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THIS DOCUMENT IS A CONFIRMING COPY OF A SCHEDULE 14D-1 THAT WAS FILED ON
NOVEMBER 2, 1998 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
-----------------------
Cable TV Fund 14-A, Ltd.
(Name of Subject Company)
Madison Liquidity Investors 104, LLC
(Bidder)
LIMITED PARTNERSHIP INTERESTS
(Title of Class of Securities)
None
(CUSIP Number of Class of Securities)
--------------------------
Copy to:
Ronald M. Dickerman Lance D. Myers, Esq.
Madison Liquidity Investors 104, LLC Cullen and Dykman
P.O. Box 7461 177 Montague Street
Incline Village, Nevada 89452 Brooklyn, New York 11201
(212) 687-1899 (718) 780-0048
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications on Behalf of Bidder)
Calculation of Filing Fee
--------------------------
Transaction Amount of
Valuation Filing Fee
$3,643,200.00 $728.64
--------------------------
* For purposes of calculating the filing fee only. This amount assumes the
purchase of 15,840 Limited Partnership Interests ("Units") of the subject
company at $230.00 in cash per Unit.
[ ] 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:
Form or Registration Number:
Filing Party:
Date Filed:
CUSIP NO. None 14D-1
Page 1 of 3 Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification Nos. of Above Person
Madison Liquidity Investors 104, LLC
134022656
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
3. SEC Use Only
4. Sources of Funds (See Instructions)
WC, PF and OO
<PAGE>
CABLE TV FUND 14-A, LTD. - SC 14D1
o Document
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o Base
----
o Cover Page
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o Security and Subject
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o Identity and Background
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o Past Contacts
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o Source and Amount of Funds
--------------------------
o Purpose of Tender
-----------------
o Interest in Securities
----------------------
o Contracts and Arrangements
--------------------------
o Persons Retained
----------------
o Financial Statement of Bidder
-----------------------------
o Additional Information
----------------------
o Exhibits Filed
--------------
o Signatures
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o Exhibits
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o Exhibit Index
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o Additional Exhibits
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o Additional Exhibits
-------------------
o Additional Exhibits
-------------------
o Additional Exhibits
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<PAGE>
CUSIP NO. None 14D-1
Page 2 of 3 Pages
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(e) or 2(f) [ ]
6. Citizenship or Place of Organization
Delaware
7. Aggregate Amount Beneficially Owned by Each Reporting Person
7,838 Madison Partnership Liquidity Investors 46, LLC
65 ISA Partnership Liquidity Investors, LLC
10 Cobble Hill Investments, LP
8 Madison/AG Partnership Value Partners II, LP
-----
7,921 Total
8. Check if the Aggregate in Row (7) Excludes Certain Shares
(See Instructions)[ ]
9. Percent of Class Represented by Amount in Row (7)
5.0
10. Type of Reporting Person (See Instructions)
OO
Item 1. Security and Subject Company.
(a) This Schedule relates to limited partnership interests (the
"Units") of Cable TV Fund 14-A, Ltd. (the "Issuer"), the subject company. The
address of the Issuer's principal executive offices is: 9697 E. Mineral Avenue,
P.O. Box 3309, Englewood, Colorado 80155.
(b) This Schedule relates to the offer by Madison Liquidity Investors
104, LLC (the "Purchaser"), to purchase up to 15,840 Units for cash at a price
equal to $230.00 per Unit less the amount of any cash distributions made on or
after October 30, 1998, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated October 30, 1998 (the "Offer to Purchase") and
the related Agreement of Assignment and Transfer, copies of which are attached
hereto as Exhibits (a)(1) and (a)(2), respectively. The Issuer had 160,000 Units
outstanding as of October 15, 1998, according to its definitive proxy statement.
(c) The information set forth under the captions
"Introduction-Establishment of the Offer Price" and "Effects of the Offer" in
the Offer to Purchase is incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d) The information set forth in "Introduction," "Certain
Information Concerning the Purchasers" and in Schedule I of the Offer to
Purchase is incorporated herein by reference.
(e)-(g) The information set forth in "Certain Information Concerning
the Purchasers" and Schedule I in the Offer to Purchase is incorporated herein
by reference. Other than as set forth in the Offer to Purchase, during the last
five years, neither the Purchasers nor, to the best of the knowledge of the
Purchasers, any person named on Schedule I to the Offer to Purchase nor any
affiliate of the Purchasers (i) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding were or are subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, Federal or State securities laws or finding any violation of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a)-(b) See the Offer to Purchase for information concerning purchases
of Units by certain of the Purchasers and their affiliates. Other than the
foregoing, since September 1, 1998, there have been no transactions between any
of the persons identified in Item 2 and the Issuer or, to the knowledge of the
Purchaser, any of the Issuer's affiliates or general partners, or any directors
or executive officers of any such affiliates or general partners.
Item 4. Source and Amount of Funds or Other Consideration.
(a) The information set forth under the caption "Source of Funds" of
the Offer to Purchase is incorporated herein by reference.
(b)-(c) Not applicable.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(e) and (g) The information set forth under the caption "Future
Plans" in the Offer to Purchase is incorporated herein by reference.
(f) Not applicable.
Item 6. Interest in Securities of the Subject Company.
(a) and (b) The information set forth in "Certain Information
Concerning the Purchaser" of the Offer to Purchase is incorporated
herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
to the Subject Company's Securities.
The information set forth in "Certain Information Concerning the
Purchaser" of the Offer to Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or To Be Compensated.
None.
<PAGE>
CUSIP NO. None 14D-1
Page 3 of 3 Pages
Item 9. Financial Statements of Certain Bidders.
Not applicable.
Item 10. Additional Information.
(a) None.
(b)-(c) The information set forth in "Certain Legal Matters" of the
Offer to Purchase is incorporated herein by reference.
(d) None.
(e) None.
(f) Reference is hereby made to the Offer to Purchase and the related
Agreement of Assignment and Transfer, copies of which are attached
hereto as Exhibits (a)(1) and (a)(2), respectively, and which are
incorporated herein in their entirety by reference.
Item 11. Material to be Filed as Exhibits.
(a)(1) Offer to Purchase dated October 30, 1998
(a)(2) Agreement of Assignment and Transfer
(a)(3) Form of Letter to Unitholders dated October 30, 1998
(a)(4) Form of Advertisement (if applicable)
(b)-(f) Not applicable.
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
Dated: October 30, 1998
Madison Liquidity Investors 104, LLC
By Ronald M. Dickerman, Managing Director
By: /s/ RONALD M. DICKERMAN
--------------------------------------
Ronald M. Dickerman, Managing Director
EXHIBIT INDEX
Exhibit Description
- ------- -----------
(a)(1) Offer to Purchase dated October 30, 1998
(a)(2) Agreement of Assignment and Transfer
(a)(3) Form of Letter to Unitholders dated October 30, 1998
(a)(4) Form of Advertisement (if applicable)
<PAGE>
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
LIMITED PARTNERSHIP INTERESTS
OF
CABLE TV FUND 14-A, LTD
a Colorado Limited Partnership
AT
$230.00 PER UNIT
by
MADISON LIQUIDITY INVESTORS 104, LLC
(the "Purchaser")
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
EASTERN STANDARD TIME, ON DECEMBER 1, 1998, UNLESS THE OFFER IS EXTENDED.
Madison Liquidity Investors 104, LLC (the "Purchaser") hereby seeks to acquire
limited partnership interests (the "Units") in Cable TV Fund 14-A, Ltd., a
Colorado limited partnership (the "Partnership"). The Purchaser hereby offers to
purchase up to 15,840 Units at $230.00 per Unit (the "Purchase Price"), in cash,
reduced by (i) the $50.00 transfer fee (per transfer, not per Unit) charged by
the Partnership and (ii) any cash distributions made on or after October 30,
1998 (the "Offer Date"), without interest, upon the terms and subject to the
conditions set forth in this Offer to Purchase (the "Offer to Purchase") and in
the related Agreement of Assignment and Transfer and accompanying documents, as
each may be supplemented or amended from time to time (which together constitute
the "Offer"). The Offer will expire at 5:00 p.m., Eastern Standard Time on
December 1, 1998 or such other date to which this Offer may be extended (the
"Expiration Date"). The Units sought pursuant to the Offer represent 9.9% of the
Units outstanding as of October 16, 1998. Neither Jones Intercable, Inc., the
General Partner of Cable TV Fund 14-A Ltd. ("Jones" or the "General Partner")
nor Cable TV Fund 14-A, Ltd. or their respective affiliates or subsidiaries are
parties to this Offer.
THE OFFER TO PURCHASE IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF UNITS BEING
TENDERED. A UNITHOLDER MAY TENDER ANY OR ALL UNITS OWNED BY SUCH UNITHOLDER.
The Purchaser expressly reserves the right, in its sole discretion, at any time
and from time to time, (i) to extend the period of time during which the Offer
is open and thereby delay acceptance for payment of, and the payment for, any
Units, (ii) upon the occurrence of any of the conditions specified in Section 14
of this Offer to Purchase, to terminate the Offer and not accept for payment any
Units not theretofore accepted for payment or paid for, or to delay the
acceptance for payment of, or payment for, any Units not theretofore accepted
for payment or paid for, and (iii) to amend the Offer in any respect. Notice of
any such extension, termination or amendment will promptly be disseminated to
Unitholders in a manner reasonably designed to inform Unitholders of such change
in compliance with Rule 14d-4(c) under the Securities Exchange Act of 1934 (the
"Exchange Act"). In the case of an extension of the Offer, such extension will
be followed by a press release or public announcement which will be issued no
later than 9:00 a.m., Eastern Standard Time, on the next business day after the
scheduled Expiration Date, in accordance with Rule 14e-1(d) under the Exchange
Act.
OCTOBER 30, 1998
<PAGE>
IMPORTANT
Any Unitholder desiring to tender Units should complete and sign the Agreement
of Assignment and Transfer (a copy of which is printed on yellow paper and
enclosed with this Offer to Purchase) in accordance with the instructions to the
Agreement of Assignment and Transfer (see Instructions to complete the Agreement
of Assignment and Transfer) and mail or deliver an executed Agreement of
Assignment and Transfer and any other required documents to Madison Liquidity
Investors 104, LLC in care of its Transfer Agent, Gemisys Tender Services (the
"Transfer Agent" or "Gemisys") at the address set forth below.
MADISON LIQUIDITY INVESTORS 104, LLC
c/o Gemisys Tender Services
7103 South Revere Parkway
Englewood, Colorado 80112
Telephone: (303) 705-6390
Facsimile: (303) 705-6276
(No Agreements of Assignment and Transfer will be accepted by fax)
Questions or requests for assistance or additional copies of this Offer to
Purchase or the Agreement of Assignment and Transfer may be directed to Madison
Liquidity Investors 104, LLC in care of Gemisys at (303) 705-6390.
- --------------
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION OR ANY REPRESENTATION
ON BEHALF OF THE PURCHASER OR TO PROVIDE ANY INFORMATION OTHER THAN AS CONTAINED
HEREIN OR IN THE AGREEMENT OF ASSIGNMENT AND TRANSFER. NO SUCH RECOMMENDATION,
INFORMATION OR REPRESENTATION MAY BE RELIED UPON AS HAVING BEEN AUTHORIZED.
- --------------
The Partnership is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file reports and other
information with the Securities and Exchange Commission (the "SEC" or
"Commission") relating to its business, financial condition and other matters.
Such reports and other information are available on the Commission's electronic
data gathering and retrieval (EDGAR) system, at its internet web site at
WWW.SEC.GOV, may be inspected at the public reference facilities maintained by
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and are available for inspection and copying at the
regional offices of the Commission located in Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can also
be obtained from the Public Reference Room of the Commission in Washington, D.C.
at prescribed rates.
The Purchaser has or will be filing with the Commission a Tender Offer Statement
on Schedule 14D-1 (including exhibits) pursuant to Rule 14d-3 of the General
Rules and Regulations under the Exchange Act, furnishing certain additional
information with respect to the Offer. Such statement and any amendments
thereto, including exhibits, may be inspected and copies may be obtained from
the offices of the Commission in the manner specified above.
<PAGE>
TABLE OF CONTENTS
Page
INTRODUCTION ................................................................ 1
TENDER OFFER
Section 1. Terms of the Offer......................................... 3
Section 2. Procedures for Tendering Units............................. 3
Section 3. Acceptance for Payment and Payment for Units............... 3
Section 4. Proration.................................................. 4
Section 5. Withdrawal Rights.......................................... 4
Section 6. Extension of Tender Period; Termination; Amendment......... 4
Section 7. Certain Federal Income Tax Consequences.................... 5
Section 8. Effects of the Offer....................................... 5
Section 9. Future Plans............................................... 6
Section 10. The Business of the Partnership............................ 6
Section 11. Conflicts of Interest...................................... 6
Section 12. Certain Information Concerning the Purchaser............... 7
Section 13 Source of Funds............................................ 7
Section 14. Conditions of the Offer.................................... 7
Section 15. Certain Legal Matters...................................... 7
Section 16. Fees and Expenses.......................................... 8
Section 17. Miscellaneous.............................................. 8
Schedule I - The Purchasers and Their Respective Principals
<PAGE>
To the Unitholders of Cable TV Fund 14-A Ltd.:
INTRODUCTION
The Purchaser hereby offers to purchase up to 15,840 of the outstanding
units of limited partnership interest ("Units"), representing approximately 9.9%
of the Units outstanding, in Cable TV Fund 14-A, Ltd. (the "Partnership") at a
purchase price of $230.00 per Unit, in cash, reduced by (i) the $50.00 transfer
fee (per transfer, not per Unit) charged by the Partnership and (ii) any cash
distribution made on or after October 30, 1998 (the "Offer Date"), without
interest, (the "Offer Price") upon the terms and subject to the conditions set
forth in the Offer. The Offer will expire at 5:00 p.m., Eastern Standard Time,
on December 1, 1998, or such other date to which this Offer may be extended (the
"Expiration Date"). The Offer is not conditioned on any aggregate minimum number
of Units being tendered. Unitholders who tender their Units will not be
obligated to pay any brokerage commissions in connection with the tender of
Units.
For further information concerning the Purchaser, see Section 12 below and
Schedule "I".
Unitholders are urged to consider the following factors:
- Unitholders who tender their Units will give up the opportunity to
participate in any future benefits from the ownership of Units,
including potential future distributions by the Partnership, and the
purchase price per Unit payable to a tendering Unitholder by the
Purchaser may be less than the total amount which might otherwise be
received by the Unitholder with respect to the Units over the
remaining term of the Partnership. In this regard, Unitholders should
note that the Partnership has announced the sale of its last remaining
cable systems and has estimated that as a result of this proposed sale
it may distribute $353.00 for each $500.00 Unit, although it cannot
provide any assurance that the actual distribution may not vary from
its estimate. Additionally, there can be no assurance that the
announced sale of the remaining systems will be approved by
Unitholders or that the proposed transactions will close in accordance
with the proposed terms or in the expected time frame.
- The decision to accept the Offer eliminates the potential uncertainty
related to waiting for future distributions of sales proceeds.
Furthermore, by selling the Units for cash now, the Unitholder would
enjoy the ability to redeploy investment assets into alternative and
more liquid investments.
- In its October 16, 1998 Definitive Proxy Statement, the Partnership
states that "its ability to complete the transaction discussed...and
the Partnership's ability to make a distribution to its partners...are
(sic) dependent upon the approval of the transaction by the holders of
a majority of the Partnership's limited partnership interests."
Consequently, if a majority of Unitholders do not vote in favor of the
transaction, the Partnership will need to either extend the proxy
solicitation or renegotiate the terms of the sales contract to ones
more favorable to Unitholders. In either case, these outcomes
potentially delay distributions to Unitholders.
- In its October 16, 1998 Definitive Proxy Statement, the Partnership
states that the sales contract is dependent upon many conditions,
including (i) the sales of certain systems by the buyer and (ii) a
minimum number of subscribers to the Naperville System existing when
the sale closes. While the buyer is able to waive the first condition,
doing so would delay the sale by a minimum of nine months and
potentially as long as 12 months. Consequently, and due to market
conditions related to the Naperville System, a delay may impact the
second condition. As a result of these conditions and regardless of
whether or not they are eventually met and the sale consummated,
distributions to Unitholders may be delayed.
- The Purchaser is making the Offer for investment purposes and with the
intention of making a profit from the ownership of the Units. In
establishing the purchase price of $230.00 per Unit, the Purchaser is
motivated to establish the lowest price which might be acceptable to
Unitholders consistent with the Purchaser's objectives. Such
objectives and motivations may conflict with the interests of the
Unitholders in receiving the highest price for their Units.
- For Unitholders who sell their Units in accordance with this Offer,
1998 will be the final year for which you receive a K-1 Tax Form from
the Partnership assuming that the transfer of your Units is
effectuated by the General Partner in 1998. Many investors who have
tax professionals prepare their taxes find the cost of filing K-1s to
be burdensome, particularly if more than one limited partnership is
owned. As mentioned above, the General Partner has disclosed that the
sale of the remaining cable systems is not anticipated to close until
1999, and in conjunction with these proposed closings it is expected
that the indemnity escrow accounts that will be maintained pursuant to
the proposed system sales will not be liquidated until, at the
earliest, the Fourth Quarter of 1999, which will result in the
Unitholders having to file a K-1 Tax Form in 2000.
o The Offer will provide Unitholders with an opportunity to liquidate
their investment without the usual transaction costs associated with
secondary market sales. Unitholders may have a more immediate need to
use the cash now tied up in an investment in the Units and wish to
sell them to the Purchaser.
Establishment of the Offer Price
The Purchaser has set the Offer Price at $230.00 per Unit, in cash, reduced
by (i) the $50.00 transfer fee (per transfer, not per Unit) charged by the
Partnership and (ii) any cash distributions made on or after October 30, 1998.
In determining the Offer Price, the Purchaser based its valuation of the Units
on its own investigation of Partnership assets, liabilities and business plan
and in part on the General Partner's estimate of the cash distribution from the
sale of cable systems and the final liquidating distribution which may occur at
the earliest in the Fourth Quarter of 1999, subject to certain contingencies.
The net asset value of the Units as reported by the General Partner in its
October 16, 1998 Definitive Proxy Statement is $353.00 per Unit. The net asset
value does not necessarily reflect the fair market value of a Unit, which may be
higher or lower than the net asset value depending on several factors. The
General Partner estimates net asset value based on a hypothetical sale of all of
the Partnership's assets, as of a hypothetical date, and the distribution to the
Limited Partners and the General Partner of the gross proceeds of such sales,
net of related indebtedness, together with the Partnership's cash, proceeds from
temporary investments, if any, and all other assets that are believed to be
liquidated, after provision in full for all of the Partnership's other known
liabilities. The net asset value estimates prepared by the General Partner do
not take into account (i) future changes in market conditions, (ii) timing
considerations or (iii) costs associated with winding up the Partnership. It is
the Purchaser's belief that the net asset value estimate prepared by the General
Partner does not accurately reflect the fair market value of a Unit or the
amount a Limited Partner could expect to receive upon liquidation if the
Partnership liquidated today.
Although not necessarily an indication of value, the $230.00 purchase price
per Unit is 9.33% less than the $253.67 weighted average selling price for the
Units (as adjusted for typical commissions), as reported by The Partnership
Spectrum, an independent, third-party source. As further reported by The
Partnership Spectrum during the six month period ended July, 1998, there were 19
trades conducted representing an aggregate of 379 Units sold or transferred.
Because the gross sales prices reported by The Partnership Spectrum do not
necessarily reflect the net sales proceeds received by sellers of Units, which
typically are reduced by commissions and other secondary market transaction
costs to amounts less than the reported prices; the Purchaser cannot, and does
not, know whether the information compiled by The Partnership Spectrum is
accurate or complete.
The $230.00 per Unit Offer Price is 43.75% higher than the May and June,
1998 tender offers from Lafayette Bay, LLC and Smithtown Bay, LLC, respectively,
and 2.22% higher than the August, 1998 offer from CMG Partners, LLC.
In a Definitive Proxy Statement on Form 14A dated as of October 16, 1998
the Partnership reported (in part) as follows:
A special vote of the limited partners of Cable TV Fund 14-A, Ltd. (the
"Partnership") is being conducted through the mails (sic) on behalf of the
Partnership by Jones Intercable, Inc., the general partner of the
Partnership (the "General Partner"), for the purpose of obtaining limited
partner approval of the sale, to TCI Communications, Inc. or one of its
affiliates, of the cable television system serving areas in and around
Naperville, Illinois (the "Naperville System") owned by the Partnership for
$23,000,000 in cash, subject to customary working capital closing
adjustments that may have the effect of increasing or decreasing the sales
price by a non-material amount...
1
<PAGE>
If the limited partners approve the proposed sale of the Naperville System
and if the transaction is closed, the Partnership will pay a brokerage fee
totaling $575,000 (representing 2.5 percent of the sales price) to The
Jones Group, Ltd., a subsidiary of the General Partner, for acting as a
broker in this transaction, settle working capital adjustments and deposit
$696,000 into an indemnity escrow account, and then the Partnership will
distribute the approximate $21,000,000 of net sale proceeds to the partners
of record as of the closing date of the sale of the Naperville System.
Because at the time of the Naperville System's sale the distributions made
to the limited partners from the prior sales of other cable television
systems owned by the Partnership will have returned to limited partners
more than 125 percent of the amounts originally contributed to the
Partnership by the limited partners, the net proceeds from the sale of the
Naperville System will be allocated 75 percent to the limited partners
($15,750,000) and 25 percent to the General Partner ($5,250,000). The
$15,750,000 distribution to the limited partners will give the limited
partners a return of $98 for each $500 limited partnership interest, or
$196 for each $1,000 invested in the Partnership. Distribution checks will
be issued to limited partners' account registration or payment instruction
of record.
In addition to the Naperville System, the Partnership owns and operates the
cable television system serving areas in and around Buffalo, Minnesota (the
"Buffalo System") and the cable television system serving areas in and
around Calvert County, Maryland (the "Calvert County System"), both of
which also are in various stages of being sold. The General Partner
currently anticipates that the Buffalo System and the Calvert County System
will be sold prior to the closing of the sale of the Naperville System, but
the actual order of the various closings may change depending upon a
variety of timing factors not in the General Partner's control. The
Partnership also has owned a 27 percent interest in the Cable TV Fund
14-A/B venture (the "Venture"). The venture owned and operated the cable
television system serving certain areas in Broward County, Florida (the
"Broward System") until its sale in March 1998. From the Venture's sale of
the Broward System, the Partnership received $25,484,569, representing 27
percent of the net sale proceeds. In April 1998, the Partnership
distributed this amount to its limited partners of record as of March 31,
1998. This distribution represented $159 for each $500 limited partnership
interest or $318 for each $1,000 invested in the Partnership.
The Partnership has agreed to sell the Calvert County System to a
subsidiary of the General Partner for a sales price of $39,388,667. The
closing of the sale of the Calvert County System, which is expected to
occur in the first quarter of 1999, will be subject to several conditions,
including necessary governmental and other third party consents and the
approval of the holders of a majority of the limited partnership interests
in a separate proxy vote to be conducted by the General Partner later this
year. Upon the sale of the Calvert County System, the Partnership intends
to distribute approximately $19,300,000 of the net sale proceeds to the
Partnership's limited partners of record as of the closing date of the sale
of the Calvert County System. This distribution will represent $121 for
each $500 limited partnership interest or $242 for each $1,000 invested in
the Partnership.
The Partnership has also agreed to sell its Buffalo System to an
unaffiliated party for a sales price of $27,000,000. The closing of the
sale of the Buffalo System, which is expected to occur in the first quarter
of 1999, also will be subject to several conditions, including the
Partnership and the prospective buyer negotiating a definitive asset
purchase agreement, necessary governmental and other third party consents
and the approval of the holders of a majority of the limited partnership
interests of the Partnership in a separate proxy vote to be conducted by
the General Partner later this year. Upon the sale of the Buffalo System,
which is expected to follow the sale of the Calvert County System and
precede the sale of the Naperville System, the Partnership expects to
distribute the net sale proceeds of $21,600,000 to the Partnership's
partners of record as of the closing date of the sale of the Buffalo
System. Because the distribution to the limited partners from the sale of
the Buffalo System, together with the distributions that have been or will
be made to the limited partners of the Partnership from the prior cable
television system sales, will return to the limited partners more than 125
percent of the capital they initially contributed to the Partnership, the
General Partner will receive a general partner distribution from the
proceeds of the sale of the Buffalo System. It is estimated that the
limited partners, as a group, will receive $21,367,000 from the sale of the
Buffalo System and that the General Partner will receive a general partner
distribution of $233,000 from the net sale proceeds. The limited partner
distribution from the sale of the Buffalo System will represent $134 for
each $500 limited partnership interest or $268 for each $1,000 invested in
the Partnership.
Portions of the proceeds from the Buffalo System sale and the Naperville
System sale will be held in indemnity escrow accounts for varying periods
in 1999 following the closings of the sales. After the distribution of the
amounts, if any, remaining in the indemnity escrow accounts, the
Partnership will be liquidated and dissolved, most likely in the fourth
quarter of 1999. Taking into account the distributions that have been or
will be made to the limited partners of the Partnership from all of the
prior and pending cable television system sales (excluding escrowed
proceeds), the General Partner estimates that the limited partners of the
Partnership will have received a total return of $728 for each $500 limited
partnership interest or $1,456 for each $1,000 invested in the Partnership
at the time that the Partnership is liquidated and dissolved.
The Offer Price represents the price at which the Purchaser is willing to
purchase Units. No independent person has been retained to evaluate or render
any opinion with respect to the fairness of the Offer Price and no
representation is made by the Purchaser or any affiliate of the Purchaser as to
such fairness. Other measures of the value of the Units may be relevant to
Unitholders. Unitholders are urged to consider carefully all of the information
contained herein and consult with their own advisors, tax, financial or
otherwise, in evaluating the terms of the Offer before deciding whether to
tender Units.
General Background Information
Certain information contained in this Offer to Purchase which relates to,
or represents, statements made by the Partnership or the General Partner, has
been derived from information provided in reports filed by the Partnership with
the Securities and Exchange Commission. The Purchaser expressly disclaims any
responsibility for the information included in these filed reports and extracted
in this discussion.
According to publicly available information as of October 15, 1998, there
were 160,000 Units issued and outstanding, held by approximately 11,197
Unitholders. Certain affiliates of the Purchaser currently beneficially own an
aggregate of 7,921 Units or approximately 4.95% of the outstanding Units (See
Section 12 of the Tender Offer-"Certain Information Concerning the Purchaser"
below).
Tendering Unitholders will not be obligated to pay brokerage fees or
commissions on the sale of the Units to the Purchaser pursuant to the Offer. The
Purchaser will pay all charges and expenses incurred in connection with the
Offer with the exception of the $50.00 transfer fee that will be paid by the
Unitholder via a reduction in the proceeds from the sale of the Units. The
Purchaser desires to purchase all of the Units tendered by each Unitholder, up
to 9.9% of the total outstanding Units and subject to Proration, when
applicable, except where otherwise prohibited. (See Section 4 to the Tender
Offer-"Proration" below).
IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER INCREASES THE CONSIDERATION
OFFERED TO UNITHOLDERS PURSUANT TO THE OFFER, SUCH INCREASED CONSIDERATION WILL
BE PAID WITH RESPECT TO ALL UNITS THAT ARE PURCHASED PURSUANT TO THE OFFER,
WHETHER OR NOT SUCH UNITS WERE TENDERED PRIOR TO SUCH INCREASE IN CONSIDERATION.
UNITHOLDERS ARE URGED TO READ THIS OFFER TO PURCHASE AND THE ACCOMPANYING
AGREEMENT OF ASSIGNMENT AND TRANSFER CAREFULLY BEFORE DECIDING WHETHER TO TENDER
THEIR UNITS.
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TENDER OFFER
SECTION 1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for Units validly tendered on or prior to the
Expiration Date and not withdrawn in accordance with Section 5 of this Offer to
Purchase. The term "Expiration Date" shall mean 5:00 p.m., Eastern Standard
Time, on DECEMBER 1, 1998, unless and until the Purchaser shall have extended
the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date on which the Offer, as so
extended by the Purchaser, shall expire.
The Offer is conditioned on satisfaction of certain conditions. See Section
14, which sets forth in full the conditions of the Offer. The Purchaser reserves
the right (but shall not be obligated), in its sole discretion and for any
reason, to waive any or all of such conditions. If, by the Expiration Date, any
or all of such conditions have not been satisfied or waived, the Purchaser
reserves the right (but shall not be obligated) to (i) decline to purchase any
of the Units tendered, terminate the Offer and return all tendered Units to
tendering Unitholders, (ii) waive all the unsatisfied conditions and, subject to
complying with the applicable rules and regulations of the Commission, purchase
all Units validly tendered, (iii) extend the Offer and, subject to the right of
Unitholders to withdraw Units until the Expiration Date, retain the Units that
have been tendered during the period or periods for which the Offer is extended
or (iv) amend the Offer.
SECTION 2. PROCEDURES FOR TENDERING UNITS.
VALID TENDER. For Units to be validly tendered pursuant to the Offer, a properly
completed and duly executed Agreement of Assignment and Transfer (a copy of
which is enclosed and printed on yellow paper) with any other documents required
by the Agreement of Assignment and Transfer, or instructions thereto, must be
received by the Purchaser in care of its Transfer Agent at its address, Madison
Liquidity Investors 104, LLC c/o Gemisys Tender Services, 7103 South Revere
Parkway, Englewood, Colorado 80112 on or prior to the Expiration Date. A
Unitholder may tender any or all Units owned by such Unitholder.
In order for a tendering Unitholder to participate in the Offer, the
Unitholder must complete, in its entirety, the following documents that
accompany this Offer to Purchase:
(1) The Agreement of Assignment and Transfer; and
(2) Any other applicable documents included herewith or in the Instructions
to complete the Agreement of Assignment and Transfer.
IN ORDER FOR A TENDERING UNITHOLDER TO PARTICIPATE IN THE OFFER, UNITS MUST
BE VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE, WHICH IS
5:00 P.M., EASTERN STANDARD TIME, ON DECEMBER 1, 1998, OR SUCH DATE TO WHICH THE
OFFER MAY BE EXTENDED.
THE METHOD OF DELIVERY OF THE AGREEMENT OF ASSIGNMENT AND TRANSFER AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING UNITHOLDER
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE TRANSFER
AGENT.
BACKUP FEDERAL INCOME TAX WITHHOLDING. To prevent the possible application of
31% backup federal income tax withholding with respect to payment of the Offer
Price for Units purchased pursuant to the Offer, a tendering Unitholder must
provide the Transfer Agent with such Unitholder's correct taxpayer
identification number ("TIN") or Social Security Number and make certain
certifications that such Unitholder is not subject to backup federal income tax
withholding. EACH TENDERING UNITHOLDER MUST INSERT IN THE AGREEMENT OF
ASSIGNMENT AND TRANSFER THE UNITHOLDER'S TAXPAYER IDENTIFICATION NUMBER OR
SOCIAL SECURITY NUMBER IN THE SPACE PROVIDED ON THE SIGNATURE PAGE TO THE
AGREEMENT OF ASSIGNMENT AND TRANSFER. THE AGREEMENT OF ASSIGNMENT AND TRANSFER
ALSO INCLUDES A SUBSTITUTE FORM W-9, WHICH CONTAINS THE CERTIFICATIONS REFERRED
TO ABOVE. (SEE THE INSTRUCTIONS TO THE AGREEMENT OF ASSIGNMENT AND TRANSFER).
FIRPTA WITHHOLDING. To prevent the withholding of federal income tax in an
amount equal to 10% of the sum of the Offer Price plus the amount of Partnership
liabilities allocable to each Unit tendered, each Unitholder must complete the
FIRPTA Affidavit included in the Agreement of Assignment and Transfer certifying
such Unitholder's TIN or Social Security Number and address and that the
Unitholder is not a foreign person. (See the Instructions to the Agreement of
Assignment and Transfer and Section 7-"Certain Federal Income Tax
Consequences").
OTHER REQUIREMENTS. By executing an Agreement of Assignment and Transfer as set
forth above, a tendering Unitholder irrevocably appoints the designees of the
Purchaser as such Unitholder's proxy, in the manner set forth in the Agreement
of Assignment and Transfer, each with full power of substitution, to the full
extent of such Unitholder's rights with respect to the Units tendered by such
Unitholder and accepted for payment by the Purchaser. Such appointment will be
effective when, and only to the extent that, the Purchaser accepts such Units
for payment and has received confirmation from the General Partner that the
Units have been transferred. Upon such acceptance for payment and confirmation
from the General Partner of the transfer, all prior proxies given by such
Unitholder with respect to such Units will, without further action, be revoked,
and no subsequent proxies may be given (and if given will not be effective). The
designees of the Purchaser will, with respect to such Units, be empowered to
exercise all voting and other rights of such Unitholder as they in their sole
discretion may deem proper at any meeting of Unitholders, by written consent or
otherwise. In addition, by executing an Agreement of Assignment and Transfer,
and not otherwise timely withdrawing pursuant to the provisions of Section 5
herein, a Unitholder also assigns to the Purchaser all of the Unitholder's
rights to receive distributions from the Partnership with respect to the Units
which are accepted for payment and purchased pursuant to the Offer, including
all cash distributions made on or after the Offer Date-October 30, 1998.
DETERMINATION OF VALIDITY; REJECTION OF UNITS; WAIVER OF DEFECTS; NO OBLIGATION
TO GIVE NOTICE OF DEFECTS. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Units
pursuant to the procedures described above will be determined by the Purchaser,
in its sole discretion, which determination shall be final and binding. THE
PURCHASER RESERVES THE ABSOLUTE RIGHT TO REJECT ANY OR ALL TENDERS IF NOT IN
PROPER FORM OR IF THE ACCEPTANCE OF, OR PAYMENT FOR, THE UNITS TENDERED MAY, IN
THE OPINION OF THE PURCHASER'S COUNSEL, BE UNLAWFUL. The Purchaser also reserves
the right to waive any defect or irregularity in any tender with respect to any
particular Units of any particular Unitholder, and the Purchaser's
interpretation of the terms and conditions of the Offer (including the Agreement
of Assignment and Transfer and the Instructions thereto) will be final and
binding. Neither the Purchaser, the Transfer Agent, nor any other person will be
under any duty to give notification of any defects or irregularities in the
tender of any Units or will incur any liability for failure to give any such
notification.
A tender of Units pursuant to any of the procedures described above will
constitute a binding agreement between the tendering Unitholder and the
Purchaser upon the terms and subject to the conditions of the Offer, including
the tendering Unitholder's representation and warranty that (i) such Unitholder
owns the Units being tendered within the meaning of Rule 14e-4 under the
Exchange Act and (ii) the tender of such Units complies with Rule 14e-4. Rule
14e-4 requires, in general, that a tendering security holder will actually be
able to deliver the security subject to the tender offer, and is of concern
particularly to any Unitholders who have granted options to sell or purchase the
Units, hold option rights to acquire such securities, maintain "short" positions
in the Units (i.e., have borrowed the Units) or have loaned the Units to a short
seller. Because of the nature of limited partnership interests, the Purchaser
believes it is unlikely that any option trading or short selling activity exists
with respect to the Units. In any event, a Unitholder will be deemed to tender
Units in compliance with Rule 14e-4 and the Offer if the holder is the record
owner of the Units and the holder (i) delivers the Units pursuant to the terms
of the Offer, (ii) causes such delivery to be made, (iii) guarantees such
delivery, (iv) causes a guaranty of such delivery, or (v) uses any other method
permitted in the Offer (such as a facsimile delivery of the Agreement of
Assignment and Transfer).
SECTION 3. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment, and will pay for, Units
validly tendered and not withdrawn in accordance with Section 5, as promptly as
practicable following the Expiration Date. The tendering Unitholders will be
paid promptly following (i) receipt of a valid, properly and fully executed
Agreement of Assignment and Transfer and (ii) receipt by the Purchaser of the
Partnership's confirmation that the transfer of Units have been effectuated,
subject to Section 4 ("Proration") of this Offer to Purchase. The Transfer Agent
will issue payment only to the Unitholder of record and payment will be
forwarded only to the address listed on the Agreement of Assignment and
Transfer.
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For purposes of the Offer, the Purchaser shall be deemed to have been
accepted for payment (and thereby purchased) tendered Units when the Purchaser
is in receipt of the Partnership's confirmation that the transfer of Units has
been effectuated. Upon the terms and subject to the conditions of the Offer,
payment for the Units purchased pursuant to the Offer will in all cases be made
by the Transfer Agent.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE BY REASON
OF ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Units are not purchased for any reason, the Agreement of
Assignment and Transfer with respect to such Units not purchased will be of no
force or effect. If, for any reason whatsoever, acceptance for payment of, or
payment for, any Units tendered pursuant to the Offer is delayed or the
Purchaser is ale to accept for payment, purchase or pay for the Units tendered
pursuant to the Offer, then without prejudice to the Purchaser's rights under
Section 14 (but subject to compliance with Rule 14e-1(c) under the Exchange
Act), the Transfer Agent may, nevertheless, on behalf of the Purchaser, retain
tendered Units, subject to any limitations of applicable law, and such Units may
not be withdrawn except to the extent that the tendering Unitholders are
entitled to withdrawal rights as described in Section 5.
If, prior to the Expiration Date, the Purchaser shall increase the
consideration offered to Unitholders pursuant to the Offer, such increased
consideration shall be paid for all Units accepted for payment pursuant to the
Offer, whether or not such Units were tendered prior to such increase.
Unless otherwise prohibited, the Purchaser reserves the right to transfer
or assign, in whole or from time to time in part, the right to purchase Units
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer or prejudice the rights
of tendering Unitholders to receive payment for Units validly tendered and
accepted for payment pursuant to the Offer.
SECTION 4. PRORATION.
If not more than 15,840 Units are validly tendered and not properly
withdrawn prior to the Expiration Date, the Purchaser, upon the terms and
subject to the conditions of the Offer, will accept for payment all such Units
so tendered.
If more than 15,840 Units are validly tendered and not properly withdrawn
on or prior to the Expiration Date, the Purchaser, upon the terms and subject to
the conditions of the Offer, will accept for payment and pay for an aggregate of
15,840 Units so tendered, pro rata according to the number of Units validly
tendered by each Limited Partner and not properly withdrawn on or prior to the
Expiration Date, on a pro rata basis, with appropriate adjustments to avoid
tenders of fractional Units and purchases that may otherwise violate the
Partnership's Limited Partnership Agreement, where applicable.
In the event that proration is required, the Purchaser will determine the
precise number of Units to be accepted and will forward payment together with a
notice explaining the final results of the proration as soon as practicable. The
Purchaser will not pay for any Units tendered until after the final proration
factor has been determined.
SECTION 5. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 5, all tenders of Units
pursuant to the Offer are irrevocable, provided that Units tendered pursuant to
the Offer may be withdrawn at any time prior to the Expiration Date.
For withdrawal to be effective, a written notice of withdrawal must be
timely received by the Transfer Agent (i.e. a valid notice of withdrawal must be
received after October 30, 1998 but on or before December 1, 1998 or such other
date to which this Offer may be extended) at the address set forth in the
attached Agreement of Assignment and Transfer. Any such notice of withdrawal
must specify the name of the person who tendered the Units to be withdrawn and
must be signed by the person(s) who signed the Agreement of Assignment and
Transfer in the same manner as the Agreement of Assignment and Transfer was
signed, and if the original Agreement of Assignment and Transfer was executed
with a Medallion Signature Guarantee, the notice of withdrawal must also contain
a Medallion Signature Guarantee.
If purchase of, or payment for, Units is delayed for any reason, or if the
Purchaser is unable to purchase or pay for Units for any reason, then, without
prejudice to the Purchaser's rights under the Offer, tendered Units may be
retained by the Transfer Agent on behalf of the Purchaser and may not be
withdrawn except to the extent that tendering Unitholders are entitled to
withdrawal rights as set forth in this Section 5, subject to Rule 14e-1(c) under
the Exchange Act, which provides, in part, that no person who makes a tender
offer shall fail to pay the consideration offered or return the securities (i.e.
Units) deposited by or on behalf of security holders promptly after the
termination or withdrawal of the tender offer.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. Neither the
Purchaser, the Transfer Agent, nor any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or will incur any liability for failure to give any such notification.
Any Units properly withdrawn will be deemed not to be validly tendered for
purposes of the Offer. Withdrawn Units may be re-tendered, however, by following
the procedures described in Section 2 at any time prior to the Expiration Date.
SECTION 6. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT.
The Purchaser expressly reserves the right, in its sole discretion, at any
time and from time to time, (i) to extend the period of time during which the
Offer is open and thereby delay acceptance for payment of, and the payment for,
validly tendered Units, (ii) upon the occurrence or failure to occur of any of
the conditions specified in Section 14, to delay the acceptance for payment of,
or payment for, any Units not heretofore accepted for payment or paid for, or to
terminate the Offer and not accept for payment any Units not theretofore
accepted for payment or paid for, by giving written notice, of such termination
to the Transfer Agent, and (iii) to amend the Offer in any respect (including,
without limitation, by increasing or decreasing the consideration offered or the
number of Units being sought in the Offer or both or changing the type of
consideration) by giving written notice of such amendment to the Transfer Agent.
Any extension, termination or amendment will be followed as promptly as
practicable by public announcement, the announcement in the case of an extension
to be issued no later than 9:00 a.m., Eastern Standard Time, on the next
business day after the previously scheduled Expiration Date, in accordance with
the public announcement requirement of Rule 14d-4(c) under the Exchange Act.
Without limiting the manner in which the Purchaser may choose to make any public
announcement, except as provided by applicable law (including Rule 14d-4(c)
under the Exchange Act), the Purchaser will have no obligation to publish,
advertise or otherwise communicate any such public announcement, other than by
issuing a release to the Dow Jones News Service. The Purchaser may also be
required by applicable law to disseminate to Unitholders certain information
concerning the extensions of the Offer or any other material changes in the
terms of the Offer.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Units) is delayed in its payment for Units
or is unable to pay for Units pursuant to the Offer for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Transfer Agent
may retain tendered Units on behalf of the Purchaser, and such Units may not be
withdrawn except to the extent tendering Unitholders are entitled to withdrawal
rights as described in Section 5. However, the ability of the Purchaser to delay
payment for Units that the Purchaser has accepted for payment is limited by Rule
14e-1 under the Exchange Act, which requires that the Purchaser pay the
consideration offered or return the securities deposited by or on behalf of
holders of securities promptly after the termination or withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will extend the Offer to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which an
offer must remain open following a material change in the terms of the Offer or
information concerning the Offer, other than a change in price or a change in
percentage of securities sought, will depend upon the facts and circumstances,
including the relative materiality of the change in the terms or information.
With respect to a change in price or a change in percentage of securities sought
(other than an increase of not more than 2% of the securities sought), however,
a minimum ten business day period
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is generally required to allow for adequate dissemination to security holders
and for investor response. As used in this Offer to Purchase, "business day"
means any day other than a Saturday, Sunday or a federal holiday, and consists
of the time period from 12:01 a.m. through 12:00 midnight, Eastern Standard
Time.
SECTION 7. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. THE FEDERAL INCOME TAX
DISCUSSION SET FORTH BELOW IS INCLUDED HEREIN FOR GENERAL INFORMATION ONLY AND
DOES NOT PURPORT TO ADDRESS ALL ASPECTS OF TAXATION THAT MAY BE RELEVANT TO A
PARTICULAR UNITHOLDER. For example, this discussion does not address the effect
of any applicable foreign, state, local or other tax laws other than federal
income tax laws. Certain Unitholders (including trusts, foreign persons,
tax-exempt organizations or corporations subject to special rules, such as life
insurance companies or "S Corporations") may be subject to special rules not
discussed below. This discussion is based on the Internal Revenue Code of 1986,
as amended (the "I.R.C." or "Code"), existing regulations, court decisions and
Internal Revenue Service ("IRS") rulings and other pronouncements. EACH
UNITHOLDER TENDERING UNITS SHOULD CONSULT SUCH UNITHOLDER'S OWN TAX ADVISOR AS
TO THE PARTICULAR TAX CONSEQUENCES TO SUCH UNITHOLDER OF ACCEPTING THE OFFER,
INCLUDING THE APPLICATION OF THE ALTERNATIVE MINIMUM AND FEDERAL, FOREIGN,
STATE, LOCAL AND OTHER TAX LAWS.
The following discussion is based on the assumption that the Partnership is
treated as a partnership for federal income tax purposes and is not a "publicly
traded partnership" as that term is defined in the Code.
GAIN OR LOSS. A taxable Unitholder will recognize a gain or loss on the sale of
such Unitholder's Units in an amount equal to the difference between (i) the
amount realized by such Unitholder on the sale and (ii) such Unitholder's
adjusted tax basis in the Units sold. The amount realized by a Unitholder will
include the Unitholder's share of the Partnership's liabilities, if any (as
determined under I.R.C. ss.752 and the regulations thereunder). If the
Unitholder is a corporation and reports a loss on the sale, such loss generally
could not be currently deducted by such Unitholder except against such
Unitholder's capital gains from such other investments. If the Unitholder is an
individual and reports a loss on the sale, such loss generally could not be
deducted by such Unitholder except against such Unitholder's capital gains from
such other investments and up to $3,000.00 in the aggregate against ordinary
income. Assuming the activities engaged in by the Partnership constitute passive
activities as defined in I.R.C. ss.469, such loss would be treated as a passive
activity loss. (See "Suspended 'Passive Activity Losses'" below.)
The adjusted tax basis in the Units of a Unitholder will depend upon
individual circumstances. (See also "Partnership Allocations in Year of Sale"
below.) EACH UNITHOLDER WHO PLANS TO TENDER HEREUNDER SHOULD CONSULT WITH THE
UNITHOLDER'S OWN TAX ADVISOR AS TO THE UNITHOLDER'S ADJUSTED TAX BASIS IN THE
UNITHOLDER'S UNITS AND THE RESULTING TAX CONSEQUENCES OF A SALE.
If any portion of the amount realized by a Unitholder is attributable to
such Unitholder's share of "unrealized receivables" or "substantially
appreciated inventory items" as defined in I.R.C. ss.751, a corresponding
portion of such Unitholder's gain or loss will be treated as ordinary gain or
loss. It is possible that the basis allocation rules of I.R.C. ss.751 may result
in a Unitholder's recognizing ordinary income with respect to the portion of the
Unitholder's amount realized on the sale of a Unit that is attributable to such
items while recognizing a capital loss with respect to the remainder of the
Unit.
A tax-exempt Unitholder (other than an organization described in I.R.C.
ss.ss.501(c)(7) (social club), 501(c)(9) (voluntary employee benefit
association), 501(c)(17) (supplementary unemployment benefit trust), or
501(c)(20) (qualified group legal services plan)) should not be required to
recognize unrelated trade or business income upon the sale of its Units pursuant
to the Offer, assuming that such Unitholder does not hold its Units as a
"dealer" and has not acquired such Units with debt financed proceeds.
PARTNERSHIP ALLOCATIONS IN YEAR OF SALE. A tendering Unitholder will be
allocated the Unitholder's pro rata share of the annual taxable income and
losses from the Partnership, in accordance with the terms and conditions of the
Partnership Agreement, with respect to the Units sold for the period through the
date of sale, even though such Unitholder will assign to the Purchaser his, her
or its rights to receive certain cash distributions with respect to such Units.
Such allocations and any Partnership distributions for such period would affect
a Unitholder's adjusted tax basis in the tendered Units and, therefore, the
amount of gain or loss recognized by the Unitholder on the sale of the Units.
POSSIBLE TAX TERMINATION. The Code provides that if 50% or more of the capital
and profits interests in a partnership are sold or exchanged within a single
12-month period, such partnership generally will terminate for federal income
tax purposes. It is possible that the Partnership could terminate for federal
income tax purposes as a result of consummation of the Offer. If so, the
Partnership will be treated as having made a liquidating distribution of an
undivided interest in all of its assets to the Unitholders, in proportion to
their respective interests in the Partnership's properties, the partners of the
Partnership after consummation of the Offer (i.e., the non-tendering Unitholders
and the Purchaser) would be treated as having recontributed their interests in
Partnership assets to a new Partnership, and the capital accounts of all
partners would be restated. A Unitholder would recognize gain on the liquidating
distribution only to the extent that the amount of cash deemed distributed to
the Unitholder exceeded the Unitholder's basis in the Units. Depending on the
Unitholders' basis in their Units and the Partnership's tax basis in its
property, a tax termination could affect, perhaps adversely, the amount of
depreciation deductions reported by the Partnership for the period following the
date of such termination. A tax termination of the Partnership also could have
the adverse effect on Unitholders whose tax year is not the calendar year, of
the inclusion of more than one year of Partnership tax items in one tax return
of such Unitholders, resulting in a "bunching" of income or deductions. In
addition, a tax termination could have the adverse effect on non-tendering
Unitholders who subsequently dispose of their Units at a gain of requiring them
to treat a greater portion of such gain as ordinary income (due to the
application of I.R.C. ss.735) than would otherwise be required absent a tax
termination of the Partnership.
SUSPENDED "PASSIVE ACTIVITY LOSSES". A Unitholder who sells all of the
Unitholder's Units would be able to deduct "suspended" passive activity losses
from the Partnership, if any, in the year of sale free of the passive activity
loss limitation. If it is determined that the Partnership is engaged in
activities that are defined by I.R.C. ss.469 as "passive activities", the
ability of a Unitholder, as a limited partner of the Partnership, who or which
is subject to the passive activity loss rules, to claim tax losses from the
Partnership is limited. Upon sale of all of the Unitholder's Units, such
Unitholder would be able to use any "suspended" passive activity losses first
against gain, if any, on sale of the Unitholder's Units and then against any
other net income or gain from all other passive activities and then against any
non-passive income.
FOREIGN UNITHOLDERS. Gain realized by a foreign Unitholder on a sale of a Unit
pursuant to the Offer will be subject to federal income tax. Under I.R.C.
ss.1445, the transferee of a partnership interest held by a foreign person is
generally required to deduct and withhold a tax equal to 10% of the amount
realized on the disposition. The Purchaser will withhold 10% of the amount
realized by a tendering Unitholder from the purchase price payment to be made to
such Unitholder unless the Unitholder properly completes and signs the FIRPTA
Affidavit included as part of the Tax Certification certifying the Unitholder's
TIN, that such Unitholder is not a foreign person and the Unitholder's address.
Amounts withheld would be creditable against a foreign Unitholder's federal
income tax liability and, if in excess thereof, a refund could be obtained from
the Internal Revenue Service by filing a U.S. income tax return.
SECTION 8. EFFECTS OF THE OFFER.
EFFECT ON TRADING MARKET. There is no established public trading market for the
Units and, therefore, a reduction in the number of Unitholders should not
materially further restrict the Unitholders' ability to find Purchasers for
their Units on any secondary market.
VOTING POWER OF PURCHASER. Depending on the number of Units acquired by the
Purchaser pursuant to the Offer, the Purchaser may have the ability to exert
certain influence on matters subject to the vote of Unitholders, unless
otherwise prohibited.
The Units are registered under the Exchange Act, which requires, among
other things that the Partnership furnish certain information to its Unitholders
and to the Commission and comply with the Commission's proxy rules in connection
with meetings of, and solicitation of consents from, Unitholders.
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SECTION 9. FUTURE PLANS.
Following the completion of the Offer, the Purchaser, or its affiliates,
may acquire additional Units. Any such acquisitions may be made through private
purchases, one or more future tender offers or by any other means deemed
advisable or appropriate. Any such acquisitions may be at a consideration higher
or lower than the consideration to be paid for the Units purchased pursuant to
the Offer.
The Purchaser is acquiring the Units pursuant to the Offer solely for
investment purposes. Although the Purchaser has no present intention to seek
control of the Partnership or to change the management or operations of the
Partnership, the Purchaser reserves the right, at an appropriate time, to
exercise its rights as a limited partner, unless otherwise prohibited, to vote
on matters subject to a limited partner vote, including a vote to cause the sale
of the Partnership's remaining property and the liquidation and dissolution of
the Partnership.
SECTION 10. THE BUSINESS OF THE PARTNERSHIP.
Information included herein concerning the Partnership is derived
exclusively from the Partnership's publicly-filed reports. Cable TV Fund 14-A,
Ltd. (the "Partnership"), a Colorado limited partnership, that was formed in
February 1987 pursuant to the public offering of limited partnership interests
in the Cable TV Fund 14-A Limited Partnership which was sponsored by Jones
Intercable, Inc. ("Jones" or the "General Partner"). Its principal offices are
located at 9697 East Mineral Avenue, Englewood, CO 80112. Its telephone number
at that address is (303) 792-3111.
The Partnership was formed to acquire and operate cable television systems.
The Partnership owns, or has owned, and operates, or has operated, the cable
television systems serving areas in and around Buffalo, Minnesota, Naperville,
Illinois, Calvert County, Maryland and certain areas of Broward County, Florida.
The Partnership has announced the proposed sale of its remaining cable systems
and its intention to liquidate by the end of 1999. Except as otherwise described
in the Introduction to the Tender Offer-"Establishment of the Offer Price", it
is anticipated that there will be no further distributions to the limited
partners other than from any amounts remaining after liquidation of indemnity
escrow accounts established in conjunction with the proposed sales of the
remaining cable systems.
Jones, a publicly-held Colorado corporation, is the "General Partner" and
manages the Partnership. Jones is not affiliated with the Purchaser.
Additional information concerning the Partnership, its assets, operations
and management is contained in its Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q and other filings with the Securities and Exchange
Commission. Such reports and filings are available on the Commission's EDGAR
system, at its internet website at WWW.SEC.GOV, and are available for inspection
at the Commission's principal office in Washington, D.C. and at its regional
offices in New York, New York and Chicago, Illinois. The Purchaser expressly
disclaims any responsibility for the information included in such reports and
extracted in this discussion.
For additional information, please see the discussion above under
Introduction-"Establishment of the Offer Price."
Selected Financial Data. Set forth below is a summary of certain financial data
for the Partnership which has been excerpted from the Partnership's Annual
Report on Form 10-K for the year ended December 31, 1997. The financial
information set forth below is qualified in its entirety by reference to such
reports and documents filed with the Securities and Exchange Commission and the
financial statements and related notes contained therein. The Purchaser
expressly disclaims any responsibility for the information contained in these
filed reports and extracted in this discussion.
The following table sets forth in comparative tabular form a summary of
selected financial data for each of the Partnership's last five full years:
<TABLE>
<CAPTION>
Years Ended December 31
(In dollars, except per Unit amounts)
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues 26,642,247 47,808,719 44,094,802 40,442,268 38,916,469
Depreciation and Amortization 10,111,635 14,627,726 14,459,479 14,826,256 15,197,677
Operating Income (Loss) (2,713,383) (397,890) (1,459,868) (3,323,006) (3,562,804)
Equity in Net Loss of Cable Television (626,089) (815,252) (1,104,003) (1,468,218) (1,277,358)
Joint Venture
Net Income (Loss) 62,735,041(a) (7,371,183) (8,536,167) (9,472,910) (8,608,115)
Net Income (Loss) per Limited 387.70(a) (45.61) (52.82) (58.61) (53.26)
Partnership Unit
Weighted Average Number of Limited 160,000 160,000 160,000 160,000 160,000
Partnership Units Outstanding
General Partner's Deficit (72,389) (776,152) (702,440) (617,078) (522,349)
Limited Partners' Capital (Deficit) 19,267,904 (8,215,874) (918,403) 7,532,402 16,910,583
Total Assets 44,982,801 79,343,054 82,900,838 87,556,346 94,106,926
Debt 22,773,095 85,424,507 80,726,793 77,425,047 75,601,829
General Partner Advances 489,313 352,232 887,215 706,579 58,974
</TABLE>
(a) Net income resulted primarily from the sales of the Turnersville (N.J.)
System in January 1997 and the Central Illinois System in June 1997.
SECTION 11. CONFLICTS OF INTEREST.
It is the Purchaser's belief that other than the 7,921 Units currently held by
an affiliate or affiliates of the Purchaser, as a limited partner(s), there is
no conflict of interest between the Purchaser and the Partnership, the General
Partner or the Transfer Agent.
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<PAGE>
SECTION 12. CERTAIN INFORMATION CONCERNING THE PURCHASER.
The Purchaser is Madison Liquidity Investors 104, LLC, a limited liability
company organized under the laws of the State of Delaware. For information
concerning the Purchaser and its principals, please refer to Schedule "I"
attached hereto. The principal business of the Purchaser is investment in
securities, particularly limited partnership securities. The principal business
address of the Purchaser is P.O. Box 7461, Incline Village, Nevada 89452.
The Purchaser has made binding commitments to contribute and has available
sufficient amounts of liquid capital necessary to fund the acquisition of all
Units subject to the Offer, the expenses to be incurred in connection with the
Offer, and all other anticipated costs of the Purchaser. The Purchaser is not a
public company and has not prepared audited financial statements. The Purchaser,
its principals, owners and members have an aggregate net worth in excess of $5
million, including net liquid assets of more than $1 million.
As of August 31, 1998, Madison Partnership Liquidity Investors 46, LLC, ISA
Partnership Liquidity Investors, LLC, Madison/AG Partnership Value Partners II,
and Cobble Hill Investments, LP, affiliates of the Purchaser, owned a total of
7,921 Units, or 4.95% of the outstanding Units of the Partnership. These Units
were acquired during 1997 and 1998 at prices ranging from $215.00 per Unit to
$390.00 per Unit. In consideration of a distribution made by the Partnership on
April 30, 1998 in the amount of $159.00 per Unit and also in consideration of
the limited and inefficient nature of the market for the Units, the Purchaser
does not believe that the prices paid for previously acquired Units should be
relied upon as a complete and accurate representation as to the current fair
market value of the Units.
Except as otherwise set forth herein, (i) neither the Purchaser nor, to the
best knowledge of the Purchaser, the persons listed on Schedule "I" nor any
affiliate of the Purchaser, beneficially owns or has a right to acquire any
Units, (ii) neither the Purchaser nor, to the best knowledge of the Purchaser,
the persons listed on Schedule "I" nor any affiliate of the Purchaser, or any
director, executive officer or subsidiary of any of the foregoing has effected
any transaction in the Units within the past 60 days, (iii) except as set forth
in Section 15 of this Offer to Purchase ("Certain Legal Matters"), neither the
Purchaser nor, to the best knowledge of the Purchaser, the persons listed on
Schedule "I" nor any affiliate of the Purchaser have any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Partnership, including but not limited to, contracts,
arrangements, understandings or relationships concerning the transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies,
consents or authorizations, (iv) there have been no transactions or business
relationships which would be required to be disclosed under the rules and
regulations of the Commission between the Purchaser or, to the best knowledge of
the Purchaser, the persons listed on Schedule "I", or any affiliate of the
Purchaser on the one hand, and the Partnership or its affiliates, on the other
hand, and (v) there have been no contracts, negotiations or transactions between
the Purchaser, or to the best knowledge of the Purchaser any affiliate of the
Purchaser on the one hand, the persons listed on Schedule "I", and the
Partnership or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets.
SECTION 13. SOURCE OF FUNDS.
The Purchaser expects that approximately $3,643,200.00 would be required to
purchase up to the 15,840 Unit maximum of the outstanding Units, if tendered,
and an additional $150,000.00 may be required to pay related fees and expenses.
The Purchaser anticipates funding all of the purchase price and related expenses
through existing equity sources and/or borrowing facilities. It is expected that
the Purchaser will obtain its funding from its Member, Madison/OHI Liquidity
Investors, LLC ("OHI"), which in turn has represented that it intends to utilize
its existing capital sources. The Offer is not contingent on obtaining
financing.
SECTION 14. CONDITIONS OF THE OFFER.
Notwithstanding any other terms of the Offer, the Purchaser shall not be
required to accept for payment or to pay for any Units tendered if all
authorizations, consents, orders or approvals of, or declarations or filings
with, or expirations of waiting periods imposed by, any court, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign, necessary for the consummation of the transactions
contemplated by the Offer shall not have been filed, occurred or been obtained
on or before the Expiration Date.
The Purchaser shall not be required to accept for payment or pay for any
Units not theretofore accepted for payment or paid for and may terminate or
amend the Offer as to such Units if, at any time on or after the date of the
Offer and before the Expiration Date, any of the following conditions exits:
(a) a preliminary or permanent injunction or other order of any federal or
state court, government or governmental authority or agency shall have been
issued and shall remain in effect which (i) makes illegal, delays or otherwise
directly or indirectly restrains or prohibits the making of the Offer or the
acceptance for payment of or payment for any Units by the Purchaser, (ii)
imposes or confirms limitations on the ability of the Purchaser effectively to
exercise full rights of ownership of any Units, including, without limitation,
the right to vote any Units acquired by the Purchaser pursuant to the Offer or
otherwise on all matters properly presented to the Partnership's Unitholders,
(iii) requires divestiture by the Purchaser of any Units, (iv) causes any
material diminution of the benefits to be derived by the Purchaser as a result
of the transactions contemplated by the Offer or (v) might materially adversely
affect the business, properties, assets, liabilities, financial condition, tax
status, operations, results of operations or prospects of the Purchaser or the
Partnership;
(b) there shall be any action taken, or any statute, rule, regulation or
order proposed, enacted, enforced, promulgated, issued or deemed applicable to
the Offer by any federal or state court, government or governmental authority or
agency, other than the application of the waiting period provisions of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which might,
directly or indirectly, result in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above;
(c) any change or development shall have occurred or been threatened since
the date hereof, in the business, properties, assets, liabilities, financial
condition, tax status, operations, results of operations or prospects of the
Partnership, which, in the reasonable judgment of the Purchaser, is or may be
materially adverse to the Partnership, or the Purchaser shall have become aware
of any fact that, in the reasonable judgment of the Purchaser, does or may have
a material adverse effect on the value of the Units;
(d) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange or in
the over-the-counter market in the United States, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any limitation by any governmental authority on, or other
event which might affect, the extension of credit by lending institutions or
result in any imposition of currency controls in the United States, (iv) a
commencement of a war or armed hostilities or other national or international
calamity directly or indirectly involving the United States, (v) a material
change in United States or other currency exchange rates or a suspension of a
limitation on the markets thereof, or (vi) in the case of any of the foregoing
existing at the time of the commencement of the Offer a material acceleration or
worsening thereof;
(e) it shall have been publicly disclosed or the Purchaser shall have
otherwise learned that (i) more than fifty percent of the outstanding Units have
been or are proposed to be acquired by another person (including a "group"
within the meaning of Section 13(d)(3) of the Exchange Act), or (ii) any person
or group that prior to such date had filed a Statement with the Commission
pursuant to Section 13(d) or (g) of the Exchange Act has increased or proposes
to increase the number of Units beneficially owned by such person or group as
disclosed in such Statement by two percent or more of the outstanding Units; or
(f) any developments that would substantially impair or encumber those
benefits that the Purchaser is attempting to achieve in this tender offer.
The foregoing conditions are for the sole benefit of the Purchaser and may
be asserted by the Purchaser regardless of the circumstances giving rise to such
conditions or may be waived by the Purchaser in whole or in part at any time and
from time to time in its sole discretion. Any termination by the Purchaser
concerning the events described above will be final and binding upon all
parties.
SECTION 15. CERTAIN LEGAL MATTERS.
GENERAL. Except as set forth in this Section 15, the Purchaser is not aware of
any filings, approvals or other actions by any domestic or foreign governmental
or administrative agency that would be required prior to the acquisition of
Units by the Purchaser pursuant to the Offer. Should any such approval or other
action be required, it is the Purchaser's present intention that such additional
approval or action would be sought. While there is no present intent to delay
the purchase of Units tendered pursuant to the Offer pending receipt of any such
additional approval or the taking of any such action, there can be no assurance
that any such additional approval or action, if needed, would be obtained
without substantial conditions or that adverse consequences might not result to
the Partnership's business, or that
7
<PAGE>
certain parts of the Partnership's business might not have to be disposed of or
held separate or other substantial conditions complied with in order to obtain
such approval or action, any of which could cause the Purchaser to elect to
terminate the Offer without purchasing Units thereunder. The Purchaser's
obligation to purchase and pay for Units is subject to certain conditions,
including conditions related to the legal matters discussed in this Section 15.
An affiliate of the Purchaser is currently a party to an Agreement with the
General Partner dated as of October 8, 1997 (the "Agreement"). While the
validity, terms and conditions, and applicability of the Agreement are subject
to the interpretation of the courts of appropriate jurisdiction, the Purchaser
does not believe that the terms of this Agreement will prevent the Purchaser
from accepting any of the Units validly tendered in accordance with the terms
and conditions of this Offer.
The Agreement was originally entered into in connection with a request for
the production of a list of Partnership Unitholders to facilitate the making of
a limited tender offer not subject to the regulations under Section 14(d) or the
Exchange Act. Among other things, the Agreement requires the Purchaser's
affiliate, and affiliates, to vote all of its interests in the Partnership in
the same manner as the majority of all other limited partners who vote on any
proposal or issue submitted to a vote of the limited partners, for a period of
two years. The Agreement also limits, for a period of two years, the Purchaser's
affiliate, and other affiliates, under certain circumstances, from requesting
the transfer of interests in the Partnership in any tax year of the Partnership
if such transfers, together with all other transfers made during such tax year,
would cause transfers of interests in the Partnership to exceed a certain 5%
safe harbor limit promulgated by the Internal Revenue Service. The Purchaser
believes that the Agreement is not applicable to this Offer to Purchase; that
even if the Agreement were applicable to this Offer to Purchase, the safe harbor
limit would not apply to this Offer to Purchase; and that even if such limit
were applicable, it is unlikely that the application of such limit would cause a
significant delay in the Partnership's confirmation that transfers of Units have
been effectuated pursuant to this Offer to Purchase.
ANTITRUST. The Purchaser does not believe that the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, is applicable to the acquisition of Units
pursuant to the Offer.
MARGIN REQUIREMENTS. The units are not "margin securities" under the regulations
of the Board of Governors of the Federal Reserve System and, accordingly, such
regulations are not applicable to the Offer.
STATE TAKEOVER LAWS. A number of states have adopted anti-takeover laws which
purport, to various degrees, to be applicable to attempts to acquire securities
of corporations which are incorporated in such states or which have substantial
assets, security holders, principal executive offices or principal places of
business therein. These laws are directed at the acquisition of corporations and
not partnerships. The Purchaser, therefore, does not believe that any
anti-takeover laws apply to the transactions contemplated by the Offer.
Although the Purchaser has not attempted to comply with any state
anti-takeover statutes in connection with the Offer, the Purchaser reserves the
right to challenge the validity or applicability of any state law allegedly
applicable to the Offer and nothing in this Offer nor any action taken in
connection herewith is intended as a waiver of such right. If any state
anti-takeover statute is applicable to the Offer, the Purchaser might be unable
to accept for payment or purchase Units tendered pursuant to the Offer or be
delayed in continuing or consummating the Offer. In such case, the Purchaser may
not be obligated to accept for purchase or pay for any Units tendered.
SECTION 16. FEES AND EXPENSES.
The Purchaser has retained Gemisys Tender Services, to act as the
Purchaser's Transfer Agent. The Purchaser will pay Gemisys reasonable and
customary compensation for its services in connection with the Offer and will
indemnify Gemisys against certain liabilities and expenses in connection
therewith, including liabilities under the federal securities laws. Except as
otherwise set forth herein, the Purchaser will also pay all costs and expenses
of printing, publication and mailing of the Offer.
SECTION 17. MISCELLANEOUS.
THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON
BEHALF OF) UNITHOLDERS IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR
THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH
JURISDICTION. THE PURCHASER IS NOT AWARE OF ANY JURISDICTION WITHIN THE UNITED
STATES IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD BE
ILLEGAL.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained herein or in the
Agreement of Assignment and Transfer and, if given or made, such information or
representation must not be relied upon as having been authorized.
OCTOBER 30, 1998
MADISON LIQUIDITY INVESTORS 104, LLC
8
<PAGE>
SCHEDULE I
THE PURCHASER AND ITS RESPECTIVE PRINCIPALS
The Purchaser is Madison Liquidity Investors 104, LLC. The Member of the
Purchaser is Madison/OHI Liquidity Investors, LLC, an affiliate of The Madison
Avenue Capital Group LLC ("MACG"). The names of the officers of the Purchaser
and Madison/OHI Liquidity Investors, LLC and their principal occupations and
five year employment histories are set forth below. Each individual is a citizen
of the United States.
THE MADISON AVENUE CAPITAL GROUP, LLC is a Delaware limited liability company
founded in January 1995 from predecessor entities created by Bryan E. Gordon and
Ronald M. Dickerman. MACG is an investment management boutique with a value
investing philosophy. MACG invests in limited partnership units, common stock
and other securities issued by companies which own diversified portfolios of
real estate, cable television systems, transportation and other leased
equipment, film portfolios, LBO/venture investment portfolios and other cash
flow producing assets. MACG and its affiliates have over $270 million in
committed capital. To date, over 45,000 limited partners nationwide in over 250
limited partnerships have sold their units to MACG and its affiliates. The
business address of MACG is P.O. Box 7461, Incline Village, Nevada 89452.
BRYAN E. GORDON is a Managing Director of the Purchaser as well as being a
Managing Director of The Madison Avenue Capital Group. Prior to co-founding
predecessor entities to MACG in January 1995, Mr. Gordon had 13 years of
experience in the investment banking and management consulting fields, with an
emphasis on real estate and corporate finance. Mr. Gordon has extensive
experience with equity and debt financings, mergers and acquisitions, roll-up
and formation transactions, and restructurings of limited partnerships, REITs,
corporations and joint ventures. Mr. Gordon's experience includes: seven years
in the Real Estate and Partnership Finance Groups at Smith Barney, Inc.; two
years in the Investment Banking Division of Bear, Stearns & Co. Inc.; one year
in the Real Estate and Partnership Finance Group at EF Hutton & Company; and
three years in management consulting with Tillinghast/Towers, Perrin, Foster &
Crosby. Mr. Gordon earned an MBA from Columbia University's Graduate School of
Business and a BSE from the Wharton School of the University of Pennsylvania.
RONALD M. DICKERMAN is a Managing Director of the Purchaser as well as being a
Managing Director of The Madison Avenue Capital Group. Prior to co-founding
predecessor entities to MACG in January 1995, Mr. Dickerman had 14 years of
experience in the analysis, acquisition, financing, management, and disposition
of income-producing real estate. In 1991, Mr. Dickerman founded First Equity
Realty Corp, a real estate investment firm specializing in the acquisition of
multi-family properties from financial institutions, utilizing a value-added
approach. From 1987-1991, Mr. Dickerman was an investment banker in the
Partnership Finance Group of Smith Barney, Harris, Upham & Co., Inc. His
responsibilities included the origination, analysis, structuring, acquisition,
asset management, disposition and marketing of real estate and other limited
partnerships. In this capacity, Mr. Dickerman was responsible for transactions
that raised approximately $525 million for assets with a value of $2 billion.
Mr. Dickerman earned an MBA from Columbia University's Graduate School of
Business and a BA from Tufts University.
EXHIBIT (A)(2)
AGREEMENT OF ASSIGNMENT AND TRANSFER
FOR LIMITED PARTNERSHIP INTERESTS IN
CABLE TV FUND 14-A, LTD.
[Name of Owner of Units] TAID# [Number]
[Address] Cable TV Fund 14-A, Ltd.
[Address] UNITS OWNED: [Number]
[Town], [State] [Zip Code]
Please make any corrections to name/mailing address in space to the left.
I hereby tender to Madison Liquidity Investors 104, LLC, a Delaware limited
liability company ("Madison"), the above-described limited partnership interests
(the "Units") in Cable TV Fund 14-A, Ltd., a Colorado limited partnership (the
"Partnership"), for $230.00 per Unit in cash (reduced by the amount of (i) any
transfer fee payable to the Partnership in respect of the Units tendered hereby
and (ii) any cash distributions made to me by the Partnership on or after
October 30, 1998) in accordance with the terms and subject to the conditions of
Madison's Offer to Purchase as Exhibit (a)(1) to Schedule 14D-1 dated October
30, 1998 (the "Offer to Purchase") and this Agreement of Assignment and Transfer
(which, together with the Offer to Purchase and any supplements or amendments,
constitutes the "Offer"). I acknowledge that I have received the Offer to
Purchase. The Offer will remain open until December 1, 1998, subject to
extension at the discretion of Madison. It is understood that payment for the
Units tendered hereby will be made by check mailed to me at the address above
promptly after the date of the Partnership's confirmation that the transfer of
the Units to Madison is effective, subject to Section 4 (Proration) and Section
5 (Withdrawal Rights) of the Offer to Purchase. The Offer is subject to Section
14 (Conditions of the Offer) of the Offer to Purchase.
Subject to, and effective upon, acceptance of this Agreement of Assignment and
Transfer and payment for the Units tendered hereby in accordance with the terms
and subject to the conditions of the Offer, I hereby sell, assign, transfer,
convey and deliver (the "Transfer") to Madison, all of my right, title and
interest in and to the Units tendered hereby and accepted for payment pursuant
to the Offer and any and all non-cash distributions, other Units or other
securities issued or issuable in respect thereof on or after October 30, 1998,
including, without limitation, to the extent that they exist, all rights in, and
claims to, any Partnership profits and losses, cash distributions, voting rights
and other benefits of any nature whatsoever distributable or allocable to the
Units under the Partnership's limited partnership agreement (the "Partnership
Agreement"), (i) unconditionally to the extent that the rights appurtenant to
the Units may be transferred and conveyed without the consent of the general
partner of the Partnership (the "General Partner"), and (ii) in the event that
Madison elects to become a substituted limited partner of the Partnership,
subject to the consent of the General Partner to the extent such consent may be
required in order for Madison to become a substituted limited partner of the
Partnership.
It is my intention that Madison, if it so elects, succeed to my interest as a
Substitute Limited Partner, as defined in the Partnership Agreement, in my place
with respect to the transferred Units. It is my understanding, and I hereby
acknowledge and agree, that Madison shall be entitled to receive all
distributions of cash or other property from the Partnership attributable to the
transferred Units that are made on or after October 30, 1998, including, without
limitation, all distributions of Distributable Cash Flow and Net Cash Proceeds,
without regard to whether the cash or other property that is included in any
such distribution was received by the Partnership before or after the Transfer
and without regard to whether the applicable sale, financing, refinancing or
other disposition took place before or after the Transfer. It is my further
understanding, and I further acknowledge and agree, that the taxable income and
taxable loss attributable to the transferred Units with respect to the taxable
period in which the Transfer occurs shall be divided among and allocated between
me and Madison as provided in the Partnership Agreement, or in accordance with
such other lawful allocation methodology as may be agreed upon by the
Partnership and Madison. I represent and warrant that I have the full right,
power and authority to transfer the subject Units and to execute this Agreement
of Assignment and Transfer and all other documents executed in connection
herewith without the joinder of any other person or party, and if I am executing
this Agreement of Assignment and Transfer or any other document in connection
herewith on behalf of a business or other entity other than an individual
person, I have the right, power and authority to execute such documents on
behalf of such entity without the joinder of any other person or party.
Subject to Section 5 (Withdrawal Rights) of the Offer to Purchase, I hereby
irrevocably constitute and appoint Madison as my true and lawful agent and
attorney-in-fact with respect to the Units, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to (i) vote or act in such manner as any such attorney-in-fact shall,
in its sole discretion, deem proper with respect to the Units; (ii) deliver the
Units and transfer ownership of the Units on the Partnership's books maintained
by the General Partner; (iii) endorse, on my behalf, any and all payments
received by Madison from the Partnership that are made on or after October 30,
1998, which are made payable to me, in favor of Madison or any other payee
Madison otherwise designates; (iv) execute a Loss and Indemnity Agreement
relating to the Units on my behalf if I fail to include my original
certificate(s) (if any) representing the Units with this Agreement; (v) execute
on my behalf any applications for transfer and any distribution allocation
agreements required by National Association of Securities Dealers Notice to
Members 96-14 to give effect to the transactions contemplated by this Agreement;
(vi) receive all benefits and cash distributions and otherwise exercise all
rights of beneficial ownership of the Units; and (vii) direct the General
Partner to immediately change the address of record of the registered owner of
the transferred Units to that of Madison, as my attorney-in-fact. Madison is
further authorized, as part of its powers as my attorney-in-fact with respect to
the Units, to commence any litigation that Madison, in its sole discretion,
deems necessary to enforce any exercise of Madison's powers as my
attorney-in-fact as set forth herein. Madison shall not be required to post bond
of any nature in connection with this power of attorney. I hereby direct the
Partnership and the General Partner to remit to Madison any distributions made
by the Partnership with respect to the Units on or after October 30, 1998. To
the extent that any distributions are made by the Partnership with respect to
the Units on or after October 30, 1998, that are received by me, I agree to
promptly pay over such distributions to Madison. I further agree to pay any
costs incurred by Madison in connection with the enforcement of any of my
obligations hereunder or my breach of any of the agreements, representations and
warranties made by me herein.
I hereby direct the General Partner to immediately change my address of record
as the registered owner of the Units to be transferred herein to that of
Madison, conditional solely upon Madison's execution of this Agreement.
IF LEGAL TITLE TO THE UNITS IS HELD THROUGH AN IRA OR KEOGH OR SIMILAR ACCOUNT,
I UNDERSTAND THAT THIS AGREEMENT MUST BE SIGNED BY THE CUSTODIAN OF SUCH IRA OR
KEOGH ACCOUNT. FURTHERMORE, I HEREBY AUTHORIZE AND DIRECT THE CUSTODIAN OF SUCH
IRA OR KEOGH TO CONFIRM THIS AGREEMENT.
I hereby represent and warrant to Madison that I (i) have received and reviewed
the Offer to Purchase and (ii) own the Units and have full power and authority
to validly sell, assign, transfer, convey and deliver to Madison the Units, and
that effective when the Units are accepted for payment by Madison, I hereby
convey to Madison, and Madison will hereby acquire good, marketable and
unencumbered title thereto, free and clear of all options, liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the Units will not be subject to
any adverse claim. I further represent and warrant that I am a "United States
person," as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986,
as amended.
I hereby release and discharge the General Partner and its officers,
shareholders, directors, employees and agents from all actions, causes of
action, claims or demands I have, or may have, against the General Partner that
result from the General Partner's reliance on this Agreement of Assignment and
Transfer or any of the terms and conditions contained herein. I hereby indemnify
and hold harmless the Partnership from and against all claims, demands, damages,
losses, obligations and responsibilities arising, directly or indirectly, out of
a breach of any one or more representations and warranties set forth herein.
All authority herein conferred or agreed to be conferred shall survive my death
or incapacity and all of my obligations shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. In
addition, I hereby agree not to offer, sell or accept any offer to purchase any
or all of the Units to or from any third party while the Offer remains open.
Upon request, I will execute and deliver any additional documents deemed by
Madison to be necessary or desirable to complete the assignment, transfer and
purchase of the Units.
<PAGE>
I HEREBY CERTIFY, UNDER PENALTIES OF PERJURY, THAT THE STATEMENTS IN BOX A, BOX
C, BOX D AND, IF APPLICABLE, BOX E BELOW ARE TRUE AND CORRECT.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware. I waive any claim that any State or Federal court located
in the State of Delaware is an inconvenient forum, and waive any right to trial
by jury.
PLEASE COMPLETE ALL SHADED AREAS
SIGN HERE TO TENDER YOUR UNITS
================================================================================
BOX A
(See Instructions to Complete Agreement of Assignment and Transfer - Box A)
All
Date:__________________________, 1998 _________________________________________
(If you desire to sell less than
all of your Units, strike "All" and
indicate the number of Units to be
sold)
<TABLE>
<CAPTION>
<S> <C> <C>
- ----------------------------------- ------------------------------------- ----------------------------------------------------
Your Social Security or Your Telephone Number Signature of Co-Seller and Medallion Signature
Taxpayer Identification Number Guarantee (If applicable)
</TABLE>
- --------------------------------------------------------------------------------
Your Signature and Medallion Signature Guarantee
- --------------------------------------------------------------------------------
Custodian Signature and Medallion Signature Guarantee
(REQUIRED IF UNITS HELD IN IRA/KEOGH)
Please note: A Medallion Signature Guarantee is similar to a notary, but is
provided by your bank or brokerage house where you have an account.
================================================================================
BOX B
MEDALLION SIGNATURE GUARANTEE
(Required for all Sellers)
(See Instructions to Complete Agreement of Assignment and Transfer - Box B)
- --------------------------------------------------------------------------------
Name and Address of Bank or Brokerage House:____________________________________
Authorized Signature of Bank or Brokerage House Representative:_________________
Title:__________________________________________________________________________
Name:___________________________________________________________________________
Date: ________, 199_
Please note: A Medallion Signature Guarantee is similar to a notary, but is
provided by your bank or brokerage house where you have an account.
================================================================================
BOX C
SUBSTITUTE FORM W-9
(See Instructions to Complete Agreement of Assignment and Transfer - Box C)
- --------------------------------------------------------------------------------
The person signing this Agreement of Assignment and Transfer hereby
certifies the following to the Purchaser under penalties of perjury:
(i) The TIN set forth in the signature box in Box A of this Agreement
of Assignment and Transfer is the correct TIN of the Unitholder, or if this box
[ ] is checked, the Unitholder has applied for a TIN. If the Unitholder has
applied for a TIN, a TIN has not been issued to the Unitholder, and either: (a)
the Unitholder has mailed or delivered an application to receive a TIN to the
appropriate IRS Center or Social Security Administration Office, or (B) THE
UNITHOLDER INTENDS TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE (IT
BEING UNDERSTOOD THAT IF THE UNITHOLDER DOES NOT PROVIDE A TIN TO THE PURCHASER
WITHIN SIXTY (60) DAYS, 31% OF ALL REPORTABLE PAYMENTS MADE TO THE UNITHOLDER
THEREAFTER WILL BE WITHHELD UNTIL A TIN IS PROVIDED TO THE PURCHASER); and
(ii) Unless this box [ ] is checked, the Unitholder is not subject to
backup withholding either because the Unitholder: (a) is exempt from backup
withholding, (b) has not been notified by the IRS that the Unitholder is subject
to backup withholding as a result of a failure to report all interest or
dividends, or (c) has been notified by the IRS that such Unitholder is no longer
subject to backup withholding.
Note: Place an "X" in the box in (ii) if you are unable to certify that the
Unitholder is not subject to backup withholding.
================================================================================
BOX D
FIRPTA AFFIDAVIT
(See Instructions to Complete Agreement of Assignment and Transfer - Box D)
- --------------------------------------------------------------------------------
Under Section 1445(e)(5) of the Internal Revenue Code and Treas. Reg.
1.1445-11T(d), a transferee must withhold tax equal to 10% of the amount
realized with respect to certain transfers of an interest in a partnership if
50% or more of the value of its gross assets consists of U.S. real property
interests and 90% or more of the value of its gross assets consists of U.S. real
property interests plus cash equivalents, and the holder of the partnership
interest is a foreign person. To inform the Purchaser that no withholding is
required with respect to the Unitholder's interest in the Partnership, the
person signing this Agreement of Assignment and Transfer hereby certifies the
following under penalties of perjury:
(i) Unless this box [ ] is checked, the Unitholder, if an individual,
is a U.S. citizen or a resident alien for purposes of U.S. income taxation, and
if other than an individual, is not a foreign corporation, foreign partnership,
foreign estate or foreign trust (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations); (ii) the Unitholder's U.S. social
security number (for individuals) or employer identification number (for
non-individuals) is correctly printed in the signature box in Box A of this
Agreement of Assignment and Transfer; and (iii) the Unitholder's home address
(for individuals) or office address (for non-individuals), is correctly printed
(or corrected) on the top of this Agreement of Assignment and Transfer. If a
corporation, the jurisdiction of incorporation is ________________________.
The person signing this Agreement of Assignment and Transfer understands
that this certification may be disclosed to the IRS by the Purchaser and that
any false statements contained herein could be punished by fine, imprisonment,
or both.
================================================================================
BOX E
SUBSTITUTE FORM W-8
(See Instructions to Complete Agreement of Assignment and Transfer - Box E)
- --------------------------------------------------------------------------------
By checking this box [ ], the person signing this Agreement of Assignment
and Transfer hereby certifies under penalties of perjury that the Unitholder is
an "exempt foreign person" for purposes of the backup withholding rules under
the U.S. federal income tax laws, because the Unitholder:
(i) Is a nonresident alien individual or a foreign corporation,
partnership, estate or trust;
(ii) If an individual, has not been and plans not to be present in the
U.S. for a total of 183 days or more during the calendar year; and
(iii) Neither engages, nor plans to engage, in a U.S. trade or business
that has effectively connected gains from transactions with a
broker.
================================================================================
AGREED TO AND ACCEPTED:
Madison Liquidity Investors 104, LLC
By:_______________________________________________________
Madison Liquidity Investors 104, LLC, c/o Gemisys Tender Services,
7103 South Revere Parkway, Englewood, CO 80112
Tel: 303-705-6390 Fax: 303-705-6276
<PAGE>
Exhibit (a)(3)
MADISON LIQUIDITY INVESTORS 104, LLC,
- --------------------------------------------------------------------------------
c/o Gemisys Tender Services o 7103 South Revere Parkway o Englewood, CO 80112
Tel: 303-705-6390 o Fax: 303-705-6276
October 30, 1998
TO UNITHOLDERS IN CABLE TV FUND 14-A, LTD.
RE: Offer to Purchase Limited Partnership Interests
-----------------------------------------------
Dear Fellow Investor:
Madison Liquidity Investors 104, LLC ("Madison") is seeking to buy your Limited
Partnership Interests (the "Units") in Cable TV Fund 14-A, Ltd. (the
"Partnership") for $230.00 per Unit in CASH. This amount will be reduced by the
$50.00 transfer fee (per transfer, not per Unit) charged by the Partnership and
any cash distributions made by the Partnership on or after October 30, 1998.
WE ARE AN INVESTMENT FIRM WHICH BUYS UNITS IN DOZENS OF UNDERPERFORMING LIMITED
PARTNERSHIPS AND ARE NOT AFFILIATED WITH THE PARTNERSHIP NOR THE GENERAL
PARTNER(S). We are principals seeking to acquire Units for our investment
portfolio only (we are not a matching service or professional broker who resells
units). Madison and its affiliates have over $270 million in capital that is
committed to paying limited partners for their units. To date, over 45,000
limited partners nationwide in over 250 limited partnerships have chosen to sell
their units to us. This has made Madison a leading and reliable choice for
limited partnership investors seeking a time and cost efficient liquidity
option.
Please consider the following points in evaluating our offer:
o FAST, COMMISSION-FREE SALE. Our offer provides you with the opportunity to
immediately sell your Units without the commission costs (generally, up to
10% of the sales price, subject to a $150-$200 minimum commission per
trade) paid by the seller in typical secondary market sales. Remember, with
secondary market matching services, the process to sell your Units will not
even begin until an interested buyer can be found, which cannot be assured
and can take days, weeks or even months.
o HISTORICAL PARTNERSHIP PERFORMANCE. The Partnership was closed 11 years
ago. You invested $500.00 per Unit and to date an original investor has
received total cash distributions of approximately $375.00 per Unit from
the Partnership. When combined with the remaining net asset value (as
estimated by the General Partner) this would represent an average annual
return on your investment of 4.15%. This return is generally equivalent to
that which can be obtained from investing in U.S. Treasury notes.
o HIGHER PRICE THAN RECENT SALES. Our offer price of $230.00 per Unit is
43.75% higher than the May and June 1998 tender offers from Lafayette Bay,
LLC and Smithtown Bay, LLC, respectively, and 2.22% higher than the August
1998 offer from CMG Partners, LLC.
o ILLIQUID UNITS. The relative illiquidity of the Units resulting from the
absence of a formal trading market means the Units are difficult to sell.
In fact, there were only five sales per month, on average, during the
months of June and July 1998 (the most recent period for which information
is available) according to the July/August issue of The Partnership
Spectrum.
O NEGATIVE IMPACT OF COMPETITION ON THE NAPERVILLE CABLE SYSTEM. In its
October 16, 1998 definitive proxy statement, the Partnership disclosed it
has been marketing the Naperville System for sale since 1996. Furthermore,
the Partnership stated "during 1996, Ameritech, the regional telephone
service provider for Illinois, began construction of cable television
systems in certain suburban Chicago communities including Naperville. The
growing competition from Ameritech has made the market for cable television
properties in the Chicago metropolitan area very soft."
o RISK OF DELAYED SALE. If a majority of the Unitholders in the Partnership
do not vote in favor of the sale of the Naperville System or the necessary
regulatory approval is not granted, the Partnership would not be able to
consummate the sale on the terms described in the October 16, 1998
definitive proxy statement. Considering the Partnership's statement in the
same definitive proxy statement that, "a longer holding period would expose
investors to the risk that competition from direct broadcast satellite
companies, telephone companies, especially Ameritech, and/or neighboring
cable basic and premium services, thereby decreasing the value of the
Naperville Systems," investors should consider the benefits offered through
a cash sale of Units owned, today, versus the aforementioned risks related
to the timing and uncertainty of a delayed sale of the Naperville System.
o SIMPLIFIED TAX FILING. If you sell your Units now, 1998 will be the final
year for which you receive a K-1 tax form from the Partnership, assuming
the transfer of your Units is completed by year end. Many investors who
have tax professionals prepare their taxes find the cost of filing K-1s to
be burdensome, particularly if more than one limited partnership is owned.
o ABILITY TO REDEPLOY SALE PROCEEDS INTO OTHER INVESTMENTS. The decision to
sell your Units for cash now would provide you with the ability to redeploy
your investment assets into potentially stronger and liquid investments.
This could, depending on your individual investment decisions, provide
current income and capital appreciation potential, as well as liquidity if
needed.
o ELIMINATION OF RETIREMENT ACCOUNT FEES. If you sell your Units now, 1998
could be the final year in which you incur fees for your IRA or retirement
account. Due to the lackluster performance and declining value of limited
partnership units generally, many custodians will not allow the transfer of
limited partnership units into new retirement accounts. While many
investors have consolidated their retirement accounts and taken advantage
of custodial services offered through discount brokerage firms, they may
have had to maintain separate retirement accounts for limited partnership
units, because of custodian restrictions on the transfer of such units.
Once our cash payment is sent directly to your retirement account, you are
free to consolidate your retirement accounts or transfer the funds to a
custodian that offers lower fees.
o UNCERTAIN TIMING OF FINAL PARTNERSHIP LIQUIDATION. A sale of all of the
assets of a partnership is no guarantee that full liquidation will occur
immediately after such sale or shortly thereafter. As stated in the
July/August 1998 issue of The Partnership Spectrum, "Long suffering
partnership investors rejoicing over the sale of their partnership's assets
typically don't realize that it could be months or even years before their
partnership is formally dissolved and the final K-1 is mailed out. While
warranties and representations made to buyers in connection with asset
sales often keep a partnership from dissolving for six to twelve months
after the last property has been sold, a lawsuit can require a partnership
to stay open for years." Accordingly, to the extent that the Partnership
continues to exist after its final asset sale, you will continue to receive
a K-1 in each year in which the Partnership continues to exist and there
can be no assurance that the Partnership will make cash distributions in
each of such years.
Madison will only purchase a maximum of 9.9% of the outstanding Units pursuant
to this offer. If more Units are offered to us, we will prorate our purchase
ratably to all sellers. You will be paid promptly following (i) receipt of a
valid, properly executed Agreement of Assignment and Transfer (see the yellow
document enclosed) and (ii) receipt by Madison of the Partnership's confirmation
that the transfer of Units has been effectuated, subject to Section 4
(Proration) of the Offer to Purchase. ALL SALES OF UNITS WILL BE IRREVOCABLE BY
YOU, SUBJECT TO SECTION 5 (WITHDRAWAL RIGHTS) OF THE OFFER TO PURCHASE.
A COMPREHENSIVE DISCUSSION OF THE TERMS OF THE OFFER CAN BE FOUND IN THE OFFER
TO PURCHASE, EXHIBIT (A)(1) TO THE SCHEDULE 14D-1.
If you wish to accept our offer, please complete and MEDALLION SIGNATURE
GUARANTEE (this must be done by your broker or a bank where you have an account)
the enclosed yellow Agreement of Assignment and Transfer and return it in the
enclosed envelope, along with your limited partnership certificate (if one was
issued to you and is available).
Our offer will expire at 5:00 p.m., Eastern Standard Time, on December 4, 1998,
unless the offer is extended. We encourage you to act promptly.
Please call us at (303)705-6390, or send a fax to (303)705-6276, if you have any
questions. Thank you for your consideration of our offer.
Very truly yours,
Madison Liquidity Investors 104, LLC
The price offered hereby may be more or less than prices recently quoted by
secondary market matching market services. We believe that transactions through
these secondary market services are costly and time consuming, and that the
quoted prices often differ from the price a seller actually receives. Therefore,
you may prefer to sell to us even at a lower price than otherwise so quoted. We
believe that the value of the Units will ultimately be more than the price
offered hereby. However, there are numerous risks and uncertainties that may
cause our belief to be wrong. If you wish to have us bear those risks and
uncertainties, you should consider selling your Units to us. We reserve the
right to apply procedural considerations in determining which Units to accept.
We may extend the term of our offer at our discretion. At times when a Madison
tender offer for Units of the Partnership is not outstanding, affiliates of
Madison may purchase Units at negotiated prices which may be more or less than
the price offered hereby.
<PAGE>
INSTRUCTIONS TO COMPLETE AGREEMENT OF ASSIGNMENT AND TRANSFER
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
By checking-off below ALL of the items that pertain to your form of ownership,
you are guaranteeing the fastest turnaround time for payment for your Units.
Refer to the "Other Common Oversights" section below to make sure you are not
forgetting anything that may delay processing.
Upon our receipt of your Agreement of Assignment and Transfer, Madison will
evaluate it to determine if it is complete by the General Partner's standards.
If your Agreement is incomplete, you will receive a deficiency letter from us
that will let you know the additional information that we need to process your
sale. Please respond promptly to such request for additional information. YOUR
FAILURE TO PROVIDE THIS ADDITIONAL INFORMATION CAN ADD WEEKS TO THE PROCESSING
TIME.
1. BOX A
- INDIVIDUAL OWNER/JOINT OWNERS OF RECORD
[ ] Sign Agreement (BOTH owners must sign if joint account).
[ ] Provide a MEDALLION SIGNATURE GUARANTEE.
[ ] Enclose your original limited partnership certificate,
if available.
[ ] Return Agreement to Madison c/o Gemisys Tender Services in
pre-paid/pre-addressed envelope provided.
- IRA INVESTORS
[ ] Beneficial owner should sign Agreement.
Madison will work directly with your Custodian to get the
necessary custodial signature/medallion guarantee and we
will then forward your check directly to your IRA account.
- TRUST, PROFIT SHARING AND PENSION PLANS
[ ] Authorized signatory should sign Agreement.
[ ] Enclose first, last and other applicable pages of TRUST
OR PLAN AGREEMENT showing that signor(s) is authorized
signatory.
- CORPORATIONS
[ ] Authorized signatory should sign Agreement.
[ ] INCLUDE CORPORATE RESOLUTION showing that signor(s) is
authorized signatory.
- OTHER COMMON OVERSIGHTS
[ ] Death Certificates: If the owner of the Units has died,
please enclose a copy of the Death Certificate and
evidence of your signature authority.
[ ] Letters Testamentary: If you have inherited the Units,
include a copy of the original owner's DEATH CERTIFICATE
and a copy of the LETTERS TESTAMENTARY OR WILL showing
that you are the legal owner of the Units.
2. BOX B - MEDALLION SIGNATURE GUARANTEE.
Required to be signed by your bank or brokerage house only.
3. BOX C - SUBSTITUTE FORM W-9.
Please check the shaded box in Box C(i) if you do not have a Taxpayer
identification Number or Social Security Number ("TIN") but have already applied
for a TIN. Please check the shaded box in Box C(ii) if you are subject to the
31% federal tax backup withholding.
4. BOX D - FIRPTA AFFIDAVIT.
Please check the shaded box in Box D(i) if you are not a U.S. citizen or a
resident alien for purposes of U.S. income taxation, or are a foreign
corporation, foreign partnership, foreign estate or foreign trust. If the
Unitholder is a corporation, please indicate the state of incorporation in the
shaded area in Box D(iii).
5. BOX E - FOREIGN PERSONS.
Please check the shaded box in Box E if you are an "exempt foreign person"
for purposes of the backup withholding rules under the U.S. federal income tax
laws.
Please note: A Medallion Signature Guarantee is similar to a notary, but is
provided by your bank or brokerage house where you have an account.
IF YOU HAVE ANY ADDITIONAL QUESTIONS, PLEASE CALL:
MADISON LIQUIDITY INVESTORS 104, LLC
C/O GEMISYS TENDER SERVICES
(303) 705-6390
Madison Liquidity Investors 104, LLC, c/o Gemisys Tender Services,
7103 South Revere Parkway, Englewood, CO 80112
Tel: 303-705-6390 Fax: 303-705-6276
<PAGE>
COMMONLY ASKED QUESTIONS AND ANSWERS
WHY WOULD I WANT TO SELL MY UNITS TO MADISON?
Have your original objectives for this investment been met? Are your pleased
with the way this investment has performed to date? We have found that most
investors are disappointed with the performance of their limited partnership
investments. Many investors have been in these investments far longer than
originally anticipated and their returns have been disappointing. In addition,
the tax reporting requirements for limited partnerships are burdensome and
costly, often requiring an accountant to prepare your taxes. Recent requirements
by certain states have also increased this burden by requiring limited partners
to file state income tax returns, and potentially to pay taxes, in states where
a partnership owns properties, regardless of the overall profitability of the
partnership.
Many investors feel that selling their limited partnership units will free up
funds to pursue more attractive investment options. And unlike limited
partnerships, most other investments provide immediate liquidity in the event an
investor needs access to his/her funds.
While emotionally difficult to accept, many investors are realizing that not
only will original projections never be met on many of these limited
partnerships, but, in some cases, original investment capital will never be
fully recovered. Thus, a readily available purchase offer for an underperforming
investment with an uncertain termination date may be an opportunity worthy of
your consideration.
WHY DOES MADISON WANT TO BUY MY UNITS?
Madison purchases units in dozens of underperforming limited partnerships for
its own investment portfolio... not for the purposes of reselling the units or
matching buyers and sellers, as is the case with secondary market matching
services. By agreeing to sell to Madison, you are assuring a sale of your Units,
subject to proration rights and other conditions having been met. A secondary
market firm cannot assure a sale unless it can locate a buyer who is interested
in purchasing your particular Units. Most individual investors are not
interested in purchasing limited partnership units for their investment
portfolios, so Madison is providing you with a liquidity option that is
generally not otherwise readily available.
Unlike other firms that purchase limited partnership units, Madison is typically
not interested in acquiring controlling interests in limited partnerships.
Furthermore, buying units in a broad portfolio of limited partnerships allows us
to diversify our investment portfolio, thus mitigating our risk of purchasing
such underperforming investments.
WHAT OTHER OPTIONS ARE AVAILABLE TO ME TO SELL MY UNITS?
NOT MANY! Unlike Madison, secondary market firms will only match buyers and
sellers, they do not provide a firm bid, so the only way you can sell your Units
through this market is if they can locate an interested buyer. FURTHERMORE,
MADISON CHARGES NO COMMISSIONS (SECONDARY MARKET FIRMS GENERALLY CHARGE UP TO
10%, SUBJECT TO A $150 - $200 MINIMUM COMMISSION PER TRADE) AND OUR OFFER PRICE
IS OFTEN HIGHER THAN RECENT SECONDARY MARKET PRICES!
HOW DO I SUBSCRIBE TO MADISON'S OFFER AND WHEN WILL I BE PAID?
The purchase process involves several steps. By carefully following the
instructions on the enclosed checklist, you are ensuring the fastest possible
turnaround time for the sale of your Units. Properly completed Agreements of
Assignment and Transfer are forwarded by Madison to the general partner on a
weekly basis following the completion of the offer. Most general partners will
take approximately four weeks thereafter to confirm the number of Units you own
and provide Madison with the effective transfer date. IRA investors should add
approximately two weeks because of the additional signatures required from your
custodian. Thereafter, you will be promptly paid by Madison.
HOW DID MADISON GET MY NAME?
In every limited partnership in which Madison conducts a tender offer, one of
its affiliates is a limited partner, and as such, we are entitled to receive a
list of the names and addresses of all of our fellow limited partners or have
the General Partner forward this correspondence to you.
WHAT HAPPENS IF I DON'T SELL MY UNITS?
Nothing. If you choose to retain your investment in the Partnership, you will be
a limited partner until all its assets and the Partnership have been liquidated.
Remember, however, that even if the Partnership had an original anticipated
holding period of five, seven or ten years, there is usually nothing requiring
liquidation within this time frame. In fact, most limited partnerships can
legally continue for up to twenty or thirty years, or longer, from inception.
IF YOU HAVE ANY ADDITIONAL QUESTIONS, PLEASE CALL:
MADISON LIQUIDITY INVESTORS 104, LLC
C/O GEMISYS TENDER SERVICES
(303) 705-6390
<PAGE>
ENVELOPE COPY FOLLOWS
[BAR CODE]
--------------
NO POSTAGE
NECESSARY
IF MAILED
IN THE
UNITED STATES
--------------
--------------------------------------------------- ==============
BUSINESS REPLY MAIL ==============
FIRST CLASS MAIL PERMIT NO. 273 ENGLEWOOD, CO ==============
--------------------------------------------------- ==============
POSTAGE WILL BE PAID BY ADDRESSEE ==============
==============
MADISON LIQUIDITY INVESTORS ==============
C/O GEMISYS TENDER SERVICES ==============
7103 S REVERE PKWY ==============
ENGLEWOOD, CO 80112-9523
[BAR CODE]
<PAGE>
o Did you remember to sign and notarize or signature medallion guarantee the
Agreement?
o Did you provide your social security number or tax id number and telephone
number?
o Did you make any necessary corrections to your name and address?
o Did all of the unitholders/shareholders of record sign the yellow
Agreement?
<PAGE>
If you are interested in selling other public and private Limited Partnership
Units, please call Investment Services of America, an affiliate of Madison
Liquidity Investors at 800 750-0064 or fill in the information below and return
this form in the envelope provided. Investment Services of America purchases
units in over 300 limited partnerships as well as other types of securities.
ISA offers fast, commission free service.
Please list the full name of any Limited Partnerships or other securities and
number of units or shares which you would like to sell. Visit our website:
Ipliquidity.com
___________________#Units/Shares owned
___________________indicate type: Partnership / Bond / Stock / Other
___________________#Units/Shares owned
___________________indicate type: Partnership / Bond / Stock / Other
___________________#Units/Shares owned
___________________indicate type: Partnership / Bond / Stock / Other
___________________#Units/Shares owned
___________________indicate type: Partnership / Bond / Stock / Other
___________________#Units/Shares owned
___________________indicate type: Partnership / Bond / Stock / Other
Please indicate the most convenient method that ISA may use to contact you.
[ ] Home Telephone
(_____) ___-____
[ ] Office Telephone
(_____) ___-____
[ ] Fax
(_____) ___-____
[ ] E-Mail
________________
Indicate Address
[ ] Regular Mail
___________________
___________________
___________________
___________________
Best time to contact you:
Morning_____________
Afternoon___________
Evening_____________
Weekend_____________
