., which owns the Managing General Partner, also holds 9.8%
of the capital stock of N' Tandem.
In accordance with the Agreement of Limited Partnership of the
Partnership (the "Partnership Agreement"), the General Partners are seeking
the consent of the holders (the "Limited Partners") of units of limited
partnership interest in the Partnership (the "Units") to the sale of assets
(the "Sales") and the Plan of Liquidation.
The Cross Reference Sheet below is furnished pursuant to General
Instruction F to Schedule 13E-3 and shows the location of the information
required to be included in response to the items of this Schedule 13E-3 in
the Partnership's Consent Solicitation Statement (the "Consent Solicitation
Statement") filed on February 5, 1999, by the Partnership with the
Securities and Exchange Commission pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
information in the Consent Solicitation Statement is incorporated into this
Schedule 13E-3 by reference. A copy of the Consent Solicitation Statement
is attached hereto as Exhibit (d). Capitalized terms not defined herein
have the meanings ascribed to them in the Consent Solicitation Statement.
_______________
1 For purposes of calculating the filing fee only.
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<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
Item in Schedule 13E-3 Location in Consent Solicitation
Statement by Caption
<S> <C> <C>
Item 1. Issuer and Class of Security
Subject to the Transaction
(a) Cover Page. Summary - Purpose of the Consent
Solicitation
(b) Consent Procedures; Transactions Authorized By
Consents - Record Date; Required Vote
(c) Summary - No Established Trading Market for the
Units
(d) Summary - Historical Distributions
(e) Not applicable
(f) Description of the Proposed Transaction -
Background of the Transaction
Item 2. Identity and Background
(a) - (d) Certain Risk Factors and Other Considerations -
Conflicts of Interest. Description of the
Proposed Transaction - Information Concerning the
Purchaser. Appendix A - Information Concerning
the Managing General Partner and the Purchaser
(e) Not applicable
(f) Not applicable
</TABLE>
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<TABLE>
<CAPTION>
Item in Schedule 13E-3 Location in Consent Solicitation
Statement by Caption
<S> <C> <C>
(g) Appendix A - Information Concerning the Managing
General Partner and the Purchaser
Item 3. Past Contacts, Transactions or
Negotiations
(a)(1) Description of the Proposed Transaction
- Background of the Proposed Transaction
(2) Description of the Proposed Transaction
- Background of the Proposed Transaction and - The
Purchase and Sale Agreement
(b) Description of the Proposed Transaction
- Background of the Proposed Transaction and - The
Purchase and Sale Agreement
Item 4. Terms of the Transaction
(a) Description of the Proposed Transaction
(b) Not applicable
Item 5. Plans or Proposal of the Issuer or
Affiliate
(a) - (g) Description of the Proposed Transaction
Item 6. Source and Amounts of Funds or Other
Consideration
(a) Description of the Proposed Transaction
- The Purchase and Sale Agreement
</TABLE>
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<TABLE>
<CAPTION>
(b) Description of the Proposed Transaction - The
<S> <C> <C>
Purchase and Sale Agreement. Consent Procedures;
Transactions Authorized by
Consents - Solicitation Expenses and - Estimate of
Liquidating Distributions
(c) Description of the Proposed Transaction
- Purchase and Sale Agreement
(d) Not applicable
Item 7. Purposes, Alternatives, Reasons and
Effects
(a) - (c) Description of the Proposed Transaction - Purpose
of the Consent Solicitation, - Background of the
Proposed Transaction. Special Factors - Fairness
of the Transaction; Recommendation of the General
Partners and - Alternatives Considered
(d) Description of the Proposed Transaction - Purpose
of the Consent Solicitation and - Background of
the Proposed Transaction. Special Factors -
Fairness of the Transaction; Recommendation of the
General Partners, and - Ownership of Properties By
N' Tandem Following Sales. Federal Income Tax
Consequences
Item 8. Fairness of the Transaction
(a) - (b) Description of the Proposed Transaction - Purpose
of the Consent Solicitation and - Background of
the Proposed Transaction. Special Factors -
Fairness of the Transaction; Recommendation of the
General Partners
(c) Consent Procedures; Transactions Authorized by
Consents - Record Date; Required Vote
(d) Special Factors - Fairness of the Transaction;
Recommendation of the General Partners. Certain
Risk Factors and Other Considerations - No
Fairness Opinion; No Appointment of Independent
Representative
(e) Not applicable
(f) Description of the Proposed Transaction -
Background of the Proposed Transaction, Special
Factors - Fairness of the Transaction.
Recommendation of the General Partners
</TABLE>
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<TABLE>
<CAPTION>
Item 9. Reports, Opinions, Appraisals and
Certain Negotiations
(a) - (c) The Partnership's Properties - Appraisals, -
Summary and Methodology of Appraisals and -
Description of Properties, Appraised Values and
Ownership Interests
<S> <C> <C>
Item 10. Interest in Securities of the Issuer
(a)
Consent Procedures; Transactions Authorized By
Consents - Record Date; Required Vote
(b) Not applicable
Item 11. Contracts, Arrangements or
Understandings with Respect to the
Issuer's Securities
Not applicable
Item 12. Present Intention and Recommendation of
Certain Persons with Regard to the
Transaction
(a)
Consent Procedures; Transactions Authorized By
Consents - Record Date; Required Vote
(b) Consent Procedures; Transactions Authorized By
Consents - Record Date; Required Vote. Special
Factors - Fairness of the Transaction;
Recommendation of the General Partners
Item 13. Other Provisions of the Transaction
(a)
Consent Procedures; Transactions Authorized By
Consents - No Appraisal or Dissenters' Rights
(b) Not applicable
(c) Not applicable
Item 14. Financial Information
(a) Financial Statements. Incorporation of Certain
Documents by Reference
(b) Not applicable
Item 15. Persons and Assets Employed, Retained
or Utilized
Consent Procedures; Transactions Authorized By
(a) Consents - Solicitation of Consents
(b) Consent Procedures; Transactions Authorized By
Consents - Solicitation of Consents
Item 16. Additional Information Summary. Certain Risk Factors and Other
Considerations. Description of the Proposed
Transaction. Special Factors. The Partnership's
Properties. Federal Income Tax Considerations.
Consent Procedures; Transactions Authorized By
Consents. Financial Statements. Incorporation of
Certain Documents By Reference.
</TABLE>
7
<PAGE>
Item 1. Issuer and Class of Security Subject to the Transaction.
(a) The name of the issuer of the class of equity securities which is the
subject of the Rule 13e-3 transaction is Windsor Park Properties 4, a
California limited partnership (the "Partnership"), and the address of its
principal executive offices is 6430 S. Quebec Street, Englewood, CO 80111.
The information set forth on the cover page of the Consent Solicitation
Statement and under the caption "Summary - Purpose of the Consent
Solicitation" is incorporated herein by reference.
(b) The class of security which is the subject of the Rule 13e-3
transaction is the units of limited partnership interest of the Partnership
(the "Units"). The information set forth under the caption "Consent
Procedures; Transactions Authorized by Consents - Record Date; Required
Vote" in the Consent Solicitation Statement is incorporated herein by
reference.
(c) The information set forth under the caption "Summary - No Established
Trading Market For the Units" in the Consent Solicitation Statement is
incorporated herein by reference.
(d) The information set forth under the caption "Summary - Historical
Distributions" in the Consent Solicitation Statement is incorporated herein
by reference.
(e) Not applicable.
(f) The information set forth under the caption "Description of the
Proposed Transaction - Background of the Proposed Transaction" is
incorporated herein by reference.
Item 2. Identity and Background.
This Schedule 13E-3 is being filed jointly by N' Tandem, which is an
affiliate of the Partnership, and the Partnership (the issuer of the class
of equity securities which is the subject of the Rule 13e-3 transaction).
The information set forth under the captions "Background of the Transaction
- Information about the Purchaser" and "Certain Risk Factors and Other
Considerations - Conflicts of Interest," in the Consent Solicitation
Statement is incorporated herein by reference.
(a)-(d) Information required by this item relating to directors and
executive officers of N' Tandem, Chateau, and The Windsor Corporation is
set forth in Appendix A to the Consent Solicitation Statement, which is
incorporated herein by reference.
(e) To the knowledge of N' Tandem and the General Partners of the
Partnership, none of the persons with respect to whom information is
provided in response to this Item 2 was, during the last five years,
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(f) To the knowledge of N' Tandem, and the General Partners of the
Partnership, none of the persons with respect to whom information is
provided in response to this Item 2 was, during the last five years, 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 further violations of, or
prohibiting activities, subject to, Federal or state securities laws or
finding any violation of such laws.
(g) Information required by this item relating to directors and executive
officers of N' Tandem, Chateau and The Windsor Corporation is set forth in
Appendix A to the Consent Solicitation Statement, which is incorporated
herein by reference.
8
<PAGE>
Item 3. Past Contacts, Transactions or Negotiations.
(a) (1) The information under set forth the caption "Description
of the Proposed Transaction Background of the Proposed
Transaction" in the Consent Solicitation Statement is
incorporated herein by reference.
(2) The information set forth under the caption "Description
of the Proposed Transaction Background of the Proposed
Transaction" and "- The Purchase and Sale Agreement" in the
Consent Solicitation Statement is incorporated herein by
reference.
(b) The information set forth under the caption and "Description of the
Proposed Transaction" in the Consent Solicitation Statement is incorporated
herein by reference.
Item 4. Terms of the Transaction.
(a) The information set forth under the caption "Description of the
Proposed Transaction" in the Consent Solicitation Statement is incorporated
herein by reference.
(b)Not applicable.
Item 5. Plans or Proposals of the Issuer or Affiliate.
(a)-(g) The Rule 13e-3 transaction provides for the sale of all of the
Partnership's assets, a dissolution and winding up of the Partnership, and
a termination of registration of the Units under the Exchange Act. The
information set forth under the caption "Description of the Proposed
Transaction" in the Consent Solicitation Statement is incorporated herein
by reference.
Item 6. Source and Amounts of Funds or Other Consideration.
(a) The information contained in the last paragraph of "Description of the
Proposed Transaction - The Purchase and Sale Agreement" in the Consent
Solicitation Statement is incorporated herein by reference.
(b) The information set forth under the captions "Description of the
Proposed Transaction - The Purchase and Sale Agreement," "Consent
Procedures; Transactions Authorized by Consents -Solicitation Expenses" and
"-Estimate of Liquidating Distributions" in the Consent Solicitation
Statement relating to the expenses estimated to be incurred in the
transaction, is incorporated herein by reference.
(c) The information contained in the last paragraph under the caption
"Description of the Proposed Transaction - The Purchase and Sale Agreement"
in the Consent Solicitation Statement is incorporated herein by reference.
(d) Not applicable.
Item 7. Purpose(s), Alternatives, Reasons and Effects.
(a)-(c) The information set forth under the captions "Description of the
Proposed Transaction-Purpose of the Consent Solicitation," "- Background of
the Proposed Transaction," and "Special Factors - Fairness of the
Transaction; Recommendation of the General Partners" and "- Alternatives
Considered" in the Consent Solicitation Statement is incorporated herein by
reference.
(d) The information set forth under the captions "Description of the
Proposed Transaction - Background of the Proposed Transaction" and "-
Ownership of Properties By N' Tandem Following Sales" and "Special Factors
- Fairness of the Transaction; Recommendation of the General Partners" in
the Consent Solicitation Statement is incorporated herein by reference. The
information contained under the caption "Federal Income Tax Consequences"
is incorporated herein by reference.
9
<PAGE>
Item 8. Fairness of the Transaction.
(a)-(b) N' Tandem and the General Partners of the Partnership reasonably
believe that the transaction is fair to the unaffiliated Limited Partners.
The information set forth under the captions "Description of the Proposed
Transaction - Background of the Proposed Transaction" and "Special Factors
- Fairness of the Transaction; Recommendation of the General Partners" in
the Consent Solicitation Statement is incorporated herein by reference.
(c) The information contained under the caption "Consent Procedures;
Transactions Authorized By Consents Record Date; Required Vote" in the
Consent Solicitation Statement is incorporated herein by reference.
(d) The General Partners of the Partnership have not retained an
independent representative to act on behalf of unaffiliated Unitholders.
The information set forth under the caption "Special Factors - Fairness of
the Transaction; Recommendation of the General Partners" and "Certain Risk
Factors and Other Considerations - No Fairness Opinion; No Appointment of
Independent Representative" in the Consent Solicitation Statement is
incorporated herein by reference.
(e) The proposed transaction was approved by both of the General Partners
of the Partnership. As a limited partnership, the Partnership does not have
directors. All of the directors of the Managing General Partner were
appointed by Chateau.
(f) The information contained under the captions "Description of the
Proposed Transaction - Background of the Proposed Transaction" and "Special
Factors - Fairness of the Transaction; Recommendation of the General
Partners" in the Consent Solicitation Statement is incorporated herein by
reference.
Item 9. Reports, Opinions, Appraisals and Certain Negotiations.
(a)-(c) The information contained under the captions "The Partnership's
Properties - Appraisals," "Summary and Methodology of Appraisals," and "-
Description of Properties, Appraised Values and Ownership Interests" in the
Consent Solicitation Statement is incorporated herein by reference.
Item 10. Interest in Securities of the Issuer.
(a) The information contained under the caption "Consent Procedures;
Transactions Authorized By Consents Record Date; Required Vote" in the
Consent Solicitation Statement is incorporated herein by reference.
(b) Not applicable.
Item 11. Contracts, Arrangements or Understandings with
Respect to the Issuer's Securities.
10
<PAGE>
Not applicable.
Item 12. Present Intention and Recommendation of Certain
Persons with Regard to the Transaction.
(a) The information contained under the caption "Consent Procedures;
Transactions Authorized By Consents Record Date; Required Vote" in the
Consent Solicitation Statement is incorporated herein by reference.
(b) The information contained under the caption "Consent Procedures;
Transactions Authorized By Consents Record Date; Required Vote" in the
Consent Solicitation Statement is incorporated herein by reference. The
information set forth under the caption "Special Factors - Fairness of the
Transaction; Recommendation of the General Partners" in the Consent
Solicitation Statement is incorporated herein by reference. No other person
has made a recommendation required to be described herein.
Item 13. Other Provisions of the Transaction.
(a) The information set forth under the caption "Consent Procedures;
Transactions Authorized By Consents No Appraisal or Dissenters' Rights" in
the Consent Solicitation Statement is incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
Item 14. Financial Information.
(a) The information set forth under the captions "Financial Statements" and
"Incorporation of Certain Documents By Reference" in the Consent
Solicitation Statement is incorporated herein by reference.
(b) Not applicable.
Item 15. Persons and Assets Employed, Retained or Utilized.
(a) The information set forth under the caption "Consent Procedures;
Transactions Authorized By Consents Solicitation of Consents" in the
Consent Solicitation Statement is incorporated herein by reference.
(b) The information set forth under the caption "Consent Procedures;
Transactions Authorized By Consents Solicitation of Consents" in the
Consent Solicitation Statement is incorporated herein by reference.
Item 16. Additional Information.
The information contained in the Consent Solicitation Statement is
incorporated herein by reference in its entirety.
Item 17. Materials to be Filed as Exhibits.
(a) Promissory Note of N' Tandem in favor of Chateau Communities,
Inc.*
(b)(1) Appraisals of Whitcomb Real Estate, Inc.*
(b)(2) Appraisals of Landmark Valuation, Inc.*
(b)(3) Appraisals of Appraisal Technology, Inc.*
(d) Preliminary Consent Solicitation Statement and related proxy
materials, as filed with the Commission on February 5, 1999.
11
<PAGE>
Signature
After due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
WINDSOR PARK PROPERTIES 4,
California Limited Partnership
By: The Windsor Corporation,
general partner
By: /s/ Steven G. Waite
____________________________
Steven G. Waite
President
Date: February 5, 1999
12
<PAGE>
Signature
After due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
N' TANDEM TRUST
By:/s/ Gary P. McDaniel
______________________________
Gary P. McDaniel
Trustee
Date: February 5, 1999
13
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
(a) Promissory Note of N' Tandem in favor of Chateau
Communities, Inc.*
(b)(1) Appraisals of Whitcombe Real Estate, Inc.*
(b)(2) Appraisals of Landmark Valuation, Inc.*
(b)(3) Appraisals of Appraisal Technology, Inc.*
(d) Preliminary Consent Solicitation Statement and related
proxy materials, as filed with the Commission on February
5, 1999.
______________
* To be Filed by Amendment
14
EXHIBIT (D)
CONSENT SOLICITATION STATEMENT
Windsor Park Properties 4,
A California Limited Partnership
6430 South Quebec Street
Englewood, Colorado 80111
In accordance with the Agreement of Limited Partnership (the
"Partnership Agreement") of Windsor Park Properties 4, a California limited
partnership (the "Partnership"), the term of the Partnership expired on December
31, 1997, and accordingly, the general partners of the Partnership (the "General
Partners") are obligated to liquidate and dissolve the Partnership.
The purpose of this Consent Solicitation is to obtain the consent of
the holders (the "Limited Partners") of units of limited partner interest in the
Partnership (the "Units") to the plan of liquidation adopted by the General
Partners (the "Plan of Liquidation"), pursuant to which the Partnership will
sell its single remaining wholly owned property and its six partial ownership
interests in other properties (together, the "Properties") to N' Tandem Trust, a
California business trust ("N' Tandem"), whose advisory company is the managing
general partner of the Partnership (the "Managing General Partner"). Upon
completion of the Plan of Liquidation, final liquidating distributions
(estimated to be an average of approximately $44.18 per Unit) will be made to
the partners in accordance with the terms of the Partnership Agreement.
The proposed transaction is subject to certain risk factors described
herein, including the following:
o The General Partners have engaged in limited marketing efforts with
respect to the sales of the Properties;
o The potential conflicts of interest of the Managing General Partner;
o The Limited Partners will lose the opportunity to benefit from potential
increases in the value of the Properties;
o No fairness opinion has been sought with respect to the sale of the
Properties; and
o The sale of the Partnership's Properties and liquidation of the
Partnership will result in a net taxable gain to Limited Partners of
approximately $_____ per Unit.
The close of business on January __, 1999 has been fixed as the record
date for determining Limited Partners entitled to give written consent to the
sales and the Plan of Liquidation. In order to be valid, a consent must be
received prior to March __, 1999.
LIMITED PARTNERS ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED
CONSENT FORM AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES, TO BE RECEIVED NO LATER THAN MARCH __,
1999.
This Consent Solicitation Statement is dated February __, 1999.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS CONSENT SOLICITATION STATEMENT, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS CONSENT SOLICITATION STATEMENT
DOES NOT CONSTITUTE THE SOLICITATION OF A CONSENT IN ANY JURISDICTION TO OR FROM
ANY PERSON TO OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH CONSENT SOLICITATION IN
SUCH JURISDICTION.
NEITHER THE PLAN OF LIQUIDATION NOR THIS CONSENT SOLICITATION STATEMENT
HAVE BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THE
PLAN OF LIQUIDATION OR THE ACCURACY OR ADEQUACY OF THIS CONSENT SOLICITATION
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE PARTNERSHIP OR THE GENERAL PARTNERS.
AVAILABLE INFORMATION
The Partnership is subject to certain informational reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith file reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information may be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the Commission at 7 World Trade Center, New York, New York
10048, and Northwest Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such 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. The Commission
maintains a site on the Internet at http://www.sec.gov that contains reports,
proxy and other information statements and other information regarding
registrants that file electronically with the Commission.
Statements contained herein concerning the provisions of documents are
summaries of such documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document if attached as an appendix
hereto.
Pursuant to Rule 13e-3 of the General Rules and Regulations under the
Exchange Act the Partnership and N' Tandem have filed with the Commission a Rule
13e-3 Transaction Statement on Schedule 13E-3 (including any amendments thereto,
the "Schedule 13E-3"), together with exhibits thereto, furnishing certain
additional information with respect to the sales and the Plan of Liquidation.
This Consent Solicitation Statement does not contain all the information
contained in the Schedule 13E-3 and the exhibits thereto, certain portions of
which are omitted as permitted by the rules and regulations of the Commission.
All reports from outside parties filed as exhibits to the Schedule
13E-3 filed with the Commission in connection with the proposed transaction also
will be made available for inspection and copying at the principal executive
offices of the Partnership during its regular business hours by any interested
Limited Partner or representative thereof who has been so designated in writing.
ii
This Consent Solicitation Statement was first mailed to
Limited Partners on February __, 1999.
iii
<PAGE>
TABLE OF CONTENTS
SUMMARY 1
Purpose of the Consent Solicitation.....................1
Background of the Proposed Transaction..................1
Risk Factors............................................2
Valuation of Properties................................ 3
Appraisals..............................................3
Recommendation of the General Partners..................3
Alternatives Considered.................................5
Certain Federal Income Tax Considerations...............5
Consent Procedures; Transactions Authorized by Consents.6
Record Date; Required Consents..........................6
No Appraisal or Dissenters' Rights......................6
Historical Distributions................................7
No Established Trading market For Units.................7
SUMMARY HISTORICAL FINANCIAL DATA.......................8
CERTAIN RISK FACTORS AND OTHER CONSIDERATIONS...........9
The General Partners Have Engaged in Limited Marketing
Efforts with Respect to the Properties ...............9
Conflicts of Interest...................................9
Loss of Opportunity to Benefit from Future Events.......9
No Fairness Opinion Sought with Respect to the Sales;
No Appointment of Independent Representative ...........9
Tax Consequences.......................................10
DESCRIPTION OF THE PROPOSED TRANSACTION................10
Background of the Proposed Transaction................10
Information Concerning the Purchaser...................11
The Purchase and Sale Agreement........................12
Solicitation Expenses..................................13
Estimate of Liquidating Distributions Payable to
Limited Partners.......................................13
Ownership of Properties by N' Tandem Following Sales...14
SPECIAL FACTORS........................................14
Fairness of the Transaction; Recommendation of the
General Partners.......................................14
Alternatives Considered................................16
THE PARTNERSHIP'S PROPERTIES...........................16
Nature of Ownership Interests in Properties............16
Appraisals............................................17
Summary of Methodology of Appraisals...................17
Description of Properties, Appraised Values and
Ownership Interests ...................................19
FEDERAL INCOME TAX CONSIDERATIONS......................21
Overview...............................................21
Taxation on the Sales..................................21
Liquidation of the Partnership.........................22
Income Tax Rates/Taxation of Gains and Losses..........22
CONSENT PROCEDURES; TRANSACTIONS AUTHORIZED BY
CONSENTS...............................................23
Solicitation of Consents...............................24
Record Date; Required Vote.............................24
No Appraisal or Dissenters' Rights.....................25
Consequences If Consents Are Not Obtained..............25
FINANCIAL STATEMENTS...................................25
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........26
i
<PAGE>
SUMMARY
The following summarizes certain information contained elsewhere in
this Consent Solicitation Statement. While the purpose of this Summary is to
discuss and disclose the material aspects of the Sales and the Plan of
Liquidation, this Summary is not intended to be complete, and is qualified in
its entirety by reference to the more detailed information contained elsewhere
herein.
Purpose of the Consent Solicitation
In accordance with the Agreement of Limited Partnership (the
"Partnership Agreement") of Windsor Park Properties 4, a California limited
partnership (the "Partnership"), the term of the Partnership expired on December
31, 1997, and accordingly, the General Partners are obligated to take actions to
liquidate and dissolve the Partnership. The purpose of this Consent Solicitation
is to obtain the consent of the holders (the "Limited Partners") of units of
limited partner interest in the Partnership (the "Units") to the plan of
liquidation adopted by the General Partners (the "Plan of Liquidation"),
pursuant to which the Partnership will sell (the "Sales") to N' Tandem Trust, a
California business trust ("N' Tandem"), its six partial ownership interests
("Ownership Interests") in properties and its single remaining wholly owned
property (such property, together with the Ownership Interests are sometimes
hereinafter referred to as the "Properties"). The managing general partner of
the Partnership (the "Managing General Partner") is the advisor to N' Tandem,
and is wholly owned by Chateau Communities, Inc. ("Chateau"), a real estate
investment trust which owns approximately 9.8% of the outstanding capital stock
of N' Tandem. The terms of the Sales are set forth in a Purchase and Sale
Agreement between N' Tandem and the Partnership (the "Purchase and Sale
Agreement"), as more particularly described herein. Upon completion of the Plan
of Liquidation, final liquidating distributions will be made (estimated to
average approximately $44.18 per Unit) to the partners in accordance with the
terms of the Partnership Agreement.
Background of the Proposed Transaction
In the third quarter of 1997, the General Partners began to develop a
plan to liquidate the Partnership. As a first step in this process, the General
Partners ordered appraisals (the "Appraisals") for the Properties. The General
Partners received the Appraisals in December 1997, which reported on the
appraised values of the Properties as of December 1997 (the "Appraised Values").
After reviewing the Appraisals, the General Partners established the
basic outline for a plan of liquidation for the Partnership. This plan had two
basic aspects. The first part involved efforts to sell one of the Partnership's
wholly owned Properties, and its largest Ownership Interest, to third parties.
In this regard, the General Partners marketed the Sunrise Village Property and
the Harmony Ranch Property (in which the Partnership has a 75% Ownership
Interest) for sale to third parties. These efforts resulted in the sale of the
Sunrise Village Property in May 1998, but not in any other completed
transactions.
The second part of the plan involved the sale of the remaining
Ownership Interests and any other assets not sold to third parties to N' Tandem,
which already owned separate partial interests in two of the Properties. The
General Partners decided not to attempt to market the remaining Partnership's
Ownership Interests for sales to parties other than N' Tandem based, in part, on
their belief that very limited demand for these Ownership Interests exists and
that any prospective buyers for these interests would not be willing to pay the
Partnership full value for the Ownership Interests based on the value of the
underlying Properties due to several factors, including that control over the
underlying Properties is vested in the Managing General Partner. See
"Description of the Proposed Transaction-Nature of Ownership Interests." The
General Partners also believed that N' Tandem would not view these control
issues in the same negative light as a prospective buyer who is unfamiliar with
the Properties and the Managing General Partner, and that N' Tandem would be
willing to purchase the Ownership Interests without a minority interest
discount. However, the General Partners could not engage in serious discussions
or negotiations with N' Tandem until N' Tandem adopted certain changes to its
organizational documents which permitted N' Tandem to purchase additional
properties. After N' Tandem adopted these changes in the third quarter of 1998,
the General Partners and representatives of N' Tandem negotiated the purchase
prices (the "Purchase Prices") and the other terms of the Sales for the
remaining Property and the Ownership Interests. Representatives of N' Tandem
agreed to pay the full Appraised Value for the remaining Property and an amount
for each Ownership Interest equal to the full value of the Ownership Interest
based on the Appraised Values. N' Tandem has agreed to pay cash for the Property
and Ownership Interests.
1
<PAGE>
It is currently anticipated that the Sales will occur as soon as
practicable following the approval by Limited Partners of the Sales and the Plan
of Liquidation. If sufficient consents to proceed with the Sales are not
obtained, the General Partners intend to explore, consider and pursue such
alternatives as may be available to the Partnership.
Risk Factors
The Sales involve certain risks, conflicts of interest and other
considerations which are discussed elsewhere in this Consent Solicitation
Statement. They include the following:
The General Partners Have Engaged in Limited Marketing Efforts with
Respect to the Properties. The General Partners have engaged in only limited
marketing efforts with respect to the Properties. Additionally, the General
Partners do not intend to take significant actions to market or sell the
remaining Properties pending the results of this Consent Solicitation.
Conflicts of Interest. The Sales, and the recommendations of the
General Partners set forth herein, could be deemed to involve certain conflicts
of interest between the Managing General Partner, and Limited Partners in that
the Managing General Partner of the Partnership is the Advisor to N' Tandem.
Under its advisory agreement with N' Tandem dated April 9, 1992 (the "Advisory
Agreement"), the Managing General Partner is entitled to (i) annual advisory
fees based on the value of N' Tandem's assets, (ii) brokerage commissions in
connection with acquisitions of properties and other assets, and (iii) a
subordinated incentive fee payable on liquidation of N' Tandem based on N'
Tandem's performance. In connection with the Sales, pursuant to the advisory
agreement, the Managing General Partner will receive a brokerage commission from
N' Tandem equal to 3% of the Purchase Price for each Property or Ownership
Interest, or $356,153. The Managing General Partner's sole stockholder is
Chateau, which also owns approximately 9.8% of the outstanding capital stock of
N' Tandem.
Loss of Opportunity to Benefit from Future Events. It is possible that
the future performance of the Properties will improve or that prospective buyers
may be willing to pay more for the remaining Properties in the future. It is
possible that Limited Partners might earn a higher return on their investment if
the Partnership retained ownership of the Properties. By approving the Sales,
Limited Partners will also be foregoing certain current benefits of ownership of
the Properties, such as continuing distributions.
No Fairness Opinion Sought with Respect to the Sales; No Appointment of
Independent Representative. The General Partners have not in connection with the
Sales sought to obtain an opinion relating to the fairness, to the Limited
Partners, of the Sales. The Partnership Agreement does not require any such
fairness opinion to be obtained and the General Partners concluded that because
all of the Purchase Prices for the Partnership's Properties are based on
Appraised Values, no such opinion is warranted. The General Partners have not
appointed an independent representative to represent the unaffiliated Limited
Partners or to negotiate the terms of the Sales. Had such a fairness opinion
been obtained, or had an independent representative been appointed, the Purchase
Prices, or other terms of the Sales, might have been different, and possibly
more favorable to the Partnership and the Limited Partners.
2
<PAGE>
Tax Consequences. The Sales will have a tax impact on Limited Partners,
and will result in a net taxable gain to Limited Partners of approximately
$_____ per Unit.
Valuation of Properties
The following table sets forth a list of the Partnership's wholly owned
Property and the Ownership Interests and their respective values (based on the
Appraised Values), the debt attributable to the Ownership Interests held by the
Partnership, and the value of the Property or Ownership Interest after deducting
attributable debt:
<TABLE>
<CAPTION>
Name of Property Ownership % Date Acquired Value of Property or Debt Attributable Net Value of
Ownership Interest to Property or Property or
Before Indebtedness Ownership Ownership
Based on Appraised Value Interest Interest
<S> <C> <C> <C> <C> <C> <C>
Sunset Vista 100% April 1987 $ 3,800,000 0 $ 3,800,000
Magna, UT
Big Country Estates 60% December 1986 $ 1,620,000 0 $ 1,620,000
Cheyenne, WY
Harmony Ranch 75% December 1986 $ 1,762,500 $ 900,000 $ 862,500
Thonotosassa, FL
Rancho Margate 33% September 1995 $ 2,112,000 $ 1,202,000 $ 910,000
Margate, FL
Winter Haven 33% October 1995 $ 1,221,000 $ 528,330 $ 692,670
Winter Haven, FL
Apache East 25% February 1997 $ 495,000 $ 276,123 $ 218,877
Phoenix, AZ
Denali Park 25% February 1997 $ 861,250 $ 480,378 $ 380,872
------------ ---------- ----------
Phoenix, AZ
Total $ 11,871,750 $ 3,386,831 $ 8,484,919
=========
</TABLE>
Appraisals
In November and December 1997, the Partnership ordered Appraisals with
respect to each of the Properties. Each of the appraisers (the "Appraisers") is
MAI certified and was selected based upon such Appraiser's expertise and/or
experience within the geographic area that each Property was located, as well as
such Appraiser's familiarity with valuing real estate underlying manufactured
home communities. A further description of the Appraisals, including a summary
of the methodology used in determining Appraised Values, is set forth under the
caption "Appraisals."
Recommendation of the General Partners
The General Partners believe that the Sales and the Plan of Liquidation
are (i) consistent with the original investment objectives of the Partnership,
(ii) contemplated by the terms of the Partnership Agreement, (iii) consistent
with the desires and current investment objectives of a majority of the holders
of the Units, and (iv) superior to any alternative courses of action that the
General Partners believe are available to the Partnership. Accordingly, the
General Partners believe that the terms of the Sales are fair to, and in the
best interests of, the Limited Partners and have approved the Sales and the Plan
of Liquidation and recommend their approval by the Limited Partners. In reaching
this determination the General Partners considered among other things, the
following factors:
3
<PAGE>
o In each instance, N' Tandem is paying the full Appraised Value for the
Properties, without a discount for the fact that the Partnership owns
only a minority Ownership Interest in the majority of the Properties;
o The Purchase Price being offered in respect of the Harmony Ranch
Ownership Interest, which is one of the Ownership Interests that the
General Partners attempted to market for sale to third parties, is also
equal to the purchase price offered in July 1998 for such Ownership
Interest by a third party;
o N' Tandem is willing to buy all of the Partnership's Properties at
their full Appraised Value;
o The aggregate purchase price being paid by N' Tandem exceeds the net
book value of the Partnership's real estate assets as of September 30,
1998 (the "Net Book Value") by $3,231,519;
o Due to N' Tandem's Advisor's familiarity with the Properties, N' Tandem
is willing to purchase the Properties "as-is," and without
representations or warranties from the Partnership;
o As a result, the General Partners will be able to make full liquidating
distributions (without any holdback for future contingencies) promptly
upon the approval of the Sales and the Plan of Liquidation by the
Limited Partners;
o The Sales do not involve any brokerage commissions payable by the
Partnership; and
o The other expenses likely to be incurred by the Partnership in
connection with the Sales are expected to be substantially lower than
if the Properties were sold to a third party who is unfamiliar with the
Properties and the Managing General Partner.
The General Partners also believe that the Sales are procedurally fair
to the Limited Partners, based in part on the following factors:
o The Properties have been independently appraised by MAI certified
appraisers, and N' Tandem is paying the full value of the Properties
based on the Appraised Values;
o The Sales are subject to the approval of Limited Partners holding
not less than a majority of the issued and outstanding Units; and
o The Sales have been structured to provide the Partnership and Limited
Partners with benefits that are not likely to be available in a sale to
a different party.
In reaching their determination that the Sales are fair to, and in the
best interests of, the Limited Partners, the General Partners also considered
potentially negative aspects of the proposed transaction, including the various
factors and information set forth under "Risk Factors" and elsewhere in this
Consent Solicitation Statement, including the following:
o The Partnership has engaged in limited marketing efforts with respect
to the Properties;
4
<PAGE>
o The Managing General Partner of the Partnership is the advisor to N'
Tandem. Chateau, which is the sole stockholder of the Managing General
Partner, owns approximately 9.8% of the outstanding capital stock of N'
Tandem. As a result, the Managing General Partner may be subject to
conflicts of interest with respect to the Sales;
o It is possible that the future performance of the Properties will
improve or that prospective buyers may be willing to pay more for the
Properties in the future;
o The General Partners have not in connection with the Sales sought to
obtain an opinion relating to the fairness, to the Limited Partners, of
the Sales and have not retained an independent representative to
represent the unaffiliated Limited Partners in connection with the
Sales; and
o The Sales will have a tax impact on Limited Partners, and result in a
net taxable gain to Limited Partners of approximately $_____ per Unit;
The foregoing discussion of the positive, negative and other
information and factors considered by the General Partners is not intended to be
exhaustive. The General Partners did not assign relative weights to the above
factors or determine that any factor was of particular importance. A
determination of various weightings would, in the view of the General Partners,
be impractical. Rather the General Partners viewed their position and
recommendations as being based on the totality of the information presented to,
and considered by, them.
Alternatives Considered
Under the Partnership Agreement, the term of the Partnership is through
December 31, 1997. Pursuant to the Partnership Agreement, the General Partners
were required to proceed with a winding up and liquidation of the Partnership,
and to take such actions as are required to cause the partners of the
Partnership to receive liquidating distributions. Accordingly, the General
Partners are not in a position to, and did not consider, alternatives other than
to proceed with selling the Properties. While the General Partners did consider
the possibility of selling the Properties to parties other than N' Tandem, the
General Partners ultimately concluded that such alternative transactions would
not be likely to result in the distribution of greater liquidating proceeds to
the Limited Partners.
Certain Federal Income Tax Considerations
The following is a brief summary of certain United States federal
income tax consequences to Limited Partners arising from the Sales and
liquidation of the Partnership:
Tax Consequences of the Sales. The Sales should result in the
recognition of gain by the Partnership and, therefore, should result in
recognition of gain by the Limited Partners. The amount of gain recognized by
the Partnership with respect to each of the Properties and Ownership Interests
will equal the difference between (i) the Partnership's amount realized (i.e.,
the amount of cash received increased by the amount of liabilities of the
Partnership assumed or taken subject to by the purchaser) and (ii) the
Partnership's adjusted tax basis in each of the Properties and Ownership
Interests. The aggregate gain expected to be recognized by the Partnership on
the Sales is approximately $2,965,573.
Allocation of Gain. The $2,965,573 gain recognized by the Partnership
in the year of Sales will be allocated among the partners in accordance with the
terms of the Partnership Agreement. These provisions will result in an
allocation of approximately $2,935,917 of taxable gain on the Sales to Limited
5
<PAGE>
Partners (or an average of $15.03 per Unit). The gain per Unit resulting from
the Sales is primarily caused by the fact that the Partnership generated tax
losses in prior years that were allocated to Limited Partners.
Tax Consequences of Liquidation. Upon liquidation of the Partnership, a
Limited Partner will recognize gain or loss equal to the difference between the
cash received by such Limited Partner (including the Limited Partner's share of
partnership liabilities under Section 752 of the Code (as hereafter defined),
assumed by the purchaser, and the adjusted tax basis of the Limited Partner's
Units, adjusted by such Limited Partner's allocable share of income, gain or
loss arising from normal Partnership operations for the year of liquidation and
the sale of the Properties and Ownership Interests in the year of liquidation.
See "-- Taxation on Sales -- Allocation of Gain" above. It is expected that a
Limited Partner will recognize an average loss of approximately $10.80 per Unit
on liquidation of the Partnership.
Consent Procedures; Transactions Authorized by Consents
The consents being solicited hereby will authorize the General
Partners: (i) to complete the Sales at any time on or prior to September 30,
1999, and to proceed with the Plan of Liquidation; and (ii) to take all actions
necessary or appropriate, as determined by the General Partners, to complete the
Sales and to proceed with the Plan of Liquidation, including, without
limitation, agreeing to any changes to the Purchase and Sale Agreement, provided
that any such change does not, in the reasonable judgment of the General
Partners, have a material adverse effect on the Limited Partners, or is
otherwise in the best interests of the Limited Partners.
Consents are being solicited from the Limited Partners in accordance
with the requirements of the Partnership Agreement.
Record Date; Required Consents
The close of business on January __, 1999 has been fixed as the record
date (the "Record Date") for determining Limited Partners entitled to consent to
the Sales and the Plan of Liquidation. As of the Record Date, there were 195,366
Units outstanding held of record by a total of 2,424 Limited Partners. Pursuant
to the Partnership Agreement, the Sales and the Plan of Liquidation require the
consents of Limited Partners holding at least a majority of the outstanding
Units. Each Unit entitles the holder thereof to cast one vote with respect to
the approval of the Sales and the Plan of Liquidation. As of the Record Date,
the General Partners and their affiliates own approximately 1,000 Units (or
approximately 0.5% of total outstanding Units) and have indicated that they
intend to consent to the Sales and the Plan of Liquidation with respect to all
such Units.
No Appraisal or Dissenters' Rights
If Limited Partners owning the requisite number of Units in the
Partnership consent to the Sales and Plan of Liquidation, all Limited Partners
of the Partnership will be bound by such consent, including Limited Partners who
have not returned their consents or who have denied consent. None of the
Partnership Agreement, California law or the proposed terms and conditions of
the Sales or the Plan of Liquidation provide objecting Limited Partners with the
right to exercise any dissenters', appraisal or similar rights. Under California
law, the general partner of a California limited partnership owes fiduciary
duties to its limited partners. To the extent that a general partner has engaged
in a transaction in breach of its fiduciary duties to limited partners, a
damages remedy may be available to such limited partners.
6
<PAGE>
Historical Distributions
Set forth below is certain information relating to distributions made by the
Partnership since January 1, 1993:
<TABLE>
<CAPTION>
Year Total Aggregate Total Aggregate to Limited Per Unit to
<S> <C> <C> <C> <C>
To all Partners Partners Limited Partners
1998* $ 440,500 $ 435,700 $ 2.23
1997 452,500 448,000 2.28
1996 452,500 448,000 2.26
1995 339,400 336,000 1.68
1994 813,100 805,000 4.00
1993 5,516,300 5,461,200 27.17
========== ------------ -=====
Total $8,014,300 $ 7,933,900 $ 39.62
===== ========== ============ ==========
----------
* Through September 30, 1998.
(1) The portion of such distribution representing a return of capital to Limited
Partners is as follows: 1998 (0%); 1997 (0%); 1996 (0%), 1995 (0%); 1994
(50%); and 1993 (87%).
</TABLE>
The Partnership typically makes distributions to its Partners on a
quarterly basis. There are no restrictions on the Partnership's present or
future ability to make distributions. The Partnership is not in arrears with
respect to any dividends or distributions, and the Partnership has made all
distributions required to be made by it under the Partnership Agreement.
No Established Trading market For Units
The Units are not listed on any securities exchange, and no established
trading market for the Units exists.
7
<PAGE>
SUMMARY HISTORICAL FINANCIAL DATA
The following summary historical financial data, insofar as it relates
to each of the years ended December 31, 1993 through 1997, has been derived from
the annual financial statements of the Partnership, including the balance sheet
at December 31, 1997 and the related statements of income for the two years
ended December 31, 1996 and 1997 and notes thereto as included in the
Partnership's annual report on Form 10-KSB for December 31, 1997. The data for
the nine months ended September 30, 1998 has been derived from unaudited
financial statements as included in the Partnership's quarterly report on Form
10-QSB/A for the quarter ended September 30, 1998, which, in the opinion of
management, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results for the unaudited
interim periods. The results set forth for the nine-month periods ended
September 30, 1998 and 1997 are not necessarily indicative of results to be
expected for a full year.
<TABLE>
<CAPTION>
For the Nine Months For the Year Ended December 31,
Ended September 30,
------------------------ --------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues $903,700 $1,008,400 $1,359,500 $1,349,800 $1,241,600 $1,139,100 $1,500,300
Net income (loss)(1) $183,200 $26,000 $38,900 $144,400 $(991,200) $(567,400) $325,100
Earnings (loss) per share $0.93 $.13 $.20 $.72 $(4.89) $(2.79) $1.60
Balance Sheet Data:
Total Assets $5,372,000 $7,428,500 $7,390,800 $7,815,900 $7,826,800 $7,760,500 $9,544,700
Long tem debt -- $1,775,000 $1,775,000 $1,775,000 $1,400,000 - -
Other Data:
Distributions per $2.23 $2.27 $2.28 $2.26 $1.68 $4.00 $27.17
limited(1)
partnership unit
- ---------------
(1) The Partnership sold its interests in three investment properties, incurring a gain of $1,104,000.
</TABLE>
8
<PAGE>
CERTAIN RISK FACTORS AND OTHER CONSIDERATIONS
The Sales involve certain risks, conflicts of interest and other
considerations, which are discussed below. Limited Partners are urged to
consider such factors and considerations and to consult with their independent
legal, financial and tax advisors before consenting to the Sales and the Plan of
Liquidation.
The General Partners Have Engaged in Limited Marketing Efforts with Respect to
the Properties
The General Partners have engaged in only limited marketing efforts
with respect to the Properties. Additionally, the General Partners do not intend
to take significant actions to market or sell the Properties pending the results
of this Consent Solicitation. While aggressively marketing the Properties to
third parties could conceivably result in a higher purchase price being paid for
the Properties, the General Partners do not believe that doing so is likely to
result in superior transaction for the Limited Partners, especially given the
brokerage commissions and other increased selling expenses that would be
incurred by the Partnership.
Conflicts of Interest
The Sales and the Plan of Liquidation, and the recommendation of the
General Partners set forth herein, could be deemed to involve certain conflicts
of interest between the Managing General Partner and Limited Partners in that
the Managing General Partner of the Partnership is the Advisor to N' Tandem .
Under the Advisory Agreement, the Managing General Partner is entitled to the
following fees: (i) annual subordinated advisory fees of up to 1% of invested
assets, and .05% of uninvested assets of N' Tandem, (ii) brokerage commissions
in connection with the acquisition of properties by N' Tandem equal to the
lesser of one-half of the brokerage commission paid, or 3% of the sales price,
and (iii) a subordinated incentive fee on the disposition of N' Tandem's assets
equal to 15% of cash remaining from sales or financing of N' Tandem assets after
holders of shares of beneficial interest of N' Tandem have received specified
preferred returns. In connection with the Sales, pursuant to the Advisory
Agreement, the Managing General Partner will receive a brokerage commission from
N' Tandem equal to 3% of the Purchase Price for each Property or Ownership
Interest, or $356,153.
Ownership by Parent of the Managing General Partner of Minority
Interest in N' Tandem. Chateau, the sole stockholder of the Managing General
Partner, currently owns approximately 9.8% of the outstanding capital stock of
N' Tandem. Chateau and N' Tandem anticipate that in the first or second quarter
of 1999, Chateau may acquire additional equity interests in N' Tandem that could
cause it to own up to a 45% equity interest in N' Tandem.
Loss of Opportunity to Benefit from Future Events
It is possible that the future performance of the Properties will
improve or that prospective buyers may be willing to pay more for the remaining
Properties in the future. It is possible that Limited Partners might earn a
higher return on their investment if the Partnership retained ownership of the
Properties. By approving the Sales and the Plan of Liquidation, Limited Partners
will also be foregoing certain current benefits of ownership of the Properties,
such as continuing distributions.
No Fairness Opinion Sought with Respect to the Sales;
No Appointment of Independent Representative
The General Partners have not in connection with the Sales sought to
obtain an opinion relating to the fairness, to the Limited Partners, of the
Sales. The Partnership Agreement does not require any such fairness opinion to
9
<PAGE>
be obtained and the General Partners concluded that because all of the Purchase
Prices for the Partnership's Properties are based on Appraised Values, no such
opinion is warranted. The General Partners have not appointed an independent
representative to represent the unaffiliated Limited Partners or to negotiate
the terms of the Sales. Had such a fairness opinion been obtained, or had an
independent representative been appointed, the Purchase Prices, or other terms
of the Sales, might have been different, and possibly more favorable to the
Partnership and the Limited Partners.
Tax Consequences
The Sales will have a tax impact on Limited Partners. For a discussion
of the tax impact of the Sales, and the Partnership's assumptions and the bases
therefor, see "Federal Income Tax Consequences." THE SPECIFIC TAX IMPACT OF THE
SALES ON LIMITED PARTNERS SHOULD BE DETERMINED BY LIMITED PARTNERS IN
CONSULTATION WITH THEIR OWN TAX ADVISORS.
DESCRIPTION OF THE PROPOSED TRANSACTION
Purpose of the Consent Solicitation
In accordance with the Partnership Agreement, the term of the
Partnership expired on December 31, 1997, and accordingly, the General Partners
are obligated to take actions to sell the Partnership's assets and to liquidate
the Partnership.
The purpose of this Consent Solicitation is to obtain the consent of
the Limited Partners to a Plan of Liquidation whereby the Partnership will sell
all of its Properties and Ownership Interests to N' Tandem pursuant to the
Purchase and Sale Agreement. Following the consummation of the Sales, the
Partnership would be liquidated and dissolved, and liquidating distributions
will be made to the partners in accordance with the terms of the Partnership
Agreement.
Background of the Proposed Transaction
The Partnership was formed in June 1986 pursuant to the provisions of
the California Uniform Limited Partnership Act. The Partnership was organized as
a finite-life entity to acquire and hold existing manufactured home communities
for investment for a limited time period. Its principal investment objectives
were to provide to its Limited Partners: (i) distributions of cash from
operations, (ii) preservation, protection and eventual return of the Limited
Partners' investment, and (iii) realization of appreciation in the value of the
properties acquired (the "Original Objectives"). It was originally anticipated
that the Partnership would be liquidated and dissolved at year end 1997. In
September of 1997, all of the outstanding capital stock of the Managing General
Partner was purchased by Chateau for 101,239 common shares of Chateau, and
$750,000 in cash (the "Windsor Acquisition"). Following the Windsor Acquisition,
the Trustees of N' Tandem voluntarily resigned, and in connection with such
resignation, appointed three new Trustees, including two independent trustees.
As a result of the Windsor Acquisition, Chateau became the indirect owner of
1000 Units in the Partnership. No particular value was attributed or allocated
to the Units in connection with the Windsor Acquisition. Since February __,
1997, Chateau has provided property management services to N' Tandem, the
Partnership, and certain other partnerships that are controlled by the Managing
General Partner, pursuant to a management agreement between the Partnership and
the Managing General Partner. The total amount received by the Managing General
Partner in respect of services rendered pursuant to such management agreement
was approximately $33,000 in 1998, and approximately $58,000 in 1997.
Promptly following the Windsor Acquisition, the General Partners began
to develop a plan to liquidate the Partnership. As a first step in this process,
10
<PAGE>
the General Partners ordered Appraisals for the two Properties which were wholly
owned by the Partnership and for the six communities in which the Partnership
holds a partial Ownership Interest. The General Partners received the Appraisals
in December 1997, which reported on the Appraised Values of the Properties as of
December 1997.
After reviewing the Appraisals, the General Partners established the
basic outline for a plan of liquidation for the Partnership. This plan had two
basic aspects. The first part involved efforts to sell the Sunrise Village
Property and Harmony Ranch Property (in which the Partnership owns a 75%
Ownership Interest) to third parties. In this regard, the General Partners
attempted to market the Sunrise Village and the Harmony Ranch Property for sale
to third parties. The General Partners entered into a purchase and sale
agreement relating to the Sunrise Village Property and closed on the sale of the
Sunrise Village Property in May, 1998. In July, 1998, the Partnership entered
into a letter of intent providing for the sale of the Harmony Ranch Property to
a third party for $2,350,000, of which $1,762,500 would be attributable to the
Partnership's 75% Ownership Interest. Subsequently, a portion of the Harmony
Ranch Property became flooded as a result of a period of unusually high rainfall
in central Florida. Although most of the damage to the Harmony Ranch Property
was covered by insurance, as a result of the flooding problems, the purchaser
failed to close on the sale. The General Partners subsequently remarketed the
Harmony Ranch Property without success, as all subsequent offers were
substantially below the original contract price.
The second part of the plan involved the sale of the remaining
Ownership Interests, and any other assets not sold to third parties, to N'
Tandem, which already owned separate partial interests in two of the Properties.
The General Partners decided not to attempt to market the remaining
Partnership's Ownership Interests for sales to parties other than N' Tandem
based, in part, on their belief that very limited demand for these Ownership
Interests exists and that any prospective buyers for these interests would not
be willing to pay the Partnership the full value of the Ownership Interest,
based on the value of the underlying Properties, due to several factors,
including that control over the underlying Properties is vested in the Managing
General Partner.
The General Partners also believed that N' Tandem would not view these
control issues in the same negative light as a prospective buyer who is
unfamiliar with the Properties and the Managing General Partner, and that N'
Tandem would be willing to purchase the Ownership Interests without a minority
interest discount. However, the General Partners could not engage in serious
discussions or negotiations with N' Tandem until N' Tandem adopted certain
changes to its organizational documents which permitted N' Tandem to purchase
additional properties. After N' Tandem adopted these changes in the third
quarter of 1998, the General Partners and representatives of N' Tandem
negotiated the Purchase Prices and the other terms of the Sales. Representatives
of N' Tandem agreed to pay the full Appraised Value for the Partnership's
remaining wholly owned Property and an amount for each Ownership Interest equal
to the full value of the Ownership Interest based on the Appraised Values.
Information Concerning the Purchaser
N' Tandem is an unincorporated California business trust with principal
executive offices at 6430 S. Quebec Street, Englewood, CO 80111. The principal
business of N' Tandem is the acquisition, ownership and operation of
manufactured home communities. Chateau owns all of the capital stock of the
Managing General Partner and holds a 9.8% equity ownership interest in N'
Tandem. Chateau's principal executive offices are at 6430 S. Quebec Street,
Englewood, CO 80111. Chateau is the largest publicly-held REIT principally
engaged in the acquisition, ownership and operation of manufactured home
communities, and is the largest owner/operator of manufactured home communities
in the United States. Chateau also owns the Managing General Partner which is
also the advisor to N' Tandem. Information concerning the Trustees of N' Tandem
and the executive officers and directors of Chateau is included in Appendix A
which is incorporated herein by reference.
11
The Purchase and Sale Agreement
General. The Purchase and Sale Agreement does not contain any seller
representations and warranties. As a result, following the closing, N' Tandem
will have no recourse against the Partnership in connection with the condition
of, or other matters affecting, the Properties.
Purchase Prices. The following table sets forth a list of the
Partnership's wholly owned Property and the Ownership Interests and their
respective values (based on the Appraised Values), the debt attributable to the
Ownership Interests held by the Partnership, and the value of the Property or
Ownership Interest after deducting attributable debt:
<TABLE>
<CAPTION>
Name of Property Ownership % Date Acquired Value of Property or Debt Attributable Net Value of
Ownership Interest to Property or Property or
Before Indebtedness Ownership Ownership
Based on Appraised Value Interest Interest
<S> <C> <C> <C> <C> <C> <C>
Sunset Vista 100% April 1987 $ 3,800,000 0 $ 3,800,000
Magna, UT
Big Country Estates 60% December 1986 $ 1,620,000 0 $ 1,620,000
Cheyenne, WY
Harmony Ranch 75% December 1986 $ 1,762,500 $ 900,000 $ 862,500
Thonotosassa, FL
Rancho Margate 33% September 1995 $ 2,112,000 $ 1,202,000 $ 910,000
Margate, FL
Winter Haven 33% October 1995 $ 1,221,000 $ 528,330 $ 692,670
Winter Haven, FL
Apache East 25% February 1997 $ 495,000 $ 276,123 $ 218,877
Phoenix, AZ
Denali Park 25% February 1997 $ 861,250 $ 480,378 $ 380,872
Phoenix, AZ ------------ ---------- ----------
Total $ 11,871,750 $ 3,386,831 $ 8,484,919
</TABLE>
N' Tandem has agreed to pay cash for the Property and Ownership
Interests. The total cost to N' Tandem of consummating the Sales is expected to
be $____. Substantially all of the funds required by N' Tandem to complete the
acquisition of the Properties will be supplied by Chateau, in exchange for the
issuance by N' Tandem of an unsecured promissory note (the "Promissory Note").
The Promissory Note will be in a principal amount of $9,000,000, will bear
interest at an annual rate equal to 1% per annum above the prime rate
established by First Chicago NBD Corporation and will be payable in full on
February __, 2000. It is anticipated that N' Tandem and Chateau may agree at
some time in the future to cause all or a portion of the principal amount of the
Promissory Note to be converted into common or preferred shares of beneficial
interest of N' Tandem. However, there is no agreement or understanding between
N' Tandem and Chateau relating to any such conversion.
Sales Expenses. The Partnership will pay certain closing costs
customarily paid by sellers in the respective jurisdictions in which the
Properties are located, including the seller's portion of title insurance and
escrow fees. The aggregate amount of such costs is expected to be approximately
$142,000. There are no brokerage fees payable by the Partnership in connection
with the Sales.
12
Solicitation Expenses
The Partnership will bear the costs incurred in connection with this
Consent Solicitation. The aggregate amount of such costs is expected to be
approximately $125,000, which the Partnership expects to pay out of the proceeds
from the Sales.
Estimate of Liquidating Distributions Payable to Limited Partners
The following table sets forth the basis of the General Partners'
estimate of the liquidating distributions payable to Limited Partners. The table
assumes the Sales occurred as of September 30, 1998. The actual liquidating
distributions will vary from the amount shown below depending upon the operating
results of the Properties, the level of distributions, if any, to partners,
capital expenditures for the Properties for the period October 1, 1998 through
the closing date, and the amount of closing adjustments.
<TABLE>
<CAPTION>
Aggregate Purchase Price for Properties and Ownership Interests $ 11,871,750.00
Less: Outstanding mortgage indebtedness(1) $ (3,386,831.00)
<S> <C> <C>
Current liabilities
Estimated Transactional expenses payable by the Partnership(2)
Filing Fees $ ______________
=========== = ==============
Legal Fees $ ______________
========== = ==============
Accounting Fees $ ______________
=============== = ==============
Closing Costs
=============
(other than legal) $ ______________
================== = ==============
Appraisals $ ______________
========== = ==============
Solicitation Expenses $ 125,000.00
===================== = ==========
Printing Costs $ ______________
============== = ==============
Total Estimated Transactional Expenses Payable by the Partnership ($ 267,000.00)
================================================================= == ===========
Plus: Cash, cash equivalents and other current assets $ 500,000.00
Cash available for distribution $ 8,717,919.00
Allocable to Limited Partners(3) $ 8,630,740.00
Allocable to the General Partners $ 87,179.00
Estimated Cash available for distribution per Unit(3) $ 44.18
</TABLE>
_________
(1) Based on amounts outstanding, including accrued interest, as of September
30, 1998, on debt attributable to the Ownership Interests.
(2) See "-- The Purchase and Sale Agreement -- Expenses" and "--Solicitation
Expenses." (3) Based on 195,366 Units outstanding as of the Record Date.
Since the organization of the Partnership, total distributions to
Limited Partners have amounted to approximately $14,366,800.00 (or an average of
approximately $73.54 per Unit). If the Sales are completed and the liquidating
distributions estimated above are paid to Limited Partners, total distributions
to Limited Partners will amount to approximately $22,997,627.00 (or an average
of approximately $117.72 per Unit), compared to an initial purchase price for
each Unit of $100.00.
As the Partnership is not making any representations and warranties
under the Purchase and Sale Agreement, the General Partners do not intend to
reserve any funds out of the cash available for liquidating distributions to
fund contingent liabilities arising out of potential claims or litigation which
might arise after the Sales are consummated, and the full amount of the net
proceeds from the Sales will be distributed to the Partners as soon as
practicable following the closing.
13
<PAGE>
Ownership of Properties by N' Tandem Following Sales
Following the consummation of the Sales, N' Tandem will be entitled to
all of the benefits of ownership of the Properties, including future cash flows,
earnings and increases in the values of the Properties, if any.
SPECIAL FACTORS
Fairness of the Transaction; Recommendation of the General Partners
The General Partners believe that the Sales and the Plan of Liquidation
are (i) consistent with the Original Objectives of the Partnership, and (ii)
contemplated by the terms of the Partnership Agreement. In addition, the General
Partners believe that the terms of the Sales are fair to, and in the best
interests of, the Limited Partners and have approved the Sales and the Plan of
Liquidation and recommend their approval by the Limited Partners. In reaching
this determination the General Partners considered among other things, the
following factors:
o In each instance, N' Tandem is paying the full Appraised Value for the
Properties, without a discount for the fact that the Partnership owns
only a minority Ownership Interest in the majority of the Properties;
o The Purchase Price being offered in respect of the Harmony Ranch
Ownership Interest, which is one of the Ownership Interests that the
General Partners attempted to market for sale to third parties, is also
equal to the purchase price offered in July 1998 for such Ownership
Interest by a third party.
o N' Tandem is willing to buy all of the Partnership's Properties at
their full Appraised Value, something the General Partners believe most
third parties would be unwilling to do;
o The aggregate purchase price being paid by N' Tandem exceeds the Net
Book Value of the Partnership's assets by $3,231,519;
o Due to N' Tandem's Advisor's familiarity with the Properties, it is
willing to purchase the Properties "as-is," and without representations
and warranties from the Partnership;
o Because N' Tandem is buying the Properties in a single transaction, and
is buying such Properties without representations and warranties from
the Partnership, the General Partners will be able to wind up the
Partnership, and make full liquidating distributions (without any
holdback for future contingencies) promptly upon the approval of the
Sales and the Plan of Liquidation by the Limited Partners;
o The Sales do not involve any brokerage commissions payable by the
Partnership; and
o The other expenses likely to be incurred by the Partnership in
connection with the Sales are expected to be substantially lower than
if the Properties were sold to a third party.
The General Partners also believe that the Sales are procedurally fair
to the Limited Partners, based in part on the following factors:
14
<PAGE>
o The Properties have been independently appraised by MAI certified
appraisers, and the fact that N' Tandem is paying the full value of the
Properties based on the Appraised Values;
o The Sales are subject to the approval of Limited Partners holding
not less than a majority of the issued and outstanding Units; and
o The Sales have been structured to provide the Partnership and Limited
Partners with benefits that are not likely to be available in a sale to
a different party.
In reaching their determination that the Sales are fair to, and in the
best interests of, the Limited Partners, the General Partners also considered
potentially negative aspects of the Sales, including the various factors and
information set forth under "Risk Factors" and elsewhere in this Consent
Solicitation Statement, including the following:
o The Partnership has engaged in limited marketing efforts with respect
to the Properties and the Partnership does not intend to take
significant actions to market or sell the Properties pending the
results of this Consent Solicitation;
o The Managing General Partner of the Partnership is the Advisor to N'
Tandem pursuant to the Advisory Agreement. Under the Advisory
Agreement, the Managing General Partner is entitled to (i) annual
advisory fees based on the value of N' Tandem's assets, (ii) brokerage
commissions in connection with acquisitions of properties, and (iii) a
subordinated incentive fee payable on a liquidation of N' Tandem based
on N' Tandem's performance. In connection with the Sales the Managing
General Partner will receive a brokerage commission from N' Tandem
equal to 3% of the Purchase Price for each Property or Ownership
Interest, or $356,153. Chateau, which is the sole stockholder of the
Managing General Partner, owns approximately 9.8% of the outstanding
capital stock of N' Tandem;
o It is possible that the future performance of the Properties will
improve or that prospective buyers may be willing to pay more for the
Properties in the future. It is possible that Limited Partners might
earn a higher return on their investment if the Partnership retained
ownership of the Properties. By approving the Sales, Limited Partners
will also be foregoing certain current benefits of ownership of the
Properties, such as continuing distributions;
o The General Partners have not in connection with the Sales sought to
obtain an opinion relating to the fairness, to the Limited Partners, of
the Sales and have not retained an independent representative to
represent the unaffiliated Limited Partners in connection with the
Sales;
o The Sales will have a tax impact on Limited Partners, producing a net
taxable gain of approximately $_____ per Unit.
The foregoing discussion of the positive, negative and other
information and factors considered by the General Partners is not intended to be
exhaustive. The General Partners did not assign relative weights to the above
factors or determine that any factor was of particular importance. A
determination of various weightings would, in the view of the General Partners,
be impractical. Rather the General Partners viewed their position and
recommendations as being based on the totality of the information presented to,
and considered by, them.
15
<PAGE>
Alternatives Considered
Under the Partnership Agreement, the term of the Partnership is through
December 31, 1997. Pursuant to the Partnership Agreement, the General Partners
required to proceed with a winding up and liquidation of the Partnership, and to
take such actions as are required to cause the partners of the Partnership to
receive liquidating distributions. Accordingly, the General Partners are not in
a position to, and did not consider, any alternatives other than to proceed with
selling the Properties.
While the General Partners did consider the possibility of selling the
Properties to parties other than N' Tandem, the General Partners ultimately
concluded that such alternative transactions would not be likely to result in
the distribution of greater proceeds to the Limited Partners.
THE PARTNERSHIP'S PROPERTIES
Nature of Ownership Interests in Properties
Properties Owned by Limited Partnerships in which the Partnership is a
Limited Partner. Each of the Rancho Margate, Winter Haven, Apache East and
Denali Park Estates Properties is owned by a limited partnership (the "Limited
Partnerships") and each of the Ownership Interests of the Partnership in such
Properties is in the form of a limited partner interest in such Limited
Partnerships. Under the agreements of limited partnership of the Limited
Partnerships, virtually all management, business and other decisions relating to
the properties owned by such Limited Partnerships are within the control and
discretion of the Managing General Partner, and the limited partners have no
control over the management of, and decisions with respect to the properties
owned by such Limited Partnership, including, without limitation, any
disposition of any such property.
Although the limited partners in each Limited Partnership (including
the Partnership) can legally sell their limited partner interests in any Limited
Partnership, the transferee of any such limited partner interest will be
entitled to the full benefits relating to the limited partner interest only if
the Managing General Partner, as general partner of such limited Partnership, in
its sole discretion, determines to admit such transferee as a limited partner of
such Limited Partnership. If the Managing General Partner fails to do so, the
transferee generally will be entitled only to the economic benefits relating to
the limited partner interest, but would not be entitled to certain other rights
(such as voting rights) conferred upon such limited partners under the
partnership agreement of such Limited Partnership and by law.
The Rancho Margate and Winter Haven Properties are owned by Windsor
Park 456 ("Windsor Park 456"), a California limited partnership. The Partnership
is a 33% limited partner in Windsor Park 456. The Managing General Partner, in
addition to being the sole general partner of the Windsor Park 456 is also the
sole general partner of Windsor Park Properties 5, a California limited
partnership ("Windsor 5"), and Windsor Park Properties 6, a California limited
partnership ("Windsor 6"), which partnerships own the remaining 67% limited
partner interests in Windsor Park 456.
16
<PAGE>
The Apache East and Denali Park Estates Properties are owned by Windsor
Park 345 ("Windsor Park 345"), a California limited partnership. The Partnership
is a 25% limited partner in Windsor Park 345. The Managing General Partner is
the sole general partner of Windsor Park 345, and of Windsor Park Properties 3,
a California limited partnership ("Windsor 3"), Windsor 5, Windsor 6 and Windsor
Park Properties 7, a California limited partnership ("Windsor 7"), and is the
Advisor to N' Tandem, which together own the remainder of the limited partner
interests in Windsor Park 345. N' Tandem has an 11% limited partner interest in
Windsor Park 345.
Properties Owned Pursuant to Joint Venture Agreements. The Partnership
owns (i) a 60% undivided interest in Big Country Estates as a tenant in common
with Windsor 3, which owns a 40% undivided interest in the Property; (ii) a 75%
undivided interest in Harmony Ranch, as a tenant in common with Windsor 3, which
owns the remaining 25%. Each of the Partnership's Ownership Interests in the Big
Country Estates and Harmony Ranch Properties are subject to joint venture
agreements relating to such Properties between the Partnership and Windsor 3.
Pursuant to the Purchase and Sale Agreement, the Partnership will assign its
rights under the respective joint venture agreements to N' Tandem at the
closing.
Difficulty of Selling Ownership Interests to Third Party Buyers. Given
the limited rights and control that holders of Ownership Interests have with
respect to the Properties owned by the Limited Partnerships, or pursuant to
joint venture agreements, the General Partners believe that finding third party
buyers willing to pay full value for the Ownership Interests based on the
Appraised Values would be extremely difficult, and believes that efforts to sell
such Ownership Interests to third parties are likely to result in purchase
prices below the Purchase Prices, and substantially higher selling expenses and
would result in substantially lower liquidating distributions to the Limited
Partners.
Appraisals
Each of the appraisers (the "Appraisers") is MAI certified and was
selected based upon such Appraiser's expertise and/or experience within the
geographic area that each Property was located, as well as such Appraiser's
familiarity with valuing real estate underlying manufactured home communities.
Each of the Appraisals set forth the Appraised Values of the Properties as of
December 1997, except for Harmony Ranch Property which was reappraised as in
December 1998, in light of the flooding problems that occurred at such Property.
A brief description of the Appraisals, including the appraised values
of the Properties ("Appraised Values") is set forth below. The Appraisals are
based on conditions as of their respective dates. Subsequent developments could
have a material effect on the valuations stated therein.
Summary of Methodology of Appraisals
The Appraisers typically considered two approaches to value: (i) the
income capitalization approach, and (ii) the sales comparison approach. The
income capitalization approach involves an economic analysis of the property
based on its potential to provide future net annual income. The sales comparison
approach involves a comparative analysis of the subject property with other
similar properties that have sold recently or that are currently offered for
sale in the market. The final Appraised Value for each Property was based upon
an appropriate weighted average of the values resulting from these two
approaches, as determined by the Appraiser of such Property.
17
<PAGE>
Valuation Methodology -- Income Capitalization Approach. The income
capitalization approach to value is an approach through which an appraiser
derives a value indication for income-producing property by converting
anticipated benefits, i.e., cash flows and reversion, into property value. The
present value of future benefits or cash flows from a rental income of a
property can be measured. This income stream and anticipated resale value of a
property or reversion, are then capitalized into a present, lump sum value. Two
basic formulas are used in this approach - income divided by rate equals value,
or income times a factor equals value.
For each of the Properties, income stream is in the form of net
operating income produced through the collection of rents, deducting the
appropriate vacancy and credit loss, adding other income if any, then deducting
expenses. The net operating income is then capitalized by an overall rate
obtained from the market, indicating a value.
The income capitalization approach valuations for each Property have
been based in part upon information supplied to the Appraisers by the
Partnership, including but not limited to: rent rolls, building reports; lease
information; financial schedules of current lease rates, income, expenses, cash
flow and related financial information; property descriptive information; prior
appraisals; and, where appropriate, proposed sales terms, sales agreements and
supporting documentation. The Appraisers relied upon such information and
assumed that the information provided by the Partnership was accurate and
complete and generally did not attempt to independently verify such information.
The Appraisers also interviewed and relied upon the Partnership's
management personnel to obtain information relating to the condition of each
Property, including any deferred maintenance, capital budgets, environmental
conditions, status of on-going or newly planned Property additions,
reconfiguration, improvements, and other factors affecting the physical
condition of the Property improvements. The Appraisers also interviewed the
Partnership's management personnel regarding competitive conditions in property
markets, trends affecting the Properties, certain lease and financing factors,
and historical and anticipated lease revenues and expenses and reviewed
historical operating statements for the Properties.
Based on the lease and market rent analysis, rental revenue projections
were developed for each Property based on the terms of existing leases and on an
analysis of market rents and historical rents achieved at each of the
Properties. Expenses were analyzed based upon a review of actual expenses for
1996 and 1997. The Appraisers also reviewed 1998 budgeted expenses for the
Properties and published data on expenses for comparable properties.
In its income approach analysis, the Appraisers utilized a discounted
cash flow analysis. The discount rate employed was based on current acquisition
criteria and target rates of return among real property investors.
Valuation Methodology -- Sales Comparison Approach. The Appraisers also
estimated the value of each Property based on the sales comparison approach. In
the sales comparison approach, market value is estimated by comparing the
subject property to similar properties that have been sold recently or for which
offers to purchase have been made. A major premise of the sales comparison
approach is that the market value of a property is directly related to the
prices of comparable, competitive properties.
There are five basic steps in the sales comparison approach: (i)
research the market to locate sales of properties similar to the subject
property; (ii) confirm and verify the sales price, terms of sale, physical
characteristics, income characteristics and that the sale represents an
18
<PAGE>
arms-length transaction; (iii) identify relevant elements of comparison and
analyze each sale for each unit; (iv) compare the subject property to the
comparable sales and adjust each for relevant differences to establish
comparability; and (v) reconcile the various indications of value into a market
value estimate for the subject property.
In conducting the Property valuations, the Appraisers also performed
site inspections of the Properties. In the course of each Property site visit,
information on the local market was gathered. Information gathered during the
site inspection was supplemented by a review of published information concerning
economic, demographic and real estate trends in the subject property's market.
Assumptions, Limitations and Qualifications of Appraisals. The
Appraisers utilized certain assumptions to determine the appraised value
of the Properties.
Events occurring after appraisal dates, and before the closing of the
Sales could affect the Properties or assumptions used in preparing the
Appraisals. The Appraisers have no obligation to update the Appraisals on the
basis of subsequent events. In connection with preparing the Appraisals, the
Appraisers were not engaged to, and consequently did not, prepare any written
report or compendium of their analysis for internal or external use.
Each of the Appraisers received customary and market-based fees in
connection with the rendering of the Appraisals. The General Partners of the
Partnership also utilized (i) Whitcomb Real Estate in connection with the
original purchase by the Partnership of the Sunrise Village Property and the
Partnership's Ownership Interest in Harmony Ranch, and the original purchase by
Windsor Park 456 (as hereinafter defined) of the Rancho Margate and Winter Haven
Properties; (ii) Landmark Valuation, Inc. in connection with the original
purchase by the Partnership of the Big Country Estates Ownership Interest and
the remaining Property; and (iii) Appraisal Technology, Inc. in connection with
the original purchase by Windsor Park 345 (as hereinafter defined) of the Apache
East and Denali Park Estates Properties. All Appraisers were paid usual and
customary market based fees in connection with such original appraisals and
neither the General Partners of the Partnership or the Partnership have utilized
the Appraisers in any other capacity or has any relationship with any such
Appraiser.
Copies of the Appraisals (with or without Exhibits) are available for
inspection and copying at the Partnership's principal executive offices during
regular business hours by any interested Limited Partner, or any representative
of a Limited Partner who has been designated in writing. Copies may also be
obtained through the written request of any Limited Partner or representative,
at the requestor's expense.
Description of Properties, Appraised Values and Ownership Interests
Sunset Vista Estates. Sunset Vista Estates is a 208-space manufactured
home community that can accommodate 142 single-wide and 66 double-wide
manufactured homes. Amenities include an office, two playgrounds, pavilion/BBQ
area, RV storage, tennis/basketball court, and swimming pool. The Appraisal was
prepared as of December 15, 1997 by Landmark Valuation, Inc., Aurora, CO. The
"as-is" Appraised Value of the Property is $3,800,000. The Partnership has a
100% ownership interest in this Property.
Big Country Estates. Big Country Estates is a 255-space manufactured
home community located at 3400 South Greeley Highway, Cheyenne, Wyoming.
Amenities include a clubhouse, office and playground. The Appraisal was prepared
as of November 24, 1997 by Landmark Valuation, Inc., Aurora, CO. The "as-is"
Appraised Value of the Property is $2,700,000. The Partnership has a 60%
ownership interest in this Property. There is no mortgage on this Property.
Harmony Ranch. Harmony Ranch is a fully developed 194-space
manufactured home community with a clubhouse and office, laundry and
19
<PAGE>
playground/recreation area located at 10321 Main Street, Thonotosassa, FL. The
Appraisal was prepared as of November 17, 1997 by Whitcomb Real Estate, Tampa,
FL. The initial "as-is" Appraisal Value of the Property was $2,560,000. The
Property experienced substantial flooding in 1998, and was re-appraised by
Whitcomb Real Estate in December 1998 for $2,350,000. There is an outstanding
mortgage on this Property securing $1,200,000 of indebtedness which is expected
to continue following any Sale. The Partnership has a 75% ownership interest in
this Property.
Rancho Margate. Rancho Margate is a fully developed 245-space
manufactured home community, with a clubhouse, pool, laundry, shuffleboard and
petangue courts and on-site office. The Appraisal was prepared as of November
20, 1997 by Whitcomb Real Estate, Tampa, FL. The "as-is" Appraised Value of the
Property is $6,400,000. There is a mortgage on this Property securing
indebtedness of $3,642,000 which will continue following the closing of the
Sales. The Partnership has a 33% ownership interest in this Property.
Winter Haven. Winter Haven is a fully developed 238-space manufactured
home community, with a clubhouse, pool, laundry, shuffleboard courts and an
on-site office. The Appraisal was prepared as of November 17, 1997 by Whitcomb
Real Estate, Tampa, FL. The "as-is" Appraised Value of the Property is
$3,700,000. There is a mortgage on this Property securing indebtedness of
$1,601,000 which will continue following the closing of the Sales. The
Partnership has a 33% ownership interest in this Property.
Apache East. Apache East Estate is a 123-space adult manufactured home
community located at 3800 South Tomahawk Road, Apache Junction, Arizona. The
Appraisal was prepared as of November 10, 1997 by Appraisal Technology, Inc.,
Phoenix, AZ. The "as-is" appraised value of this Property is $1,980,000. This
Property is adjacent to Denali Park Estates and there is a single mortgage
covering both properties relating to outstanding indebtedness in the amount of
$3,026,000 which will continue following the Sales. For purposes of calculating
the value of the Apache East and Denali Park Estates Ownership Interests only,
the Partnership has assumed that 36.5% of such indebtedness or $1,104,490 is
allocable to the Apache East Property and that 63.5% of such indebtedness or
$1,921,510 is allocable to the Denali Park Estates Property. This mortgage and
the related indebtedness are to continue following the Sales. The Partnership
has a 25% ownership interest in this Property.
Denali Park Estates. Denali Park Estates is a 162-space adult
manufactured home community located at 3405 South Tomahawk Road, Apache
Junction, AZ. The Appraisal was prepared as of November 10, 1997 by Appraisal
Technology, Inc., Phoenix, AZ. The "as-is" appraised value of this Property is
$3,445,000. This Property is adjacent to Apache East and there is a single
mortgage covering both properties relating to outstanding indebtedness in the
amount of $3,026,000 which will continue following the Sales. For purposes of
calculating the value of the Apache East and Denali Park Estates Ownership
Interests only, the Partnership has assumed that 36.5% of such indebtedness or
$1,104,490 is allocable to the Apache East Property and that 63.5% of such
indebtedness or $1,921,510 is allocable to the Denali Park Estates Property.
This mortgage and the related indebtedness are to continue following the Sales.
The Partnership has a 25% ownership interest in this Property.
20
<PAGE>
FEDERAL INCOME TAX CONSIDERATIONS
The following is a brief summary of certain United States federal
income tax consequences to Limited Partners arising from the Sales and
liquidation of the Partnership. This summary is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), as currently in effect, applicable
Treasury Regulations adopted thereunder, reported judicial decisions and
Internal Revenue Service ("IRS") rulings all as of the date hereof, all of which
are subject to prospective or retroactive change in a manner which could
adversely affect Limited Partners.
This summary is based on the assumption that Units in the Partnership
are held as capital assets and does not purport to deal with Limited Partners in
special tax situations such as insurance companies, financial institutions,
tax-exempt entities, nonresident aliens and foreign corporations. Moreover, this
summary does not address the possible consequences to Limited Partners under any
state, local or foreign tax laws of the states and localities where they reside
or otherwise do business or where the Partnership operates. AS SUCH, EACH
LIMITED PARTNER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR CONCERNING THE
CONSEQUENCES TO HIM OR HER OF THE SALE OF THE PROPERTIES AND OWNERSHIP INTERESTS
AND LIQUIDATION OF THE PARTNERSHIP.
Overview
The Sales should result in the recognition of gain by the Partnership
and, therefore, should result in recognition of gain by Limited Partners. The
amount of gain recognized by the Partnership with respect to each of the
Properties and Ownership Interests will equal the difference between (i) the
amount realized by the Partnership (i.e., the amount of cash received plus the
amount of liabilities of the Partnership assumed by the Purchasers) and (ii) the
Partnership's adjusted tax basis in each of the Properties and Ownership
Interests. The aggregate gain expected to be recognized by the Partnership on
the Sales is approximately $2,965,573. This gain will be allocated among the
partners of the Partnership in accordance with the terms of the Partnership
Agreement. These provisions will result in the allocation of approximately
$2,935,917 of taxable gain on the Sales to Limited Partners (or an average of
$15.03 per Unit). Upon liquidation of the Partnership, a Limited Partner will
recognize gain or loss equal to the difference between the cash received by such
Limited Partner and the adjusted tax basis of such Limited Partner's Units. It
is expected that a Limited Partner will recognize an average of approximately
$10.80 of loss per Unit on liquidation. The gain per Unit resulting from the
Sales is primarily caused by the fact that the Partnership generated tax losses
in prior years that were allocated to Limited Partners. Limited Partners should
be aware that all of the per-Unit amounts stated above may vary for each Limited
Partner depending on the historical losses allocated and cash distributions to
such Limited Partner.
Taxation on the Sales
Tax Consequences of the Sales. The Sales should result in the
recognition of gain by the Partnership and, therefore, should result in
recognition of gain by Limited Partners. The amount of gain recognized by the
Partnership with respect to each of the Properties and Ownership Interests will
equal the difference between (i) the Partnership's amount realized (i.e., the
amount of cash received increased by the amount of liabilities of the
Partnership assumed or taken subject to by the Purchaser) and (ii) the
Partnership's adjusted tax basis in each of the Properties and Ownership
Interests. The aggregate gain expected to be recognized by the Partnership on
the Sales is approximately $2,965,573.
Allocation of Gain. The $2,965,573 gain recognized by the Partnership
in the year of Sales will be allocated among the partners in accordance with the
terms of the Partnership Agreement. These provisions will result in an
allocation of approximately $2,935,917 of taxable gain on the Sales to Limited
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Partners (or an average of $15.03 per Unit). The gain per Unit resulting from
the Sales is primarily caused by the fact that the Partnership generated tax
losses in prior years that were allocated to Limited Partners. See "-- Income
Tax Rates/Taxation of Gains and Losses," below.
Characterization of Gain or Loss. In general, gains (other than the
amount of gain attributable to certain depreciation recapture, which would be
classified as ordinary income, and gain attributable to Ownership Interests that
are partnership interests) recognized with respect to the Sales should be
treated as recognized from the sale of a "Section 1231" asset (i.e., real
property and depreciable assets used in a trade or business and held for more
than one year). A Limited Partner's share of gains from the sale of Section 1231
assets of a Partnership will be combined with any other Section 1231 gains and
losses recognized by such Limited Partner in that year. If the result is a net
loss, such loss is characterized as an ordinary loss. If the result is a net
gain, such gain is characterized as a capital gain; provided, however, that such
gain will be treated as ordinary income to the extent the Limited Partner has
"non-recaptured" Section 1231 losses. For these purposes, "non-recaptured"
Section 1231 losses means a Limited Partner's aggregate Section 1231 losses for
the five most recent prior years that have not previously been recaptured.
In general, gain or loss recognized with respect to the Sale of
Ownership Interests that are partnership interests will be gain or loss from the
sale or exchange of a capital asset. However, any amount received in exchange
for a partnership interest attributable to a partnership's "unrealized
receivables" (including certain depreciation recapture) or "inventory items"
will be considered to be gain or loss from the sale or exchange of property
other than a capital asset.
For purposes of the passive activity loss limitations of Section 469 of
the Code, gains recognized from the Sales generally will be treated as passive
activity income.
Liquidation of the Partnership
Tax Consequences of Liquidation. Upon liquidation of the Partnership, a
Limited Partner will recognize gain or loss equal to the difference between the
cash received by such Limited Partner (including the Limited Partner's share of
partnership liabilities under Section 752 of the Code assumed by the Purchaser)
and the adjusted tax basis of the Limited Partner's Units, adjusted by such
Limited Partner's allocable share of income, gain or loss arising from normal
Partnership operations for the year of liquidation and the sale of the
Properties in the year of liquidation. See "-- Taxation on Sales -- Allocation
of Gain" above. It is expected that a Limited Partner will recognize an average
of approximately $10.80 of loss per Unit on liquidation of the Partnership.
Characterization of Gain or Loss. Any gain or loss recognized by a
Limited Partner on liquidation of the Partnership should be treated as gain or
loss from the sale of a capital asset if the Units are held as a capital asset
by the Limited Partner. Such gain or loss generally will be treated as passive
gain or loss pursuant to Section 469 of the Code.
Income Tax Rates/Taxation of Gains and Losses
The Taxpayer Relief Act of 1997 and the IRS Restructuring and Reform
Act of 1998 contain significant changes to the taxation of capital gains of
individuals, trusts and estates. The maximum rate of tax on net capital gains of
individuals, trusts and estates from the sale or exchange of capital assets held
for more than one year has been reduced to 20%, and the maximum rate for net
capital gains attributable to the sale of depreciable real property held for
more than one year (other than certain depreciation recapture taxable as
ordinary income) is 25% to the extent of the deductions for depreciation with
respect to such property. The current maximum tax rate on ordinary income of
individuals is 39.6%. This disparity in tax rates could be beneficial to
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individual Limited Partners with suspended losses attributable to the
Partnership. Since a Limited Partner will be considered to have disposed of his
or her entire interest in the Partnership, such Limited Partner will be entitled
to deduct all suspended passive losses from the Partnership against any ordinary
income earned by such Limited Partner in the year of liquidation of the
Partnership or use such suspended losses to offset any gain allocable to such
Limited Partner on the Sales. Capital gains of individuals and corporate
taxpayers can be offset by capital losses. However, capital losses can be
deducted, in any year, only to the extent of a Limited Partner's capital gains
plus, in the case of an individual, taxable income of up to $3,000.
CONSENT PROCEDURES; TRANSACTIONS AUTHORIZED BY CONSENTS
The consents being solicited hereby (the "Consents") will authorize
the General Partners: (i) to complete the Sales at any time on or prior to
September 30, 1999, and to proceed with the Plan of Liquidation; and (ii) to
take all actions necessary or appropriate, as determined by the General
Partners, to complete the Sales and to proceed with the Plan of Liquidation,
including, without limitation, agreeing to any changes to the Purchase and Sale
Agreement or waiving any provision of the Purchase and Sale Agreement, provided
that any such change does not, in the reasonable judgment of the General
Partners, have a material adverse effect on Limited Partners, or is otherwise in
the best interests of the Limited Partners.
Consents are being solicited from the Limited Partners as required by
the Partnership Agreement which provides that such transactions must be approved
by Limited Partners owning a majority of the issued and outstanding Units.
The Consents being sought are for approval of the Sales and the Plan of
Liquidation and not for the approval of any individual Sale. If sufficient
Consents approving the Sales and the Plan of Liquidation are received, the
Partnership intends to consummate the Sales and proceed with the Plan of
Liquidation. If sufficient Consents are not received, the Partnership intends to
explore such alternatives as may be available to it.
Set forth below are the procedures to be followed by Limited Partners
in order to consent to, abstain from, or deny consent to, the Sales and the Plan
of Liquidation. A form of Consent was mailed to Limited Partners along with this
Consent Solicitation Statement. These procedures must be strictly followed in
order for the instructions of a Limited Partners as marked on such Consent to be
effective:
1. A Limited Partner may make his or her election on the Consent only
during the solicitation period commencing upon the date of
delivery of this Consent Solicitation Statement and continuing
until the earlier of (i) March __, 1999 or such later date as
may be determined by the General Partners, and (ii) the date upon
which the General Partners determine that holders of not less than
a majority of all issued and outstanding Units have consented to
the Sale, (the "Solicitation Period").
2. Each Limited Partner must consent to, deny consent to, or abstain
from consenting to the Sales and the Plan of Liquidation with
respect to all Units held by such Limited Partner. The effect of
abstaining or failing to sign and return the consent form will be
the same as denying consent.
3. All questions as to the validity, form, eligibility (including
time of receipt), acceptance and withdrawal of the Consent will be
determined by the General Partners, whose determination will be
final and binding. The General Partners reserve the absolute right
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to reject any or all Consents that are not in proper form or the
acceptance of which, in the opinion of the General Partners, would
be unlawful. The General Partners also reserve the right to waive
any irregularities or conditions of the Consent as to particular
Units. Unless waived, any irregularities in connection with the
Consents must be cured within such time as the General Partners
shall determine.
4. A Consent delivered by a Limited Partner may be changed prior to
the expiration of the Solicitation Period by delivering to the
Partnership a substitute Consent, properly completed and executed,
together with a letter indicating that the Limited Partner's prior
consent has been revoked.
5. Limited Partners are encouraged to return a properly completed and
executed Consent in the enclosed envelope prior to the expiration
of the Solicitation Period.
6. A Limited Partner submitting a signed but unmarked Consent will be
deemed to have consented to the Sales and the Plan of Liquidation.
Each Limited Partner is requested to complete, date and sign the
accompanying form of consent and return same to Arlen Capital, LLC, 1650 Hotel
Circle North, Suite 200, San Diego, CA 92108, which has been appointed to serve
as the solicitation agent for the proposed transaction (the "Solicitation
Agent"). If the consent solicitation period is extended, the General Partners
will give written notice of such extension to all Limited Partners. For more
information concerning this solicitation, Limited Partners may call the
Solicitation Agent at 800-553-4039. The costs of this consent solicitation,
including fees payable to the Solicitation Agent, will be borne by the
Partnership.
Solicitation of Consents
In addition to soliciting consents by mail, consents may be solicited
by directors, officers and employees of the General Partners and their
affiliates, who will not receive additional compensation therefor, by personal
interview, telephone, telegram, courier service, or similar means of
communication. Arlen Capital, LLC has been engaged as Solicitation Agent to
solicit consents to the Sales from Limited Partners, administer the delivery of
information to Limited Partners and receive and tally votes.
Under the solicitation agreement between the Partnership Arlen Capital,
LLC (the "Solicitation Agreement"), the Partnership has agreed to pay Arlen
Capital a base fee of $7,335 plus an additional per Unit fee for re-mails and
incoming and outgoing phone calls, plus expenses. The General Partners expect
that the total amount payable under the Solicitation Agreement will not exceed
$15,000.
Record Date; Required Vote
The close of business on January __, 1999 has been fixed as the Record
Date for determining Limited Partners entitled to Consent to the Sales and the
Plan of Liquidation. As of the Record Date, there were 195,366 Units outstanding
held of record by a total of 2,424 Limited Partners. Pursuant to the Partnership
Agreement, the Sales and the Plan of Liquidation require Consents of Limited
Partners holding at least a majority of the outstanding Units.
As of the Record Date, the General Partners and/or their affiliates
held and are entitled to exercise voting rights with respect to an aggregate of
1,000 Units, representing approximately 0.5% of the outstanding Units of the
Partnership.
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It is expected that the General Partners will consent to the Sales and
the Plan of Liquidation with respect to all Units for which they hold voting
rights. Counting such Units, approval of the unaffiliated Limited Partners
holding 96,683 Units, representing 49.5% of all other outstanding Units, is
required. Neither N'Tandem nor any affiliate of N'Tandem (other than the
Managing General Partner) owns, or has voting rights, with respect to any Units.
No Appraisal or Dissenters' Rights
If Limited Partners owning the requisite number of Units in the
Partnership consent to the Sales and the Plan of Liquidation, all Limited
Partners of the Partnership will be bound by such consent, including Limited
Partners who have not returned their consents or who have abstained from or
denied consent. None of the Partnership Agreement, California law or the
proposed terms and conditions of the Sales or the Plan of Liquidation and
provide objecting Limited Partners with the right to exercise any dissenters',
appraisal or similar rights. Under California law, the general partner of a
California limited partnership owes fiduciary duties to its limited partners. To
the extent that a general partner has engaged in a transaction in breach of its
fiduciary duties to limited partners, a damages remedy may be available to such
limited partners.
Consequences If Consents Are Not Obtained
If sufficient consents to proceed with the Sales and the Plan of
Liquidation are not obtained, the General Partners intend to proceed to explore
such alternatives as may be available to the Partnership. See "Reasons For and
Background of the Sales; Recommendation of General Partners," and "Alternatives
Considered."
FINANCIAL STATEMENTS
The financial statements and portions thereof contained in the
Partnership's Form 10-KSB for the year ended December 31, 1997, and Quarterly
Reports on Form 10-QSB identified in "Incorporation of Certain Documents By
Reference" below have been incorporated herein by reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents (or portions thereof) filed with the Commission by the
Partnership (File No. 0-15700) pursuant to the Exchange Act are incorporated
herein by reference:
(i) Item 6, "Management's Discussion and Analysis,"
contained in the Partnership's Annual Report on Form
10-KSB for the year ended December 31, 1997;
(ii) Item 7, "Financial Statements" contained in the
Partnership's Annual Report on Form 10-KSB for the
year ended December 31, 1997;
(iii) The Partnership's Current Report on Form 8-K filed
on January 27, 1998 and the related Form 8-K/A dated
February 3, 1998;
(iv) Item 2, "Management's Discussion and Analysis of
Financial Condition and Results of Operations"
contained in the Partnership's Quarterly Report on
Form 10-QSB for the quarter ended March 31, 1998 and
Quarterly Reports on Form 10-QSB/A for the quarters
ended June 30, 1998 and September 30, 1998.
(v) Item 1, "Financial Statements" contained in the
Partnership's Form 10-QSB Quarterly Reports for the
quarter ended March 31, 1998, and Quarterly Reports on
Form 10-QSB/A for the quarters ended June 30, 1998 and
September 30, 1998.
Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for the purposes of this
Consent Solicitation Statement to the extent that a statement contained herein
or in any other subsequently filed document that is incorporated by reference
herein modifies or supersedes such earlier statement. Any such statements
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Consent Solicitation Statement.
Copies of any or all of the documents specifically incorporated
herein by reference (not including the exhibits to such documents, unless such
exhibits are specifically incorporated by reference in such documents) will be
furnished without charge to each person, including any beneficial owner, to whom
a copy of this Consent Solicitation Statement is delivered upon written or oral
request. Requests should be made to: Windsor Park Properties 4 -- Investor
Relations, 6430, S. Quebec St., Englewood, Colorado 80111.
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APPENDIX A
INFORMATION CONCERNING OFFICERS AND
DIRECTORS OF THE MANAGING GENERAL PARTNER
AND OF N 'TANDEM AND CHATEAU
A. The Windsor Corporation
The Windsor Corporation is the Managing General Partner of the
Partnership. The Directors and executive officers of The Windsor Corporation are
as follows:
Gary P. McDaniel, 52, became a Director of The Windsor Corporation
in September 1997. Mr. McDaniel's biographical information is set forth
below under "C. Chateau Communities, Inc."
C. G. Kellogg, 55, became a Director of The Windsor Corporation in
September 1997. Mr. Kellogg's biographical information is set forth below
under "C. Chateau Communities, Inc."
Steven G. Waite, 44, has been President of The Windsor Corporation
since September 1997. From 1990 through accepting his position at The
Windsor Corporation, Mr. Waite was Vice President/General Manager of Communities
at Clayton Homes, Inc., a company which owns and operates manufactured home
factories, sales centers, financing and insurance units and communities (NYSE:
CMH). Mr. Waite holds a B.S. from the University of Colorado and an M.B.A. from
the University of Alabama. Each of Messrs. McDaniel, Kellogg and Waite is a
United States citizen.
B. N' Tandem Trust
As an unincorporated business trust, N' Tandem Trust is managed by its
Trustees. The Trustees of N' Tandem Trust are as follows:
Gary P. McDaniel, 53, became a Trustee of the Trust in September of
1997. Mr. McDaniel's biographical information is set forth below under "C.
Chateau Communities, Inc."
Richard B. Ray, 58, became a Trustee of the Trust in September of 1997.
Since 1995 he has been Co-Chairman of the Board and Chief Financial Officer of
21st Century Mortgage Corporation, (a lender to the manufactured home industry)
and a director of the following companies: BankFirst, Radio Systems Corporation
and Knox Housing Partnership (a not for profit developer of low income housing
in Knox County, Tennessee). Previously, he was Executive Vice President, Chief
Financial Officer, and Director of Clayton Homes Inc. (a vertically integrated
manufactured housing company) from 1982-1994 and a Director of Palm Harbor
Homes, Inc. (a national producer of manufactured homes) from 1994-1995.
Kenneth G. Pinder, 62, became a Trustee of the Trust in September of
1997. Mr. Pinder entered the manufactured housing business in 1970 managing a
manufactured housing site rental community and formed American Living Homes
Inc., a manufactured housing dealership, in 1974. He continues to be the owner
and president of this corporation. He is also sole owner of Able Mobile Housing
Inc., a temporary housing company for fire loss victims and has developed
manufactured home sites and purchased and sold numerous communities over the
past twenty years. Mr. Pinder has been a member of the Michigan Manufactured
Housing Association for over 35 years. In 1992 he was elected to the Michigan
Manufactured Housing Board of Directors, and serves on its Executive Committee.
27
Each of Messrs. McDaniel, Ray and Pinder is a United States citizen.
C. Directors and Executive Officers of Chateau Communities, Inc.
Chateau owns all of the capital stock of The Windsor Corporation, the
Managing General Partner of the Partnership, and the advisor to N' Tandem Trust.
Chateau also owns a 9.8% equity ownership interest in N' Tandem. The Directors
and executive officers of Chateau are as follows:
Gary P. McDaniel, 52, has been Chief Executive Officer and a director
of the Company since February 1997. He served as the Chairman of the Board,
President and Chief Executive Officer of ROC since 1993 and had been a principal
of ROC's predecessors since 1979. He has been active in the manufactured home
industry since 1972. He is a Trustee of N' Tandem Trust and a Director of The
Windsor Corporation. Mr. McDaniel has been active in several state and national
manufactured home associations, including associations in Florida and Colorado.
In 1996, he was named "Industry Person of the Year" by the National Manufactured
Housing Industry Association. Mr. McDaniel is on the Board of Directors of the
Manufactured Housing Institute. He is a graduate of the University of Wyoming
and served as a Captain in the United States Air Force.
Gebran S. Anton, Jr., 65, first became a director of the Company in
1993. He is the owner of Gebran Anton Development Co. and Anton, Zorn &
Associates, Inc., a commercial and industrial real estate broker and former
owner of Anton's, a men's retail chain. He is an incorporator and Director of
Community Central Bank, and a former Chairman of the Board for First National
Bank, St. Joseph Hospital, and Downtown Development Committee.
James M. Lane, 68, first became a director of the Company in 1993. He
retired as the Senior Vice President and Chief Investment Officer of the
Investment Management Division, NBD Bank, Detroit, where he served for
approximately thirteen years. Mr. Lane was associated with the Chase Manhattan
Corporation from 1953 to 1978, attaining the position of Executive Vice
President while also serving as President and Chief Executive Officer of Chase
Investors Management Corporation. He has a B.A. degree in economics from Wheaton
College and an MBA in finance from the University of Chicago.
Rhonda G. Hogan, 45, has served as director of the Company since March
1997. Ms. Hogan is presently a partner of Tishman Speyer Properties. She
recently served on the Board of Directors and as President of The Water Club
Condominium Association, Inc. and is on the Silver Council of the Urban Land
Institute. In addition, she served on the Board of Directors of Barnett Bank of
South Florida, N.A. from 1986 to 1996. Ms. Hogan has also served or currently
serves on several other Boards of Directors and as a member of several councils
or institutes, including appointments to State Boards by the Governor and
Cabinet of the State of Florida. Ms. Hogan received her B.B.A. from the
University of Iowa.
C.G. Kellogg, 54, has been President and a director of the Company since
its inception, and was Chief Executive Officer of the Company from its inception
to February 1997. For the five years preceding the formation of the Company, Mr.
Kellogg was President and Chief Operating Officer of Chateau Estates. Mr.
Kellogg is a Director of The Windsor Corporation. He is extremely active in
local and national industry associations, often in leadership positions. Mr.
Kellogg is a past President of the Michigan Manufactured Housing Association and
served on the Manufactured Housing Institute's Community Operations Committee.
He is a graduate of Michigan Technological University with a B.S. in Civil
Engineering. Mr. Kellogg is the husband of Tamara D. Fischer, who is the
Company's Executive Vice President and Chief Financial Officer.
Edward R. Allen, 57, has served as a director of the Company since
1993. He was, for the five years preceding the formation of the Company,
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Chairman and Chief Executive Officer of InterCoastal Communities, Inc., a
Florida corporation which was engaged in operating seven manufactured home
communities in Florida. Prior to joining InterCoastal, Mr. Allen developed a
chain of steak houses which he and his partner sold in 1977 to Green Giant
Corporation. He remained as President for two years, and expanded the chain
nearly doubling the number of restaurants. Mr. Allen is a graduate of Cornell
University.
James M. Hankins, 63, served as a director of ROC Communities, Inc.
("ROC") from August 1993 until ROC's merger with the Company on February 11,
1997 (the "Merger"). Since the Merger, he has served as a director of the
Company. He is managing general partner of a partnership which owns and operates
destination RV resorts in Arizona. Prior to organizing the partnership in 1985,
Mr. Hankins was a founder of Mobile Home Communities, Inc. in 1969, and served
as President and Chief Executive Officer from 1973 to 1984. He holds a B.S. from
the University of South Carolina and an MBA from Harvard University, and has
served as a Captain in the United States Air Force.
Donald E. Miller, 67, served a s a director of ROC from August 1993 to
February 1997, and has served as a director of the Company since February 1997.
In May 1994, Mr. Miller was appointed Vice Chairman of the Board of Directors of
The Gates Corporation. Form 1987 to May 1994, he was President, Chief Operating
Officer and director of The Gates Corporation and The Gates Rubber Company,
which engage in the production and manufacture of rubber products, primarily for
automotive needs. Mr. Miller is a graduate of the Colorado School of Mines.
John A. Boll, 68, has been Chairman of the Board of Directors of the
Company since its inception in 1993. Prior to the formation of the Company, Mr.
Boll was the co-founder, partner and Chief Executive Officer of Chateau Estates,
which was formed in 1966. He was inducted in the MH/RV Hall of Fame in 1992 for
his outstanding contributions to the manufactured housing industry. Mr. Boll was
appointed by the Governor of the State of Michigan to become the first Chairman
of the Michigan Mobile Home Commission, which is the principal Michigan
authority regulating manufactured housing, a position he held for six years.
James L. Clayton, 64, served as a director of ROC from August 1993
until February 1997 and as a director of the Company since February 1997. He is
the founder, and since 1966 has been the Chairman of the Board and Chief
Executive Officer of, Clayton Homes, Inc., ("Clayton Homes") a company which
owns and operates manufactured home factories, sales centers, financing and
insurance units and communities (NYSE: CMH). Mr. Clayton is a director of Dollar
General Stores and Chairman of the Board of BankFirst. In 1992, Mr. Clayton was
inducted into the MH/RV Hall of Fame. Mr. Clayton received an undergraduate
degree in electrical engineering and a law degree from the University of
Tennessee.
Steven G. Davis, 48, has served as a director of the Company since
February 1997. He is currently the owner of East Silent Advisors, a real estate
consulting firm. He served as Chief Financial Officer, Executive Vice President
and a director of ROC from 1993 to 1997. From 1990 to 1993, Mr. Davis served as
an officer and director of The Windsor Group, an owner/operator of 42
manufactured home communities, and, from 1991 through March 1993, as that
company's President. Mr. Davis served as a director of ASR Investments, a REIT
owning apartments in the Southwest, and is currently on the advisory boards of
Arlen Capital Advisors and Leroc Partners, Inc. Mr. Davis is a Certified Public
Accountant and is a graduate of the University of San Diego.
EXECUTIVE OFFICERS OF CHATEAU COMMUNITIES, INC.
The following information is presented with respect to the current
executive officers of Chateau Communities, Inc.:
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Gary P. McDaniel is the Chief Executive Officer and a director of the
Company. Biographical information of Mr. McDaniel is set forth above.
C.G. ("Jeff") Kellogg is President and a director of the Company.
Biographical information on Mr. Kellogg is set forth above.
James B. Grange, 41, is Chief Operating Officer of the Company, having
served in such capacity since February 1997. He served as Executive Vice
President and Chief Operating Officer of ROC from 1993 to February 1997. Mr.
Grange served as Executive Vice President, Chief Operating Officer and a
director for ROC's predecessors from 1986 to 1993. He is currently active in The
Manufactured Housing Institute. Mr. Grange is a graduate of the University of
Montana.
Tamara D. Fischer, 42, is Executive Vice President, Chief Financial Officer
of the Company, having served in these roles since the Company's formation.
Prior to joining the Company, Ms. Fischer was employed by Coopers & Lybrand for
11 years. Ms. Fischer is a CPA and a graduate of Case Western Reserve
University. Ms. Fischer is the wife of Mr. Kellogg who is the President and a
Director of the Company.
Rees F. Davis, Jr., 39, is Executive Vice President-Acquisitions of the
Company, having served in such capacity since February 1997. He served as
Executive Vice President of Acquisitions and Sales for ROC from 1993 to February
1997. Prior to that, Mr. Davis previously served as Vice President of
Acquisitions and Sales and a director for ROC's predecessors since 1986. Mr.
Davis is a two-term past officer of the Colorado Manufactured Housing
Association. He is also an active member of The Manufactured Housing Institute.
Mr. Davis is a graduate of Colorado State University.
Each of the officers and directors of Chateau is a United States Citizen.
30
