<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)
(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
Courtyard by Marriott Limited Partnership
-----------------------------------------
(Name of Registrant as Specified in Its Charter)
---------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-
11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
[X] Fee paid previously with preliminary materials: $30,448.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11 (a) (2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
-----------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------
(3) Filing Party:
-----------------------------------
Date Filed:
-----------------------------------
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Supplement dated September 26, 2000 to
Purchase Offer and Consent Solicitation dated August 7, 2000
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.
Has Amended its Offer to Purchase for Cash
Each Outstanding Unit of Limited Partnership Interest
in
COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
by
Increasing the Net Amount to be Received by Each Class Member to $133,500 per
Unit
(the Offer Price of $134,130 per Unit Remains Unchanged)
and
is Soliciting Consents to a Merger and Amendments to the Partnership Agreement
----------------
THE PURCHASE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON OCTOBER 16, 2000, UNLESS THE PURCHASE OFFER IS
EXTENDED (AS SO EXTENDED, THE "EXPIRATION DATE").
----------------
The following information amends and supplements the Purchase Offer and
Consent Solicitation dated August 7, 2000 (the "Original Purchase Offer and
Consent Solicitation") 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 in the Original Purchase
Offer and Consent Solicitation. This Supplement, dated September 26, 2000, to
the Original Purchase Offer and Consent Solicitation (this "Supplement")
provides information with respect to an increase in the net amount to be
received by class members from approximately $116,000 per Unit, plus a pro
rata portion of certain interest accrued on the Settlement Fund (as defined in
the Settlement Agreement), to $133,500 per Unit (or a pro rata portion
thereof) (the "Net Settlement Amount"), which amount includes certain interest
accrued on the Settlement Fund, and certain other information.
On September 25, 2000, the parties to the Settlement Agreement entered into
an amendment to the Settlement Agreement (the "Amendment to the Settlement
Agreement") relating to the Partnership. Pursuant to the terms of the
Amendment to the Settlement Agreement, CBM I Holdings LLC (the "Purchaser") is
continuing to offer to purchase all Units tendered prior to the Expiration
Date for $134,130. However, the Net Settlement Amount that each Unitholder who
is a class member will receive has been increased to $133,500 per Unit (or a
pro rata portion thereof) in cash. The Net Settlement Amount of $133,500
includes each Unit's pro rata portion of certain interest accrued on the
Settlement Fund. Under the terms of the Settlement Agreement, interest will
continue to accrue until all third-party lender and other consents necessary
to consummate the Settlement (other than the consents that constitute
conditions to the Purchase Offer and the Merger (as defined)) have been
obtained. As of September 22, 2000, approximately $3,800 in interest had
accrued per Unit. In addition, pursuant to the terms of the merger agreement
between a subsidiary of the Purchaser and the
<PAGE>
Partnership (the "Merger Agreement"), each outstanding Unit that has not been
tendered in the Purchase Offer (other than Units held by CBM One LLC, a
limited liability company and the general partner of the Partnership (the
"General Partner"), the Purchaser and Unitholders who elect to opt out of the
Settlement) will be converted in the merger of a subsidiary of the Purchaser
into the Partnership (the "Merger") into the right to receive $134,130 per
Unit (or a pro rata portion thereof) in cash. The net amount that each
Unitholder who has not opted out of the Settlement will receive in the Merger
has been increased to $133,500 per Unit (or a pro rata portion thereof) in
cash, which amount includes each Unit's pro rata portion of certain interest
accrued on the Settlement Fund. CBM Joint Venture LLC, a Delaware limited
liability company (the "Joint Venture") has agreed to pay a portion of the
fees and expenses of counsel to the class action plaintiffs in the Haas
Litigation (as defined in the Original Purchase Offer and Consent
Solicitation) so that such counsel will receive the same amount as they would
have received from the Settlement Fund prior to the increase in the Net
Settlement Amount (if their request for attorneys' fees and expenses had been
approved by the Court) and has also agreed to reimburse certain of the
expenses of the CBM I LP Partners' Committee, a committee with which the
revised Settlement was negotiated. The amount to be received by any Unitholder
in the Purchase Offer or the Merger will be reduced by any amount owed by such
holder on the original purchase price of his or her Units.
IF YOU WISH TO RECEIVE THE NET SETTLEMENT AMOUNT OF $133,500 PER UNIT AND
YOU HAVE NOT CONSENTED TO THE MERGER OR YOU HAVE PREVIOUSLY VOTED AGAINST THE
MERGER, YOU SHOULD CONSENT TO THE MERGER AND THE AMENDMENTS AS DESCRIBED
BELOW.
The Settlement will not be consummated unless the Court approves the
fairness of the Settlement, as amended (including the terms and conditions of
the revised 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. A new
hearing date has been set for October 19, 2000. See the "Notice of Pendency
and Settlement of Claim and Derivative Action Related to Courtyard by Marriott
LP and Final Approval Hearing," which was distributed by counsel to the class
action plaintiffs with the Original 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 reviewed the terms of the revised Settlement and determined that
the revised Settlement does not affect the Special Litigation Committee's
determination that the terms of the Settlement (1) are fair and reasonable to
the Partnership (which the Special Litigation Committee considers, as a
practical matter, to have an identity of interest with the limited partners
with respect to the derivative claims in the Haas Litigation), and (2) include
a fair and reasonable settlement of any and all derivative claims, expressed
or implied, made on behalf of the Partnership in the Haas Litigation. Counsel
for the class action plaintiffs recommends that the class action plaintiffs
approve the revised Settlement by tendering their Units in the Purchase Offer
and consenting to the Merger and the Amendments. The CBM I LP Partners'
Committee, of which Marvin Schick is Chairman, has determined that the terms
of the revised Settlement are fair and reasonable.
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 in the Partnership (other than units held by the persons named as
insiders in the Settlement Agreement (the "Insiders")) being held by holders
who have elected to opt out of 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) having submitted valid written consents to the
Merger and to the Amendments. See "Special Factors--Conditions of the Purchase
Offer and the Merger" in the Original Purchase Offer and Consent Solicitation
for a description of the other conditions to the Purchase Offer and Merger.
The condition that holders of not more than ten percent of the units of
limited partnership interest in any of the partnerships involved in the
Settlement shall have opted out of the Settlement has been satisfied (other
than with respect to the Partnership).
The Partnership has filed with the Securities and Exchange Commission a
Solicitation/Recommendation Statement on an amended Schedule 14D-9, which is
being mailed to limited partners concurrently herewith.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of this transaction, passed upon the
fairness or merits of such transaction or passed upon the accuracy or adequacy
of the disclosure contained in this document. Any representation to the
contrary is a criminal offense.
LIMITED PARTNERS WHO HAVE PREVIOUSLY CONSENTED TO THE MERGER AND THE
AMENDMENTS TO THE PARTNERSHIP AGREEMENT AND HAVE VALIDLY TENDERED AND NOT
WITHDRAWN THEIR UNITS PURSUANT TO THE ORIGINAL PURCHASE OFFER NEED NOT TAKE
ANY FURTHER ACTION IN ORDER TO RECEIVE THE INCREASED NET SETTLEMENT AMOUNT FOR
THEIR UNITS.
This Supplement should be read in conjunction with the Original Purchase
Offer and Consent Solicitation. Except as set forth in this Supplement or to
the extent inconsistent with this Supplement, the terms and conditions
previously set forth in the Original Purchase Offer and Consent Solicitation
remain applicable in all respects to the Purchase Offer and Consent
Solicitation. The Original Purchase Offer and Consent Solicitation, this
Supplement and the related Proof of Claim, Assignment and Release contain
important information and should be read carefully in their entirety before
any decision is made with respect to the Purchase Offer or Consent
Solicitation. Terms used but not defined in this Supplement have the meanings
set forth in the Original Purchase Offer and Consent Solicitation.
This Supplement, dated September 26, 2000, is being mailed to Unitholders on
or about September 26, 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SUMMARY OF SUPPLEMENT..................................................... 1
BACKGROUND OF THE REVISED PURCHASE OFFER.................................. 4
THE AMENDED SETTLEMENT AGREEMENT.......................................... 4
FAIRNESS DETERMINATIONS................................................... 4
Position of Marriott International, MI Investor, Rockledge, Host
Marriott, Host LP, the Joint Venture and the Purchaser Regarding
Fairness............................................................... 4
Determination of the Special Litigation Committee; and Recommendation of
Counsel to the Class Action Plaintiffs................................. 5
Determination of the CBM I LP Partners' Committee....................... 5
EXTENSION OF EXPIRATION DATE.............................................. 5
EXTENSION OF SOLICITATION PERIOD.......................................... 5
EXPIRATION OF THE OPT OUT PERIOD.......................................... 6
THE MERGER................................................................ 6
FEDERAL INCOME TAX CONSIDERATIONS OF THE REVISED PURCHASE OFFER........... 6
FINAL COURT HEARING AND RIGHT TO APPEAR................................... 7
SOURCE AND AMOUNT OF FUNDS................................................ 8
VOTING AND REVOCATION OF CONSENTS; HOW TO CHANGE YOUR VOTE................ 8
OTHER MATTERS............................................................. 9
Fees and Expenses....................................................... 9
Solicitation of Consents................................................ 10
</TABLE>
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SUMMARY OF SUPPLEMENT
The following are some of the questions that you, as a unitholder of
Courtyard by Marriott Limited Partnership, may have regarding the revised
purchase offer and consent solicitation and answers to those questions. We
urge you to carefully read this supplement and the original purchase offer and
consent solicitation in their entirety, because the information in this
summary is not complete and additional important information is contained in
both the remainder of this supplement and in the original purchase offer and
consent solicitation.
HOW HAS THE OFFER CHANGED?
We are offering to pay all unitholders the same gross amount of $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.
However, pursuant to an amendment to the settlement agreement, the net
settlement amount that each unitholder who is a class member will receive has
been increased from approximately $116,000 per unit, plus a pro rata portion
of certain interest accrued on the settlement fund, to $133,500 per unit (or a
pro rata portion thereof) in cash. The net settlement amount of $133,500 per
unit includes each unit's pro rata portion of certain interest accrued on the
settlement fund. As of September 22, 2000, approximately $3,800 in interest
had accrued per unit. CBM Joint Venture LLC will pay a portion of the fees and
expenses of counsel to the class action plaintiffs in the Haas Litigation so
that class counsel will receive the same amount as they would have received
from the settlement fund prior to the increase in the net settlement amount if
their request for attorneys' fees and expenses had been approved by the Court.
CBM Joint Venture LLC has also agreed to reimburse certain of the expenses of
the CBM I LP Partners' Committee, a committee with which the revised
settlement was negotiated. The net settlement amount per unit will be reduced
by any amount owed by the holder on the original purchase price of his or her
units. The other payment terms remain the same as stated in the original
purchase offer and consent solicitation.
DO CLASS COUNSEL AND THE SPECIAL LITIGATION COMMITTEE BELIEVE THAT THE TERMS
OF THE REVISED OFFER ARE FAIR?
Yes. Counsel to the class action plaintiffs recommends that the class action
plaintiffs approve the revised settlement by tendering their units in the
purchase offer and consenting to the merger and the amendments, to the extent
they have not already done so. In addition, the special litigation committee
appointed for Courtyard by Marriott Limited Partnership by the general partner
has reviewed the terms of the revised settlement and determined that the
revised settlement does not affect the special litigation committee's
determination that the terms of the settlement are fair and reasonable to the
partnership.
HAS THE CBM I LP PARTNERS' COMMITTEE HEADED BY MARVIN SCHICK DETERMINED THE
TERMS OF THE REVISED OFFER ARE FAIR?
The CBM I LP Partners' Committee, of which Marvin Schick is Chairman, has
determined that the terms of the revised settlement are fair and reasonable.
DO YOU HAVE THE FINANCIAL RESOURCES TO PAY THE FEES AND EXPENSES OF CLASS
COUNSEL AND IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN
THE OFFER?
We will need approximately $172 million to purchase all of the units
pursuant to the purchase offer, to pay a portion of the fees and expenses of
counsel to the class action plaintiffs, to reimburse the CBM I LP Partners'
Committee for certain of its expenses to date, to consummate the merger and to
pay related fees and expenses. We will obtain the funds indirectly from
Marriott International and Rockledge (which will obtain some funds from Host
Marriott, L.P.). 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 and the amendments.
1
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HOW LONG DO I HAVE TO DECIDE WHETHER TO CONSENT TO THE MERGER OR TO CHANGE MY
VOTE?
We are extending the expiration date of the purchase offer and the
solicitation period, which is the time during which unitholders may vote for
or against the merger and the amendments to the partnership's partnership
agreement. Accordingly, if you have not yet submitted a consent form and wish
to do so now, or if you previously voted against the merger and the amendments
to the partnership agreement and you now wish to change your vote, you will
have until 5:00 p.m., New York City time, on October 16, 2000 to do so. We may
further extend the end of the solicitation period, in which case the new
expiration of the solicitation period will be the last date on which your
consent form will be accepted.
WHAT MUST I DO IF I PREVIOUSLY SUBMITTED A CONSENT FORM, BUT NOW WISH TO
CHANGE MY VOTE?
You may revoke your executed and submitted consent form at any time during
the solicitation period, by delivering to the claims administrator a later-
dated consent form. Enclosed with this supplement is a new GREEN consent form.
If at 5:00 p.m., New York City time, on Monday, October 16, 2000, the merger
and the amendments to the partnership agreement have received the approval of
holders of a majority of the outstanding units (excluding units held by the
partnership's general partner and its affiliates) and if the solicitation
period is not further extended, the solicitation period will expire, and both
the merger and the amendments to the partnership agreement will have been
approved by the unitholders and will be consummated, subject to satisfaction
or waiver (if waivable) of the conditions to consummation of the purchase
offer and the merger.
WHAT WILL HAPPEN IF THE MERGER AND THE AMENDMENTS DO NOT RECEIVE THE REQUISITE
VOTE OF UNITHOLDERS?
One of the conditions to the purchase offer and the merger is that holders
of a majority of the outstanding units of limited partnership interests in
Courtyard by Marriott Limited Partnership (other than the general partner and
its affiliates) have submitted valid written consents to the partnership's
merger and certain amendments to its partnership agreement. Although we have
the right to extend the offer so that this condition can be met, we can not
waive this condition. Accordingly, if the merger and certain amendments to the
partnership agreement do not receive the requisite vote of unitholders, we
will not purchase the units or effect the merger.
IF I TENDER MY UNITS DO I ALSO NEED TO SUBMIT A CONSENT FORM?
Tendering your units does not in itself constitute your consent to the
merger and the amendments to the partnership agreement. If you wish to have
your units purchased in the purchase offer and you have not yet consented to
the merger and the amendments, you should also complete and timely return the
enclosed GREEN consent form.
HOW DO I TENDER MY UNITS?
If you did not yet tender your units and wish to do so now, you must either
(1) complete and sign the BLUE proof of claim, assignment and release (or a
facsimile thereof) that we previously sent you or that is enclosed with this
Supplement and mail or deliver it and any other required documents to GEMISYS
Corporation at the address set forth on the back cover of this purchase offer
and consent solicitation, or (2) if your units are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee, you must
contact such nominee and instruct it to tender your units.
WHAT IF I HAVE ALREADY CONSENTED TO THE MERGER AND THE AMENDMENTS AND TENDERED
MY UNITS IN THE PURCHASE OFFER?
You do not need to take any further action if you have previously consented
to the merger and the amendments to the partnership agreement by submitting a
valid consent form and if you have previously tendered
2
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your units in the purchase offer and have not withdrawn them, unless you wish
to change your vote or withdraw your units.
HOW LONG DO I HAVE TO OPT OUT OF THE SETTLEMENT?
Unitholders who do not wish to participate in the settlement have until 6:00
p.m., New York City time, on Friday, October 13, 2000 to submit a written opt
out notice to the claims administrator. If you previously opted out of the
settlement, but now wish to participate in the settlement as a member of the
settlement class, you may do so at any time by sending a written notice to the
claims administrator stating your name, address and that you want to
participate in the settlement class.
WHEN WILL THE FINAL COURT HEARING BE HELD?
A new court hearing date has been set for October 19, 2000. The final
approval hearing may be continued or adjourned from time to time by the court
without further notice to you. Unitholders who have not opted out of the
settlement have the right to appear at the final court hearing, if they follow
the procedures described in the "Notice of Pendency and Settlement of Claim
and Derivative Action Related to Courtyard by Marriott LP and Final Approval
Hearing," which was distributed by counsel to the class action plaintiffs in
the Haas litigation with the original purchase offer and consent solicitation.
The final date for submission of a written notice of intent to appear at the
final court hearing is October 13, 2000. The settlement will not be
consummated unless the court approves the fairness of the settlement, as
amended, at the final hearing.
WHAT MATERIAL FEDERAL INCOME TAX CONSIDERATIONS SHOULD I CONSIDER IN
CONNECTION WITH THE SETTLEMENT, THE PURCHASE OFFER AND THE MERGER?
Our offer to pay a portion of the fees and expenses incurred by counsel to
the class action plaintiffs may have tax consequences to you, as described in
more detail under the heading "Federal Income Tax Considerations of the
Revised Purchase Offer."
HOW CAN I GET MORE INFORMATION?
Questions concerning (1) how to complete your consent form or the proof of
claim, (2) where to remit the consent form or the proof of claim, (3)
obtaining additional consent forms, proofs of claim, copies of the original
purchase offer and consent solicitation or this supplement should be directed
to GEMISYS Corporation, the claims administrator at (800) 326-8222.
Substantive questions concerning the consent form or the proof of claim 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. In addition, you may call Andrea Morehouse
Jacob at Host Marriott, L.P. at (301) 380-1735.
3
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BACKGROUND OF THE REVISED PURCHASE OFFER
Following announcement of the Settlement Agreement and the Purchase Offer,
the Defendants were contacted by Marvin Schick, a limited partner and the
Chairman of the CBM I LP Partners' Committee (the "Partners' Committee"), a
committee of limited partners, and his counsel, concerning the terms of the
Settlement Agreement. Mr. Schick indicated that direct negotiation with the
Partners' Committee would be important in determining whether the limited
partners would approve the Settlement Agreement by voting for the Merger and
the Amendments and by tendering their Units in the Purchase Offer. During the
course of the discussions among the Defendants and the Partners' Committee,
the Partners' Committee indicated that it had concerns regarding the adequacy
of the net settlement amount to be received by the class members. An agreement
was reached through negotiations to increase the Net Settlement Amount to be
received by class members to $133,500 per unit, including certain interest
accrued on the Settlement Fund, and for Defendants to agree to pay the fees
and expenses that counsel to the class action plaintiffs would otherwise have
received if their request for attorneys' fees and expenses had been approved
by the Court. Defendants also agreed to reimburse the Partners' Committee for
$100,000 of expenses incurred in connection with the negotiation of the
revised Settlement. Based on that agreement, all parties agreed to amend the
Settlement Agreement and the members of the Partners' Committee agreed to join
the Settlement and support the Merger and tender their Units.
THE AMENDED SETTLEMENT AGREEMENT
On September 25, 2000, the parties to the Settlement Agreement entered into
the Amendment to the Settlement Agreement. Pursuant to the terms of the
Amendment to the Settlement Agreement, the Purchaser is continuing to offer to
purchase all Units tendered prior to the Expiration Date for $134,130 per Unit
(or a pro rata portion thereof). However, the net amount that each Unitholder
(other than Unitholders who have opted out of the Settlement) will receive in
the Settlement will be $133,500 per Unit (or a pro rata portion thereof) in
cash, which amount includes a pro rata portion of certain interest that has
accrued on the Settlement Fund less any attorneys' fees and expenses awarded
by the Court to counsel to the class action plaintiffs. As of September 22,
2000, approximately $3,800 per Unit of interest had accrued on the Settlement
Fund.
The Amendment to the Settlement Agreement also provides that the Joint
Venture will pay a portion of the fees and expenses of counsel to the class
action plaintiffs in the Haas Litigation so that such counsel will receive the
same amount as they would have received from the Settlement Fund prior to the
increase in the Net Settlement Amount if their request for attorneys' fees and
expenses had been approved by the Court. In addition, the Joint Venture will
reimburse certain of the expenses of the Partners' Committee.
If you wish to receive the increased Net Settlement Amount of $133,500 in
cash for each of your Units, you should approve the revised Settlement by
tendering your Units in the Purchase Offer and consenting to the Merger and
the Amendments, to the extent you have not already done so. If you have
previously voted against the Merger and the Amendments and you now wish to
change your vote, you should follow the procedures set forth in this
Supplement under the heading "Voting and Revocation of Consents; How to Change
Your Vote."
FAIRNESS DETERMINATIONS
Position of Marriott International, MI Investor, Rockledge, Host Marriott,
Host LP, the Joint Venture and the Purchaser Regarding Fairness
Based on the factors and subject to the qualifications set forth in the
Original Purchase Offer and Consent Solicitation, Marriott International, MI
Investor, Rockledge, Host Marriott, Host LP, the Joint Venture and the
Purchaser continue to believe that the Original Purchase Offer and Merger were
fair to the unaffiliated limited partners of the Partnership, and believe that
the terms of the revised Purchase Offer and the Merger are fair to the
unaffiliated limited partners of the Partnership.
4
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The position of Marriott International, MI Investor, Rockledge, Host
Marriott, Host LP, the Joint Venture and the Purchaser regarding the fairness
of the revised Purchase Offer and the Merger are included herein pursuant to
the requirements of Rule 13e-3 promulgated under the Securities Exchange Act
of 1934 and should not be construed by you as a recommendation by any of these
entities to tender your Units in the Purchase Offer or consent to the Merger
and the Amendments.
Determination of the Special Litigation Committee; and Recommendation of
Counsel to the Class Action Plaintiffs
The Special Litigation Committee has reviewed the terms of the revised
Settlement and determined that the revised Settlement does not affect the
Special Litigation Committee's determination that the terms of the Settlement,
(1) are fair and reasonable to the Partnership (which the Special Litigation
Committee considers, as a practical matter, to have an identity of interest
with the limited partners with respect to the derivative claims in the Haas
Litigation), and (2) include a fair and reasonable settlement of any and all
derivative claims, expressed or implied, made on behalf of the Partnership in
the Haas Litigation.
In addition, Class Counsel recommends to the class members that they approve
the revised Settlement by tendering their Units in the Purchase Offer and
consenting to the Merger and the Amendments. Class Counsel has previously
determined and continues to believe that the Settlement represents a fair,
reasonable and attractive settlement.
Determination of the CBM I LP Partners' Committee
The Partners' Committee, of which Marvin Schick is Chairman, has determined
that the terms of the revised Settlement are fair and reasonable.
EXTENSION OF EXPIRATION DATE
The Purchase Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on Monday, October 16, 2000, unless the Purchaser, in its sole
discretion, further extends the period of time during which the Purchase Offer
is open. The term "Expiration Date" shall mean the latest time and date at
which the Purchase Offer, as so extended by the Purchaser, shall expire.
Unitholders may tender their Units, or withdraw any Units previously tendered,
until the Expiration Date.
EXTENSION OF SOLICITATION PERIOD
The solicitation period (the "Solicitation Period"), which is the time
during which Unitholders may vote for or against the Merger and the
Amendments, has been extended to 5:00 p.m., New York City time, on Monday,
October 16, 2000, unless the Partnership's general partner, in its sole
discretion, elects to further extend the period of time during which the
Solicitation Period is open. If at 5:00 p.m., New York City time, on Monday,
October 16, 2000, the Merger and the Amendments have received the approval of
holders of a majority of the outstanding Units (excluding Units held by the
General Partner and its affiliates) and if the Solicitation Period is not
further extended, the Solicitation Period will expire, and both the Merger and
the Amendments will have been approved by the Unitholders and will be
consummated, subject to satisfaction or waiver (if waivable) of the conditions
to consummation of the Purchase Offer and the Merger. The Purchaser is hereby
amending the original Purchase Offer and Consent Solicitation so that,
effective immediately after 5:00 p.m., New York City time, on Monday, October
16, 2000, the Solicitation Period will no longer be required to coincide with
the Expiration Date. Effective immediately after 5:00 p.m., New York City
time, on Monday, October 16, 2000, the Expiration Date and the Solicitation
Period may be extended to the same date or different dates, or not at all. The
General Partner may extend the Solicitation Period by giving oral or written
notice of such extension to the Claims Administrator and by making a public
announcement thereof in the same manner as required for an extension of the
Purchase Offer (as described in the Original Purchase Offer and Consent
Solicitation), but any such extension of the Solicitation Period may, but need
not, coincide with a further extension of the Expiration Date of the Purchase
Offer.
5
<PAGE>
If you have not yet submitted a valid Consent Form and wish to do so now, or
if you have previously submitted a valid Consent Form and you now wish to
change your vote, you should follow the procedures set forth under the heading
"Voting and Revocation of Consents; How To Change Your Vote."
EXPIRATION OF THE OPT OUT PERIOD
Unitholders who do not wish to participate in the Settlement may exclude
themselves from the Settlement class by submitting to the Claims
Administrator, at the address set forth on the back cover page of this
Supplement, a written request to be excluded (an "Opt-Out Notice"). Pursuant
to an order of the Court, the Opt-Out Notice must be received by the Claims
Administrator on or prior to 6:00 p.m., New York City time, on Friday, October
13, 2000, unless the period during which Opt-Out Notices may be submitted is
further extended.
The Opt-Out Notice must contain the information set forth in the "Notice of
Pendency and Settlement of Claim and Derivative Action Related to Courtyard by
Marriott LP and Final Approval Hearing," which was distributed by counsel to
the class action plaintiffs with the Original Purchase Offer and Consent
Solicitation. Unitholders who fail to timely and validly submit an Opt-Out
Notice will be bound by all orders and judgments entered in the Haas
Litigation, whether favorable or unfavorable to them. If you wish to opt out
of the Settlement, you should follow the procedures set forth in the "Notice
of Pendency and Settlement of Claim and Derivative Action Related to Courtyard
by Marriott LP and Final Approval Hearing," which was distributed by counsel
to the class action plaintiffs with the Original Purchase Offer and Consent
Solicitation.
THE MERGER
Pursuant to the terms of the Merger Agreement, 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 not
elected to opt out of the Settlement will be converted in the Merger into the
right to receive $134,130 per Unit (or a pro rata portion thereof) in cash,
which amount will be distributed and applied in accordance with the Settlement
Agreement, as amended. In accordance with the terms of the Amendment to the
Settlement Agreement, the net amount that each Unitholder who is a class
member will receive in the Merger has been increased to $133,500 per Unit in
cash. The Joint Venture will pay a portion of the fees and expenses of counsel
to the class action plaintiffs in the Haas Litigation so that such counsel
will receive the same amount as they would have received from the Settlement
Fund prior to the increase in the Net Settlement Amount if their request for
attorneys' fees and expenses had been approved by the Court. The amount to be
received by any Unitholder in the Merger will be reduced by any amount owed by
such holder on the original purchase price of his or her Units.
FEDERAL INCOME TAX CONSIDERATIONS OF THE REVISED PURCHASE OFFER
As described in the Original Purchase Offer and Consent Solicitation under
"Federal Income Tax Considerations--Tax Treatment of Participating
Unitholders," each Unitholder who does not opt out of the Settlement very
likely will be deemed, solely for federal income tax purposes, to have
received the Deemed Unit Purchase Amount and the Deemed Claim Value (as such
terms are defined therein). As discussed in "--Tax Treatment of Class
Counsel's Attorneys' Fees," the Deemed Claim Value may or may not be
considered to include the Unitholder's pro rata share of Class Counsel's
Attorneys' Fees paid from the Settlement Fund and by the Joint Venture
pursuant to the terms of the Amendment to the Settlement Agreement and, with
regard to those Unitholders who were obligated to reimburse the expenses of
the CBM I LP Partner's Committee prior to the Amendment to the Settlement
Agreement, each such Unitholder's pro rata share of such expenses that are
reimbursed by the Defendants.
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<PAGE>
In determining the correct allocation between the Deemed Unit Purchase
Amount and the Deemed Claim Value, each Participating Unitholder should take
into consideration the factors described in "--Tax Treatment of Participating
Unitholders." One of the factors described therein is the allocation that will
be made by the Purchaser and the Defendants 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. Although neither the
Purchaser nor the Defendants have yet determined how they will allocate the
increase in the Net Settlement Amount, it is possible that a portion of that
increase may be allocated to the Deemed Claim Value (and not to the Deemed
Unit Purchase Amount). As described in "--Federal Tax Consequences of Receipt
of Deemed Claim Value," each Participating Unitholder will be required to
treat as ordinary income for federal income tax purposes the portion of the
payment received that is attributable to interest accrued on the Settlement
Fund.
The Amendment to the Settlement Agreement will not affect the tax
considerations of those Unitholders who opt out of the Settlement.
For a full discussion of the material federal income tax considerations of
the Settlement, each Unitholder is urged to review the section entitled
"Federal Income Tax Considerations" in the Original Purchase Offer and Consent
Solicitation and the summary prepared by Chamberlain, Hrdlicka, White,
Williams, and Martin entitled "United States Federal Income Tax
Considerations--Courtyard I Settlement," which was separately distributed to
Unitholders by Class Counsel (the "Chamberlain, Hrdlicka Summary").
The Chamberlain, Hrdlicka Summary currently states that ". . . the Marriott
Defendants have indicated that they currently intend to treat for their own
financial and tax purposes, no more than 45 million dollars of the total
settlement amount payable to partners in CBM I LP and Courtyard by Marriott II
Limited Partnership (CBM II LP) as an expense rather than as a purchase of a
partnership interest." To the extent that a portion of the increase in the Net
Settlement Amount is treated by the Marriott Defendants as an expense for
financial and tax purposes, the aggregate amount that the Marriott Defendants
treat as an expense for their own financial and tax purposes may exceed $45
million.
FINAL COURT HEARING AND RIGHT TO APPEAR
The Court will make a determination on the fairness of the proposed
Settlement at the final approval hearing, which has been rescheduled for
October 19, 2000 at 10:00 a.m. in the courtroom of the Honorable
Michael Peden, 285th District Court, Bexar County Courthouse, 100 Dolorosa
Street, San Antonio, Texas. The final approval hearing may be continued or
adjourned from time to time by the Court without further notice to you.
Any class member who has not opted out of the Settlement may appear at the
final approval hearing to demonstrate why the proposed Settlement should not
be approved as fair, reasonable, and adequate, why the Haas Litigation should
not be dismissed with prejudice, or to present any opposition to the proposed
distribution of the Settlement Fund or to Class Counsel's application for an
award of attorneys' fees and expenses. Unitholders will only be heard at the
final approval hearing if they, on or prior to October 13, 2000, submit
written notice of their intention to appear at the hearing to:
Robert M. Haas, Sr. et al. v. Marriott International, Inc. et al., No. 98- CI
04092 District Clerk
Bexar County Courthouse
100 Dolorosa Street
San Antonio, Texas 78205
7
<PAGE>
and copies to:
Co-lead counsel:
Stephen M. Hackerman
Hackerman Peterson Frankel & Manela
1122 Bissonnet Street
Houston, Texas 77005
and counsel for Defendants:
Tom A. Cunningham, Esq.
Cunningham, Darlow, Zook & Chapoton, LLP
600 Travis Street, Suite 1700
Houston, Texas 77002
Attorneys for Host Marriott Corporation
Seagal C. Wheatley, Esq.
Jenkens & Gilchrist, P.C.
1800 Frost Bank Tower
100 West Houston Street
San Antonio, Texas 78205
Attorneys for Marriott International, Inc.
A written notice of intention to appear at the hearing should contain the
information set forth in the "Notice of Pendency and Settlement of Claim and
Derivative Action Related to Courtyard by Marriott LP and Final Approval
Hearing," which was distributed by counsel to the class action plaintiffs with
the Original Purchase Offer and Consent Solicitation.
SOURCE AND AMOUNT OF FUNDS
The total amount of funds required to purchase the Units in the Purchase
Offer, pay a portion of Class Counsel's legal fees and expenses incurred in
connection with the Haas Litigation pursuant to the terms of the revised
Settlement, consummate the Merger and pay related fees and expenses will be
approximately $172 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.
Rockledge will obtain a portion of its funds from Host LP through loans and a
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.
VOTING AND REVOCATION OF CONSENTS; HOW TO CHANGE YOUR VOTE
A new GREEN Consent Form is enclosed with this Supplement. If you have not
yet submitted a Consent Form and wish to do so now, you should complete, date
and execute the GREEN Consent Form and return it to the Claims Administrator,
GEMISYS Corporation, Proxy Department, 7103 South Revere Parkway, Englewood,
Colorado 80112. In addition, properly completed and executed Consent Forms may
be returned to the Claims Administrator via facsimile (303) 705-6171. Such
Consent Forms transmitted via facsimile will be deemed to have been received
and dated on the date they are actually received by GEMISYS.
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<PAGE>
If you previously submitted a Consent Form, but now wish to change your
vote, you must execute and deliver to the Claims Administrator, prior to the
expiration of the Solicitation Period, a subsequently dated Consent Form.
Enclosed herewith is a new GREEN Consent Form, which you should complete and
timely return to the Claims Administrator if you wish to change your vote.
Alternatively, you may submit a written notice stating that your previously
submitted Consent Form is revoked. If you wish to change your vote by
submitting a written notice please clearly state your name and address on such
written notice. You may submit such subsequently dated Consent Form or written
notice via regular mail or facsimile, provided that it is received by the
Claims Administrator on or prior to the expiration of the Solicitation Period.
Any subsequently dated Consent Form or written revocation notices transmitted
via facsimile will be deemed to have been received and dated on the date they
are actually received by GEMISYS.
Any properly executed Consent Forms received by GEMISYS prior to the
expiration of the Solicitation Period 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 of the
Solicitation Period. Consent Forms may be withdrawn at any time prior to the
expiration of the Solicitation Period. Consent Forms and notices of withdrawal
or change of vote dated after the expiration of the Solicitation Period will
not be valid. If at the expiration of the Solicitation Period the Merger and
the Amendments have received the approval of holders of a majority of the
outstanding Units (excluding Units held by the General Partner and its
affiliates), both the Merger and the Amendments will have been approved by the
Unitholders and will be consummated, subject to satisfaction or waiver (if
waivable) of the conditions to consummation of the Purchase Offer and the
Merger. Questions concerning (1) how to complete the Consent Form, (2) where
to remit the Consent Form or (3) obtaining additional Consent Forms should be
directed to the Claims Administrator. 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. In addition, you may call
Andrea Jacob Morehouse at Host Marriott, L.P. at (301) 380-1735.
OTHER MATTERS
Fees and Expenses
It is estimated that the expenses incurred by the Joint Venture in
connection with the consummation of this Purchase Offer and Consent
Solicitation will be approximately as set forth below (none of which are
payable by the Partnership):
<TABLE>
<S> <C>
Accounting Fees.............................................. $ 4,100
Claims Administrator Fees and Expenses....................... $ 25,000
Fees to Merrill Lynch........................................ $ 2,000,000
Legal Fees................................................... $ 950,000
Printing Costs............................................... $ 75,000
Appraisal Fees............................................... $ 250,000
Escrow Agent Fees............................................ $ 25,000
Filing Fees.................................................. $ 30,448
Interest..................................................... $ 4,000,000
Class Counsel's fees and expenses............................ $13,000,000
Reimbursement of Partnerships' Committee's fees.............. $ 100,000
Georgeson Shareholder Services, Inc.'s fees.................. $ 3,500
Miscellaneous................................................ $ 240,452
-----------
Total...................................................... $20,703,500
===========
</TABLE>
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<PAGE>
Solicitation of Consents
Pursuant to the terms of the Amendment to the Settlement Agreement, the
Defendants or their designees may solicit consents of the Unitholders. Any
costs incurred in connection with the solicitation of consents from
Unitholders will be paid by the Joint Venture. In addition to solicitation by
mail, the directors, officers and employees or designees of the Defendants may
solicit consents from Unitholders by telephone or facsimile or in person.
Arrangements may also be made with brokerage houses and other custodians,
nominees and fiduciaries for the forwarding of solicitation materials to the
beneficial owners of Units held of record by these persons, and the Joint
Venture will reimburse the custodians, nominees and fiduciaries for their
reasonable out-of-pocket expenses in connection therewith.
The General Partner may engage Georgeson Shareholder Services, Inc.
("Georgeson") to assist in the solicitation of consents to the Merger and the
Amendments. In the event Georgeson were to be engaged, the Joint Venture would
pay it a fee of approximately $3,500, plus reimbursement of various out-of-
pocket expenses, and would agree to indemnify Georgeson against any losses
arising out of Georgeson's consent soliciting services. It is estimated that
Georgeson would employ approximately five persons to solicit the consents of
Unitholders to the Merger and the Amendments.
10
<PAGE>
Questions and requests for assistance concerning (1) how to complete the
Consent Form or the Proof of Claim, (2) where to remit the Consent Form or the
Proof of Claim or (3) obtaining additional copies of this Purchase Offer and
Consent Solicitation, the Supplement, the Proof of Claim and the Consent Form
and other Purchase Offer and Consent Solicitation materials should be directed
to the Claims Administrator at its address and telephone number listed below.
You may also contact your broker, dealer, commercial bank, trust company or
other nominee for assistance concerning the Purchase Offer or the Merger.
Substantive questions concerning the Consent Form and the Proof of Claim
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. In addition, you may call Andrea Jacob
Morehouse at Host Marriott, L.P. at (301) 380-1735.
Facsimile copies of the BLUE Proof of Claim will be accepted. The GREEN
Consent Form, properly completed, dated and duly executed, may be returned to
the Claims Administrator in the enclosed envelope with pre-paid postage.
Facsimile copies of the GREEN Consent Form, properly completed, dated and duly
executed, will also be accepted. Consent Forms transmitted via facsimile will
be deemed to have been received and dated on the date they are actually
received by GEMISYS. 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 the address set forth below.
The Claims Administrator for the Purchase Offer and Consent Solicitation is:
GEMISYS Corporation
<TABLE>
<CAPTION>
By Mail, Hand or Overnight Delivery: Facsimile Transmission:
<S> <C>
Attention: Proxy Department 303-705-6171
7103 South Revere Parkway Telephone:
Englewood, CO 80112-9523 (800) 326-8222
</TABLE>
11
<PAGE>
CONSENT FORM
(may also be used to change your vote)
IF YOU PREVIOUSLY SUBMITTED A VALID CONSENT FORM AND DO NOT WISH TO
CHANGE YOUR VOTE, YOU NEED NOT RETURN THIS CONSENT FORM!
THIS WRITTEN CONSENT IS SOLICITED BY THE GENERAL PARTNER OF COURTYARD BY
MARRIOTT LIMITED PARTNERSHIP FOR ACTION BY WRITTEN CONSENT OF LIMITED PARTNERS
TO BE EFFECTIVE AS SET FORTH IN THE SUPPLEMENT TO THE PURCHASE OFFER AND
CONSENT SOLICITATION ACCOMPANYING THIS CONSENT FORM.
The undersigned, with respect to each unit of limited partnership interest
in Courtyard by Marriott Limited Partnership (the "Partnership") held of
record by the undersigned on August 2, 2000, hereby sets forth his, her or its
vote in connection with the written consents solicited by the General Partner
of the Partnership as described in the Purchase Offer and Consent Solicitation
dated August 7, 2000, as supplemented by the Supplement thereto dated
September 26, 2000. You are encouraged to indicate your vote by marking the
appropriate boxes below. Failure to check any of the boxes with respect to the
proposed authorization will, if this consent card has been signed and dated,
constitute a vote "FOR" the proposed authorization. Please sign and date this
card. A postage-paid return envelope is enclosed for your convenience in
returning this form.
You only need to complete, date and sign this Consent Form if: (1) you have
not yet submitted a Consent Form and now wish to vote on the Merger and the
Amendments to the Partnership Agreement, or (2) you have previously submitted
a valid Consent Form but now wish to change your vote. You do not need to
complete or return this Consent Form if you previously submitted a valid
Consent Form and you do not wish to change your vote.
Please check the following box if you are submitting this Consent Form
because you have previously submitted a Consent Form and now wish to change
your vote: [_]
Authorization of the General Partner's grant of consent on behalf of the
Partnership to:
(1) the proposed Merger as described in the Purchase Offer and Consent
Solicitation Statement dated August 7, 2000, as supplemented by the
Supplement thereto dated September 26, 2000:
FOR [_] AGAINST [_] ABSTAIN [_]
(2) the following proposed amendments to the Partnership Agreement as
described in the Purchase Offer and Consent Solicitation Statement dated
August 7, 2000, as supplemented by the Supplement thereto dated September
26, 2000:
(a) The proposed amendment to Section 7.01B of the Partnership Agreement:
FOR [_] AGAINST [_] ABSTAIN [_]
(b) The proposed amendment to Section 7.01A of the Partnership Agreement:
FOR [_] AGAINST [_] ABSTAIN [_]
(c) The proposed amendments to Sections 4.05 and 4.07 of the Partnership
Agreement:
FOR [_] AGAINST [_] ABSTAIN [_]
(d)The proposed amendment to Section 5.01C of the Partnership Agreement:
FOR [_] AGAINST [_] ABSTAIN [_]
Dated: , 2000 _______________________________________
(SIGNATURE(S) OF LIMITED PARTNERS(S))
(NOTE: Please sign exactly as your
name or names appear on the label. If
more than one name appears, all
persons so designated should sign.
When signing in a representative
capacity, please give your full
title.)
