<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(d) (1) OF THE SECURITIES EXCHANGE ACT OF 1934
Income Growth Partners, Ltd. X
- --------------------------------------------------------------------------------
(Name of Subject Company [Issuer])
Everest Investors 10, LLC
Everest Properties II, LLC
- --------------------------------------------------------------------------------
(Bidders)
Class A Units of Limited Partnership Interests
Original Units of Limited Partnership Interests
- --------------------------------------------------------------------------------
(Title of Class of Securities)
None
- --------------------------------------------------------------------------------
(CUSIP Number of Class of Securities)
Christopher K. Davis
- --------------------------------------------------------------------------------
Everest Properties II, LLC
199 S. Los Robles Ave., Suite 440
Pasadena, CA 91101
Telephone (800) 611-4613
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on Behalf of Bidder)
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
Transaction Valuation: $1,657,650(1) Amount of Filing Fee: $332.00
(1) Calculated as the product of the number of Units on which the Offer is made
and the gross cash price 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: Not Applicable Filing party: Not Applicable
Form or registration no.: Not Applicable Date filed: Not Applicable
<PAGE>
Schedule 14D-1
CUSIP No : None
--------- -----------------------------------------------------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Everest Investors 10, LLC; IRS No. 95-4671899
Everest Properties II, LLC; IRS No. 95-4599059
--------- -----------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER (a) [ ]
OF A GROUP* (b) [X]
--------- -----------------------------------------------------------------
3. SEC USE ONLY
--------- -----------------------------------------------------------------
4. SOURCE OF FUNDS*
AF
--------- -----------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(e) OR 2(f) [ ]
Not Applicable
--------- -----------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Everest Investors 10, LLC - California
Everest Properties II, LLC - California
--------- -----------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
--------- -----------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES [ ]
CERTAIN SHARES
Not Applicable
--------- -----------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Not Applicable
--------- -----------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
Everest Investors 10, LLC - OO
Everest Properties II, LLC - OO
--------- -----------------------------------------------------------------
<PAGE>
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
an offer by Everest Investors 10, LLC ("Everest 10" or the "Purchaser"), a
California limited liability company owned by Everest Properties II, LLC
("EPII"), a California limited liability company, and Blackacre Everest, LLC
("Blackacre"), a Delaware limited liability company, to purchase up to 3,240
class A units ("Class A Units") and 7,530 original units ("Original Units") of
limited partnership interests in Income Growth Partners, Ltd. X (the
"Partnership") at a cash purchase price of $500 per Class A Unit and $5 per
Original Unit, without interest, less the amount of Distributions (as defined in
the Offer to Purchase (as defined herein)) per unit, if any, made to unit
holders by the Partnership after February 1, 1999, and less any Partnership
transfer fees, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated February 24, 1999, as it may be supplemented or amended
from time to time (the "Offer to Purchase"), and the related Agreement of
Transfer and Letter of Transmittal, as it may be supplemented or amended from
time to time (the "Letter of Transmittal", which, together with the Offer to
Purchase, constitutes the "Offer"), copies of which are filed as Exhibits
11(a)(1) and 11(a)(2) hereto, respectively. Capitalized terms used but not
defined herein have the meaning ascribed to them in the Offer to Purchase. As
used herein, the term "Units" shall mean the Class A Units, the Original Units,
or both.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Income Growth Partners, Ltd. X, a
California limited partnership (the "Partnership"). The address of the
Partnership's principal executive offices is 11300 Sorrento Valley Road, Suite
108, San Diego, California 92121.
(b) The classes of equity securities to which this Statement relates are
Class A Units and Original Units of Limited Partnership Interests in the
Partnership. Reference is hereby made to the information set forth on the cover
page, in the "Introduction" and "Certain Information Concerning the Partnership
- - Outstanding Units" of the Offer to Purchase, which is incorporated herein by
reference.
(c) Reference is hereby made to the information set forth in the
"Introduction," "Purpose of the Offer" and "Determination of Purchase Price -
Trading History of the Units" of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) Reference is hereby made to the information set forth on the
cover page and in the "Certain Information Concerning the Purchaser" and
Schedule I concerning the directors and executive officers of EPII and Blackacre
("Directors and Executive Officers") of the Offer to Purchase, which is
incorporated herein by reference.
(e)-(f) During the last five years, none of the Purchaser, EPII or, to the
knowledge of each of the Purchaser and EPII, Blackacre or any of the Directors
and Executive Officers, has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding any such person 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) None.
(b) Reference is hereby made to the information set forth in "Certain
Information Concerning the Partnership - Prior Acquisitions of Units and Prior
Contacts" of the Offer to Purchase, which is incorporated herein by reference.
<PAGE>
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Reference is hereby made to the information set forth in "Certain
Information Concerning the Purchaser - Source of Funds" of the Offer to
Purchase, which is incorporated herein by reference.
(b)-(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSAL OF THE BIDDER.
(a)-(g) Reference is hereby made to the information set forth in the
"Introduction," "Purpose of the Offer," "Future Plans of the Purchaser" and
"Effects of the Offer" of the Offer to Purchase, which is incorporated herein by
reference. Except as set forth in the Offer to Purchase, the Purchaser does not
have any present plans or proposals which would relate to, or would result in,
any transaction, change or other occurrence with respect to the Partnership or
the Units as is listed in paragraphs (a) through (g) of Item 5 of Schedule
14D-1.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in the
"Introduction" and "Certain Information Concerning the Partnership - Prior
Acquisitions of Units and Prior Contacts" of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Reference is hereby made to the information set forth in the "Certain
Information Concerning the Partnership-Prior Acquisitions of Units and Prior
Contacts" of the Offer to Purchase, which is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the information set forth in "Certain Legal
Matters - Fees and Expenses" of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF BIDDER.
Certain information regarding Purchaser's method of financing the Offer and
the Purchaser's financial condition is set forth in "Certain Information
Concerning the Purchaser - Source of Funds" and Appendix B of the Offer to
Purchaser and is incorporated herein by reference. The incorporation by
reference herein of the above-referenced information does not constitute an
admission that such information is material to a decision by a holder of the
Units as to whether to sell, tender or hold Units being bought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(d) Reference is hereby made to the information set forth in "Certain
Legal Matters" of the Offer to Purchase, which is incorporated herein by
reference.
(e) To the best knowledge of each of the Purchaser and EPII, no such
proceedings are pending or have been instituted.
(f) Reference is hereby made to the entire text of the Offer to Purchase
and the related Letter of Transmittal, which are incorporated herein by
reference.
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
11(a)(1) Cover Letter to holders of Class A Units and Original Units of the
Partnership and the related Offer to Purchase, dated February 24, 1999.
11(a)(2) Agreement of Transfer and Letter of Transmittal, with
Instructions.
11(a)(3) Summary Publication.
11(a)(4) Cover Sheet for Distributed Materials.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: February 23, 1999
EVEREST INVESTORS 10, LLC
By: EVEREST PROPERTIES II, LLC,
Manager
By: /s/ David I. Lesser
---------------------------
David I. Lesser
Executive Vice President
EVEREST PROPERTIES II, LLC
By: /s/ David I. Lesser
-------------------------------
David I. Lesser
Executive Vice President
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
11(a)(1) Cover Letter to holders of Class A Units and Original Units
of the Partnership and the related Offer to Purchase,
dated February 24, 1999.
11(a)(2) Agreement of Transfer and Letter of Transmittal, with
Instructions.
11(a)(3) Summary Publication.
11(a)(4) Cover Sheet for Distributed Materials.
<PAGE>
February 24, 1999
OFFER TO PURCHASE FOR CASH
3,240 Class A Units and 7,530 Original Units of
Limited Partnership Interests in
INCOME GROWTH PARTNERS, LTD. X
by
EVEREST INVESTORS 10, LLC
at a Cash Purchase Price of
$500.00 per Class A Unit and
$5 per Original Unit
Enclosed is an OFFER TO PURCHASE up to 3,240 class A units ("Class A
Units") and 7,530 original units ("Original Units") of limited partnership
interests in Income Growth Partners, Ltd. X (the "Partnership") at a cash
purchase price of $500 per Class A Unit and $5 per Original Unit, without
interest, less the amount of Distributions (as defined in the accompanying Offer
to Purchase) per unit made to you (the "Unit Holders") by the Partnership after
February 1, 1999, and less any Partnership transfer fees. The Offer is not
subject to brokerage commissions and is not conditioned upon financing. As used
herein, the term "Units" shall refer to the Class A Units, the Original Units,
or both.
Please consider the following points, which are discussed in greater detail
in the accompanying Offer to Purchase:
o The price offered for the Class A Units is double the subscription price
paid per Class A Unit in June 1995 and reflects a $250 gain per Class A
Unit.
o The Partnership's general partner has advised the Purchaser that it does
not intend to market or sell the Partnership's properties for at least two
to three years.
o The Partnership's publicly filed documents state that there is no
established public trading market for the Units and it is not anticipated
that any public market will develop. Partnership Spectrum, an independent
industry publication, reflects only two transfers of Units between
December 1, 1996 and November 30, 1998.
o The Offer allows Unit Holders to dispose of their Units without incurring
the sales commissions (typically up to 8% with a minimum of $150-$200)
associated with transfers of Units arranged through brokers or other
intermediaries.
o The Purchaser is making the Offer with a view to making a profit for
itself. Accordingly, there is a conflict between the desire of the
Purchaser to purchase Units at a low price and the desire of the Unit
Holders to sell their Units at a high price.
o The Offer is an immediate opportunity for Unit Holders to liquidate their
investment in the Partnership, subject to proration, but Unit Holders who
tender their Units will be giving up the opportunity to participate in any
potential future benefits from ownership of Units.
We urge you to read the Offer to Purchase completely and to return your
completed Agreement of Transfer and Letter of Transmittal promptly. The Offer is
scheduled to expire on March 29, 1999.
For answers to any questions you might have regarding these materials or
our Offer, or assistance in the procedures for accepting our Offer and tendering
your Units, please contact us at (800) 611-4613 (toll free).
Sincerely,
Everest Investors 10, LLC
<PAGE>
OFFER TO PURCHASE FOR CASH
3,240 Class A Units and 7,530 Original Units of
Limited Partnership Interests in
INCOME GROWTH PARTNERS, LTD. X
by
EVEREST INVESTORS 10, LLC
at a Cash Purchase Price of
$500.00 per Class A Unit and
$5 per Original Unit
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 5:00 P.M., LOS
ANGELES TIME, ON MONDAY, MARCH 29, 1999 UNLESS THE OFFER IS EXTENDED.
Everest Investors 10, LLC ("Everest 10" or the "Purchaser"), a California
limited liability company, is offering to purchase up to 3,240 Class A Units and
7,530 Original Units of Income Growth Partners, Ltd. X (the "Partnership"), at a
cash purchase price of $500 per Class A Unit and $5 per Original Unit, without
interest, less the amount of the Distributions (as defined below) per Unit, if
any, made to the Unit Holders by the Partnership after February 1, 1999, and
less any transfer fees imposed by the Partnership for each transfer. The Offer
(as defined below) is subject to certain terms and conditions set forth in this
Offer to Purchase, as it may be supplemented from time to time (the "Offer to
Purchase") and in the related Agreement of Transfer and Letter of Transmittal,
as it may be supplemented or amended from time to time (the "Letter of
Transmittal," which together with the Offer to Purchase, constitutes the
"Offer"). This Offer is not subject to brokerage commissions and is not
conditioned upon financing. As used herein, the term "Units" shall refer to the
Class A Units, the Original Units, or both, and the term "Purchase Price" shall
refer to the respective cash purchase prices offered for the Class A Units and
the Original Units, or both.
__________________
For More Information or for Further Assistance,
Please Call or Contact the Purchaser at:
Everest Properties II, LLC
(Manager)
199 South Los Robles Avenue
Suite 440
Pasadena, California 91101
(626) 585-5920
(800) 611-4613 (toll free)
February 24, 1999
<PAGE>
TABLE OF CONTENTS
Page
INTRODUCTION...................................................................1
PURPOSE OF THE OFFER...........................................................1
DETAILS OF THE OFFER...........................................................1
1. Terms of the Offer; Expiration Date; Proration.......................1
2. Acceptance for Payment and Payment of Purchase Price.................2
3. Procedure to Accept the Offer........................................3
4. Determination of Validity; Rejection of Units; Waiver of Defects;
No Obligation to Give Notice of Defects.........................4
5. Withdrawal Rights....................................................4
6. Extension of Tender Period; Termination; Amendment...................5
7. Conditions of the Offer..............................................5
8. Backup Federal Income Tax Withholding................................7
9. FIRPTA Withholding...................................................7
CERTAIN INFORMATION CONCERNING THE PARTNERSHIP.................................7
General...................................................................7
Outstanding Units.........................................................8
Selected Financial and Property Related Data..............................8
Prior Acquisitions of Units and Prior Contacts............................8
DETERMINATION OF PURCHASE PRICE................................................8
Trading History of the Units..............................................8
CERTAIN INFORMATION CONCERNING THE PURCHASER...................................9
The Purchaser.............................................................9
General...................................................................9
Source of Funds..........................................................10
FUTURE PLANS OF THE PURCHASER.................................................10
EFFECTS OF THE OFFER..........................................................10
Future Benefits of Unit Ownership........................................10
Limitations on Resales...................................................10
Influence on Voting Decisions by the Purchaser...........................11
CERTAIN FEDERAL INCOME TAX MATTERS............................................11
CERTAIN LEGAL MATTERS.........................................................12
General..................................................................12
State Takeover Statutes..................................................13
Fees and Expenses........................................................13
Miscellaneous............................................................13
<PAGE>
INTRODUCTION
The Purchaser hereby offers to purchase up to 3,240 Class A Units and
7,530 Original Units of limited partnership interests in the Partnership at a
cash purchase price of $500 per Class A Unit and $5 per Original Unit, without
interest, less the amount of Distributions per Unit, if any, made to Unit
Holders by the Partnership after February 1, 1999, and less any transfer fees
imposed by the Partnership for each transfer.
PURPOSE OF THE OFFER.
The purpose of the Offer is for the Purchaser to acquire a substantial
equity interest in the Partnership primarily for investment.
In considering the Offer, Unit Holders are urged to consider the following:
o The price offered for the Class A Units is double the subscription price
paid per Class A Unit in June 1995 and reflects a $250 gain on investment
per Class A Unit.
o The Partnership's general partner has advised the Purchaser that it does
not intend to market or sell the Partnership's properties for at least two
to three years.
o The Partnership's publicly filed documents state that there is no
established public trading market for the Units and it is not anticipated
that any public market will develop. Partnership Spectrum, an independent
industry publication, reflects only two transfers of Units between
December 1, 1996 and November 30, 1998. For further information, see
"Determination of Purchase Price-Trading History of The Units."
o The Offer allows Unit Holders to dispose of their Units without incurring
the sales commissions (typically up to 8% with a minimum of $150-$200)
associated with transfers of Units arranged through brokers or other
intermediaries.
o The Purchaser is making the Offer with a view to making a profit for
itself. Accordingly, there is a conflict between the desire of the
Purchaser to purchase Units at a low price and the desire of the Unit
Holders to sell their Units at a high price.
o The Offer is an immediate opportunity for Unit Holders to liquidate their
investments in the Partnership, but Unit Holders who tender their Units
will be giving up the opportunity to participate in any potential future
benefits from ownership of Units.
In order to validly tender Class A Units pursuant to the Offer, a Unit
Holder must tender all Class A Units and all Original Units he beneficially
owns. However, a Unit Holder who tenders only Original Units pursuant to the
Offer may validly tender all or a portion of his Original Units. Each Unit
Holder must make his own decision, based on the Unit Holder's particular
circumstances, whether to tender Units. Unit Holders should consult with their
respective advisors about the financial, tax, legal and other implications of
accepting the Offer.
DETAILS OF THE OFFER
1. Terms of the Offer; Expiration Date; Proration. On the terms and subject
to the conditions of the Offer, the Purchaser will accept and purchase up to
3,240 validly tendered, and not withdrawn, Class A Units and 7,580 validly
tendered, and not withdrawn, Original Units in accordance with the procedures
set forth in this Offer to Purchase ("Properly Tendered"). For purposes of the
Offer, the term "Expiration Date" means 5:00 p.m., Los Angeles time, on
Monday, March 29, 1999,
<PAGE>
unless the Purchaser extends the period of time during which the Offer is open,
in which event the term "Expiration Date" shall mean the latest time and date to
which the Offer is extended by the Purchaser.
If, prior to the Expiration Date, the Purchaser increases the Purchase
Price offered to the Unit Holders 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 3,240 Class A Units or 7,580 Original Units are Properly
Tendered (or if the number of either Class A or Original Units that are Properly
Tendered exceeds the number that can be transferred without triggering
applicable limitations on resales) the Purchaser will, upon the terms and
subject to the conditions of the Offer, accept for payment and pay for an
aggregate of 3,240 Class A Units and 7,580 Original Units (or, if less, the
maximum number of such Units that can be transferred without triggering
applicable limitations on resales), pro rata, according to the number of Units
that are Properly Tendered by each Unit Holder, with appropriate adjustments to
avoid purchases of fractional Units. If the number of Units that are Properly
Tendered is less than or equal to 3,240 Class A Units or 7,580 Original Units
(or, if less, the maximum number of such Units which can be transferred without
triggering applicable limitations on resales), the Purchaser will purchase all
Units that are Properly Tendered, upon the terms and subject to the conditions
of the Offer.
If proration of tendered Units is required, the Purchaser may not be able
to announce the final results of the proration until at least seven business
days after the Expiration Date because of the difficulty of determining the
proration results. The Purchaser does not intend to pay for any Units accepted
for payment pursuant to the Offer until the final proration or other adjustment
results are known.
If prior to the Expiration Date any or all of the conditions of the Offer
have not been satisfied or waived by the Purchaser, the Purchaser reserves the
right to: (i) decline to purchase any of the Units tendered, terminate the Offer
and return all tendered Units, (ii) waive the unsatisfied conditions and,
subject to complying with applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), purchase all Units that are Properly
Tendered, (iii) extend the Offer and, subject to the right of Unit Holders to
withdraw Units until the Expiration Date, retain previously tendered Units for
the period or periods for which the Offer is extended, and (iv) amend the Offer.
2. Acceptance for Payment and Payment of Purchase Price. On the terms and
subject to the conditions of the Offer, the Purchaser will purchase and will pay
for up to 3,240 Properly Tendered Class A Units and 7,530 Properly Tendered
Original Units, as promptly as practicable following the Expiration Date. In all
cases, payment for Units purchased pursuant to the Offer will be made only after
timely receipt by the Purchaser of: (i) a properly completed and duly executed
and acknowledged Letter of Transmittal, (ii) any other documents required in
accordance with the Letter of Transmittal, and (iii) written confirmation from
the Partnership of the transfer of the Units to the Purchaser.
UNDER NO CIRCUMSTANCE 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 (other than
proration adjustments), the original Letter of Transmittal with respect to the
Units may 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
<PAGE>
the Purchaser is unable to accept for payment, purchase or pay for Units
tendered, then, without prejudice to the Purchaser's rights under Section 4
herein, the Purchaser may, nevertheless, retain documents concerning tendered
Units, and those Units may not be withdrawn except to the extent that the
tendering Unit Holders are otherwise entitled to withdrawal rights as described
in Section 5 herein, subject, however, to the Purchaser's obligation under Rule
14e-1(c) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to pay Unit Holders the Purchase Price in respect of Units tendered or
return documents, if any, representing those Units promptly after termination or
withdrawal of the Offer.
3. Procedure to Accept the Offer. In order to validly tender Class A Units
pursuant to the Offer, a Unit Holder must tender all of his Class A Units and
all of his Original Units. However, a Unit Holder who validly tenders only
Original Units pursuant to the Offer may tender all or a portion of his Original
Units. In addition, for the tender of any Units to be valid, the Purchaser must
receive, at the address listed on the back page of this Offer to Purchase on or
prior to the Expiration Date, a properly completed and duly executed Letter of
Transmittal, the original partnership certificate (if available) and all
documents required by the Letter of Transmittal.
The method of delivery of the Letter of Transmittal and all other required
documents is at the option and risk of the tendering Unit Holder, and delivery
will be deemed made only when actually received by the Purchaser. If delivery is
by mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to assure timely
delivery.
By executing and delivering a Letter of Transmittal, a tendering Unit
Holder irrevocably appoints the Purchaser and its officers and any other
designee of the Purchaser, and each of them, the attorneys-in-fact and proxies
of the Unit Holder, in the manner set forth in the Letter of Transmittal, each
with full power of substitution, to the full extent of the Unit Holder's rights
with respect to the Units tendered by the Unit Holder and accepted for payment
by the Purchaser (and with respect to any and all distributions, other Units,
rights or other securities issued or issuable in respect thereof (collectively,
"Distributions")), including without limitation the right to direct any IRA
custodian, trustee or other record owner to execute and deliver the Letter of
Transmittal, the right to accomplish a withdrawal of any previous tender of the
Unit Holder's Units and the right to complete the transfer contemplated thereby.
All such proxies will be considered coupled with an interest in the tendered
Units, are irrevocable and are granted in consideration of, and are effective
upon, the acceptance for payment of the Units by the Purchaser in accordance
with the terms of the Offer. Upon acceptance for payment, all prior powers of
attorney and proxies given by the Unit Holder with respect to the Units and
Distributions will, without further action, be revoked, and no subsequent powers
of attorney or proxies may be given (and, if given, will be without force or
effect). The officers and designees of the Purchaser will, with respect to the
Units for which the appointment is effective, be empowered to exercise all
voting and other rights of the Unit Holder as they in their discretion may deem
proper at any meeting of the Partnership or any adjournment or postponement
thereof. In order for Units to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of the Units, the Purchaser or its designee
must be able to exercise full voting rights with respect to the Units, including
voting at any meeting of the Partnership's Limited Partners.
By executing and delivering a Letter of Transmittal, a tendering Unit
Holder irrevocably assigns to the Purchaser and its assigns all of the right,
title and interest of the Unit Holder in and to any and all Distributions made
by the Partnership from and after the date of acceptance with respect to Units
accepted for payment and thereby purchased by the Purchaser.
4. Determination of Validity; Rejection of Units; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions about the validity, form,
eligibility (including time of receipt) and
<PAGE>
acceptance for payment of any tender of Units pursuant to the Offer will be
determined by the Purchaser, which determination will be final and binding. The
Purchaser reserves the 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 Purchaser's counsel, be unlawful.
The Purchaser also reserves the right to waive or amend any of the conditions of
the Offer that it is legally permitted to waive and to waive any defect in any
tender with respect to any particular Units. The Purchaser's interpretation of
the terms and conditions of the Offer (including the Letter of Transmittal) will
be final and binding. No tender of Units will be deemed to have been validly
made until all defects have been cured or waived. Neither the Purchaser nor any
other person will be under any duty to give notification of any defects in the
tender of any Units or will incur any liability for failure to give any such
notification.
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 Unit Holder and the Purchaser on the terms set forth in the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment pursuant to this Offer, and thereby purchased, Properly Tendered
Units if, as and when the Purchaser gives written notice to the Partnership or
its Transfer Agent 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
and transmitted directly to Unit Holders whose Units have been accepted for
payment.
5. Withdrawal Rights. Tenders of Units made 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 April 25, 1999. If purchase of, or payment for, Units is delayed for
any reason, including extension by the Purchaser of the Expiration Date, or if
the Purchaser is unable to purchase or pay for Units for any reason (for
example, because of proration adjustments) then, without prejudice to the
Purchaser's rights under the Offer, tendered Units may be retained by the
Purchaser and may not be withdrawn, except to the extent that tendering Unit
Holders are otherwise entitled to withdrawal rights as set forth in this Section
5; subject, however, to the Purchaser's obligation, pursuant to Rule 14e-1(c)
under the Exchange Act, to pay Unit Holders the Purchase Price in respect of
Units tendered promptly after termination or withdrawal of the Offer.
For withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Purchaser at its address listed on
the back cover of this Offer to Purchase. Any notice of withdrawal must specify
the name of the person(s) who tendered the Units to be withdrawn and must be
signed by the person(s) who signed the Letter of Transmittal in the same manner
as the Letter of Transmittal 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 herein
at any time prior to the Expiration Date.
All questions about the validity and form (including time of receipt) of
notices of withdrawal will be determined by the Purchaser , which determination
shall be final and binding. Neither the Purchaser nor any other person will be
under any duty to give notice of any defects in any notice of withdrawal or
incur any liability for failure to give any such notice.
<PAGE>
6. Extension of Tender Period; Termination; Amendment. The Purchaser
expressly reserves the right, at any time:
o 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;
o to terminate the Offer and not accept for payment any Units not already
accepted for payment;
o upon the occurrence of any of the conditions specified in Section 7 herein
to delay the acceptance for payment of, or payment for, any Units not
already accepted for payment or paid for; and
o to amend the Offer in any respect (including, without limitation, by
increasing or decreasing the Purchase Price, increasing or decreasing the
number of Units being sought, or both).
Notice of any such extension, termination or amendment will promptly be
disseminated to Unit Holders in a manner reasonably designed to inform Unit
Holders 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-1(d) under the Exchange Act. 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.
7. Conditions of the Offer. Notwithstanding any other term of the Offer,
the Purchaser will not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act (relating to a bidder's obligation to pay for or return
tendered securities promptly after the termination or withdrawal of such
bidder's offer), to pay for any Units tendered if all authorizations, consents,
orders of, or filings with, or expirations of waiting periods imposed by, any
court, administrative agency or other governmental authority necessary for the
consummation of the transactions contemplated by the Offer shall not have
occurred or been filed, or obtained. Furthermore, notwithstanding any other term
of the Offer, the Purchaser will not be required to accept for payment or,
subject to the aforesaid, pay for any Units, may delay the acceptance for
payment of the Units tendered, or may withdraw the Offer 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 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 both legal and beneficial ownership of the Units; (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; (v) might materially adversely affect the business,
properties, assets, liabilities, financial condition, operations, results of
operations or prospects of the Purchaser, or the Partnership; or (vi) seeks to
impose any material condition to the Offer unacceptable to the Purchaser;
(b) there shall be any action taken, or any statute, rule, regulation or
order proposed, enacted, enforced, promulgated, issued or deemed applicable to
the Offer by any federal or state court, government
<PAGE>
or governmental authority or agency which might, directly or indirectly, result
in any of the consequences referred to in paragraph (a) above;
(c) any change or development shall have occurred or been threatened or
disclosed 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 there shall be any material
lien not disclosed in the Partnership's financial statements, 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 or the Properties (as defined herein);
(d) the General Partner (as defined herein) of the Partnership shall have
failed or refused to take all other action that the Purchaser deems necessary,
in the Purchaser's judgment, for the Purchaser to be the registered owner of the
Units tendered and accepted for payment hereunder simultaneously with the
consummation of the Offer or as soon thereafter as is permitted under the
Partnership Agreement, in accordance with the Partnership Agreement and
applicable law;
(e) there shall have been threatened, instituted or pending any action or
proceeding before any court or governmental 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 judgment of the
Purchaser, adversely affecting the Purchaser, the Partnership or the Properties
or the value of the Units or the benefits expected to be derived by the
Purchaser as a result of the transactions contemplated by the Offer;
(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) declared or paid any
Distribution, other than in cash, on any of the Units, or (iv) 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; or
(g) the General Partner shall have modified, or taken any step or steps to
modify, in any way, the procedures or regulations applicable to the registration
of Units or transfers of Units on the books and records of the Partnership or
the admission of transferees of Units as registered owners and as Unit Holders.
The foregoing conditions are for the sole benefit of the Purchaser and may
be (but need not 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. Any determination by the Purchaser concerning the events
described above will be final and binding upon all parties.
8. 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 Unit Holder must provide the
Purchaser with the Unit Holder's correct taxpayer identification number in the
space provided in the Letter of Transmittal.
9. FIRPTA Withholding. To prevent the withholding of federal income tax in
an amount equal to ten percent of the amount of the Purchase Price plus
Partnership liabilities allocable to each Unit
<PAGE>
purchased, the Letter of Transmittal includes FIRPTA representations certifying
the Unit Holder's taxpayer identification number and address and that the Unit
Holder is not a foreign person.
CERTAIN INFORMATION CONCERNING THE PARTNERSHIP
Information contained in this section is based upon documents and reports
publicly filed by the Partnership, including the Annual Report on Form 10-K for
the fiscal year ended December 31, 1997 (the "1997 Form 10-K"). Although the
Purchaser has no information that any statements contained in this section are
untrue, the Purchaser has not independently investigated the accuracy of
statements, and takes no responsibility for the accuracy, inaccuracy,
completeness or incompleteness of any of the information contained in this
section or for the failure by the Partnership to disclose events which may have
occurred and may affect the significance or accuracy of any such information.
General. The Partnership is a California limited partnership formed under
the laws of the State of California in February 1988. The sole general partner
of the Partnership is Income Growth Management, Inc. (the "General Partner").
The business of the Partnership is conducted primarily through the General
Partner, as the Partnership has no employees of its own. Employees of
corporations affiliated with the General Partner perform certain administrative
and other services on behalf of the Partnership. The Partnership's executive
offices are located at 11300 Sorrento Valley Road, Suite 108, San Diego,
California 92121 and the Partnership's telephone number is (619) 457-2750.
The Partnership was formed to acquire, operate and hold for investment one
or more parcels of income-producing, multi-family residential real property.
Currently, the Partnership has an indirect ownership interest in two separate
apartment complexes in Southern California: (1) Mission Park; and (2) Shadow
Ridge Meadow, (collectively, the "Properties"). Although the Partnership
initially owned the Properties directly, according to the 1997 Form 10-K, as a
result of a series of transactions that were consummated in 1995 and 1997, the
Partnership now indirectly operates the Properties.
The Partnership's Amended and Restated Agreement of Limited Partnership
(the "Partnership Agreement") provides that the Partnership shall continue
through February 2021, unless terminated sooner. The General Partner has made no
cash capital contributions to date. As of December 31, 1997, there were
approximately 2,082 limited partners in the Partnership.
Attached as Part I of Appendix A to this Offer to Purchase are excerpts
from the 1997 Form 10-K, which excerpts describe the business and operations of
the Partnership in more detail. Unit Holders should also refer to the Quarterly
Report on Form 10-Q (the "1998 Form 10-Q") for the quarter ended September 30,
1998 for more recent information relating to the business and operations of the
Partnership.
The Partnership is subject to the information reporting requirements of the
Exchange Act and 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, or
electronically at http://www.sec.gov. 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.
Outstanding Units. According to the 1997 Form 10-K, there were 18,826.5
Original Units and 8,100 Class A Units issued and outstanding, held by
approximately 2,082 Unit Holders, as of December 31, 1997.
<PAGE>
Selected Financial and Property Related Data. Attached as Part II of
Appendix A is a summary of certain financial and statistical information with
respect to the Partnership and the Properties, all of which has been taken from
the 1997 Form 10-K. More comprehensive financial and other information is
included in such reports and other documents filed by the Partnership with the
Commission. Part II of Appendix A is qualified in its entirety by reference to
such publicly filed reports and documents, including, without limitation, all
the financial information and related notes contained therein. Unit Holders
should also refer to the 1998 Form 10-Q for more recent information relating to
the business and operations of the Partnership.
Prior Acquisitions of Units and Prior Contacts. Neither the Purchaser nor
any of its affiliates holds any Units of the Partnership. In 1998, Everest
Properties II, LLC, a California limited liability company and the manager of
the Purchaser ("EPII"), made several requests to the General Partner for an
address list of the limited partners of the Partnership, pursuant to a
power-of-attorney from an existing limited partner, in order to conduct a tender
offer for Units. The General Partner failed to respond to such requests and
follow-up phone calls. On December 11, 1998, Purchaser had one conversation with
a representative of the General Partner regarding an investment in, or
acquisition of, all of the General Partner's equity interest in the Partnership
or, alternatively, the direct acquisition of the Properties from the
Partnership. During that conversation, the General Partner indicated that
neither it nor the Partnership was interested in Purchaser's proposal and no
agreements were reached. The General Partner further indicated that it does not
intend to market or sell the Properties for two to three years. Except as set
forth above, neither the Purchaser nor its affiliates are party to any past,
present or proposed material contracts, arrangements, understandings,
relationships, or negotiations with the Partnership or with the General Partner
concerning the Partnership.
DETERMINATION OF PURCHASE PRICE
In establishing the Purchase Price, the Purchaser reviewed certain publicly
available information including among other things: (i) the Partnership
Agreement, (ii) the 1997 Form 10-K and (iii) the 1998 Form 10-Q. The Purchaser
determined the Purchase Price pursuant to its independent analysis of the
Partnership and the Properties. The Purchaser did not obtain current independent
valuations on appraisals of the assets. Based on that information, the Purchaser
considered several factors, some of which are discussed below.
Trading History of the Units. Secondary market sales activity for the
Units, including privately negotiated sales, has been limited and highly
sporadic. The 1997 Form 10-K states that "no public trading market for the units
exists or is intended or expected to develop." At present, privately negotiated
sales and sales through intermediaries (such as through the American Partnership
Board) are the only means available to a Unit Holder to liquidate an investment
in Units (other than this Offer or other occasional offers by other partnership
investors, if any) because the Units are not listed or traded on any exchange or
quoted on any Nasdaq list or system.
According to Partnership Spectrum, an independent third party publication,
there were two transfers of Units between December 1, 1996 and November 30,
1998: one in September-October 1997, for $35.00 per Unit, and one in
January-February 1998, for $62.00 per Unit. Partnership Spectrum does not state,
and Purchaser does not know, whether such transfers were of Class A Units or
Original Units. Sales may be conducted which are not reported in the Partnership
Spectrum and the prices of sales through other channels may differ from those
reported by the Partnership Spectrum. The reported gross sales prices may not
reflect the net sales proceeds received by sellers of Units, which typically are
reduced by commissions (typically up to 8% with a minimum of $150-$200) and
other secondary market transaction
<PAGE>
costs. The Purchaser does not know whether the information provided by the
Partnership Spectrum is accurate or complete.
CERTAIN INFORMATION CONCERNING THE PURCHASER
The Purchaser. The Purchaser is a California limited liability company that
was formed on January 26, 1999. The principal office of the Purchaser is 199
South Los Robles Avenue, Suite 440, Pasadena, CA 91101. The Purchaser is owned
by EPII, and by Blackacre Everest, LLC, a Delaware limited liability company
("Blackacre"). The Manager of the Purchaser is EPII and it is the person that
manages the Purchaser's affairs. Blackacre did not participate, to any material
extent, in the initiation, structuring, preparation or documentation of this
Offer. For certain information concerning the directors and executive officers
of EPII and Blackacre, see Schedule I to this Offer to Purchase.
The Purchaser's business consists solely of making and holding the proposed
investment in the Partnership. Accordingly, the Purchaser has not had any
material operations to date. For certain selected unaudited financial
information available with respect to the Purchaser, see Appendix B to this
Offer to Purchase. The inclusion of this information is for informational
purposes only and is not intended as an admission that such information is
material to a decision whether to sell, tender or hold the Units.
General. Except as set forth above or elsewhere in this Offer to Purchase:
(i) the Purchaser does not beneficially own or have a right to acquire, and, to
the best knowledge of the Purchaser, no associate or majority-owned subsidiary
of Purchaser or the persons listed in Schedule I hereto, beneficially owns or
has a right to acquire any Units or any other equity securities of the
Partnership; (ii) the Purchaser has not, and to the best knowledge of the
Purchaser, none of the persons and entities referred to in clause (i) above or
any of their executive officers, directors or subsidiaries has, effected any
transaction in the Units or any other equity securities of the Partnership
during the past 60 days other than as stated in this Offer to Purchase; (iii)
the Purchaser does not have and, to the best knowledge of the Purchaser, none of
the persons listed in Schedule I hereto has, any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Partnership, including, but not limited to, the transfer or
voting thereof, joint ventures, loan arrangements, puts or calls, guarantees of
loans, guarantees against loss or the giving or withholding of proxies, consents
or authorizations; (iv) since December 31, 1995, there have been no transactions
which would require reporting under the rules and regulations of the Commission
between the Partnership or any of its affiliates and the Purchaser or any of its
subsidiaries or, to the best knowledge of the Purchaser, any of its executive
officers, directors or affiliates; and (v) since December 31, 1995 except as
otherwise stated in this Offer to Purchase, there have been no contacts,
negotiations or transactions between the Purchaser, or any of its subsidiaries
or, to the best knowledge of the Purchaser, any of the persons listed in
Schedule I hereto, on the one hand, and the Partnership or its affiliates, on
the other hand, concerning a merger, consolidation or acquisition, tender offer
or other acquisition of securities, an election of directors, or a sale or other
transfer of a material amount of assets of the Partnership.
Source of Funds. Based on the Purchase Price of $500 per Class A Unit and
$5 per Original Unit, the Purchaser estimates that the total amount of funds
necessary to purchase all Units sought by this Offer and to pay related fees and
expenses, will be approximately $1,675,000. The Purchaser expects to obtain
these funds by means of equity capital contributions from its members at the
time the Units tendered pursuant to the Offer are accepted for payment. Such
members will fund their capital contributions through existing cash and other
financial assets which in the aggregate are sufficient to provide the funds
required in connection with the Offer without any borrowings.
<PAGE>
FUTURE PLANS OF THE PURCHASER
The Purchaser is seeking to acquire Units pursuant to the Offer to obtain a
substantial equity interest in the Partnership, primarily for investment.
Following the completion of the Offer, the Purchaser and persons related to or
affiliated with the Purchaser 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 by the Purchaser. Any
such acquisition may be at a price higher or lower than the price to be paid for
the Units purchased pursuant to the Offer, and may be for cash or other
consideration. However, the Purchaser has no present intention of making
additional tender offers for the Units. The Purchaser also may consider selling
some or all of the Units it acquires pursuant to the Offer, either directly or
by a sale of one or more interests in the Purchaser itself, depending upon
liquidity, strategic, tax and other considerations.
The Purchaser intends to encourage the General Partner to market the
Properties for sale, and the Purchaser plans to encourage and assist other
persons in making offers to purchase one or both Properties. There can be no
assurances that any offers will be made or that any sale of any Property will be
completed.
Except as described herein, the Purchaser does not currently intend to
change current management or the operation of the Partnership and does not have
current plans for any extraordinary transaction such as a merger,
reorganization, liquidation, reallocation of operations or sale or transfer of
assets involving the Partnership. However, these plans could change at any time
in the future. If any transaction is effected by the Partnership and financial
benefits accrue to the Unit Holders, the Purchaser and its affiliates will
participate in those benefits to the extent of their ownership of the Units.
EFFECTS OF THE OFFER
Future Benefits of Unit Ownership. Tendering Unit Holders shall receive
cash in exchange for their Units purchased by the Purchaser and will forego all
future distributions and income and loss allocations from the Partnership with
respect to such Units.
Limitations on Resales. The Partnership Agreement provides that the General
Partner may refuse to recognize a transfer of Units if in its opinion the
transfer would, for federal income tax purposes, cause the Partnership to be
characterized as a "publicly traded partnership," or cause the Partnership to be
taxed as a corporation. This provision may limit sales of Units on the secondary
market and in private transactions following completion of the offer.
Accordingly, the Partnership may not recognize any requests for recognition of a
transferee Unit Holder upon a transfer of Units if the General Partner believes
the transfer would cause a tax termination of the Partnership.
Influence on Voting Decisions by the Purchaser. Under the Partnership
Agreement, Unit Holders holding a majority of the Units are entitled to take
action with respect to a variety of matters, including removal of the General
Partner, dissolution and termination of the Partnership, and approval of most
types of amendments to the Partnership Agreement. If the Purchaser obtains all
or most of the Class A Units and the Original Units sought, the influence of
Purchaser and its affiliates on such actions may be significant.
CERTAIN FEDERAL INCOME TAX MATTERS
The following summary is a general discussion of certain of the federal
income tax consequences of a sale of Units pursuant to the Offer. The summary is
based on the Internal Revenue Code of 1986, as amended (the "Code"), applicable
Treasury regulations thereunder, administrative rulings, and judicial
<PAGE>
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. This summary does not discuss all aspects of federal income taxation
that may be relevant to a particular Unit Holder in light of such Unit Holder's
specific circumstances, nor does it describe any aspect of state, local, foreign
or other tax laws. The discussion below assumes that the Partnership does not
own any unrealized receivables or inventory items as such terms are defined in
Section 751 of the Code and the regulations promulgated thereunder. Sales of
Units pursuant to the Offer may be taxable transactions under applicable state,
local, foreign and other tax laws. UNIT HOLDERS SHOULD CONSULT THEIR RESPECTIVE
TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THE UNIT HOLDER OF SELLING
UNITS PURSUANT TO THE OFFER.
In general, a Unit Holder will recognize gain or loss on a sale of Units
pursuant to the Offer equal to the difference between (i) the Unit Holder's
"amount realized" on the sale and (ii) the Unit Holder's adjusted tax basis in
the Units sold. The amount of a Unit Holder's adjusted tax basis in a Unit will
vary depending upon the Unit Holder's particular circumstances, and it will
include the amount of the Partnership's liabilities allocable to the Unit (as
determined under Code Section 752). The "amount realized" with respect to a Unit
will be a sum equal to the amount of cash received by the Unit Holder 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).
The gain or loss recognized by a Unit Holder on a sale of a Unit pursuant
to the Offer generally will be treated as a capital gain or loss if the Unit was
held by the Unit Holder as a capital asset. Recent changes to the tax laws
modified applicable capital gain rates and holding periods. Gain with respect to
Units held for more than one year will be taxed, for federal income tax
purposes, at a maximum long-term capital gain rate of 20 percent. Gain with
respect to Units held one year or less will be taxed at ordinary income rates.
It should also be noted that the Taxpayer Relief Act of 1997 imposed
depreciation recapture of previously deducted straight line depreciation with
respect to real property at a rate of 25 percent (assuming eligibility for
long-term capital gain treatment). A portion of the gain realized by a Unit
Holder with respect to a disposition of the Units may be subjected to this 25
percent rate to the extent that the gain is attributable to depreciation
recapture inherent in the properties of the Partnership.
Capital losses are deductible only to the extent of capital gains, except
that taxpayers who are natural persons may deduct up to $3,000 per year 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 "C" corporation's carry-forward period is five years and an individual
taxpayer can carry forward such losses indefinitely).
Under Code Section 469, individuals, S corporations and certain
closely-held corporations generally are able to deduct "passive activity losses"
in any year only to the extent of the person's passive activity income for that
year. Substantially all post-1986 losses of Unit Holders from the Partnership
are passive activity losses. Unit Holders may have "suspended" passive activity
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). The benefits estimated to be realized by
each seller of a Unit assumes that all of the seller's losses from the
Partnership have been suspended and not utilized.
If a Unit Holder sells less than all of its Units pursuant to the Offer, a
passive loss recognized by that Unit Holder can be currently deducted (subject
to the other applicable limitations) to the extent of the Unit Holder's passive
income from the Partnership for that year plus any other net passive activity
income
<PAGE>
for that year, and any gain recognized by a Unit Holder upon the sale of Units
can be offset by the Unit Holder's current or "suspended" passive activity
losses (if any) from the Partnership and other sources. If, on the other hand, a
Unit Holder sells 100 percent of its Units pursuant to the Offer, any
"suspended" passive activity losses from the Partnership and any passive
activity losses recognized upon the sale of the Units will be offset first
against any net passive activity income from the Unit Holder's other passive
activity investments, and the balance of any net passive activity losses
attributable to the Partnership will no longer be subject to the passive
activity loss limitation and, therefore, will be deductible by such Unit Holder
from its other "ordinary" income (subject to any other applicable limitations).
If more than 3,240 Class A Units or 7,530 Original Units are Properly Tendered,
some tendering Unit Holders may not be able to sell 100 percent of their Units
pursuant to the Offer because of proration of the number of Units to be
purchased by the Purchaser, unless the Purchaser amends the Offer to increase
the number of Units to be purchased.
Unit Holders (other than tax-exempt persons, corporations and certain
foreign individuals) who tender Units may be subject to 31 percent backup
withholding unless those Unit Holders provide a taxpayer identification number
("TIN") and are certain that the TIN is correct or properly certify that they
are awaiting a TIN. A Unit Holder may avoid backup withholding by properly
completing and signing the Letter of Transmittal. If a Unit Holder who is
subject to backup withholding does not include its TIN, the Purchaser will
withhold 31 percent from payments to such Unit Holder.
A Unit Holder who tenders Units must file an information statement with his
federal income tax return for the year of the sale which provides the
information specified in Treasury Regulation Section 1.751-1(a)(3). The selling
Unit Holder must also notify the Partnership of the date of the transfer and the
names, addresses and tax identification numbers of the transferors and
transferee within 30 days of the date of the transfer (or, if earlier, January
15 of the following calendar year) (See IRS Form 8308).
CERTAIN LEGAL MATTERS
General. Except as set forth herein, 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. The Purchaser's obligation to purchase
and pay for Units is subject to certain conditions, including conditions related
to the legal matters discussed herein.
State Takeover Statutes. The Partnership was formed under the laws of the
State of California, which currently does not have any takeover statute
applicable to limited partnerships. However, it is a condition to the Offer that
no state or federal statute impose a material limitation on the Purchaser's
right to vote the Units purchased pursuant to the Offer. If this condition is
not met, Purchaser may terminate or amend the Offer.
If any person seeks to apply any state takeover statute, the Purchaser will
take such action as then appears desirable, which action may include challenging
the validity or applicability of any such statute in appropriate court
proceedings. If there is a claim that one or more takeover statutes apply to the
Offer, and it is not determined by an appropriate court that such statutes do
not apply or are invalid as applied to the Offer, the Purchaser might be
required to file certain information with, or receive approvals from, the
relevant state authorities. This could prevent the Purchaser from purchasing or
paying for Units tendered pursuant to the Offer, or cause delay in continuing or
consummating the Offer. In such case, the Purchaser may not be obligated to
accept for payment or pay for Units tendered.
<PAGE>
Fees and Expenses. 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 will pay all costs and expenses of printing and mailing the
Offer and its legal fees and expenses. The Purchaser will reduce the purchase
price of Units by any transfer fees imposed by the Partnership.
Miscellaneous. The Offer is not made to (nor will tenders be accepted on
behalf of) Unit Holders residing in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities
or other laws of such jurisdiction. However, the Purchaser may take such action
as it deems necessary to make the Offer in any jurisdiction and extend the Offer
to Unit Holders in such jurisdiction.
In any jurisdiction where the securities or other laws require the Offer to
be made by a licensed broker or dealer, the Offer will 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 under the caption "Certain Information Concerning The
Partnership -- General."
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 Letter
of Transmittal and, if given or made, such information or representation must
not be relied upon as having been authorized.
EVEREST INVESTORS 10, LLC
February 24, 1999
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
The business address of each executive officer and director of Everest
Properties II, LLC is 199 South Los Robles Avenue, Suite 440, Pasadena,
California 91101. Each executive officer and director is a United States
citizen. The name and principal occupation or employment of each executive
officer and director of Everest Properties II, LLC, are set forth below.
Present Principal Occupation or Employment
Name Position and Five-Year Employment History
- ---- ------------------------------------------
W. Robert Kohorst President of Everest Properties II, LLC from 1996 -
present. President and Director of Everest Properties,
Inc. from 1994 - present. President and Director of KH
Financial, Inc. from 1994 - present.
David I. Lesser Executive Vice President and Secretary of Everest
Properties II, LLC from 1996 - present. Executive Vice
President of Everest Properties, Inc. from 1995 -
present. Principal and member of Feder, Goodman &
Schwartz, Inc. from 1994 - 1996.
The Manager of Blackacre Everest, LLC is Blackacre Capital Group, L.P., the
general partner of which is Blackacre Capital Management Corp. ("Blackacre
Capital"). The business address of each executive officer and director of
Blackacre Capital is 450 Park Avenue, 28th Floor, New York, NY 10027. Each
executive officer and director is a United States citizen. The name and
principal occupation or employment of each executive officer and director of
Blackacre Capital are set forth below.
Present Principal Occupation or Employment
Name Position and Five-Year Employment History
- ---- ------------------------------------------
Jeffrey B. Citrin President and the sole director of Blackacre Capital since
its inception in August 1994. Managing Director of the
Commercial Mortgage Investment Unit at Oppenheimer & Co.
from June 1993 through July 1994.
Stephen Feinberg President of Blackacre Capital since November 1997, and
Senior Managing Director and Chief Executive Officer
of Cerberus Capital Management, L.P. since 1992.
Ronald J. Kravit Vice President of Blackacre Capital since July 1996.
Principal of Apollo Real Estate Advisors from September
1994 through July 1996. Senior Vice President/Managing
Director of G. Soros Realty Advisors/Reichman International
from September 1993 through October 1994.
Howard M. Glatzer Vice President of Blackacre Capital since June 1997.
Senior Associate of Rockwood Realty Associates from March
1995 through May 1997. Project Manager of KG LAND NY
Corp. from November 1990 through February 1995.
Robert M. Stern Secretary and Managing Director of Blackacre Capital
since June 1998. Director of Asset Services of BDG, Ltd.
from 1996 to 1998. Director and Senior Asset Manager of
Kemper Corporation from 1989 through 1995.
<PAGE>
APPENDIX A
The following information has been copied from the Partnership's Annual
Report on Form 10-K for the year ended December 31, 1997 (the "1997 Form 10-K").
Although the Purchaser has no information that any statements contained in this
Appendix A are untrue, the Purchaser has not independently investigated the
accuracy of statements, and takes no responsibility for the accuracy,
inaccuracy, completeness or incompleteness of any of the information contained
in this section or for the failure by the Partnership to disclose events which
may have occurred and may affect the significance or accuracy of any such
information.
PART I
Item 1. Business:
General. Income Growth Partners, Ltd. X, a California limited partnership
(the "Limited Partnership") and subsidiaries (collectively, the "Partnership"),
was formed in February 1988, to acquire, operate and hold for investment one or
more parcels of income-producing, multi-family residential real property.
Currently, the Limited Partnership operates two separate apartment complexes in
Southern California: (1) Mission Park and (2) Shadow Ridge Meadows. The limited
partnership agreement provides that the Partnership shall continue through
February 2021, unless terminated sooner. Income Growth Management, Inc. ("IGM")
is the sole general partner. The general partner has made no cash capital
contributions to date. As of December 31, 1997, there were approximately 2,082
limited partners in the Partnership. The Partnership has no full time employees.
Employees of corporations affiliated with the general partner perform certain
administrative and other services on behalf of the Partnership (see Item 13).
The Partnership's executive offices are located at 11300 Sorrento Valley Road,
Suite 108, San Diego, California 92121 and the Partnership's telephone number is
(619) 457-2750.
Financing Strategy. The Partnership seeks to minimize the cost of financing
its properties and will refinance loans from time to time to take advantage of
prevailing market conditions. The Mission Park and Shadow Ridge Meadows
properties were refinanced to prevailing rates during 1995 and 1997,
respectively.
Competitive Conditions. Changes in the national and regional economic
climates, change in local real estate conditions such as the oversupply of
apartments or a reduction in demand for apartments, competition from
single-family housing, apartment properties and other forms of multifamily
residential housing, the inability to provide adequate maintenance and to obtain
adequate insurance, increased operating costs, changes in zoning, building,
environmental, rent control and other laws and regulations, the costs of
compliance with current and future laws, changes in real property taxes and
unusual occurrences (such as earthquakes and floods) and other factors beyond
the control of the Partnership may adversely affect the income from, and value
of, the Partnership's properties.
Leases and Inflation. Substantially all of the leases at the Partnership's
apartment properties are for a period of six months or less, allowing, at the
time of renewal, for adjustments in the rental rate and the opportunity to
release the apartment unit at the prevailing market rate. The short-term nature
of these leases generally serves to minimize the risk to the Partnership of the
adverse effect of inflation and the Partnership does not believe that inflation
has had a material adverse impact on its revenues.
Restrictions Imposed By Laws Benefiting Disabled Persons. Under the
Americans with Disabilities Act of 1990 (the "ADA"), all places of public
accommodation are required to meet certain
A-1
<PAGE>
federal requirements related to access and use by disabled persons. These
requirements became effective in 1992. A number of additional federal, state and
local laws exist which also may require modifications to the properties, or
restrict certain further renovations thereof, with respect to access thereto by
disabled persons. For example, the Fair Housing Amendments Act of 1988 (the
"FHAA") requires apartment properties first occupied after March 13, 1990 to be
accessible to the handicapped. Noncompliance with the ADA or the FHAA could
result in an order to correct any noncomplying feature, which could result in
substantial capital expenditures. Although management of the Partnership
believes that the properties are substantially in compliance with present
requirements, if the properties are not in compliance, the Partnership is likely
to incur additional costs to comply with the ADA and the FHAA.
Recent Developments. In January 1994, the Limited Partnership filed a
voluntary petition for relief under Chapter 11 of the federal bankruptcy laws in
the United States Bankruptcy Court for Southern District of California.
In October 1994, the Limited Partnership filed a Plan of Reorganization
(the "Plan") that was confirmed by the Bankruptcy Court in March 1995. In
general, the Plan provided for resolution of all claims against the Limited
Partnership as of January 26, 1994. The Limited Partnership emerged from Chapter
11 effective in May 1995 having fully satisfied all claims in accordance with
the Plan.
The Plan proposed that the Limited Partnership raise additional funds
through an offering of Class A Units that have a preferred status over the
Original Units. The gross proceeds from the offering, which closed in June 1995,
were approximately $2 million.
Under the provisions of the Plan, the Limited Partnership was allowed to
retain ownership of the Mission Park and Shadow Ridge Meadows properties.
However, the Limited Partnership was unable to raise the capital necessary to
retain ownership of its third property, Margarita Summit.
During 1995, on a tax free basis, the Limited Partnership exchanged the
Mission Park property for a 99% interest in IGP X Mission Park Associates, L.P.,
a newly formed California limited partnership (the "Mission Park Subsidiary").
The Mission Park Subsidiary is separate and distinct from the Partnership,
having separate assets, liabilities and business operations.
During 1997, on a tax free basis, the Limited Partnership exchanged the
Shadow Ridge Meadows property for a 99% interest in IGP X Shadow Ridge Meadows,
Ltd., a newly formed California limited partnership (the "Shadow Ridge Meadows
Subsidiary"). The Shadow Ridge Meadows Subsidiary is also separate and distinct
from the Partnership, having separate assets, liabilities and business
operations.
Formation of the Mission Park Subsidiary and the Shadow Ridge Subsidiary
had no impact on the Partnership's overall operations, allocation of net
income/loss, cash distributions or Partnership assets.
A-2
<PAGE>
PART II
Item 2. Properties.
The Partnership presently owns two properties, as follows:
MISSION PARK:
Date of purchase: August 1989
Purchase price: $17,100,000
1995 impairment write-down: $1,200,000
Property Description: A 264-unit apartment complex located in San Marcos,
California. The property includes two full-size recreation rooms, two
heated swimming pools and spas, night-lighted tennis courts, a satellite
cable TV system and covered parking. The building is approximately eight
years old. The property contains 215,292 square feet.
SHADOW RIDGE MEADOWS:
Date of purchase: November 1988
Purchase price $12,700,000
1995 impairment write-down: $1,600,000
Property Description: A 184-unit apartment complex located in Vista,
California. The property includes a large recreation center, a heated
swimming pool and spa, five laundry facilities, a satellite cable TV system
and covered parking. The building is approximately eleven years old. The
property contains 127,197 square feet.
A-3
<PAGE>
Item 6. Selected Financial Data.
The following selected financial data should be read in conjunction with the
financial statements and the related notes set forth in the 1997 Form 10-K:
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Total assets.....$21,225,719 $21,476,918 $22,153,868 $28,945,057 $33,954,409
Long-term
obligations .... 19,765,202 19,788,869 19,966,935 29,426,708 29,678,456
Total revenue.... 3,791,975 3,576,981 3,896,384 4,344,717 4,418,407
Total expense....(4,163,361) (4,063,509 (4,584,674) (9,413,282) (6,969,061)
Write-down of land
and building.... -- -- -- 3,900,000 --
Loss before
extraordinary item:
gain on forgiveness
of debt......... (371,386) (486,528) (688,290) (5,322,740) (2,550,654)
Extraordinary item:
gain on forgiveness
of debt......... -- -- 4,446,019 -- --
Net income (loss) (371,386) (486,528) 3,757,729 (5,322,740) (2,550,654)
Net income (loss)
per partnership
unit before
extraordinary gain (13.79) (18.06) (28.48) (282.73) (135.49)
Extraordinary gain
per partnership
unit............ -- -- 184.01 -- --
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Net income (loss)
per partnership
unit............ (13.79) (18.06) 155.53 (282.73) (135.49)
Weighted average
limited partnership
units........... 26,926 26,926 24,161 18,826 18,826
There has been no cash distributions to partners prior to December 31,
1997. The Partnership distributed $100,000 during January 1998.
A-4
<PAGE>
APPENDIX B
Everest Investors 10, LLC
Balance Sheet
As of February 22, 1999
(unaudited)
ASSETS
Current Assets
Cash and Equivalents.................................. $87,500
-------
Total Current Assets....................................... $87,500
-------
TOTAL ASSETS..................................................... $87,500
=======
LIABILITIES & EQUITY
Equity
Members Capital....................................... $87,500
-------
Total Equity............................................... $87,500
-------
TOTAL LIABILITIES & EQUITY....................................... $87,500
=======
B-1
<PAGE>
The Letter of Transmittal, and any other required documents should be sent
or delivered by each Unit Holder or his broker, dealer, commercial bank, trust
company or other nominee to the Purchaser at its address set forth below:
Everest Properties II, LLC
(Manager)
199 South Los Robles Avenue
Suite 440
Pasadena, California 91101
Questions and requests for assistance may be directed to the Purchaser at
its address and telephone number listed below. Additional copies of this Offer
to Purchase, the Letter of Transmittal, and other tender offer materials may be
obtained from the Purchaser as set forth below, and will be furnished promptly
at the Purchaser's expense.
For information regarding the Offer contact:
Everest Properties II, LLC
(Manager)
199 South Los Robles Avenue
Suite 440
Pasadena, California 91101
(800) 611-4613 or (626) 585-5920
Facsimile: (626) 585-5929
<PAGE>
AGREEMENT OF TRANSFER AND LETTER OF TRANSMITTAL
for Units of
INCOME GROWTH PARTNERS, LTD. X
for $500 per Class A Unit and $5 per Original Unit
Subject to and effective upon acceptance for payment, the undersigned (the
"Seller") hereby sells, assigns, transfers and delivers, and irrevocably directs
any custodian or trustee to sell, assign, transfer and deliver ("Transfer") to
Everest Investors 10, LLC, a California limited liability company (the
"Purchaser"), all of the Seller's right, title and interest in such Seller's
class A units ("Class A Units") and original units ("Original Units") of limited
partnership interests of Income Growth Partners, Ltd. X, a California limited
partnership (the "Partnership"), at the cash purchase price of $500 per Class A
Unit and $5 per Original Unit, without interest, less the amount of
Distributions (as defined in the Offer to Purchase) per Unit, if any, made to
Seller by the Partnership after February 1, 1999, and less any Partnership
transfer fees, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated February 24, 1999, as it may be supplemented or amended
(the "Offer to Purchase") and this Agreement of Transfer and Letter of
Transmittal, as it may be supplemented or amended (the "Letter of Transmittal,"
which together with the Offer to Purchase, constitutes the "Offer"). As used
herein, the term "Units" refers to Class A Units, Original Units, or both.
Such Transfer shall include, without limitation, all rights in, and claims
to, any Partnership profits and losses, cash distributions, voting rights and
other benefits of any nature whatsoever distributable or allocable to Seller's
tendered Units, and all certificates evidencing the same, and Seller agrees
immediately to endorse and deliver to Purchaser all distribution checks received
from the Partnership after the date upon which the Purchaser purchases Units
tendered pursuant to the Offer. Seller hereby irrevocably constitutes and
appoints the Purchaser as the true and lawful agent and attorney-in-fact of the
Seller with respect to all tendered Units, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to vote, inspect Partnership books and records, change the address of
record of tendered Units prior to or after completion of the Transfer, or act in
such manner as any such attorney-in-fact shall, in its discretion, deem proper
with respect to such Units, to deliver such Units and transfer ownership of such
Units on the Partnership's books maintained by the General Partners of the
Partnership, together with all accompanying evidences of transfer and
authenticity to, or upon the order of, the Purchaser, to immediately revoke and
withdraw all prior tenders of Units, to direct any custodian or trustee holding
record title to the Units to do any of the foregoing, including the execution
and delivery of a copy of this Letter of Transmittal, and upon payment by the
Purchaser of the purchase price, to receive all benefits and cash distributions,
endorse Partnership checks payable to Seller and otherwise exercise all rights
of beneficial ownership of such Units. The Purchaser shall not be required to
post bond of any nature in connection with this power of attorney.
Seller hereby represents and warrants to the Purchaser that Seller owns all
Units tendered pursuant to the Offer and, if Seller is tendering Class A Units,
that Seller has tendered all of the Units beneficially held by Seller. Seller
further hereby represents and warrants to Purchaser that Seller has full power
and authority to validly sell, assign, transfer and deliver such Units to the
Purchaser, and that when any such Units are accepted for payment by the
Purchaser, the Purchaser will acquire good and marketable title thereto, free
and clear of all claims, options, restrictions, charges, encumbrances or other
interests. If the undersigned is signing on behalf of an entity, the undersigned
declares that he has authority to sign this document on behalf of such entity.
The undersigned recognizes that under certain circumstances set forth in
the Offer to Purchase (including proration), the Purchaser may not be required
to accept for payment any or all of the Units tendered hereby. In such event,
the undersigned understands that this Letter of Transmittal will be effective to
Transfer only those Units accepted for payment by the Purchaser and any Letter
of Transmittal for Units not accepted for payment may be destroyed by the
Purchaser.
<PAGE>
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity or liquidation of Seller and any obligations of the Seller
shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned. Upon request, Seller will execute and deliver, and
irrevocably directs any custodian to execute and deliver, any additional
documents deemed by the Purchaser to be necessary or desirable to complete the
assignment, transfer and purchase of such Units. Seller requests that Purchaser
become a substitute limited partner of the Partnership.
Seller hereby certifies, under penalties of perjury, that (1) the number
shown below on this form as Seller's Taxpayer Identification Number is correct
and (2) Seller is not subject to backup withholding either because Seller has
not been notified by the Internal Revenue Service (the "IRS") that Seller is
subject to backup withholding as a result of a failure to report all interest or
dividends, or the IRS has notified Seller that Seller is no longer subject to
backup withholding. Seller hereby also certifies, under penalties of perjury,
that Seller, if an individual, is not a nonresident alien for purposes of U.S.
income taxation, and if not an individual, is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations). Seller 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.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of a Letter of Transmittal will be determined by the
Purchaser, and such determinations will be final and binding. The Purchaser's
interpretation of the terms and conditions of the Offer (including this Letter
of Transmittal) will also be final and binding. The Purchaser will have the
right to waive any defects or conditions as to the manner of tendering. Any
defects in connection with tenders, unless waived, must be cured within such
time as the Purchaser will determine. This Letter of Transmittal will not be
valid until all defects have been cured or waived.
Date: February 24, 1999
PLEASE CHECK ONLY ONE:
[If neither or both are checked, Seller is deemed to tender ALL Class A Units
and Original Units]
[ ]Seller Tenders ALL Class A and Original Units
[ ]Seller Tenders Original Units Only. Specify Number, if less than ALL: _______
____________________________________ ____________________________________
[Seller's Telephone Number] [Signature of Owner]
____________________________________ ____________________________________
[Seller's Social Security or [Print Name]
Taxpayer ID Number]
____________________________________ ____________________________________
[Signature of Co-Owner]
____________________________________ ____________________________________
[Seller's Address] [Print Name]
________________________________________
[Name of IRA Custodian, if applicable]
--------------------------------------------------------
Forward the completed Letter of Transmittal and
original Partnership Certificate(s) (if available) to:
Everest Properties II, LLC
199 S. Los Robles Ave., Suite 440
Pasadena, CA 91101
Attn: Securities Processing Department
(626) 585-5920
Re: Income Growth Partners, Ltd. X,
a California limited partnership
--------------------------------------------------------
<PAGE>
INSTRUCTIONS
Beneficial Owner of Record Should:
1. Sign the Agreement.
2. Indicate the Number of Units Owned, if not correctly indicated in the
bottom right-hand corner.
3. Fill in Telephone Number, Social Security, or Tax ID Number.
4. Return the Agreement in the envelope provided.
If Owned Jointly:
1. Joint owner should sign, as well.
2. If joint owner is deceased and units have not been reregistered, owner
should send:
o A copy of the Death Certificate
If Units have been Inherited or are owned by an Estate:
Executor should submit:
o A copy of the Death Certificate
o Letter of Testamentary or Will showing your beneficial ownership or
executor capacity.
If Units are held in an IRA Account:
Beneficial Owner should sign; we will then work with the IRA Custodian to
complete the transfer. The funds will also be forwarded directly into your
IRA Account.
Include the Name of the IRA Custodian on the Agreement of Transfer.
If Units are held in a Trust, Profit Sharing or Pension Plan:
Please provide first, last, and other applicable pages of the Trust
Agreement showing authorized signatory.
If Units are held by a Corporation:
Corporate resolutions required showing authorized signatory.
IF AVAILABLE SEND IN THE ORIGINAL LIMITED PARTNER CERTIFICATE.
SIGNATURES DO NOT NEED TO BE NOTARIZED.
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Class A Units or Original Units. Each Offer is being made
solely by the Offer to Purchase dated February 24, 1999 and the related
Agreement of Transfer and Letter of Transmittal and is not being made to,
nor will tenders be accepted from or on behalf of, the Unit Holders that
reside in any jurisdiction in which making or accepting the Offer would
violate that jurisdiction's laws. In those jurisdictions where the 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, if at all, only by
one or more registered brokers or dealers licensed under the laws of the
applicable jurisdiction.
Notice of Offer to Purchase for Cash
3,240 Class A Units and 7,530 Original Units of
Limited Partnership Interests in
INCOME GROWTH PARTNERS, LTD. X
by
EVEREST INVESTORS 10, LLC
at a Cash Purchase Price of
$500 per Class A Unit and
$5 per Original Unit
Everest Investors 10, LLC, a California limited liability company (the
"Purchaser"), is offering to purchase up to 3,240 class A units ("Class A
Units") and 7,530 original units ("Original Units") of limited partnership
interest in Income Growth Partners, Ltd. X, a California limited partnership
(the "Partnership"), at a cash purchase price of $500 per Class A Unit and $5
per Original Unit, without interest, less the amount of the Distributions (as
defined in the Offer to Purchase) per Unit, if any, made to the holders of Units
("Unit Holders") by the Partnership after February 1, 1999, and less any
Partnership transfer fees, upon the terms and conditions set forth in the Offer
to Purchase, dated February 24, 1999, as it may be supplemented or amended (the
"Offer to Purchase") and in the related Agreement of Transfer and Letter of
Transmittal, as it may be supplemented or amended (the "Letter of Transmittal,"
and, together with the Offer to Purchase, the "Offer"). The Offer is not subject
to brokerage commissions and is not conditioned upon financing. As used herein,
the term "Units" refers to Class A Units, Original Units, or both.
THE OFFER, WITHDRAWAL RIGHTS AND PRO-RATION PERIOD WILL EXPIRE AT 5:00P.M.,
LOS ANGELES TIME, ON MONDAY, MARCH 29, 1999, UNLESS THE OFFER IS EXTENDED.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment pursuant to the Offer, and thereby purchased, validly tendered Units
if, as and when the Purchaser gives oral or written notice to the Partnership 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 and transmitted directly
to the Unit Holders whose Units have been accepted for payment.
The Purchaser is making the Offer in order to acquire a substantial equity
interest in the Partnership primarily for investment and does not currently
intend to change current management or the operation of the Partnership and,
except as set forth in the Offer to Purchase and herein, does not have current
plans for any extraordinary transaction involving the Partnership. The Purchaser
does intend to encourage the Partnership's general partner to market the
Partnership's properties for sale and to encourage and assist others in making
offers to purchase one or both of such properties. There can be no assurances
that any offers will be made or that any sale of any Property will be completed.
In all cases, payment for Units purchased pursuant to the Offer will be
made only after timely receipt by the Purchaser of: (i) a properly completed and
duly executed and acknowledged Letter of Transmittal, (ii) any other documents
required by the Letter of Transmittal, and (iii) written confirmation from the
Partnership of the transfer of the Units to the Purchaser. If more than the
Units being sought in the Offer are validly tendered and not withdrawn on or
prior to the Expiration Date (as defined herein), the Purchaser will, upon the
terms and subject to the conditions of the Offer, accept and pay for an
aggregate of the Units of each class being sought in the Offer (or, if less, the
maximum number of Units that can be purchased without imposing limitations on
future resales), pro rata, with appropriate adjustments to avoid purchases of
fractional Units. Under no circumstance will interest on the purchase price for
Units be paid, regardless of any extension of the Offer or delay in making the
payment to Unit Holders.
As used herein, the term "Expiration Date" means 5:00 p.m., Los Angeles
time, on Monday, March 29, 1999, unless the Purchaser extends the period of time
during which the Offer is open, in which event the term "Expiration Date" will
mean the latest time and date to which the Offer is extended by the Purchaser.
Subject to the applicable regulations of the Securities and Exchange Commission,
the Purchaser expressly reserves the right at any time to extend the period of
time during which the Offer is open for any reason, including the occurrence of
any of the events specified in the Offer to Purchase. Any extension will be
followed by a press release or public announcement made no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date.
Tenders of Units made 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 April 25, 1999.
For withdrawal to be effective, a written or facsimile transmission notice of
withdrawal must be timely received by the Purchaser at its address set forth on
the back cover of the Offer to Purchase. Any notice of withdrawal must specify
the name of the person(s) who tendered the Units to be withdrawn and must be
signed by the person(s) who signed the respective Letter of Transmittal in the
same manner as such Letter of Transmittal was signed. Any Units properly
withdrawn will be deemed not validly tendered for purposes of the Offer.
Withdrawn Units may be re-tendered, however, at any time prior to the Expiration
Date.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities and Exchange Act of 1934, as
amended (the "Act"), is contained in the Offer to Purchase and is incorporated
herein by reference.
A request is being made under Rule 14d-5 under the Act, for the use of the
list of the Unit Holders for the purpose of disseminating the Offer to the
respective Unit Holders. Upon compliance by the Partnership with the request,
the Offer to Purchase and the Letter of Transmittal and, if required, other
relevant materials will be mailed to registered owners of the Units and will be
furnished to brokers, banks and similar persons whose names, or whose nominees,
appear on the list of Unit Holders, or if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Units.
Questions and requests for assistance may be directed to the Purchaser at
its address and telephone number set forth below. Copies of the Offer to
Purchase and the related Letter of Transmittal may be obtained from the
Purchaser, and will be furnished promptly at the Purchaser's expense. The
Purchaser will not pay any fees or commissions to any broker or dealer or any
other person for soliciting tenders of Units pursuant to the Offer.
Information About the Offer is Available From:
Everest Properties II, LLC
199 S. Los Robles Ave., Suite 440
Pasadena, California 91101
Telephone: (800) 611-4613
Facsimile: (626) 585-5929
February 24, 1999
<PAGE>
OFFER TO PURCHASE
UNITS OF
INCOME GROWTH PARTNERS, LTD. X
FOR
$500 PER CLASS A UNIT AND
$5 PER ORIGINAL UNIT
(Subject to the terms and conditions of the Offer)
Everest Investors 10, LLC
199 S. Los Robles Avenue, Suite 440
Pasadena, California 91101
Everest Investors 10, LLC is not an affiliate of the Partnership or
the General Partner of the Partnership.
---
Please read carefully the enclosed Offer to Purchase.
---
To accept the Offer, please carefully follow the enclosed Instructions and
return your duly executed Agreement of Transfer in the envelope provided.
If you have any questions or need assistance in completing the Agreement of
Transfer, please call Everest at 1-800-611-4613
February 24, 1999
