<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
(Name of Subject Company)
SV FAIRFIELD II, L.L.C.
(Bidder)
ASSIGNED LIMITED PARTNERSHIP INTERESTS
(Title of Class of Securities)
NONE
(CUSIP Number of Class of Securities)
JUDITH D. FRYER, ESQ.
GREENBERG, TRAURIG, HOFFMAN
LIPOFF, ROSEN & QUENTEL
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
(212) 801-9200
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
CALCULATION OF FILING FEE
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TRANSACTION VALUATION(*) AMOUNT OF FILING FEE
<S> <C>
$9,000,000 $1,800
--------- -----
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(*) For purposes of calculating the filing fee only. This amount assumes
the purchase of 22,500 units of Assigned Limited Partnership Interests
("Units") of the subject company at $400 in cash per Unit.
/ / CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY RULE
0-11(a)(2) AND IDENTIFY THE FILING WITH WHICH THE OFFSETTING FEE WAS
PREVIOUSLY PAID. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT
NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
Amount Previously Paid: __________ Filing Party: __________
Form or Registration No.: __________ Date Filed: __________
(CONTINUED ON FOLLOWING PAGE(S))
(Page 1 of 6 Pages)
<PAGE> 2
CUSIP NO. NONE 14D-1 PAGE 2 OF 6 PAGES
-------------
(1) Names of Reporting Persons SV FAIRFIELD II, L.L.C.
-------------------------------------------
S.S. or I.R.S. Identification Nos. of Above Persons 06-1439119
------------------
(2) Check the Appropriate Box if a Member of a Group (a) / /
(b) / /
(3) SEC Use Only
---------------------------------------------------------
(4) Source of Funds AF;WC
------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(e) or 2(f) / /
(6) Citizenship or Place of Organization CONNECTICUT
---------------------------------
(7) Aggregate Amount Beneficially Owned by Each Reporting
Person 0 UNITS
---------------------------------------------------------------
(8) Check if the Aggregate Amount in Row (7) Excludes Certain Shares
/ /
(9) Percent of Class Represented by Amount in Row (7) 0.0%
--------------------
(10) Type of Reporting Person OO
---------------------------------------------
<PAGE> 3
ITEM 1. SECURITY AND SUBJECT COMPANY.
(A). The name of the subject limited partnership is Scottsdale
Land Trust Limited Partnership, a Delaware limited partnership (the
"Partnership"), which has its principal executive offices at The Perimeter
Center, 17207 North Perimeter Drive, Scottsdale, Arizona 85255. Capitalized
terms used in this Schedule 14D-1 and not defined herein shall have the meanings
set forth in the Offer to Purchase, dated November 22, 1996 (the "Offer to
Purchase"), annexed hereto as Exhibit (a)(1).
(B). The information set forth in "INTRODUCTION" of the Offer
to Purchase is incorporated herein by reference.
(C). The information set forth in "THE OFFER -- Effects of the
Offer -- Effect on Trading Market; Registration Under 12(g) of the Exchange Act"
and "-- Background of the Offer -- Trading History of Units" of the Offer to
Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
The information set forth in "INTRODUCTION" and "THE OFFER --
Certain Information Regarding the Purchaser, SCG and SOF L.P." of the Offer
to Purchase is incorporated herein by reference.
(E) AND (F). During the last five years, neither SV Fairfield
II, L.L.C. (the "Purchaser"), SCG Investors II, L.L.C. ("SCG"), the managing
member of the Purchaser, Starwood Opportunity Fund IV, L.P. ("SOF L.P."), the
other member of the Purchaser, Barry S. Sternlicht ("Sternlicht"), the managing
member of SCG, nor any other members of SCG or any person or persons
ultimately in control of any of the foregoing members has (i) been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and, as a result of such proceeding, was or is subject to
a judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS
WITH THE SUBJECT COMPANY.
(A) AND (B). The information set forth in "THE OFFER --
Certain Information Regarding the Purchaser, SCG and SOF L.P." and
"-- Background of the Offer" of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(A) AND (B). The information set forth in "INTRODUCTION" and
"THE OFFER -- Source of Funds" of the Offer to Purchase is incorporated herein
by reference.
(C). Not Applicable.
(Page 3 of 6 Pages)
<PAGE> 4
ITEM 5. PURPOSE OF THE TENDER OFFER AND
PLANS OR PROPOSALS OF THE BIDDER.
(A)-(G). The information set forth in "INTRODUCTION," "THE
OFFER -- Effects of the Offer," "-- Future Plans of the Purchaser," and "--
Conflicts of Interest" of the Offer to Purchase is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(A) AND (B). The information set forth in "INTRODUCTION" and
"THE OFFER -- Certain Information Regarding the Purchaser, SCG and
SOF L.P." of the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in "THE OFFER -- Certain Information
Regarding the Purchaser, SCG and SOF L.P." of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "THE OFFER -- Fees and Expenses"
of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in "THE OFFER -- Certain Information
Regarding the Purchaser, SCG and SOF L.P." of the Offer to Purchase is
incorporated herein by reference.
The incorporation by reference herein of the above-referenced
financial information does not constitute an admission that such information is
material to a decision by a Unitholder whether to sell, tender or hold Units
being sought in this tender offer.
ITEM 10. ADDITIONAL INFORMATION.
(A). The information set forth in "THE OFFER -- Certain
Information Regarding the Purchaser, SCG and SOF L.P.," and "-- Background
of the Offer" of the Offer to Purchase is incorporated herein by reference.
(B)-(D). The information set forth in "THE OFFER -- Certain
Legal Matters" of the Offer to Purchase is incorporated herein by reference.
(E). None.
(F). Reference is hereby made to the Offer to Purchase and the
related Assignment of Limited Partnership Units, copies of which are attached
hereto as Exhibits (a)(1) and (a)(2), respectively, and which are incorporated
herein in their entirety by reference.
(Page 4 of 6 Pages)
<PAGE> 5
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(A)(1). Offer to Purchase, dated November 22, 1996.
(A)(2). Form of Assignment of Limited Partnership Units.
(A)(3). Letter to Unitholders, dated November 22, 1996.
(B)-(D). None.
(E)-(F). Not Applicable.
(Page 5 of 6 Pages)
<PAGE> 6
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: November 22, 1996. SV FAIRFIELD II, L.L.C.
(BIDDER)
By: SCG Investors II, L.L.C.
(Managing Member)
By: /s/ Barry S. Sternlicht
-------------------------------------
Barry S. Sternlicht, Managing Member
(Page 6 of 6 Pages)
<PAGE> 7
EXHIBIT INDEX
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<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
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(a)(1) Offer to Purchase, dated November 22, 1996
(a)(2) Form of Assignment of Limited Partnership Units
(a)(3) Letter to Unitholders, dated November 22, 1996
(b) None
(c) None
(d) None
(e) Not Applicable
(f) Not Applicable
</TABLE>
<PAGE> 1
Offer to Purchase for Cash
Up to 22,500 Assigned Limited Partnership Interests
in
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
for
$400 Net Per Unit
by
SV FAIRFIELD II, L.L.C.
- -------------------------------------------------------------------------------
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK TIME, ON FRIDAY, DECEMBER 20, 1996
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
IMPORTANT
SV Fairfield II, L.L.C., a Connecticut limited liability company (the
"Purchaser"), is offering to purchase up to 22,500 of the outstanding units of
assigned limited partnership interests ("Units") in Scottsdale Land Trust
Limited Partnership, a Delaware limited partnership (the "Partnership"), at a
purchase price of $400 per Unit (the "Purchase Price"), net to the seller in
cash, without interest, upon the terms and subject to the conditions set forth
in this Offer to Purchase and in the related Assignment of Limited Partnership
Units (which, together with any supplements or amendments, collectively
constitute the "Offer"). The Purchase Price is subject to adjustment under
certain circumstances, as described herein. UNITHOLDERS WHO TENDER THEIR UNITS
IN RESPONSE TO THE OFFER WILL NOT BE OBLIGATED TO PAY ANY COMMISSIONS OR
PARTNERSHIP TRANSFER FEES, WHICH EXPENSES WILL BE BORNE BY THE PURCHASER. The
22,500 Units sought pursuant to the Offer are believed to constitute 45% of the
total outstanding Units as of December 31, 1995. The Purchaser is an affiliate
of Starwood Capital Group, L.L.C. and is not affiliated with FFCA Management
Company Limited Partnership, the general partner of the Partnership (the
"General Partner").
Unitholders are urged to consider the following factors:
- The Purchaser is aware that two unaffiliated third parties
recently contacted Unitholders and each offered to purchase
less than 5% of the outstanding Units at a price of $150 per
Unit and $230 per Unit, respectively (the "Third Party
Offers"). The Purchase Price is higher than the Third Party
Offers.
- The Offer provides Unitholders with the ability to sell Units
immediately for cash, which opportunity might not otherwise be
available due to the limited secondary market which exists.
According to the information reported in Partnership Spectrum
for the most recent two-month period prior to the commencement
<PAGE> 2
of the Offer, only three trades of Units occurred during this
period. The Purchase Price approximates the weighted average
price paid for Units on the secondary market during this
period as reported in such publication. The published prices
do not reflect any commissions or fees which are customarily
paid in connection with the sale of Units on the secondary
market, or the fees customarily charged on the subsequent
transfer of such Units to the new owner. Unitholders will not
pay these commissions or fees if they tender their Units
pursuant to the Offer. Secondary market sales information is
probably not, however, a reliable basis upon which to measure
the value of the Units because of the limited activity in the
secondary market.
- No independent person has been retained by the Purchaser to
evaluate or render an opinion with respect to the Purchase
Price. The Purchase Price could be substantially less than the
net proceeds that could be realized from a current sale of the
Partnership's assets or that may be realized upon a future
liquidation of the Partnership. In addition, the General
Partner provided the Unitholders with a third party estimate,
as of December 31, 1995, that the indicated value per Unit
investment was $846.00 per Unit (the "Third Party Estimate"),
before distributions of $76.51 per Unit during 1996. The
Third Party Estimate does not necessarily reflect the fair
market value of a Unit, which may be higher or lower
depending on several factors, including liquidity of the
Units and external economic and market factors. The Third
Party Estimate also does not reflect the amount which a
Unitholder would ultimately receive if the Partnership were
liquidated. Such amount would likely be affected by several
factors, including the time required to effect a liquidation
of the Partnership's assets, the costs of effectuating such
a liquidation and the ability of the Partnership to realize
the full value of its assets as reflected in the Third Party
Estimate. The Purchaser makes no representation and expresses
no opinion as to the fairness or adequacy of the Purchase
Price.
- If the Purchaser is successful in acquiring a significant
number of Units pursuant to the Offer, the Purchaser will have
the right to direct the vote with respect to those Units and
thereby significantly influence all voting decisions with
respect to the Partnership, including decisions concerning
liquidation, amendments to the Partnership Agreement and
removal and replacement of the General Partner.
- The Purchaser is making the Offer with a view to making a
profit. Accordingly, there is a conflict between the desire of
the Purchaser to purchase Units at a low price and the desire
of Unitholders to sell their Units at a high price.
- Consummation of the Offer may limit the ability of Unitholders
to dispose of Units during the twelve-month period following
completion of the Offer.
The Offer is not conditioned upon financing or upon any minimum number
of Units being tendered.
ii
<PAGE> 3
Any Unitholder desiring to tender Units should complete and sign the
Assignment of Limited Partnership Units (or a facsimile thereof) in accordance
with the Instructions to the Assignment of Limited Partnership Units and mail or
deliver the signed Assignment of Limited Partnership Units, any and all
assignees' certificates evidencing ownership of the Units tendered (the
"Certificates") and the other documents required pursuant to the Assignment of
Limited Partnership Units to the Information Agent/Depositary. A Unitholder may
tender any or all of the Units owned by that Unitholder; provided, however, that
tenders of fractional Units will not be permitted, except by a Unitholder who is
tendering all of the Units owned by such Unitholder, and that tenders of Units
which will result in a Unitholder continuing as a Unitholder who holds fewer
than 10 Units will not be permitted (unless allowed under the Partnership
Agreement).
Questions and requests for assistance or for additional copies of this
Offer to Purchase and the Assignment of Limited Partnership Units may be
directed to the Information Agent/Depositary at the address and telephone
numbers set forth below and on the back cover of this Offer to Purchase. No
soliciting dealer fees or other payments to brokers for tenders are being paid
by the Purchaser.
----------------------
For More Information or for Further Assistance Please Call:
The Herman Group, Inc.
(800) 992-6211
November 22, 1996
iii
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
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PAGE
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INTRODUCTION.................................................................................................... 1
Some Factors to be Considered by Unitholders........................................................... 1
Potentially Adverse Aspects of the Offer for Unitholders...................................... 1
Potentially Beneficial Aspects for Unitholders of the Offer................................... 2
The Purchaser and Certain of its Affiliates............................................................ 4
The Purchaser's Reasons for the Offer.................................................................. 5
Source of Funds........................................................................................ 5
Certain Tax Considerations............................................................................. 5
Holding Period of Partnership Parcels; Alternatives.................................................... 5
Conditions............................................................................................. 5
Distributions.......................................................................................... 5
Outstanding Units...................................................................................... 6
THE OFFER....................................................................................................... 6
Section 1. Terms of the Offer; Expiration Date; Proration.............................................. 6
Section 2. Acceptance for Payment and Payment for Units................................................ 7
Section 3. Procedure for Tendering Units............................................................... 8
Valid Tender.................................................................................. 8
Signature Requirements........................................................................ 9
Delivery of Assignment of Limited Partnership Units........................................... 9
Assignment of Interests in Future Distributions............................................... 9
Appointment as Proxy; Power of Attorney....................................................... 9
Determination of Validity; Rejection of Units; Waiver of Defects; No
Obligation to Give Notice of Defects................................................. 11
Backup Federal Income Tax Withholding......................................................... 11
FIRPTA Withholding............................................................................ 11
Section 4. Withdrawal Rights........................................................................... 12
Section 5. Extension of Tender Period; Termination; Amendment.......................................... 12
Section 6. Certain Federal Income Tax Matters.......................................................... 13
General ..................................................................................... 13
Gain or Loss Generally........................................................................ 14
Unrealized Receivables and Certain Inventory.................................................. 15
Passive Activity Loss Limitation.............................................................. 15
Partnership Termination....................................................................... 16
Backup Withholding and FIRPTA Withholding..................................................... 16
Section 7. Effects of the Offer........................................................................ 17
Assignment of Interests in Future Distributions............................................... 17
Appointment as Proxy; Power of Attorney....................................................... 17
Limitations on Resales........................................................................ 18
Effect on Trading Market; Registration Under Section 12(g) of the
Exchange Act......................................................................... 19
Control of Unitholder Voting Decisions by Purchaser........................................... 19
</TABLE>
iv
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C> <C>
Section 8. Future Plans of the Purchaser............................................................... 20
Section 9. Certain Information Concerning the Partnership.............................................. 20
General ..................................................................................... 21
Selected Financial and Property-Related Data.................................................. 22
Additional Information........................................................................ 22
Section 10. Conflicts of Interest...................................................................... 22
Conflicting Interests......................................................................... 22
Voting by the Purchaser....................................................................... 23
Financing Arrangements........................................................................ 23
Section 11. Certain Information Regarding the Purchaser, SCG,
SOF L.P. and Capital....................................................................... 23
The Purchaser................................................................................. 23
SCG ..................................................................................... 24
SOF L.P. ..................................................................................... 24
Section 12. Source of Funds............................................................................ 25
Section 13. Background of the Offer.................................................................... 25
Relationship with the Partnership and the General Partner..................................... 25
Determination of Purchase Price............................................................... 26
Trading History of Units...................................................................... 26
Third Party Estimate.......................................................................... 27
Section 14. Conditions of the Offer.................................................................... 28
Section 15. Certain Legal Matters...................................................................... 30
General ..................................................................................... 30
Antitrust..................................................................................... 30
Margin Requirements........................................................................... 30
Section 16. Fees and Expenses.......................................................................... 30
Section 17. Miscellaneous.............................................................................. 30
SCHEDULE I - INFORMATION REGARDING THE MANAGER AND CERTAIN
OTHER MEMBERS AND OFFICERS OF SCG INVESTORS II, L.L.C.................................................. 32
</TABLE>
v
<PAGE> 6
To: Unitholders of
Scottsdale Land Trust Limited Partnership
INTRODUCTION
SV Fairfield II, L.L.C., a Connecticut limited liability company (the
"Purchaser") hereby offers to purchase up to 22,500 of the outstanding units of
assigned limited partnership interests (the "Units") of Scottsdale Land Trust
Limited Partnership (the "Partnership") at a purchase price of $400 per Unit
(the "Purchase Price"), net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in this Offer to Purchase and in
the related Assignment of Limited Partnership Units (which, together with any
supplements or amendments, collectively constitute the "Offer"). The Purchase
Price shall automatically be reduced by the aggregate amount of distributions
per Unit, if any, made by the Partnership to Unitholders from and including
November 18, 1996 through and including the Expiration Date (as defined in
Section 1). UNITHOLDERS WHO TENDER THEIR UNITS IN RESPONSE TO THE OFFER WILL NOT
BE OBLIGATED TO PAY ANY COMMISSIONS OR PARTNERSHIP TRANSFER FEES. The Purchaser
will pay all charges and expenses of The Herman Group, Inc. (the "Information
Agent/Depositary") and the Partnership in connection with the Offer. The Offer
is not conditioned upon financing or upon any minimum number of Units being
tendered. A Unitholder may tender any or all of the Units owned by that
Unitholder, subject to the restrictions set forth in Section 3.
Some Factors to be Considered by Unitholders. In considering the Offer,
Unitholders may wish to consider the following factors:
Potentially Adverse Aspects of the Offer for Unitholders
- PURCHASE PRICE DOES NOT EQUAL THE ANTICIPATED VALUE OF THE
PARTNERSHIP'S ASSETS OR THIRD PARTY VALUATION. No independent
person has been retained by the Purchaser to evaluate or
render an opinion with respect to the Purchase Price. The
Purchase Price could be substantially less than the net
proceeds that could be realized from a current sale of the
Partnership's Units or assets or that may be realized upon a
future liquidation of the Partnership. The general partner of
the Partnership provided the Unitholders with a third party
estimate as of December 31, 1995 that the indicated value per
Unit investment was $846.00 per Unit (the "Third Party
Estimate"), before distributions of $76.51 per Unit during
1996. The Third Party Estimate does not necessarily represent
the fair market value of a Unit nor the amount which a
Unitholder would ultimately receive if the Partnership were
liquidated. See Section 13. THE PURCHASER MAKES NO
REPRESENTATION AND
1
<PAGE> 7
EXPRESSES NO OPINION AS TO THE FAIRNESS OR ADEQUACY OF
THE PURCHASE PRICE.
- POTENTIAL VOTING POWER. If the Purchaser is successful in
acquiring a significant number of Units pursuant to the Offer,
the Purchaser will have the right (subject to certain
restrictions described in Sections 7 and 8) to vote those
Units and thereby significantly influence all voting decisions
with respect to the Partnership, including decisions
concerning liquidation, amendments to the Partnership
Agreement, and removal and replacement of the General Partner.
This means that (i) non-tendering Unitholders could be
prevented from taking action they desire but that the
Purchaser opposes and (ii) the Purchaser may be able to take
action desired by the Purchaser but opposed by the
non-tendering Unitholders.
- POTENTIAL CONFLICT OF INTEREST. As with any rational
investment decision, the Purchaser is making the Offer with a
view to making a profit. Accordingly, there is a conflict
between the desire of the Purchaser to purchase Units at a low
price and the desire of the Unitholders to sell their Units at
a high price.
- LIMITATION ON RESALES OF UNITS. Consummation of the Offer may
limit the ability of Unitholders to dispose of Units during
the twelve-month period following completion of the Offer.
Potentially Beneficial Aspects for Unitholders of the Offer
- CASH. The Offer may be attractive to Unitholders who have an
immediate need for cash.
- SUPERIOR OFFER. The Purchaser is aware that two unaffiliated
third parties recently contacted Unitholders and each offered
to purchase less than 5% of the outstanding Units at a price
of $150 per Unit and $230 per Unit, respectively (the "Third
Party Offers"). THE PURCHASE PRICE IS SUBSTANTIALLY HIGHER
THAN THE PRICES OFFERED IN CONNECTION WITH SUCH THIRD PARTY
OFFERS.
- POSSIBLE HIGHER RETURN. The Purchaser is aware, based upon
publicly available information, that THE PARTNERSHIP HAS PAID
NO DISTRIBUTIONS TO UNITHOLDERS IN 1987, 1988, 1989, 1990,
1991, 1992, 1993, 1994 AND 1995, and that in 1996 the
Partnership has paid total distributions of $76.51 per Unit.
As a result, Unitholders who have held Units since their
issue by the Partnership have received cumulative
distributions of only $76.51 per Unit on their initial
investment of $1,000.00 per
2
<PAGE> 8
Unit. Accordingly, THE OFFER PRESENTS AN OPPORTUNITY FOR
UNITHOLDERS TO LIQUIDATE THEIR INVESTMENT IN THE PARTNERSHIP
AND REPLACE IT WITH AN INVESTMENT AFFORDING AN OPPORTUNITY FOR
A HIGHER RETURN.
- LIQUIDITY. The Annual Report on Form 10-K of the Partnership
for the year ended December 31, 1995 (the "Form 10-K") states
that "[d]uring 1995, there was no established public trading
market for the Units, and it is unlikely that an established
public trading market for Units will develop." Although there
are some limited resale mechanisms available to Unitholders
wishing to sell their Units, there is no formal trading market
for Units. Accordingly, THE OFFER AFFORDS UNITHOLDERS AN
IMMEDIATE OPPORTUNITY TO DISPOSE OF THEIR UNITS FOR CASH WHICH
OTHERWISE MIGHT NOT BE AVAILABLE TO THEM. In addition, the
Purchase Price approximates the weighted average price of
Units of the three trades on the secondary market reported by
Partnership Spectrum for the most recent period prior to the
commencement of the Offer. The published prices do not reflect
any commissions or fees which are customarily paid in
connection with the sale of Units on the secondary market or
the fees customarily charged on the subsequent transfer of
such Units to the new owner. Unitholders will not pay these
commissions or fees if they tender their Units pursuant to the
Offer. Secondary market sales information is probably not,
however, a reliable basis upon which to measure the value of
the Units because of the limited activity on the secondary
market.
- NO COMMISSIONS OR FEES. THE OFFER WILL PERMIT UNITHOLDERS TO
DISPOSE OF THEIR UNITS WITHOUT INCURRING SALES COMMISSIONS,
and in some instances other costs, typically associated with
transfers of Units arranged through brokers or other
intermediaries. Also, Unitholders who tender their Units will
not be required to pay the transfer fee typically imposed by
the Partnership to process transfers of Units. THE PURCHASER
WILL PAY ANY PARTNERSHIP TRANSFER FEES IMPOSED BY THE
PARTNERSHIP IN CONNECTION WITH UNITS PURCHASED PURSUANT TO THE
OFFER.
- REPLACE UNITS WITH LESS SPECULATIVE INVESTMENTS. Real estate
markets in the United States generally have recovered and
experienced an upward trend since the end of the last
recession. That recovery and upward trend might continue. On
the other hand, those markets also may be adversely affected
by a variety of factors, including possible fluctuations in
interest rates, economic slowdowns and overbuilding.
Accordingly, ownership of Units continues to be a speculative
investment. THE OFFER MAY PROVIDE UNITHOLDERS WITH THE
3
<PAGE> 9
OPPORTUNITY TO LIQUIDATE THEIR UNITS IN THE PARTNERSHIP AND
REPLACE THEM WITH INVESTMENTS THAT ARE LESS SPECULATIVE. On
the other hand, Unitholders who tender their Units will be
giving up the opportunity to participate in any potential
future benefits represented by the ownership of those Units,
including, for example, the right to participate in any future
distributions.
- UTILIZE LOSS FROM UNITS. A UNITHOLDER WHO SELLS 100% OF ITS
UNITS PURSUANT TO THE OFFER WILL NO LONGER BE SUBJECT TO THE
PASSIVE ACTIVITY LOSS LIMITATION WITH RESPECT TO "SUSPENDED"
LOSSES ATTRIBUTABLE TO THOSE UNITS AND, THEREFORE, WILL BE
ABLE TO UTILIZE FULLY ANY SUCH LOSSES.
- AVOID FILING TAX RETURNS. The Offer may be attractive to
Unitholders who wish to avoid in the future the expenses,
delays, and complications of filing Form K-1 personal income
tax returns which may be caused by ownership of Units. A sale
will also eliminate the inconvenience of reporting taxable
income and paying taxes on income without receiving
distributions, which has occurred in past years, albeit in
minimal amounts.
THE PURCHASER MAKES NO RECOMMENDATION TO ANY UNITHOLDER AS TO WHETHER
TO TENDER OR REFRAIN FROM TENDERING UNITS. EACH UNITHOLDER MUST MAKE ITS OWN
DECISION, BASED ON THE UNITHOLDER'S PARTICULAR CIRCUMSTANCES, AS TO WHETHER TO
TENDER UNITS AND, IF SO, HOW MANY UNITS TO TENDER. UNITHOLDERS SHOULD CONSULT
WITH THEIR RESPECTIVE ADVISORS ABOUT THE FINANCIAL, TAX, LEGAL AND OTHER
IMPLICATIONS OF ACCEPTING THE OFFER. UNITHOLDERS ARE URGED TO READ THIS OFFER TO
PURCHASE AND THE RELATED MATERIALS CAREFULLY AND IN THEIR ENTIRETY BEFORE
DECIDING WHETHER TO TENDER THEIR UNITS.
The Purchaser and Certain of its Affiliates. The Purchaser is a
recently formed Connecticut limited liability company, the managing member of
which is SCG Investors II, L.L.C. ("SCG"), also a recently formed Connecticut
limited liability company. Barry S. Sternlicht ("Sternlicht") is the managing
member of, and controlling interest holder in, SCG. The other members of SCG,
who also serve as officers, are Jonathan D. Eilian ("Eilian") and Madison F.
Grose ("Grose"). In addition to SCG, the other member of the Purchaser is
Starwood Opportunity Fund IV, L.P. ("SOF L.P."), a recently formed Delaware
limited partnership. The general partner of SOF L.P. is SOFI IV Management,
L.L.C. ("SOFI"), a recently formed Connecticut limited liability company, the
managing member of which is Starwood Capital Group, L.L.C. ("Capital"). The
President, Chief Executive Officer and General Manager of Capital, and the owner
of its controlling interest, is Sternlicht. Eilian and Grose are two other
members of Capital. The Purchaser is not affiliated with the General Partner of
the Partnership. See Section 11.
4
<PAGE> 10
The Purchaser's Reasons for the Offer. The Purchaser's purpose of
making the Offer is to acquire a substantial equity interest in the Partnership,
primarily for investment purposes and with a view to making a profit. Although
the number of Units being sought in the Offer will not give the Purchaser
absolute control over the Partnership, if the Purchaser is successful in
acquiring all or a substantial portion of the Units for which it is tendering,
it could be in a position to exercise significant influence over the outcome of
any vote by Unitholders. See Sections 7, 8 and 10.
Source of Funds. The Purchaser expects that $9,000,000 (exclusive of
fees and expenses) will be required to purchase all of the Units sought pursuant
to the Offer, if tendered. The Purchaser presently contemplates that it will
obtain all of such funds from capital contributions from SOF L.P., which has
capital and capital commitments in excess of $200,000,000, or from another
affiliate to which SOF L.P. may transfer its interests in the Purchaser.
Accordingly, the Offer is not conditioned upon the Purchaser obtaining
financing. See Sections 11 and 12.
Certain Tax Considerations. A sale by a Unitholder pursuant to the
Offer will result in taxable gain (or loss) equal to the excess (deficit) of the
amount realized by the Unitholder for the Units sold over such Unitholder's
adjusted tax basis in those Units. In the case of a Unitholder who is an
individual and who has held Units since their issue by the Partnership, the sale
is expected to result in a gain, a portion of which will be taxable as ordinary
income and the balance as a long-term capital gain. Unitholders who have
suspended "passive losses" from the Partnership or other passive activity
investments generally may deduct these losses up to the amount of gain from the
sale. A sale pursuant to the Offer of all of a Unitholder's Units will terminate
his or her investment in the Partnership and, commencing with the year following
the year of sale, the Unitholder will no longer receive Partnership tax
information or have to report the complicated tax information currently required
of Unitholders. See Section 6.
Holding Period of Partnership Parcels; Alternatives. The Partnership
was formed in August 1987. The prospectus dated June 14, 1988 estimated that
sales of parcels (other than the initial one sold to the General Partner of the
Partnership) would commence in 1990 and that all parcels would be sold within 15
years after the Partnership acquired its property. However, no parcels were sold
during 1987, 1988, 1989, 1990, 1991, 1992, 1993, 1994 and 1995. The first sale
of parcels commenced in 1996. Moreover, the Partnership Agreement provides that
the Partnership is not required to liquidate and dissolve until December 31,
2047.
Conditions. The Offer is not conditioned upon financing or upon any
minimum number of Units being tendered. Certain other conditions do apply,
however. See Section 14.
Distributions. The potential for future distributions, both from
operating cash flow and in connection with sales or financings of the
Partnership's parcels, was considered by the Purchaser when establishing the
Purchase Price. Unitholders who tender their Units in response to the Offer will
be entitled to receive any subsequent distributions made by the Partnership on
or prior to the Expiration Date, although any such distribution will result in a
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reduction of the Purchase Price, as described in Section 1. Tendering
Unitholders will not be entitled to receive any distributions in respect of
tendered Units purchased by the Purchaser pursuant to the Offer made after the
Expiration Date, regardless of the fact that the record date for any such
distribution may be a date prior to the Expiration Date. See Section 3.
Outstanding Units. According to the Form 10-K, there were 50,000 Units
issued and outstanding as of December 31, 1995, which as of March 1, 1996 were
held of record by approximately 3,139 Unitholders. An affiliate of the Purchaser
owns 80 Units.
THE OFFER
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE; PRORATION. Upon the
terms and subject to the conditions of the Offer (including, if the Offer is
extended or amended, the terms of any such extension or amendment), the
Purchaser will accept (and thereby purchase) up to 22,500 Units that are validly
tendered on or prior to the Expiration Date and not withdrawn in accordance with
the procedures set forth in Section 4. For purposes of the Offer, the term
"Expiration Date" means 12:00 Midnight, New York City time, on Friday, December
20, 1996, unless the Purchaser in its sole discretion shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as
extended by the Purchaser, shall expire. See Section 5 for a description of the
Purchaser's right to extend the period of time during which the Offer is open
and to amend or terminate the Offer.
THE PURCHASE PRICE SHALL AUTOMATICALLY BE REDUCED BY THE AGGREGATE
AMOUNT OF DISTRIBUTIONS PER UNIT, IF ANY, MADE BY THE PARTNERSHIP TO UNITHOLDERS
FROM AND INCLUDING NOVEMBER 18, 1996 THROUGH AND INCLUDING THE EXPIRATION DATE.
If, prior to the Expiration Date, the Purchaser increases the Purchase
Price offered to Unitholders pursuant to the Offer, the increased Purchase Price
will be paid for all Units accepted for payment pursuant to the Offer, whether
or not the Units were tendered prior to the increase in consideration.
If more than 22,500 Units are validly tendered in accordance with the
procedure specified in Section 3 and not properly withdrawn in accordance with
the procedures specified in Section 4 on or prior to the Expiration Date, the
Purchaser will, upon the terms and subject to the conditions of the Offer,
accept for payment and pay for an aggregate of 22,500 of the Units so tendered,
pro rata according to the number of Units validly tendered by each Unitholder
and not properly withdrawn on or prior to the Expiration Date. If the number of
Units validly tendered and not properly withdrawn on or prior to the Expiration
Date is less than or equal to 22,500 Units, the Purchaser will purchase all
Units so tendered and not withdrawn, upon the terms and subject to the
conditions of the Offer. Regardless of the total number of Units tendered, the
Purchaser will also make appropriate adjustments to avoid purchases of
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fractional Units, and to preclude any Unitholder who, after tendering some Units
continues to hold other Units, from retaining fewer than 10 Units, unless
otherwise permitted by the Partnership Agreement.
If the Purchaser extends the Offer, or if the Purchaser (whether before
or after its acceptance for payment of Units) is delayed in its payment for
Units or is unable to pay for Units pursuant to the Offer for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Information
Agent/Depositary may retain tendered Units and those Units may not be withdrawn
except to the extent that tendering Unitholders are entitled to withdrawal
rights as described in Section 4; subject, however, to the Purchaser's
obligation, pursuant to Rule 14e-l(c) under the Exchange Act, to pay Unitholders
the Purchase Price in respect of Units tendered or return those Units promptly
after termination or withdrawal of the Offer. Under no circumstances will
interest be paid on the Purchase Price by reason of any delay in making such
payment.
The Offer is conditioned on satisfaction of certain conditions, which
are set forth in full in Section 14, below. The Purchaser reserves the right
(but in no event shall be obligated), in its sole discretion, to waive any or
all of those conditions. If, on or prior to the Expiration Date, any or all of
the conditions have not been satisfied or waived, the Purchaser reserves the
right to (i) decline to purchase any of the Units tendered, terminate the Offer
and return all tendered Units to tendering Unitholders, (ii) waive all the
unsatisfied conditions and, subject to complying with applicable rules and
regulations of the Commission and with the other terms of the Offer, purchase
all Units validly tendered, (iii) extend the Offer and, subject to the right of
Unitholders to withdraw Units until the Expiration Date, retain the Units that
have been tendered during the period or periods for which the Offer is extended,
and (iv) amend the Offer.
The Purchaser currently possesses a list of Unitholders that was
previously provided to an affiliate of the Purchaser by the General Partner,
which list the Purchaser believes is current as of December 31, 1995. This Offer
to Purchase and the related Assignment of Limited Partnership Units will be
mailed by the Purchaser to the Unitholders shown on that list. The Purchaser is
aware, based upon information compiled by Partnership Spectrum, that
approximately 195 Units (or less than half of 1% of the total outstanding Units)
have been transferred during the period from December 31, 1995 through the
September 1996/October 1996 reporting period (the last period reported prior to
the commencement of the Offer). This Offer is being made to all current
Unitholders of the Partnership, and any Unitholder that has not received a copy
of this Offer to Purchase, the Assignment of Limited Partnership Units and
related documentation through the mail may obtain such documents, at the
Purchaser's expense, by written request to the Information Agent/Depositary at
the address and facsimile numbers set forth on the back cover of this Offer to
Purchase.
SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS. Upon the terms
and subject to the conditions of the Offer, the Purchaser will purchase by
accepting for payment and will pay for all Units validly tendered and not
withdrawn in accordance with the procedures specified in Section 4, as promptly
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as practicable following the Expiration Date. A tendering beneficial owner of
Units whose Units are owned of record by an Individual Retirement Account (IRA)
or other qualified plan will not receive direct payment of the Purchase Price;
rather, payment will be made to the custodian of such account or plan. In all
cases, payment for Units purchased pursuant to the Offer will be made only after
timely receipt by the Information Agent/Depositary of a properly completed and
duly executed Assignment of Limited Partnership Units (or facsimile thereof),
Certificates representing the Unitholder's interest in the Units tendered and
any other documents required by the Assignment of Limited Partnership Units. See
Section 3.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment pursuant to this Offer, and thereby purchased, validly
tendered Units if, as and when the Purchaser gives verbal or written notice to
the Information Agent/Depositary of the Purchaser's acceptance of those Units
for payment pursuant to the Offer. Upon the terms and subject to the conditions
of the Offer, payment for Units accepted for payment pursuant to the Offer will
be made by deposit of the Purchase Price with the Information Agent/Depositary,
which will act as agent for tendering Unitholders for the purpose of receiving
payments from the Purchaser and transmitting those payments to Unitholders whose
Units have been accepted for payment. Under no circumstances will interest on
the Purchase Price be paid, regardless of any extension of the Offer or any
delay in making such payment.
If any tendered Units are not purchased for any reason, the Assignment
of Limited Partnership Units with respect to such Units will be destroyed by the
Purchaser. If for any reason acceptance for payment of, or payment for, any
Units tendered pursuant to the Offer is delayed or the Purchaser is unable to
accept for payment, purchase or pay for Units tendered pursuant to the Offer,
then, without prejudice to the Purchaser's rights under Section 14, the
Information Agent/Depositary may, nevertheless, on behalf of the Purchaser
retain tendered Units, and those Units may not be withdrawn except to the extent
that the tendering Unitholders are entitled to withdrawal rights as described in
Section 4; subject, however, to the Purchaser's obligation under Rule 14e-l(c)
under the Exchange Act to pay Unitholders the Purchase Price in respect of Units
tendered or return those Units promptly after termination or withdrawal of the
Offer.
The Purchaser reserves the right to transfer or assign, in whole or
from time to time in part, to one or more of the Purchaser's affiliates, the
right to purchase Units tendered pursuant to the Offer, but any such transfer or
assignment will not relieve the Purchaser of its obligations under the Offer or
prejudice the rights of tendering Unitholders to receive payment for Units
validly tendered and accepted for payment pursuant to the Offer.
SECTION 3. PROCEDURE FOR TENDERING UNITS.
Valid Tender. In order for a tendering Unitholder to participate in the
Offer, its Units must be validly tendered and not withdrawn on or prior to the
Expiration Date. In order for Units to be validly tendered pursuant to the
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Offer, a properly completed and duly executed Assignment of Limited Partnership
Units (or facsimile thereof), Certificates evidencing ownership of the Units
tendered and any other documents required by the Assignment of Limited
Partnership Units must be received by the Information Agent/Depositary, at its
address set forth on the back cover of this Offer to Purchase, on or prior to
the Expiration Date. A Unitholder may tender any or all of the Units owned by
that Unitholder; provided, however, that tenders of fractional Units will not be
permitted, except by a Unitholder who is tendering all of the Units owned by
that Unitholder, and provided further that, unless otherwise permitted by the
Partnership Agreement, no Unitholder will be permitted to tender any number of
Units which will result in the Unitholder holding fewer than 10 Units following
the tender. No alternative, conditional or contingent tenders will be accepted.
Signature Requirements. If the Assignment of Limited Partnership Units
is signed by the registered holder of the Units and payment is to be made
directly to that holder, then no signature guarantee is required on the
Assignment of Limited Partnership Units. Similarly, if the Units are tendered
for the account of a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial
bank, savings bank, credit union, savings and loan association or trust company
having an office, branch or agency in the United States (each an "Eligible
Institution"), no signature guarantee is required on the Assignment of Limited
Partnership Units. However, in all other cases, all signatures on the Assignment
of Limited Partnership Units must be guaranteed by an Eligible Institution.
Delivery of Assignment of Limited Partnership Units. THE METHOD OF
DELIVERY OF THE ASSIGNMENT OF LIMITED PARTNERSHIP UNITS, CERTIFICATES EVIDENCING
OWNERSHIP OF THE UNITS TENDERED AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING UNITHOLDER AND DELIVERY WILL BE DEEMED MADE
ONLY WHEN ACTUALLY RECEIVED BY THE INFORMATION AGENT/DEPOSITARY. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
Assignment of Interests in Future Distributions. By executing and
delivering an Assignment of Limited Partnership Units, a tendering Unitholder
irrevocably assigns to the Purchaser and its assigns all of the right, title and
interest of such Unitholder in and to any and all distributions made by the
Partnership after the Expiration Date in respect of the Units tendered by such
Unitholder and accepted for payment by the Purchaser, regardless of the fact
that the record date for any such distribution may be on or prior to the
Expiration Date. The Purchaser will seek to be recognized by the Partnership as
a Unitholder upon consummation of the Offer.
Appointment as Proxy; Power of Attorney. By executing an Assignment of
Limited Partnership Units, a tendering Unitholder irrevocably appoints the
Purchaser, Capital, Sternlicht and their designees as the Unitholder's proxies
and attorneys-in-fact, in the manner set forth in the Assignment of Limited
Partnership Units, each with full power of substitution, to the full extent of
the Unitholder's rights with respect to the Units tendered by the Unitholder and
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accepted for payment by the Purchaser, including, without limitation, the right
to receive all benefits and otherwise exercise all rights of beneficial
ownership of such Units as a Unitholder of the Partnership, all in accordance
with the terms of the Offer. Each such proxy shall be considered coupled with an
interest in the tendered Units. Such appointment will be effective when, and
only to the extent that, the Purchaser accepts the tendered Units for payment.
Upon such acceptance for payment, all prior proxies given by the Unitholder with
respect to the Units will, without further action, be revoked, and no subsequent
proxies may be given (and if given will not be effective). The Purchaser, SCG,
Sternlicht and their designees will, as to those Units, be empowered to exercise
all voting and other rights of the Unitholder, including, but not limited to,
the right to direct the initial limited partner of the Partnership (the "Initial
Limited Partner") to vote the limited partnership interests relating to such
Units as such proxies, in their sole discretion, may deem proper at any meeting
of Unitholders or Limited Partners, 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 upon the Purchaser's
acceptance for payment of the Units, the Purchaser, SCG, Sternlicht and their
designees must be able to exercise fully the voting rights with respect to the
Units, including, without limitation, the power to direct the Initial Limited
Partner to vote the limited partnership interests relating to such Units as
they, in their sole discretion, may deem proper, at any meeting of Unitholders
or Limited Partners then scheduled or by written consent without a meeting or
otherwise.
By executing an Assignment of Limited Partnership Units a tendering
Unitholder also irrevocably constitutes and appoints the Purchaser, SCG,
Sternlicht and their designees as the Unitholder's attorneys-in-fact, each with
full power of substitution, to the full extent of the Unitholder's rights with
respect to the Units tendered by the Unitholder and accepted for payment by the
Purchaser. Such appointment will be effective when, and only to the extent that,
the Purchaser accepts the tendered Units for payment. Upon such acceptance for
payment, all prior powers of attorney granted by the Unitholder with respect to
such Units will, without further action, be revoked, and no subsequent powers of
attorney may be granted (and if granted will not be effective). Pursuant to such
appointment as attorneys-in-fact, the Purchaser, SCG, Sternlicht and their
designees each will have the power, among other things, (i) to seek to transfer
ownership of such Units on the Partnership books maintained by the General
Partner (and execute and deliver any accompanying evidences of transfer and
authenticity any of them may deem necessary or appropriate in connection
therewith), (ii) if the Units are held in an IRA, pension or similar account, to
contact the Unitholder's custodian(s) and/or trustee(s) and direct them to
facilitate the transfer of the Units from such account of the Unitholder to the
Purchaser, (iii) upon receipt by the Information Agent/Depositary (as the
tendering Unitholder's agent) of the Purchase Price, to become a registered
owner of Units, to receive any and all distributions made by the Partnership
after the Expiration Date, and to receive all benefits and otherwise exercise
all rights of beneficial ownership of such Units in accordance with the terms of
the Offer, (iv) to execute and deliver to the General Partner a change of
address form instructing the General Partner to send any and all future
distributions to which the Purchaser is entitled pursuant to the terms of the
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Offer in respect of tendered Units to the address specified in such form, and
(v) to endorse any check payable to or upon the order of a tendering Unitholder
representing a distribution to which the Purchaser is entitled pursuant to the
terms of the Offer, in each case on behalf of the tendering Unitholder. Such
Assignment of Limited Partnership Units shall also serve as a Letter of
Authorization directing the Unitholder's custodian(s) and/or trustee(s) to sign
any documents necessary to facilitate the transfer of Units being assigned
thereby as directed by the Purchaser, SCG, Sternlicht and their designees.
Determination of Validity; Rejection of Units; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Units pursuant to the Offer will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. The Purchaser
reserves the absolute right to reject any or all tenders of any particular Units
determined by it not to be in proper form or if the acceptance of or payment for
those Units may, in the opinion of the Purchaser's counsel, be unlawful. The
Purchaser also reserves the absolute right to waive or amend any of the
conditions of the Offer that it is legally permitted to waive as to the tender
of any particular Units and to waive any defect or irregularity in any tender
with respect to any particular Units of any particular Unitholder. The
Purchaser's interpretation of the terms and conditions of the Offer (including
the Assignment of Limited Partnership Units and the Instructions thereto) will
be final and binding. No tender of Units will be deemed to have been validly
made until all defects and irregularities have been cured or waived. Neither the
Purchaser, the Information Agent/Depositary nor any other person will be under
any duty to give notification of any defects or irregularities in the tender of
any Units or will incur any liability for failure to give any such notification.
Backup Federal Income Tax Withholding. To prevent the possible
application of backup federal income tax withholding of 31% with respect to
payment of the Purchase Price, a tendering Unitholder must provide the Purchaser
with the Unitholder's correct taxpayer identification number by completing the
Substitute Form W-9 included in the Assignment of Limited Partnership Units. See
the Instructions to the Assignment of Limited Partnership Units and Box A
therein.
FIRPTA Withholding. To prevent the withholding of federal income tax in
an amount equal to 10% of the amount of the Purchase Price plus Partnership
liabilities allocable to each Unit purchased, a tendering Unitholder must
complete the FIRPTA Affidavit included in the Assignment of Limited Partnership
Units certifying such Unitholder's taxpayer identification number and address
and that the Unitholder is not a foreign person. See the Instructions to the
Assignment of Limited Partnership Units and Box B therein.
A tender of Units pursuant to the procedure described above and the
acceptance for payment of such Units will constitute a binding agreement between
the tendering Unitholder and the Purchaser on the terms set forth in the Offer.
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SECTION 4. WITHDRAWAL RIGHTS. Tenders of Units pursuant to the Offer
are irrevocable, except that Units tendered pursuant to the Offer may be
withdrawn at any time on or prior to the Expiration Date and, unless already
accepted for payment by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after January 20, 1997. For withdrawal to be effective, a
written or facsimile transmission notice of withdrawal must be timely received
by the Information Agent/Depositary, at its address set forth on the back cover
of this Offer to Purchase. Any such notice of withdrawal must specify the name
of the person who tendered the Units to be withdrawn and must be signed by the
person(s) who signed the Assignment of Limited Partnership Units in the same
manner as the Assignment of Limited Partnership Units was signed. Any Units
properly withdrawn will be deemed not validly tendered for purposes of the
Offer. Withdrawn Units may be re-tendered, however, by following the procedures
described in Section 3 at any time prior to the Expiration Date.
If purchase of, or payment for, Units is delayed for any reason or if
the Purchaser is unable to purchase or pay for Units for any reason, then,
without prejudice to the Purchaser's rights under the Offer, tendered Units may
be retained by the Information Agent/Depositary and may not be withdrawn, except
to the extent that tendering Unitholders are entitled to withdrawal rights as
set forth in this Section 4; subject, however, to the Purchaser's obligation,
pursuant to Rule 14e-l(c) under the Exchange Act, to pay Unitholders the
Purchase Price in respect of Units tendered or return those Units promptly after
termination or withdrawal of the Offer.
All questions as to the validity and form (including time of receipt)
of notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. Neither the
Purchaser, the Information Agent/Depositary 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 failure to give any such notification.
SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT. The
Purchaser expressly reserves the right, in its sole discretion, at any time and
from time to time, (i) to extend the period of time during which the Offer is
open and thereby delay acceptance for payment of, and the payment for, any
Units, (ii) to terminate the Offer and not accept for payment any Units not
already accepted for payment or paid for, (iii) upon the occurrence of any of
the conditions specified in Section 14, to delay the acceptance for payment of,
or payment for, any Units not already accepted for payment or paid for, and (iv)
to amend the Offer in any respect (including, without limitation, by increasing
the consideration offered, increasing or decreasing the number of Units being
sought, or both). Notice of any such extension, termination or amendment will
promptly be disseminated to Unitholders in a manner reasonably designed to
inform Unitholders of such change in compliance with Rule 14d-4(c) under the
Exchange Act. In the case of an extension of the Offer, the extension will be
followed by a press release or public announcement which will be issued no later
than 9:00 a.m., New York City time, on the next business day after the scheduled
Expiration Date, in accordance with Rule 14e-l(d) under the Exchange Act.
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If the Purchaser extends the Offer, or if the Purchaser (whether before
or after its acceptance for payment of Units) is delayed in its payment for
Units or is unable to pay for Units pursuant to the Offer for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Information
Agent/Depositary may retain tendered Units and those Units may not be withdrawn
except to the extent that tendering Unitholders are entitled to withdrawal
rights as described in Section 4; subject, however, to the Purchaser's
obligation, pursuant to Rule 14e-l(c) under the Exchange Act, to pay Unitholders
the Purchase Price in respect of Units tendered or return those Units promptly
after termination or withdrawal of the Offer. Notwithstanding any such delay in
payment, no interest will be paid on the Purchase Price.
If the Purchaser makes a material change in the terms of the Offer or
the information concerning the Offer or waives a material condition of the
Offer, the Purchaser will extend the Offer and disseminate additional tender
offer materials to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act. The minimum period during which an offer must remain open
following a material change in the terms of the offer or information concerning
the offer will depend upon the facts and circumstances, including the relative
materiality of the change in the terms or information. In the Commission's view,
an offer should remain open for a minimum of five business days from the date
the material change is first published, sent or given to securityholders, and if
material changes are made with respect to information that approaches the
significance of price or the percentage of securities sought, a minimum of ten
business days may be required to allow for adequate dissemination to
securityholders and investor response. As used in this Offer to Purchase,
"business day" means any day other than a Saturday, Sunday or a federal holiday,
and consists of the time period from 12:01 a.m. through 12:00 Midnight, New York
City time.
SECTION 6. CERTAIN FEDERAL INCOME TAX MATTERS.
General. The following summary is a general discussion of certain of
the federal income tax consequences of a sale of Units pursuant to the Offer.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), applicable Treasury regulations thereunder, administrative rulings,
practice and procedures and judicial authority, all as of the date of the Offer.
All of the foregoing are subject to change, and any such change could affect the
continuing accuracy of this summary. In addition, the Purchaser does not have
access to tax information of the Partnership; consequently, the statements made
in this summary are subject to change based on a complete review of the
Partnership's records. This summary does not discuss all aspects of federal
income taxation that may be relevant to a particular Unitholder in light of such
Unitholder's specific circumstances or to certain types of Unitholders subject
to special treatment under the federal income tax laws (for example, foreign
persons, dealers in securities, banks, insurance companies and tax-exempt
organizations), nor (except as otherwise expressly indicated) does this summary
describe any aspect of state, local, foreign or other tax laws. Sales of Units
pursuant to the Offer will be taxable transactions for federal income tax
purposes, and also may be taxable transactions under applicable state, local,
foreign and other tax laws. EACH UNITHOLDER SHOULD CONSULT ITS OWN TAX ADVISOR
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AS OF THE PARTICULAR TAX CONSEQUENCES TO SUCH UNITHOLDER OF SELLING UNITS
PURSUANT TO THE OFFER.
Gain or Loss Generally. In general, a Unitholder will recognize gain or
loss on a sale of Units pursuant to the Offer equal to the difference between
(i) the Unitholder's "amount realized" on the sale and (ii) the Unitholder's
adjusted tax basis in the Units sold. Generally, a Unitholder's adjusted tax
basis with respect to an Unit equals its cost increased by the amount of income
and the amount of Partnership Liabilities (as determined under Code Section 752)
allocated to the Unit and decreased by (i) any distributions made with respect
to the Unit, (ii) the amount of deductions or losses allocated to the Unit and
(iii) any decrease in the amount of Partnership Liabilities (as determined under
Code Section 752) allocated to the Unit. Thus, the amount of a Unitholder's
adjusted tax basis in such Units will vary depending upon the Unitholder's
particular circumstances. The "amount realized" with respect to an Unit will be
a sum equal to the amount of cash received by the Unitholder for the Unit
pursuant to the Offer (that is, the Purchase Price) plus the amount of the
Partnership's liabilities allocable to the Unit (as determined under Code
Section 752). Unitholders who purchased their Units from the Partnership in the
original issue of the Units are expected to recognize taxable gain on the sale.
Most of the gain or loss recognized by a Unitholder on a sale of a Unit
pursuant to the Offer generally will be treated as a capital gain or loss, if
(as is generally expected to be the case) the Unit was held by the Unitholder as
a capital asset. That capital gain or loss will be treated as long-term capital
gain or loss if the tendering Unitholder's holding period for the Unit exceeds
one year. Under current law, long-term capital gains of individuals and other
non-corporate taxpayers are taxed at a maximum marginal federal income tax rate
of 28%, whereas the maximum marginal federal income tax rate for ordinary income
of such persons is 39.6%. Capital losses are deductible only to the extent of
capital gains, except that, subject to the passive activity loss limitations
discussed below, noncorporate taxpayers may deduct up to $3,000 of capital
losses in excess of the amount of their capital gains against ordinary income.
Excess capital losses generally can be carried forward to succeeding years (a
corporation's carryforward period is five years and a non-corporate taxpayer can
carry forward such losses indefinitely); in addition, a corporation is permitted
to carry back excess capital losses to the three preceding taxable years,
provided the carryback does not increase or produce a net operating loss for any
of those years.
On December 6, 1995, President Clinton vetoed a tax bill that would
have lowered the maximum capital gains rate to 19.8% and would have further
limited the use of capital losses to offset ordinary income by requiring two
dollars of long-term capital loss of an individual to offset every one dollar of
ordinary income. Although Congress may redraft the tax bill, it is unclear
whether or when a capital gain rate reduction or a capital loss limitation, if
any, will become effective.
A tendering Unitholder will be allocated a pro rata share of the
Partnership's taxable income or loss for the year of sale with respect to the
14
<PAGE> 20
Units sold in accordance with the provisions of the Partnership Agreement
concerning transfers of Units. Such allocation and any cash distributed by the
Partnership to the Unitholder for that year will affect the Unitholder's
adjusted tax basis in Units and, therefore, the amount of such Unitholder's
taxable gain or loss upon a sale of Units pursuant to the Offer.
Unrealized Receivables and Certain Inventory. If any portion of the
amount realized by a Unitholder is attributable to "unrealized receivables"
(which includes depreciation recapture, if any) or "substantially appreciated
inventory" as defined in Code Section 751, then a portion of the Unitholder's
gain or loss may be ordinary rather than capital. The Purchaser is not aware
that the Partnership has taken any significant amount of depreciation
deductions; nonetheless, a portion of the gain upon the sale of Units is
expected to be attributable to unrealized receivables. A Unitholder who tenders
Units must file an information statement with such Unitholder's federal income
tax return for the year of the sale which provides the information specified in
Treasury Regulation Section 1.751-l(a)(3). The selling Unitholder also must
notify the Partnership of the date of the transfer and the names, addresses and
tax identification numbers of the transferor(s) and transferee within 30 days of
the date of the transfer (or, if earlier, by January 15 of the following
calendar year).
Passive Activity Loss Limitation. Under Code Section 469, a
non-corporate taxpayer or personal service corporation generally can deduct
"passive losses" in any year only to the extent of the person's passive income
for that year. Closely held corporations (other than personal service
corporations) may offset such losses against active income as well as passive
activity income for that year. Substantially all post-1986 losses of Unitholders
from the Partnership are believed to be passive losses. Thus, Unitholders may
have "suspended" passive losses from the Partnership (i.e., post-1986 net
taxable losses in excess of statutorily permitted "phase-in" amounts and which
have not been used to offset income from other passive activities).
Substantially all gain from a sale of Units pursuant to the Offer will be
passive income.
If a Unitholder sells less than all of its Units pursuant to the Offer,
suspended passive losses can be currently deducted (subject to other applicable
limitations) to the extent of the Unitholder's passive income from the
Partnership for that year (including any gain recognized on the sale of Units)
plus any other passive income for that year. If, on the other hand, a Unitholder
sells 100% of its Units pursuant to the Offer, any "suspended" losses and any
losses recognized upon the sale of the Units will be offset first against any
other net passive gain to the Unitholder from the sale of the Units and any
other net passive activity income from other passive activity investments, and
the balance of any "suspended" net losses from the Units will no longer be
subject to the passive activity loss limitation and, therefore, will be
deductible by such Unitholder from its other income (subject to any other
applicable limitations). A tendering Unitholder must sell all of its Units to
receive these tax benefits. If more than 45% of the outstanding Units are
tendered, some tendering Unitholders may not be able to sell 100% of their Units
pursuant to the Offer because of proration of the number of Units to be
purchased by the Purchaser. See Section 1.
15
<PAGE> 21
Partnership Termination. Section 708(b) of the Code provides that a
partnership terminates for income tax purposes if there is a sale or exchange of
50% or more of the total interests in partnership capital and profits within a
twelve-month period (although successive transfers of the same interests within
a twelve-month period will be treated as a single transfer for this purpose).
Accordingly, it is possible that transfers of Units made pursuant to the Offer,
in combination with other transfers made within twelve months of the Offer, will
result in a termination of the Partnership. In the event of a termination, the
Partnership's tax year would close and the Partnership would be treated for
income tax purposes as if it had made a liquidating distribution of its assets
to the remaining partners and the new partners, followed by a recontribution of
the assets to a "new" partnership. Because the "new" partnership would be
treated as having acquired its assets on the date of the deemed recontribution,
a new depreciation recovery period would begin on such date, and the
Partnership's annual depreciation deductions, if any, over the next few years
could be reduced, and the Partnership could have greater taxable income (or less
tax loss) than if no tax termination occurred. In addition, depreciation, if
any, may be required to be allocated to those Unitholders that have a higher tax
basis, such as the Purchaser. A tax termination could also have the adverse
effect on non-tendering Unitholders who subsequently dispose of their Units at a
gain of requiring them to treat a greater portion of such gain as ordinary
income (due to the application of Code Section 735) than would otherwise be
required absent a tax termination of the Partnership. A tax termination will not
affect a Unitholder who sells all of his Units but will affect the taxation of a
Unitholder in respect of any Units retained after the date of the tax
termination. A tax termination of the Partnership will also terminate any
partnership in which the Partnership holds a majority interest (50% or more).
Provided there is not a tax termination of the Partnership, the
Purchaser does not anticipate that a Unitholder who does not tender Units will
realize any material tax consequences as a result of the election not to tender.
Although the Purchaser has access to certain public information compiled by
Partnership Spectrum concerning assignments of Units during the period from
December 31, 1995 through the September/October 1996 reporting period, such
information may not be complete and, therefore, the Purchaser cannot be certain
that the Partnership will not terminate for tax purposes as a result of sales
pursuant to the Offer. THE PURCHASER DOES NOT REPRESENT THAT A TAX TERMINATION
WILL NOT RESULT FROM THE OFFER OR FUTURE DIRECT OR INDIRECT TRANSFERS OF UNITS
TO OR BY THE PURCHASER.
Backup Withholding and FIRPTA Withholding. Unitholders (other than
tax-exempt persons, corporations and certain foreign individuals) who tender
Units may be subject to 31% backup withholding unless those Unitholders provide
a taxpayer identification number ("TIN") and certify that the TIN is correct or
properly certify that they are awaiting a TIN. A Unitholder may avoid backup
withholding by properly completing and signing the Substitute Form W-9 included
as part of the Assignment of Limited Partnership Units. If a Unitholder who is
subject to backup withholding does not properly complete and sign the Substitute
Form W-9, the Purchaser will withhold 31% from payments to such Unitholder.
16
<PAGE> 22
Gain realized by a foreign Unitholder on the sale of a Unit pursuant to
the Offer will be subject to federal income tax. Under Code Section 1445, the
transferee of an interest held by a foreign person in a partnership which owns
United States real property generally is required to deduct and withhold a tax
equal to 10% of the amount realized on the disposition. In order to comply with
this requirement, the Purchaser will withhold 10% of the amount realized by a
tendering Unitholder unless the Unitholder properly completes and signs the
FIRPTA Affidavit included as part of the Assignment of Limited Partnership Units
certifying the Unitholder's TIN, that such Unitholder is not a foreign person
and the Unitholder's address. Amounts withheld would be creditable against a
foreign Unitholder's federal income tax liability and, if in excess thereof, a
refund could be obtained from the Internal Revenue Service by filing a U.S.
income tax return.
SECTION 7. EFFECTS OF THE OFFER.
Assignment of Interests in Future Distributions. By executing and
delivering an Assignment of Limited Partnership Units, a tendering Unitholder
irrevocably assigns to the Purchaser and its assigns all of the right, title and
interest of such Unitholder in and to any and all distributions made by the
Partnership after the Expiration Date in respect of the Units tendered by such
Unitholder and accepted for payment by the Purchaser, regardless of the fact
that the record date for any such distribution may be a date on or prior to the
Expiration Date. The Purchaser will seek to be recognized by the Partnership as
a Unitholder upon consummation of the Offer.
Appointment as Proxy; Power of Attorney. By executing an Assignment of
Limited Partnership Units, a tendering Unitholder irrevocably appoints the
Purchaser, SCG, Sternlicht and their designees as the Unitholder's proxies and
attorneys-in-fact, in the manner set forth in the Assignment of Limited
Partnership Units, each with full power of substitution, to the full extent of
the Unitholder's rights with respect to the Units tendered by the Unitholder and
accepted for payment by the Purchaser, including, without limitation, the right
to receive all benefits and otherwise exercise all rights of beneficial
ownership of such Units as a Unitholder of the Partnership, all in accordance
with the terms of the Offer. Each such proxy shall be considered coupled with an
interest in the tendered Units. Such appointment will be effective when, and
only to the extent that, the Purchaser accepts the tendered Units for payment.
Upon such acceptance for payment, all prior proxies given by the Unitholder with
respect to the Units will, without further action, be revoked, and no subsequent
proxies may be given (and if given will not be effective). The Purchaser, SCG,
Sternlicht and their designees will, as to those Units, be empowered to exercise
all voting and other rights of the Unitholder, including, but not limited to,
the right to direct the Initial Limited Partner to vote the limited partnership
interests relating to such Units as such proxies, in their sole discretion, may
deem proper at any meeting of Unitholders or Limited Partners, 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,
17
<PAGE> 23
immediately upon the Purchaser's acceptance for payment of the Units, the
Purchaser, SCG, Sternlicht and their designees must be able to exercise fully
the voting rights with respect to the Units, including, without limitation,
the power to direct the Initial Limited Partner to vote the limited partnership
interests relating to such Units as they, in their sole discretion, may deem
proper at any meeting of Unitholders or Limited Partners then scheduled or by
written consent without a meeting or otherwise.
By executing an Assignment of Limited Partnership Units a tendering
Unitholder also irrevocably constitutes and appoints the Purchaser, SCG,
Sternlicht and their designees as the Unitholder's attorneys-in-fact, each with
full power of substitution, to the full extent of the Unitholder's rights with
respect to the Units tendered by the Unitholder and accepted for payment by the
Purchaser. Such appointment will be effective when, and only to the extent that,
the Purchaser accepts the tendered Units for payment. Upon such acceptance for
payment, all prior powers of attorney granted by the Unitholder with respect to
such Units will, without further action, be revoked, and no subsequent powers of
attorney may be granted (and if granted will not be effective). Pursuant to such
appointment as attorneys-in-fact, the Purchaser, SCG, Sternlicht and their
designees each will have the power, among other things, (i) to seek to transfer
ownership of such Units on the Partnership books maintained by the General
Partner (and execute and deliver any accompanying evidences of transfer and
authenticity any of them may deem necessary or appropriate in connection
therewith), (ii) if the Units are held in an IRA, pension or similar account, to
contact the Unitholder's custodian(s) and/or trustee(s) and direct them to
facilitate the transfer of the Units from such account of the Unitholder to the
Purchaser, (iii) upon receipt by the Information Agent/Depositary (as the
tendering Unitholder's agent) of the Purchase Price, to become a registered
owner of Units, to receive any and all distributions made by the Partnership
after the Expiration Date, and to receive all benefits and otherwise exercise
all rights of beneficial ownership of such Units in accordance with the terms of
the Offer, (iv) to execute and deliver to the General Partner a change of
address form instructing the General Partner to send any and all future
distributions to which the Purchaser is entitled pursuant to the terms of the
Offer in respect of tendered Units to the address specified in such form, and
(v) to endorse any check payable to or upon the order of a tendering Unitholder
representing a distribution to which the Purchaser is entitled pursuant to the
terms of the Offer, in each case on behalf of the tendering Unitholder. Such
Assignment of Limited Partnership Units shall also serve as a Letter of
Authorization directing the Unitholder's custodian(s) and/or trustee(s) to sign
any documents necessary to facilitate the transfer of Units being assigned
thereby as directed by the Purchaser, SCG, Sternlicht and their designees.
Limitations on Resales. The Partnership Agreement prohibits transfers
of Units if a transfer, when considered with all other transfers during the same
applicable twelve-month period, would cause a termination of the Partnership for
federal income tax purposes (which termination may occur when 50% or more of the
Units are transferred in a twelve-month period). This provision may limit sales
of Units on the secondary market and in private transactions for the
twelve-month period following completion of the Offer. The Purchaser attempted
to take this restriction into account in determining the number of Units for
which the Offer is made (representing approximately 45% of the outstanding Units
18
<PAGE> 24
if 22,500 Units are tendered) in order to permit some transfers to occur
following the transfers of Units pursuant to the Offer without violating this
prohibition. Although the Purchaser has access to certain public information
compiled by Partnership Spectrum concerning assignments of Units during the
period from December 31, 1995 through the September/October 1996 reporting
period, such information, however, may not be complete and, therefore, the
Purchaser cannot be certain that the Partnership will not terminate for tax
purposes as a result of sales pursuant to the Offer.
Effect on Trading Market; Registration Under Section 12(g) of the
Exchange Act. If a substantial number of Units are purchased pursuant to the
Offer, the result will be a reduction in the number of Unitholders. In the case
of certain kinds of equity securities, a reduction in the number of
securityholders might be expected to result in a reduction in the liquidity and
volume of activity in the trading market for the security. In this case,
however, there is no established public trading market for the Units and,
therefore, the Purchaser does not believe that a reduction in the number of
Unitholders will materially further restrict the Unitholders' ability to find
purchasers for their Units through secondary market transactions. See Section 13
for certain limited information regarding recent secondary market sales of the
Units.
The Units are registered under Section 12(g) of the Exchange Act, which
means, among other things, that the Partnership is required to file periodic
reports with the Commission and to comply with the Commission's proxy rules. The
Purchaser does not expect or intend that consummation of the Offer will cause
the Units to cease to be registered under Section 12(g) of the Exchange Act. If
the Units were to be held by fewer than 300 persons, the Partnership could apply
to de-register the Units under the Exchange Act. Because the Units are widely
held, however, the Purchaser expects that even if it purchases the maximum
number of Units in the Offer, the Units will continue to be held of record by
substantially more than 300 persons.
Control of Unitholder Voting Decisions by Purchaser. The Purchaser will
seek to be recognized by the Partnership as a registered owner of the Units upon
consummation of the Offer and, if admitted, will have the right (subject to
certain limitations described below) to direct the Initial Limited Partner with
respect to the voting of the limited partnership interests relating to the Units
purchased pursuant to the Offer. Even if the Purchaser is not recognized by the
Partnership as a registered owner of the Units, however, the Purchaser
nonetheless will have the right to direct the Initial Limited Partner to vote
the limited partnership interests (relating to the Units purchased in the Offer)
as the Purchaser, in its discretion, may deem appropriate pursuant to the
irrevocable appointment by tendering Unitholders of the Purchaser, SCG,
Sternlicht and their designees as proxies and attorneys-in-fact with respect to
the Units tendered by such Unitholders and accepted for payment by the
Purchaser. As a result, the Purchaser could be in a position to significantly
influence all voting decisions with respect to the Partnership. This could (i)
prevent non-tendering Unitholders from taking actions they desire but that the
Purchaser opposes and (ii) enable the Purchaser to take actions desired by the
Purchaser but opposed by non-tendering Unitholders. Under the Partnership
Agreement, Unitholders holding a majority of the Units are entitled to direct
actions with respect to a variety of matters, including: removal of a general
partner; dissolution of the Partnership; sale of all or substantially all of the
19
<PAGE> 25
Partnership's assets not in the ordinary course of business; and most types of
amendments to the Partnership Agreement. When voting on those matters, the
Purchaser will vote the Units owned by it in whatever manner it deems to be in
the Purchaser's best interest.
SECTION 8. FUTURE PLANS OF THE PURCHASER. The Purchaser is seeking to
acquire Units pursuant to the Offer in order to acquire a substantial equity
interest in the Partnership, primarily for investment purposes and with a view
to making a profit. The Purchaser intends to seek recognition by the Partnership
immediately following the consummation of the Offer as a registered owner with
respect to all of the Units purchased pursuant to the Offer. Following the
completion of the Offer, the Purchaser, and/or persons related to or affiliated
with it, may acquire additional Units. Any such acquisition may be made through
private purchases, through one or more future tender or exchange offers or by
any other means deemed advisable, may be at a price higher or lower than the
Purchase Price, and may be for cash or other consideration. In addition, the
Purchaser or an affiliate of the Purchaser may seek to acquire one or more of
the Partnership's parcels or property at some time in the future. The Purchaser
does not currently have any definitive plans in this regard, however.
There is a substantial possibility that the Purchaser will sell or
otherwise transfer some or all of the Units it acquires pursuant to the Offer
within the next year, either directly or in connection with a merger or other
extraordinary transaction involving the Purchaser and one or more of its
affiliates, depending among other things on liquidity, strategic, tax and other
considerations applicable to the Purchaser, SCG, Sternlicht and their
affiliates. It is also possible that the Purchaser could seek to sell additional
interests in the Purchaser to affiliates or to unaffiliated third parties,
although neither the Purchaser, SCG nor Sternlicht has any definitive plans in
this regard.
Neither the Purchaser, SCG nor Sternlicht has any present plans or
intentions with respect to a liquidation, sale of assets or refinancing of any
of the Partnership's properties, nor do they presently intend to change the
current management or the operations of the Partnership or to seek to cause the
Partnership to engage in any extraordinary transaction. However, the
Purchaser's, SCG's or Sternlicht's plans in these regards could change at any
time in the future and, at such time, the ability of the Purchaser to influence
actions on which Unitholders are entitled to direct the vote will depend in part
on the Unitholders' response to this Offer.
SECTION 9. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP.
Except as otherwise indicated, information contained in this Section 9
is based upon documents and reports publicly filed by the Partnership with the
Commission. Although the Purchaser is not aware that any statements
contained in this Section 9 are untrue, the Purchaser cannot take responsibility
for the accuracy or completeness of any information contained in this Section 9
20
<PAGE> 26
which is derived from such public documents, or for any failure by the
Partnership to disclose events which may have occurred and may affect the
significance or accuracy of any such information but which are unknown to the
Purchaser.
General. The Partnership was organized in 1987 under the laws of the
State of Delaware. Its principal executive offices are located at The Perimeter
Center, 17207 North Perimeter Drive, Scottsdale, Arizona 85255. Its telephone
number is (602) 585-4500.
The Partnership's primary business is real estate ownership and related
operations. The Partnership was organized to (i) acquire approximately 261 gross
acres of unimproved land (the "Property") in Scottsdale, Arizona, (ii) develop
roads, water, sewer, drainage, utility and similar on-site and off-site
improvements (collectively, the "Infrastructure") with respect to the Property,
(iii) sell the Property on a parcel-by-parcel basis after construction of the
Infrastructure and (iv) make a participating, first mortgage loan to Franchise
Finance Corporation of America ("FFCA"), a Delaware corporation, which is an
affiliate of the General Partner of the Partnership, thereby enabling FFCA to
acquire a parcel of land within the Property and construct an office building
thereon. Under the Partnership Agreement, the term of the Partnership will
continue until December 31, 2047, unless sooner terminated as provided in the
Partnership Agreement or by law. According to the Form 10-K and the quarterly
report on Form 10-Q for the quarter ended September 30, 1996 ("Form 10-Q"), as
of September 30, 1996 the Partnership had completed the Infrastructure and had
sold its first two parcels to unaffiliated purchasers.
Selected Financial and Property-Related Data. Set forth below is a
summary of certain financial and statistical information with respect to the
Partnership and its property, all of which has been excerpted or derived from
the Partnership's Form 10-K and the Partnership's Form 10-Q. More comprehensive
financial and other information is included in such reports and other documents
filed by the Partnership with the Commission, and the following summary is
qualified in its entirety by reference to such reports and other documents and
all the financial information and related notes contained therein.
21
<PAGE> 27
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Nine Months
Ended Fiscal Year Ended December 31,
September 30,
------------------------------------------------------------------------------------
Statement of Operations Data: 1996 1995 1995 1994 1993 1992 1991
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $4,757,914 $690,543 $920,426 $892,589 $889,361 $927,138 987,840
Net Income (Loss) 1,610,817 35,419 46,044 153,430 (407,529) (599,703) (756,036)
Net Income (Loss) Per Limited 32.22 .70 .91 3.04 (8.07) (11.87) (14.97)
Partnership Unit
Distributions to Limited Partners 3,825,604 -- -- -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
As of September 30, Fiscal Year Ended December 31,
---------------------------------------------------------------------------------------------------------
Balance Sheet Data: 1996 1995 1995 1994 1993 1992 1991
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Total Assets $39,870,445 $41,957,560 $42,024,785 $41,989,599 $41,858,418 $42,445,522 $42,905,465
</TABLE>
Additional Information. The Partnership is subject to the informational
requirements of the Exchange Act and accordingly is required to file
reports and other information with the Commission relating to its business,
financial results and other matters. Such reports and other documents may be
examined and copies may be obtained from the offices of the Commission at 450
Fifth Street, N.W., Washington, D.C 20549, and at the regional offices of the
Commission located in the Northwestern Atrium Center, 500 Madison Street, Suite
1400, Chicago, Illinois 60661, and 7 World Trade Center, New York, New York
10048. Copies should be available by mail upon payment of the Commission's
customary charges by writing to the Commission's principal offices at 450 Fifth
Street, N.W., Washington, D.C. 20549. Such reports may also be accessed on the
World Wide Web through the Commission's Internet address at
"http://www.sec.gov."
SECTION 10. CONFLICTS OF INTEREST. The Purchaser has conflicts of
interest with respect to the Offer as set forth below.
Conflicting Interests. The Purchaser is making the Offer with a view to
making a profit. Accordingly, there is a conflict between the desire of the
Purchaser to purchase Units at a low price and the desire of the Unitholders to
sell their Units at a high price.
22
<PAGE> 28
Voting by the Purchaser. The Purchaser will seek to be recognized by
the Partnership as a registered Unitholder upon consummation of the Offer. Even
if the Purchaser is not recognized by the Partnership as a registered
Unitholder, however, the Purchaser nonetheless will have the right to direct the
Initial Limited Partner to vote the limited partnership interests relating to
the Units purchased in the Offer as the Purchaser, in its discretion, may deem
appropriate pursuant to the irrevocable appointment by tendering Unitholders of
the Purchaser, SCG, Sternlicht and their designees as proxies and
attorneys-in-fact with respect to the Units tendered by such Unitholders and
accepted for payment by the Purchaser. As a result, if the Purchaser is
successful in acquiring a significant number of Units pursuant to the Offer, the
Purchaser will have the right (subject to certain limitations described in
Sections 7 and 8) to direct the vote with respect to those Units and thereby
significantly influence all voting decisions with respect to the Partnership,
including decisions concerning removal of a General Partner; dissolution of the
Partnership; sale of all or substantially all of the Partnership's assets not in
the ordinary course; and most types of amendments to the Partnership Agreement.
This means that (i) non-tendering Unitholders could be prevented from taking
actions they desire but that the Purchaser opposes and (ii) the Purchaser may be
able to take actions desired by the Purchaser but opposed by the non-tendering
Unitholders.
Financing Arrangements. The Purchaser expects that $9,000,0000
(exclusive of fees and expenses) would be required to purchase the Units sought
pursuant to the Offer, if tendered. The Purchaser presently contemplates that it
will obtain all of such funds from a capital contribution from SOF L.P., which
has subscribed for 99.5% of the Purchaser's interests, or from an affiliate to
which SOF L.P. may transfer such interests in the future. SOF L.P. has capital
and capital commitments in excess of $200,000,000. Accordingly, the Offer is not
conditioned upon the Purchaser obtaining financing. See Sections 11 and 12. It
is possible, however, that in connection with its future financing activities,
the Purchaser could pledge the Units it purchases pursuant to the Offer as
collateral for loans, or otherwise agree to terms which provide the Purchaser
with incentives to generate substantial near-term cash flow from the Purchaser's
investment in the Units. This could be the case, for example, if a loan has a
"bullet" maturity after a relatively short time or bears a high or increasing
interest rate. In such a situation, the Purchaser may experience a conflict of
interest in seeking to reconcile the best interests of the Partnership with the
Purchaser's potential need for cash flow from the Partnership's activities. The
partnership agreement of the Purchaser does not prohibit or otherwise limit the
Purchaser's ability to borrow money or to pledge the purchased Units as
collateral for any loan.
SECTION 11. CERTAIN INFORMATION REGARDING THE PURCHASER, SCG,
SOF L.P. AND CAPITAL.
The Purchaser. The Purchaser is a recently formed Connecticut limited
liability company which has not been actively engaged in any business activity
other than in connection with the Offer. The Purchaser does not have any
significant liabilities at the present time, and the Purchaser does not
presently anticipate that it will have any significant liability after the
consummation of the Offer. The Purchaser is an affiliate of Starwood Capital
23
<PAGE> 29
Group I, L.P. and is not affiliated with the General Partner of the
Partnership. Set forth below is certain unaudited financial information with
respect to the Purchaser. The Purchaser has not prepared audited financial
statements in the ordinary course of its business (and does not intend to do so
in the future); accordingly, audited financial statements of the Purchaser were
not available or obtainable without unreasonable expense.
SV FAIRFIELD II, L.L.C.
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
As of November 22, 1996
ASSETS
<S> <C>
Cash................................................................. $ 500,000
Due from Subscribing Member(1)....................................... $9,000,000
Total Assets......................................................... $9,500,000
LIABILITIES AND PARTNERS' CAPITAL
Liabilities.......................................................... $ --
Partners' Capital.................................................... $9,500,000
Total Liabilities and Members' Capital............................... $9,500,000
- ------------------------
<FN>
(1) Represents the cash contribution due to the Purchaser pursuant to a promissory note for up to $9,000,000 from SOF L.P., which
contribution will be payable upon the consummation of the Offer in an amount sufficient to purchase the Units to be acquired
pursuant to the Offer.
</TABLE>
The principal executive offices of the Purchaser are located at Three
Pickwick Plaza, Suite 250, Greenwich, Connecticut 06830. The Purchaser does not
have any employees.
SCG. SCG is a recently formed, Connecticut limited liability company
and is not affiliated with the General Partner of the Partnership. SCG's only
significant asset is its 0.5% membership interest in the Purchaser, and it does
not presently have any liabilities. SCG is the managing member of the
Purchaser. The principal executive offices of SCG are located at Three Pickwick
Plaza, Suite 250, Greenwich, Connecticut 06830. For certain information
concerning Sternlicht, the managing member of SCG, and of certain other
officers and members of SCG, see Schedule I to this Offer to Purchase.
SOF L.P. SOF L.P. is a Delaware limited partnership and is not
affiliated with the General Partner of the Partnership. SOF L.P. owns a 99.5%
membership interest in the Purchaser. As of the date of this Offer, it has
capital and capital commitments of in excess of $200,000,000 and liabilities of
less than $10,000,000. The principal executive offices of SOF L.P. are located
at Three Pickwick Plaza, Suite 250, Greenwich, Connecticut 06830. The general
partner of SOF L.P. is SOFI, a Connecticut limited liability company whose
managing member is Capital, which is a Connecticut limited liability company.
Sternlicht is the managing member of, and controlling interest holder in,
Capital. For certain information concerning Sternlicht, see Schedule I to this
Offer to Purchase.
24
<PAGE> 30
Except as otherwise set forth in this Offer to Purchase, none of the
Purchaser, SCG, SOF L.P., SOFI, Capital, or, to the best of the Purchaser's
knowledge, any of the persons listed on Schedule I hereto, or any affiliate of
the foregoing, (i) beneficially owns or has a right to acquire any Units, (ii)
has effected any transaction in the Units within the past 60 days, or (iii) has
any contract, arrangement, understanding or relationship with any other person
with respect to any securities of the Partnership, including, but not limited
to, contracts, arrangements, understandings or relationships concerning the
transfer or voting thereof, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss or the giving or withholding
of proxies.
SECTION 12. SOURCE OF FUNDS. The Purchaser expects that $9,000,000
(exclusive of fees and expenses) will be required to purchase the Units sought
pursuant to the Offer, if tendered. The Purchaser presently contemplates that it
will obtain all of such funds from a capital contribution from SOF L.P., which
has subscribed for 99.5% of the Purchaser's interests, and in connection
therewith issued a promissory note in the amount of up to $9,000,000, payable
upon the consummation of the Offer in an amount sufficient to purchase the Units
to be acquired pursuant to the Offer. SOF L.P. has capital and capital
commitments of in excess of $200,000,000 and liabilities of less than
$10,000,000. SOF L.P. is permitted to assign its interest in the Purchaser to an
affiliate, but if it should do so, SOF L.P. will remain legally obligated under
its promissory note to the Purchaser to contribute the capital to be used for
the Offer. See Section 11. ACCORDINGLY, THE OFFER IS NOT CONDITIONED UPON THE
PURCHASER OBTAINING FINANCING.
SECTION 13. BACKGROUND OF THE OFFER.
Relationship with the Partnership and the General Partner. Earlier this
year, Starwood Lodging Trust, a real estate investment trust of which Sternlicht
is the Chairman of the Board and chief executive officer, purchased three hotels
from Guaranteed Hotel Investors, L.P., the general partner of which is an
affiliate of the General Partner of the Partnership, for a purchase price of
$73,250,000. Other than the foregoing transaction, (i) there have been no
transactions or business relationships which would be required to be disclosed
under the rules and regulations of the Commission between any of the Purchaser,
SCG, SOF L.P., SOFI, Capital, or, to the best of the Purchaser's knowledge, the
persons listed on Schedule I, on the one hand, and the Partnership or its
affiliates, on the other hand, and (ii) there have been no contacts,
negotiations or transactions between any of the Purchaser, SCG, SOF L.P., SOFI,
Capital, or, to the best of the Purchaser's knowledge, the persons listed on
Schedule I, on the one hand, and the Partnership or its affiliates, on the other
hand concerning a merger, consolidation or acquisition, a tender offer or other
acquisition of securities, or a sale or other transfer of assets.
25
<PAGE> 31
An affiliate of the Purchaser currently owns 80 Units of the
Partnership. Through such affiliate, the Purchaser became aware of (i) the first
Third Party Offer to purchase less than 5% of the outstanding Units at a price
of $150 per Unit, which Third Party Offer expired on October 6, 1996, and (ii)
the second Third Party Offer to purchase less than 5% of the outstanding Units
at a price of $250 per Unit, which Third Party Offer is due to expire on
December 6, 1996.
Determination of Purchase Price. In establishing the Purchase Price,
the Purchaser reviewed certain publicly available information, including, among
other things, the Partnership Agreement, as amended to date, and the
Partnership's Form 10-K and Forms 10-Q. The Purchaser also considered the
potential for future distributions by the Partnership, both from operating cash
flow and in connection with sales or financings of the Partnership's parcels.
Among the other quantitative and qualitative factors considered by the Purchaser
in establishing the Purchase Price were: (i) the absence of a significant number
of recent secondary market resales of the Units; (ii) the lack of liquidity of
an investment in the Partnership; (iii) the book value of the Units, and the
Third Party Estimate; (iv) the costs to the Purchaser associated with acquiring
the Units and completing the Offer; and (v) the administrative costs to the
Partnership from being publicly registered. The Purchaser relied on the real
estate experience of Capital, Sternlicht and their affiliates in owning,
operating, purchasing and selling properties of a similar nature when
establishing the Purchase Price.
NO INDEPENDENT PERSON HAS BEEN RETAINED BY THE PURCHASER TO EVALUATE OR
RENDER AN OPINION WITH RESPECT TO THE PURCHASE PRICE. THE PURCHASE PRICE COULD
BE SUBSTANTIALLY LESS THAN THE NET PROCEEDS THAT WOULD BE REALIZED FROM A
CURRENT SALE OF THE PARTNERSHIP'S ASSETS OR THAT MAY BE REALIZED UPON A FUTURE
LIQUIDATION OF THE PARTNERSHIP. THE PURCHASER MAKES NO REPRESENTATION AND
EXPRESSES NO OPINION AS TO THE FAIRNESS OR ACCURACY OF THE PURCHASE PRICE.
Trading History of Units. Secondary market sales activity for the
Units, have been limited and sporadic. Set forth in the table below are the high
and low sales prices of Units for the quarterly periods from November 1995 to
October 1996, as reported by Partnership Spectrum, an independent, third-party
source. The gross sales prices reported by Partnership Spectrum do not
necessarily reflect the net sales proceeds actually received by sellers of
Units, which typically are reduced by commissions and other secondary market
transaction costs to amounts less than the reported prices. The Purchaser does
not know how many Units have traded at either the high or the low sales prices
reported below, nor does the Purchaser know whether the information compiled by
Partnership Spectrum is accurate or complete. In addition, the Partnership is
authorized to charge transfer fees in connection with the transfer of Units.
26
<PAGE> 32
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
REPORTED SALES PRICES OF PARTNERSHIP UNITS
<TABLE>
<CAPTION>
total
number of
number units weighted
of trades trading volume traded trading high trading low average
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sept./Oct. 96 3 $12,210.00 30 $447.00 $375.00 $407.00
July/Aug 96 2 $11,174.75 25 $452.99 $438.00 $446.99
May/June 96 4 $26,784.55 65 $431.44 $365.00 $412.07
March/April 96 4 $27,025.05 65 $420.00 $410.00 $415.77
Jan/Feb 96 1 $4,200.00 10 $420.00 $420.00 $420.00
Nov/Dec 95 4 $30,550.50 75 $410.00 $395.07 $407.34
</TABLE>
The Purchaser believes that although secondary market sales information
probably is not a reliable measure of value because of the limited and
inefficient nature of the market for Units, this information may be relevant to
a Unitholder's decision whether to tender its Units pursuant to the Offer.
At present, privately negotiated sales and sales through intermediaries (e.g.,
through the trading system operated by Chicago Partnership Board, Inc., which
publishes sell offers by holders of Units) are the only means available to a
Unitholder to liquidate an investment in Units (other than the Offer and the
Third Party Offers) because the Units are not listed or traded on any national
securities exchange or quoted on any NASDAQ list or system.
Third Party Estimate. The General Partner on behalf of the Partnership
obtained from Cushman & Wakefield, Inc. an estimated indicated value per Unit as
of December 31, 1995 of $846.00 per Unit, which is the Third Party Estimate
referred to in the "INTRODUCTION." Deducting the distributions made to the
Unitholders during 1996 of $76.51 would reduce the estimated indicated value to
$769.49 per Unit.
The Third Party Estimate concluded that the market value as of December
31, 1995 of the fee simple and mortgagee's interests in the Property, taking
into account the effect of the FFCA mortgage note, was $41,000,000. It then took
into account information provided by the General Partner concerning the cash on
hand and net receivables, less other liabilities, and concluded that there was a
total valuation of $42,299,996 which it divided by the 50,000 outstanding Units,
giving an indicated value per Unit of $846.00. Their opinion is subject to
certain assumptions and limiting conditions which were not disclosed in the Form
10-K. They relied on the "income approach" to value (reportedly based on the
properties' capabilities to be bought and sold in the investment marketplace)
and on the "sales comparison approach" (reportedly based on the sales of office
sites in the area). Because the complete valuation, including the assumptions
and limiting conditions have not been publicly disclosed, the Purchaser could
not evaluate the reasonableness of the factors upon which the Third Party
27
<PAGE> 33
Estimate is based. However, the Third Party Estimate appears to approximate book
value and does not necessarily reflect the fair market value of a Unit, which
may be higher or lower depending on several factors, including liquidity of the
Units and external economic and market factors. The Third Party Estimate also
does not reflect the amount which a Unitholder would ultimately receive if the
Partnership were liquidated. Such amount would likely be affected by several
factors, including the time required to effect a liquidation of the
Partnership's assets and the ability of the Partnership to realize the full
value of its assets as reflected in the Third Party Estimate.
SECTION 14. CONDITIONS OF THE OFFER. Notwithstanding any other term of
the Offer, the Purchaser will not be required to accept for payment or to pay
for any Units tendered if (i) the Purchaser has reason to believe that upon the
purchase of Units pursuant to the Offer, the General Partner will not recognize
as valid or effective the transfer to the Purchaser of the Units tendered
pursuant to the Offer, will not admit the Purchaser to the Partnership as a
recognized Unitholder simultaneously with or promptly after the consummation of
the Offer or will not permit the Purchaser to exercise the proxies granted to
the Purchaser by tendering Unitholders, or (ii) all authorizations, consents,
orders or approvals of, or declarations or filings with, or expirations of
waiting periods imposed by, any court, administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign, necessary
for the consummation of the transactions contemplated by the Offer shall not
have been filed, occurred or been obtained. Furthermore, notwithstanding any
other term of the Offer and in addition to the Purchaser's right to withdraw the
Offer at any time before the Expiration Date, the Purchaser will not be required
to accept for payment or pay for any Units not theretofore accepted for payment
or paid for and may terminate or amend the Offer as to such Units if, at any
time on or after the date of the Offer and before the acceptance of such Units
for payment or the payment therefor, any of the following conditions exists:
(a) a preliminary or permanent injunction or other order of any federal
or state court, government or governmental authority or agency shall have been
issued and shall remain in effect which (i) makes illegal, delays or otherwise
directly or indirectly restrains or prohibits the making of the Offer or the
acceptance for payment, purchase of or payment for any Units by the Purchaser,
(ii) imposes or confirms limitations on the ability of the Purchaser effectively
to exercise full rights of ownership of any Units, including, without
limitation, the right to direct the vote with respect to any Units acquired by
the Purchaser pursuant to the Offer or otherwise on all matters properly
presented to the Partnership's Unitholders, (iii) requires divestiture by the
Purchaser of any Units, (iv) causes any material diminution of the benefits to
be derived by the Purchaser as a result of the transactions contemplated by the
Offer, or (v) might materially adversely affect the business, properties,
assets, liabilities, financial condition, operations, results of operations or
prospects of the Purchaser or the Partnership;
(b) there shall be any action taken, or any statute, rule, regulation
or order proposed, enacted, enforced, promulgated, issued or deemed applicable
28
<PAGE> 34
to the Offer by any federal or state court, government or governmental authority
or agency, which might, directly or indirectly, result in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;
(c) any change or development shall have occurred or been threatened
since the date of the Offer to Purchase, in the business, properties, assets,
liabilities, financial condition, operations, results of operations or prospects
of the Partnership, which is or may be materially adverse to the Partnership, or
the Purchaser shall have become aware of any fact that does or may have a
material adverse effect on the value of the Units;
(d) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange or
in the over-the-counter market in the United States, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any limitation by any governmental authority on, or other
event which might affect, the extension of credit by lending institutions or
result in any imposition of currency controls in the United States, (iv) a
commencement of a war or armed hostilities or other national or international
calamity directly or indirectly involving the United States, (v) a material
change in United States or other currency exchange rates or a suspension of a
limitation on the markets thereof, or (vi) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material acceleration
or worsening thereof;
(e) there shall have been threatened, instituted or pending any action
or proceeding before any court or government agency or other regulatory or
administrative agency or commission or by any other person challenging the
acquisition of any Units pursuant to the Offer, or otherwise directly or
indirectly relating to the Offer, or otherwise, in the reasonable judgment of
the Purchaser, adversely affecting the Purchaser or the Partnership; or
(f) the Partnership shall have (i) issued, or authorized or proposed
the issuance of, any partnership interests of any class, or any securities
convertible into, or rights, warrants or options to acquire, any such interests
or other convertible securities, (ii) issued or authorized or proposed the
issuance of any other securities in respect of, in lieu of, or in substitution
for, all or any of the presently outstanding Units, (iii) financed any of the
Partnership's properties, other than in the ordinary course of the Partnership's
business and consistent with the past practice, (iv) declared or paid any
distribution, other than in cash and consistent with past practice, on any of
its partnership interests, or (v) the Partnership or the General Partner shall
have authorized, proposed or announced its intention to propose any merger,
consolidation or business combination transaction, acquisition of assets,
disposition of assets or material change in its capitalization, or any
comparable event not in the ordinary course of business and consistent with past
practice.
The foregoing conditions are for the sole benefit of the Purchaser and
may be asserted by the Purchaser regardless of the circumstances giving rise to
such conditions or may be waived by the Purchaser in whole or in part at any
time and from time to time in its sole discretion.
29
<PAGE> 35
Any determination by the Purchaser concerning the events described above will be
final and binding upon all parties.
SECTION 15. CERTAIN LEGAL MATTERS.
General. The Purchaser is not aware of any filings, approvals or other
actions by any domestic or foreign governmental or administrative agency that
would be required prior to the acquisition of Units by the Purchaser pursuant to
the Offer, other than the filing of a Tender Offer Statement on Schedule 14D-1
with the Commission (which has already been filed) and any required amendments
thereto. Should any such approval or other action be required, it is the
Purchaser's present intention that such additional approval or action would be
sought. Although there is no present intent to delay the purchase of Units
tendered pursuant to the Offer pending receipt of any such additional approval
or the taking of any such action, there can be no assurance that any such
additional approval or action, if needed, would be obtained without substantial
conditions or that adverse consequences might not result to the Partnership's
business, or that certain parts of the Partnership's business might not have to
be disposed of or other substantial conditions complied with in order to obtain
such approval or action, any of which could cause the Purchaser to elect to
terminate the Offer without purchasing Units thereunder.
Antitrust. The Purchaser does not believe that the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, is applicable to the acquisition
of Units contemplated by the Offer.
Margin Requirements. The Units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, those regulations generally are not applicable to the Offer.
SECTION 16. FEES AND EXPENSES. Except as set forth in this Section 16,
the Purchaser will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Units pursuant to the Offer. The
Purchaser has retained The Herman Group, Inc. to act as Information
Agent/Depositary in connection with the Offer. The Purchaser will pay the
Information Agent and the Depositary reasonable and customary compensation for
its services in connection with the Offer, plus reimbursement for out-of-pocket
expenses, and has agreed to indemnify the Information Agent/Depositary against
certain liabilities and expenses in connection therewith, including liabilities
under the federal securities laws. The Purchaser will also pay all costs and
expenses of printing and mailing the Offer and its legal fees and expenses.
SECTION 17. MISCELLANEOUS. The Offer is being made solely by this Offer
to Purchase and the related Assignment of Limited Partnership Units and is being
made to all holders of Units. The Purchaser is not aware of any state where the
making of the Offer 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 Offer or the acceptance of Units pursuant
thereto, the Purchaser will make a good faith effort to comply with any such
30
<PAGE> 36
state statute. If, after such good faith effort, the Purchaser cannot comply
with such state statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Units in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by one or more registered brokers or dealers that are
licensed under the laws of such jurisdiction.
The Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1, pursuant to Rule 14d-3 under the Exchange Act, furnishing
certain additional information with respect to the Offer, and may file
amendments thereto. The Schedule 14D-1 and any amendments thereto, including
exhibits, may be inspected and copies may be obtained at the same places and in
the same manner as set forth in Section 9 (except that they will not be
available at the regional offices of the Commission).
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained herein or in the
Assignment of Limited Partnership Units and, if given or made, such information
or representation must not be relied upon as having been authorized.
SV FAIRFIELD II, L.L.C.
November 22, 1996
31
<PAGE> 37
SCHEDULE I
INFORMATION REGARDING THE MANAGER AND
CERTAIN OTHER MEMBERS AND OFFICERS
OF
SCG INVESTORS II, L.L.C.
1. SCG INVESTORS II, L.L.C. Set forth in the table below are the names and the
present principal occupations or employment and the names, principal business
and address of any corporation or other organization in which such occupation or
employment is conducted, and the five-year employment history of the managing
member of SCG Investors II, L.L.C., and of certain other members and officers of
SCG Investors II, L.L.C. SCG Investors II, L.L.C. is the managing member of the
Purchaser. Unless otherwise indicated, each person identified below is employed
by Starwood Capital Group I, L.P. which is in the business of making real estate
investments. The principal business address of SCG Investors II, L.L.C., and
each person identified below, is Three Pickwick Plaza, Suite 250, Greenwich,
Connecticut 06830. All persons identified below are United States citizens.
BARRY S. STERNLICHT. Mr. Sternlicht is the managing member of SCG
Investors II, L.L.C. and serves as its president and chief executive officer and
owns a controlling interest in the entity. Mr. Sternlicht's principal
occupations include serving as the chairman, chief executive officer and a
trustee of Starwood Lodging Trust (a real estate investment trust ("REIT") which
owns hotels) and as a member of the management committee and as a director-elect
of Starwood Lodging Corporation (which operates most of these hotels). He is
also the general manager, president and chief executive officer of Starwood
Capital Group, L.L.C. In 1993, Mr. Sternlicht founded Starwood Capital Group
I, L.P. (which he indirectly controls) and he has served as its president and
chief executive officer since its formation and was the co-founder of its
predecessor entity in September 1991. Prior to forming such predecessor
entity, he was vice president and then senior vice president from 1989 to 1991
of JMB Realty Corporation, a real estate investment firm. Mr. Sternlicht is
also currently a director of U.S. Franchise Systems Inc. (a company which
franchises hotels), is a trustee of Equity Residential Properties Trust, a
REIT, and is a trustee, chairman and chief executive officer of Angeles
Participating Mortgage Trust, a REIT.
JONATHAN D. EILIAN. Mr. Eilian is an officer and member of SCG
Investors II, L.L.C. His principal employment is serving as a managing director
of Starwood Capital Group I, L.P. and he was a senior vice president of its
predecessor entity since its formation in September 1991. He is a managing
director of Starwood Capital Group, L.L.C. Mr. Eilian serves as a member of the
management committee and as a director-elect of Starwood Lodging Corporation.
Prior to that time he was an associate of JMB Realty Corporation, a real estate
investment firm, and of The Palmer Group, L.P., a private investment firm
specializing in corporate acquisitions. Mr. Eilian received an M.B.A. degree
from the Wharton Graduate School of Business in 1991.
31
<PAGE> 38
MADISON F. GROSE. Mr. Grose is an officer and member of SCG Investors
II, L.L.C. His principal employment is serving as an executive vice president
and general counsel of Starwood Capital Group I, L.P. He is the general counsel
and a managing director of Starwood Capital Group, L.L.C. Mr. Grose served as
the general counsel in the predecessor entity beginning in July 1992. From
November 1983 through June 1992, he was a partner in the law firm of Pircher,
Nichols & Meeks. Mr. Grose is a trustee of Starwood Lodging Trust and of Angeles
Participating Mortgage Trust.
Questions and requests for assistance or for additional copies of this
Offer to Purchase and the Assignment of Limited Partnership Units may be
directed to the Information Agent/Depositary at its telephone number and address
listed below. You may also contact your broker, dealer, bank, trust company or
other nominee for assistance concerning the Offer.
Manually signed facsimile copies of the Assignment of Limited
Partnership Units will be accepted. The Assignment of Limited Partnership Units
and any other required documents should be sent or delivered by each
Unitholder's broker, dealer, bank, trust company or other nominee to the
Information Agent/Depositary as set forth below.
The Information Agent/Depositary for the Offer is:
THE HERMAN GROUP, INC.
BY MAIL:
P.O. BOX 357
DALLAS, TX 75221-9602
BY FACSIMILE:
(214) 999-9323
OR
(212) 999-9348
TO CONFIRM:
(800) 992-6211
BY HAND/OVERNIGHT DELIVERY:
2121 SAN JACINTO STREET
26TH FLOOR
DALLAS, TX 75201-9821
32
<PAGE> 1
ASSIGNMENT OF LIMITED PARTNERSHIP UNITS
OF
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
PURSUANT TO THE OFFER TO PURCHASE
DATED NOVEMBER 22, 1996
OF
SV FAIRFIELD II, L.L.C.
<TABLE>
<CAPTION>
No. of Units Purchase Price No. of Units Total Purchase Price
Owned Per Unit Tendered(1) if all Units Tendered
<S> <C> <C> <C> <C>
</TABLE>
(Please indicate changes or corrections to the name and address printed above)
- -------------------------------------------------------------------------------
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, DECEMBER 20, 1996,
UNLESS THE OFFER IS EXTENDED
- -------------------------------------------------------------------------------
Unitholders desiring to tender their Units should complete and sign
this Assignment of Limited Partnership Units, and forward it to the Information
Agent/Depositary at the address or facsimile number set forth in the
Instructions AND DELIVER ANY AND ALL ASSIGNEE'S CERTIFICATES EVIDENCING
OWNERSHIP OF THE UNITS TENDERED (THE "CERTIFICATES") AND ALL OTHER DOCUMENTS
REQUIRED HEREBY TO THE INFORMATION AGENT/DEPOSITARY AT THE ADDRESS SET FORTH IN
THE INSTRUCTIONS. The Instructions for completing this Assignment of Limited
Partnership Units are included herein, along with a pre-addressed envelope to
the Information Agent/Depositary.
DELIVERY OF THIS ASSIGNMENT OF LIMITED PARTNERSHIP UNITS OR ANY OTHER
REQUIRED DOCUMENTS TO AN ADDRESS OTHER THAN THE ONE SET FORTH IN THE
INSTRUCTIONS, OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH IN THE
INSTRUCTIONS DOES NOT CONSTITUTE VALID DELIVERY.
PLEASE CAREFULLY READ THE ACCOMPANYING INSTRUCTIONS.
CAPITALIZED TERMS USED HEREIN AND NOT DEFINED SHALL HAVE THE MEANINGS
GIVEN TO THEM IN THE SV FAIRFIELD II, L.L.C. OFFER TO PURCHASE FOR CASH UP TO
22,500 ASSIGNED LIMITED PARTNERSHIP INTERESTS IN SCOTTSDALE LAND TRUST LIMITED
PARTNERSHIP DATED NOVEMBER 22, 1996, AS THE SAME MAY BE AMENDED FROM TIME TO
TIME (THE "OFFER TO PURCHASE").
- --------
1 Subject to Partnership transfer limitations.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to SV Fairfield II, L.L.C., a
Connecticut limited liability company (the "Purchaser"), the number of the
undersigned's units of assigned limited partnership interests specified above
(the "Units"), together with the Certificates evidencing ownership of the Units
tendered hereby, and all right, title and interest associated therewith, in
Scottsdale Land Trust Limited Partnership, a Delaware limited partnership (the
"Partnership"), at a price of $400 per Unit, net to the seller in cash, less the
amount of distributions per Unit, if any, made by the Partnership from and
including November 22, 1996 through and including the Expiration Date, upon the
terms and subject to the conditions set forth in the Offer to Purchase, receipt
of which is hereby acknowledged, and in this Assignment of Limited Partnership
Units (which, together with any supplements or amendments, collectively
constitute the "Offer"). The Purchaser reserves the right to transfer or assign,
in whole or from time to time in part, to one or more of its affiliates, the
right to purchase Units tendered pursuant to the Offer, but any such transfer or
assignment will not relieve the Purchaser of its obligations under the Offer or
prejudice the rights of tendering Unitholders to receive payment for Units
validly tendered and accepted for payment pursuant to the Offer.
Subject to and effective upon acceptance for payment of and payment for
the Units tendered hereby, the undersigned hereby sells, assigns, and transfers
to or upon the order of the Purchaser all right, title and interest in and to
all of the Units tendered hereby (including the related Certificates),
including, without limitation, all rights in, and claims to, all distributions
made by the Partnership after the Expiration Date in respect of the Units
tendered by such Unitholder, regardless of the fact that the record date for any
such distribution may be a date prior to the Expiration Date; provided, that if
proration of tendered Units is required as described in Section 1 of the Offer
to Purchase, this Assignment of Limited Partnership Units shall be effective to
transfer to the Purchaser only that number of the undersigned's Units as is
accepted for payment and thereby purchased by the Purchaser. The Purchaser will
seek to be recognized by the Partnership as a Unitholder upon consummation of
the Offer.
The undersigned Unitholder irrevocably appoints the Purchaser, SCG
Investors II, L.L.C. ("SCG"), a Connecticut limited liability company which
serves as the managing member of the Purchaser, and Barry S. Sternlicht
("Sternlicht") who is the managing member of SCG, and their designees, as the
proxies and attorneys-in-fact of the undersigned, each with full power of
substitution, to exercise all voting and other rights with respect to the Units
tendered by the undersigned and accepted for payment by the Purchaser,
including, without limitation, to receive all benefits and otherwise exercise
all rights of beneficial ownership of such Units and as a Unitholder of the
Partnership, all in accordance with the terms of the Offer. Such proxy and power
of attorney shall be considered coupled with an interest in the tendered Units
and are irrevocable. When the Units tendered hereby are accepted for payment
pursuant to the Offer, all prior proxies and powers given by the undersigned
with respect to the Units will, without further action, be revoked, and no
subsequent proxies or powers may be given (and if given will not be effective).
The Purchaser, SCG, Sternlicht and their designees will, with respect to the
Units, be empowered to exercise all voting and other rights of the undersigned,
including, without limitation, the right to direct the initial limited partner
of the Partnership (the "Initial Limited Partner") to vote the limited
partnership interests relating to such Units as they, in their sole discretion,
may deem proper, at any meeting of the Partnership's Unitholders or Limited
Partners, by written consent or otherwise. The Purchaser reserves the right to
require that, in order for the Units to be deemed validly tendered, immediately
upon the Purchaser's acceptance for payment of the Units, the Purchaser, SCG,
Sternlicht and their designees must be able to exercise all voting and other
rights of the undersigned, including, without limitation, the right to direct
the Initial Limited Partner to vote the limited partnership interests relating
to such Units as they, in their sole discretion, may deem proper, at any meeting
of the Partnership's Unitholders or Limited Partners, by written consent or
otherwise. The foregoing proxy and power may be exercised by the Purchaser or
any of the other persons referred to above acting alone.
In addition to and without limiting the generality of the foregoing,
the undersigned Unitholder hereby irrevocably constitutes and appoints the
Purchaser, SCG, Sternlicht and their designees as the Unitholder's
attorneys-in-fact, each with full power of substitution, to the full extent of
the Unitholder's rights with respect to the Units tendered by the Unitholder and
accepted for payment by the Purchaser. Such appointment will be effective when,
and only to the extent that, the Purchaser accepts the tendered Units for
2
<PAGE> 3
payment. Upon such acceptance for payment, all prior powers of attorney granted
by the Unitholder with respect to such Units will, without further action, be
revoked, and no subsequent powers of attorney may be granted (and if granted
will not be effective). Pursuant to such appointment as attorneys-in-fact, the
Purchaser, SCG, Sternlicht and their designees each will have the power, among
other things, (i) to seek to transfer ownership of such Units on the Partnership
books maintained by the General Partner (and execute and deliver any
accompanying evidences of transfer and authenticity any of them may deem
necessary or appropriate in connection therewith), (ii) if the Units are held in
an IRA, pension or similar account, to contact the Unitholder's custodian(s)
and/or trustee(s) and direct them to facilitate the transfer of the Units from
such account of the Unitholder to the Purchaser, (iii) upon receipt by the
Information Agent/Depositary (as the tendering Unitholder's agent) of the
Purchase Price, to become a registered owner of Units, to receive any and all
distributions made by the Partnership after the Expiration Date, and to receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Units in accordance with the terms of the Offer, (iv) to execute and deliver to
the General Partner a change of address form instructing the General Partner to
send any and all future distributions to which the Purchaser is entitled
pursuant to the terms of the Offer in respect of tendered Units to the address
specified in such form, and (v) to endorse any check payable to or upon the
order of a tendering Unitholder representing a distribution to which the
Purchaser is entitled pursuant to the terms of the Offer, in each case on behalf
of the tendering Unitholder. This Assignment of Limited Partnership Units shall
also serve as a Letter of Authorization directing the Unitholder's custodian(s)
and/or trustee(s) to sign any documents necessary to facilitate the transfer of
Units being assigned hereby as directed by the herein named attorneys-in-fact.
The undersigned Unitholder hereby represents and warrants for the
benefit of the Partnership and the Purchaser that the undersigned owns the Units
tendered hereby within the meaning of Rule 13d-3 of the Securities Exchange Act
of 1934, as amended, and has full power and authority to validly tender, sell,
assign and transfer the Units tendered hereby and that when the same are
accepted for payment by the Purchaser, (i) the Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale or transfer thereof, (ii) such Units will not
be subject to any adverse claims and that the transfer and assignment
contemplated herein are in compliance with all applicable laws and regulations,
and (iii) that the Purchaser will have the right to execute on the Unitholder's
behalf any applications for transfer and any distribution allocation agreements
required by the National Association of Securities Dealers, Inc. Notice to
Members to give effect to the transfer and assignment contemplated herein. The
undersigned further represents and warrants that the undersigned is a "United
States person," as defined in Section 7701(a)(30) of the Internal Revenue Code
of 1986, as amended (the "Internal Revenue Code"), or if the undersigned is not
a United States person, the undersigned does not own beneficially or of record
more than 5 per cent of the outstanding Units. Upon request, the undersigned
will execute and deliver any additional documents deemed by the Information
Agent/Depositary or the Purchaser to be necessary or desirable to complete the
assignment, transfer and purchase of Units tendered hereby and otherwise in
order to complete the transactions, and transfers of record ownership
contemplated herein.
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. The representations, warranties,
covenants and agreements contained herein shall survive the transfer of the
Units made hereby and the payment of the consideration therefor. If the
Unitholder is more than one person, then and in such event, the obligations of
the Unitholder hereunder shall be joint and several and the representations,
warranties, and covenants herein contained shall be deemed to be made by and
binding upon each such person and his heirs, executors, administrators,
successors and assigns.
The undersigned hereby acknowledges that: (i) if more than 22,500 Units
are validly tendered prior to or on the Expiration Date and not properly
withdrawn, the Purchaser will, upon the terms of the Offer to Purchase, accept
for payment from among those Units tendered prior to or on the Expiration Date
22,500 Units on a pro rata basis, with adjustments to avoid purchase of certain
fractional Units, based upon the number of Units validly tendered prior to the
Expiration Date and not withdrawn; (ii) a Unitholder may tender any or all of
the Units owned by that Unitholder; provided, however, that tenders of
fractional Units will not be permitted, except by a Unitholder who is tendering
all of the Units owned by that Unitholder, and provided further that, unless
3
<PAGE> 4
otherwise permitted by the Partnership Agreement, no Unitholder, who will
continue as a Unitholder, will be permitted to tender any number of Units which
will result in the Unitholder holding fewer than 10 Units following the tender;
(iii) no alternative, conditional or contingent tenders will be accepted; (iv)
the Purchaser reserves the absolute right to extend the Offer and, subject to
the right of Unitholders to withdraw Units until the Expiration Date, retain the
Units that have been tendered during the period or periods for which the Offer
is extended; (v) the Purchaser reserves the absolute right to reject any or all
tenders of any particular Units; (vi) the Purchaser reserves the absolute right
to waive or amend any of the conditions of the Offer that it is legally
permitted to waive or amend; (vii) the Purchaser's interpretation of the terms
and conditions of the Offer shall be final and binding; and (viii) the General
Partner of the Partnership has recommended that the Units not be traded.
The undersigned understands that a tender of Units pursuant to the
procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Except as stated in the Offer to Purchase, this tender is irrevocable, provided
Units tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless already accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after January 20, 1997.
Upon acceptance of Units by the Purchaser, the Purchaser hereby accepts
and adopts each and every provision of the Partnership Agreement of the
Partnership and agrees to be bound thereby. The Purchaser acknowledges (i) that
the General Partner of the Partnership has recommended that the Units not be
traded and (ii) that the General Partner of the Partnership may indicate that
(a) the Units are not traded on an "established securities market" or "secondary
market (or the substantial equivalent thereof)" within the meaning of Section
7704 of the Code, (b) the Units are subject to certain restrictions on
transferability and resale and may not be transferred or resold, except as
permitted under the Partnership Agreement of the Partnership and applicable
federal and state securities laws and, therefore, the Purchaser may be required
to hold the Units for an indefinite period of time, and/or (c) the pattern of
distributions of the Partnership in respect of the Units is expected to be
irregular. The Purchaser further constitutes and appoints the General Partner of
the Partnership, with full power of substitution, its true and lawful
attorney-in-fact, for it and in its name, place and stead, to make, execute,
sign, acknowledge, swear to, deliver, record and file any documents or
instruments which may be considered necessary or desirable by the General
Partner of the Partnership to carry out fully the provisions of the Partnership
Agreement, including, without limitation, an amendment or amendments to the
Partnership Agreement or Certificate of Limited Partnership of the Partnership
for the purpose of admitting the Purchaser as a Unitholder of the Partnership.
The Purchaser hereby represents and warrants to the Partnership and the
Unitholder that: (i) the Purchaser has the full right, power and authority to
execute this Assignment of Limited Partnership Units; (ii) the Purchaser has no
need for liquidity with respect to its investment in the Units; and (iii) the
Purchaser has a net worth (excluding from the computation thereof homes, home
furnishings, and personal automobiles) of in excess of $300,000.
The Unitholder agrees to indemnify and hold the Purchaser and the
Partnership harmless from and against, and to reimburse the Purchaser and/or the
Partnership on demand for, any damage, loss, cost, or expense (including
attorneys' fees and costs of investigation incurred in defending against and/or
settling such damage, loss, cost or expense) reasonably incurred by the
Purchaser and/or the Partnership arising out of or in connection with any
misrepresentations, breach of warranty, or failure to perform or violation of
any agreement or covenant on the part of the Unitholder under this Assignment of
Limited Partnership Units.
4
<PAGE> 5
===============================================================================
SIGNATURE BOX (ALL UNITHOLDERS)
(See Instructions 2,3 and 4 as necessary)
- -------------------------------------------------------------------------------
Please sign your name below. For joint owners, each joint owner must sign. (See
Instruction 2).
The signatory hereto hereby tenders to the Purchaser the number of Units
indicated below pursuant to the terms of the Offer and certifies under penalties
of perjury the statements in Box A, Box B, and, if applicable, Box C.
X_____________________________________ X______________________________________
(Signature) (Signature)
Tax I.D. Number X ____________________
Name and Capacity (If other than individuals)_______________________________
Title) ______________________________
Address (fiduciaries Only):____________________________________________________
(city) (state) (zip)
Area Code and Telephone No. ( )_________________ ( )____________________
(Day) (Evenings)
____________________________________________________
for SV Fairfield II, L.L.C.
Signature Guarantee (If Required)
(See Instruction 2)
Name and Address of Eligible Institution_______________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Authorized Signature__________________________ Title__________________________
Name___________________________________________ Date____________________, 1996
===============================================================================
FOR INFORMATION CONTACT:
THE HERMAN GROUP, INC.
2121 San Jacinto Street
26th Floor
Dallas, Texas 75201-9821
Telephone: (800) 992-6211
Facsimile: (214) 999-9323
or
(214) 999-9348
(If tendering by facsimile, please transmit both the front and back of the
Assignment of Limited Partnership Units AND the Tax Certification Page.)
BEFORE RETURNING THIS ASSIGNMENT OF LIMITED PARTNERSHIP UNITS, PLEASE REFER TO
THE ACCOMPANYING INSTRUCTIONS.
<PAGE> 6
STATEMENT OF DESTROYED, LOST OR STOLEN CERTIFICATE(S)
(IF REQUIRED - SEE INSTRUCTION NO. 8)
TO BE COMPLETED ONLY IF YOU CANNOT LOCATE YOUR CERTIFICATES
NAME & ADDRESS __________________________________________________
CITY/STATE/ZIP __________________________________________________
NUMBER OF UNITS OWNED _________
The undersigned person(s) hereby represents, warrants, acknowledges and agrees
under penalties of perjury as follows:
I am the lawful owner of Certificate(s) representing the number of
Units referred to above. The Certificate(s) has not been endorsed, cashed,
negotiated, transferred, assigned, or otherwise disposed of. I have made a
diligent search for the Certificate(s) and have been unable to find it, and make
this Statement to the Purchaser, the Partnership and the general partner thereof
for the purpose of inducing the acceptance of tender of the Certificate(s)
without surrender of the Certificate(s), and hereby agree to surrender the
Certificate(s) for cancellation should I at any time find the Certificate(s). I,
in consideration of the proceeds of tendering the Units and the Certificate(s),
agree to completely indemnify, protect and save harmless the Purchaser, the
Partnership, the general partner thereof, the Information Agent/Depositary, and
each of their respective agents and affiliates, and any other party to the
transaction (collectively, the "Obligees"), from and against all loss, costs and
damages, including, without limitation, court costs and attorneys' fees, which
they may be subject to or liable for in respect of the cancellation and
replacement of the Certificate(s), and the distribution of the proceeds of the
Certificate(s). The rights accruing to the Obligees under the preceding
sentences shall not be limited by the negligence, inadvertence, accident,
oversight or their failure to inquire into, contest, or litigate any claim,
whenever such negligence, inadvertence, accident, oversight, breach or failure
may occur or have occurred.
Signed and delivered this __________ day of _______________, 1996.
X __________________________________________
X __________________________________________
Signature(s) of Unitholder(s)
(Must be signed by registered Unitholder(s) exactly as name(s) appear(s) in the
Certificate(s) or in the Partnership's records. If signature is by an officer of
a corporation, attorney-in-fact, agent, executor, administrator, trustee,
guardian or other person(s) acting in fiduciary or representative capacity,
please complete the line captioned "Capacity (Full Title)" and see Instruction
2.)
Date: ________________________
In addition to signing your name(s) above, PLEASE PRINT YOUR NAME(S) in the
following space:
____________________________________
Capacity (Full Title): ____________________________________________
<PAGE> 7
TAX CERTIFICATIONS
===============================================================================
BOX A
SUBSTITUTE FORM W-9
(See Instruction 4 - Box A)
- -------------------------------------------------------------------------------
The person signing this Assignment of Limited Partnership Units hereby certifies
to the Purchaser the following under penalties of perjury:
(i) The TIN provided in the Signature Box on the Assignment of Limited
Partnership Units is the correct TIN of the Unitholder, or if this box
[ ] is checked, the Unitholder has applied for a TIN. If the
Unitholder has applied for a TIN, a TIN has not been issued to the
Unitholder, and either: (a) the Unitholder has mailed or delivered an
application to receive a TIN to the appropriate IRS Center or Social
Security Administration Office, or (b) the Unitholder intends to mail
or deliver an application in the near future (it being understood that
if the Unitholder does not provide a TIN to the Purchaser 31% of all
reportable payments made to the Unitholder will be withheld until a TIN
is provided to the Purchaser); and
(ii) Unless this box [ ] is checked, the Unitholder is not subject to
Backup Withholding either because the Unitholder: (a) is exempt from
Backup Withholding, (b) has not been notified by the IRS that the
Unitholder is subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) has been notified by the IRS
that such Unitholder is no longer subject to Backup Withholding.
Note: Place an "X" in the box in (ii) if you are unable to certify that
the Unitholder is not subject to Backup Withholding.
===============================================================================
===============================================================================
BOX B
FIRPTA AFFIDAVIT
(See Instruction 4 - Box B)
- -------------------------------------------------------------------------------
Under Section 144(e)(5) of the Internal Revenue Code and Treas. Reg.
1.1445-IIT(d), a transferee must withhold tax equal to 10% of the amount
realized with respect to certain transfers of an interest in a partnership if
50% or more of the value of its gross assets consists of U.S. real property
interests and 90% or more of the value of its gross assets consists of U.S. real
property interests plus cash equivalents, and the holder of the partnership
interest is a foreign person. To inform the Purchaser that no withholding is
required with respect to the Unitholder's interest in the Partnership, the
person signing this Assignment of Limited Partnership Units hereby certifies the
following under penalties of perjury:
(i) Unless this box [ ] is checked, the Unitholder, if an individual, is a U.S.
citizen or a resident alien for purposes of U.S. income taxation, and if other
than an individual, is not a foreign corporation, foreign partnership, foreign
estate or foreign trust (as those terms are defined in the Internal Revenue Code
and income Tax Regulations): (ii) the Unitholder's U.S. social security number
(for individuals) or employer identification number (for non-individuals) is
correct as provided (or corrected) in this Assignment of Limited Partnership
Units; and (iii) the Unitholder's home address (for individuals), or office
address (for non-individuals), is correctly printed (or corrected) on the front
of this Assignment of Limited Partnership Units. If a corporation, the
jurisdiction of incorporation is ______________________________.
The person signing this Assignment of Limited Partnership Units
understands that this certification may be disclosed to the IRS by the
Purchaser and that any false statements contained herein could be
punished by fine, imprisonment, or both.
===============================================================================
<PAGE> 8
===============================================================================
BOX C
SUBSTITUTE FORM W-8
(See Instruction 4 - Box C)
- -------------------------------------------------------------------------------
By checking this box [ ], the person signing this Assignment of Limited
Partnership Units hereby certifies under penalties of perjury that the
Unitholder is an "exempt foreign person" for purposes of the Backup Withholding
rules under the U.S. federal income tax laws, because the Unitholder:
(a) Is a nonresident alien individual or a foreign corporation,
partnership, estate or trust;
(b) If an individual, has not been and plans not to be present in
the U.S. for a total of 183 days or more during the calendar
year; and
(c) Neither engages, nor plans to engage, in a U.S. trade or
business that has effectively connected gains for transactions
with a broker or barter exchange.
===============================================================================
PLEASE REFER TO ATTACHED INSTRUCTIONS ON BACK PAGE
<PAGE> 9
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. DELIVERY OF ASSIGNMENT OF LIMITED PARTNERSHIP UNITS AND CERTIFICATES.
For convenience in responding to the Offer, a pre-addressed,
postage-paid envelope has been enclosed with the Offer to Purchase.
However, to ensure receipt of the Assignment of Limited Partnership
Units and Certificates, it is suggested that you use overnight courier
delivery or, if the Assignment of Limited Partnership Units and
Certificates are to be delivered by United Sates mail, that you use
certified or registered mail, return receipt requested.
To be effective, a duly completed and signed Assignment of Limited
Partnership Units (or facsimile thereof), along with ANY AND ALL
CERTIFICATES, any required signature guarantees and any other required
documents must be received by the Information Agent/Depository at the
address (or facsimile number) set forth below before the Expiration
Date, Midnight, New York City Time on Friday, December 20, 1996, unless
extended. Assignments of Limited Partnership Units which have been duly
executed, but where no indication is marked in the "No. of Units
Tendered" column, shall be deemed to have tendered all Units pursuant
to the Offer.
<TABLE>
<CAPTION>
<S> <C> <C>
By mail or THE HERMAN GROUP, INC.
Hand Delivery 2121 San Jacinto Street
26th Floor
Dallas, Texas 75201-9821
By Facsimile: (214) 999-9323
or
(214) 999-9348
For Additional Information Call: (800) 992-6211
</TABLE>
THE METHOD OF DELIVERY OF THE ASSIGNMENT OF LIMITED PARTNERSHIP UNITS,
THE CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND
RISK OF THE TENDERING UNITHOLDER AND DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE INFORMATION AGENT/DEPOSITARY. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
2. SIGNATURE REQUIREMENTS.
INDIVIDUAL AND JOINT OWNERS. After carefully reading and completing the
Assignment of Limited Partnership Units, in order to tender Units,
Unitholders must sign at the "X" in the SIGNATURE BOX of the Assignment
of Limited Partnership Units. The signature(s) must correspond exactly
with the name printed (or corrected) on the front of the Assignment of
Limited Partnership Units without any change whatsoever. If any Units
are registered in the names of two or more joint holders, all such
holders must sign the Assignment of Limited Partnership Units. If the
Assignment of Limited Partnership Units is signed by the registered
holder of the Units and the payment is to be made directly to that
holder at its address on the Assignment of Limited Partnership Units,
then no signature guarantee is required on the Assignment of Limited
Partnership Units. However, in all other cases, all signatures on the
Assignment of Limited Partnership Units must be guaranteed by an
Eligible Institution.
Similarly, if Units are held in an account of a member firm of a
registered national securities exchange, a member firm of the National
Association of Securities Dealers, Inc. or a commercial bank, savings
bank, credit union, savings and loan association or trust company
having an office, branch or agency in the United States, each an
Eligible Institution, no signature guarantee is required.
<PAGE> 10
TRUSTEES, CORPORATIONS AND FIDUCIARIES. Trustees, executors,
administrators, guardians, attorneys-in-fact, officers of a
corporation, authorized partner of a partnership or other persons
acting in a fiduciary or representative capacity must sign at the "X"
in the SIGNATURE BOX and have their signatures guaranteed by an
Eligible Institution, by completing the Signature Guarantee set forth
in the SIGNATURE BOX of the Assignment of Limited Partnership Units and
must submit proper evidence satisfactory to the Purchaser of their
authority to so act. (See Instruction 3 herein).
3. DOCUMENTATION REQUIREMENTS. In addition to information required to be
completed on the Assignment of Limited Partnership Units, additional
documentation may be required by the Purchaser under certain
circumstances including, but not limited to those listed below.
Questions on documentation should be directed to The Herman Group, Inc.
at (800) 992-6211. Project Administration Department.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DECEASED OWNER (JOINT TENANT) - Certified Copy of Death Certificate.
DECEASED OWNER (OTHERS) - Certified Copy of Death Certificate. (See also
Executor/Administrator/Guardian below).
EXECUTOR/ADMINISTRATOR/GUARDIAN- (d) Certified Copies of Court Appointment Documents
for Executor or Administrator dated within 60 days;
and
(e) a copy of applicable provisions of the Will (Title
Page, Executor(s) powers, asset distribution); OR
(f) Certified copy of Estate distribution documents.
ATTORNEY-IN-FACT - Current Power of Attorney.
CORPORATIONS/PARTNERSHIPS - Certified copy of Corporate Resolution(s), (with raised
corporate seal), or other evidence of authority to act.
Partnerships should furnish copy of Partnership
Agreement.
TRUST/PENSION PLANS - Copy of cover page of the Trust or Pension Plan, along with
copy of the section(s) setting forth names and powers of
Trustee(s) and any amendments to such sections or
appointment of Successor Trustee(s).
</TABLE>
4. TAX CERTIFICATIONS. Unitholders tendering Units to the Purchaser
pursuant to the Offer must furnish the purchaser with his, her or its
Taxpayer Identification Number ("TIN") in the SIGNATURE BOX and certify
under penalties of perjury, the representations in Boxes A, B and, if
applicable, Box C.
U.S. PERSONS. A Unitholder who or which is a United States citizen OR a
resident alien individual, a domestic corporation, a domestic
partnership, a domestic trust or a domestic estate (collectively, "U.S.
Persons") as those terms are defined in the Internal Revenue Code and
Income Tax Regulations, should follow the instructions below with
respect to certifying Boxes A and B (on the reverse side of the
Assignment of Limited Partnership Units).
BOX A - SUBSTITUTE FORM W-9. Part (i), Taxpayer Identification Number -
The persons signing this Assignment of Limited Partnership Units must
provide to the Purchaser in the blank provided for that purpose in the
SIGNATURE BOX of the Assignment of Limited Partnership Units, the
Unitholder's correct TIN and certify its correctness as provided in the
SIGNATURE BOX, under penalties of perjury. If a correct TIN is not
provided, penalties may be imposed by the Internal Revenue Service
("IRS"), in addition
<PAGE> 11
to the Unitholder's being subject to Backup Withholding. Part (ii),
Backup Withholding - in order to avoid 31% federal income tax Backup
Withholding, the person signing this Assignment of Limited Partnership
Units must certify, under penalties of perjury, that such Unitholder is
not subject to Backup Withholding. Certain Unitholders (including,
among others, all Corporations and certain exempt non-profit
organizations) are not subject to Backup Withholding. Backup
Withholding is not an additional tax. If withholding results in an
overpayment of taxes, a refund may be obtained from the IRS. DO NOT
CHECK THE BOX IN BOX A, PART (ii), UNLESS YOU HAVE BEEN NOTIFIED BY THE
IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING.
When Determining the TIN to Be Furnished, Please Refer to the Following
Note as a Guideline:
Individual Accounts should reflect their own TIN. Joint Accounts should
reflect the TIN of the person whose name appears first. Trust Accounts
should reflect the TIN assigned to the Trust. IRA custodial accounts
should reflect the TIN of the custodian (not necessary to obtain).
Custodial accounts for the benefit of minors should reflect the TIN of
the minor. Corporations or other business entities should reflect the
TIN assigned to that entity.
BOX B - FIRPTA AFFIDAVIT - Section 1445 of the Internal Revenue Code
requires that Unitholders transferring interests in partnerships with
real estate assets meeting certain criteria, certify under penalty of
perjury, the representations made in Box B, or be subject to
withholding of tax equal to 10% of the Purchase Price for Units
purchased. Tax withheld under Section 1445 of the Internal Revenue Code
is not an additional tax. If withholding results in an overpayment of
tax, a refund may be obtained from the IRS. Note(s): Box B, Part(i)
should be checked only if the Unitholder is NOT a U.S. Person, as
described therein. Corporations should insert the jurisdiction of
incorporation in the blank in Part (i).
BOX C - FOREIGN PERSONS - In order for a Unitholder, who is a Foreign
Persons (i.e., not a U.S. Person as defined above) to qualify as exempt
from 31% Backup Withholding, the person signing this must certify,
under penalties of perjury, the statement in Box C attesting to the
Foreign Unitholder's status by checking the box preceding such
statement. UNLESS THE BOX IS CHECKED, SUCH FOREIGN UNITHOLDER WILL BE
SUBJECT TO 31% WITHHOLDING OF TAX UNDER SECTION 1445 OF THE CODE.
5. VALIDITY OF ASSIGNMENT OF LIMITED PARTNERSHIP UNITS. All questions as
to the validity, form, eligibility (including time of receipt) and
acceptance of an Assignment of Limited Partnership Units will be
determined by the Purchaser and such determination will be final and
binding. The Assignment of Limited Partnership Units will not be valid
until any irregularities have been cured or waived. Neither the
Purchaser nor The Herman Group, Inc. is under any duty to give
notification of defects in an Assignment of Limited Partnership Units
and neither will incur liability for failure to give such notification.
6. CONDITIONAL TENDERS. No alternative, conditional or contingent tenders
will be accepted.
7. ASSIGNEE STATUS. Assignees of Unitholders must provide documentation to
the Information Agent/Depositary which demonstrates, to the
satisfaction of the Purchaser, such person's status as an Assignee.
8. STATEMENT OF DESTROYED, LOST OR STOLEN CERTIFICATE(S). The Statement of
Destroyed, Lost or Stolen Certificate(s) (the "Statement") has been
prepared by the Purchaser without consultation with the Partnership or
its General Partner. Accordingly, there can be no assurance that the
Statement will be acceptable to the Partnership. In the event that the
Statement will be rejected by the Partnership, the Purchaser reserves
the right to reject and not pay for any applicable Units. As a result,
Unitholders who are unable to locate their Certificates may desire to
contact the Partnership directly in order to obtain replacement
Certificates or otherwise comply with such procedures as may have been
<PAGE> 12
adopted by the Partnership. If you are unable to locate your
Certificates, then, subject to the foregoing, you may complete and sign
the Statement set forth in the Assignment of Limited Partnership Units.
FOR INFORMATION PLEASE CALL:
THE HERMAN GROUP, INC.
2121 San Jacinto Street, 26th Floor
Dallas, Texas 75201
(800) 992-6211 - Phone
(214) 999-9323 - Fax
or
(214) 999-9348 - Fax
<PAGE> 1
SV FAIRFIELD II, L.L.C.
THREE PICKWICK PLAZA, SUITE 250
GREENWICH, CONNECTICUT 06830
November 22, 1996
To Unitholders of Scottsdale
Land Trust Limited Partnership
SV Fairfield II, L.L.C., a Connecticut limited liability company (the
"Purchaser"), is offering to purchase up to 22,500 of the outstanding units of
assigned limited partnership interests (the "Units") in Scottsdale Land Trust
Limited Partnership (the "Partnership") for a cash purchase price of $400 per
Unit, net to the seller, upon the terms and subject to the conditions set forth
in the attached Offer to Purchase, dated November 22, 1996, and the Assignment
of Limited Partnership Units (which together constitute the "Offer"). Unless
extended by the Purchaser, the Offer is effective until midnight, New York City
time, on Friday, December 20, 1996. The Offer is not conditioned upon any
minimum number of Units being tendered; however, tender offers of fractional
Units will only be accepted if all of the Units held by such Unitholder are
tendered. In addition, no Unitholder who tenders Units will be permitted to
continue as a Unitholder if such Unitholder retains less than 10 Units after the
tender. THE PURCHASER WILL PAY ANY TRANSFER FEES charged by the Partnership in
connection with transferring ownership of the Units pursuant to the Offer. In
addition, A UNITHOLDER WILL NOT INCUR ANY COMMISSIONS in connection with a
tender of Units pursuant to the Offer.
The materials included in this package include important information
concerning the Purchaser, the terms and conditions of the Offer, tax
implications and instructions for tendering your Units. It is important that
Unitholders take some time to read carefully the enclosed Offer to Purchase, the
Assignment of Limited Partnership Units and other accompanying materials in
order to evaluate the Offer being made by the Purchaser.
Each Unitholder must decide whether to tender based on his or her
particular circumstances. Unitholders should consult with their respective
advisors about the financial, tax, legal and other implications to them of
accepting the Offer.
If you desire additional information regarding the Offer or need
assistance in tendering your Units, you may call The Herman Group, Inc., which
is acting as Information Agent/Depositary for the Offer, at (800) 992-6211.
Informed and courteous agents are available to assist you.
SV FAIRFIELD II, L.L.C.
