<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
SCHEDULE TO
(Rule 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(d) (1) OR 13(e) (1)
OF THE SECURITIES EXCHANGE ACT OF 1934
Courtyard by Marriott Limited Partnership
(Name of Subject Company)
CBM I Holdings LLC
CBM Joint Venture LLC
Marriott International, Inc.
MI CBM Investor LLC
Rockledge Hotel Properties, Inc.
(Names of Offerors and Other Persons)
Units of limited partnership interests
(Title of Class of Securities)
None
(CUSIP Number of Class of Securities)
W. Edward Walter Ward R. Cooper
Rockledge Hotel Properties, Inc. Marriott International, Inc.
10400 Fernwood Road Dept. 52/923.23
Bethesda, Maryland 20817 10400 Fernwood Road
(301) 380-9000 Bethesda, Maryland 20817
(301) 380-3000
(Name, Address and Telephone Numbers of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)
_______________
Copies to:
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<S> <C>
J. Warren Gorrell, Jr. David G. Pommerening
Bruce W. Gilchrist O'Melveny & Myers LLP
Hogan & Hartson LLP Columbia Square, 555 Thirteenth Street, N.W.
Columbia Square, 555 Thirteenth Street, N.W. Washington, D.C. 20004-1109
Washington, D.C. 20004-1109 (202) 383-5300
(202) 637-5600
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CALCULATION OF FILING FEE
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- --------------------------------------------------------------------------------------------------------
Transaction Valuation (1): $152,237,550 Amount Filing Fee (2): $30,448
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Calculated by multiplying $134,130, the per unit tender offer price, by
1,135, the total number of units sought in the tender offer.
(2) Calculated as 1/50 of one percent of the transaction value in accordance
with Regulation 240.0-11 under the Securities Exchange Act of 1934.
[X] Check the 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: $30,448 Form or Registration No.: Schedule 14A
------- ------------
Filing Party: Courtyard by Marriott Limited Partnership Date Filed: May 18,
----------------------------------------- --------
2000
- ----
[_] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer:[ ]
<PAGE>
TENDER OFFER
This Tender Offer Statement on Schedule TO (the "Schedule TO") relates to
an offer by CBM I Holdings LLC, a Delaware limited liability company (the
"Purchaser") and an indirect, wholly owned subsidiary of CBM Joint Venture LLC
(the "Joint Venture"), a Delaware limited liability company that is a joint
venture between MI CBM Investor LLC ("MI Investor"), a Delaware limited
liability company and a wholly owned indirect subsidiary of Marriott
International, Inc., a Delaware corporation ("Marriott International"), and
Rockledge Hotel Properties, Inc., a Delaware corporation ("Rockledge") (through
wholly owned subsidiaries), to purchase (the "Purchase Offer") all outstanding
units of limited partnership interest in Courtyard by Marriott Limited
Partnership, a Delaware limited partnership (the "Partnership") other than units
owned by the general partner, at $134,130 per unit (or a pro rata portion
thereof) in cash, upon the terms and subject to the conditions set forth in the
Purchase Offer and Consent Solicitation dated ________, 2000 and the related
Proof of Claim, Assignment and Release, copies of which are attached hereto as
Exhibits (a) (1) and (a) (2), respectively (which, as amended or supplemented
from time to time, are collectively herein referred to as the "Purchase Offer
and Consent Solicitation"). If the court approves legal fees and expenses of
approximately $18,000 per unit to counsel to the class action plaintiffs in the
Haas Litigation (as defined in the Purchase Offer and Consent Solicitation), the
net amount that each holder that is a class member will receive is approximately
$116,000 per unit (or a pro rata portion thereof) (the "Net Settlement Amount").
The Net Settlement Amount to be received by any holder in the Purchase Offer or
the Merger (as defined below) will be reduced by any amount owed by the holder
on the original purchase price of such unit. In the Merger, each outstanding
unit (or partial unit) held by a holder who elects not to participate in the
Settlement (as defined in the Purchase Offer and Consent Solicitation) will be
converted into the right to receive a cash amount equal to the appraised value
of such unit (or a pro rata portion thereof), not including any amount relating
to the claims asserted in the class action litigation and reduced by any amount
owed by the holder on the original purchase price of such unit.
The Purchase Offer and Consent Solicitation also relates to the
solicitation by the general partner of the Partnership of consents to a merger
of a subsidiary of the Joint Venture with and into the Partnership (the
"Merger") and to certain amendments to the Partnership's Partnership Agreement.
The information in the Purchase Offer and Consent Solicitation including
all schedules and annexes thereto, is hereby expressly incorporated by reference
as set forth below.
ITEM 1. SUMMARY TERM SHEET.
The information set forth in the section of the Purchase Offer and
Consent Solicitation captioned "Summary Term Sheet" is incorporated
herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) The information set forth in the section of the Purchase Offer and
Consent Solicitation captioned "The Settlement -- Certain Information
Concerning the Partnership" is incorporated herein by reference.
(b) The information set forth in the sections of the Purchase Offer and
Consent Solicitation captioned "Summary Term Sheet" and "The Written
Consents -Record Date and Outstanding Units" is incorporated herein by
reference.
(c) The information set forth in the section of the Purchase Offer and
Consent Solicitation captioned "The Purchase Offer -- Market for the
Partnership's Limited Partnership Units and Related Security Holder
Matters" is incorporated herein by reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
<PAGE>
(a) The information set forth in the section of the Purchase Offer and
Consent Solicitation captioned "The Settlement -- Certain Information
Concerning the Purchaser, the Joint Venture, Marriott International, MI
Investor and Rockledge" and Schedule I to the Purchase Offer and
Consent Solicitation captioned "Directors and Executive Officers of
Marriott International, Inc., MI CBM Investor LLC, Rockledge Hotel
Properties, Inc., CBM Joint Venture LLC and CBM I Holdings LLC" is
incorporated herein by reference.
(b) The information set forth in the section of the Purchase Offer and
Consent Solicitation and Consent Solicitation captioned
"The Settlement --Certain Information concerning the Purchaser, the
Joint Venture, Marriott International, MI Investor and Rockledge" and
Schedule I to the Purchase Offer and Consent Solicitation captioned
"Directors and Executive Officers of Marriott International, Inc., MI
CBM Investor LLC, Rockledge Hotel Properties, Inc., CBM Joint Venture
LLC and CBM I Holdings LLC" is incorporated herein by reference.
(c) The information set forth in the section of the Purchase Offer and
Consent Solicitation captioned "The Settlement -- Certain Information
Concerning the Purchaser, the Joint Venture, Marriott International, MI
Investor and Rockledge" and Schedule I to the Purchase Offer and
Consent Solicitation captioned "Directors and Executive Officers of
Marriott International, Inc., MI CBM Investor LLC, Rockledge Hotel
Properties, Inc., CBM Joint Venture LLC and CBM I Holdings LLC" is
incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in the sections of the Purchase Offer and
Consent Solicitation captioned "Summary Term Sheet," "The Settlement --
Purpose and Structure of the Purchase Offer, Merger and Amendments,"
"The Settlement -- The Merger," "The Settlement -- The Amendments,"
"The Settlement -- Federal Income Tax Considerations,"
"The Settlement --Plans for the Partnership; Certain Effects of the
Purchase Offer," "The Purchase Offer -- Terms of the Purchase Offer,"
"The Purchase Offer --Settlement Fund; Acceptance for Payment; Payment
for Units," "The Purchase Offer -- Procedures for Accepting the
Purchase Offer and Tendering Units," "The Purchase Offer -- Withdrawal
Rights," "The Written Consents -- Effective Time of the Merger," "The
Written Consents --Effective Time of the Amendments" is incorporated
herein by reference.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
(a) The information set forth in the section of the Purchase Offer and
Consent Solicitation captioned "The Settlement -- Certain Transactions
with the Partnership," "The Settlement -- Certain Information
Concerning the Purchaser, the Joint Venture, Marriott International, MI
Investor and Rockledge" and Schedule I to the Purchase Offer and
Consent Solicitation captioned "Directors and Executive Officers of
Marriott International, Inc., MI CBM Investor LLC, Rockledge Hotel
Properties, Inc., CBM Joint Venture LLC and CBM I Holdings LLC" is
incorporated herein by reference.
(b) The information set forth in the sections of the Purchase Offer and
Consent Solicitation captioned "The Settlement -- Background of the
Settlement" and "The Settlement -- Plans for the Partnership; Certain
Effects of the Purchase Offer" is incorporated herein by reference.
ITEM 6. PURPOSE OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a) and (c) (1) -- (7) The information set forth in the sections of the
Purchase Offer and Consent Solicitation captioned "The Settlement --
Background of the Settlement," "The Settlement -- The Merger," "The
Settlement -- Plans for the Partnership; Certain Effects of the
Purchase Offer" and "The Written Consents -- Rights of Appraisal" is
incorporated herein by reference.
<PAGE>
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a), (b) and (d) The information set forth in the section of the
Purchase Offer and Consent Solicitation captioned "The Settlement --
Source and Amount of Funds" is incorporated herein by reference.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in the section of the Purchase
Offer and Consent Solicitation captioned "The Settlement -- Security
Ownership and Certain Beneficial Owners and Management" is incorporated
herein by reference.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
(a) The information set forth in the section of the Purchase Offer and
Consent Solicitation captioned "Other Matters -- Fees and Expenses" is
incorporated herein by reference.
ITEM 10. FINANCIAL STATEMENTS.
(a) The financial statements of the Purchaser, the Joint Venture,
Marriott International, MI Investor and Rockledge are not material to
the Purchase Offer.
(b) The pro forma financial statements of the Purchaser, the Joint
Venture, Marriott International, MI Investor, and Rockledge are not
material to the Purchase Offer.
ITEM 11. ADDITIONAL INFORMATION
(a) (1) The information set forth in the section of the Purchase Offer
and Consent Solicitation captioned "The Settlement -- Background of the
Settlement" and "The Settlement -- The Settlement Agreement" is
incorporated herein by reference.
(a) (2) - (3) The information set forth in the section of the Purchase
Offer and Consent Solicitation captioned "The Settlement -- Regulatory
Matters" is incorporated herein by reference.
(a) (4) None
(a) (5) The information set forth in the section of the Purchase Offer
and Consent Solicitation captioned "The Settlement -- Background of the
Settlement" and "The Settlement -- The Settlement Agreement" is
incorporated herein by reference.
(b) The information set forth in the Purchase Offer and Consent
Solicitation and the Proof of Claim, Assignment and Release is
incorporated herein by reference.
ITEM 12. MATERIALS TO BE FILED AS EXHIBITS.
(a) (1) Purchase Offer and Consent Solicitation dated __________, 2000.
(a) (2) Proof of Claim, Assignment and Release.
(a) (3) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a) (4) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a) (5) Guidelines Regarding Taxpayer Identification Number.
(a) (6) Summary advertisement.*
(b) Not applicable.
(c) Not applicable.
<PAGE>
(d) (1) Form of Agreement and Plan of Merger by and between the Partnership and
the Joint Venture.*
(d) (2) Settlement Agreement dated as of March 9, 2000 among the Milkes
Plaintiffs (as defined therein), the Haas Plaintiffs (as defined
therein), the Palm and Equity Intervenors (as defined therein) and the
Defendants (as defined therein), each by and through their respective
counsel of record.*
(g) Not applicable.
(h) Not applicable.
__________________
* To be filed by amendment.
ITEM 13 INFORMATION REQUIRED BY SCHEDULE 13E-3
Not applicable.
<PAGE>
SIGNATURES
After due inquiry and to the best knowledge and belief of the undersigned,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Date: May 18, 2000 CBM I HOLDINGS LLC
By: CBM Joint Venture LLC
By: Rockledge Hotel Properties, Inc.
By: /s/ C. G. Townsend
--------------------------------
Name: C.G. Townsend
Title: Vice President
By: MI CBM Investor LLC
By: /s/ C.B. Handlon
-------------------------------
Name: Carolyn B. Handlon
Title: Manager and Treasurer
CBM JOINT VENTURE LLC
By: Rockledge Hotel Properties, Inc.
By: /s/ C.G. Townsend
-------------------------------
Name: C.G. Townsend
Title: Vice President
By: MI CBM Investor LLC
By: /s/ C.B. Handlon
-------------------------------
Name: Carolyn B. Handlon
Title: Manager and Treasurer
MARRIOTT INTERNATIONAL, INC.
By:/s/ C.B. Handlon
---------------------------------------
Name: Carolyn B. Handlon
Title: Vice President and Treasurer
MI CBM INVESTOR LLC
By:/s/ C. B. Handlon
---------------------------------------
Name: Carolyn B. Handlon
Title: Manager and Treasurer
<PAGE>
ROCKLEDGE HOTEL PROPERTIES, INC.
By: /s/ C.G. Townsend
-----------------
Name: C.G. Townsend
Title: Vice President
<PAGE>
EXHIBIT INDEX
(a) (1) Purchase Offer and Consent Solicitation dated ____________, 2000.
(a) (2) Proof of Claim, Assignment and Release.
(a) (3) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a) (4) Letter to Clients for Use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a) (5) Guidelines Regarding Taxpayer Identification Number.
(a) (6) Summary advertisement.*
(d) (1) Form of Agreement and Plan of Merger by and between the Partnership
and the Joint Venture.*
(d) (2) Settlement Agreement dated as of March 9, 2000 among the Milkes
Plaintiffs (as defined therein), the Haas Plaintiffs (as defined
therein), the Palm and Equity Intervenors (as defined therein) and
the Defendants (as defined therein), each by and through their
respective counsel of record.*
__________________
* To be filed by amendment.
<PAGE>
Exhibit (a)(1)
Offer to Purchase for Cash
All Outstanding Units of Limited Partnership Interest in
COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
for
$134,130 Per Unit (or a Net Amount per Unit of Approximately
$116,000 after Payment of Court-Awarded Attorneys' Fees)
by
CBM I HOLDINGS LLC,
a wholly owned indirect subsidiary of
CBM JOINT VENTURE LLC,
a joint venture between
MI CBM INVESTOR LLC (a wholly owned indirect subsidiary of
MARRIOTT INTERNATIONAL, INC.) and
ROCKLEDGE HOTEL PROPERTIES, INC. (through wholly owned subsidiaries)
and
Solicitation of Consents to a Merger and Amendments to the Partnership Agreement
________________________
________________________________________________________________________________
THE PURCHASE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON ___________, 2000, UNLESS THE PURCHASE OFFER IS EXTENDED (AS SO
EXTENDED, THE "EXPIRATION DATE").
________________________________________________________________________________
________________________
This Purchase Offer and Consent Solicitation and the related proof of
claim, assignment and release (the "Proof of Claim") is being furnished to
holders ("Unitholders") of units of limited partnership interest ("Units") in
Courtyard by Marriott Limited Partnership (the "Partnership") pursuant to the
terms of a settlement agreement (the "Settlement Agreement") relating to the
settlement (the "Settlement") of class action litigation described herein.
Pursuant to the terms of the Settlement, CBM I Holdings LLC (the "Purchaser") is
offering to purchase (the "Purchase Offer") all outstanding Units (other than
Units held by the General Partner) and the General Partner of the Partnership is
soliciting consents to the merger of a subsidiary of CBM Joint Venture LLC, a
Delaware limited liability company (the "Joint Venture") into the Partnership
(the "Merger") pursuant to an agreement and plan of merger (the "Merger
Agreement") and to certain amendments (the "Amendments") to the Partnership's
partnership agreement (the "Partnership Agreement"). The Purchaser will purchase
all Units tendered prior to the Expiration Date for $134,130 per Unit (or a pro
rata portion thereof) in cash. If the Court approves legal fees and expenses of
approximately $18,000 per Unit to counsel to the class action plaintiffs in the
Haas Litigation (as defined herein), the net amount that each holder that is a
class member will receive is approximately $116,000 per Unit (or a pro rata
portion thereof).
The Merger will be consummated immediately after the purchase of the Units
pursuant to the Purchase Offer. In the Merger, each outstanding Unit (other than
Units held by the General Partner, the Purchaser and holders who elect not to
participate in the Settlement) will be converted into the right to receive
$134,130 per Unit (or a pro rata amount thereof) in cash. If the Court approves
legal fees and expenses of approximately $18,000 per unit to counsel to the
class action plaintiffs in the Haas Litigation, the net amount that each holder
that is a class member will receive is approximately $116,000 per Unit (or a pro
rata portion thereof). The amount to be received by any holder in the Purchase
Offer or the Merger will be reduced by any amount owed by the holder on the
original purchase price of such Unit. In the Merger, each outstanding Unit (or
partial Unit) held by a holder who elects not to participate in the Settlement
will be converted into the right to receive a cash amount equal to the appraised
value of such Unit (or a pro
<PAGE>
rata portion thereof), not including any amount relating to the claims asserted
in the class action litigation, and reduced by any amount owed by the holder on
the original purchase price of such Unit.
THE SETTLEMENT WILL NOT BE CONSUMMATED UNLESS THE COURT APPROVES THE
FAIRNESS OF THE SETTLEMENT (INCLUDING THE TERMS AND CONDITIONS OF THE PURCHASE
OFFER, THE MERGER AND THE AMENDMENTS) AT A HEARING AT WHICH UNITHOLDERS WHO HAVE
NOT OPTED OUT OF THE SETTLEMENT AND WHO HAVE TIMELY FILED THE PROPER DOCUMENTS
WITH THE COURT HAVE THE RIGHT TO APPEAR. SEE THE "NOTICE OF PENDENCY AND
SETTLEMENT OF CLASS AND DERIVATIVE ACTION RELATED TO COURTYARD BY MARRIOTT LP
AND FINAL APPROVAL HEARING" (THE "NOTICE") DISTRIBUTED WITH THIS PURCHASE OFFER
AND CONSENT SOLICITATION FOR A DESCRIPTION OF THE PROCEDURES THAT MUST BE
FOLLOWED IN ORDER TO APPEAR AT THE HEARING.
A SPECIAL LITIGATION COMMITTEE APPOINTED FOR THE PARTNERSHIP BY THE GENERAL
PARTNER HAS DETERMINED THAT THE TERMS OF THE SETTLEMENT ARE FAIR AND REASONABLE
AND INCLUDE A FAIR AND REASONABLE SETTLEMENT OF ANY AND ALL DERIVATIVE CLAIMS,
EXPRESSED OR IMPLIED, MADE ON BEHALF OF THE PARTNERSHIP IN THE LITIGATION.
THE GENERAL PARTNER OF THE PARTNERSHIP MAKES NO RECOMMENDATION TO ANY
UNITHOLDER AS TO WHETHER TO TENDER OR TO REFRAIN FROM TENDERING UNITS OR AS TO
WHETHER TO VOTE FOR OR AGAINST THE MERGER OR THE AMENDMENTS. THE GENERAL PARTNER
IS A DEFENDANT IN THE LITIGATION AND, THEREFORE, HAS A CONFLICT OF INTEREST WITH
RESPECT TO THE PURCHASE OFFER, THE MERGER AND THE AMENDMENTS.
_______________________
IN ADDITION TO COURT APPROVAL, CONSUMMATION OF THE PURCHASE OFFER AND THE
MERGER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) NOT MORE THAN TEN PERCENT OF
THE UNITS OF LIMITED PARTNERSHIP INTERESTS OF EACH OF THE PARTNERSHIPS INVOLVED
IN THE SETTLEMENT (OTHER THAN UNITS HELD BY THE PERSONS NAMED AS INSIDERS IN THE
SETTLEMENT AGREEMENT (THE "INSIDERS")) SHALL BE HELD BY HOLDERS WHO HAVE ELECTED
NOT TO PARTICIPATE IN THE SETTLEMENT (WHICH CONDITION MAY BE WAIVED BY THE
PURCHASER) AND (2) PRIOR TO THE EXPIRATION DATE, THE HOLDERS OF A MAJORITY OF
THE OUTSTANDING UNITS (OTHER THAN UNITS HELD BY THE GENERAL PARTNER AND OTHER
AFFILIATES) SHALL HAVE SUBMITTED VALID WRITTEN CONSENTS TO THE MERGER AND TO THE
AMENDMENTS.
________________________
This Purchase Offer and Consent Solicitation is dated __________, 2000 and
is being mailed to Unitholders on or about ________________, 2000.
<PAGE>
TABLE OF CONTENTS
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SUMMARY TERM SHEET............................................................................................................ 2
THE SETTLEMENT................................................................................................................ 10
Background of the Settlement............................................................................................... 10
The Settlement Agreement................................................................................................... 12
Position of the General Partner, the Purchaser, the Joint Venture, Marriott International, MI Investor and Rockledge
Regarding the Purchase Offer.............................................................................................. 13
Recommendation of the Special Litigation Committee and Counsel to the Class Action Plaintiffs.............................. 14
Purpose and Structure of the Purchase Offer; Merger and Amendments......................................................... 14
Conditions of the Purchase Offer and the Merger............................................................................ 14
Plans for the Partnership; Certain Effects of the Purchase Offer........................................................... 15
Certain Information Concerning the Partnership............................................................................. 15
Certain Information Concerning the Purchaser, the Joint Venture, Marriott International, MI Investor and Rockledge......... 16
Source and Amount of Funds................................................................................................. 18
Certain Transactions with the Partnership.................................................................................. 18
Security Ownership of Certain Beneficial Owners and Management............................................................. 20
Regulatory Matters......................................................................................................... 20
The Merger................................................................................................................. 21
The Amendments............................................................................................................. 22
Federal Income Tax Considerations.......................................................................................... 27
THE PURCHASE OFFER............................................................................................................ 35
Terms of the Purchase Offer................................................................................................ 35
Settlement Fund; Acceptance for Payment; Payment for Units................................................................. 36
Procedures for Accepting the Purchase Offer and Tendering Units............................................................ 37
Withdrawal Rights.......................................................................................................... 39
Market for the Partnership's Limited Partnership Units and Related Security Holder Matters................................. 39
THE WRITTEN CONSENTS.......................................................................................................... 41
Record Date and Outstanding Units.......................................................................................... 41
Majority Vote Required; Voting Rights...................................................................................... 41
Solicitation Period........................................................................................................ 41
Voting and Revocation of Consents.......................................................................................... 41
Effective Time of Amendments............................................................................................... 42
Effective Time of the Merger............................................................................................... 42
No Special Meeting......................................................................................................... 42
Rights of Appraisal........................................................................................................ 42
Interests of Certain Persons in the Matters to be Acted Upon............................................................... 43
OTHER MATTERS................................................................................................................. 44
Fees and Expenses.......................................................................................................... 44
Miscellaneous.............................................................................................................. 44
</TABLE>
Schedule I - Directors and Executive Officers of Marriott International,
Inc., MI CBM Investor LLC, Rockledge Hotel Properties, Inc., CBM Joint
Venture LLC and CBM I Holdings LLC
Schedule II - Directors and Executive Officers of CBM One LLC
-1-
<PAGE>
SUMMARY TERM SHEET
We urge you to read carefully this purchase offer and consent solicitation,
particularly the matters discussed under the heading "The Settlement," before
deciding whether to tender or refrain from tendering your units of limited
partnership interest in the Partnership and whether to vote for or against the
merger and the amendments to the partnership agreement described below. The
following is a summary of information contained in this purchase offer and
consent solicitation. The summary is not intended to be complete, and you should
read carefully this entire purchase offer and consent solicitation and the
related proof of claim, assignment and release, consent form and the other
documents to which we have referred you. The purchase offer and consent
solicitation, together with the proof of claim, assignment and release, are
referred to herein as the "Purchase Offer and Consent Solicitation."
The term the "Partnership" as used in this purchase offer and consent
solicitation refers to Courtyard by Marriott Limited Partnership; and the term
the "General Partner" refers to CBM One LLC, the general partner of the
Partnership. The terms "we", "our" and the "Purchaser" as used in this purchase
offer and consent solicitation refer to CBM I Holdings LLC, a wholly owned
indirect subsidiary of CBM Joint Venture LLC, or the "Joint Venture," which is a
joint venture between MI CBM Investor LLC, or "MI Investor," a wholly owned
indirect subsidiary of Marriott International, Inc., or "Marriott
International," and Rockledge Hotel Properties, Inc., or "Rockledge" (through
wholly owned subsidiaries).
WHY ARE YOU MAKING THIS PURCHASE OFFER AND CONSENT SOLICITATION?
This purchase offer and consent solicitation is being made pursuant to the
terms of a settlement agreement relating to a class action lawsuit brought
against the General Partner, Marriott International, Host Marriott Corporation,
or Host Marriott, various related entities and others. The settlement also
relates to litigation involving six other limited partnerships, including
Courtyard by Marriott II Limited Partnership. See "The Settlement -- Background
of the Settlement," pages 10 through 12.
WHO IS OFFERING TO BUY MY UNITS?
Our name is CBM I Holdings LLC. We are a Delaware limited liability company
and a wholly owned indirect subsidiary of the Joint Venture. We were organized
on April 19, 2000 for the sole purpose of acquiring all issued and outstanding
units of limited partnership interest in the Partnership other than those owned
by the General Partner. We have engaged in no activities to date, other than
those incidental to our organizing as an entity and making the purchase offer.
The Joint Venture, a Delaware limited liability company, was organized on April
19, 2000 as a joint venture between MI Investor, a Delaware limited liability
company and a subsidiary of Marriott International, and Rockledge (through
wholly owned subsidiaries), for the purpose of carrying out the obligations of
Marriott International and Rockledge under the settlement agreement. MI Investor
and Rockledge (through wholly owned subsidiaries) each own fifty percent of the
equity interests in the Joint Venture. Rockledge will manage the day-to-day
affairs of the Joint Venture. All major decisions will require the approval of
both Rockledge and MI Investor. See "The Settlement --Certain Information
Concerning the Purchaser, the Joint Venture, Marriott International, MI Investor
and Rockledge," pages 16 through 18.
WHAT CLASSES AND AMOUNTS OF SECURITIES ARE YOU SEEKING IN THE OFFER?
We are offering to purchase all outstanding units of limited partnership
interest in the Partnership other than units owned by the General Partner.
-2-
<PAGE>
HOW MUCH ARE YOU OFFERING TO PAY FOR MY SECURITIES AND WHAT IS THE FORM OF
PAYMENT?
We are offering to pay $134,130 per unit (or a pro rata portion thereof) in
cash to purchase each unit, settle the Haas litigation and obtain a release of
all claims in the Haas litigation. If the court approves legal fees and expenses
of approximately $18,000 per unit to counsel to the class action plaintiffs in
the Haas litigation, the net amount that each holder that is a class member will
receive is approximately $116,000 per unit (or a pro rata portion thereof). The
amount to be received by any holder in the purchase offer or the merger will be
reduced by any amount owed by the holder on the original purchase price of such
unit. The aggregate amount we are offering to pay for all outstanding units
(other than the 15 units held by the General Partner) is $152,237,550. See "The
Settlement -- The Settlement Agreement," pages 12 and 13.
WHAT WILL I RECEIVE IF I PURCHASED A UNIT FROM A CLASS MEMBER, BUT DID NOT
OBTAIN AN ASSIGNMENT OF LITIGATION CLAIMS FROM THAT CLASS MEMBER?
If you purchased a unit from a class member without obtaining an assignment
of that class member's litigation claims, the Purchaser will still pay $134,130
for each unit that you tender in the purchase offer or that is converted in the
merger. However, this amount represents not only the value of your units, but
also the value of the claims settled in the Haas litigation. Accordingly, the
$134,130 per unit (or a net amount per unit of approximately $116,000 after
payment of court awarded legal fees and expenses to counsel to the class action
plaintiffs of approximately $18,000 per unit), or a pro rata portion thereof
will have to be divided between you and the class member from whom you purchased
the unit. If you are unable to agree on how the money should be divided, the
division will be made by a special master appointed by the court.
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
We will need approximately $_____ million to purchase all of the units
pursuant to the purchase offer, to consummate the merger and to pay related fees
and expenses. We will obtain the funds indirectly from Marriott International
and Rockledge. See "The Settlement -- Source and Amount of Funds," page 18.
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
Because the form of payment consists solely of cash and the purchase offer
is not conditioned on our ability to obtain financing, we do not think our
financial condition is relevant to your decision as to whether to tender in the
purchase offer or consent to the merger. Our obligations in connection with the
purchase offer and the merger are guaranteed by Marriott International and Host
Marriott. See "The Settlement -- Source and Amount of Funds," page 18.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE PURCHASE OFFER?
You will have at least until 12:00 midnight, New York City time, on
_____________, 2000 to decide whether to tender your units in the purchase
offer. See "The Purchase Offer -- Terms of the Purchase Offer," pages 34 and 35.
CAN THE PURCHASE OFFER BE EXTENDED?
Yes. We can elect to extend the purchase offer at any time. See "The
Purchase Offer -- Terms of the Purchase Offer," pages 34 and 35.
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HOW WILL I BE NOTIFIED IF THE PURCHASE OFFER IS EXTENDED?
If the purchase offer is extended we will issue a press release announcing
the extension no later than 9:00 a.m., New York City time, on the next business
day after the day the purchase offer was scheduled to expire. See "The Purchase
Offer -- Terms of the Purchase Offer," pages 34 and 35.
HOW DO I TENDER MY UNITS?
To tender all or any portion of your units, you must either (1) complete
and sign the PINK proof of claim, assignment and release (or a facsimile
thereof) in accordance with the instructions in the proof of claim, assignment
and release and mail or deliver it and any other required documents to the
claims administrator at the address set forth on the back cover of this purchase
offer and consent solicitation or (2) instruct your broker, dealer, commercial
bank, trust company or other nominee to effect the transaction as set forth
below. In either case, the proof of claim, assignment and release must be
received by the claims administrator no later than the time the purchase offer
(or any extension) expires. See "The Purchase Offer -- Procedures for Accepting
the Purchase Offer and Tendering Units," pages 36 and 37.
WHAT IF MY UNITS ARE NOT IN MY NAME?
If your units are registered in the name of a broker, dealer, commercial
bank, trust company or other nominee, you must contact such broker, dealer,
commercial bank, trust company or other nominee if you desire to tender your
units or consent to the merger and the amendments. See "The Purchase Offer --
Procedures for Accepting the Purchase Offer and Tendering Units," pages 36 and
37.
WHAT ARE THE SIGNIFICANT CONDITIONS TO THE PURCHASE OFFER AND THE MERGER?
The consummation of the purchase offer and the merger is subject to a
number of conditions, including:
(1) the order of the court approving the terms of the settlement and the
dismissal of the litigation shall have become final (other than by reason of
an appeal relating solely to counsel fees and expenses),
(2) not more than 10% of the units (other than units held by the persons
named as insiders in the settlement agreement) shall be held by holders who
have elected to "opt-out" of the settlement,
(3) not more than 10% of the units of limited partnership interests in each
of the other six limited partnerships involved in the settlement (other than
units held by persons named as insiders in the settlement agreement) shall be
held by holders who have elected to "opt-out" of the settlement, and
(4) holders of a majority of the units in each of the Partnership and
Courtyard by Marriott II Limited Partnership (other than affiliates of these
partnerships) shall have approved each partnership's merger and amendments to
each partnership's partnership agreement.
We can waive conditions (2) and (3) above. See "The Settlement
-- Conditions of the Purchase Offer and the Merger," pages 14 and 15.
WHEN WILL I RECEIVE PAYMENT FOR MY UNITS IF I TENDER?
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The court will hold a hearing for approval of the settlement once all other
conditions to consummating the purchase offer and the merger have been
satisfied. On or before the third business day following the entry by the court
of an order approving the settlement, the Purchaser will deposit the total
settlement amount in an interest bearing account which will be held in escrow by
Chase Bank of Texas, N.A., as escrow agent. Within seven business days after the
judgment order approving the terms of the settlement and the dismissal of the
litigation becomes final, Chase Bank will distribute to each unitholder who has
submitted a valid proof of claim prior to such date the funds to which such
holder is entitled. See "The Purchase Offer -- Settlement Fund; Acceptance for
Payment; Payment for Units," pages 35 and 36.
MUST I SUBMIT A PROOF OF CLAIM TO RECEIVE FUNDS IN THE SETTLEMENT?
Yes. No unitholder will be entitled to receive any funds from the
settlement until a valid proof of claim is submitted, whether before or after
the judgment order becomes final. However, if you have not submitted a valid
proof of claim within 90 days of the date a judgment order approving the
settlement becomes final and you have not opted out of the settlement, then the
counsel to the class action plaintiffs may execute a proof of claim on your
behalf. See "The Purchase Offer -- Procedures for Accepting the Purchase Offer
and Tendering Units," pages 36 and 37.
HOW DO I WITHDRAW PREVIOUSLY TENDERED UNITS?
You may withdraw units that you have tendered at any time prior to the
expiration date. To withdraw units, you must deliver a written notice to the
claims administrator prior to the expiration of the purchase offer at the
address set forth on the back cover of this purchase offer and consent
solicitation. For more information on your withdrawal rights, see "The Purchase
Offer--Withdrawal Rights." If the settlement agreement terminates without the
settlement becoming final, then all of your tendered units will be returned. See
"The Purchase Offer -- Withdrawal Rights," page 37.
WHO HAS DETERMINED THAT THE TERMS OF THE SETTLEMENT ARE FAIR?
Counsel to the class action plaintiffs recommends that their clients tender
their units in the purchase offer and consent to the merger and the amendments.
The special litigation committee appointed for the Partnership by the General
Partner has determined that the terms of the settlement are fair and reasonable
and include a fair and reasonable settlement of any and all derivative claims,
expressed or implied, made on behalf of the Partnership in the litigation. See
"The Settlement -- Recommendation of the Special Litigation Committee and
Counsel to the Class Action Plaintiffs," pages 13 and 14.
MUST THE COURT APPROVE THE FAIRNESS OF THE SETTLEMENT?
The settlement will not be consummated unless the court approves the
fairness of the settlement (including the terms and conditions of the purchase
offer, the merger and the amendments) at a hearing at which only unitholders who
have not opted out of the settlement and who have timely filed the proper
documents with the court have the right to appear. See the notice of the
hearing that was distributed with this purchase offer and consent solicitation
for a description of the procedures that must be followed in order to appear at
the hearing. See also "The Settlement -- Conditions of the Purchase Offer and
the Merger," pages 14 and 15.
WHY IS THE GENERAL PARTNER SOLICITING CONSENTS?
The General Partner is soliciting the consents of the limited partners
pursuant to the terms of the settlement agreement. The approval of the merger
and the amendments to the partnership agreement by limited partners (other than
the General Partner and its affiliates) holding a majority of the outstanding
units is one of the conditions to the consummation of the settlement agreement.
If the merger and the amendments to the partnership agreement are not approved
by limited partners holding a majority of the outstanding units (excluding units
held by the General Partner and its
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affiliates), the settlement agreement will not be consummated and the Purchaser
will not be obligated to purchase the units. See "The Settlement -- Conditions
of the Purchase Offer and the Merger," pages 14 and 15.
WHAT WILL HAPPEN IN THE MERGER?
The terms of the settlement agreement provide for the merger of CBM
Acquisition, L.P., a subsidiary of the Joint Venture, with and into the
Partnership immediately after the consummation of the purchase offer. The
Partnership will be the surviving entity in the merger. In the merger, each
outstanding unit (other than units owned by the General Partner, the Purchaser
and holders who elect not to participate in the settlement) will be converted
into the right to receive $134,130 per unit (or a pro rata portion thereof) in
cash. If the court approves legal fees and expenses of approximately $18,000 per
unit to counsel to the class action plaintiffs in the Haas litigation, the net
amount that each holder that is a class member will receive is approximately
$116,000 per unit (or a pro rata portion thereof). The amount to be received by
any holder in the purchase offer or the merger will be reduced by any amount
owed by the holder on the original purchase price of such unit. Each unit held
by a holder who elects not to participate in the settlement will be converted
into the right to receive a cash amount equal to the appraised value of such
unit (or a pro rata portion thereof) not including any amount relating to the
claims asserted in the Haas litigation and reduced by any amount owed by the
holder on the original purchase price of such unit. See "The Settlement -- The
Merger," pages 21 and 22.
WHAT ARE THE PROPOSED AMENDMENTS TO THE PARTNERSHIP AGREEMENT?
The proposed amendments to the partnership agreement would:
(1) eliminate the provisions limiting the voting rights of the General
Partner and its affiliates to permit the General Partner and its affiliates
(including the Purchaser) to have full voting rights with respect to all
units owned by the General Partner, the Purchaser or their affiliates;
(2) eliminate the provision that prohibits the transfer of 50% or more of
the outstanding units within a 12-month period, so that the Purchaser may
acquire more than 50% of the outstanding units in the purchase offer;
(3) revise the provision that permits unit transfers only on the first day
of an accounting period, so that the transfer of units to the Purchaser
pursuant to the purchase offer can occur on the designated closing date,
rather than on the first day of an accounting period;
(4) add a provision to permit distributions of cash available for
distribution in accordance with the settlement agreement and revise the
provisions relating to allocations of profits and losses and distributions
that conflict with such provision; and
(5) add a provision that would expressly permit the General Partner to
authorize one or more third parties to appraise the market value of the
hotels owned by the Partnership and the value of the units, to remove any
doubt that the value of units held by limited partners who elect to opt-out
of the settlement can be established in accordance with the terms of the
settlement agreement and the merger agreement.
See "The Settlement -- The Amendments," pages 22 through 26 for
additional information regarding the proposed amendments.
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WHO IS ENTITLED TO VOTE ON THE MERGER AND THE PROPOSED AMENDMENTS TO THE
PARTNERSHIP AGREEMENT?
You are entitled to vote on the merger and the proposed amendments to the
partnership agreement if you owned units on __________, 2000 and have been
admitted as a limited partner, except that if you are in default with respect to
the original purchase price of your units, you are not entitled to vote with
respect to such units. See "The Written Consents -- Record Date and Outstanding
Units," page 40.
HOW DO I CONSENT TO THE MERGER AND THE PROPOSED AMENDMENTS?
If you wish to consent to the merger and the amendments, you should
complete, sign, date and return the YELLOW consent form in the enclosed envelope
with pre-paid postage. Your vote on these matters is very important. Your
failure to return the enclosed consent form will have the same effect as not
consenting to the merger and the amendments and, therefore, will constitute a
vote against the settlement. See "The Written Consents -- Voting and Revocation
of Consents," pages 40 and 41.
HOW DO I REVOKE MY CONSENT?
You may revoke your executed and returned consent form at any time prior to
the expiration date by delivering to the claims administrator a signed and dated
written notice stating that your consent is revoked. After the expiration date,
all consents previously executed and delivered and not revoked shall become
irrevocable and shall be deemed coupled with an interest. See "The Written
Consents -- Voting and Revocation of Consents," pages 40 and 41.
HOW LONG DO I HAVE TO CONSENT?
You may submit your signed consent form now. In order for your consent form
to be accepted, it must be received by the claims administrator no later than
12:00 midnight, New York City time, on _____________, 2000, unless the
expiration date of the purchase offer is extended, in which case the new
expiration date will be the last date on which your consent form will be
accepted. See "The Written Consents -- Solicitation Period," page 40.
HOW DO I OPT-OUT OF THE SETTLEMENT?
If you do not wish to participate in the settlement, you may exclude
yourself from the settlement class by submitting a written request to be
excluded, or an opt-out notice, no later than the expiration date to the claims
administrator. The opt-out notice must include the name of the case (Haas), your
name, address and telephone number, your social security number or taxpayer
identification number, the number of units you hold and the name of the
Partnership, a statement that you are requesting to be excluded from the
settlement class and your signature. In addition, certain amounts will be
required to be withheld from the cash payment that you will receive pursuant to
the merger representing the appraised value of your units unless you complete,
execute and include with your opt-out notice the Certificate of Non-Foreign
Status included in the proof of claim. See "Federal Income Tax Considerations--
Federal Tax Withholding Applicable to Participating and Nonparticipating
Unitholders" in this purchase offer and consent solicitation and Instruction 8
to the proof of claim. If you do not timely and validly submit an opt-out
notice, you will be bound by all orders and judgments entered in the litigation,
whether favorable or unfavorable to you. See "The Settlement -- The Merger --
Rights of Unitholders Who Have Elected Not to Participate in the Settlement,"
pages 21 and 22.
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WHAT FEDERAL INCOME TAX CONSIDERATIONS SHOULD I CONSIDER IN CONNECTION WITH THE
SETTLEMENT, THE PURCHASE OFFER AND THE MERGER?
Participating Unitholders. If you tender your units and submit the required
proof of claim to the claims administrator under the terms of the purchase offer
or if you do not tender your units but do not affirmatively "opt-out" of the
settlement (in either case, you will be a "participating unitholder"), you very
likely will be deemed to have received, solely for federal income tax purposes,
either in the purchase offer or pursuant to the merger, two separate amounts on
a per unit basis: (1) an amount in exchange for your units, and (2) an amount in
settlement of the claims asserted in the litigation. None of the defendants in
the litigation nor any of their affiliates are taking any position, for federal
income tax purposes, regarding the allocation by the participating unitholders
of the cash payment between the amount received in consideration for the units
and the amount received in settlement of the claims. We cannot assure you that
the allocation you choose to make will be respected by the Internal Revenue
Service, and you should consult your own tax advisor concerning this allocation.
If you are a participating unitholder, you will be treated as having made a
taxable disposition of your units in the purchase offer or pursuant to the
merger. If the sum of the portion of the cash payment from the Purchaser that is
properly allocable to the purchase of your units (which amount will be deemed to
include any amount owed by you on the original purchase price of your units)
plus your share of the Partnership's nonrecourse liabilities exceeds your
adjusted tax basis in your units, you will recognize gain, all of which (subject
to a possible exception described below under "Federal Income Tax
Considerations --Federal Income Tax Rates Applicable to Gain from Disposition of
Units by Participating and Nonparticipating Unitholders") will be treated as
capital gain taxable at applicable capital gain rates (including the 25% rate
applicable to your share of the "unrecaptured Section 1250 gain" of the
Partnership). If you are a participating unitholder, you may offset any gain
recognized from the disposition of your units with any "passive" or active
losses from the Partnership or other activities.
It is not clear how the portion of the cash payment that is properly
allocable to the settlement of the claims in the litigation, including the
portion of that amount attributable to your share of the legal fees and expenses
paid to counsel for the class action plaintiffs, will be characterized.
Generally, to the extent the complaints specified by the class action plaintiffs
in their pleadings might be construed as relating to injury to capital assets, a
recovery attributable to those complaints may result in the recognition of
capital gain by the plaintiffs. Conversely, to the extent the class action
plaintiffs' complaints might be construed as asking for compensation for lost
profits or punitive damages, a recovery attributable to those complaints may
result in the recognition of ordinary income by the plaintiffs. You might be
required to include in income your share of the legal fees and expenses paid to
counsel for the class action plaintiffs in the litigation. If you are required
to include in income your share of the legal fees and expenses paid to class
action plaintiff's counsel, you might be able to deduct all or a portion of the
legal fee and expense payment (subject to various limitations) or otherwise
reduce a portion of the gain that you would have recognized upon receiving the
offer consideration from the Purchaser.
Participating unitholders will be allocated Partnership taxable income and
loss through the date that the judgment order relating to the settlement is
determined to be final. Assuming that the judgment order is not appealed (other
than an appeal that relates solely to counsel fees and expenses), unitholders
will receive a cash distribution from the Partnership that relates only to the
period prior to the date the judgment order is entered.
Nonparticipating Unitholders. If you affirmatively "opt-out" of the
settlement (so that we refer to you as a "nonparticipating unitholder"), you
will be treated as having made a taxable disposition of your units pursuant to
the merger, which disposition would be deemed to occur on the effective date of
the merger. If the sum of the cash payment received in respect of your units
(which amount will be deemed to include any amount owed by you on the original
purchase price of your units) plus your share of the Partnership's nonrecourse
liabilities exceeds your adjusted tax basis in
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your units, you will recognize gain, all of which (subject to a possible
exception described below under "Federal Income Tax Considerations -- Federal
Income Tax Rates Applicable to Gain from Disposition of Units by Participating
and Nonparticipating Unitholders") will be treated as capital gain taxable at
applicable capital gain rates (including the 25% rate applicable to your share
of the "unrecaptured Section 1250 gain" of the Partnership). As a
nonparticipating unitholder, you may offset any gain recognized from the
disposition of your units with any "passive" or active losses from the
Partnership or other activities. Nonparticipating unitholders will be allocated
Partnership taxable income and loss through the date that the judgment order
relating to the settlement is determined to be final. Assuming that the judgment
order is not appealed (other than an appeal that relates solely to counsel fees
and expenses), you will receive a cash distribution from the Partnership that
relates only to the period prior to the date the judgment order is entered.
Federal Tax Withholding Applicable to Participating and Nonparticipating
Unitholders. Even if you choose not to return the rest of the proof of claim,
you should return the Certificate of Non-Foreign Status to prevent federal
income tax withholding on the amounts payable to you pursuant to the settlement.
See "The Settlement -- Federal Income Tax Considerations," pages 27 through 33.
WHAT WILL BE THE CONSEQUENCES TO THE PARTNERSHIP OF THE PURCHASE OFFER AND THE
MERGER?
The Joint Venture, through its subsidiaries, and, therefore, its equity
owners would own 99.94% of the equity interests in the Partnership and would
solely have the benefit or detriment of any change in the Partnership's value
and would receive all distributions, if any, with respect to the Partnership's
operations. Although the Partnership would become privately held and would no
longer be subject to the reporting requirements of the Securities Exchange Act
of 1934, it will be required to continue filing periodic reports with the SEC
under the terms of its senior notes. See "The Settlement -- Plans for the
Partnership; Certain Effects of the Purchase Offer," page 15.
TO WHOM MAY I SPEAK IF I HAVE QUESTIONS ABOUT THE PURCHASE OFFER OR THE CONSENT
SOLICITATION?
You may direct questions and requests for assistance relating to the
completion of the proof of claim and the consent form to GEMISYS, Inc., (800)
955-0245. You may also obtain additional copies of this purchase offer and
consent solicitation, the proof of claim, assignment and release, the consent
form, and other related materials from GEMISYS, Inc. Because we or our
affiliates are defendants in the lawsuit, the Purchaser, the Joint Venture, MI
Investor, Marriott International and the General Partner and its affiliates are
prohibited from discussing the settlement with you. You are encouraged to call
David Berg or Jim Moriarty, counsel to the class action plaintiffs, if you have
questions regarding the terms of the settlement. Mr. Berg's telephone number is
(713) 529-5622 and Mr. Moriarty's telephone number is (713) 528-0700.
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THE SETTLEMENT
Background of the Settlement
Organization and Business of the Partnership. The Partnership is a Delaware
limited partnership formed on July 15, 1986 to acquire and own 50 Courtyard by
Marriott hotels (the "Hotels") and the land on which certain of the Hotels are
located. The sole general partner of the Partnership, with a 5% general partner
interest, is CBM One LLC, which is jointly owned by Host Marriott, L.P., which
holds the sole managing interest, and Rockledge, which holds a non-managing
interest.
On August 20, 1986, the General Partner made a capital contribution of $1.2
million in cash and land valued at $4.8 million for its 5% general partner
interest. On that same date, 1,150 Units, representing a 95% interest in the
Partnership, were sold in a private placement at an offering price per Unit of
$100,000. A portion of the Units were purchased on an installment basis, with
the limited partners' obligations to make the installment payments evidenced by
promissory notes payable to the Partnership and secured by their Units. The
General Partner currently owns a total of 15 Units, which were purchased from
defaulting investors, representing a 1.24% limited partnership interest in the
Partnership.
On August 20, 1986, the Partnership began operations and executed a
purchase agreement with Marriott Corporation (the predecessor to Host Marriott
Corporation) to acquire the Hotels and the land on which certain of the Hotels
are located for a total price of $448.2 million. Of the total purchase price,
$374.7 million was paid in cash from the proceeds of mortgage financing and the
initial installment payments from the sale of the Units, and $73.5 million from
a note payable to Host Marriott Corporation. Twenty-eight of the Hotels were
conveyed to the Partnership in 1986, twenty-one Hotels in 1987, and the final
Hotel in January 1988. The Hotels are managed as part of the Courtyard by
Marriott hotel system under a long-term management agreement with Courtyard
Management Corporation (the "Manager"), currently a wholly owned subsidiary of
Marriott International. For a description of certain terms of the management
agreement, see "Certain Transactions with the Partnership--Management Agreement"
below.
The Partnership did not have sufficient cash to repay its original mortgage
loan at maturity in June 1993 and defaulted on the loan. In December 1993, the
Partnership entered into a forbearance agreement whereby its mortgage lenders
agreed not to exercise their rights and remedies for nonpayment of the loan. In
April 1994, the Partnership entered into a restated loan agreement with its
mortgage lenders, which would have matured in June 1997, subject to extension of
two one-year periods if certain operating profit levels were met. The loan
required that 75% or more of the available cash flow each year be applied to
additional principal repayments. The General Partner's predecessor provided a
$37.3 million guarantee of the original loan and Host Marriott provided a $40.0
million guarantee of the refinanced loans, which was backed up by a guarantee
from Marriott International. A total amount of $7,341,000 was advanced by the
General Partner's predecessor under the original guarantee, which as of March
24, 2000, had accrued a total of $7,600,000 of interest.
On March 21, 1997, the Partnership refinanced its mortgage debt. The total
amount of the debt was increased from $280.8 million to $325.0 million. The
$44.2 million of excess refinancing proceeds were used to: (i) make a $7 million
contribution to the property improvement fund to cover anticipated shortfalls;
(ii) pay approximately $7 million of refinancing costs; and (iii) make a $30.2
million partial return of capital distribution to the partners. The new loan
requires monthly payments of interest at a fixed rate of 7.865% and principal
based on a 20-year amortization schedule. The loan has a scheduled maturity in
April 2012.
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The Abandoned 1997 Rollup Transaction. In late 1997, the Partnership and
five other Marriott partnerships that own limited service hotels explored a
potential transaction involving the formation of an "umbrella partnership real
estate investment trust," or UPREIT, that would acquire the limited service
hotels owned by the six partnerships. The transaction was intended to provide
the limited partners in the six partnerships with liquidity and the opportunity
to participate in a public entity with growth potential. As a result of
conditions in the market for limited service hotels, the transaction was
abandoned.
The Unsuccessful Sales Effort. In mid-1998, the Partnership and five other
Marriott partnerships retained Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") as their financial advisor to explore the
possibility of sales of these Marriott partnerships, on a portfolio or
individual basis, in an effort to provide liquidity to limited partners and help
them realize the value of their investments. More than 70 prospective purchasers
were contacted, and certain financial information concerning the Partnership was
made available to a number of them for their review and analysis on a
confidential basis. Due to the large number of Hotels in the Partnership, many
prospective purchasers did not have the ability to consummate a transaction of
this size. Although the Partnership did have preliminary discussions with one
bidder, the Partnership and this bidder did not pursue a definitive agreement
because of uncertainties regarding the future operating results of the
Partnership's Hotels.
The Litigation. The Settlement Agreement is intended to resolve lawsuits
brought on behalf of limited partners in the Partnership, as well as lawsuits on
behalf of partners in six other partnerships. On March 16, 1998, limited
partners in the Partnership and several other Marriott Partnerships filed a
lawsuit (the "Haas Litigation"), styled Robert M. Haas, Sr. and Irwin Randolph
Joint Tenants, et al. v. Marriott International, Inc., et al., Case No. 98-CI-
04092, in the 57th Judicial District Court of Bexar County, Texas (the "Court")
against Marriott International, Host Marriott, various of their subsidiaries,
various individuals, and Hospitality Valuation Services, Inc. (collectively, the
"Haas Litigation Defendants"). This lawsuit related to the Partnership and the
following other partnerships (collectively, the "Marriott Partnerships"):
Courtyard by Marriott II Limited Partnership, Marriott Residence Inn Limited
Partnership, Marriott Residence Inn II Limited Partnership, Fairfield Inn by
Marriott Limited Partnership, Host DSM Limited Partnership (formerly known as
Desert Springs Marriott Limited Partnership) and Atlanta II Limited Partnership
(formerly known as Atlanta Marriott Marquis Limited Partnership). The plaintiffs
in the Haas Litigation alleged, among other things, that the defendants in this
lawsuit conspired to sell hotels to those Marriott Partnerships at inflated
prices and that they charged excessive management fees to manage the hotels
owned by those partnerships. They also alleged that the Haas Litigation
Defendants committed fraud, breached fiduciary duties, and violated the
provisions of various contracts. As part of the Settlement, counsel to the
plaintiffs in the Haas Litigation ("Class Counsel") will move for certification
of a settlement class consisting of all limited partners that were Unitholders
as of March 9, 2000, excluding the Haas Litigation Defendants, the Insiders and
two groups of limited partners that have elected to opt-out of the Haas
Litigation and intervene and are represented by separate counsel -- Palm
Investors, LLC and several Equity Resource Funds (the "Intervenors"). In
addition, the settlement class will consist of persons who were named as
plaintiffs in the Haas Litigation and sold their Units prior to March 9, 2000,
but did not assign their litigation claims.
In addition, certain limited partners of Courtyard by Marriott II Limited
Partnership filed a separate lawsuit, styled Whitey Ford, et al. v. Host
Marriott Corporation, et al., Case No. 96-CI-08327, in the 285th Judicial
District Court of Bexar County, Texas, involving similar allegations against
Host Marriott, Marriott International, various related entities, and others
(collectively, the "Courtyard II Defendants" and together with the Haas
Litigation Defendants, the "Defendants"). On January 29, 1998, two other limited
partners of Courtyard by Marriott II Limited Partnership, A.R. Milkes and D.R.
Burklew, filed a petition to expand this lawsuit (the "Milkes Litigation" and,
together with the Haas Litigation, the "Litigation") into a class action. On
June 23, 1998, the Court entered an order certifying a class of limited partners
under Texas law in the Milkes Litigation. As a result, Courtyard by Marriott II
Limited Partnership is no longer included in the Haas Litigation.
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The Defendants in both the Haas Litigation and the Milkes Litigation have
filed answers denying the allegations and asserting various defenses, including
the statutes of limitations.
On August 17, 1999, the General Partner appointed a special litigation
committee (the "Special Litigation Committee") consisting of The Honorable
William H. Webster and The Honorable Charles B. Renfrew, to investigate, review,
and analyze, on behalf of the Partnership, the facts and circumstances
surrounding the derivative claims asserted in the Haas Litigation and decide
what action the Partnership should take with respect to such claims. The general
partner of Courtyard by Marriott II Limited Partnership appointed the same
persons to serve as a special litigation committee to investigate the derivative
claims asserted on behalf of that partnership in the Milkes Litigation. The
Special Litigation Committee retained separate counsel to assist in its
investigation and review.
Fees. In connection with the consummation of the Purchase Offer and the
Merger, the Joint Venture will pay Merrill Lynch a fee in accordance with the
terms of its engagement letter entered into in mid-1998 in connection with its
sales efforts.
The Settlement Agreement
On March 9, 2000, the Defendants, Rockledge, counsel to the class action
plaintiffs in the Litigation, and certain other persons entered into the
Settlement Agreement. Insofar as it relates to the limited partners in the
Partnership, the Settlement Agreement provides for a two-step process to
effectuate the Settlement, consisting of the Purchase Offer and the Merger on
the terms and conditions set forth elsewhere in this Purchase Offer and Consent
Solicitation.
The Settlement Agreement provides that the Joint Venture, Host Marriott,
Rockledge, and Marriott International, or their designees, will deposit the
settlement funds with respect to the Haas Litigation (an aggregate amount of
$152,237,550 reduced by $134,130 for each Unit held by a Unitholder who opts-out
of the Settlement and further reduced by any amounts owed by Unitholders on the
original purchase price of any Units) in escrow within three business days after
the Court enters a judgment order approving the Settlement Agreement. If the
judgment order becomes final without an appeal (other than an appeal that
relates solely to counsel fees and expenses), then the escrow agent will be
authorized to make distributions within seven business days after the date on
which the judgment order becomes final (such date, the "Effective Date") of an
amount equal to $134,130 per Unit (or a pro rata portion thereof) in cash to
limited partners who have submitted valid Proofs of Claim on or before the
Effective Date. If the Court approves legal fees and expenses of approximately
$18,000 per Unit to Class Counsel, the net amount that each Unitholder that is a
class member will receive is approximately $116,000 per Unit (or a pro rata
portion thereof) (the "Net Settlement Amount"). The Net Settlement Amount to be
received by any holder will be reduced by any amount owed by the holder on the
original purchase price of such Unit. The escrow agent will be authorized to
make distributions of the Net Settlement Amount to limited partners who submit
valid Proofs of Claim after the Effective Date within seven days after receipt
of their Proofs of Claim. If a class action plaintiff has not submitted a valid
Proof of Claim to the Claims Administrator within 90 days following the
Effective Date and such plaintiff has not opted out of the Settlement, Class
Counsel may execute a Proof of Claim on behalf of that limited partner. The
execution of the Proof of Claim by Class Counsel on behalf of a limited partner
will entitle the limited partner to receive the Net Settlement Amount for each
Unit held by such limited partner and release, on behalf of such limited
partner, all claims that are released, settled and discharged as part of the
Settlement as provided in the Proof of Claim.
By execution and delivery of a Proof of Claim, you will be granting a
release of any and all claims, whether known or unknown, relating to the
purchase and sale of Units, the operation of the Partnership or management of
the Hotels, and other related matters, as set forth in greater detail in the
Proof of Claim. If you do not opt-out of the settlement class, you will also be
deemed to have granted such a release by virtue of the judgment order, even if
you fail to execute and deliver a valid
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<PAGE>
Proof of Claim. Pursuant to a Proof of Claim delivered prior to the Effective
Date, you will also transfer your Units to the Purchaser, free and clear of any
liens or encumbrances.
The Haas Litigation Defendants have agreed with the Intervenors to pay the
Intervenors $134,130 per Unit in the Purchase Offer pursuant to the same
Settlement Agreement entered into with Class Counsel. The Intervenors have
agreed to grant releases to the Haas Litigation Defendants as provided in the
Proof of Claim and to pay their own counsel fees and expenses. The Intervenors
have also agreed to exercise their best efforts to accomplish the terms and
conditions of the Settlement Agreement and accordingly are expected to tender
their Units in the Purchase Offer and to vote in favor of the Merger and the
Amendments. Insiders who own Units will also not be members of the plaintiff
class in the Haas Litigation. They will receive $134,130 per Unit tendered in
the Purchase Offer. If any of the persons discussed in this paragraph who are
not members of the plaintiff class in the Haas Litigation do not tender their
Units prior to the Expiration Date, their Units will be converted in the Merger
in the same manner as Units held by other participating Unitholders in the
Merger.
If you or any other plaintiffs file an appeal of the judgment order (other
than an appeal that relates solely to counsel fees and expenses), the escrow
agent will return the settlement fund, with interest, to the Joint Venture, Host
Marriott, Rockledge, and Marriott International, or their designees, within two
days after receiving documentation of the event. If an order of an appellate
court affirming the judgment order subsequently becomes final, then the Joint
Venture, Host Marriott, Rockledge, and Marriott International, or their
designees, will return the settlement fund to the escrow agent within three
business days thereafter, without interest.
The Settlement Agreement provides that the limited partners in the
Partnership will continue to own their respective Units until the judgment order
becomes final. The General Partner will cause the Partnership to make
distributions of Cash Available for Distribution (as defined in the Partnership
Agreement) for the period until the judgment order is entered. Following entry
of the judgment order, and until the judgment order becomes final, assuming
there is no appeal, no additional distribution of Cash Available for
Distribution will be made, but the limited partners will be entitled to receive
interest accumulated on the settlement fund, less administrative expenses. If an
appeal is filed, the General Partner will cause the Partnership to make
distributions of Cash Available for Distribution for the period until the
judgment order becomes final.
There may be a delay in such distribution to the extent the judgment order
becomes final in the middle of an accounting period or the General Partner is
otherwise unable to finally determine the amount of the distribution prior to
the judgment order becoming final.
Position of the General Partner, the Purchaser, the Joint Venture, Marriott
International, MI Investor and Rockledge Regarding the Purchase Offer
The terms of the Purchase Offer and the Merger (as well as all of the other
terms of the Settlement Agreement) were established through negotiations between
and among the plaintiffs, the Defendants, Rockledge and their counsel. None of
the Joint Venture, the Purchaser, Marriott International, MI Investor, Rockledge
or the General Partner makes any recommendation with respect to the Purchase
Offer, the Merger, the Amendments, or the other terms of the Settlement
Agreement.
The General Partner is a Haas Litigation Defendant. Accordingly, the
General Partner makes no recommendation to any Unitholder whether to tender or
to refrain from tendering his or her Units. YOU MUST EACH MAKE YOUR OWN DECISION
WHETHER OR NOT TO TENDER AND WHETHER OR NOT TO CONSENT TO THE MERGER AND THE
AMENDMENTS.
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<PAGE>
Recommendation of the Special Litigation Committee and Counsel to the Class
Action Plaintiffs
The Special Litigation Committee engaged the law firm of Milbank,
Tweed, Hadley & McCloy LLP to act as counsel and assist in the investigation.
The Special Litigation Committee also retained the law firm of Bouchard Margules
Friedlander & Maloney Huss to advise on matters of Delaware law and Jackson &
Walker LLP to advise on matters of Texas law. In addition to these three law
firms, the Special Litigation Committee retained experts to assist in analyzing
the claims. After extensive analysis of the factual and legal issues, the
Special Litigation Committee concluded that the proposed Settlement is fair and
reasonable because (1) it fairly reflects the substantial risks of litigation to
the Partnership and its limited partners and (2) it fairly accounts for the
inherent value of the Units based upon market-tested offers to purchase the
Partnership obtained by the Partnership's financial advisor in the summer of
1999.
In addition, counsel to the class action plaintiffs have recommended
to their clients that they tender their Units in the Purchase Offer and consent
to the Merger and the Amendments.
Purpose and Structure of the Purchase Offer; Merger and Amendments
The purpose of the Purchase Offer and the Merger is to fulfill the
obligations of Marriott International, Host Marriott and Rockledge under the
Settlement Agreement. See "The Settlement Agreement." The acquisition of the
Units has been structured as a cash purchase offer followed by a merger in order
to ensure that all of the Units are acquired, to permit different consideration
for Unitholders that participate in the Settlement and Unitholders that elect to
opt-out of the Settlement, and to provide for a majority vote on the Amendments.
The Settlement Agreement and the Merger Agreement provide that, if the
judgment order approving the Settlement becomes final, Unitholders who fail to
tender their Units, other than Unitholders who opt-out of the Settlement, will
receive the same consideration in the Merger as Unitholders whose Units are
purchased in the Purchase Offer. If the judgment order approving the Settlement
becomes final, each holder of Units who has opted out of the Settlement will be
entitled to receive a cash amount per Unit determined through an appraisal
process set forth in the Settlement Agreement and the Merger Agreement, but such
appraisal amount will not include any amount for the value of the claims that
---
were asserted in the Haas Litigation.
Conditions of the Purchase Offer and the Merger
Notwithstanding any other provisions of the Purchase Offer and Consent
Solicitation, the Purchaser is not obligated to accept for payment, purchase or
pay for, subject to Rule 14e-1(c) under the Securities Exchange Act of 1934, any
Units tendered, or to consummate the Merger, unless the following conditions are
satisfied:
(1) the order of the Court approving the terms of the Settlement and
the dismissal of the Litigation shall have become final (other than by
reason of an appeal relating solely to counsel fees and expenses),
(2) not more than ten percent of the Units (other than Units held by
Insiders) shall be held by holders who have elected not to participate in
the Settlement,
(3) not more than ten percent of the units of limited partnership
interests in each of the other six Marriott Partnerships (other than units
held by Insiders) shall be held by holders who have elected not to
participate in the Settlement,
(4) holders of a majority of the outstanding Units (other than the
General Partner or its affiliates) shall have submitted valid written
consents to the Merger and the Amendments, and
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(5) holders of a majority of the outstanding units of limited
partnership interests in Courtyard by Marriott II Limited Partnership
(other than its general partner and affiliates of its general partner)
shall have submitted valid written consents to its merger and the proposed
amendments to its partnership agreement.
The conditions set forth in (2) and (3) above are for the sole benefit
of the Purchaser and may be asserted by the Purchaser regardless of the
circumstances giving rise to these conditions and may be waived by the Purchaser
in writing, in whole or in part, at any time and from time to time, in its sole
discretion. The failure by the Purchaser at any time to exercise this right will
not be deemed a waiver of such right and this right will be deemed an ongoing
right which may be asserted at any time and from time to time until the
Expiration Date.
Plans for the Partnership; Certain Effects of the Purchase Offer
The Purchaser, the Joint Venture, Marriott International, MI Investor
and Rockledge currently intend that, upon consummation of the Purchase Offer and
the Merger, the Partnership will continue its business and operations,
substantially as, and in such places as, they are currently being conducted.
Except as set forth in this Purchase Offer and Consent Solicitation, the
Purchaser has no present plans or proposals regardless of the outcome of the
Purchase Offer that would result in an extraordinary transaction, such as a
merger, reorganization, liquidation, or sale or transfer of a material amount of
assets, involving the Partnership or its subsidiaries, or any material changes
in the Partnership's capitalization, distribution policy, structure or business.
Following the Merger, the Partnership will be 99.94% owned indirectly by the
Joint Venture and, therefore, by the Joint Venture's equity owners, MI Investor
and Rockledge (through wholly owned subsidiaries). The other .06% of the
Partnership will be owned by Host Marriott, L.P. In addition, subject to
contractual obligations to third parties, Rockledge (through wholly owned
subsidiaries) and MI Investor intend to make certain changes to the arrangements
under which the Manager provides management services to the subsidiaries of the
Partnership that own the Hotels to make such arrangements more consistent with
arrangements that the Manager and its affiliates currently have with other
properties in which Rockledge and Host Marriott have an interest. See "--Certain
Transactions with the Partnership." In addition, following consummation of the
Purchaser Offer and the Merger, the Partnership will be required, under the
terms of its senior notes, to make an offer to purchase all outstanding senior
notes as a result of a change of control of the Partnership.
The Units currently are registered under the Exchange Act, and the
Partnership currently is subject to the periodic reporting requirements of that
Act. Following the consummation of the Purchase Offer and the Merger, the
Partnership will become privately held directly and indirectly by Marriott
International and Rockledge through the Joint Venture and its subsidiaries.
Under the terms of its senior notes, the Partnership will be required to
continue filing periodic reports with the SEC, although it will not be required
to do so under the Exchange Act.
Following consummation of the Purchase Offer and the Merger, you will
have no further opportunity to participate in the benefit of increases, if any,
in the value of the Partnership's business and properties or to receive future
distributions, if any, in respect of the Partnership's operations.
Certain Information Concerning the Partnership
Business Description. The Partnership is a Delaware limited
partnership with its principal offices located at 10400 Fernwood Road, Bethesda,
Maryland 20817. The Partnership was formed on July 15, 1986 to acquire and own
the Hotels and the respective fee or leasehold interests in the land on which
the Hotels are located. The Hotels are located in 16 states and contained a
total of 7,223 guest rooms as of December 31, 1999. The Partnership is engaged
solely in the business of owning and operating hotels. The Hotels are operated
as part of the Courtyard by Marriott system, which includes over 471 hotels
worldwide in the moderately-priced segment of the lodging industry. The
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<PAGE>
Hotels are managed by the Manager, a wholly owned subsidiary of Marriott
International, under the Management Agreement. See "Certain Transactions with
the Partnership."
The Partnership has no directors or officers. The business
policymaking functions of the Partnership are carried out through the managers
and executive officers of the General Partner. The name, business address,
principal occupation, five-year employment history, and citizenship of the
managers and executive officers of the General Partner are set forth in Schedule
II to this Purchase Offer and Consent Solicitation.
Except as otherwise described in this Purchase Offer and Consent
Solicitation, neither the Partnership nor any of its affiliates nor, to the best
of the Partnership's knowledge, any of the persons listed in Schedule II hereto,
nor any associate or majority-owned subsidiary of any of the foregoing,
beneficially owns or has a right to acquire any Units. Except as otherwise
described in this Purchase Offer and Consent Solicitation, neither the
Partnership nor any of its affiliates nor, to the best of the Partnership's
knowledge, any of the persons or entities referred to above, nor any subsidiary
of the Partnership, has effected any transaction in such Units during the past
60 days.
Except as described in this Purchase Offer and Consent Solicitation,
neither the Partnership nor any of its affiliates nor, to the best of the
Partnership's knowledge, any of the persons listed on Schedule II hereto, has
any contract, arrangement, understanding or relationship with another person
with respect to any securities of the Partnership, including, but not limited
to, any contract, arrangement, understanding or relationship concerning the
transfer or voting of such securities, joint ventures, loan or option
arrangements, puts or calls, guarantees or loans, guarantees against loss or the
giving or withholding of proxies.
The Partnership is currently subject to the information and reporting
requirements of the Exchange Act and, as a result, is required to file reports
and other information with the SEC relating to its business, financial condition
and other matters. Certain information, as of particular dates, concerning the
Partnership, the General Partner's managers and executive officers, the
principal holders of the Partnership's securities, any material interests of
these persons in transactions with the Partnership and other matters is required
to be disclosed in reports filed with the SEC. Such reports and other
information can be inspected and copied at the public reference facilities
maintained by the SEC in Washington, D.C., New York, New York and Chicago,
Illinois. Information regarding the public reference facilities may be obtained
from the SEC by telephoning 1-800-SEC-0330. The Partnership's filings are also
available to the public on the SEC's Internet site (http://www.sec.gov). Copies
of such materials may also be obtained by mail from the Public Reference Section
of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates.
Certain Information Concerning the Purchaser, the Joint Venture, Marriott
International, MI Investor and Rockledge
The Purchaser. The Purchaser, a Delaware limited liability company and
a wholly owned subsidiary of the Joint Venture, was formed on April 19, 2000,
for the purpose of acquiring the Units pursuant to the Purchase Offer, and has
engaged in no activities to date, other than those incidental to its organizing
as an entity and making the Purchase Offer. Because the Purchaser is newly
formed and has minimal assets and capitalization, no meaningful financial
information with respect to the Purchaser is available. Similarly, because the
Purchaser has yet to establish an office, it should be contacted through either
MI Investor or Rockledge at the address and telephone numbers shown below.
The Joint Venture. The Joint Venture, a Delaware limited liability
company, is owned 50% by Marriott International, through MI Investor, and 50% by
Rockledge (through wholly owned subsidiaries). The Joint Venture was formed by
MI Investor and Rockledge (through wholly owned subsidiaries) on April 19, 2000
in order to effectuate the terms of the Settlement Agreement and has engaged in
no activities to date, other than those incidental to its organization and
satisfying the
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<PAGE>
terms of the Settlement Agreement. Because the Joint Venture has yet to
establish an office, it should be contacted through either MI Investor or
Rockledge at the address and telephone numbers shown below.
MI Investor. MI Investor, a Delaware limited liability company, is a
wholly owned indirect subsidiary of Marriott International. MI Investor was
formed on April 13, 2000, for the purpose of investing in the Joint Venture, and
has engaged in no activities to date, other than those incidental to its
organization and the formation of the Joint Venture. The principal office of MI
Investor is located at 10400 Fernwood Road, Bethesda, Maryland 20817 and its
telephone number is (301) 380-3000.
Marriott International. Marriott International, a Delaware
corporation, was incorporated on September 19, 1997 and became a public company
when it was spun off as a separate entity by the company formerly named
"Marriott International, Inc." (now known as Sodexho Marriott Services, Inc.) on
March 27, 1998. Marriott International is a worldwide operator and franchisor of
hotels and related lodging facilities, an operator of senior living communities,
and a provider of distribution services. Its operations are grouped in three
business segments, lodging, senior living services and distribution services,
which represented 81, six, and 13 percent, respectively, of total sales in the
fiscal year ended December 31, 1999. The principal office of Marriott
International is located at 10400 Fernwood Road, Bethesda, Maryland 20817 and
its telephone number is (301) 380-3000.
Marriott International is subject to the information and reporting
requirements of the Exchange Act and, in accordance therewith, files reports and
other information with the SEC relating to its business, financial condition and
other matters. Certain information, as of particular dates, concerning Marriott
International's directors and officers, the principal holders of Marriott
International's securities, any material interests of these persons in
transactions with Marriott International and other matters is required to be
disclosed in proxy statements distributed to Marriott International's
stockholders and filed with the SEC. Such reports, proxy statements, and other
information can be inspected at the public reference facilities maintained by
the SEC in Washington, D.C., New York, New York and Chicago, Illinois.
Information regarding the public reference facilities may be obtained from the
SEC by telephoning 1-800-SEC-0330. Marriott International's filings are also
available to the public on the SEC's Internet site (http://www.sec.gov). Copies
of such materials may also be obtained by mail from the Public Reference Section
of the SEC at 450 Fifth Street, N.W., Washington, D.C., 20549. Such reports,
proxy statements and other information can be inspected and copied at prescribed
rates. Such information should also be available for inspection at the New York
Stock Exchange at 20 Broad Street, New York, NY 10005.
Rockledge. Rockledge, a Delaware corporation, was formed in connection
with Host Marriott's efforts to reorganize its business operations to qualify as
a "real estate investment trust," or REIT, for federal income tax purposes.
Rockledge was formed to own various assets through a contribution of
approximately $264 million from Host Marriott to its operating partnership, the
direct ownership of which by Host Marriott or its operating partnership could
jeopardize Host Marriott's status as a REIT. These assets primarily consist of
partnership or other interests in hotels which are not leased and certain
furniture, fixtures and equipment used in the hotels. In exchange for the
contribution of these assets, the operating partnership received only non-voting
common stock, representing 95% of the total economic interests therein. The Host
Marriott Statutory Employee/Charitable Trust, the beneficiaries of which are
certain employees of Host Marriott, L.P., concurrently acquired all of the
voting common stock representing the remaining 5% of the total economic
interest. The principal office of Rockledge is 10400 Fernwood Road, Bethesda,
Maryland 20817 and its telephone number is (301) 380-9000.
The name, business address, present principal occupation, five-year
employment history and citizenship of each of the directors and executive
officers of the Purchaser, the Joint Venture, Marriott International, MI
Investor and Rockledge are set forth in Schedule I hereto.
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<PAGE>
Except as set forth in this Purchase Offer and Consent Solicitation
and in Schedule I, neither the Joint Venture, the Purchaser, Marriott
International, MI Investor or Rockledge, nor any person controlling the Joint
Venture, the Purchaser, Marriott International, MI Investor or Rockledge, nor,
to the best knowledge of the Joint Venture, the Purchaser, Marriott
International, MI Investor or Rockledge, any of the persons listed in Schedule I
or any associate or majority-owned subsidiary of any of the foregoing,
beneficially owns or has a right to acquire any Units or has effected any
transactions in the Units during the past 60 days. Except as described in this
Purchase Offer and Consent Solicitation, neither the Joint Venture, the
Purchaser, Marriott International, MI Investor or Rockledge, nor any of their
affiliates nor, to the knowledge of the Joint Venture, the Purchaser, Marriott
International, MI Investor or Rockledge, any of the persons listed on Schedule I
hereto, has any contract, arrangement, understanding or relationship with
another person with respect to any securities of the Partnership, including, but
not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or voting of such securities, joint ventures, loan or
option arrangements, puts or calls, guarantees or loans, guarantees against loss
or the giving or withholding of proxies, consents, or authorizations. Except as
described in this Purchase Offer and Consent Solicitation, neither the Joint
Venture, the Purchaser, Marriott International, MI Investor or Rockledge, nor
any of their affiliates nor, to the knowledge of the Joint Venture, the
Purchaser, Marriott International, MI Investor or Rockledge, any of the persons
listed on Schedule I hereto, has since January 1, 1998 engaged in any business
relationship or transaction with the Partnership or any of its affiliates that
would require disclosure herein under the rules and regulations of the SEC
applicable to the Purchase Offer. Except as described in this Purchase Offer and
Consent Solicitation, there have been no contacts, negotiations or transactions
since January 1, 1998 between the Purchaser, the Joint Venture, Marriott
International, MI Investor or Rockledge, and their respective affiliates or any
of the persons listed on Schedule I hereto, on the one hand, and the Partnership
or its affiliates on the other hand, concerning a merger, consolidation,
acquisition, tender offer or other acquisition of securities, election of
directors or sale or other transfer of a material amount of assets of the
Partnership.
Source and Amount of Funds
The total amount of funds required to purchase the Units in the
Purchase Offer and to consummate the Merger will be up to approximately $152.2
million, depending upon the number of Units held by limited partners who elect
to opt-out of the class and the appraised value determined for those Units under
the Merger Agreement. The Purchaser will obtain the necessary funds, indirectly,
from Marriott International, and from Rockledge, which will obtain funds from
the operating partnership of Host Marriott through a loan or capital
contribution. MI Investor and Rockledge will provide a portion of the funds for
the Purchase Offer and the Merger by equity contributions to the Joint Venture,
and a subsidiary of Marriott International will provide a portion of the funds
through a loan. There is no financing contingency to consummation of the
Purchase Offer and the Merger. Host Marriott and Marriott International have
guaranteed the obligations of the Haas Litigation Defendants and Rockledge to
provide the funds necessary to fund payments under the Settlement Agreement, if
the judgment order becomes final.
The Joint Venture, Marriott International, Host Marriott, and
Rockledge will be responsible for payment of expenses of the Purchase Offer and
the Merger. See "Other Matters - Fees and Expenses."
Certain Transactions with the Partnership
The following paragraphs describe certain transactions between the
Partnership, on the one hand, and Host Marriott, Rockledge, Marriott
International, and certain affiliates and related persons, on the other hand.
Management Agreement. The Hotels owned by the Partnership's
subsidiaries are managed by the Manager, a wholly owned subsidiary of Marriott
International, under a management agreement
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(the "Management Agreement"). The following paragraphs summarize the principal
provisions of the Management Agreement.
The Management Agreement has an initial term expiring December 31,
2017 and can be renewed for four successive ten-year periods as to one or more
of the Hotels. The Partnership may terminate the Management Agreement if, during
any three consecutive years, the average operating profit, as defined, does not
exceed $40,198,000 plus 8% of the sum of owner funded capital expenditures. In
addition, upon the sale of a Hotel, the Partnership may terminate the Management
Agreement with respect to that Hotel with payment of a termination fee. Prior to
December 31, 2001, a maximum of fifteen Hotels can be sold free and clear of the
Management Agreement with payment of the termination fee. The termination fee is
calculated by the Manager as the net present value of reasonably anticipated
future incentive management fees.
The Management Agreement provides for annual payments of (1) the base
management fee equal to 3% of gross Hotel sales, (2) the Courtyard management
fee equal to 3% of gross Hotel sales, and (3) the incentive management fee not
to exceed 15% of operating profit, as defined, payable from available cash as
described in the following paragraph. A portion of the Courtyard management fee
equal to 1% of gross Hotel sales is subordinate to debt service on the mortgage
loan.
As part of the Partnership's debt financing in March 1997, the
Partnership agreed to pay $4.2 million of deferred incentive management fees and
the Manager agreed to forgive approximately $14.9 million of these fees. This
left a remaining balance of $6.5 million of accrued incentive management fees as
of each of March 21, 1997 and December 31, 1997. The Partnership paid $823,000
and $876,000 of deferred incentive management fees during 1998 and 1999,
respectively, leaving a balance of $4.8 million of deferred incentive management
fees as of December 31, 1999. Deferred and current year incentive management
fees are payable from 50% of available cash after the payment of: (1) debt
service, (2) deferred Courtyard management fees, if any, (3) deferred Marriott
International ground rent, if any, and (4) a priority return to the Partnership
equal to 10% of cumulative capital less sale and refinancing proceeds. Deferred
management fees are not payable to the Manager from sale or refinancing
proceeds. Unpaid incentive management fees will not accrue.
The Management Agreement provides for the establishment of a repairs
and equity reserve (property improvement fund) for the Hotels to ensure that the
physical condition and product quality of the Hotels are maintained.
Contributions to the property improvement fund were equal to 5% of gross Hotel
sales through 1998 and were increased to 6% of gross Hotel sales in 1999 and
2000 and may be increased, at the option of the Manager, to 7% thereafter. For
the years ended December 31, 1999 and 1998, the Partnership reported
contributions of $12,361,000 and $10,540,000, respectively, to the property
improvement fund.
Following the Merger, the Partnership will be owned, directly and
indirectly, by Marriott International, Rockledge and Host Marriott. See "The
Settlement -- Plans for the Partnership; Certain Effects of the Purchase Offer."
Subject to contractual obligations to third parties, Rockledge and MI Investor
intend to make certain changes to the arrangements under which the Manager
provides management services to the subsidiaries of the Partnership that own the
Hotels to make such arrangements more consistent with arrangements that the
Manager and its affiliates currently have with other properties in which
Rockledge and Host Marriott have an interest. These changes include eliminating
the ability of the Management Agreement to be terminated with respect to a Hotel
upon the sale of such Hotel by payment of a termination fee, decreasing the
amount to which the incentive fee would increase under certain circumstances and
increasing annual contributions to the repairs and equipment reserve.
The following table sets forth the Partnership's reported breakdown of
amounts paid to Marriott International and affiliates under the Management
Agreement for the years ended December 31, 1999 and 1998:
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<TABLE>
<CAPTION>
1999 1998
---- ----
(in thousands)
<S> <C> <C>
Incentive management fee................................. $ 9,165 $ 9,426
Ground rent.............................................. 7,479 7,383
Chain services and MRP allocation........................ 10,185 9,676
Base management fee...................................... 6,182 6,037
Courtyard management fee................................. 6,182 6,037
Deferred incentive management fee........................ 876 823
------- -------
$40,069 $39,382
======= =======
</TABLE>
Ground Leases. The land on which 31 of the Hotels are located is
leased from affiliates of Marriott International. In addition, two of the Hotels
are located on land leased from third parties. The ground leases have remaining
terms (including all renewal options) expiring between the years 2058 and 2081.
The Marriott International ground leases provide for rent based on specific
percentages (from 4% to 8.5%) of certain sales categories subject to minimum
amounts. The minimum rentals are adjusted at various anniversary dates
throughout the lease terms, as defined in the agreements. The affiliates of
Marriott International, as land lessors, agreed to continue to subordinate their
ownership interest, as well as receipt of ground rent, to debt service on the
Partnership's existing debt financing and qualified refinancing.
Payments to Host Marriott and Subsidiaries. The following sets forth
amounts paid by the Partnership to Host Marriott and its subsidiaries for the
years ended December 31, 1999 and 1998:
1999 1998
---- ----
(in thousands)
Cash distributions.............................. $ 831 $ 755
Administrative expenses reimbursed.............. 146 523
----- ------
$ 977 $1,278
===== ======
Security Ownership of Certain Beneficial Owners and Management
As of December 31, 1999, Palm Investors, LLC, an unrelated third
party, owned approximately 5.4% of the 1,150 Units outstanding. The General
Partner owns a total of 15 Units representing a 1.24% limited partnership
interest in the Partnership.
As of December 31, 1999, two individuals that are officers and
managers of the General Partner and officers of Host Marriott each owned a
quarter Unit. In addition, two officers of Marriott International owned one Unit
each.
In connection with the Settlement Agreement, the Purchaser intends to
acquire all of the outstanding Units. The Purchaser is a subsidiary of a joint
venture between Rockledge and Marriott International.
Regulatory Matters
General. The Purchaser is not aware of any license or regulatory
permit that appears to be material to the business of the Partnership that might
be adversely affected by the Purchaser's acquisition of Units as contemplated
herein, the Merger or the other provisions of the Settlement Agreement.
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Based upon an examination of available information relating to the
businesses in which the Partnership is engaged, the Purchaser, the Joint
Venture, Marriott International, MI Investor and Rockledge believe that the
acquisition of Units pursuant to the Purchase Offer or the Merger would not
violate the antitrust laws. The Purchaser, the Joint Venture, Marriott
International, MI Investor and Rockledge believe that retention of all of the
operations of the Partnership should be permitted under the antitrust laws.
Nevertheless, no one can assure you that a challenge to the Purchase Offer on
antitrust grounds will not be made or, if such challenge is made, what the
result will be.
Except as set forth in this section entitled "Regulatory Matters," the
Purchaser is not aware of any filings, approvals or other action by any federal
or state governmental administrative or regulatory authority that would be
required for the acquisition of Units by the Purchaser as contemplated herein or
the Merger. Should any such other approval or action be required, it is
currently contemplated that such approval or other action would be sought. We
cannot assure you that any such additional approval or other action, if needed,
would be obtained without substantial conditions or that adverse consequences
might not result to the Partnership's business in the event that such other
approvals were not obtained or such other actions were not taken.
The Merger
Pursuant to the Settlement Agreement, and in accordance with the provisions
of Section 17-211 of the Delaware Revised Uniform Limited Partnership Act (the
"Partnership Act"), the Partnership and the Joint Venture, have entered into the
Merger Agreement. The following summary of certain provisions of the Merger
Agreement is qualified in its entirety by reference to the complete text of the
Merger Agreement. The following summary may not contain all the information
that is important to you.
The Merger Agreement provides that CBM Acquisition L.P., a Delaware limited
partnership ("Merger Sub") will be merged with and into the Partnership, with
the holders of partnership interests in the Partnership receiving cash in
specified amounts (except that the Units held by the General Partner and the
Units held by the Purchaser will remain outstanding and will be unaffected by
the Merger), and the General Partner and the Purchaser will become the only
partners in the Partnership. The Partnership will be the surviving entity in the
Merger and Merger Sub will cease to exist. The Partnership will continue its
existence as a limited partnership under the laws of the State of Delaware, and
its name shall continue to be "Courtyard by Marriott Limited Partnership."
Effects of Merger
The Merger will have the effects set forth in the Partnership Act. The
sole General Partner of the Partnership following the Merger will continue to be
CBM One LLC, until it withdraws or is removed in accordance with the Partnership
Agreement, as amended, and the General Partner and the Purchaser will be the
only limited partners of the Partnership following the Merger. Assuming the
Unitholders consent to the Merger and the Amendments and the other conditions to
the Purchase Offer and the Merger are satisfied, the Partnership Agreement will
be amended as soon as practicable following the Expiration Date, but in any
event prior to the consummation of the Purchase Offer to give effect to the
Amendments. The Partnership Agreement will be amended and restated as soon as
practicable after the Merger to reflect the acquisition of the Units by the
Purchaser and other changes in accordance with the terms and conditions thereof
and applicable Delaware law.
Exchange and Conversion of Partnership Interests
In connection with the Merger: (1) the partnership interests in the Merger
Sub will be converted into Units and (2) each Unit held by a Unitholder (other
than the Purchaser or the General Partner) who has not delivered a Proof of
Claim prior to the Expiration Date and who has
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not elected to opt-out of the Settlement will be converted into the right to
receive cash in an amount equal to the Net Settlement Amount. The Net Settlement
Amount to be received by any holder who has not elected to opt-out of the
Settlement will be reduced by any amount owed by the holder on the original
purchase price of such Unit.
Rights of Unitholders Who Have Elected Not to Participate in the Settlement
If you elect not to participate in the Settlement by timely delivering an
opt-out notice to Gemisys, Inc., which has been retained by counsel to the class
action plaintiffs as claims administrator (the "Claims Administrator") as
described herein, your Units will be converted in the Merger into the right to
receive cash in an amount equal to the value of such Units, determined in the
following manner. Two independent, nationally recognized hotel valuation firms
________________________ and ________________________, which have been selected
in consultation with Class Counsel and will be approved by the Court (or, if the
Court does not approve such firms, such substitutes as may be approved by the
Court), will appraise the market value of the Hotels as of the Effective Date,
which appraisals will be completed within 60 days after the effective time of
the Merger and set forth in a report certified by a MAI appraiser as having been
prepared in accordance with the requirements of the Standards of Professional
Practice of the Appraisal Institute and the Uniform Standards of Professional
Appraisal Practice of the Appraisal Foundation (which may be based on site
visits to 10 or more Hotels and a limited scope review deemed appropriate by
such appraisal firm). The appraised value of your Units in the Merger will be
an amount that you would receive if the entire equity interest in the
Partnership were sold for an amount equal to (i) the average of the appraised
values determined by the two appraisers plus (or minus) (ii) the net working
capital of the Partnership (to the extent not distributed to the partners) minus
(iii) the aggregate amount of indebtedness of the Partnership and its
subsidiaries minus (iv) the fair value of deferred management fees accrued
under the Management Agreement minus (v) the amount of any commitments for owner
funded capital expenditures and the estimated cost of any deferred maintenance
with respect to the Partnership's properties, and the proceeds of such sale were
then distributed among the partners of the Partnership in the same manner as
liquidation proceeds in accordance with the terms of the Partnership Agreement.
In the fall of 1999, in connection with the Partnership's effort to sell
the Hotels, the Partnership received a preliminary nonbinding proposal from an
unaffiliated third party to acquire all of the equity of the Partnership at a
price equivalent to approximately $82,000 per Unit. The proposal was based on a
methodology of adjustments similar to the methodology described in the
immediately preceding paragraph. The appraised value of Units payable in the
Merger to persons who opt-out of the Settlement may be more or less than $82,000
per Unit, depending upon the market values of the Hotels determined by the
independent appraisers and the actual amount of the foregoing adjustments at the
time of the Merger, which may differ materially from the amounts on which the
1999 acquisition proposal was based.
If you opt-out of the settlement class and elect not to participate in the
Settlement, the amount you will receive in the Merger will not include any
amount with respect to any claims asserted against the Defendants and will be
reduced by any amount owed on the original purchase price of your Units.
The Amendments
The proposed amendments to the Partnership Agreement are discussed below.
Capitalized terms used herein but not defined have the meanings set forth in the
Partnership Agreement.
1. Amendments to Voting Provisions. The Partnership Agreement contains
various provisions that inhibit the ability of the General Partner and its
affiliates to vote Units beneficially owned by them. In the event the Purchase
Offer is consummated and such parties become the owners of a majority of the
outstanding Units, such parties believe it would be appropriate to amend
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the voting provisions of the Partnership Agreement to provide such parties with
the voting rights described below. The proposed Amendments would affect
provisions of the Partnership Agreement that (1) impose restrictions on voting,
and (2) establish certain voting standards.
Section 10.01.G of the Partnership Agreement currently provides that the
General Partner or its Affiliates are not entitled to any voting, determinative
or consensual rights with respect to any Units owned or controlled by them and
such Units held by the General Partner or its Affiliates are not taken into
account in determining the presence or absence of a quorum. Under the current
definition of "Consent" in Section 1.01 of the Partnership Agreement, if the
General Partner or any of its Affiliates purchases any Units, it shall not have
any voting rights with respect to such Units. The proposed Amendments would
delete or revise as appropriate the provisions limiting the voting of the
General Partner and its Affiliates to permit the General Partner and its
Affiliates to have full voting rights with respect to all Units owned by the
General Partner or its Affiliates on all matters affecting the Partnership in
the same manner as other holders are entitled.
Purpose and Effect of the Amendments. This change has been proposed
because, absent the proposed amendments, in the unlikely event that some action
needs to be taken between the time the Purchase Offer is consummated and the
time the Merger is effective, the General Partner and its Affiliates would not
be permitted to vote such Units even if they held a significant portion of the
outstanding Units. The proposed voting amendments would allow the General
Partner and its Affiliates to have full voting rights during the interim period.
In addition, in the absence of the proposed amendments, after the Merger, the
Purchaser, as an Affiliate of the General Partner, will not be allowed to vote
its Units on items presented to the limited partners for their approval,
including amendments to the Partnership Agreement.
Text of the Amendments. Section 10.01.G of the Partnership Agreement,
which currently reads as follows, would be deleted in its entirety.
If any Consents, determinations or votes of Limited Partners, with or
without a meeting, are to be requested, made or taken, the General Partner or
any of its Affiliates (other than officers, directors or employees of the
General Partner or any of its Affiliates) shall not be entitled to any voting,
determinative or consensual rights with respect to any Interests owned or
controlled by any of them nor shall any Interests be taken into account in
determining the presence or absence of a quorum.
Section 1.01 of the Partnership Agreement, which defines "Consent," would
be revised by the Amendments to delete the strike through language as set forth
below:
"Consent" means either (a) the approval given by vote at a
meeting called and held in accordance with the provisions of Section 10.01,
or (b) a prior written approval required or permitted to be given pursuant
to this Agreement or the act granting such approval, as the context may
require. Unless otherwise specified, Consent of the Limited Partners shall
mean Consent of a majority in interest of the Limited Partners entitled to
vote. However, if the General Partner or any Affiliate of the General
Partner (other than officers, directors or employees of the General Partner
or its Affiliates) purchases any Units, it shall have no voting rights with
respect to such Units.
2. Elimination of Fifty Percent Transfer Restriction. Section 7.01.B of
the Partnership Agreement effectively prohibits the transfer of 50% or more of
the outstanding Units within a 12-month period. The proposed Amendment would
eliminate this restriction on the transfer of Units.
Purpose and Effect of the Amendment. Under Section 708 of the Internal
Revenue Code of 1986, as amended (the "Code"), a partnership is considered to
"terminate" for federal income tax purposes if 50% or more of the interests in
profits and capital are sold within a 12-month period (a
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<PAGE>
"Section 708 Termination"). The Partnership Agreement, as currently written,
prohibits any assignment of Units that would result in a Section 708
Termination. Thus, the Partnership Agreement, when read in conjunction with
Section 708, permits the transfer of up to, but not including, 50% of the total
number of outstanding Units in any consecutive 12-month period. The Purchase
Offer and the Merger would result in a transfer of all of the outstanding Units
(except the 15 Units owned by the General Partner). Accordingly, the General
Partner is proposing, at the request of the Joint Venture and the Purchaser, the
deletion of Section 7.01.B from the Partnership Agreement to facilitate
consummation of the Purchase Offer and the Merger.
Text of the Amendment. Section 7.01.B of the Partnership Agreement, which
currently reads as follows, would be deleted entirely by the Amendment:
No assignment of any Interest may be made if the assignment is pursuant to
a sale or exchange of the Interest and if the Interest sought to be assigned,
when added to the total of all other Interests assigned within a period of 12
consecutive months prior thereto, would, in the opinion of legal counsel for the
Partnership, result in the Partnership being deemed to have been terminated
within the meaning of section 708 of the Code. The General Partner shall give
Notification to all Limited Partners in the event that sales or exchanges should
be suspended for such reason. Any deferred sales or exchanges shall be made (in
chronological order to the extent practicable) as of the first day of an
Accounting Period after the end of any such 12 month period, subject to the
provisions of this Article Seven.
3. Revision of Restriction on Timing of Transfers. Section 7.01.A of the
Partnership Agreement permits the assignment of Units only on the first day of
an Accounting Period. The Amendment to Section 7.01.A would eliminate this
restriction for the transfer of Units to the Purchaser pursuant to the Purchase
Offer, and would exempt the Purchaser from this restriction for any subsequent
transfer of Units to another entity.
Purpose and Effect of the Amendment. Section 7.01A of the Partnership
Agreement permits the assignment of Units only on the first day of each
Accounting Period. Without amending the Partnership Agreement to permit the
waiver of this requirement, the closing date for the Purchase Offer would have
to fall on the first day of an Accounting Period, rather than an earlier or
later date that otherwise would be chosen as the closing date. Accordingly, the
General Partner has proposed, at the request of the Joint Venture and the
Purchaser, the inclusion in Section 7.01.A of a provision that would eliminate
the Section 7.01.A transfer restrictions for Units transferred pursuant to the
Purchase Offer. This change would permit the transfer of such Units and the
closing of the Purchase Offer to occur on the earliest date practicable
following the expiration of the Purchase Offer, and in any event, on such date
as is necessary to facilitate the orderly consummation of the Purchase Offer.
The General Partner also has proposed, at the request of the Joint Venture and
the Purchaser, that Unitholders exempt the Purchaser from this restriction for
all subsequent assignments of its Units to any other entity in order to provide
the Purchaser with the flexibility to transfer its Units on such date that may
be necessary to facilitate the transfer. Because such transfers would occur in
isolated transactions, the General Partner does not believe that, as a result of
such transfers, the Partnership would be treated as an association taxable as a
corporation under Section 7704 of the Code.
Text of the Amendment. Section 7.01.A of the Partnership Agreement would
be revised to add the underlined language set forth below:
No assignment of any Interest may be made other than on the first day
of an Accounting Period, provided, however, that this restriction on the
-----------------------------------------------
timing of assignment shall not apply to (i) any transfer of Units by
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Limited Partners to CBM I Holdings LLC or (ii) any subsequent assignment of
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any Units by CBM I Holdings LLC.
--------------------------------
4. Amendments to Provisions Relating to Allocations of Profits and Losses
and Distributions of Cash. Section 4.05 of the Partnership Agreement provides
that net profits, gains,
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net losses or losses attributable to Units that are transferred during the
taxable year shall be allocated between the transferor and transferee according
to the number of accounting periods in such taxable year that each owned the
Units. If Units are transferred on a date other than the first day of an
accounting period, in violation of the transfer restriction imposed by Section
7.01.A of the Partnership Agreement (discussed above under "--Revision of
Restriction on Timing of Transfers"), Section 4.05 requires that net profits,
gains, net losses or losses attributable to the Units for the accounting period
in which the transfer occurs shall be prorated between the transferor and the
transferee if, and to the extent, legally required in the opinion of legal
counsel. Section 4.07 of the Partnership Agreement provides that cash available
for distribution with respect to each fiscal year of the Partnership shall be
distributed at least annually. Section 4.10 of the Partnership Agreement
provides that cash available for distribution with respect to Units shall be
distributed to the limited partners pro rata in accordance with the number of
Units owned by each as of the end of the accounting period with regard to which
the distribution relates. The Amendments to these provisions would clarify that
Unitholders (1) would receive allocations of profit or loss on their Units up
through the Effective Date rather than through the end of the preceding
accounting period, (2) would receive a distribution from cash available for
distribution for the period ending on the day prior to the date of the entry of
the judgment order, and (3) would not receive any additional cash distributions
(including any sale or refinancing proceeds) relating to periods beginning on or
after the date of the entry of the judgment order (which cash distributions
would inure to the benefit of the Purchaser), unless an appeal is filed with
regard to the judgment order (other than an appeal that relates solely to
counsel fees and expenses), in which case the Unitholders also would receive a
distribution of cash available for distribution for the period beginning on the
date the judgment order is entered and ending on the Effective Date.
Purpose and Effect of the Amendments. The change to Section 4.07 of the
Partnership Agreement has been proposed to permit Unitholders to receive a
distribution of cash available for distribution from the Partnership for the
period ending on the day prior to the date of the entry of the judgment order,
as required by the terms of the Settlement Agreement. In the event an appeal is
timely filed with regard to the judgment order after it is entered (other than
an appeal that relates solely to counsel fees and expenses), the proposed change
to Section 4.07 also would permit the Unitholders to receive a distribution of
cash available for distribution from the Partnership for the period beginning on
the date the judgment order is entered and ending on the Effective Date.
Because the Partnership distributes cash available for distribution on an annual
basis in accordance with Section 4.07.A, Section 4.10 otherwise would cause all
cash distributions (including sale or refinancing proceeds) with respect to the
Units to be made to the Purchaser if the Unitholders disposed of their Units
before the end of the accounting period ending prior to the date of any such
distributions from the Partnership. As a result of amending Section 4.07 so as
to require the distributions described in the Settlement Agreement, the
Unitholders will receive a distribution of cash available for distribution for
the period ending on the day prior to the entry of the judgment order and, if an
appeal is filed with regard to the judgment order (other than an appeal that
relates solely to counsel fees and expenses), a distribution of cash available
for distribution for the period beginning on the date the judgment order is
filed and ending on the Effective Date but will receive no distributions for any
period after the Effective Date.
The proposed Amendment to Section 4.05 would require the Partnership to
allocate net profits, gains, net losses and losses with respect to the Units for
the fiscal year of the Partnership in which the judgment order becomes final
between the Purchaser and each Unitholder based upon the number of days that
each held such Units during such fiscal year (including any short fiscal year
for tax purposes resulting from a "technical" termination of the Partnership
pursuant to Section 708(b)(1)(B) of the Code). Because the Partnership
currently is generating net income, if the judgment order becomes final on a
date other than the first day of an Accounting Period, the Amendment would
result in a greater amount of taxable income being allocated to the Unitholders
than would be the case currently under the Partnership Agreement. However, the
additional allocation of taxable income would increase each Unitholder's
adjusted tax basis in his Units and, thus, would decrease the amount of capital
gain, or increase any capital loss, recognized by the Unitholder in the Purchase
Offer or as a result of the Merger. See "Federal Income Tax
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Considerations--Allocations of Profits and Losses to Participating and
Nonparticipating Unitholders."
Text of the Amendments. Section 4.05 of the Partnership Agreement would be
amended to add the underlined language set forth below:
Any Net Profits or Net Losses for any Fiscal Year allocable to
the Limited Partners shall be allocated among the Limited Partners pro rata
in accordance with the number of Units owned by each as of the end of such
Fiscal Year; provided that if any Unit is assigned during the Fiscal Year
in accordance with this Agreement, the Net Profits or Net Losses that are
so allocable to such Unit shall be allocated between the assignor and
assignee of such Unit according to the number of Accounting Periods in such
Fiscal Year each owned such Unit. Any Gains or Losses allocable to the
Limited Partners shall be allocated among the Limited Partners who held
Units on the last day of the Accounting Periods in which the sale or
disposition giving rise to such Gains or Losses occurred, pro rata in
accordance with the number of Units owned by each such Limited Partner. If
any Unit is assigned by a Limited Partner other than on the first day of an
Accounting Period (in contravention of the Agreement), then the Partnership
shall recognize such assignment for the purposes of allocating Net Profits,
Gains, Net Losses or Losses if, and to the extent, it is legally required
to do so in the opinion of legal counsel. Notwithstanding the foregoing,
------------------------------
each transfer of Units to CBM I Holdings LLC or acquisition of Units
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pursuant to the merger of CBM Acquisition L.P., an affiliate of CBM I
----------------------------------------------------------------------
Holdings LLC, with and into the Partnership (the "Merger") pursuant to an
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agreement and plan of merger (the "Merger Agreement"), with the Partnership
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surviving, in connection with the settlement of certain claims brought by
-------------------------------------------------------------------------
the Limited Partners against the General Partner and other defendants, as
-------------------------------------------------------------------------
described in the Settlement Agreement, dated as of March 9, 2000 (the
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"Settlement Agreement"), shall be considered to be in accordance with this
--------------------------------------------------------------------------
Agreement and the Net Profits, Gains, Net Losses or Losses for the Fiscal
-------------------------------------------------------------------------
Year (including any short Fiscal Year resulting from the termination of the
---------------------------------------------------------------------------
Partnership pursuant to Section 708(b)(1)(B) of the Code) in which the
----------------------------------------------------------------------
transfer occurs shall be allocated between the transferor and the
-----------------------------------------------------------------
transferee based upon the number of days that each held such Units during
-------------------------------------------------------------------------
such Fiscal Year.
-----------------
Section 4.07 of the Partnership Agreement would be amended to renumber
Section 4.07 as Section 4.07.A and to add new Section 4.07.B, as set forth
below:
Section 4.07.B. To effectuate the terms of the Settlement
----------------------------------------------------------
Agreement, the Partnership shall make the following extraordinary
-----------------------------------------------------------------
distributions of Cash Available for Distribution within 90 days after the
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end of the relevant distribution period:
----------------------------------------
(i) To each Limited Partner, his pro rata share of Cash
--------------------------------------------------------
Available for Distribution, as determined in accordance with the provisions
---------------------------------------------------------------------------
of Section 4.07.A. above, with regard to the period ending on the day prior
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to the date of the entry of the judgment order relating to the Settlement
-------------------------------------------------------------------------
Agreement (the "Judgment Order"). Subject to Section 4.07.B(ii) below,
----------------------------------------------------------------------
after receipt of this distribution, no Limited Partner shall have a right
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to any other distribution from the Partnership pursuant to this Article
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Four or any other provision of this Agreement.
----------------------------------------------
(ii) To each Limited Partner, if and only if an appeal with
-----------------------------------------------------------
regard to the Judgment Order is timely filed within the time permitted for
--------------------------------------------------------------------------
such appeal (other than an appeal that relates solely to counsel fees and
-------------------------------------------------------------------------
expenses), his pro rata share of Cash Available for Distribution, as
--------------------------------------------------------------------
determined in accordance with the provisions of Section 4.07.A. above, with
---------------------------------------------------------------------------
regard to the period beginning on the date of the entry of the Judgment
-----------------------------------------------------------------------
Order and ending on the day on which the Judgment Order becomes "final" (as
---------------------------------------------------------------------------
such term is defined in the Settlement Agreement).
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Notwithstanding the last sentence of Section 4.10, for allocation
-----------------------------------------------------------------
and distribution purposes, each Limited Partner who transfers Units
-------------------------------------------------------------------
pursuant to the Settlement Agreement or the Merger shall be deemed to be a
--------------------------------------------------------------------------
Limited Partner of record as of the end of the Accounting Period prior to
-------------------------------------------------------------------------
each distribution described in Section 4.07.B(i) and (ii) and Section 4.10
--------------------------------------------------------------------------
shall be applied accordingly.
----------------------------
5. Amendment to Provisions Relating to Authority of the General Partner to
Manage the Partnership.
Purpose and Effect of the Amendment. Section 5.01A of the Partnership
Agreement currently provides that, except as expressly provided in the
Partnership Agreement, the authority of the General Partner to conduct the
business of the Partnership shall be exercised only by the General Partner.
Section 5.01C of the Partnership Agreement delineates certain powers that the
General Partner may exercise without the consent of the limited partners. The
Settlement Agreement and the Merger Agreement provide for appraisal of the fair
market value of the Hotels and the value of the Units by one or more third
parties in connection with the appraisal of the value of Units held by holders
who elect to opt-out of the Settlement. To the extent such an appraisal
procedure could otherwise be deemed to fall within the exclusive authority of
the General Partner to conduct the business of the Partnership, the proposed
amendment to Section 5.01C would clarify that the General Partner has the power
to delegate the authority to conduct such appraisal procedures in accordance
with the Settlement Agreement and the Merger Agreement.
Text of the Amendment. Section 5.01.C of the Partnership Agreement, would
be amended to add the underlined language set forth below:
(vii) sell up to 20 hotels (no more than five Hotels at less
than the Partnership's purchase price); and
(viii) retain such persons or entities as the General Partner, in
----------------------------------------------------------
its sole discretion, shall deem necessary or appropriate
--------------------------------------------------------
in order to appraise the fair market value of the Hotels
--------------------------------------------------------
and the value of the Units in accordance with the terms of
----------------------------------------------------------
the Settlement Agreement and the Merger Agreement; and
------------------------------------------------------
(ix) take such actions as the General Partner determines are
advisable or necessary, and will not result in any
material adverse effect on the economic position of
holders of a majority of the Units, to preserve the tax
status of the Partnership as a partnership for Federal
income tax purposes.
Federal Income Tax Considerations
General. The following discussion summarizes certain federal income tax
considerations related to the Settlement that may be relevant to (i) a
Unitholder who tenders his Units and submits the required Proof of Claim to the
Claims Administrator pursuant to the terms of the Purchase Offer and a
Unitholder who does not tender his Units and submit the Proof of Claim but who
does not affirmatively "opt-out" of the Settlement (in either case, hereinafter,
a "Participating Unitholder"), or (ii) a Unitholder who affirmatively "opts out"
of the Settlement and therefore exchanges his Units in the Merger (hereinafter,
a "Nonparticipating Unitholder").
The information in this section is based upon the Internal Revenue Code of
1986, as amended (the "Code"), Treasury Regulations thereunder, rulings, and
other pronouncements and decisions now in effect, all of which are subject to
change (perhaps with retroactive effect). The General Partner has not requested,
and does not plan to request, any rulings from the IRS concerning the tax
treatment of the Unitholders in connection with the Settlement. Thus, it is
possible that the IRS
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<PAGE>
would challenge the statements in this discussion, which do not bind the IRS or
the courts, and that a court would agree with the IRS.
The discussion set forth herein is not intended to be exhaustive of all
possible tax considerations. For example, this summary does not give a detailed
discussion of any state, local, or foreign tax considerations. Nor does it
discuss all aspects of federal income taxation that may be relevant to specific
Unitholders in light of their particular circumstances. Except where
specifically indicated, the discussion below describes general federal income
tax considerations applicable to individuals who are citizens or residents of
the United States. Accordingly, the following discussion has limited
application to domestic corporations and persons subject to specialized federal
income tax treatment, such as foreign persons, tax-exempt entities, regulated
investment companies and insurance companies.
The following discussion includes an estimate by the General Partner, on a
per Unit basis, of a Unitholder's adjusted tax basis in his Units (including the
amount of syndication costs includible in his basis), the amount of the
Partnership's liabilities allocable to such Unitholder, the passive activity
loss carry forward, if any, attributable to his ownership of Units and the
amount of "unrecaptured Section 1250 gain" that such Unitholder would recognize
at the time of the disposition of his Units. These amounts are only estimates,
and there could be material differences between these estimated amounts and the
actual numbers due to a variety of factors. In addition, these estimates apply
only to a Unitholder who purchased his Units on the date of the original
offering of the Units and who has held his Units continuously since that time.
The estimated amounts could differ considerably for a Unitholder who acquired
some or all of his Units after the date of the original offering. The amount of
gain recognized by such Unitholders in connection with the disposition of their
Units pursuant to the Settlement will depend upon when they acquired their Units
and the price they paid for the Units (as adjusted for subsequent allocations of
Partnership income and loss and subsequent Partnership distributions).
UNITHOLDERS SHOULD BOTH REVIEW THE FOLLOWING DISCUSSION AND CONSULT WITH
THEIR TAX ADVISORS TO DETERMINE THE TAX CONSEQUENCES TO THEM -- INCLUDING ANY
STATE, LOCAL OR NON-U.S. TAX CONSEQUENCES -- IN LIGHT OF THEIR PARTICULAR TAX
SITUATION, OF CHOOSING TO PARTICIPATE IN THE SETTLEMENT OR OPTING OUT OF THE
SETTLEMENT.
The class of Participating Unitholders is represented by Class Counsel, who
have engaged Chamberlain, Hrdlicka, White, Williams, and Martin ("Chamberlain
Hrdlicka") as special tax counsel. Chamberlain Hrdlicka is separately providing
to the Unitholders its summary regarding the potential federal income tax
consequences resulting from the Settlement. You should review this summary
carefully with your tax advisor. That summary is solely the responsibility of
such special tax counsel, and none of the Purchaser, the Partnership, the
General Partner, the Joint Venture, Rockledge, the MI Investor, any of the
Defendants nor any of their affiliates or advisors express any views with
respect to the matters set forth therein or have any responsibility with respect
thereto.
Tax Treatment of Participating Unitholders. Each Participating Unitholder
will receive, either in the Purchase Offer or pursuant to the Merger, cash in
the amount of $134,130 per Unit (or a pro rata portion thereof), before
reduction (in the case of class members) for such Unitholder's pro rata share of
legal fees and expenses ("Class Counsel's Attorneys' Fees") awarded by the court
to Class Counsel (the "Gross Per Unit Settlement Amount"). Each Participating
Unitholder very likely will be deemed, solely for federal income tax purposes,
to have received two separate amounts, on a per Unit basis: (1) an amount in
exchange for his Units (for purposes of this discussion, the "Deemed Unit
Purchase Amount"), and (2) a separate amount in settlement of the claims
asserted in the Haas Litigation (for purposes of this discussion, the "Deemed
Claim Value," which, as described below, may or may not be considered to include
the Unitholder's pro rata share of Class Counsel's Attorneys' Fees).
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<PAGE>
The correct allocation of the Gross Per Unit Settlement Amount between the
Deemed Unit Purchase Amount and the Deemed Claim Value for federal income tax
purposes is a question of fact and may depend in part upon the fair market value
of the Units. None of the Defendants nor any of their affiliates are taking any
position regarding the allocation by the Participating Unitholders of the Gross
Per Unit Settlement Amount between the Deemed Unit Purchase Amount and the
Deemed Claim Value for federal income tax purposes. As described above in "The
Merger -- Rights of Unitholders Who Have Elected Not to Participate in the
Settlement," however, Nonparticipating Unitholders will receive cash in the
Merger in an amount per Unit equal to the appraised value of a Unit, as
determined pursuant to a separate appraisal process that will be completed
within 60 days after the Merger. In addition, Class Counsel will assert in
court, for purposes of determining their legal fees, that the plaintiffs are
receiving in the Settlement benefits resulting from the Haas Litigation with a
value that is in excess of the value of the Units under the existing partnership
structure and agreements. Finally, the Purchaser and the Defendants will make
an allocation between the Deemed Unit Purchase Amount and the Deemed Claim Value
for the purpose of determining the Purchaser's initial tax basis in the Units
acquired by it through the Purchase Offer and pursuant to the Merger, the
Purchaser's share of the Partnership's tax basis in its property and the
consequences to the Defendants of the Settlement for tax and financial
accounting purposes. There can be no assurance that the IRS would not assert
that a Participating Unitholder must treat the appraised value of the Units held
by the Nonparticipating Unitholders, the value of the benefits received by the
plaintiffs in settlement of the Haas Litigation that is asserted by Class
Counsel in their petition for legal fees and expenses, the amounts used by the
Purchaser and the Defendants for determining the tax and financial accounting
consequences to them of the Settlement, or some other measurement of value as
determinative for purposes of allocating the Gross Per Unit Settlement Amount
between the Deemed Unit Purchase Amount and the Deemed Claim Value.
Federal Tax Consequences of Disposition of Units. Each Participating
Unitholder will be treated as having made a taxable disposition of his Units in
the Purchase Offer or pursuant to the Merger. The disposition likely would be
deemed to occur, with regard to a Participating Unitholder who tenders his Units
and submits the Proof of Claim, on the date his right to receive the Gross Per
Unit Settlement Amount becomes fixed, which would be the Effective Date, and,
with regard to a Participating Unitholder who does not tender his Units and
submit the Proof of Claim, on the effective date of the Merger. The gain or
loss recognized by a Unitholder upon the disposition of his Units will equal the
difference between the amount considered realized by the Unitholder for tax
purposes in exchange for his Units (as described in the next paragraph) and the
Unitholder's adjusted tax basis in such Units (described below under "Basis of
Units of Participating and Nonparticipating Unitholders").
The amount considered realized by each Participating Unitholder will equal
the sum of the following items: (1) the cash received for his Units at the time
of the disposition (which will equal the Deemed Unit Purchase Amount and will be
deemed to include any amount owed by the Unitholder on the original purchase
price of his Units), and (2) the portion of the Partnership's liabilities
allocable to the Participating Unitholder's Units for federal income tax
purposes immediately prior to the date of the disposition of such Units. The
General Partner estimates that, as of December 31, 1999, the dollar amount of
the Partnership's liabilities allocable to each Participating Unitholder was
approximately $238,000 per Unit.
A Unitholder will recognize gain to the extent that the amount realized by
him in exchange for his Units (as determined in the preceding paragraph) exceeds
his adjusted tax basis in the Units (as described below under "Basis of Units of
Participating and Nonparticipating Unitholders"). The taxable gain recognized
by the Participating Unitholder will exceed the cash amount received with
respect to his Units by an amount equal to the excess (if any) of his share of
the Partnership's liabilities allocable to him for federal tax purposes over his
adjusted tax basis in his Units (which is commonly referred to as a "negative
capital account").
For a discussion of the federal income tax rates applicable to the gain
recognized by a Unitholder from the disposition of a Unit that has been held as
a capital asset by the Unitholder, see
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"Federal Income Tax Rates Applicable to Gain from Disposition of Units by
Participating and Nonparticipating Unitholders" below.
Federal Tax Consequences of Receipt of Deemed Claim Value. As noted above,
there can be no certainty as to what portion of the Gross Per Unit Settlement
Amount would be considered allocable to the Deemed Claim Value (rather than the
Deemed Unit Purchase Amount). Moreover, there is considerable uncertainty in
the law as to how amounts that are treated as allocable to the Deemed Claim
Value received by a Participating Unitholder would be characterized for federal
income tax purposes.
The determination of the character and amount of income and gain recognized
by a plaintiff in connection with payments received in settlement of litigation
depends on many factors, including the nature and relative merits of the claims
made in the litigation that is being settled, and whether a portion of the
settlement payment that may otherwise be characterized as capital in nature is
subject to recharacterization as ordinary income to reflect certain tax benefits
realized by the plaintiff in prior years. In general, an amount received in
settlement of a claim may be characterized as ordinary income (if the amount
relates to lost profits or punitive damages) or a return of capital or capital
gain (if the amount relates to injury to capital assets).
The complaints of the plaintiffs in the Haas Litigation are specified in
their pleadings filed in that litigation. As described in the preceding
paragraph, to the extent the plaintiffs' complaints might be construed as
relating to injury to capital assets, a recovery attributable to those
complaints may result in the recognition of capital gain by the plaintiffs.
Conversely, to the extent the plaintiffs' complaints might be construed as
asking for lost profits or punitive damages, a recovery attributable to those
complaints may result in the recognition of ordinary income by the plaintiffs.
The Settlement Agreement does not address the relative merits of any of the
claims and does not provide for an allocation of all or a part of the Gross Per
Unit Settlement Amount to any specific claim. Moreover, there will be no
judicial determination of the merits of any of the various claims or the proper
allocation of the Gross Per Unit Settlement Amount among the claims. To the
extent that a Participating Unitholder takes the position that the Deemed Claim
Value should be characterized as a return of capital or capital gain, there can
be no assurance that the IRS would not challenge this position and determine
that some or perhaps even all of the Deemed Claim Value should be treated by a
Participating Unitholder as ordinary income for federal income tax purposes.
In the event that any interest accrued on the Deemed Claim Value is payable
to a Participating Unitholder, such Participating Unitholder will be required to
treat the interest as ordinary income for federal income tax purposes.
Tax Treatment of Class Counsel's Attorneys' Fees. As described above in
"The Settlement--The Settlement Agreement," the Net Settlement Amount reflects a
reduction for each Participating Unitholder's pro rata share of Class Counsel's
Attorneys' Fees. The IRS could take the position that each Participating
Unitholder must include in income his share of Plaintiff's Counsel's Attorneys'
Fees. There is existing judicial authority that would support a position that,
under certain circumstances, a plaintiff's attorneys' fees and expenses that are
paid by a defendant in litigation pursuant to a judgment or settlement are
excludable from the income of the plaintiff; however, the facts in these cases
are distinguishable from the facts underlying the Haas Litigation, and there can
be no assurance that a court would follow the decisions in those cases. The
determination of whether a Participating Unitholder must include in income his
share of Class Counsel's Attorneys' Fees may depend upon the laws of Texas or
that of another state (including the Participating Unitholder's state of
residence) regarding the relative rights under state law of a particular
Participating Unitholder and of Class Counsel to that portion of the Deemed
Claim Value represented by legal fees and expenses.
In the event that a Participating Unitholder must include his share of the
Class Counsel's Attorneys' Fees in income, the characterization of that amount
as ordinary income or capital gain would depend on the manner in which the
balance of the Deemed Claim Value is correctly
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characterized. For example, if the Deemed Claim Value were determined to be
allocable between claims for lost profits and claims for injury to a capital
asset, the legal fees allocated to lost profits will be treated as ordinary
income and the legal fees allocated to the capital asset claim likely will be
treated as a return of capital or capital gain.
A Participating Unitholder may be able to claim a deduction on his federal
income tax return with regard to all or a portion of the Class Counsel's
Attorneys' Fees paid on his behalf by the Defendants to the extent those amounts
are required to be included in income. If the Participating Unitholder is
required to treat part of the Deemed Claim Value as ordinary income, the
corresponding part of the legal fees and expenses paid on his behalf that are
required to be included in income may be deductible currently under Section 162
(which addresses trade or business expenditures) or Section 212 (which addresses
expenditures for the production of income) of the Code. Because (among other
things) each Participating Unitholder is a limited partner rather than a general
partner, such Participating Unitholder may not be able to prove that legal fees
and expenses incurred in the Litigation are properly characterized as trade or
business expenditures, which is the necessary prerequisite for an ordinary
deduction under Section 162. Even if a Participating Unitholder takes the
position that all or a portion of the Class Counsel's Attorneys' Fees that he is
required to include in income relates to the production of income and such
position is respected (with the result that the fees and expenses fall under
Section 212), if such Participating Unitholder is an individual, the Class
Counsel's Attorneys' Fees would be treated as a miscellaneous itemized deduction
that is allowable as a deduction only to the extent that the Participating
Unitholder's total miscellaneous itemized deductions (including the Class
Counsel's Attorneys' Fees) exceeds two percent (2%) of his adjusted gross
income. Such deduction will be subject to reduction if the Participating
Unitholder's "adjusted gross income" for the tax year with regard to which the
deduction relates exceeds a specified amount (which amount, for 2000, is
$128,950 (or $64,475 in the case of a married individual filing a separate
return)). For purposes of calculating his "alternative minimum taxable income,"
a Participating Unitholder who is an individual will not be able to utilize any
miscellaneous itemized deductions.
A Participating Unitholder will be required to capitalize (i.e., add to the
adjusted tax basis in his Units) any portion of the Class Counsel's Attorneys'
Fees that are paid on his behalf by the Defendants and that relate to capital
asset claims, resulting in a reduction of the total amount of capital gain, or
an increase in any capital loss, recognized by the Participating Unitholder as a
result of the Settlement.
Tax Treatment of Nonparticipating Unitholders. Each Nonparticipating
Unitholder will be treated as having made a taxable disposition of his Units
pursuant to the Merger, which disposition would be deemed to occur on the
effective date of the Merger. The gain or loss recognized by a Nonparticipating
Unitholder upon the disposition of his Units will equal the difference between
the amount considered realized by the Unitholder for tax purposes in exchange
for his Units in the Merger and the Unitholder's adjusted tax basis in such
Units. See "Basis of Units of Participating and Nonparticipating Unitholders"
below.
The amount realized by each Nonparticipating Unitholder will equal the sum
of the following items: (1) the cash received for his Units at the time of the
Merger (as determined in accordance with the procedures described above in "The
Settlement--The Merger--Rights of Unitholders Who Have Elected Not to
Participate in the Settlement"), which will be deemed to include any amount owed
by the Nonparticipating Unitholder on the original purchase price of his Units,
and (2) the portion of the Partnership's liabilities allocable to the
Nonparticipating Unitholder's Units for federal income tax purposes immediately
prior to the Merger. The General Partner estimates that, as of December 31,
1999, the dollar amount of the Partnership's liabilities allocable to each
Nonparticipating Unitholder was approximately $238,000 per Unit.
To the extent that the amount realized, as determined in the preceding
paragraph, exceeds the Nonparticipating Unitholder's adjusted tax basis in the
Units, such Nonparticipating Unitholder will recognize gain. The taxable gain
recognized by the Nonparticipating Unitholder will exceed the
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cash amount received with respect to his Units by an amount equal to the excess
(if any) of his share of the Partnership's liabilities allocable to him for
federal tax purposes over his adjusted tax basis in his Units (which is commonly
referred to as a "negative capital account").
For a discussion of the federal income tax rates applicable to the gain
recognized by a Nonparticipating Unitholder from the disposition of a Unit that
has been held as a capital asset by the Nonparticipating Unitholder, see
"Federal Income Tax Rates Applicable to Gain from Disposition of Units by
Participating and Nonparticipating Unitholders" below.
Allocations of Profits and Losses to Participating and Nonparticipating
Unitholders. Pursuant to the Amendments, Unitholders will be allocated
Partnership profits and losses through the period ending on the date that the
judgment order relating to the Settlement becomes final. However, if no appeal
is filed after the judgment order is entered, Unitholders will receive a final
distribution of cash available for distribution (in accordance with the terms of
the Partnership Agreement) for the period ending on the day before the date the
judgment order is entered. Unitholders will not receive any distribution that
relates to the period beginning on the date of the entry of the judgment order
and ending on the date the judgment order becomes final (the "Appeal Period")
unless an appeal is filed with regard to the judgment order during the Appeal
Period (other than an appeal relating solely to counsel's fees), in which event
Unitholders also will receive a distribution of cash available for distribution
(in accordance with the terms of the Partnership Agreement) for the Appeal
Period. Any allocation of taxable income received by a Unitholder with regard
to the Appeal Period will increase such Unitholder's adjusted tax basis in his
Units and, thus, will decrease the amount of capital gain, or increase any
capital loss, recognized by the Unitholder as a result of the disposition of his
Units in the Purchase Offer or pursuant to the Merger. Any distribution
received by a Unitholder will decrease such Unitholder's adjusted tax basis in
his Units and, consequently, will increase the amount of capital gain, or
decrease any capital loss, recognized by the Unitholder as a result of the
disposition of his Units.
Basis of Units of Participating and Nonparticipating Unitholders. In
general, a Unitholder had an initial tax basis in his Units ("Initial Basis")
equal to his cash investment in the Partnership, plus his share of the
Partnership's liabilities allocable to him for tax purposes at the time he
acquired his Units. A Unitholder's Initial Basis generally has been increased
by (1) such Unitholder's share of Partnership taxable income, and (2) any
increases in his share of liabilities of the Partnership. Generally, such
Unitholder's Initial Basis has been decreased (but not below zero) by (a) his
share of Partnership cash distributions, (b) any decreases in his share of
liabilities of the Partnership, (c) his share of losses of the Partnership, and
(d) his share of nondeductible expenditures of the Partnership that are not
chargeable to capital. A Unitholder's basis in his Units would include his
share of the syndication costs incurred by the Partnership at formation if he
acquired his Units in the original offering.
The General Partner estimates that, as of December 31, 1999, a Unitholder
who acquired his Units at the time of the original offering of such Units and
has held such Units at all times since the offering would have an adjusted basis
in each Unit of approximately $201,000 (which amount includes approximately
$238,000 attributable to his share of the Partnership's nonrecourse
liabilities). Accordingly, such a Unitholder has a "negative capital account"
with respect to his Units of approximately $37,000, and thus the gain recognized
on any disposition of those Units would exceed the cash received therefor by
that amount. Such Unitholder's share of syndication costs would be
approximately $11,000 per Unit.
Federal Income Tax Rates Applicable to Gain from Disposition of Units by
Participating and Nonparticipating Unitholders. The disposition of Units by a
Unitholder in the Purchase Offer or pursuant to the Merger generally will result
in the recognition of capital gain by the Unitholder with respect to the Deemed
Unit Purchase Amount if the Units have been held by the Unitholder as a capital
asset. For corporations, the maximum rate of tax on the net capital gain from a
sale or exchange of a capital asset held for more than twelve months is
currently 35%. Generally, non-corporate Unitholders (i.e., individuals, trusts
and estates) who have held their Units
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as capital assets for more than 12 months will be taxed at a maximum long-term
capital gain rate of 20% on the disposition of those Units. However, a maximum
rate of 25% for non-corporate Unitholders may apply to capital gain that is
recognized as a result of the transfer of Units in the Purchase Offer or
pursuant to the Merger to the extent such capital gain is treated as
"unrecaptured section 1250 gain" (i.e., previously claimed depreciation
deductions with respect to depreciable real property that would not be
recaptured as ordinary income pursuant to Sections 751 and 1250 of the Code, as
described in the next paragraph). While there is some uncertainty regarding the
issue, the IRS takes the position, for which there is support in legislative
history, that a Unitholder who has held his Units for more than one year prior
to the disposition of those Units will be subject to the 25% capital gain tax
rate on his share of the Partnership's "unrecaptured Section 1250 gain."
Regulations proposed by the IRS that were issued in August of 1999 would treat
the amount of "unrecaptured Section 1250 gain" that a partner must recognize
upon the disposition of his partnership interest as his share of the amount that
would result if his partnership had transferred all of its Section 1250 property
in a fully taxable transaction immediately prior to the disposition of his
partnership interest. There can be no assurance that such proposed regulations,
if adopted, would be adopted in their proposed form without substantive
revisions. Accordingly, Unitholders are urged to consult with their own tax
advisors with respect to their capital gain tax liability.
In addition, to the extent that the amount realized on the disposition of
the Units attributable to a Unitholder's share of the Partnership's inventory
items and/or "unrealized receivables" (as defined in Section 751 of the Code)
exceeds the basis attributable to those assets, such excess will be treated as
ordinary income, taxable to non-corporate Unitholders at a maximum statutory
rate of 39.6%. Unrealized receivables include amounts that would be subject to
recapture as ordinary income if the Partnership had sold its assets at their
fair market value at the time of the disposition of the Units, such as
"depreciation recapture" under Sections 1245 and 1250 of the Code.
The General Partner estimates that, as of December 31, 1999, the
"unrecaptured Section 1250 gain" of the Partnership that is taxable to non-
corporate Unitholders at the 25% capital gain rate was approximately $87,000 per
Unit with regard to a Unitholder who acquired his Units in the original offering
of Units by the Partnership.
The General Partner has not estimated the fair market value of the
Partnership's personal property, and thus takes no position at this time as to
whether the value is such that a Unitholder would recognize ordinary income
pursuant to Sections 751 and 1245 upon the disposition of his Units. In any
event, the ordinary income amount would be equal to the Unitholder's share of
the excess, if any, of the value of such personal property at the time of
disposition of the Units over its adjusted basis at such time. For purposes of
determining its share of the Partnership's tax basis in its personal property
after the Purchase Offer and the Merger, however, the Purchaser will take the
position that the fair market value of the Partnership's personal property is
equal to its adjusted tax basis at the time of the Purchase Offer and the
Merger. If this position is respected by the IRS, no ordinary income would be
recognized pursuant to Sections 751 and 1245; however, there can be no assurance
that the IRS will respect the Purchaser's position.
Passive Activity Income and Loss Carryforwards of Participating and
Nonparticipating Unitholders. Any gain recognized by a Unitholder in connection
with the disposition of his Units pursuant to the Settlement will constitute
"passive activity income" for purposes of the "passive activity loss" limitation
rules. Accordingly, such income generally may be offset by losses from all
sources, including "passive activity loss" carryforwards with respect to the
Partnership and "passive" or active losses from other activities. The General
Partner estimates that, as of December 31, 1999, a Unitholder who purchased his
Units at the time of the original offering, has held those Units continuously
since that time, and whose Units have been his only investment in a passive
activity would not have any passive activity loss carryforward with respect to
his Units.
Federal Tax Withholding Applicable to Participating and Nonparticipating
Unitholders. The federal income tax laws require that taxes be withheld on
amounts payable to foreign persons by reason of a disposition of certain United
States real property interests, which
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includes interests in certain partnerships that hold real property in the United
States. Withholding of ten percent (10%) of the amount realized by a Unitholder
pursuant to the Purchase Offer or the Merger may be required unless the
Unitholder completes, executes and returns the Certificate of Non-Foreign Status
included in the Proof of Claim. Because uncertainty exists as to the correct
allocation of the amount received by a Participating Unitholder in the Purchase
Offer or pursuant to the Merger between the Deemed Unit Purchase Amount and the
Deemed Claim Value, solely for purposes of determining any amounts required to
be withheld, the "amount realized" by a Participating Unitholder will be treated
as the sum of (1) the amount of $134,130 per Unit (or a pro rata portion
thereof) plus (2) the Participating Unitholder's share of the Partnership's
nonrecourse liabilities immediately prior to the disposition of his Units. The
"amount realized" by a Nonparticipating Unitholder will be treated as the sum of
(a) the cash amount received for his Units at the time of the Merger (which will
be deemed to include any amount owed by the Nonparticipating Unitholder on the
original purchase price of his Units), plus (b) the Nonparticipating
Unitholder's share of the Partnership's nonrecourse liabilities immediately
prior to the disposition of his Units. See "Important Tax Information" in the
Proof of Claim.
Even if a Unitholder chooses not to return the rest of the Proof of Claim,
he should return the Certificate of Non-Foreign Status to prevent federal income
tax withholding on the amounts payable to him pursuant to the Settlement.
* * * * *
BECAUSE THE INCOME TAX CONSEQUENCES OF THE DISPOSITION OF UNITS PURSUANT TO
THE SETTLEMENT WILL NOT NECESSARILY BE THE SAME FOR ALL UNITHOLDERS, UNITHOLDERS
CONSIDERING TENDERING THEIR UNITS SHOULD CONSULT THEIR TAX ADVISORS WITH
SPECIFIC REFERENCE TO THEIR OWN TAX SITUATIONS.
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THE PURCHASE OFFER
Terms of the Purchase Offer
Upon the terms, and subject to the conditions of, the Purchase Offer
(including, if the Purchase Offer is extended or amended, the terms and
conditions of any such extension or amendment), the Purchaser will accept for
payment and thereby purchase all Units validly tendered on or prior to the
Expiration Date and not validly withdrawn in accordance with the procedures
described under the heading "--Withdrawal Rights" of this Purchase Offer and
Consent Solicitation. The term "Expiration Date" means 12:00 midnight, New York
City time, on [weekday], _______ __, 2000, unless and until the Purchaser, in
its sole discretion, shall have extended the period of time during which the
Purchase Offer is open, in which event the term "Expiration Date" shall mean the
latest time and date at which the Purchase Offer, as so extended by the
Purchaser, shall expire.
The Purchaser expressly reserves the right, in its sole discretion, at any
time or from time to time, to extend the period during which the Purchase Offer
is open by giving oral or written notice of such extension to the Claims
Administrator and making a public announcement thereof. There can be no
assurance that the Purchaser will exercise its right to extend the Purchase
Offer. During any such extension, all Units previously tendered and not
withdrawn will remain subject to the Purchase Offer and subject to the right of
a tendering Unitholder to withdraw such Units. See "--Withdrawal Rights." For
purposes of this Purchase Offer, a "business day" means any day other than a
Saturday, Sunday, or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time.
Subject to applicable rules and regulations of the SEC and to the
provisions of the Settlement Agreement and any applicable court order, the
Purchaser reserves the right, at any time or from time to time, to (a) terminate
the Purchase Offer and not accept for payment any Units, (b) delay acceptance
for payment or, regardless of whether such Units were theretofore accepted for
payment, payment for, any Units and not pay for any Units not theretofore
accepted for payment or paid for, until such time as the first condition
referred to under the heading "The Settlement--Conditions of the Purchase Offer
and the Merger" is satisfied, (c) waive any unsatisfied condition (if it is
waivable) to its obligation to acquire Units pursuant to the Purchase Offer, (d)
extend the period of time during which the Purchase Offer is open, or (e)
otherwise amend the Purchase Offer. Whenever the Purchaser extends the period
during which the Purchase Offer is open or otherwise amends the Purchase Offer,
it will give oral or written notice of such amendment to the Claims
Administrator and make a public announcement thereof. The Purchaser acknowledges
that (a) Rule 14e-1(c) under the Exchange Act requires the Purchaser to pay the
consideration offered or return the Units tendered promptly after the
termination or withdrawal of the Purchase Offer (except as provided in clause
(b) of the first sentence of this paragraph) and (b) upon and after the
Expiration Date, the Purchaser may not delay acceptance for payment of, or
payment for (except as provided in clause (b) of the first sentence of this
paragraph), any Units if the second through fifth conditions specified under the
heading "The Settlement--Conditions of the Purchase Offer and the Merger" have
been satisfied, without extending the period of time during which the Purchase
Offer is open.
Any extension, delay in payment, termination, waiver, or amendment will be
followed as promptly as practicable by a public announcement thereof, and such
announcement in the case of an extension will be made no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Without limiting the manner in which the Purchaser may choose
to make any public announcement, subject to applicable law (including Rules 14d-
4(c), 14d-6(d) and 14e-1 under the Exchange Act, which require that material
changes be promptly disseminated to holders of Units), the Purchaser shall 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 or by
letter sent to the Unitholders.
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If the Purchaser makes a material change in the terms of the Purchase Offer
or the information concerning the Purchase Offer, or waives a material condition
of the Purchase Offer, the Purchaser will extend the Purchase Offer and
disseminate additional tender offer materials to the extent required by Rules
14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act. Those rules prescribe that
the minimum period during which a tender offer must remain open following
material changes in the terms of the tender offer or information concerning the
tender offer, other than a change in price or a change in percentage of
securities sought or in any dealer's soliciting fee, will depend upon the facts
and circumstances, including the relative materiality of the terms or
information changed. The SEC has announced in a published release that in its
view a tender offer must remain open for a minimum period of time following a
material change in the terms of a tender offer or in information concerning a
tender offer. The release states that a tender offer should remain open for a
minimum of five business days from the date the material change is first
published, sent or given to security holders and that, if material changes are
made with respect to information that approaches the significance of price and
share levels, a minimum of 10 business days may be required to allow for
adequate dissemination and investor response.
If, by the Expiration Date, the second and third conditions to the Purchase
Offer set forth under the heading "The Settlement--Conditions of the Purchase
Offer and Merger," have not been satisfied, the Purchaser may, in its sole
discretion, elect to (a) extend the Purchase Offer and, subject to applicable
withdrawal rights, retain all tendered Units until the expiration of the
Purchase Offer, as extended, subject to the terms of the Purchase Offer, (b)
waive the unsatisfied condition (if it is waivable) and not extend the Purchase
Offer or (c) terminate the Purchase Offer and return all tendered Units to
tendering Unitholders and be relieved from any obligations under the Settlement
Agreement.
If an order of an appropriate court denying approval of the Settlement
becomes final after all applicable appeals have been exhausted or if the parties
to the Settlement Agreement decide to terminate the Settlement as to the
Partnership, the Purchase Offer will terminate and all tendered Units will be
returned to the tendering Unitholders as soon as practicable.
The Partnership has provided the Purchaser, the Claims Administrator and
the Information Agent with a list of Unitholders and security position listings
for the purpose of disseminating the Purchase Offer and Consent Solicitation to
Unitholders. This Purchase Offer and Consent Solicitation and the related
documents and, if required, other relevant materials will be mailed to record
holders of Units and will be furnished for subsequent transmittal to beneficial
owners of Units to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
Unitholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Units.
The Purchaser does not currently intend to make available a "subsequent
offering period" as provided for in Rule 14d-11 of the Exchange Act.
Settlement Fund; Acceptance for Payment; Payment for Units
Upon the terms and subject to the conditions of this Purchase Offer and
Consent Solicitation (including, if the Purchase Offer is extended or amended,
the terms and conditions of any such extension or amendment), on or before the
third business day following the entry by the Court of an executed judgment
order approving the Settlement, the Purchaser or the Joint Venture, or one or
more of their designees, will pay or cause to be paid by wire transfer the
settlement funds to Chase Bank of Texas, N.A., which will serve as escrow agent
pursuant to the terms of an escrow agreement. The escrow agent will deposit the
settlement funds in an interest-bearing account.
If the judgment order becomes final without an appeal (other than an appeal
that relates solely to counsel fees and expenses) and you have submitted a valid
Proof of Claim to the Claims
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Administrator on or before the Effective Date, within seven business days
following such date, the escrow agent will distribute to you the Net Settlement
Amount for each Unit held by you. If you submit a valid Proof of Claim after the
Effective Date, the escrow agent will distribute to you the Net Settlement
Amount for each Unit held by you within seven business days following the
receipt of the Proof of Claim by the Claims Administrator. If a class action
plaintiff has not submitted a valid Proof of Claim to the Claims Administrator
within 90 days following the Effective Date and such plaintiff has not opted out
of the Settlement, Class Counsel may execute a Proof of Claim on behalf of that
limited partner. The execution of the Proof of Claim by Class Counsel on behalf
of a limited partner will entitle the limited partner to receive the Net
Settlement Amount for each Unit held by such limited partner and release, on
behalf of such limited partner, all claims that are released, settled and
discharged as part of the Settlement as provided in the Proof of Claim. The
escrow agent will not distribute funds from the settlement fund to any limited
partner unless and until a valid Proof of Claim for that limited partner is
received, whether from such limited partner or from counsel to the class action
plaintiffs. The Net Settlement Amount to be received by any holder of a Unit
will be reduced by any amount owed by the holder on the original purchase price
of such Unit.
If you or any other plaintiffs file an appeal of the judgment order (other
than an appeal that relates solely to counsel fees and expenses), the escrow
agent will return the settlement fund, with interest, to the Purchaser or the
Joint Venture, or their designees, within two days after receiving documentation
of such event. If an order of an appellate court affirming the judgment order
subsequently becomes final, then the Purchaser or the Joint Venture, or their
designees, will return the settlement fund to the escrow agent within three
business days thereafter, without interest.
The Purchaser and the escrow agent expressly reserve the right to delay the
acceptance for payment of, or payment for, Units in order to comply in whole or
in part with any applicable law and the terms of the Settlement Agreement and
any applicable court order.
For purposes of the Purchase Offer, the Purchaser will be deemed to have
accepted for payment (and thereby purchased) Units validly tendered and not
withdrawn as, if and when the Purchaser gives oral or written notice to the
Claims Administrator that the "Effective Date" under the Settlement Agreement
has occurred.
If, prior to the Expiration Date, the Purchaser increases the consideration
offered per Unit, the Purchaser will pay such increased consideration to all
holders of those Units purchased pursuant to the Purchase Offer, whether or not
such Units have been tendered prior to such increase in the consideration.
Procedures for Accepting the Purchase Offer and Tendering Units
In order for a Unitholder to validly tender Units pursuant to the Purchase
Offer, a properly completed and duly executed Proof of Claim (or facsimile
thereof) and any other documents required by the Proof of Claim must be received
by the Claims Administrator at its address set forth on the back cover of this
Purchase Offer and Consent Solicitation on or prior to the Expiration Date.
If the Units are registered in the name of a person other than the signer
of the Proof of Claim, or if payment is to be made to a person other than the
registered holder of the Units surrendered, then the Proof of Claim must be
accompanied by duly executed powers signed exactly as the name or names of the
registered holder or holders appear in the records of the Partnership. See
Instructions 4 and 6 of the Proof of Claim.
The method of delivery of the Proof of Claim and all other required
documents is at the option and risk of each tendering Unitholder. If delivery is
by mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
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Notwithstanding any other provision hereof, payment for Units accepted for
payment pursuant to the Purchase Offer will in all cases be made only after
timely receipt by the Claims Administrator of a properly completed and duly
executed Proof of Claim (or facsimile thereof) and any other documents required
by the Proof of Claim.
Appointment as Proxy. By executing the Proof of Claim, a tendering
Unitholder irrevocably appoints designees of the Purchaser, and each of them, as
such Unitholder's attorneys-in-fact and proxies in the manner set forth in the
Proof of Claim, 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 and with respect to any and all other
Units or other securities or rights issued or issuable in respect of such Units
on or after the date of this Purchase Offer and Consent Solicitation. All such
proxies shall be considered coupled with an interest in the tendered Units. This
appointment will become effective when the judgment order rendered by the Court
becomes final. Upon such acceptance for payment, all prior proxies given by such
Unitholder with respect to such Units or other securities or rights will,
without further action, be revoked, and no subsequent proxies may be given (and,
if given, will not be deemed effective) by such Unitholder. The designees of the
Purchaser will, with respect to such Units and other securities or rights, be
empowered to exercise all voting and other rights of such Unitholder as the
designees, in their sole discretion, may deem proper at any annual, special or
adjourned meeting of the Unitholders, by written consent in lieu of any such
meeting or otherwise. The Purchaser reserves the right to require that, in order
for Units to be deemed validly tendered, immediately after the judgment order
rendered by the Court becomes final, the Purchaser must be able to exercise full
voting and other rights with respect to such Units and other securities or
rights including voting at any meeting of Unitholders then scheduled or acting
by written consent. In addition, by executing a Proof of Claim, a tendering
Unitholder agrees promptly to remit and transfer to the Claims Administrator for
the account of the Purchaser any and all cash dividends, distributions, rights,
other Units and other securities issued or issuable in respect thereof on or
after the date that the Court renders a judgment order (assuming there is no
appeal of the order) or, in the event of an appeal, the date that the judgment
order becomes final accompanied by appropriate documentation of transfer.
Pending such remittance or appropriate assurance thereof, the Purchaser shall be
entitled to all rights and privileges as owner of any such other Units or other
securities or property and may withhold the entire purchase price or deduct from
the purchase price the amount or value thereof, as determined by the Purchaser
in its sole discretion.
Determination of Validity. The Claims Administrator will review the
validity, form and eligibility (including the timeliness of receipt) of Units
tendered pursuant to any of the procedures described above. All issues as to
the validity, form, eligibility and acceptance for payment of any tendered Units
will be determined by the Court. No tender of Units will be deemed to have been
validly made until all defects and irregularities have been cured or waived.
None of the Purchaser, the Joint Venture, Rockledge or Marriott International,
any of their affiliates or assigns, if any, the Claims Administrator, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification.
It is a violation of Section 14(e) of the Exchange Act and Rule 14e-4
promulgated thereunder for a person to tender Units for his or her account
unless the person so tendering (1) owns such Units or (2) owns other securities
convertible into or exchangeable for such Units or owns an option, warrant or
right to purchase such Units and intends to acquire such Units for tender by
conversion, exchange or exercise of such option, warrant or right. Rule 14e-4
provides a similar restriction applicable to the tender or guarantee of a tender
on behalf of another person.
A tender of Units made pursuant to any one of the procedures set forth
above will constitute the tendering Unitholder's acceptance of the terms and
conditions of the Purchase Offer, including the tendering Unitholder's
representation that (1) such Unitholder owns the Units being tendered within the
meaning of Rule 14e-4 and (2) the tender of such Units complies with Rule 14e-4.
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Withdrawal Rights
Except as otherwise provided in this Section, tenders of Units made
pursuant to the Purchase Offer are irrevocable. Units tendered pursuant to the
Purchase Offer may be withdrawn at any time on or prior to the Expiration Date
and, unless theretofore accepted for payment by the Purchaser pursuant to the
Purchaser Offer, may also be withdrawn at any time after _______, 2000, but any
Consent Form properly executed and received and not withdrawn prior to the
Expiration Date will become binding and irrevocable after the Expiration Date
and will be deemed coupled with an interest. See "The Written Consents - Voting
and Revocation of Consents." Thereafter, Units may not be withdrawn, but will be
retained until the conditions for consummation of the Purchase Offer are
satisfied or waived (if waivable) and will be returned promptly at such time as
it is finally determined that such conditions will not be satisfied or waived.
In order for a withdrawal to be effective, a written, telegraphic or
facsimile transmission notice of withdrawal must be timely received by the
Claims Administrator at one of its addresses or numbers set forth on the back
cover of this Purchase Offer and Consent Solicitation. Any such notice of
withdrawal must specify the name of the person who tendered the Units to be
withdrawn, the number of Units to be withdrawn, and the name of the registered
holder of the Units to be withdrawn, if different from that of the tendering
Unitholder.
Withdrawals of Units may not be rescinded and any Units properly withdrawn,
thereafter, will be deemed not validly tendered for purposes of the Purchase
Offer. However, withdrawn Units may be re-tendered at any time prior to the
Expiration Date by following one of the procedures described under the heading
"--Procedures for Accepting the Purchase Offer and Tendering Units."
All questions as to the form and validity (including the timeliness of
receipt) of any notice of withdrawal will be determined by the Court. Neither
the Purchaser, the Joint Venture, Marriott International, MI Investor or
Rockledge any of their affiliates or assigns, if any, the Claims Administrator
nor any other person will be under any duty to give notification of any defects
or irregularities in any notice of withdrawal or incur any liability for failing
to give any such notification.
Market for the Partnership's Limited Partnership Units and Related Security
Holder Matters
There is currently no established public trading market for the Units, and
it is not anticipated that a public market for the Units will develop. Transfers
of Units are limited to the first date of each Accounting Period (as defined in
the Partnership Agreement) and may be made only to accredited investors. All
transfers are subject to approval by the General Partner. As of December 31,
1999, there were 1,076 holders (including holders of half-units) of record of
the 1,150 Units.
The Settlement Agreement provides that, until the judgment order approving
the Settlement becomes final, the limited partners in the Partnership will
continue to own their respective Units. The General Partner will cause the
Partnership to make distributions of Cash Available for Distribution (as defined
in the Partnership Agreement) for the period until the judgment order is
entered. Following entry of the judgment order, and until the order becomes
final, assuming there is no appeal other than an appeal as to counsel fees and
expenses only, no further Cash Available for Distribution will be distributed.
If an appeal is filed, the General Partner will cause the Partnership to make
distributions of Cash Available for Distribution for the period until the
judgment order becomes final.
As of December 31, 1999, the Partnership had distributed a total of $4.9
million to the General Partner and $92.2 million to the limited partners
($80,181 per Unit) since inception. Included in the $80,181 of distributions per
Unit was a $4,000 distribution per Unit from excess refinancing proceeds that
was distributed to the partners in 1988 and the $25,000 per Unit from
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1997 excess refinancing proceeds. During 1999, the Partnership distributed
$666,000 to the General Partner and $12.7 million ($3,000 and $8,000 per Unit
from 1998 and 1999 operations, respectively) to the limited partners. An
additional $3,500 per Unit from 1999 operations was distributed in February
2000.
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THE WRITTEN CONSENTS
In accordance with the terms of the Settlement Agreement, the General
Partner is soliciting the consent of the Unitholders to (1) the Merger and (2)
the Amendments to the Partnership Agreement. As discussed more fully under "The
Settlement--The Settlement Agreement," the Merger and the proposed Amendments
must receive Unitholder approval in order for Unitholders to have the
opportunity to receive the cash price per Unit offered pursuant to the Purchase
Offer. For a discussion of the interests that the Purchaser, the General Partner
and their respective affiliates have in the Amendments, the Merger and the
Purchase Offer, see "The Settlement--Certain Transactions with the Partnership."
Record Date and Outstanding Units
The General Partner has set the close of business on ________, 2000 as the
record date for the determination of Unitholders entitled to consent to the
Merger and the Amendments. The only Unitholders who will be entitled to consent
to the Merger and the Amendments will be Unitholders of record as of the record
date who have been admitted to the Partnership as limited partners and who are
not in default with respect to the original purchase price of their Units. On
the record date, there were 1,150 Units issued and outstanding, held of record
by 1076 Unitholders. The Partnership has no other class of securities.
Majority Vote Required; Voting Rights
Under the Partnership Agreement, approval of the Merger and the Amendments
require the affirmative consent of Unitholders (excluding the General Partner
and its affiliates) holding a majority of the issued and outstanding Units. An
abstention or failure to timely return the enclosed Consent Form will have the
same effect as not consenting to the Merger and the Amendments. With the
exception of the General Partner, the Purchaser, and their respective
affiliates, each Unitholder who has been admitted to the Partnership as a
limited partner is entitled to cast one vote for each Unit held of record on the
Merger and the Amendments, other than Unitholders who are in default with
respect to the original purchase price of their Units who shall not be entitled
to cast a vote with respect to such Units. Holders of half-Units are entitled to
cast half a vote for each half-Unit held of record. Units held by the General
Partner, and its affiliates cannot be voted on the Merger and the Amendments.
Solicitation Period
The solicitation period is the time during which Unitholders may vote for
or against the Merger and the Amendments. The solicitation period will commence
upon delivery of this Purchase Offer and Consent Solicitation and will continue
until 12:00 midnight, New York City time, on __________ ___, 2000 unless the
Purchase Offer is extended by the Purchaser, in which case the solicitation
period will be extended to such later date that coincides with the expiration
date of the Purchase Offer, and as to which notice is given to Unitholders.
Voting and Revocation of Consents
A YELLOW Consent Form is included with this Purchase Offer and Consent
Solicitation. The Consent Form should be properly executed and returned to the
Claims Administrator, GEMISYS, Inc., Proxy Department, 7103 South Revere
Parkway, Englewood, Colorado 80112. Any properly executed Consent Forms
received by GEMISYS prior to the Expiration Date will be voted in accordance
with the instructions contained therein. All properly executed Consent Forms
that contain no voting instructions will be deemed to have consented to the
Merger and all of the Amendments. Consent Forms will be effective only when
actually received by the Claims Administrator prior to the Expiration Date.
Consent Forms may be withdrawn at any time prior to
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the Expiration Date. In addition, subsequent to the submission of a Consent
Form, but prior to the Expiration Date, Unitholders may change their vote. For a
withdrawal or change of vote to be effective, Unitholders must execute and
deliver to the Claims Administrator, prior to the Expiration Date, a
subsequently dated Consent Form or a written notice stating that the consent is
revoked. Consent Forms and notices of withdrawal or change of vote dated after
the Expiration Date will not be valid. All properly executed Consent Forms that
are received and not withdrawn prior to the Expiration Date will become binding
and irrevocable after the Expiration Date and will be deemed coupled with an
interest. Questions concerning (1) how to complete the Consent Form, (2) where
to remit the Consent Form and (3) obtaining additional Consent Forms should be
directed to the Information Agent. Substantive questions concerning the Consent
Form should be directed to David Berg or Jim Moriarty, counsel to the class
action plaintiffs. Mr. Berg's telephone number is (713) 529-5622 and Mr.
Moriarty's telephone number is (713) 528-0700.
Effective Time of Amendments
If approved by the Unitholders, the Amendments will become effective when
the General Partner executes and delivers an Amended and Restated Agreement of
Limited Partnership incorporating the Amendments in accordance with the
Partnership Agreement. Assuming the Unitholders will consent to the Merger and
the Amendments and the conditions to the Purchase Offer and the Merger will be
satisfied, it is contemplated that the General Partner will execute and deliver
the Amended and Restated Agreement of Limited Partnership as soon as practicable
following the Expiration Date, but in any event immediately prior to the
consummation of the Purchase Offer. If for any reason the Purchase Offer is not
consummated, however, the Amendments to the Partnership Agreement will not be
implemented, even if they receive Unitholder approval.
Effective Time of the Merger
As soon as practicable after all conditions of the Purchase Offer and the
Merger have been satisfied, the General Partner will file a certificate of
merger with the Secretary of State of the State of Delaware. The Merger shall
become effective upon the filing of the certificate of merger with the Secretary
of State of the State of Delaware or such later time as provided in the
certificate of merger.
No Special Meeting
The Partnership Agreement does not require a special meeting of Unitholders
to consider the Merger or the Amendments. Accordingly, no such meeting will be
held.
Rights of Appraisal
The Partnership was organized under the Partnership Act. Under the
Partnership Act a limited partnership agreement or a merger agreement may
contractually provide for appraisal rights with respect to limited partnership
interests. Neither the Partnership Agreement nor the Merger Agreement provides
for appraisal rights. However, the Settlement Agreement and the Merger Agreement
provide that upon consummation of the Merger, each Unit held by a holder who
elects not to participate in the Settlement by delivering an "opt-out" notice to
the Claims Administrator no later than the Expiration Date will be converted
into the right to receive the appraised value of such Unit, not including any
amount relating to the claims asserted in the litigation, as determined in
accordance with the provisions in the Settlement Agreement and the Merger
Agreement and reduced by any amount owed by the holder on the original purchase
price of such Unit.
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Interests of Certain Persons in the Matters to be Acted Upon
In considering whether to vote for or against the Merger and the
Amendments, you should be aware that the General Partner is a Haas Litigation
Defendant. Accordingly, the General Partner has a conflict of interest with
respect to this consent solicitation and makes no recommendation to any
Unitholder as to whether to vote for or against the Merger and the Amendments.
Your vote in favor of the Merger and the Amendments does not require that
you tender your Units pursuant to the Purchase Offer. If you desire to receive
the Net Settlement Amount for each of your Units, you should submit the Proof of
Claim and consent to the Merger and the Amendments. If you desire to have the
value of your Units appraised pursuant to the terms of the Settlement Agreement
and the Merger Agreement, you should consent to the Merger and the Amendments,
not tender your Units and submit an opt-out notice to the Claims Administrator
no later than the Expiration Date.
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OTHER MATTERS
Fees and Expenses
Counsel to the class action plaintiffs has retained GEMISYS, Inc. to act as
the Claims Administrator in connection with the Purchase Offer and the Consent
Solicitation. The costs of sending the Notice and the Purchase Offer and Consent
Solicitation and related materials to the Partnership's limited partners will be
paid by the Joint Venture. Other fees and expenses will be paid out of any
interest accrued on the settlement funds during the time the settlement funds
(including the settlement funds relating to the other Marriott Partnerships) are
in escrow. See "The Settlement -- The Settlement Agreement." To the extent such
accrued interest is insufficient to cover the Claims Administrator's fees and
expenses, the fees will be paid by the Joint Venture.
The Joint Venture has also retained GEMISYS, Inc. to act as the Information
Agent in connection with the Purchase Offer and Consent Solicitation. The
Information Agent's fee will be paid by the Joint Venture. The Information Agent
may contact holders of Units by mail, telephone, telex, telegraph and personal
interview and may request brokers, dealers, commercial banks, trust companies
and other nominees to forward the Purchase Offer and Consent Solicitation
materials to beneficial owners.
The Court has approved the retention of Chase Bank of Texas, N.A. to act as
escrow agent for the settlement funds relating to all of the Litigation covered
by the Settlement Agreement. The escrow agent will be paid out of any interest
accrued during the time the settlement funds (including the settlement funds
relating to the other Marriott Partnerships) are in escrow. To the extent such
accrued interest is insufficient to cover the fees, the fees will be paid by the
Joint Venture.
Neither the Purchaser, the Joint Venture, Marriott International, MI
Investor nor Rockledge will pay any fees or commissions to any broker or dealer
or any other person for soliciting tenders of Units pursuant to this Purchase
Offer and Consent Solicitation (other than the fees to the Information Agent and
the Claims Administrator). Brokers, dealers, commercial banks and trust
companies will, upon request, be reimbursed by the Joint Venture for customary
mailing and handling expenses incurred by them in forwarding materials to their
customers.
Miscellaneous
The Purchase Offer and Consent Solicitation is being made to all holders of
Units, other than the General Partner. The Purchaser is not aware of any state
where the making of the Purchase Offer or the soliciting of consents is
prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Purchase Offer or the acceptance of Units pursuant thereto, or
the soliciting of consents, the Purchaser will make a good faith effort to
comply with such state statute. If, after such good faith effort, the Purchaser
cannot comply with such state statute, the Purchase Offer and Consent
Solicitation will not be made to nor will tenders be accepted from or on behalf
of the holders of Units in such state.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, the Purchaser, the Joint Venture, Marriott International, MI
Investor and Rockledge have filed with the SEC a Tender Offer Statement on
Schedule TO, and pursuant to Rule 14d-9 and Rule 14a-6 of the Exchange Act, the
Partnership has filed with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 and a Consent Solicitation Statement on Schedule 14A,
respectively, together with exhibits in each case, furnishing certain additional
information with respect to the Purchase Offer and the Consent Solicitation.
Such Statements and any amendments thereto, including exhibits, may be inspected
and copies may be obtained with the SEC at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. These
SEC filings are also available to
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the public from commercial document retrieval services and at the Internet world
wide web site maintained by the SEC at www.sec.gov.
You should rely only on the information contained or incorporated by
reference in this Purchase Offer and Consent Solicitation. We have not
authorized anyone to provide you with information that is different from what is
contained in this Purchase Offer and Consent Solicitation. This Purchase Offer
and Consent Solicitation is dated ________ __, 2000. You should not assume that
the information contained in this Purchase Offer and Consent Solicitation is
accurate as of any date other than that date. The mailing of this Purchase Offer
and Consent Solicitation does not create any implication of the contrary.
No person has been authorized to give any information or make any
representation on behalf of the Partnership, the General Partner or the
Purchaser not contained herein or in the Proof of Claim and, if given or made,
such information or representation must not be relied on as having been
authorized.
CBM I HOLDINGS LLC
CBM ONE LLC
_____________ __, 2000
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF MARRIOTT INTERNATIONAL, INC.,
MI CBM INVESTOR LLC, ROCKLEDGE HOTEL PROPERTIES, INC.,
CBM JOINT VENTURE LLC AND CBM I HOLDINGS LLC
The following table sets forth the name, business address and principal
occupation or employment at the present time and during the last five years, and
the name, principal business and address of any corporation or other
organization in which such employment is or was conducted, of each director and
executive officer of Marriott International, Inc., MI CBM Investor LLC,
Rockledge Hotel Properties, Inc., CBM Joint Venture LLC and CBM I Holdings LLC.
The business address of each such person is 10400 Fernwood Road, Bethesda,
Maryland 20817. Except as otherwise noted, each occupation set forth below a
person's name refers to employment with Marriott International, Inc., MI CBM
Investor LLC, Rockledge Hotel Properties, Inc., CBM Joint Venture LLC and CBM I
Holdings LLC, respectively, and each such person has held such occupation for at
least the past five years and, other than Dr. Cheng, each such person is a
citizen of the United States. Except as otherwise noted, where an office with
Marriott International, Inc. is set forth opposite a person's name, that person
has held that office since March 1998, when the present Marriott International,
Inc. was spun off from the prior corporation of the same name ("Old Marriott
International," now known as Sodexho Marriott Services, Inc.) and prior to that
spin-off held the same office with Old Marriott International.
I. MARRIOTT INTERNATIONAL, INC.
Present Principal Occupation or
Employment and Material Occupations,
Offices or Employment Held During the
Name Past Five Years
- ---- ---------------------------------------
J.W. Marriott, Jr. J.W. Marriott, Jr. is Chairman of the Board
Chairman of the Board and Chief and Chief Executive Officer of Marriott
Executive Officer International. He joined Marriott
Corporation (now known as Host Marriott
Corporation) in 1956, became President
and a director in 1964, Chief Executive
Officer in 1972 and Chairman of the Board
in 1985. Mr. Marriott also is a director of
Host Marriott Corporation, General Motors
Corporation and the Naval Academy Endowment
Trust. He serves on the Board of Trustees
of the National Geographic Society and The
J. Willard & Alice S. Marriott Foundation,
and the Board of Directors of Georgetown
University, and is a member of the
Executive Committee of the World Travel &
Tourism Council and the Business Council.
Mr. Marriott has served as Chief Executive
Officer of Marriott International since its
inception in 1997, and served as Chairman
and Chief Executive Officer of Old Marriott
International from October 1993 to March
1998. Mr. Marriott has served as a director
of Marriott International since March 1998.
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Todd Clist Todd Clist joined Marriott Corporation in
Vice President; 1968. Mr. Clist served as general manager
President, North American of several hotels before being named
Lodging Operations Regional Vice President, Midwest Region
for Marriott Hotels, Resorts and Suites
in 1980. Mr. Clist became Executive Vice
President of Marketing for Marriott Hotels,
Resorts and Suites in 1985, and Senior Vice
President, Lodging Products and Markets in
1989. Mr. Clist was named Executive Vice
President and General Manager for Fairfield
Inn in 1990, for both Fairfield Inn and
Courtyard in 1991, and for Fairfield Inn,
Courtyard and Residence Inn in 1993. Mr.
Clist was appointed to his current position
in January 1994.
Edwin D. Fuller Edwin D. Fuller joined Marriott Corporation
Vice President; President in 1972 and held several sales positions
and Managing Director-Marriott before being appointed Vice President of
Lodging International Marketing in 1979. He became Regional
Vice President in the Midwest Region in
1985, Regional Vice President of the
Western Region in 1988, and in 1990 was
promoted to Senior Vice President &
Managing Director of International Lodging,
with a focus on developing the
international group of hotels. He was named
Executive Vice President and Managing
Director of International Lodging in 1994,
and was promoted to his current position of
President and Managing Director of
International Lodging in 1997.
Gilbert M. Grosvenor Gilbert M. Grosvenor is Chairman of the
Director Board of the National Geographic Society
(a publisher of books and magazines and
producer of television documentaries) and a
director or trustee of Chevy Chase Federal
Savings Bank, Ethyl Corporation, B.F. Saul
REIT and Saul Centers, Inc. He is on the
Board of Visitors of the Nicholas School of
the Environment of Duke University. Mr.
Grosvenor served as a member of the Board
of Directors of Old Marriott International
(and prior to October 1993 of Marriott
Corporation) from 1987 to March 1998, and
has served as a director of Marriott
International since March 1998.
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Paul E. Johnson, Jr. Paul E. Johnson, Jr. joined Marriott
Vice President; President-Marriott Corporation in Senior Living 1983 in
Senior Living Services Corporate Financial Planning & Analysis.
In 1987, he was promoted to Group Vice
President of Finance and Development for
the Marriott Service Group and later
assumed responsibility for real estate
development for Marriott Senior Living
Services. During 1989, he served as Vice
President and General Manager of Marriott
Corporation's Travel Plazas division. Mr.
Johnson subsequently served as Vice
President and General Manager of Marriott
Family Restaurants from December 1989
through 1991. In October 1991, he was
appointed as Executive Vice President and
General Manager of Marriott Senior Living
Services, and in June 1996 he was appointed
to his current position.
Henry Cheng Kar-Shun Henry Cheng Kar-Shun has served as
Director Managing Director of New World
Development Company Limited ("New World
Development"), a publicly held Hong Kong
real estate development and investment
company, since 1989. He is the Chairman of
New World China Land Limited, New World
CyberBase Limited, New World Infrastructure
Limited and Tai Fook Group Limited and a
director of HKR International Limited and
Kwoon Chung Bus Holding Limited, all of
which are publicly-held Hong Kong
companies. Dr. Cheng serves as an executive
officer of Chow Tai Fook Enterprises
Limited, a privately-held family company
that controls New World Development. Dr.
Cheng served as Chairman and Director of
Renaissance Hotel Group N.V. from June 1995
until its purchase by the Company in March
1997. He is Chairman of the Advisory
Council for The Better Hong Kong
Foundation. Dr. Cheng serves as a member of
the Services Promotion Strategy Group, a
unit under the Hong Kong Financial
Secretary's Office, and as a Committee
Member of the Eighth and Ninth Chinese
People's Political Consultative Committee
of the People's Republic of China. Dr.
Cheng has also served as a member of the
Election Committee of the Hong Kong Special
Administrative Region. Dr. Cheng served as
a director of Old Marriott from June 1997
to March 1998, and has served as a director
of the Company since March 1998.
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Brendan M. Keegan Brendan M. Keegan joined Marriott
Vice President; Executive Vice Corporation in 1971, in the Corporate
President-Human Resources Organization Development Department and
subsequently held several human resources
positions, including Vice President of
Organization Development and Executive
Succession Planning. In 1986, Mr. Keegan
was named Senior Vice President, Human
Resources, Marriott Service Group. In April
1997, Mr. Keegan was appointed Senior Vice
President of Human Resources for Marriott
International's worldwide human resources
functions, including compensation,
benefits, labor and employee relations,
employment and human resources planning and
development. In February 1998, he was
appointed to his current position.
Richard E. Marriott Richard E. Marriott is Chairman of the
Director Board of Host Marriott Corporation. He is
also Chairman of the Board of First Media
Corporation and serves as a trustee of
Gallaudet University, Polynesian Cultural
Center, Primary Children's Medical Center,
Boys and Girls Clubs of America SE Region
and The J. Willard & Alice S. Marriott
Foundation. He is President and a member of
the Board of Trustees of the Marriott
Foundation for People with Disabilities and
President and a director of the R.E.M.
Family Foundation, Inc. He also serves on
the Board of Trustees of Federal City
Council and the Advisory Committee for the
International Hotel and Restaurant
Association. Prior to 1993, Mr. Marriott
served as an Executive Vice President and
member of the Board of Directors of
Marriott Corporation. Mr. Marriott has been
a director of Marriott Corporation (now
known as Host Marriott Corporation) since
1979, served as a director of Old Marriott
International from October 1993 to March
1998, and has served as a director of
Marriott International since March 1998.
-49-
<PAGE>
Floretta Dukes McKenzie Floretta Dukes McKenzie is the founder,
Director Chairwoman and Chief Executive Officer
of The McKenzie Group, Inc. (an educational
consulting firm). She is also a director or
trustee of Potomac Electric Power Company
(PEPCO), National Geographic Society,
Acacia Group, Group Hospitalization and
Medical Services, Inc. (GHMSI), Howard
University, White House Historical
Association, American Association of School
Administrators Leadership of Learning
Foundation, Lightspan Partnership, Inc.,
Impact II - The Teachers Network, National
School Board Foundation, Institute for
Educational Leadership, Inc., Forum for the
American School Superintendent, Harvard
Graduate School of Education Urban
Superintendents Program and Johns Hopkins
Leadership Development Program. From 1981
to 1988, she served as Superintendent of
the District of Columbia Public Schools and
Chief State School Officer. Dr. McKenzie
served as a director of Old Marriott (and
prior to October 1993 of Marriott
Corporation) from 1992 to March 1998, and
has served as a director of the Company
since March 1998.
Harry J. Pearce Harry J. Pearce is Vice Chairman of the
Director Board of General Motors Corporation (an
automobile manufacturer) and a director of
General Motors Acceptance Corporation,
Hughes Electronics Corporation, Alliance of
Automobile Manufacturers, MDU Resources
Group, Inc. and the Bone Marrow Foundation
and is a member of the U.S. Air Force
Academy's Board of Visitors. He also serves
on the Board of Trustees of Howard
University and Northwestern University and
is a member of the Northwestern University
School of Law's Law Board. Mr. Pearce
served as a director of Old Marriott
International from 1995 to March 1998, and
has served as a director of Marriott
International since March 1998.
-50-
<PAGE>
William T. Petty William T. Petty joined Marriott
Vice President; Executive Vice Corporation in 1984 as Vice President of
President, North American Planning & Business. He has since held a
Lodging Operations number of positions with Marriott
Corporation and Marriott International,
becoming Vice President of Market Planning
in 1985; General Manager of the Atlanta
Perimeter Marriott Hotel in 1989; Vice
President of Operations for Marriott's time
share division in 1990; Regional Vice
President for Lodging Operations in 1991;
and Senior Vice President for the Western
Region in 1995. Mr. Petty was appointed to
his present position in December 1998.
Robert T. Pras Robert T. Pras joined Marriott Corporation
Vice President; President-Marriott in 1979 as Executive Vice President of
Distribution Services Fairfield Farm Kitchens, the predecessor
of Marriott Distribution Services. In 1981,
Mr. Pras became Executive Vice President of
Procurement and Distribution. In May 1986,
Mr. Pras was appointed to the additional
position of General Manager of Marriott
Corporation's Continuing Care Retirement
Communities. He was named Executive Vice
President and General Manager of Marriott
Distribution Services in 1990. Mr. Pras was
appointed to his current position in
January 1997.
W. Mitt Romney W. Mitt Romney was appointed President and
Director Chief Executive Officer of the Salt Lake
Olympic Committee on February 19, 1999. He
is a director, President and Chief
Executive Officer of Bain Capital, Inc. (a
private equity investment firm). He is also
a director of Staples, Inc. Mr. Romney is a
member of the Executive Board of the Boy
Scouts of America and the board of the
National Points of Light Foundation. Mr.
Romney served as a member of the Board of
Directors of Old Marriott (and of Marriott
Corporation prior to October 1993) from
1993 to March 1998 and has served as a
director of Marriott International since
March 1998.
-51-
<PAGE>
Joseph Ryan Joseph Ryan joined Old Marriott in
Executive Vice President and December 1994 as Executive Vice President
General Counsel and General Counsel. Prior to that time,
he was a partner in the law firm of
O'Melveny & Myers, serving as the Managing
Partner from 1993 until his departure. He
joined O'Melveny & Myers in 1967 and was
admitted as a partner in 1976.
Roger W. Sant Roger W. Sant is Chairman of the Board of
Director The AES Corporation (a global power
company) which he co-founded in 1981. Since
1994, Mr. Sant has chaired the Board of
World Wildlife Fund (U.S.). He also chairs
the Board of The Summit Foundation, and is
a Board member of WWF-International and The
National Symphony. Mr. Sant served as a
director of Old Marriott International from
1993 to March 1998, and has served as a
director of Marriott International since
March 1998.
Horst H. Schulze Horst H. Schulze has served as the
Vice President ; President and President and Chief Operating Officer of
Chief Operating Officer, The The Ritz-Carlton since 1988. Mr. Schulze
Ritz-Carlton Hotel Company, LLC joined The Ritz-Carlton in 1983 as Vice
President, Operations and was appointed
Executive Vice President in 1987. Prior to
1983, he spent nine years with Hyatt Hotels
Corporation where he held several positions
including Hotel General Manager, Regional
Vice President and Corporate Vice
President.
-52-
<PAGE>
William J. Shaw William J. Shaw has served as President
Director, President and Chief and Chief Operating Officer of Marriott
Operating Officer International since March 1997 (including
service in the same capacity with Old
Marriott International until March 1998).
Mr. Shaw joined Marriott Corporation in
1974, was elected Corporate Controller in
1979 and a Vice President in 1982. In 1986,
Mr. Shaw was elected Senior Vice
President--Finance and Treasurer of
Marriott Corporation. He was elected Chief
Financial Officer and Executive Vice
President of Marriott Corporation in April
1988. In February 1992, he was elected
President of the Marriott Service Group.
Mr. Shaw is also Chairman of the Board of
Directors of Sodexho Marriott Services,
Inc. He also serves on the Board of
Trustees of the University of Notre Dame
and the Suburban Hospital Foundation. Mr.
Shaw has served as a director of Old
Marriott International (now named Sodexho
Marriott Services, Inc.) since May 1997,
and as a director of Marriott International
since March 1998.
Lawrence M. Small Lawrence M. Small is the Secretary of the
Director Smithsonian Institution, the world's
largest combined museum and research
complex, a position to which he was elected
in September, 1999. Prior to becoming the
11th Secretary, he served as President and
Chief Operating Officer of Fannie Mae, the
nation's largest housing finance company,
since 1991. Before joining Fannie Mae, Mr.
Small had served as Vice Chairman and
Chairman of the Executive Committee of the
Board of Directors of Citicorp and
Citibank, N.A., since January 1990. He had
been associated with Citibank since 1964.
He is also a director of The Chubb
Corporation, New York City's Spanish
Repertory Theatre, the John F. Kennedy
Center for the Performing Arts, the
National Gallery, the Woodrow Wilson Center
International Center for Scholars and Mt.
Sinai-NYU Medical Center and Health System.
Mr. Small served as director of Old
Marriott from 1995 to March 1998, and he
has served as a director of the Company
since March 1998.
-53-
<PAGE>
<TABLE>
<S> <C>
Arne M. Sorenson Arne M. Sorenson joined Old Marriott in 1996 as Senior
Executive Vice President and Vice President of Business Development. He was
Chief Financial Officer instrumental in Marriott International's acquisition
of the Renaissance Hotel Group in 1997. Prior to
joining Marriott, he was a partner in the law firm of
Latham & Watkins in Washington, D.C., where he played
a key role in 1992 and 1993 in the distribution of Old
Marriott International by Marriott Corporation.
Effective October 1, 1998, Mr. Sorenson was appointed
Executive Vice President and Chief Financial Officer.
James M. Sullivan James M. Sullivan joined Marriott Corporation in 1980,
Executive Vice President-Lodging Development departed in 1983 to acquire, manage, expand and
subsequently sell a successful restaurant chain, and
returned to Marriott Corporation in 1986 as Vice
President of Mergers and Acquisitions. Mr. Sullivan
became Senior Vice President, Finance - Lodging in
1989, Senior Vice President - Lodging Development in
1990 and was appointed to his current position in
December 1995.
William R. Tiefel William R. Tiefel joined Marriott Corporation in 1961
Vice Chairman; Chairman-The Ritz-Carlton Hotel and was named President of Marriott Hotels, Resorts
Company, LLC and Suites in 1998. He had previously served as
resident manager and general manager at several
Marriott hotels prior to being appointed Regional Vice
President and later Executive Vice President of
Marriott Hotels, Resorts and Suites and Marriott
Ownership Resorts. Mr. Tiefel was elected Executive
Vice President of Marriott Corporation in November
1989. In March 1992, he was elected President -
Marriott Lodging Group and assumed responsibility for
all of Marriott's lodging brands. In May 1998 he was
appointed to his current position.
</TABLE>
-54-
<PAGE>
<TABLE>
<S> <C>
Stephen P. Weisz Stephen P. Weisz joined Marriott Corporation in 1972
Vice President; President - and was named Regional Vice President of the
Marriott Vacation Club International Mid-Atlantic Region in 1991. Mr. Weisz had previously
served as Senior Vice President of Rooms Operations
before being appointed as Vice President of the
Revenue Management Group. Mr. Weisz became Senior
Vice President of Sales and Marketing for Marriott
Hotels, Resorts and Suites in August 1992 and
Executive Vice President - Lodging Brands in August
1994. In December 1996, Mr. Weisz was appointed
President - Marriott Vacation Club International.
II. ROCKLEDGE HOTEL PROPERTIES, INC.
Robert E. Parsons, Jr. Robert E. Parsons, Jr. joined the Corporate
President and Director Financial Planning staff of Host Marriott Corporation
("Host Marriott") in 1981, became Assistant Treasurer
in 1988, Senior Vice President and Treasurer in 1993
and in 1995, he was elected Executive Vice President
and Chief Financial Officer. He also serves as a
director, manager and officer of numerous Host
Marriott subsidiaries.
W. Edward Walter W. Edward Walter joined Host Marriott in 1996 as
Vice President and Treasurer Senior Vice President--Acquisitions and, in 1998 was
made Treasurer. He also serves as a director,
manager and officer of numerous Host Marriott
subsidiaries. Prior to joining Host Marriott, Mr.
Walter was a partner at Trammell Crow Residential
Company and President of Bailey Capital Corporation,
a real estate firm focusing on tax-exempt real estate
investments.
Richard A. Burton Richard A. Burton jointed Host Marriott in 1996 as
Vice President Senior Vice President--Taxes and General Tax Counsel.
Prior to joining Host Marriott, Mr. Burton was Senior
Tax Counsel at Mobil Oil Corporation. Prior to that,
Mr. Burton also practiced law at Sutherland, Asbill &
Brennan and served as Attorney Advisor to the United
States Tax Court in Washington, D.C.
Christopher G. Townsend Christopher G. Townsend joined Host Marriott's Law
Vice President, Secretary and Director Department in 1982 as a Senior Attorney, became
Assistant Secretary in 1984, Assistant General
Counsel in 1986, Senior Vice President, Corporate
Secretary and Deputy General Counsel in 1993 and in
January 1997,
</TABLE>
-55-
<PAGE>
<TABLE>
<S> <C>
he was made General Counsel. He also serves as a director,
manager and officer of numerous Host Marriott subsidiaries.
</TABLE>
-56-
<PAGE>
III. MI CBM INVESTOR LLC
<TABLE>
<CAPTION>
Present Principal Occupation or Employment
and Material Occupations, Offices or
Name Employment Held During the Past Five Years
- --------------------------------- -----------------------------------------------
<S> <C>
Executive Officers and Managers:
- -------------------------------
Kevin M. Kimball Kevin M. Kimball joined Marriott Corporation in 1976
President and Manager as an analyst in the Treasury Department. In 1980 he
was promoted to Director, Partnerships and
Syndications, and was named Vice President and
Assistant Corporate Controller in 1986, Vice
President, Financial Planning and Analysis in 1989,
and Vice President Finance, Residence Inn in 1990.
In 1993, Mr. Kimball was appointed Senior Vice
President and Corporate Controller of Marriott
International, Inc. In 1994 he was named Senior Vice
President and Chief Financial Officer for Marriott
Lodging, and promoted to Executive Vice President and
Chief Financial Officer for Marriott Lodging in 1996.
Mr. Kimball was appointed President and Manager of MI
Investor on April 13, 2000.
Carolyn B. Handlon Carolyn B. Handlon joined Marriott Corporation in
Treasurer and Manager 1987 as Manager of Corporate Finance. In 1992, she
was promoted to Vice President and named Assistant
Treasurer of Marriott International in October 1993,
and Senior Vice President, Finance and Treasurer in
June 1999. Ms. Handlon was appointed Treasurer and
Manager of MI Investor on April 13, 2000.
Ward R. Cooper Ward R. Cooper joined Marriott Corporation in 1988 as
Assistant Secretary and Manager an Attorney. In addition to that position he was
appointed Assistant Secretary of Marriott Corporation
in 1992. He assumed the same positions with Marriott
International in October, 1993, and was promoted to
Assistant General Counsel and Assistant Secretary in
January, 1994. Mr. Cooper was appointed Assistant
Secretary and Manager of MI Investor on April 13,
2000.
</TABLE>
IV. CBM JOINT VENTURE LLC
CBM Joint Venture LLC does not have any directors or executive officers.
It is managed by its members, Rockledge Hotel Properties, Inc. and MI CBM
Investor LLC. Information concerning the directors and executive officers of
Rockledge Hotel Properties, Inc. and MI CBM Investor LLC is set forth elsewhere
on this Schedule I.
-57-
<PAGE>
V. CBM I HOLDINGS LLC
CBM I Holdings LLC does not have any directors or executive officers. It
is managed by its sole member CBM Mezzanine Borrower LLC, which is managed by
its sole member CBM Joint Venture LLC. CBM Joint Venture LLC is managed by its
members, Rockledge Hotel Properties, Inc. and MI CBM Investor LLC. Information
concerning the directors and executive officers of Rockledge Hotel Properties,
Inc. and MI CBM Investor LLC is set forth elsewhere on this Schedule I.
-58-
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF CBM ONE LLC
The following table sets forth the name, business address and principal
occupation or employment at the present time and during the last five years, and
the name, principal business and address of any corporation or other
organization in which such employment is or was conducted, of each manager and
executive officer of CBM One LLC. Except as otherwise noted, each such person
is a citizen of the United States and the business address of each such person
is 10400 Fernwood Road, Washington, D.C. 20058. Except as otherwise noted, each
occupation set forth below a person's name refers to employment with CBM One LLC
and each such person has held such occupation for at least the past five years.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment
and Material Occupations, Offices or
Name Employment Held During the Past Five Years
- ------------------------------------------ ------------------------------------------------
<S> <C>
Robert E. Parsons, Jr. Robert E. Parsons, Jr. joined the Corporate
President and Manager Financial Planning staff of Host Marriott
Corporation ("Host Marriott") in 1981, became
Assistant Treasurer in 1988, Senior Vice President
and Treasurer in 1993 and in 1995, he was elected
Executive Vice President and Chief Financial
Officer. He is also an Executive Vice President
and Chief Financial Officer of Host Marriott L.P.
and serves as a director, manager and officer of
numerous Host Marriott subsidiaries
Christopher G. Townsend Christopher G. Townsend joined Host Marriott's
Executive Vice President, Secretary Law Department in 1982 as a Senior Attorney,
and Manager became Assistant Secretary in 1984, Assistant
General Counsel in 1986, Senior Vice President,
Corporate Secretary and Deputy General Counsel in
1993 and in January 1997, he was made General
Counsel. He is also a Senior Vice President,
Corporate Secretary and General Counsel of Host
Marriott L.P. and serves as a director, manager and
officer of numerous Host Marriott subsidiaries.
</TABLE>
-59-
<PAGE>
<TABLE>
<S> <C>
W. Edward Walter W. Edward Walter joined Host Marriott in 1996 as
Treasurer Senior Vice President--Acquisitions and, in 1998
was made Treasurer. He is also a Senior Vice
President and Treasurer of Host Marriott L.P. and
serves as a director, manager and officer of
numerous Host Marriott subsidiaries. Prior to
joining Host Marriott, Mr. Walter was a partner at
Trammell Crow Residential Company and President of
Bailey Capital Corporation, a real estate firm
focusing on tax-exempt real estate investments.
Earla L. Stowe Earla L. Stowe joined Host Marriott in 1982 and
Vice President and held various positions in the Tax Department until
Chief Accounting Officer 1988. She joined the Partnership Services
Department as an accountant in 1988, became an
Assistant Manager--Partnership Services in 1989,
Manager--Partnership Services in 1991 and
Director--Asset Management in 1996. Ms. Stowe was
promoted to Senior Director-Corporate Accounting in
1998.
</TABLE>
-60-
<PAGE>
[Back cover page]
Facsimile copies of the PINK Proof of Claim and the YELLOW Consent Form,
properly completed and duly executed, will be accepted. The Proof of Claim and
the Consent Form, and any other required documents should be sent or delivered
by you or your broker, dealer, commercial bank, trust company or other nominee
to the Claims Administrator, at one of the addresses set forth below:
The Claims Administrator for the Purchase Offer and Consent Solicitation is:
GEMISYS, Inc.
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Delivery:
Attention: Proxy Department 303-705-6171 Attention: Proxy Department
7103 South Revere Parkway 7103 South Revere Parkway
Englewood, CO 80112-9523 Englewood, CO 80112-9523
Telephone:
(800) 955-0245
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of
this Purchase Offer and Consent Solicitation, the Proof of Claim and the Consent
Form and other Purchase Offer and Consent Solicitation materials may be obtained
from the Information Agent as set forth below, and will be furnished promptly at
the Purchaser's expense. You may also contact your broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Purchase
Offer or the Merger.
The Information Agent for the Purchase Offer and Consent Solicitation is:
GEMISYS, Inc.
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Delivery:
Attention: Proxy Department 303-705-6171 Attention: Proxy Department
7103 South Revere Parkway 7103 South Revere Parkway
Englewood, CO 80112-9523 Englewood, CO 80112-9523
Telephone:
(800) 955-0245
</TABLE>
-61-
<PAGE>
Exhibit (a)(2)
NO. 98-CI-04092
ROBERT M. HAAS, SR. and (S) IN THE DISTRICT COURT OF
IRWIN RANDOLPH, (S)
JOINT TENANTS, ET AL. (S)
(S)
VS. (S)
(S)
MARRIOTT INTERNATIONAL, (S)
INC., HOST MARRIOTT (S)
CORPORATION, CBM ONE (S)
CORPORATION, CBM TWO (S)
CORPORATION, COURTYARD (S)
MANAGEMENT CORPORATION, (S)
RIBM ONE CORPORATION, (S)
MARRIOTT RIBM TWO (S)
CORPORATION, RESIDENCE (S)
INN BY MARRIOTT, INC., (S)
MARRIOTT FIBM ONE (S)
CORPORATION, FAIRFIELD (S) BEXAR COUNTY, TEXAS
FMC CORPORATION, INC., (S)
MARRIOTT DESERT SPRINGS (S)
CORPORATION, MARRIOTT (S)
DESERT SPRINGS DEVELOPMENT (S)
CORPORATION, MARRIOTT (S)
HOTEL SERVICES, INC., (S)
MARRIOTT MARQUIS (S)
CORPORATION, MARRIOTT (S)
HOTELS, INC., HOST (S)
INTERNATIONAL, INC., (S)
J.W. MARRIOTT, JR., (S)
STEPHEN RUSHMORE and (S)
HOSPITALITY VALUATION (S) 285/TH/ JUDICIAL DISTRICT
CBM I LP PROOF OF CLAIM, ASSIGNMENT AND RELEASE
-----------------------------------------------
TO: All persons who were named as Plaintiffs in this case who sold their
limited partnership interests prior to March 9, 2000 but did not assign
their litigation claims and all holders of limited partnership interests in
the Courtyard by Marriott Limited Partnership ("CBM I LP") as of March 9,
2000, excluding the Equity Intervenors, the Palm Intervenors, and the
Marriott Defendants and Insiders (the "CBM I LP Class"). The CBM I LP Class
includes the heirs, executors, administrators, successors and assigns of
the members of CBM I LP Class (the "CBM I LP Class Members").
ALL PERSONS OR ENTITIES MAKING A CLAIM ("CLAIMANTS") HEREIN ARE URGED TO
READ THE NOTICE OF PENDENCY AND SETTLEMENT OF CLASS AND
PAGE 1
<PAGE>
DERIVATIVE ACTION RELATED TO COURTYARD BY MARRIOTT LP AND FINAL APPROVAL
HEARING (THE "NOTICE") ACCOMPANYING THIS PROOF OF CLAIM, ASSIGNMENT AND RELEASE
(THE "PROOF OF CLAIM"), THE CBM I LP PURCHASE OFFER AND CONSENT SOLICITATION
(THE "PURCHASE OFFER AND CONSENT SOLICITATION") AND THE CBM I LP CONSENT FORM
(THE "CONSENT FORM"), ALL OF WHICH CONTAIN IMPORTANT INFORMATION REGARDING THE
PROPOSED SETTLEMENT DESCRIBED IN THE NOTICE (THE "SETTLEMENT") AND HOW CBM I LP
CLASS MEMBERS ARE AFFECTED.
THE SETTLEMENT OF THE HAAS LITIGATION (AS DEFINED HEREIN) ACCORDING TO THE
TERMS SET FORTH IN THE SETTLEMENT AGREEMENT DESCRIBED IN THE PURCHASE OFFER AND
CONSENT SOLICITATION (THE "SETTLEMENT AGREEMENT") WILL RESULT IN CERTAIN TAX
CONSEQUENCES FOR EACH CBM I LP CLASS MEMBER. EACH CBM I LP CLASS MEMBER IS
THEREFORE URGED TO READ THE "FEDERAL INCOME TAX CONSIDERATIONS" SECTION
CONTAINED IN THE PURCHASE OFFER AND CONSENT SOLICITATION AND TO CONSULT HIS/HER
OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF THE SETTLEMENT TO SUCH
CBM I LP CLASS MEMBER. CLASS COUNSEL FURTHER URGES THAT YOU READ THE TAX SUMMARY
FURNISHED BY SPECIAL TAX COUNSEL, CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS AND
MARTIN, TO CBM I LP CLASS MEMBERS.
IN ORDER TO FACILITATE THE ORDERLY AND PROMPT PROCESSING OF CLAIMS AND THE
DISTRIBUTION OF THE SETTLEMENT AMOUNT TO CBM I LP CLASS MEMBERS, YOU MUST
COMPLETE AND SIGN THIS PROOF OF CLAIM AND MAIL IT BY FIRST CLASS MAIL, POSTAGE
PREPAID, TO THE CLAIMS ADMINISTRATOR, GEMISYS, AT THE FOLLOWING ADDRESS:
GEMISYS
Attention: Marriott Hotel Limited Partnership Litigation
7103 South Revere Parkway
Englewood, Colorado 80112
YOUR EXECUTED PROOF OF CLAIM AND CONSENT FORM MUST BE RECEIVED BY GEMISYS NO
LATER THAN _________, 2000, UNLESS THE PURCHASE OFFER DESCRIBED IN THE PURCHASE
OFFER AND CONSENT SOLICITATION (THE "PURCHASER OFFER") IS EXTENDED (AS SO
EXTENDED, THE "EXPIRATION DATE").
A pre-addressed stamped envelope has been provided for your use to return this
Proof of Claim, along with your completed YELLOW Consent Form, to the above
address.
YOUR FAILURE TO DELIVER THIS PROOF OF CLAIM BY THE EXPIRATION DATE MAY
PRECLUDE YOU FROM PARTICIPATING IN ANY RECOVERY IN THIS ACTION, BUT YOU WILL
NONETHELESS BE BOUND BY ANY ORDERS AND JUDGMENTS ENTERED IN THIS CASE UNLESS YOU
"OPT-OUT" OF THE
PAGE 2
<PAGE>
SETTLEMENT BY FOLLOWING THE PROCEDURES SET FORTH IN THE NOTICE. IN ADDITION,
YOUR FAILURE TO DELIVER THE CONSENT FORM MAY RESULT IN THE SETTLEMENT NOT BEING
APPROVED.
ALL TERMS NOT OTHERWISE DEFINED HEREIN HAVE THE MEANINGS ASSIGNED TO THEM IN THE
SETTLEMENT AGREEMENT.
PAGE 3
<PAGE>
PLEASE TYPE OR PRINT THE INFORMATION REQUESTED HEREIN
-----------------------------------------------------
ALL INSTRUCTIONS ACCOMPANYING THIS PROOF OF CLAIM SHOULD BE READ CAREFULLY
BEFORE THIS PROOF OF CLAIM IS COMPLETED
I. IDENTIFY YOUR OWNERSHIP INTEREST IN CBM I LP:
---------------------------------------------
_____ Individual Claimant: I am acting in my own interest as an owner of a
unit of limited partnership interest in CBM I LP (a "Unit"), half-Unit
or other fractional Unit.
_____ Joint Claimant: We are claimants jointly. (All joint owners must
complete and sign this form if the Unit, half-Unit or other fractional
Unit is jointly owned).
_____ Partnership Claimant: I am authorized to make this claim on behalf of
the Partnership.
_____ Corporate Claimant: I am authorized to make this claim on behalf of
the Corporation.
_____ Decedent's Estate Claimant: I am the executor or administrator of the
estate of ____________ (deceased) whose last address was ________.
(Attach a copy of the proof of current authority to act. See
Instruction 4).
_____ Custodial or Guardian Claimant: I am the custodian or guardian for
_____ whose address is __________, __________. (Attach a copy of proof
of the current authority to act. See Instruction 4).
_____ Broker, Agent, Fiduciary or Attorney: I am a broker, agent, fiduciary
or attorney for claimant. (Attach a power of attorney or copy of other
proof of current authority to act. See Instruction 4).
_____ Trustee: I am a Trustee for Claimant. (Attach a power of attorney or
copy of other proof of current authority to act as a Trustee. See
Instruction 4).
PAGE 4
<PAGE>
II. DESCRIPTION OF UNITS TENDERED:
-----------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Number of Units Tendered
Holder(s) (Attach additional list, if necessary)
(Please fill in, if blank, exactly as name(s)
appear(s)
on transfer books of CBM I LP)
- ------------------------------------------------------------------------------------------------
Total Number Number of Units
of Units Owned Tendered
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
III. OWNERSHIP INTEREST IN CBM I LP:
------------------------------
Claimant(s) owns(s): _________________________________ Units(s).
IV. SUBMISSION TO JURISDICTION OF THE COURT:
---------------------------------------
By submitting this Proof of Claim, I state that I believe in good faith
that I am a CBM I LP Class Member as defined in the Notice, or am authorized to
act for such person or entity; and that I desire to participate in the
Settlement described in the Notice and believe that I am entitled to do so.
I, and the person or entity I represent, if any, understand that I am
subject to the jurisdiction of the 285/th/ Judicial District Court of Bexar
County, Texas, for purposes of this claim, and will be bound by and subject to
the judgments and orders of the Court in the action styled: Robert M. Haas, Sr.,
et al. v. Marriott International, Inc., et al. (the "Haas Litigation"), and will
furnish additional information or proof with respect to this Proof of Claim if
required to do so.
I have read and understand the contents of the Notice and the Purchase
Offer and Consent Solicitation Statement accompanying this Proof of Claim, and
further understand that reference is made in this Proof of Claim to the Notice
and the Purchase Offer and Consent Solicitation for the matters described and
the terms defined therein. I further agree and understand that if the Settlement
is approved by the Court and becomes effective, all claims against the Released
Persons (as defined herein) which have been or could have been asserted by me or
on my behalf relating to the subject matter of the Haas Litigation will be
satisfied, discharged, and extinguished forever.
PAGE 5
<PAGE>
V. ASSIGNMENT OF UNITS TO THE PURCHASER:
------------------------------------
By my signature hereto, the undersigned holder of Unit(s) in CBM I LP
(hereinafter, a "Unitholder"), as part of the Settlement and for other good and
valuable consideration, hereby assign(s), transfer(s) and convey(s) all my/our
Unit(s) in CBM I LP, together with all right, title and interest to such
Unit(s), to CBM I Holdings LLC (the "Purchaser") or its designee. The
undersigned hereby irrevocably constitute(s) and appoints(s) CBM One LLC, the
General Partner of CBM I LP, as my/our attorney in fact to transfer said Unit(s)
with full power of substitution in the premises. This assignment will become
effective when the Judgment Order approving the Settlement becomes Final.
VI. REPRESENTATIONS AND WARRANTIES:
------------------------------
The undersigned hereby irrevocably appoints designees of the Purchaser as
the attorneys and proxies of the undersigned, each with full power of
substitution, to exercise all voting and other rights of the undersigned in such
manner as each such attorney and proxy or his substitute shall in his sole
discretion deem proper, each with full power of substitution, to the full extent
of the undersigned's rights with respect to the Units tendered by the
undersigned and accepted for payment by the Purchaser and with respect to any
and all other Units or other securities or rights issued or issuable in respect
of such Units on or after the date of this Proof of Claim. All such proxies
shall be considered coupled with an interest in the tendered Units. This
appointment will become effective when the Judgment Order rendered by the Court
becomes Final. Upon such acceptance for payment, all prior proxies given by the
undersigned with respect to such Units or other securities or rights will,
without further action, be revoked, and no subsequent proxies may be given (and,
if given, will not be deemed effective) by the undersigned. The designees of the
Purchaser will, with respect to such Units and other securities or rights, be
empowered to exercise all voting and other rights of the undersigned as the
designees, in their sole discretion, may deem proper at any annual, special or
adjourned meeting of the Unitholders, by written consent in lieu of any such
meeting or otherwise. The Purchaser reserves the right to require that, in order
for Units to be deemed validly tendered, immediately after the Judgment Order
rendered by the Court becomes Final, upon the Purchaser's acceptance for payment
of such Units, the Purchaser must be able to exercise full voting and other
rights with respect to such Units and other securities or rights including
voting at any meeting of Unitholders then scheduled or acting by written
consent. In addition, by executing this Proof of Claim, the undersigned agrees
promptly to remit and transfer to GEMISYS for the account of the Purchaser any
and all cash dividends, distributions, rights, other Units and other securities
issued or issuable in respect thereof on or after the date that the Court
renders a Judgment Order (assuming there is no appeal of the Judgment Order) or,
in the event of an appeal, the date that the Judgment Order becomes Final,
accompanied by appropriate documentation of transfer. The undersigned further
acknowledges and agrees that pending such remittance or appropriate assurance
thereof, the Purchaser shall be entitled to all rights and privileges as owner
of any such other Units or other securities or property and may withhold the
entire purchase price or deduct from the purchase price the amount or value
thereof, as determined by the Purchaser in its sole discretion.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Units tendered
hereby (and any and all other
PAGE 6
<PAGE>
Units or other securities issued or issuable in respect thereof on or after
_____________, 2000) and that when the same are accepted for payment by the
Purchaser, the Purchaser will acquire good and unencumbered title thereto, free
and clear of all liens, restrictions, charges and encumbrances and not subject
to any adverse claims. The undersigned will, upon request, execute and deliver
any additional documents deemed by GEMISYS or the Purchaser to be necessary or
desirable to complete the sale, assignment and transfer of the Units tendered
hereby (and all such other Units or securities).
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Purchase Offer and
Consent Solicitation, this tender is irrevocable.
The undersigned understands that tenders of Units pursuant to any one of
the procedures described in the Purchase Offer and Consent Solicitation under
the heading "The Purchase Offer--Procedures for Accepting the Purchase Offer and
Tendering Units" and in the instructions hereto will constitute an agreement
between the undersigned and the Purchaser upon the terms and subject to the
conditions of the Purchase Offer and Consent Solicitation.
The check for the purchase price of all Units purchased will be issued in
the name(s) of the registered holder(s) appearing above under "Description of
Units Tendered." Unless otherwise indicated, the check for the purchase price of
all Units purchased (and accompanying documents, as appropriate) will be mailed
to the address(es) of the registered holder(s) appearing above under
"Description of Units Tendered." The undersigned recognizes that the Purchaser
has no obligation to transfer any Units from the name of the registered
holder(s) thereof.
VII. RELEASE:
-------
My signature hereto constitutes a full and complete release, relinquishment
and discharge by me, or if I am submitting this Proof of Claim on behalf of a
corporation, a partnership, estate, trust, or one or more other persons or
entities, by it, him, her or them, and by my, its, his, hers or their trustees,
shareholders, parents, affiliates, subsidiaries, general or limited partners,
and the respective executors, administrators, predecessors, successors,
affiliates and assigns of any of the above-referenced persons or entities, of:
(i) each and all of the Defendants in the Haas Litigation, namely Host Marriott
Corporation, Marriott International, Inc., CBM One LLC (successor by merger to
CBM One Corporation), CBM Two LLC (successor by merger to CBM Two Corporation),
Host International, Inc., Courtyard by Marriott II Limited Partnership, RIBM One
LLC (successor by merger to RIBM One Corporation), RIBM Two LLC (successor by
merger to Marriott RIBM Two Corporation), Residence Inn by Marriott, Inc., FIBM
One LLC (successor by merger to Marriott FIBM One Corporation), Fairfield FMC
Corporation, Inc., HMC Desert LLC (successor by merger to Marriott Desert
Springs Corporation), Marriott Desert Springs Development Corporation, Marriott
Hotel Services, Inc., Marriott Marquis Corporation, Marriott Hotels, Inc.,
Courtyard Management Corporation and J.W. Marriott, Jr., together with their
predecessors, successors, parents, subsidiaries, divisions,
PAGE 7
<PAGE>
affiliates and related entities (collectively, the "Defendants"); (ii) each of
the Defendants' respective past or present directors, officers, employees,
partners, members, principals, trustees, agents, servants, appraisers,
including, but not limited to, Stephen Rushmore and Hospitality Valuation
Services, Inc., underwriters, issuers, shareholders, insurers, co-insurers,
reinsurers, independent contractors, controlling shareholders, wholesalers,
resellers, distributors, retailers, attorneys, accountants, auditors,
consultants, investment bankers, advisors, personal representatives, affiliates,
predecessors, successors, parents, subsidiaries, divisions, assigns, spouses,
heirs, executors, administrators, associates, and related or affiliated
entities; and (iii) any members of any the foregoing persons' immediate
families, or any trust of which any of the foregoing persons is the settlor or
which is for the benefit of any of the foregoing persons and/or member(s) of his
or her family (collectively, the "Released Persons") from:
(A) any and all past, present, existing, future, pending or threatened,
suspected or unsuspected, class, derivative, representative and individual
claims, rights, demands, assertions, actions, causes of action, litigation,
lawsuits, allegations, debts, liens, accounts, dues, sums of money, reckonings,
bonds, bills, specialties, contracts, covenants, agreements, controversies,
promises, cross-actions, liabilities, trespasses, obligations, losses, damages,
costs, expenses, judgments, executions, remedies and suits, of every kind and
nature whatsoever; whether in contract or in tort; whether at law or in equity;
whether based upon fraud, breach of contract, misrepresentation, negligent
misrepresentation, negligence, gross negligence, intentional conduct, libel,
slander, business disparagement, oppression, civil conspiracy, deceit, tortious
interference, all other business torts, breach of the duty of good faith and
fair dealing, breach of fiduciary duty, or any other duty or claim under common
law or statute of any nature or jurisdiction, including, without limitation, the
Declaratory Judgment Act, the Texas Free Enterprise & Antitrust Act of 1983,
Tex. Bus. & Com. Code (S) 15.01, et seq., the Texas Business Corporation Act,
the Texas Partnership Act, the Texas Limited Partnership Act, the Delaware
Revised Uniform Limited Partnership Act, The Securities Act of 1933, 15 U.S.C.A.
(S)(S) 77k, 77o; and the Securities Exchange Act of 1934, 15 U.S.C.A. (S)(S)
78b, 78t, 17 C.F.R. (S) 240.10b-5; whether arising under or out of any sale,
purchase, offer, tender, contract, agreement, conspiracy, combination,
communication, meeting, joint or concerted action; or whether arising under or
by virtue of any statute or regulation that now exists or may be created or
recognized in the future in any manner, including without limitation, by
statute, regulation or judicial decision, including without limitation, all
claims arising under or by virtue of the federal and/or state securities laws;
together with all past, present, existing, future, liquidated or unliquidated,
fixed or contingent, known or unknown, suspected or unsuspected, pending or
threatened injuries, damages, losses, costs, expenses and remedies of every kind
and nature, including, but not limited to, actual damages; all exemplary and
punitive damages; all penalties of any kind, including but not limited to tax
liabilities or penalties; all statutory damages; all property and economic
damages; all damages to loss of individual or business reputation, loss of
business, loss of company, loss of assets, diminution in assets or investments,
loss of standard of living, lost profits and goodwill; all consequential
damages; all mental anguish and other similar emotional and psychological
damages, including loss of society, affection, consortium, enjoyment and the
like, and all other personal injury damages; together with all prejudgment and
postjudgment interest, costs and attorneys' fees; whether heretofore or
hereafter accruing (all collectively, the "Claims"); known or unknown, whether
each of which directly or indirectly arise out of, in connection with, or are
attributable to, for, or related to: (1)
PAGE 8
<PAGE>
the purchase and/or sale of the Unit(s); (2) the operation, property management
and/or asset management of the Courtyard by Marriott Hotels owned by CBM I LP,
as described more fully in the CBM I LP Private Placement Memorandum (the
"Hotels"), and the formation, operation, administration and/or reporting of CBM
I LP, including, but not limited to, the calculation and payment of all partner
and partnership distributions or the failure to do same; the calculation and
payment of all returns, including the priority return, or the failure to do
same; the calculation and use of all FF&E funds; the results of operations of
CBM I LP or the Hotels; the improvements and/or lack thereof of the Hotels; the
use, administration, management, or operations of CBM I LP and/or any Hotel; the
use of cash derived from the management or operations of CBM I LP and/or any
Hotel; any borrowings or failure(s) to borrow or refinance and/or to distribute
proceeds from same; any property management agreement; any guarantee agreement;
and any publication or disclosure, report, statement or notice, or the failure
to give same, concerning CBM I LP or the Hotels; (3) the conduct, facts,
circumstances, matters, causes, communications, agreements, meetings, approvals,
purchases, occurrences, transactions, and/or allegations asserted, relied upon
or referred to, or which could have been asserted, relied upon, or alleged in
the Litigation arising out of the transactions or occurrences that are the
subject matter of the Haas Litigation; (4) any matter or thing done, omitted or
suffered to be done relating to CBM I LP and/or the Hotels arising out of the
transactions or occurrences that are the subject of the Haas Litigation; (5) any
matter that has been brought or that could have been brought before or in any
court, tribunal, or forum, in this or any other jurisdiction, in these United
States or anywhere else, specifically including but not limited to, any claims
which were or could have been asserted in the Haas Litigation arising out of the
transactions or occurrences that are the subject matter of the Haas Litigation;
(6) the resolution of the Haas Litigation, including but not limited to, all
claims, demands, and causes of action which now exist or may arise in the future
by virtue of any assignment or otherwise, arising out of the manner in which the
Released Persons, or any other representative of the Released Persons, handled,
settled, or defended any claims, demands, or causes of action asserted in the
Haas Litigation; and (7) the provisions, rights, and benefits of Section 1542 of
the California Civil Code and any and all provisions, rights and benefits
conferred by any law of any state or territory of the United States, or any
principle of common law, which is similar, comparable or equivalent to Section
1542 of the California Civil Code; and
(B) all known Claims as of the date the Release is executed arising from
or relating to the purchase, sale, real estate investment trust or other
conversion, assignment, holding, operation, performance of, or investment in
each and all of the Defendants and their respective predecessors and successors,
and their respective present or former parents, subsidiaries or affiliates (all
Claims referred to in this Section VII are herein collectively referred to as
the "Released Claims").
Nothing in this Release is intended to release, waive, or alter the
ability of any settling party to assert any claim arising under the Settlement
Agreement.
VIII. DOCUMENTATION REQUIRED:
----------------------
A. The information contained in this Proof of Claim is subject to
verification. You must cooperate in any such verification process.
PAGE 9
<PAGE>
B. If you are signing this Proof of Claim in a representative capacity,
you must submit proof of your current authority to act for the CBM I LP Class
Member in such capacity.
C. To prevent federal income tax withholding on the amounts payable to
you pursuant to the Settlement, you are required to complete, execute and return
with this Proof of Claim the Certificate of Non-Foreign Status attached hereto
as part of Annex A.
-------
IX. CERTIFICATION UNDER PENALTY OF PERJURY:
--------------------------------------
Each Claimant signing this Proof of Claim represents that such Claimant is
authorized to execute and deliver this Proof of Claim and is not a person or
entity excluded from the CBM I LP Class as defined in the Notice.
I (we) declare under the penalties of perjury that I am (we are) the
Claimant(s), or that I am (we are) authorized in writing to make this claim on
behalf of Claimant(s). I (we) also declare under the penalties of perjury that
all the information provided herein is true, complete and correct. I (we)
further declare, under the penalties of perjury, that this Proof of Claim was
executed by me (us) as my (our) free and voluntary act and deed, after having it
fully explained to me and/or after having read it, the Notice, the Purchase
Offer and Consent Solicitation and the Consent Form completely and having fully
understood their contents, and after realizing the effect to be a full and final
release and discharge of the Released Persons from the Released Claims, and a
complete and total assignment and transfer of the Units I (we) own in CBM I LP
to the Purchaser or its designee; that I (we) have entered into this Proof of
Claim relying solely on my own independent analysis, beliefs and judgment, that
I (we) expressly waive, disclaim, abandon and relinquish any reliance (actual,
perceived or otherwise) on any Defendant, and that I (we) assume the full risk
of discovery of any facts, legal issues, events or allegations of any type; and
that this Proof of Claim was executed by me (us) without any threat, force,
duress, or reliance upon any representation of any kind made by any person
whomsoever, except as set forth herein and in the Notice.
EVEN IF YOU FAIL TO TIMELY SUBMIT A PROOF OF CLAIM, YOU WILL BE BOUND BY
ANY ORDERS AND JUDGMENTS ENTERED IN THIS CASE, UNLESS YOU ELECT TO "OPT OUT" OF
THE SETTLEMENT. BY VIRTUE OF THE ORDERS AND JUDGMENTS ENTERED IN THIS CASE YOU
WILL ALSO BE DEEMED TO HAVE RELEASED THE RELEASED CLAIMS AGAINST THE RELEASED
PERSONS AND TO HAVE ASSIGNED, TRANSFERRED AND CONVEYED TO THE PURCHASER OR ITS
DESIGNEE YOUR UNIT(S).
[ATTACH LABEL HERE]
(leave adequate space for label)
______________________________________________________________________________
PAGE 10
<PAGE>
PLEASE SIGN THIS DOCUMENT IN THE MANNER YOUR NAME(S) APPEAR(S) ON THE LABEL
AFFIXED ABOVE.
PAGE 11
<PAGE>
IMPORTANT
UNITHOLDER: SIGN HERE AND COMPLETE THE CERTIFICATE
OF NON-FOREIGN STATUS IN ANNEX A
______________________________________________________________________________
______________________________________________________________________________
Signature(s) of Owner(s)
Dated: ______________, 2000
Name(s):______________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity (full title):________________________________________________________
(See Instruction 4)
Address:______________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
Daytime Area Code and
Telephone Number: ____________________________________________________________
Taxpayer Identification Number:_______________________________________________
(Must be signed by registered holder(s) or person(s) authorized to become
registered holder(s) by certificates and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, attorney-in-fact,
agent, officer of a corporation or other person acting in a fiduciary or
representative capacity, please set forth full title and see Instruction 4.)
PAGE 12
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Purchase Offer and Consent
Solicitation
1. Requirements of Tender. This Proof of Claim (or a facsimile hereof),
----------------------
properly completed and duly executed, with any required signature guarantees and
any other documents required by this Proof of Claim, must be received by GEMISYS
at its address set forth herein on or prior to the Expiration Date.
The method of delivery of this Proof of Claim and all other required
documents is at the option and sole risk of the tendering Unitholder and the
delivery will be deemed made only when actually received by GEMISYS. If delivery
is by mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Units, other than half-Units previously issued and outstanding, will
be purchased. All tendering Unitholders, by execution of this Proof of Claim (or
a facsimile thereof), waive any right to receive any notice of the acceptance of
their Units for payment.
2. Inadequate Space. If the space provided herein under "Description of
----------------
Units Tendered" is inadequate, the number of Units should be listed on a
separate signed schedule attached hereto.
3. Partial Tenders. If fewer than all the Units held by a Unitholder are to
---------------
be tendered hereby, fill in the number of Units which are to be tendered in the
box entitled "Number of Units Tendered" as appropriate.
4. Signatures on Proof of Claim and Endorsements. If this Proof of Claim is
---------------------------------------------
signed by the registered holder(s) of the Units tendered hereby, the
signature(s) must correspond with the name(s) as written on the transfer books
of the Partnership without any change whatsoever.
If any of the Units tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Proof of Claim.
If any of the tendered Units are registered in different names, it will be
necessary to complete, sign and submit as many separate Proofs of Claim as there
are different registrations.
If this Proof of Claim is signed by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should so indicate when
signing, and proper evidence satisfactory to the Purchaser of such person's
authority so to act must be submitted.
5. Transfer Taxes. Except as set forth in this Instruction 5, the Purchaser
--------------
will pay or cause to be paid any transfer taxes with respect to the transfer and
sale of purchased Units to it or its order, pursuant to the Purchase Offer. If,
however, payment of the purchase price is to be made to, or if tendered Units
are registered in the name of, any person other than the person(s) signing this
Proof of Claim, the amount of any transfer taxes (whether imposed on the
registered holder(s) or such person) payable on account of the transfer to such
person will be deducted from
PAGE 13
<PAGE>
the purchase price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted.
6. Requests for Assistance or Additional Copies. You may direct questions
--------------------------------------------
and requests for assistance relating to the completion of this Proof of Claim to
GEMISYS, Inc., telephone number (800) 955-0245. Requests for additional copies
of the Purchase Offer and Consent Solicitation, this Proof of Claim and other
related materials may be directed to GEMISYS, Inc. or brokers, dealers,
commercial banks and trust companies and such materials will be furnished at the
Purchaser's expense. You are encouraged to call David Berg or Jim Moriarty,
counsel to the class action plaintiffs, if you have questions regarding the
terms of the Settlement. Mr. Berg's telephone number is (713) 529-5622 and Mr.
Moriarty's telephone number is (713) 528-0700.
7. Waiver of Conditions. Certain of the conditions of the Purchase Offer
--------------------
may be waived by the Purchaser, in whole or in part, to the extent set forth in
the Purchase Offer and Consent Solicitation.
8. Certification Regarding Non-Foreign Status. To comply with the Foreign
------------------------------------------
Investment in U.S. Real Property Act of 1980 ("FIRPTA"), ten percent (10%) of
the amount realized by you with regard to the disposition of your Units pursuant
to the Settlement may be required to be withheld unless you complete, execute
and return to GEMISYS the appropriate Certificate of Non-Foreign Status
(depending on whether you are an individual or an entity) included in this Proof
of Claim. Because uncertainty exists as to the correct allocation of the amount
received by a CBM I LP Class Member who does not affirmatively opt-out of the
Settlement between the amount received in settlement of the Haas Litigation and
the amount received in exchange for the CBM I LP Class Member's Units, solely
for purposes of determining any amounts required to be withheld, the "amount
realized" by such a CBM I LP Class Member will be treated as the sum of (1) the
amount of $134,130 per Unit (or a pro rata portion thereof) plus (2) the CBM I
LP Class Member's share of CBM I LP's nonrecourse liabilities immediately prior
to the disposition of his Units. The "amount realized" by a CBM I LP Class
Member who affirmatively "opts out" of the Settlement will be treated as the sum
of (a) the cash amount received for his Units pursuant to the Settlement (which
will be deemed to include any amount owed by the CBM I LP Class Member on the
original purchase price of his Units), plus (b) the CBM I LP Class Member's
share of CBM I LP's nonrecourse liabilities immediately prior to the disposition
of his Units.
Even if you do not return the rest of this Proof of Claim or even if you
affirmatively Opt-Out, you should still complete and return to GEMISYS the
Certificate of Non-Foreign Status to avoid the application of withholding to
payments made to you pursuant to the Settlement. Please review the enclosed
guidelines regarding taxpayer identification number for information regarding
the correct taxpayer identification number to use.
IMPORTANT: THIS PROOF OF CLAIM (OR FACSIMILE HEREOF), PROPERLY COMPLETED
AND DULY EXECUTED, TOGETHER WITH ANY REQUIRED CERTIFICATES AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY GEMISYS, ON OR PRIOR TO THE EXPIRATION
DATE.
PAGE 14
<PAGE>
ANNEX A
COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
CERTIFICATE OF NON-FOREIGN STATUS
for Individuals
To inform you that withholding of tax is not required under Section 1445 of
the Internal Revenue Code upon amounts received by me in connection with the
purchase by the Purchaser of outstanding units of limited partnership interest
("Units") in Courtyard by Marriott Limited Partnership ("CBM I LP") or the
acquisition of Units pursuant to the merger of CBM Acquisition L.P., an
affiliate of the Purchaser, with and into CBM I LP, with CBM I LP surviving, in
connection with the settlement of certain claims described in that certain
Settlement Agreement, dated as of March 9, 2000 (the "Settlement Agreement"), I,
the undersigned, hereby certify the following:
1. I am not a nonresident alien for purposes of U.S. income taxation;
2. My U.S. taxpayer identifying number (Social Security Number) is:
_____________________________; and
3. My current home address is as follows:____________________________
__________________________________________________________________
I hereby agree that if I become a nonresident alien prior to the date that
I receive any payment in respect of the Settlement Agreement, (i) I will notify
GEMISYS, at 7103 South Revere Parkway, Englewood, Colorado 80112 (Attention:
Marriott Hotel Limited Partnership Litigation), and (ii) I hereby authorize the
withholding of ten percent (10%) of the "amount realized" (as such term is
defined in Section 1001 of the Internal Revenue Code) by me in connection with
the Settlement Agreement. I understand that this certification may be disclosed
to the Internal Revenue Service and that any false statement I have made here
could be punished by fine, imprisonment, or both.
Under penalties of perjury, I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct,
and complete.
SIGNATURE _______________________ DATE ______________________
PRINT NAME ______________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN WITHHOLDING OF 10
PERCENT OF THE AMOUNT REALIZED BY YOU IN CONNECTION WITH THE SETTLEMENT. PLEASE
REVIEW THE ENCLOSED GUIDELINES REGARDING TAXPAYER IDENTIFICATION NUMBER FOR
ADDITIONAL DETAILS.
PAGE 15
<PAGE>
COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
CERTIFICATE OF NON-FOREIGN STATUS
for Entities
To inform you that withholding of tax is not required under Section 1445 of
the Internal Revenue Code upon amounts received by _________________________
in connection with the purchase by the Purchaser of outstanding units of limited
partnership interest ("Units") in Courtyard by Marriott Limited Partnership
("CBM I LP") or the acquisition of Units pursuant to the merger of CBM
Acquisition L.P., an affiliate of the Purchaser, with and into CBM I LP, with
CBM I LP surviving, in connection with the settlement of certain claims
described in that certain Settlement Agreement, dated as of March 9, 2000 (the
"Settlement Agreement"), the undersigned hereby certifies the following on
behalf of _________________________ .
1. _____________ is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations);
2. ____________________'s U.S. employer identifying number is _________;
and
3. ______________________________'s office address is:___________________
_________________________________________________________________.
_________________________ hereby agrees that if ___________________________
becomes a foreign person prior to the date any payment in respect of the
Settlement Agreement is received by _________________________, (i)
__________________________ will notify GEMISYS, at 7103 South Revere Parkway,
Englewood, Colorado 80112 (Attention: Marriott Hotel Limited Partnership
Litigation), and (ii) _________________________________ hereby authorizes the
withholding of ten percent (10%) of the "amount realized" (as such term is
defined in Section 1001 of the Internal Revenue Code) by
_________________________________ in connection with the Settlement Agreement.
_____________________________ understands that this certification may be
disclosed to the Internal Revenue Service and that any false statement made here
could be punished by fine, imprisonment, or both.
Under penalties of perjury, I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct,
and complete, and I further declare that I have authority to sign this document
on behalf of ________________________________.
SIGNATURE __________________________________ DATE _________________
PRINT NAME _________________________________
TITLE ______________________________________
PAGE 16
<PAGE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 10 PERCENT OF THE AMOUNT REALIZED BY YOU IN CONNECTION WITH THE SETTLEMENT.
PLEASE REVIEW THE ENCLOSED GUIDELINES REGARDING TAXPAYER IDENTIFICATION NUMBER
FOR ADDITIONAL DETAILS.
Page 17
<PAGE>
Exhibit (a)(3)
Offer to Purchase for Cash
All Outstanding Units of Limited Partnership Interest in
COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
for
$134,130 Per Unit (or a Net Amount per Unit of Approximately $116,000
after Payment of Court-Awarded Attorneys' Fees and Expenses)
by
CBM I HOLDINGS LLC,
a wholly owned indirect subsidiary of
CBM JOINT VENTURE LLC,
a joint venture between
MI CBM INVESTOR LLC (a wholly owned indirect subsidiary of
MARRIOTT INTERNATIONAL, INC.) and
ROCKLEDGE HOTEL PROPERTIES, INC. (through wholly owned subsidiaries)
and
Solicitation of Consents to a Merger and Amendments to the Partnership Agreement
- --------------------------------------------------------------------------------
THE PURCHASE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON ___________, 2000, UNLESS THE PURCHASE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
___________, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by CBM I Holdings LLC, a Delaware limited liability
company (the "Purchaser") and a wholly owned indirect subsidiary of CBM Joint
Venture LLC (the "Joint Venture"), a Delaware limited liability company that is
a joint venture between MI CBM Investor LLC, a wholly owned indirect subsidiary
of Marriott International, Inc., and Rockledge Hotel Properties, Inc., to act as
Information Agent in connection with the Purchaser's offer to purchase (the
"Purchase Offer") all outstanding units of limited partnership interest (the
"Units") of Courtyard by Marriott Limited Partnership, a Delaware limited
partnership (the "Partnership") (other than Units held by the Partnership's
general partner), upon the terms and conditions set forth in the Purchase Offer
and Consent Solicitation (the "Purchase Offer and Consent Solicitation") and the
related proof of claim, assignment and release (the "Proof of Claim") and
consent form (the "Consent Form") enclosed herewith. The Purchase Offer is
being made pursuant to the terms of a settlement agreement (the "Settlement
Agreement") relating to the settlement (the "Settlement") of class action
litigation involving the Partnership (the "Haas Litigation"). The Settlement
also relates to lawsuits filed with respect to six other limited partnerships
(such suits, together with the Haas litigation, the "Litigation"). The
Purchaser is offering to pay $134,130 per Unit (or a pro rata portion thereof)
in cash to purchase each Unit, settle the Haas Litigation and release all claims
in the Haas Litigation. If the court approves legal fees and expenses of
approximately $18,000 per Unit to counsel to the class action plaintiffs in the
Haas Litigation, the net amount that each holder that is a class member will
receive is approximately $116,000 per Unit (or a pro rata portion thereof),
reduced by any amount owed by the holder on the original purchase price of such
Unit.
Enclosed herewith for your information and for forwarding to your clients
are copies of the following documents:
1. The Purchase Offer and Consent Solicitation, dated ___________, 2000.
2. The Proof of Claim to tender Units for your use and for the
information of your clients. Facsimile copies of the Proof of Claim may be used
to tender Units. The Proof of Claim includes a Certificate of Non-Foreign Status
that should be returned to you by your client to prevent federal income tax
withholding on amounts payable to them, even if your client chooses not to
return the rest of the Proof of Claim.
<PAGE>
3. A Solicitation/Recommendation Statement on Schedule 14D-9 filed with
the Securities and Exchange Commission by the Partnership.
4. A printed form of letter which may be sent to your clients for whose
accounts you hold Units registered in your name or in the name of your nominee,
with space provided for obtaining such client's instructions with regard to the
Purchase Offer.
5. A Consent Form to be completed, dated and signed by your clients and
returned to GEMISYS, Inc., the Claims Administrator.
6. A return envelope addressed to the Claims Administrator.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Units registered in your name or in the name of your
nominee.
The Purchase Offer is conditioned upon, among other things, (1) the order
of the court approving the terms of the Settlement and the dismissal of the
Litigation having become final (other than by reason of an appeal relating
solely to counsel fees and expenses), (2) not more than 10% of the Units (other
than Units held by the persons named as insiders in the Settlement Agreement)
being held by holders who have elected to "opt-out" of the Settlement, (3) not
more than 10% of the units of limited partnership interests in each of the other
six limited partnerships involved in the Settlement (other than units held by
persons named as insiders in the Settlement Agreement) being held by holders who
have elected to "opt-out" of the Settlement, (4) holders of a majority of the
outstanding Units (other than the general partner of the Partnership or its
affiliates) having submitted valid written consents to the merger of a
subsidiary of the Joint Venture into the Partnership and to certain amendments
to the Partnership's partnership agreement, which would, among other things,
facilitate the consummation of the Purchase Offer and the merger, and (5)
holders of a majority of the outstanding units of limited partnership interests
in Courtyard by Marriott II Limited Partnership (other than its general partner
and affiliates of its general partner) having submitted valid written consents
to its merger and the proposed amendments to its partnership agreement. See
the Purchase Offer and Consent Solicitation under the heading "The Settlement
Conditions of the Purchase Offer and the Merger."
In all cases, payment for Units accepted for payment pursuant to the
Purchase Offer will be made only after timely receipt by the Claims
Administrator of the Proof of Claim (or facsimile thereof) properly completed
and duly executed, and any other documents required by the Proof of Claim.
The Purchaser will not pay any fees or commissions to brokers, dealers or
other persons (other than to the Information Agent as described in the Purchase
Offer and Consent Solicitation) for soliciting tenders of Units pursuant to the
Purchase Offer. The Purchaser will, however, upon request, reimburse you for
customary clerical and mailing expenses incurred by you in forwarding any of the
enclosed materials to your clients. The Purchaser will pay or cause to be paid
any transfer taxes payable on the transfer of Units to it, except as otherwise
provided in Instruction 5 of the Proof of Claim.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE PURCHASE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON _____________, 2000,
UNLESS THE PURCHASE OFFER IS EXTENDED. ACCORDINGLY, PLEASE FURNISH COPIES OF
THE ENCLOSED MATERIALS TO THOSE OF YOUR CLIENTS FOR WHOM YOU HOLD UNITS
REGISTERED IN YOUR NAME OR IN THE NAME OF YOUR NOMINEE AS QUICKLY AS POSSIBLE.
<PAGE>
Questions and requests for assistance with respect to completing the
enclosed materials may be directed to GEMISYS, Inc., Information Agent, 7103
South Revere Parkway, Englewood, Colorado 80112-9523, telephone number (800)
955-0245, facsimile (303) 705-6171. Additional copies of the Purchase Offer and
Consent Solicitation, the Proof of Claim and the Consent Form and other Purchase
Offer and Consent Solicitation materials may also be obtained from the
Information Agent as set forth above. You may call David Berg or Jim Moriarty,
counsel to the class action plaintiffs, if you have questions regarding the
terms of the Settlement. Mr. Berg's telephone number is (713) 529-5622 and Mr.
Moriarty's telephone number is (713) 528-0700.
Very truly yours,
GEMISYS, Inc.
By: _________________________
Name:
Title:
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, THE PARTNERSHIP, THE PARTNERSHIP'S
GENERAL PARTNER, THEIR AFFILIATES, THE CLAIMS ADMINISTRATOR OR THE INFORMATION
AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO
MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION
WITH THE PURCHASE OFFER OR THE CONSENT SOLICITATION OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE>
Exhibit (a)(4)
Offer to Purchase for Cash
All Outstanding Units of Limited Partnership Interest in
COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
for
$134,130 Per Unit (or a Net Amount per Unit of Approximately $116,000
after Payment of Court-Awarded Attorneys' Fees and Expenses)
by
CBM I HOLDINGS LLC,
a wholly owned indirect subsidiary of
CBM JOINT VENTURE LLC,
a joint venture between
MI CBM INVESTOR LLC (a wholly owned indirect subsidiary of
MARRIOTT INTERNATIONAL, INC.) and
ROCKLEDGE HOTEL PROPERTIES, INC. (through wholly owned subsidiaries)
and
Solicitation of Consents to a Merger and Amendments to the Partnership Agreement
________________________________________________________________________________
THE PURCHASE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON ___________, 2000, UNLESS THE PURCHASE OFFER IS EXTENDED.
________________________________________________________________________________
___________, 2000
To Our Clients:
Enclosed for your consideration are the Purchase Offer and Consent
Solicitation dated __________, 2000 (the "Purchase Offer and Consent
Solicitation"), including a PINK proof of claim, assignment and release (the
"Proof of Claim") and a YELLOW consent form (the "Consent Form"). These
materials are being furnished to you pursuant to the terms of a settlement
agreement (the "Settlement Agreement") relating to the settlement (the
"Settlement") of class action litigation (the "Haas Litigation") involving
Courtyard by Marriott Limited Partnership (the "Partnership"). The Settlement
also relates to lawsuits filed with respect to six other limited partnerships
(such suits, together with the Haas Litigation, the "Litigation") as described
in the Purchase Offer and Consent Solicitation. Pursuant to the terms of the
Settlement Agreement, CBM I Holdings LLC (the "Purchaser"), an indirect, wholly
owned subsidiary of CBM Joint Venture LLC (the "Joint Venture"), which is a
joint venture between MI CBM Investor LLC, a wholly owned indirect subsidiary of
Marriott International, Inc., and Rockledge Hotel Properties, Inc., is offering
to purchase (the "Purchase Offer") all outstanding units (the "Units") of
limited partnership interest in the Partnership (other than Units held by the
Partnership's general partner). In addition to the Purchase Offer, the terms of
the Settlement Agreement provide for the merger of a subsidiary of the Joint
Venture into the Partnership (the "Merger") and to certain amendments (the
"Amendments") to the Partnership's partnership agreement, which would, among
other things, facilitate the consummation of the Purchase Offer and the Merger.
Please note the following:
1. The Purchaser is offering to pay $134,130 per Unit (or a pro rata
portion thereof) in cash to purchase each Unit, settle the Haas
Litigation and obtain a release of all claims in the Haas Litigation.
If the court approves legal fees and expenses of approximately $18,000
per Unit to counsel to the class action plaintiffs in the Haas
Litigation, the net amount that each holder that is a class member
will receive is approximately $116,000 per Unit (or a pro rata portion
thereof) (the "Net Settlement Amount"). The Net Settlement Amount to
be received by any holder in the Purchase Offer or the Merger will be
reduced by any amount owed by the holder on the original purchase
price of such Unit.
2. The Purchase Offer is being made for all outstanding Units (other than
Units held by the Partnership's general partner).
3. The Purchase Offer and withdrawal rights expire at 12:00 midnight, New
York City time, on _________, ____________, 2000, unless the Purchase
Offer is extended (as so extended, the "Expiration Date").
<PAGE>
4. The Partnership's general partner makes no recommendation to you as to
whether to tender or refrain from tendering your Units or whether or
not to consent to the Merger and the Amendments. You must make your
own decision as to these matters.
5. The Purchase Offer is conditioned upon, among other things, (1) the
order of the court approving the terms of the Settlement and the
dismissal of the Litigation having become final (other than by reason
of an appeal relating solely to counsel fees and expenses), (2) not
more than 10% of the Units (other than Units held by the persons named
as insiders in the Settlement Agreement) being held by holders who
have elected to "opt-out" of the Settlement, (3) not more than 10% of
the units of limited partnership interests in each of the other six
limited partnerships involved in the Settlement (other than units held
by persons named as insiders in the Settlement Agreement) being held
by holders who have elected to "opt-out" of the Settlement, (4)
holders of a majority of the outstanding Units (other than the general
partner of the Partnership or its affiliates) having submitted valid
written consents to the Merger and the Amendments, and (5) holders of
a majority of the outstanding units of limited partnership interests
in Courtyard by Marriott II Limited Partnership (other than its
general partner and affiliates of its general partner) having
submitted valid written consents to its merger and the proposed
amendments to its partnership agreement. See the Purchase Offer and
Consent Solicitation under the heading "The Settlement Conditions of
the Purchase Offer and the Merger."
6. Tendering unitholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 5 of the
Proof of Claim, stock transfer taxes on the purchase of Units by the
Purchaser pursuant to the Purchase Offer.
We are the holder of record of Units held by us for your account. A
tender of such Units can be made only by us as the holder of record and pursuant
to your instructions. The Proof of Claim is furnished to you for your
information and to provide you with a tax form but cannot be used by you to
tender Units held by us for your account.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Units held by us for your account pursuant to
the terms and conditions set forth in the Purchase Offer and Consent
Solicitation. If you wish to have us tender any or all of the Units held by us
for your account, please so instruct us by completing, executing, detaching and
returning to us the instruction form set forth on page 4 of this letter. If you
authorize the tender of your Units, all such Units will be tendered unless
otherwise specified in the instruction form set forth on page 4 of this letter.
An envelope to return your instruction form to us is enclosed. Your instruction
form should be forwarded to us in ample time to permit us to submit a tender on
your behalf prior to the expiration of the Purchase Offer. If you wish to
prevent federal income tax withholding on amounts payable to you pursuant to the
Settlement, you must complete, execute and return to us in the enclosed envelope
(even if you choose not to tender your Units and, therefore, do not return the
instruction form to us) the appropriate Certificate of Non-Foreign Status
included with the Proof of Claim.
In addition, the general partner of the Partnership is soliciting your
consent to the Merger and the Amendments. Please complete, execute and return
the enclosed YELLOW Consent Form to GEMISYS, Inc., Claims Administrator, Proxy
Department, 7103 South Revere Parkway, Englewood, Colorado 80112. An envelope to
return your Consent Form to the Claims Administrator is enclosed. All properly
executed Consent Forms received by the Claims Administrator prior to the
Expiration Date will be voted in accordance with the instructions contained
therein. All properly executed Consent Forms that contain no voting instructions
will be deemed to have consented to the Merger and all of the Amendments.
Consent Forms will be effective only when actually received by the Claims
Administrator prior to the Expiration Date. Please note that, subsequent to the
submission of a Consent Form, but prior to the Expiration Date, you may change
your vote or withdraw your consent by following the procedures set forth under
the heading "The Written Consents--Voting and Revocation of Consents" in the
Purchase Offer and Consent Solicitation. All properly executed Consent Forms
that are received and not withdrawn prior to the Expiration Date will become
binding and irrevocable after the Expiration Date and will be deemed
2
<PAGE>
coupled with an interest. An abstention or failure to return the enclosed
Consent Form prior to the Expiration Date will have the same effect as not
consenting to the Merger and the Amendments.
The Purchaser is not aware of any state where the making of the Purchase
Offer or the soliciting of consents is prohibited by administrative or judicial
action pursuant to any valid state statute. If the Purchaser becomes aware of
any valid state statute prohibiting the making of the Purchase Offer or the
acceptance of Units pursuant thereto, or the soliciting of consents, the
Purchaser will make a good faith effort to comply with such state statute. If,
after such good faith effort, the Purchaser cannot comply with such state
statute, the Purchase Offer and consent solicitation will not be made to nor
will tenders be accepted from or on behalf of the holders of Units in such
state.
3
<PAGE>
INSTRUCTIONS FOR TENDERING YOUR UNITS
The undersigned acknowledge(s) receipt of your letter, the enclosed
Purchase Offer and Consent Solicitation dated ______________, 2000 and the
related proof of claim, assignment and release and consent form in connection
with the offer (the "Purchase Offer") by CBM I Holdings LLC (the "Purchaser"), a
Delaware limited liability company and an indirect wholly owned subsidiary of
CBM Joint Venture LLC, which is a joint venture between MI CBM Investor LLC, a
wholly owned indirect subsidiary of Marriott International, Inc., and Rockledge
Hotel Properties, Inc., to purchase all outstanding units of limited partnership
interest (the "Units") of Courtyard by Marriott Limited Partnership, a Delaware
limited partnership, at a price of $134,130 per Unit (or a pro rata portion
thereof) in cash, upon the terms and subject to the conditions set forth in the
Purchase Offer and Consent Solicitation. If the court approves legal fees and
expenses of approximately $18,000 per Unit to counsel to the class action
plaintiffs in the Haas Litigation, the net amount that each holder that is a
class member will receive is approximately $116,000 per Unit (or a pro rata
portion thereof), reduced by any amount owed by the holder on the original
purchase price of such Unit.
This will instruct you to tender to the Purchaser the number of Units
indicated below (or if no number is indicated below, all Units) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Purchase Offer.
Number of Units to be Tendered: __________ Units*
Date: _______________, 2000
SIGN HERE
Signature(s) __________________________________________________________________
Print Name(s)__________________________________________________________________
Print Address(es)______________________________________________________________
(Area Code and
Telephone Number(s)) __________________________________________________________
(Employer Identification or
Social Security Number(s))_____________________________________________________
__________
* Unless otherwise indicated, it will be assumed that all of the Units held by
us for your account are to be tendered.
4
<PAGE>
EXHIBIT (a)(5)
GUIDELINES REGARDING TAXPAYER IDENTIFICATION NUMBER
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
---
000-00-0000. Employer identification numbers have nine digits separated by one
hyphen: i.e., 00-0000000. The table below will help determine the number to
---
give the payer.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
GIVE THE NAME AND
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if combined funds,
the first individual on the account (1)
3. Husband and wife (joint account) The actual owner of the account or, if joint funds,
either person (1)
4. Custodian account of a minor (Uniform Gift to The minor (2)
Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only contributor, the
minor (1)
6. Account in the name of guardian or committee for a The ward, minor or incompetent person (3)
designated ward, minor, or incompetent person
7. a. The usual revocable savings trust account The grantor- trustee (1)
(grantor is also trustee)
b. So-called trust account that is not a legal or The actual owner (1)
valid trust under State law
8. Sole proprietorship account The owner (4)
- -----------------------------------------------------------------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- -----------------------------------------------------------------------------------------------------------------
9. A valid trust, estate, or pension trust The legal entity (Do not furnish the identifying number
of the personal representative or trustee unless the
legal entity itself is not designated in the account
title) (5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name of the The partnership
business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
</TABLE>
Page 18
<PAGE>
_________________
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's SSN.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your SSN or EIN (if you have
one).
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
Page 19
