<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
-------------------------
HIGH EQUITY PARTNERS L.P. - SERIES 88
(Name of Subject Company [Issuer])
OLYMPIA INVESTORS L.P.
OLYMPIA-GP, INC.
AMERICAN REAL ESTATE HOLDINGS, L.P.
AMERICAN PROPERTY INVESTORS, INC.
CARL C. ICAHN
(Bidders)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
NONE
(CUSIP Number of Class of Securities)
-------------------------------------
Bonnie D. Podolsky
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
(212) 626-0800
-----------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
Calculation of Filing Fee
- -----------------------------------------------------------------
Transaction Amount of
Valuation*: $17,374,500 Filing Fee: $3,474.90
- -----------------------------------------------------------------
For purposes of calculating the filing fee only. This
amount assumes the purchase of 148,500 Units of the subject
company for $117.00 per Unit in cash.
[ ] Check box if any part of the fee is offset as provided
by Rule 0-11(a)(2) and identify the filing with which the
offsetting fee was previously paid. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
Amount Previously Paid: ______________________________________
Form or Registration No.: ______________________________________
Filing Party: __________________________________________________
Dated Filed: __________________________________________________
<PAGE>
SCHEDULE 14D-1
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Olympia Investors, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF; WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
N/A
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
(See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
10 TYPE OF REPORTING PERSON (See Instructions)
PN
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<PAGE>
SCHEDULE 14D-1
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Olympia-GP, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
N/A
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
(See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
10 TYPE OF REPORTING PERSON (See Instructions)
CO
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<PAGE>
SCHEDULE 14D-1
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
American Real Estate Holdings, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
N/A
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
(See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
10 TYPE OF REPORTING PERSON (See Instructions)
PN
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<PAGE>
SCHEDULE 14D-1
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
American Property Investors, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
N/A
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
(See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
10 TYPE OF REPORTING PERSON (See Instructions)
CO
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<PAGE>
SCHEDULE 14D-1
CUSIP No. None
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Carl C. Icahn
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) /x/
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,346 Units
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
(See Instructions) / /
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0.6%
10 TYPE OF REPORTING PERSON (See Instructions)
IN
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<PAGE>
SCHEDULE 14D-1
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is High Equity Partners
L.P. - Series 88, a Delaware limited partnership (the "Partnership"),
which has its principal executive offices at 411 West Putnam Avenue,
Greenwich, CT 06830.
(b) This Schedule relates to the offer by Olympia Investors,
L.P., a Delaware limited partnership (the "Purchaser"), to purchase up
to 148,500 of the issued and outstanding Units of Limited Partnership
Interests ("Units") of the Partnership at a purchase price of $117.00
per Unit, net to the seller in cash (the "Purchase Price"), without
interest, less the amount of any distributions declared or made with
respect to the Units (other than distributions of Adjusted Cash from
Operations, as defined in the Partnership's partnership agreement)
between March 12, 1998 and the date of payment of the Purchase Price by
the Purchaser, upon the terms and subject to the conditions set forth in
the Offer to Purchase (the "Offer to Purchase") dated March 12, 1998,
and the related Assignment of Partnership Interest, copies of which are
attached hereto as Exhibits (a)(1) and (a)(2), respectively.
Information concerning the number of Units outstanding is set forth in
the "INTRODUCTION" to the Offer to Purchase and is incorporated herein
by reference.
(c) The information set forth in Section 12 ("Background of
the Offer") of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) The Purchaser is a Delaware limited partnership, the
general partner of which is Olympia-GP Inc., a Delaware corporation
which is wholly-owned by American Real Estate Holdings, L.P., a Delaware
limited partnership ("AREH"), and the sole limited partner of which is
AREH. The general partner of AREH is American Property Investors, Inc.
("API"), a Delaware corporation which is wholly-owned by Carl C. Icahn,
and the sole limited partner of AREH is American Real Estate Partners,
L.P., a Delaware limited partnership. The information set forth in
Section 10 ("Information Concerning the Purchaser and Certain Affiliates
of the Purchaser") of the Offer to Purchase and Schedule I of the Offer
to Purchase is incorporated herein by reference.
(e)-(f) During the last five years, neither the Purchaser
nor, to the best of its knowledge, any of the persons listed in Schedule
I or referred to in Section 10 ("Information Concerning the Purchaser
and Certain Affiliates of the Purchaser") of the Offer to Purchase (i)
has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) was a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
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<PAGE>
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.
(g) The information set forth in Schedule I of the Offer to
Purchase is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT
COMPANY.
(a) None.
(b) The information set forth in Section 8. ("Future Plans of
the Purchaser") and Section 12 ("Background of the Offer") of the Offer
to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in Section 11 ("Source of
Funds") of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE
BIDDER.
(a)-(c) The information set forth in Section 8 ("Future Plans
of the Purchaser") of the Offer to Purchase is incorporated herein by
reference.
(d)-(e) Not applicable.
(f)-(g) The information set forth in Section 7 ("Effects of
the Offer") of the Offer to Purchase is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction and
Section 10 ("Information Concerning the Purchaser and Certain Affiliates
of the Purchaser") of the Offer to Purchase is incorporated herein by
reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in Section 12 ("Background of the
Offer") of the Offer to Purchase is incorporated herein by reference.
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<PAGE>
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 16 ("Fees and Expenses")
of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Exhibit (c)(1) is
incorporated herein by reference.
(b)-(d) The information set forth in Section 15 ("Certain
Legal Matters") of the Offer to Purchase is incorporated herein by
reference.
(e) None.
(f) Reference is hereby made to the Offer to Purchase and
the related Assignment of Partnership Interest, copies of which are
attached hereto as Exhibits (a)(1) and (a)(2)respectively, and which are
incorporated herein in their entirety by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated March 12, 1998.
(a)(2) Assignment of Partnership Interest.
(a)(3) Press Release, dated March 12, 1998.
(a)(4) Cover Letter, dated March 12, 1998, from Olympia
Investors, L.P. to the holders of the Units.
(b) Not applicable
(c)(1) Letter Agreement, dated March 6, 1998, between
Presidio Capital Corp., Olympia Investors, L.P. and
American Real Estate Holdings, L.P.
(d)-(f) Not applicable
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<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
Dated: March 12, 1998
---------------
OLYMPIA INVESTORS, L.P. OLYMPIA GP-INC.
By: OLYMPIA GP-INC.,
its general partner By: /s/ Martin L. Hirsch
-----------------------
Name: Martin L. Hirsch
Title: Vice President
By: /s/ Martin L. Hirsch
-----------------------
Name: Martin L. Hirsch
Title: Vice President
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.,
its general partner
By: /s/ Martin L. Hirsch
-----------------------
Name: Martin L. Hirsch
Title: Vice President
AMERICAN PROPERTY INVESTORS, INC.
By: /s/ Martin L. Hirsch
-----------------------
Name: Martin L. Hirsch
Title: Vice President
-----------------------
CARL C. ICAHN
[Signature Page for High Equity Partners L.P. - Series 88, Schedule 14D-1]
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<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
(a)(1) Offer to Purchase, dated March 12, 1998.
(a)(2) Assignment of Partnership Interest.
(a)(3) Press Release, dated March 12, 1998.
(a)(4) Cover Letter, dated March 12, 1998, from Olympia
Investors, L.P. to the holders of the Units.
(b) Not applicable
(c)(1) Letter Agreement, dated March 6, 1998, between Presidio
Capital Corp., Olympia Investors, L.P. and American
Real Estate Holdings, L.P.
(d)-(f) Not applicable
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<PAGE>
Offer to Purchase for Cash
Up to 148,500 Units of Limited Partnership Interest
in
HIGH EQUITY PARTNERS L.P. - Series 88
for
$117.00 Net Per Unit
by
OLYMPIA INVESTORS, L.P.
----------------------------------------------------------
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON WEDNESDAY, APRIL 8, 1998, UNLESS THE OFFER IS EXTENDED.
----------------------------------------------------------
IMPORTANT
Olympia Investors, L.P., a Delaware limited partnership (the
"Purchaser"), is offering to purchase up to 148,500 of the outstanding units of
limited partnership interest ("Units") in High Equity Partners L.P. Series 88, a
Delaware limited partnership (the "Partnership"), at a purchase price of $117.00
per Unit (the "Purchase Price"), net to the seller in cash, without interest,
less the amount of distributions per Unit, if any (other than distributions of
Adjusted Cash from Operations, as defined in the Partnership's partnership
agreement ("Partnership Agreement")), made by the Partnership from the date of
this Offer to Purchase (as it may be supplemented or amended from time to time,
the "Offer to Purchase"), until the Payment Date (as defined below), upon the
terms and subject to the conditions set forth in the Offer to Purchase and in
the related Assignment of Partnership Interest, including the Instructions
thereto, as it may be supplemented or amended from time to time (the "Assignment
of Partnership Interest" which, collectively with the Offer to Purchase,
constitute the "Offer"). As a result of Carl C. Icahn's relationship with the
Purchaser, he may be deemed to be a "co-bidder" with the Purchaser. LIMITED
PARTNERS WHO TENDER THEIR UNITS WILL NOT BE OBLIGATED TO PAY ANY COMMISSIONS OR
PARTNERSHIP TRANSFER FEES. The 148,500 Units sought pursuant to the Offer
represent approximately 40% of the total Units outstanding as of September 30,
1997.
The Purchaser is not affiliated with the general partners of the
Partnership. However, the Purchaser has entered into an agreement (the
"Agreement") with Presidio Capital Corp. ("Presidio"), an affiliate of the
Partnership's general partners, pursuant to which, among other things and
subject to the terms and conditions set forth therein: (i) the Purchaser has
granted Presidio the right to purchase 50% of the Units acquired by the
Purchaser pursuant to the Offer and the Purchaser's offers for Units of two
related limited partnerships (the "Related Partnerships"); (ii) either party can
initiate buy/sell procedures pursuant to which the non-initiating party would be
required to elect either to buy certain Units from the initiating party or to
sell certain Units to the initiating party; (iii) the Purchaser and its
affiliates have agreed that, prior to the Standstill Expiration Date (as defined
in Section 12 ("Background of the Offer"), they will not: seek the removal of
the general partners, call any meeting of limited partners or seek to control
the management, policies or affairs of the Partnership or the Related
Partnerships, effect any business combination or other extraordinary transaction
with the Partnership, any Related Partnership or their general partners, acquire
Units other than pursuant to the Offers or acquire properties or assets of the
Partnership or any Related Partnership; (iv) the Purchaser and its affiliates
have agreed, prior to the Standstill Expiration Date, to vote their Units in
favor of a proposal, if any, by the Partnerships general partners that would
result in Limited Partners receiving securities that are listed on NASDAQ or a
national securities exchange; and (v) Presidio has agreed to cause the general
partners of the Partnership and the Related Partnership to cooperate to
facilitate the Offers. Section 12 ("Background of the Offer") contains a more
detailed description of the Agreement.
<PAGE>
The Offer is not conditioned upon any minimum number of Units being
tendered. If, as of the Expiration Date (as defined in Section 1 ("Terms of the
Offer; Expiration Date; Proration")), more than 148,500 Units are validly
tendered and not properly withdrawn, the Purchaser will accept for purchase on a
pro rata basis only 148,500 Units, subject to the terms and conditions set forth
herein. See Section 14 ("Conditions of the Offer").
Any (i) limited partner of the Partnership, (ii) beneficial owner, in
the case of Units owned by Individual Retirement Accounts or Keogh Plans (a
"Beneficial Owner"), or (iii) person who has purchased Units but has not yet
been reflected on the Partnership's books as a substitute limited partner (an
"Assignee", and collectively with limited partners of the Partnership and
Beneficial Owners, the "Limited Partners") desiring to tender Units should
complete and sign the Assignment of Partnership Interest or a facsimile thereof
in accordance with the Instructions in the Assignment of Partnership Interest
and mail or deliver the signed Assignment of Partnership Interest together with
all certificates representing such Units ("Certificates") to the Depositary (as
defined below). A Limited Partner may tender any or all of the Units owned by
that Limited Partner, provided, however, in order for a tender to be valid, (i)
a minimum of 10 Units or, if Units are tendered by an Individual Retirement
Account or a Keogh Plan, 4 Units, must be sold pursuant to the Offer and (ii) to
the extent such tender is a partial tender, after the sale of Units pursuant to
the Offer, the Limited Partner must continue to hold at least 10 Units or, if
Units are tendered by an Individual Retirement Account or a Keogh Plan, 4 Units
(8 Units for an Individual Retirement Account or a Keogh Plan for Iowa residents
and 10 Units for all South Carolina residents) ((i) and (ii) collectively, the
"Minimum Units Requirements"). See Section 3 ("Procedure for Tendering Units").
Limited Partners are urged to consider the following factors:
* The Purchaser is making the Offer with a view to making a profit.
Accordingly, in establishing the Purchase Price, the Purchaser was
motivated to set the lowest price for the Units which might be
acceptable to Limited Partners consistent with the Purchaser's
objectives. Such objectives and motivations may conflict with the
interest of the Limited Partners in receiving the highest price for
their Units. No independent person has been retained to evaluate or
render any opinion with respect to the fairness of the Purchase
Price and no representation is made by the Purchaser or any
affiliate of the Purchaser as to such fairness.
* The Purchase Price of $117.00 per Unit is approximately 80% of the
Purchaser's estimate of the net asset value per Unit of $146.04 and
approximately 84% of the Purchaser's estimate of liquidation value
per Unit of $139.39. See "Introduction" and Section 13 ("Purchase
Price Considerations").
* If the Purchaser is successful in acquiring a substantial number of
Units pursuant to the Offer, the Purchaser, which is controlled by
Carl C. Icahn, could, after the Standstill Expiration Date, thereby
be in a position to significantly influence voting decisions with
respect to the Partnership, including, without limitation,
decisions concerning amendments to the Partnership Agreement and
removal and replacement of the Partnership's general partners. This
means that, after the Standstill Expiration Date, (i) those who
remain Limited Partners could be prevented from taking action they
desire but that the Purchaser opposes and (ii) the Purchaser may be
able to take action desired by the Purchaser but opposed by such
remaining Limited Partners. Generally, however, voting decisions,
other than certain decisions concerning the removal and
substitution of the Partnership's general partners, require the
consent of the Partnership's general partners prior to
effectuation.
Questions and requests for assistance or for additional copies of the
Offer to Purchase and the Assignment of Partnership Interest may be directed to
the Information Agent (as defined below) at the address and telephone number set
forth below and on the back cover of the Offer to Purchase. No soliciting dealer
fees or other payments to brokers for tenders are being paid by the Purchaser.
<PAGE>
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION (THE "COMMISSION") NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
For More Information or for Further Assistance, Please Call the
Information Agent:
BEACON HILL PARTNERS, INC.
90 Broad Street
New York, New York 10004
(212) 843-8500 (Collect)
(800) 301-8755 (Toll Free)
<PAGE>
TABLE OF CONTENTS
Page
INTRODUCTION...................................................................1
THE OFFER......................................................................5
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE; PRORATION............5
SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS..............6
SECTION 3. PROCEDURE FOR TENDERING UNITS.............................6
SECTION 4. WITHDRAWAL RIGHTS.........................................8
SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT........9
SECTION 6. CERTAIN FEDERAL INCOME TAX MATTERS.......................10
SECTION 7. EFFECTS OF THE OFFER.....................................11
SECTION 8. FUTURE PLANS OF THE PURCHASER............................12
SECTION 9. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP...........13
SECTION 10. INFORMATION CONCERNING THE PURCHASER AND CERTAIN
AFFILIATES OF THE PURCHASER.......................17
SECTION 11. SOURCE OF FUNDS..........................................18
SECTION 12. BACKGROUND OF THE OFFER..................................18
SECTION 13. PURCHASE PRICE CONSIDERATIONS............................19
SECTION 14. CONDITIONS OF THE OFFER..................................23
SECTION 15. CERTAIN LEGAL MATTERS....................................25
SECTION 16. FEES AND EXPENSES........................................25
SCHEDULE I...................................................................I-1
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<PAGE>
To the Limited Partners of
High Equity Partners L.P. - Series 88
INTRODUCTION
The Purchaser hereby offers to purchase up to 148,500 Units at a
purchase price of $117.00 per Unit (the "Purchase Price"), net to the seller in
cash, without interest, less the amount of distributions per Unit, if any (other
than distributions of Adjusted Cash from Operations, as defined in the
Partnership Agreement), made by the Partnership from the date of the Offer until
the Payment Date, upon the terms and subject to the conditions set forth in the
Offer. Limited Partners who tender their Units in response to the Offer will not
be obligated to pay any commissions or partnership transfer fees. The Purchaser
has retained Beacon Hill Partners, Inc. to act as Information Agent (the
"Information Agent") and Harris Trust Company of New York to act as Depositary
(the "Depositary") in connection with the Offer. The Purchaser will pay all
charges and expenses in connection with the services of the Information Agent
and the Depositary. The Offer is not conditioned on any minimum number of Units
being tendered. Subject to the Minimum Units Requirements, a Limited Partner may
tender any or all of the Units owned by that Limited Partner. Notwithstanding
any provision contained in the Offer to Purchase or any related document, under
no circumstances will the Purchaser be required to accept any Units the transfer
of which to the Purchaser would be prohibited by the Partnership Agreement or
any regulation or procedure adopted thereunder.
The Purchaser is not affiliated with the general partners of the
Partnership. However, the Purchaser has entered into an Agreement with Presidio,
pursuant to which, among other things and subject to the terms and conditions
set forth therein: (i) the Purchaser has granted Presidio the right to purchase
50% of the Units acquired by the Purchaser pursuant to the Offer and offers for
Units of the Related Partnerships (collectively, the "Offers"); (ii) either
party can initiate buy/sell procedures pursuant to which the non-initiating
party would be required to elect either to buy certain Units from the initiating
party or to sell certain Units to the initiating party; (iii) the Purchaser and
its affiliates have agreed that, prior to the Standstill Expiration Date, they
will not: seek the removal of the general partners, call any meeting of limited
partners or seek to control the management, policies or affairs of the
Partnership or the Related Partnerships, effect any business combination or
other extraordinary transaction with the Partnership, any Related Partnership or
their general partners, acquire Units other than pursuant to the Offers or
acquire properties or assets of the Partnership or any Related Partnership; (iv)
the Purchaser and its affiliates have agreed, prior to the Standstill Expiration
Date, to vote their Units in favor of a proposal, if any, by the Partnerships
general partners that would result in Limited Partners receiving securities that
are listed on NASDAQ or a national securities exchange; and (v) Presidio has
agreed to cause the general partners of the Partnership and the Related
Partnership to cooperate to facilitate the Offers. Section 12 ("Background of
the Offer") contains a more detailed description of the Agreement.
Some Factors To Be Considered By Limited Partners. In considering the
Offer, Limited Partners may wish to consider the following:
* The Purchaser is making the Offer with a view to making a profit.
Accordingly, in establishing the Purchase Price, the Purchaser was
motivated to set the lowest price for the Units which might be
acceptable to Limited Partners consistent with the Purchaser's
objectives. Such objectives and motivations may conflict with the
interest of the Limited Partners in receiving the highest price for
their Units. No independent person has been retained to evaluate or
render any opinion with respect to the fairness of the Purchase
Price and no representation is made by the Purchaser or any
affiliate of the Purchaser as to such fairness.
* The Purchase Price of $117.00 per Unit is approximately 80% of the
Purchaser's estimate of the net asset value per Unit of $146.04 and
approximately 84% of the Purchaser's estimate of liquidation value
per Unit of $139.39. See Section 13 ("Purchase Price
Considerations").
<PAGE>
* Upon the liquidation of the Partnership, the Purchaser will benefit
to the extent the amount per Unit it receives in the liquidation
exceeds the Purchase Price, if at all. Therefore, Limited Partners
might receive more value if they hold their Units, rather than
tender, and receive proceeds from the liquidation of the
Partnership. Alternatively, Limited Partners may prefer to receive
the Purchase Price now rather than wait for uncertain future net
liquidation proceeds. When the assets of the Partnership are
ultimately sold or otherwise disposed of, the return to Limited
Partners could be higher or lower than the Purchase Price.
* If the Purchaser is successful in acquiring a substantial number of
Units pursuant to the Offer, the Purchaser, which is controlled by
Mr. Icahn, could, after the Standstill Expiration Date, thereby be
in a position to significantly influence voting decisions with
respect to the Partnership. This means that, after the Standstill
Expiration Date, (i) those who remain Limited Partners could be
prevented from taking action they desire but that the Purchaser
opposes and (ii) the Purchaser may be able to take action desired
by the Purchaser which may be opposed by, and which may not be in
the best interests of, such remaining Limited Partners. Generally,
however, voting decisions other than certain decisions concerning
the removal and substitution of the Partnership's general partners
require the consent of the Partnership's general partners prior to
effectuation.
* To the extent that a portion of the losses recognized and allocated
to the Limited Partners for tax purposes by the Partnership in
prior years was subject to restrictions on deductions of losses
from passive activities, such losses were generally "suspended" and
carried over by the Limited Partners. Such "suspended" losses may,
depending on a Limited Partner's particular circumstances, be
available to offset all or a portion of any gain recognized by such
Limited Partner on the sale of Units. In the event that a Limited
Partner tenders all of his Units, he would generally be able to
deduct any loss on the sale along with the balance of any
"suspended" passive activity losses from prior years. See Section 6
("Certain Federal Income Tax Matters"). Because the Offer is being
made for less than all of the outstanding Units, there can be no
assurance that a Limited Partner tendering all of his Units will in
fact sell all of such Units pursuant to the Offer.
* Consummation of the Offer may limit the ability of Limited Partners
to dispose of Units during the twelve month period following
completion of the Offer. See Section 7 ("Effects of the Offer").
* Limited Partners may no longer wish to continue with their
investment in the Partnership for a number of reasons, including:
Although not necessarily an indication of value, the $117.00
per Unit Purchase Price is a premium over the $94.80 per
Unit weighted average selling price for Units reported for
the limited and sporadic secondary market during the
six-month period ended January 31, 1998. See Section 13
("Purchase Price Considerations"). Such secondary market
selling prices do not take into account commissions charged
by secondary market makers effectuating such sales and other
transaction costs;
The Offer will provide Limited Partners with an immediate
opportunity to liquidate their investment in the Partnership
without the usual transaction costs associated with market
sales or Partnership transfer fees;
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Although there are some limited resale mechanisms available
to Limited Partners wishing to sell their Units, there is no
formal or organized trading market for the Units. The
Partnership's Form 10-K for the year ended December 31, 1996
(the "Form 10-K") states: "Units of the Partnership are not
publicly traded. There are certain restrictions set forth in
the Partnership's amended limited partnership agreement
("Limited Partnership Agreement") which may limit the
ability of a limited partner to transfer Units. Such
restrictions could impair the ability of a limited partner
to liquidate its investment in the event of an emergency or
for any other reason." Accordingly, Limited Partners who
desire resale liquidity may wish to consider the Offer. The
Offer affords a significant number of Limited Partners an
opportunity to dispose of their Units for cash, which
alternative otherwise might not be available to them.
However, the Purchase Price is not intended to represent
either the fair market value of a Unit or the fair market
value of the Partnership's assets on a per Unit basis;
General disenchantment with real estate investments;
General disenchantment with long-term investments in limited
partnerships because of, among other things, their
illiquidity and the inability of Limited Partners to
effectuate management control over the Partnership's affairs
through the annual election of general partners. Limited
Partners should note, however, that they do have the right
to remove the general partners by a majority vote;
The Offer may be attractive to certain Limited Partners who
wish in the future to avoid the expenses, delays and
complications in filing complex income tax returns which
result from an ownership of Units;
The Offer provides Limited Partners with the opportunity to
liquidate their Units and to reinvest the proceeds in other
investments should they desire to do so;
The Purchaser believes that the Units represent an
attractive investment at the Purchase Price. There can be no
assurance, however, that this judgment is correct. Ownership
of Units will remain a speculative investment.
The Purchaser reserves the right to transfer or assign, in whole or
from time to time in part, to one or more persons, the right to purchase Units
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer or prejudice the rights
of tendering Limited Partners to receive payment for Units validly tendered and
accepted for payment pursuant to the Offer.
Limited Partners should consult with their respective advisors about
the financial, tax, legal and other implications of accepting the Offer. Limited
Partners are urged to read the Offer to Purchase and the related materials
carefully and in their entirety before deciding whether to tender their Units.
The Purchaser. The Purchaser is a Delaware limited partnership, the
general partner of which is Olympia-GP Inc., a Delaware corporation which is
wholly-owned by American Real Estate Holdings, L.P., a Delaware limited
partnership ("AREH"), and the sole limited partner of which is AREH. The general
partner of AREH is American Property Investors, Inc., a Delaware corporation
which is wholly-owned by Carl C. Icahn, and the sole limited partner of AREH is
American Real Estate Partners, L.P., a Delaware limited partnership.
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Reasons For The Offer. The Purchaser is making the Offer because it
believes that the Units represent an attractive investment at the price offered.
There can be no assurance, however, that the Purchaser's judgment is correct,
and, as a result, ownership of Units (either by the Purchaser or Limited
Partners who retain their Units) will remain a speculative investment. The
Purchaser is acquiring the Units for investment purposes and has no present
intention to make any effort to change current management or the operations of
the Partnership and has no present plans for any extraordinary transaction
involving the Partnership. See Section 8 ("Future Plans of the Purchaser").
Conditions. The Offer is not conditioned on any minimum number of Units
being tendered. Certain other conditions, however, do apply. See Section 14
("Conditions of the Offer").
Outstanding Units. According to publicly available information, as of
March 15, 1997, there were 371,766 Units issued and outstanding, which were held
by 7,515 Limited Partners. An affiliate of the Purchaser beneficially owns 2,346
Units. See Section 10 ("Information Concerning the Purchaser and Certain
Affiliates of the Purchaser").
Additional Information. The Partnership is subject to the information
and reporting requirements of the Securities Exchange Act of 1934, as amended
("Exchange Act"), and in accordance therewith is required to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Such reports and other information may be inspected
at the public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and are
available for inspection and copying at the regional offices of the Commission
located in Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and at 7 World Trade Center, 13th Floor, New York, New
York 10048 and at the Commission's World Wide Website at http://www.sec.gov.
Copies of such material can also be obtained from the Public Reference Room of
the Commission in Washington, D.C. at prescribed rates.
ALL OF THE INFORMATION WITH RESPECT TO THE PARTNERSHIP CONTAINED IN
THE OFFER TO PURCHASE HAS BEEN DERIVED FROM DOCUMENTS AND REPORTS
PUBLICLY FILED BY THE PARTNERSHIP OR THE APPRAISAL INFORMATION (AS DEFINED
IN SECTION 12 ("BACKGROUND OF THE OFFER")). ALTHOUGH THE PURCHASER HAS NO
INFORMATION THAT ANY STATEMENTS CONTAINED HEREIN BASED UPON SUCH
DOCUMENTS, REPORTS OR APPRAISAL INFORMATION ARE UNTRUE, THE PURCHASER
CANNOT TAKE RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF THE
INFORMATION CONCERNING THE PARTNERSHIP CONTAINED IN SUCH DOCUMENTS,
REPORTS AND APPRAISAL INFORMATION OR FOR ANY FAILURE BY THE PARTNERSHIP
TO DISCLOSE EVENTS WHICH MAY HAVE OCCURRED AND MAY AFFECT THE
SIGNIFICANCE OR ACCURACY OF ANY SUCH INFORMATION BUT WHICH ARE UNKNOWN
TO THE PURCHASER.
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THE OFFER
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE; PRORATION.
Upon the terms and subject to the conditions of the Offer, the
Purchaser will accept (and thereby purchase) up to 148,500 Units that are
validly tendered on or prior to the Expiration Date and not withdrawn in
accordance with the procedures set forth in Section 4 ("Withdrawal Rights"). For
purposes of the Offer, the term "Expiration Date" shall mean 12:00 midnight, New
York City time, on Wednesday, April 8, 1998, unless the Purchaser in its sole
discretion shall have extended the period of time for which the Offer is open,
in which event the term "Expiration Date" shall mean the latest time and date on
which the Offer, as extended by the Purchaser, shall expire. See Section 5
("Extension of Tender Period; Termination; Amendment") for a description of the
Purchaser's right to extend the period of time during which the Offer is open
and to amend or terminate the Offer.
If, prior to the Expiration Date, the Purchaser increases the
consideration offered to Limited Partners pursuant to the Offer, the increased
consideration 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 148,500 Units are validly tendered and not properly
withdrawn on or prior to the Expiration Date, the Purchaser will, upon the terms
and subject to the conditions of the Offer, accept for payment and pay for an
aggregate of 148,500 of the Units so tendered, pro rata according to the number
of Units validly tendered by each Limited Partner and not properly withdrawn on
or prior to the Expiration Date, with appropriate adjustments to avoid (i)
purchases of fractional Units and (ii) purchases that would violate the
Partnership Agreement and any relevant procedures or regulations promulgated by
the Partnership's general partners. If the number of Units validly tendered and
not properly withdrawn on or prior to the Expiration Date is less than or equal
to 148,500 Units, the Purchaser will purchase all Units so tendered and not
properly withdrawn, upon the terms and subject to the conditions of the Offer,
subject to the adjustments referred to in the preceding sentence.
If proration of tendered Units is required, because of the difficulty
of determining the number of Units validly tendered and not withdrawn, the
Purchaser may not be able to announce the final results of such proration until
at least approximately seven business days after the Expiration Date. Subject to
the Purchaser's obligation under Rule 14e-1(c) under the Exchange Act to pay
Limited Partners the Purchase Price in respect of Units tendered or return those
Units promptly after the termination or withdrawal of the Offer, the Purchaser
does not intend to pay for any Units accepted for payment pursuant to the Offer
until the final proration results are known. NOTWITHSTANDING ANY SUCH DELAY IN
PAYMENT, NO INTEREST WILL BE PAID ON THE PURCHASE PRICE.
The Offer is conditioned on satisfaction of certain conditions. See
Section 14 ("Conditions of the Offer"), which sets forth in full the conditions
of the Offer. The Purchaser reserves the right (but in no event shall be
obligated), in its sole discretion, to waive any or all of those conditions. If,
on or prior to the Expiration Date, any or all of the conditions have not been
satisfied or waived, the Purchaser reserves the right to (i) decline to purchase
any of the Units tendered, terminate the Offer and return all tendered Units to
tendering Limited Partners, (ii) waive all the unsatisfied conditions and,
subject to complying with applicable rules and regulations of the Commission,
purchase all Units validly tendered, (iii) extend the Offer and, subject to the
right of Limited Partners to withdraw Units until the Expiration Date, retain
the Units that have been tendered during the period or periods for which the
Offer is extended, and (iv) amend the Offer.
The Partnership has provided the Purchaser with a list of Limited
Partners for purposes of making the Offer, and the Offer to Purchase, the
Assignment of Partnership Interest and, if required, any other relevant
materials are being mailed to the Limited Partners to the extent their names and
addresses are on such list.
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SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS.
Upon the terms and subject to the conditions of the Offer, the
Purchaser will purchase by accepting for payment and will pay for Units validly
tendered and not withdrawn in accordance with the procedures specified in
Section 4 ("Withdrawal Rights"), as promptly as practicable following the
Expiration Date (such date of payment referred to herein as the "Payment Date").
A tendering beneficial owner of Units whose Units are owned of record by an
Individual Retirement Account or other qualified plan will not receive direct
payment of the Purchase Price; rather, payment will be made to the custodian of
such account or plan. In all cases, payment for Units purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of a properly
completed and duly executed Assignment of Partnership Interest (or facsimile
thereof) (with required medallion signature guarantees, unless waived by the
Purchaser in its sole and absolute discretion) and any other documents required
by the Assignment of Partnership Interest. See Section 3 ("Procedure for
Tendering Units"). UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE
PRICE BY REASON OF ANY DELAY IN MAKING SUCH PAYMENT.
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 verbal or written notice to
the Depositary of the Purchaser's acceptance of those Units for payment pursuant
to the Offer. No tender of Units will be deemed to have been validly made until
all defects and irregularities with respect to such tender have been cured or
waived.
If any tendered Units are not purchased for any reason, the Assignment
of Partnership Interest shall be effective to transfer to the Purchaser only
that number of the Limited Partner's Units as is accepted for payment and
thereby purchased by the Purchaser and the Certificates representing the
unpurchased Units returned. If, for any reason, acceptance for payment of, or
payment for, any Units tendered pursuant to the Offer is delayed or the
Purchaser is unable to accept for payment, purchase or pay for Units tendered
pursuant to the Offer, then, without prejudice to the Purchaser's rights under
Section 14 ("Conditions of the Offer"), the Depositary may, nevertheless, on
behalf of the Purchaser retain tendered Units, and those Units may not be
withdrawn except to the extent that the tendering Limited Partners are entitled
to withdrawal rights as described in Section 4 ("Withdrawal Rights"); subject,
however, to the Purchaser's obligation under Rule 14e-1(c) under the Exchange
Act to pay Limited Partners the Purchase Price in respect of Units tendered or
return those Units promptly after termination or withdrawal of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or
from time to time in part, to one or more persons, the right to purchase Units
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer or prejudice the rights
of tendering Limited Partners to receive payment for Units validly tendered and
accepted for payment pursuant to the Offer.
SECTION 3. PROCEDURE FOR TENDERING UNITS.
Valid Tender. To validly tender Units, a properly completed and duly
executed Assignment of Partnership Interest (or facsimile thereof) and any other
documents required by the Assignment of Partnership Interest and related
Certificates must be received by the Depositary at its address set forth on the
back cover of the Offer to Purchase, on or prior to the Expiration Date. Subject
to the Minimum Units Requirements, a Limited Partner may tender any or all of
the Units owned by that Limited Partner. No alternative, conditional or
contingent tenders will be accepted.
Signature Requirements. The signature(s) on the Assignment of
Partnership Interest must be medallion guaranteed by a commercial bank, savings
bank, credit union, savings and loan association or trust company
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<PAGE>
having an office, branch or agency in the United States, a brokerage firm that
is a member firm of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc., as provided in the Assignment
of Partnership Interest. See Instructions to the Assignment of Partnership
Interest.
In order for a tendering Limited Partner to participate in the Offer,
his Units must be validly tendered and not withdrawn on or prior to the
Expiration Date.
THE METHOD OF DELIVERY OF THE ASSIGNMENT OF PARTNERSHIP INTEREST,
ALL OTHER REQUIRED DOCUMENTS AND THE RELATED CERTIFICATES IS AT THE
OPTION AND RISK OF THE TENDERING LIMITED PARTNER AND DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
Appointment As Proxy. By executing an Assignment of Partnership
Interest, a tendering Limited Partner irrevocably appoints the Purchaser, its
general partner and any designees of the Purchaser as the Limited Partner's true
and lawful agents and attorneys-in-fact and proxies, in the manner set forth in
the Assignment of Partnership Interest, each with full power of substitution, to
the full extent of the Limited Partners's rights with respect to the Units
tendered by the Limited Partner and accepted for payment by the Purchaser. The
Purchaser, its general partner and the designees of the Purchaser will, as to
those Units, be empowered to exercise all voting and other rights with respect
to such Units, including, without limitation, to assign such power of proxy
and/or power-of-attorney to any person without assigning the related Units with
respect to which the such proxy and power-of-attorney was granted, to deliver
such Units and transfer ownership of such Units on the Partnership books
maintained by the general partners of the Partnership, to become a substituted
limited partner and to receive all benefits and otherwise exercise all rights of
beneficial ownership of such Units and as a limited partner of the Partnership,
all in accordance with the terms of the Offer. Each such power of attorney and
proxy shall be considered coupled with an interest in the tendered Units and is
irrevocable. Such appointment is subject to and effective upon acceptance for
payment of the Units tendered by the Limited Partner. Upon such acceptance for
payment, all prior proxies given by the Limited Partner with respect to the
Units will, without further action, be revoked, and no subsequent proxies may be
given (and if given will not be effective). The Purchaser reserves the right to
require that, in order for Units to be deemed validly tendered, immediately upon
the Purchaser's acceptance for payment of the Units, the Purchaser must be able
to exercise full voting rights with respect to the Units, including voting at
any meeting of Limited Partners then scheduled or acting by written consent
without a meeting. By executing the Assignment of Partnership Interest, a
tendering holder of Units agrees to execute all such documents and take such
other actions as shall be reasonably required to enable the Units tendered to be
voted in accordance with the directions of the Purchaser.
Assignment Of Interest In Future Distributions. By executing an
Assignment of Partnership Interest, a tendering Limited Partner irrevocably
assigns to the Purchaser and its assigns all of the right, title and interest of
the Limited Partner in and to any and all distributions made by the Partnership
from and after the Payment Date in respect of the Units tendered by the Limited
Partner and accepted for payment and thereby purchased by the Purchaser.
Determination Of Validity; Rejection Of Units; Waiver Of Defects; No
Obligation To Give Notice Of Defects. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Units pursuant to the Offer will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding on all parties. The
Purchaser reserves the absolute right to reject any or all tenders of any
particular Units determined by it not to be in proper form or if the acceptance
of or payment for those Units may, in the opinion of the Purchaser's counsel, be
unlawful. The Purchaser also reserves the absolute right to waive or amend any
of the conditions of the Offer that it is legally permitted to waive as to
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<PAGE>
the tender of any particular Units and to waive any defect or irregularity in
any tender with respect to any particular Units of any particular Limited
Partner. The Purchaser's interpretation of the terms and conditions of the Offer
(including the Assignment of Partnership Interest) will be final and binding on
all parties. No tender of Units will be deemed to have been validly made unless
and until all defects and irregularities have been cured or waived. Neither the
Purchaser, the Depositary nor any other person will be under any duty to give
notification of any defects or irregularities in the tender of any Units or will
incur any liability for failure to give any such notification.
Backup Federal Income Tax Withholding. To prevent the possible
application of backup federal income tax withholding of 31% with respect to
payment of the Purchase Price, a tendering Limited Partner must provide the
Purchaser with the Limited Partner's correct taxpayer identification number by
completing the Substitute Form W-9 included in the Assignment of Partnership
Interest. See Section 6 ("Certain Federal Income Tax Matters") and the
Instructions to the Assignment of Partnership Interest.
FIRPTA Withholding. To prevent the withholding of federal income tax in
an amount equal to 10% of the amount of the Purchase Price plus Partnership
liabilities allocable to each Unit purchased, each tendering Limited Partner
must complete the FIRPTA Affidavit included in the Assignment of Partnership
Interest certifying the Limited Partner's taxpayer identification number and
address and that the Limited Partner is not a foreign person. See Section 6
("Certain Federal Income Tax Matters") and the Instructions to the Assignment of
Partnership Interest.
Assignee Status. Any assignee of Units who has not been admitted to the
Partnership as a substitute Limited Partner must provide documentation to the
Depositary which demonstrates, to the satisfaction of the Purchaser, such
person's status as an assignee of a Unit.
A tender of Units pursuant to any of the procedures described above and
the acceptance for payment of such Units will constitute a binding agreement
between the tendering Limited Partner and the Purchaser on the terms set forth
in the Offer.
SECTION 4. WITHDRAWAL RIGHTS.
Tenders of Units pursuant to the Offer are irrevocable, except that
Units tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless already accepted for payment as provided in the
Offer to Purchase, may also be withdrawn at any time after May 11, 1998.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at its address
set forth on the back cover of the Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered, the number of Units
to be withdrawn and the name in which the Certificates are registered, if
different from the person who tendered. In addition, the notice of withdrawal
must be signed by the person(s) who signed the Assignment of Partnership
Interest in the same manner as the Assignment of Partnership Interest was signed
(including medallion signature guaranties).
If purchase of, or payment for, Units is delayed for any reason or if
the Purchaser is unable to purchase or pay for Units for any reason, then,
without prejudice to the Purchaser's rights under the Offer, tendered Units may
be retained by the Depositary and may not be withdrawn, except to the extent
that tendering Limited Partners are entitled to withdrawal rights as set forth
in this Section 4; subject, however, to the Purchaser's obligation, pursuant to
Rule 14e-1(c) under the Exchange Act, to pay Limited Partners the Purchase Price
in respect of Units tendered or return those Units promptly after termination or
withdrawal of the Offer.
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Any Units properly withdrawn will be deemed not to be validly tendered
for purposes of the Offer. Withdrawn Units may be re-tendered, however, by
following the procedures described in Section 3 ("Procedure for Tendering
Units") at any time prior to the Expiration Date.
All questions as to the validity and form (including time of receipt)
of notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding on all parties.
Neither the Purchaser, the Depositary nor any other person will be under any
duty to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT.
The Purchaser expressly reserves the right, in its sole discretion, at
any time and from time to time, (i) to extend the period of time during which
the Offer is open and thereby delay acceptance for payment of, and the payment
for, any Units, (ii) to terminate the Offer and not accept for payment any Units
not theretofore accepted for payment or paid for, (iii) upon the occurrence of
any of the conditions specified in Section 14 ("Conditions of the Offer"), to
delay the acceptance for payment of, or payment for, any Units not already
accepted for payment or paid for, and (iv) to amend the Offer in any respect
(including, without limitation, by increasing or decreasing the consideration
offered, the number of Units being sought, or both). Notice of any such
extension, termination or amendment will promptly be disseminated to Limited
Partners in a manner reasonably designed to inform Limited Partners 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 extends the Offer, or if the Purchaser (whether before
or after its acceptance for payment of Units) is delayed in its payment for
Units or is unable to pay for Units pursuant to the Offer for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Depositary may
retain tendered Units and those Units may not be withdrawn except to the extent
tendering Limited Partners are entitled to withdrawal rights as described in
Section 4 ("Withdrawal Rights"); subject, however, to the Purchaser's
obligation, pursuant to Rule 14e-1(c) under the Exchange Act, to pay Limited
Partners the Purchase Price in respect of Units tendered or return those Units
promptly after termination or withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer, or
if it waives a material condition to the Offer, the Purchaser will extend the
Offer and disseminate additional tender offer materials to the extent required
by Rules 14d-4(c) and 14d-6(d) under the Exchange Act. The minimum period during
which an offer must remain open following any material change in the terms of an
offer, other than a change in price or a change in percentage of securities
sought or a change in any dealer's soliciting fee, will depend upon the facts
and circumstances, including the materiality of the change. With respect to a
change in price or, subject to certain limitations, a change in the percentage
of securities sought or a change in any dealer's soliciting fee, a minimum of
ten business days from the date of such change is generally required to allow
for adequate dissemination to holders of Units. Accordingly, if prior to the
Expiration Date, the Purchaser increases (other than increases of two percent or
less than the outstanding Units) or decreases the number of Units being sought,
or increases or decreases the consideration offered pursuant to an Offer, and if
such Offer is scheduled to expire at any time earlier than the tenth business
day from the date that notice of such increase or decrease is first published,
sent or given to holders of Units, such Offer will be extended at least until
the expiration of such ten business days. As used in the Offer to Purchase,
"business day" means any day other than a Saturday, Sunday or a federal holiday,
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
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SECTION 6. 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. This summary
is based on the Internal Revenue Code of 1986, as amended (the "Code"),
applicable Treasury regulations thereunder, administrative rulings, practice and
procedures and judicial authority, all as of the date of the Offer. All of the
foregoing are subject to change, and any such change could affect the continuing
accuracy of this summary. This summary does not discuss all aspects of federal
income taxation that may be relevant to a particular Limited Partner in light of
such Limited Partner's specific circumstances or to certain types of Limited
Partners subject to special treatment under the federal income tax laws (for
example, foreign persons, dealers in securities, banks, insurance companies and
tax-exempt organizations), nor (except as otherwise expressly indicated) does it
describe any aspect of state, local, foreign or other tax laws. Sales of Units
pursuant to the Offer will be taxable transactions for federal income tax
purposes, and also may be taxable transactions under applicable state, local,
foreign and other tax laws. LIMITED PARTNERS SHOULD CONSULT THEIR RESPECTIVE TAX
ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO EACH SUCH LIMITED PARTNER OF
SELLING UNITS PURSUANT TO THE OFFER.
In general, a Limited Partner will recognize gain or loss on a sale of
Units pursuant to the Offer equal to the difference between (i) the Limited
Partner's "amount realized" on the sale and (ii) the Limited Partner's adjusted
tax basis in the Units sold. The amount of a Limited Partner's adjusted tax
basis in such Units will vary depending upon the Limited Partner's particular
circumstances. The "amount realized" with respect to a Unit will be a sum equal
to the amount of cash received by the Limited Partner 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 Limited Partner on a sale of a Unit
pursuant to the Offer generally will be treated as a capital gain or loss if (as
is generally expected to be the case) the Unit was held by the Limited Partner
as a capital asset. That capital gain or loss will be treated as long-term
capital gain or loss if the tendering Limited Partner's holding period for the
Units exceeds 18 months. If the tendering Limited Partner's holding period for
the Units exceeds one year but not more than 18 months, the capital gain or loss
will be treated as mid- term capital gain or loss. Undercurrent law, long-term
and mid-term capital gains of individuals and other non-corporate taxpayers are
taxed at marginal federal income tax rates of 20% and 28%, respectively, whereas
the maximum marginal federal income tax rate for ordinary income of such persons
is 39.6%. Capital losses are deductible only to the extent of capital gains,
except that non-corporate taxpayers may deduct up to $3,000 of capital losses in
excess of the amount of their capital gains against ordinary income. Excess
capital losses generally can be carried forward to succeeding years (a
corporation's carry forward period is five years and a non-corporate taxpayer
can carry forward such losses indefinitely); in addition, a corporation is
permitted to carry back excess capital losses to the three preceding taxable
years, provided the carryback does not increase or produce a net operating loss
for any of those years.
If any portion of the amount realized by a Limited Partner is
attributable to "unrealized receivables" (which includes depreciation recapture)
or "inventory" as defined in Code Section 751, then a portion of the Limited
Partner's gain or loss may be ordinary rather than capital.
A tendering Limited Partner will be allocated a pro rata share of the
Partnership's taxable income or loss for the year of sale with respect to the
Units sold in accordance with the provisions of the Partnership Agreement
concerning transfers of Units. Such allocation and any cash distributed by the
Partnership to the Limited Partner for that year will affect the Limited
Partner's adjusted tax basis in Units and, therefore, the amount of such Limited
Partner's taxable gain or loss upon a sale of Units pursuant to the Offer.
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Under Code Section 469, a non-corporate taxpayer or personal service
corporation generally can deduct "passive activity losses" in any year only to
the extent of the person's passive activity income for that year. Closely held
corporations may not offset such losses against so-called "portfolio" income.
Substantially all post-1986 losses of Limited Partners from the Partnership are
passive activity losses. Limited Partners 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).
If a Limited Partner sells less than all of his Units pursuant to the
Offer, a loss recognized by that Limited Partner can be currently deducted
(subject to other applicable limitations) to the extent of the Limited Partner's
passive income from the Partnership for that year plus any other passive
activity income for that year, and a gain recognized by a Limited Partner upon
the sale of Units can be offset by the Limited Partner's current or "suspended"
passive activity losses (if any) from the Partnership and other sources. If, on
the other hand, a Limited Partner sells 100% of his Units pursuant to the Offer,
any "suspended" losses and any losses recognized upon the sale of the Units will
be offset first against any other net passive gain to the Limited Partner from
the sale of the Units and any other net passive activity income from other
passive activity investments, and the balance of any "suspended" net losses from
the Units will no longer be subject to the passive activity loss limitation and,
therefore, will be deductible by such Limited Partner from his other income
(subject to any other applicable limitations). A tendering Limited Partner must
sell all of his Units to receive these tax benefits. Because the Offer is being
made for less than all of the outstanding Units, there can be no assurance that
a Limited Partner which tenders all of his Units will in fact sell all of his
Units pursuant to the Offer.
Limited Partners (other than tax-exempt persons, corporations and
certain foreign persons) who tender Units may be subject to 31% backup
withholding unless those Limited Partners provide a taxpayer identification
number ("TIN") and certify that the TIN is correct or properly certify that they
are awaiting a TIN. A Limited Partner may avoid backup withholding by properly
completing and signing the Substitute Form W-9 included as part of the
Assignment of Partnership Interest. If a Limited Partner who is subject to
backup withholding does not properly complete and sign the Substitute Form W-9,
the Purchaser will withhold 31% from payments to such Limited Partner.
A Limited Partner 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
Limited Partner also must notify the Partnership of the date of the transfer and
the names, addresses and TINs of the transferor and transferee within 30 days of
the date of the transfer (or, if earlier, by January 15 of the following
calendar year).
Gain realized by a foreign Limited Partner on the sale of a Unit
pursuant to the Offer will be subject to federal income tax. Under Code Section
1445, the transferee of an interest held by a foreign person in a partnership
which owns United States real property generally is required to deduct and
withhold a tax equal to 10% of the amount realized on the disposition. In order
to comply with this requirement, the Purchaser will withhold 10% of the amount
realized by a tendering Limited Partner unless the Limited Partner properly
completes and signs the FIRPTA Affidavit included as part of the Assignment of
Partnership Interest certifying the Limited Partner's TIN, that such Limited
Partner is not a foreign person and the Limited Partner's address. Amounts
withheld would be creditable against a foreign Limited Partner's federal income
tax liability and, if in excess thereof, a refund could be obtained from the
Internal Revenue Service by filing a U.S. income tax return.
SECTION 7.EFFECTS OF THE OFFER.
Effect On Trading Market; Registration Under Section 12(g) Of The
Exchange Act. If a substantial number of Units are purchased pursuant to the
Offer, the likely result will be a reduction in the number of Limited
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Partners. In the case of certain kinds of securities, a reduction in the number
of security-holders might be expected to result in a reduction in the liquidity
and volume of activity in the trading market for the security. In this case,
however, there is no established public trading market for the Units and,
therefore, the Purchaser does not believe a reduction in the number of Limited
Partners will materially further restrict the Limited Partners' ability to find
purchasers for their Units.
The Units are registered under Section 12(g) of the Exchange Act, which
means, among other things, that the Partnership is required to file periodic
reports with the Commission and to comply with the Commission's proxy rules. The
Purchaser does not expect or intend that consummation of the Offer will cause
the Units to cease to be registered under Section 12(g) of the Exchange Act. If
the Units were to be held by fewer than 300 persons, the Partnership could apply
to de-register the Units under the Exchange Act. Because the Units are widely
held, however, the Purchaser expects that, even if it purchases the maximum
number of Units in the Offer, after that purchase, the Units will be held of
record by substantially more than 300 persons.
As a result of the Offer and in the Purchaser's capacity as a Limited
Partner of the Partnership, the Purchaser will participate in any subsequent
distributions to Limited Partners to the extent of the Units purchased pursuant
to the Offer.
Certain Restrictions On Transfer Of Units. The Partnership Agreement
restricts transfers of Units if, among other things, such transfer would cause a
termination of the Partnership for federal income tax purposes (which
termination would occur when Units representing 50% or more of total Partnership
capital and profits are transferred within a twelve-month period). Consequently,
sales of Units in the secondary market and in private transactions during the
twelve-month period following completion of the Offer may be restricted, and
requests for transfers of Units during such twelve-month period may not be
recognized. The Purchaser does not intend to purchase Units to the extent such
purchase would violate the transfer restrictions set forth in the Partnership
Agreement. See Section 6 ("Certain Federal Income Tax Matters").
SECTION 8.FUTURE PLANS OF THE PURCHASER.
The purpose of the Offer is to enable the Purchaser to acquire a
significant interest in the Partnership for investment purposes based on its
expectation that there may be underlying value in the Partnership's properties.
The Purchaser does not presently intend to make any effort to change current
management or the operation of the Partnership and has no present plans or
intentions for any extraordinary transaction involving the Partnership.
Furthermore, the Purchaser and its affiliates have agreed with Presidio that,
prior to the Standstill Expiration Date, they will not, among other things, seek
the removal of the general partners, seek to control the management, policies or
affairs of the Partnership, or seek to effect any form of business combination
or other extraordinary transaction with the Partnership or its general partners.
The Purchaser and its affiliates have also agreed, prior to the Standstill
Expiration Date, to vote their Units in favor of a proposal, if any, by the
Partnerships general partners that would result in Limited Partners receiving
securities that are listed on NASDAQ or a national securities exchange. See
Section 12 ("Background of the Offer"). However, the Purchaser's plans with
respect to its investment in the Units could change after the Standstill
Expiration Date. If such plans with respect to the Partnership change in the
future, the ability of the Purchaser to influence actions on which Limited
Partners have the right to vote will depend on the response of Limited Partners
to the Offer. If the Purchaser acquires only a few Units pursuant to the Offer,
the Purchaser would not be in a position to influence matters over which Limited
Partners have a right to vote. Conversely, if the maximum number of Units sought
are purchased pursuant to the Offer, the Purchaser would own approximately 40%
of the issued and outstanding Units (or 20% of the issued and outstanding Units
if the call option granted under the Agreement is exercised) and, as a result,
would be in a position, after the Standstill Expiration Date, to exert
significant influence over matters on which Limited Partners have a right to
vote. Under the Partnership Agreement, Limited
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Partners holding a majority of the Units are entitled to remove the
Partnership's general partners at any time. However, as stated above, the
Purchaser has no present intention of doing so and is prohibited from doing so
under the Agreement prior to the Standstill Expiration Date. In addition,
Limited Partners holding a majority of the Units, with the concurrence of the
Partnership's general partner, are entitled to take action with respect to a
variety of matters, including dissolution of the Partnership and most types of
amendments to the Partnership Agreement, but the Purchaser has no present
intention of doing so.
The purchase of the Units will allow the Purchaser to benefit from any
of the following: (a) any cash distributions from Partnership operations in the
ordinary course of business; (b) any distributions of net proceeds from the sale
of Partnership properties; and (c) any distributions of net proceeds from the
liquidation of the Partnership. Following the completion of the Offer (but
subject to the terms of the Agreement), the Purchaser and/or persons related to
or affiliated with it may acquire additional Units or may sell Units. Any
acquisition may be made through private purchases, through one or more future
tender or exchange offers or by any other means deemed advisable. Any
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. The Purchaser also may in the future (subject to the terms of the
Agreement) consider selling some or all of the Units it acquires pursuant to the
Offer to persons not yet determined. Under the Agreement, Presidio has the right
to purchase 50% of the Units acquired by the Purchaser in the Offer and the
Units are subject to a buy/sell agreement with Presidio. See Section 12
("Background of the Offer").
Except as set forth herein, the Purchaser does not have any present
plans or proposals which relate to or would result in an extraordinary
transaction, such as a merger, reorganization or liquidation, involving the
Partnership; a sale or transfer of a material amount of the Partnership's
assets; any changes in composition of the Partnership's senior management or
personnel or their compensation; any changes in the Partnership's present
capitalization or dividend policy; or any other material changes in the
Partnership's structure or business.
SECTION 9.CERTAIN INFORMATION CONCERNING THE PARTNERSHIP.
Information contained in this Section 9 concerning the Partnership is
derived from the Partnership's publicly-filed documents and reports. Although
the Purchaser has no information that any statement contained in this Section 9
is untrue, the Purchaser cannot take responsibility for the accuracy or
completeness of any information contained in this Section 9 or any failure by
the Partnership to disclose events which may have occurred and may effect the
significance or accuracy of any such information but which are unknown to the
Purchaser.
The Partnership's Assets and Business. The Partnership is a limited
partnership formed in 1987 under the laws of the State of Delaware. Its
principal executive offices are located at 411 West Putnam Avenue, Greenwich, CT
06830. Its telephone number is (203) 862-7444.
The Partnership is engaged in the business of operating and holding for
investment previously acquired income-producing properties, consisting of office
buildings, shopping centers and other commercial and industrial properties such
as industrial parks and warehouses.
As of March 15, 1997, the Partnership held interests in six properties
containing an aggregate of 1,981,645 square feet of leasable area.
The following table sets forth certain information regarding the
Partnership's properties as of March 15, 1997. More comprehensive information
concerning such properties is included in the Partnership's Form 10-K for the
year ended December 31, 1996.
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<TABLE>
<CAPTION>
Current
Leasable Occupancy
Square as of
Property Name Location Footage January 1,
- ------------- -------- -------- -------------
1997 1996
---- ----
<S> <C> <C> <C> <C>
TMR Warehouses(1) Columbus, OH 1,010,500 (2)
Melrose Crossing Shopping Center Melrose Park, IL (3)
Sunrise Marketplace Las Vegas, Nevada 176,765 94% 91%
Super Valu Stores(4) 257,700 100% 100%
Livonia Plaza Livonia, Michigan 120,652 100% 100%
568 Broadway(5) New York, NY 299,000 100% 95%
</TABLE>
- --------
(1)The TMR Warehouses are owned by a joint venture comprised of the
Partnership and High Equity Partners L.P. - Series 86 ("HEP-86"), an affiliated
public limited partnership. The Partnership has a 79.34% interest and HEP-86 has
a 20.66% interest in the joint venture.
(2)Consists of three separate warehouses located in Orange, Grove City
and Hilliard, all suburbs of Columbus, Ohio, with individual square footage of
583,000 square feet, 190,000 square feet and 237,500 square feet, respectively.
As of January 1, 1997 and 1996, the Orange and Grove City buildings were each
100% leased to a single tenant. As of January 1, 1997, the Hilliard property was
100% leased compared to 74% as of January 1, 1996.
(3)Previously consisted of a 24,232 square foot retail store that had
been leased to Highland Appliance, which vacated in January 1992. On December
22, 1992, the Partnership entered into a 20-year lease with Handy Andy Home
Improvement Centers, Inc. ("Handy Andy"). The lease required the Partnership to
construct a 93,728 square foot building and an adjacent 23,300 square foot
outdoor selling area. On October 12, 1995, Handy Andy filed for bankruptcy under
Chapter 11 of the United States Bankruptcy Code. On March 7, 1996, Handy Andy
closed its store and rejected its lease. A proof-of-claim has been filed on
behalf of the Partnership, and that is being pursued through the bankruptcy
process. Simultaneously, the Partnership is marketing the space to retail
tenants, and is exploring a possible conversion of the building to a light
industrial or warehouse/distribution use. However, this conversion may require a
change in zoning as well as the approval of Venture, and the probability of
obtaining those approvals is unknown.
(4)Consists of four supermarkets previously owned by Super Valu Stores.
The properties are held in joint ventures owned 50% by the Partnership and 50%
by AREH. AREH is the sole shareholder of Olympia GP-Inc., a Delaware
corporation, the general partner of the Purchaser. AREH is 99% owned by American
Real Estate Partners L.P., a public partnership. At the closing, AREH and the
Partnership assigned their contract rights with respect to each of the
Properties to three joint venture entities, each of which has AREH and the
Partnership as a 50% owner. The four supermarkets are located as follows: 73,000
square feet in Gwinnett County near Atlanta, Georgia, 60,000 square feet in
Indianapolis, Indiana, 64,700 square feet in Toledo, Ohio and 60,000 square feet
in Edina, Minnesota.
(5)568 Broadway is owned by a joint venture comprised of the
Partnership, High Equity Partners L.P. - Series 85 ("HEP-85"), an affiliated
public limited partnership, and HEP-86. The Partnership has a 22.15% interest
and HEP-85 and HEP-86 each have a 38.925% interest in the joint venture.
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<PAGE>
Selected Financial Data. Set forth below is a summary of certain
financial data for the Partnership which has been excerpted from the
Partnership's Form 10-K for the year ended December 31, 1996 and Forms 10-Q for
the nine month periods ended September 30, 1997 and September 30, 1996,
respectively. More comprehensive financial and other information is included in
such reports and other documents filed by the Partnership with the Commission,
and the following summary is qualified in its entirety by reference to such
reports and other documents and all the financial information and related notes
contained therein.
Statements of Operations
For the Nine Months Ended
-------------------------------
1997 1996
---------- ----------
Rental Revenue.................................. $7,633,161 $5,864,524
---------- ----------
Costs and Expenses:
Operating expenses..................... 1,471,158 1,392,085
Depreciation and amortization.......... 1,295,300 1,277,187
Partnership management fee............. 660,303 660,303
Administrative expenses................ 546,695 363,647
Property management fee................ 181,934 157,072
---------- ----------
4,155,390 3,850,294
---------- ----------
Income before interest and other income 3,477,771 2,014,230
Interest income........................ 218,862 115,449
Other income........................... 27,145 47,911
---------- ----------
Net income...................................... $3,723,778 $2,177,590
========== ==========
Net income attributable to:
Limited partners....................... $3,537,589 $2,068,710
General partners....................... 186,189 108,880
---------- ----------
Net income...................................... $3,723,778 $2,177,590
========== ==========
Net income per unit of limited
partnership interest (371,766 units
outstanding)........................... $ 9.52 $ 5.56
========== ==========
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Summary Selected Financial Data
<TABLE>
<CAPTION>
For the Year Ended December 31,
----------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
------------ ---------------- ------------ -------------- ----------------
<S> <C> <C> <C> <C> <C>
Revenue $ 7,759,188 $ 7,422,184 $ 7,124,114 $ 6,919,383 $ 6,815,512
Net Income (Loss) $ 2,152,172 $(7,260,499)(3) $ 2,439,021 $ 797,118(2) $(6,888,246)(1)
Net Income (Loss) Per $ 5.79 $ (18.55)(3) $ 6.23 $ 2.04(2) $ (17.60)(1)
Unit
Distributions Per Unit $ 7.00 $ 7.00 $ 7.00 $ 7.00 $ 8.96
(4)
Total Assets (5) $ 56,381,690 $ 56,305,498 $ 66,210,947 $ 66,493,618 $68,241,132
</TABLE>
____________________________
(1) Net loss for the year ended December 31, 1992 includes a write-down for
impairment on Sunrise. Livonia Plaza and 568 Broadway in the aggregate of
$9,197,100, or $23.50 per Unit.
(2) Net income for the year ended December 31, 1994 includes a write-down for
impairment on 568 Broadway of $398,700, or $1.02 per Unit. Also included in
net income for 1993 is a Loss on Abandonment of $839,202, or $2.38 per
Unit, in connection with razing the former structure on the Melrose-Phase
II site.
(3) Net loss for the year ended December 31, 1995 includes a write-down for
impairment on 568 Broadway, Sunrise and Melrose-Phase II in the aggregate
amount of $10,042,900, or $25.66 per Unit
(4) All distributions are in excess of accumulated undistributed net income and
therefore represent a return of capital to investors on a generally
accepted accounting principles basis. Distributions Per Unit for the nine
month period ended September 30, 1997 were $7.14.
(5) Total Assets as of September 30, 1997 were $56,947,567.
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<PAGE>
SECTION 10. INFORMATION CONCERNING THE PURCHASER AND CERTAIN
AFFILIATES OF THE PURCHASER.
The Purchaser is a Delaware limited partnership, the general partner of
which is Olympia-GP, Inc. (the "Olympia General Partner"), a Delaware
corporation which is wholly-owned by American Real Estate Holdings, L.P., a
Delaware limited partnership ("AREH"), and the sole limited partner of which is
AREH. The general partner of AREH is American Property Investors, Inc. ("API"),
a Delaware corporation which is wholly-owned by Carl C. Icahn, and the sole
limited partner of AREH is American Real Estate Partners, L.P., a Delaware
limited partnership ("AREP").
The address of the principal office of each of the Purchaser, the
Olympia General Partner, AREH and API is 100 South Bedford Road, Mount Kisco,
New York 10549. Mr. Icahn's business address is c/o Icahn Associates Corp., 767
Fifth Avenue, 47th Floor, New York, New York, 10153.
The Purchaser and the Olympia General Partner were formed in February,
1998 for the purpose of acquiring Units in the Partnership and in the Related
Partnerships. See Section 12 ("Background of the Offer"). AREH is primarily
engaged in the business of acquiring and managing real estate and activities
related thereto. API is engaged in the business of acting as general partner of
AREH and of AREP. Mr. Icahn's present principal occupation or employment is set
forth on Schedule I attached hereto and is incorporated herein by reference.
Also set forth on Schedule I and incorporated herein by reference are Mr.
Icahn's material occupations, positions, offices or employments during the past
five years, including the principal business and address of any business,
corporation or other organization in which such occupation, position, office or
employment was carried on.
The name, position, citizenship, business address, present principal
occupation or employment, material occupations, positions, offices or
employments during the past five years and the principal business address of any
business corporation or other organization in which such occupation, position,
office or employment was carried on, of each executive officer and director of
the Olympia General Partner and API are set forth on Schedule I attached hereto
and are incorporated herein by reference.
Neither the Purchaser, the Olympia General Partner, AREH, API, Mr.
Icahn, nor any executive officer or director of any of the foregoing, has been,
during the past five years, (a) convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (b) a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal or
state securities laws or a finding of any violation of such laws.
Except as set forth in this Offer to Purchase, (i) neither the
Purchaser, the Olympia General Partner, AREH, API, Mr. Icahn nor, to the best of
the Purchaser's knowledge, any of the persons listed on Schedule I, nor any
affiliate of the foregoing beneficially owns or has a right to acquire any
Units, (ii) neither the Purchaser, the Olympia General Partner, AREH, API, Mr.
Icahn nor, to the best of the Purchaser's knowledge, any of the persons listed
on Schedule I, nor any affiliate of the foregoing has effected any transaction
in the Units within the past 60 days, (iii) neither the Purchaser, the Olympia
General Partner, AREH, API, Mr. Icahn nor, to the best of the Purchaser's
knowledge, any of the persons listed on Schedule I nor any affiliate of the
foregoing has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Partnership, including, but
not limited to, contracts, arrangements, understandings or relationships
concerning the transfer or voting thereof, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss or the
giving or withholding of proxies, (iv) there have been no transactions or
business relationships which would be required to be disclosed under the rules
and regulations of the Commission between any of the Purchaser, the Olympia
General Partner, AREH, API, Mr. Icahn or, to the best of the Purchaser's
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<PAGE>
knowledge, any of the persons listed on Schedule I, on the one hand, and the
Partnership or its affiliates, on the other hand, and (v) there have been no
contracts, negotiations, or transactions between the Purchaser, the Olympia
General partner, AREH, API, Mr. Icahn or, to the best of the Purchaser's
knowledge, any of the persons listed on Schedule I, on the one hand, and the
Partnership or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets.
AREH owns two parcels of land in Northridge, California and San Diego,
California, respectively, which it leases to affiliates of the general partners
of the Partnership. Improvements on these properties are owned by such
affiliates and leased by them to third parties. In addition, AREH and the
Partnership each own a 50% interest in joint ventures owning four supermarket
properties. See footnote 4 to the table in Section 9 ("Certain Information
Concerning the Partnership").
Longacre Corp., a Delaware corporation ("Longacre"), an affiliate of
the Purchaser, owns an aggregate of 2,346 Units, which represents less than 1%
of the number of Units outstanding, as reported in Partnership's Form 10-Q for
the quarterly period ended September 30, 1997. Such Units are indirectly
beneficially owned by Mr. Icahn. These Units were acquired in auction
transactions through the American Partnership Board more than 60 days prior to
the date of the Offer.
SECTION 11. SOURCE OF FUNDS.
The Purchaser expects that approximately $17,374,500 (exclusive of fees
and expenses) will be required to purchase 148,500 Units, if tendered. The
Purchaser will obtain all of such funds from capital contributions from AREH,
which has an aggregate net worth substantially in excess of the amount required
to purchase such Units. AREH will obtain the funds necessary to make such
capital contributions from its working capital.
SECTION 12. BACKGROUND OF THE OFFER.
On September 11, 1997, Longacre sent letters to the general partners of
the Partnership and the Related Partnerships requesting lists of limited
partners of the Partnership and the Related Partnerships for the purpose of
enabling an affiliate to make a tender offer for Units. Longacre sent a second
letter requesting limited partner lists to the general partners of the
Partnership and the Related Partnerships on February 13, 1998. The requested
lists were furnished to the Purchaser under the Agreement discussed below on or
about March 9, 1998.
In late October or early November 1997, a representative of AREH
contacted the managing partner of Northstar Capital Partners ("Northstar"),
which indirectly controls Presidio and the general partners of the Partnership
and the Related Partnerships, to discuss the possibility of conducting a joint
tender offer for Units of the Partnership and the Related Partnerships.
Representatives of AREH met with the managing partner of Northstar on November
3, 1997, but they were unable to reach agreement on the terms on which a joint
tender might be conducted. Following the November 3 meeting, representatives of
AREH, Northstar and Presidio continued to discuss a possible joint tender offer
in several telephone conversations.
Between approximately December 17, 1997 and March 5, 1998,
representatives of AREH, Northstar and Presidio and their counsel attended
meetings and/or participated in telephone conversations in which they negotiated
the terms of the Agreement, a copy of which has been filed as Exhibit (c)(1) to
the Purchaser's Tender Offer Statement on Schedule 14D-1 filed with the
Commission on March 12, 1998. The Agreement provides, among other things, for:
(i) the Purchaser's conduct of tender offers for up to 40% of the outstanding
Units of the Partnership and the Related Partnerships, and the cooperation of
the general partners of the Partnership and Related Partnerships to facilitate
such offers (including furnishing the Purchaser with limited partner lists for
use in connection with the Offers and taking a neutral stance with respect
thereto) and the transfer of tendered Units to the Purchaser without the
imposition of transfer fees; (ii) an agreement by the Purchaser and its
affiliates to
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<PAGE>
limit their acquisition of Units in the Partnership and the Related Partnerships
to Units acquired in the Offers and to limit their acquisition of assets or
properties of the Partnership or the Related Partnerships to properties or
assets which the general partners or their affiliates have publicly announced
their intention to sell or have hired a broker for such purpose; (iii) an
agreement by the Purchaser and its affiliates not to: seek the removal of the
general partners or call any meeting of limited partners of the Partnership or
the Related Partnerships; make any proposal to or seek proxies from limited
partners of the Partnership or the Related Partnerships; or act, either alone on
in concert with others, to seek to control the management, policies or affairs
of the Partnership or any Related Partnership or to effect any business
combination or other extraordinary transaction with the Partnership or its
general partners; (iv) an agreement by the Purchaser and its affiliates to vote
Units owned by them in favor of a proposal, if any, by the general partners of
the Partnership or the Related Partnerships resulting in limited partners
receiving securities that are listed on NASDAQ or a national securities
exchange; (v) the Purchaser's grant to Presidio of a call option to purchase 50%
of the Units in the Partnership acquired in the Offer at a price equal to the
lesser of the price paid by the Purchaser or $124.13 per Unit (except that the
limitation of the call price to $124.13 per Unit will not apply if the Purchase
Price is increased to more than that amount in response to a competing bid),
plus 50% of the Purchaser's costs associated with the Offer; (vi) the grant to
Presidio of a similar call option to purchase 50% of the Units in the Related
Partnerships acquired pursuant to the Offers; (vii) a buy/sell agreement,
pursuant to which either party can initiate buy/sell procedures by notifying the
other of a specified price per Unit (not to exceed the then current net asset
value of the Units) and the other terms and conditions on which the
non-initiating party would then be required to elect (subject to certain
exceptions) either to buy certain Units from the initiating party or to sell
certain Units to the initiating party (such Units consisting, in the case of the
Purchaser, of all Units owned by the Purchaser and its affiliates and, in the
case of Northstar, of all Units purchased by Northstar upon exercise of the call
option described above). The agreements of the Purchaser and its affiliates
described in clauses (ii), (iii) and (iv) above expire on March 6, 2001 (the
"Standstill Expiration Date"), but may expire earlier under certain
circumstances. In connection with the negotiation of the Agreement, Northstar
and Presidio furnished the Purchaser with appraisals of each of the properties
of the Partnership and the Related Partnerships prepared by an independent
appraisal firm (the "Appraiser") in August and September 1997 (collectively, the
"Appraisal Information"). For a more complete discussion of the Appraisal
Information, see Section 13 ("Purchase Price Considerations").
SECTION 13. PURCHASE PRICE CONSIDERATIONS.
The Purchaser has set the Purchase Price at $117.00 net per Unit
(subject to adjustment as set forth in this Offer to Purchase). The Purchaser
established the Purchase Price by analyzing a number of quantitative and
qualitative factors including: (i) the absence of a significant number of recent
reported resales of the Units; (ii) the lack of liquidity of an investment in
the Partnership; (iii) the costs to the Purchaser associated with acquiring the
Units; (iv) the administrative costs of continuing to own the Partnership's
assets through a publicly registered limited partnership; (v) the possibility
that Limited Partners may realize taxable income in excess of tax distributions
from the Partnership in future years; (vi) the inability of Limited Partners to
exercise effective control over the management of the Partnership through the
annual election of the General Partners; and (vii) estimated transaction costs
of completing the Offer.
The Purchase Price represents the price at which the Purchaser is
willing to purchase Units. No independent person has been retained to evaluate
or render any opinion with respect to the fairness of the Purchase Price and no
representation is made by the Purchaser or any affiliate of the Purchaser as to
such fairness. Limited Partners are urged to consider carefully all of the
information contained herein and consult with their own advisors, tax, financial
or otherwise, in evaluating the terms of the Offer before deciding whether to
tender Units.
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<PAGE>
The Units are not listed or traded on any exchange or quoted on any
NASDAQ list or system. At present, privately negotiated sales and sales through
intermediaries (e.g., through the trading system operated by The American
Partnership Board, which publishes sales by holders of Units) are the principal
means available to a Limited Partner to liquidate an investment in Units (other
than the Offer). According to The Partnership Spectrum, an independent
third-party industry publication, for the six months ended January 31, 1998, a
total of 5,034 Units traded at per Unit prices between $84.00 and $111.33 with a
weighted average of $94.80 per Unit. Set forth below is a schedule of the
trading activity of Units during the six-months ended January 31, 1998, in
two-month intervals, as reported by The Partnership Spectrum:
Trading Activity for Six-Month Period Ended January 31, 1998
------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Units
Period Low/High Traded Total Volume
------ -------- ------------ ------------
<S> <C> <C> <C> <C>
August 1,1997 - Sept.30, 1997 $ 84.00/$97.00 1,989 $178,747.20
October 1,1997 - November 30, 1997 $84.00/$109.50 671 $ 63,000.00
December 1, 1997 - January 31, 1998 $88.00/$111.33 2,374 $235,458.20
-------------- ----- -----------
TOTALS: $84.00/$111.33 5,034 $477,205.40
============== ===== ===========
</TABLE>
Limited Partners are advised, however, that such gross sales prices reported by
The Partnership Spectrum do not necessarily reflect the net sales proceeds
received by sellers of Units, which typically are reduced by commissions and
other transaction costs to amounts less than the reported prices.
The Purchaser has been informed that, in a letter dated February 3,
1997, the general partners advised Limited Partners that they estimated net
asset value per Unit to be $113.30. The Purchaser is not aware of a more recent
estimate of net asset value by the general partners. Furthermore, the general
partners have not disclosed the formula used, the assumptions made, or the
underlying valuations relied upon in deriving this estimated net asset value of
each Unit. Different formulas, assumptions, or underlying valuations may result
in higher or lower estimates of net asset value.
The Purchaser has also estimated net asset value per unit, as described
below. However, the Purchaser believes that net asset value is not necessarily
representative of the value of the Units if the Partnership ultimately
liquidates its properties. Property selling costs and expenses (e.g., brokers'
commissions, attorneys' fees, escrow fees, title company costs, rent guarantees,
correction of deferred maintenance, etc.) which could be incurred by the
Partnership in disposing of the properties may significantly reduce the gross
sale proceeds paid to the Partnership and, in turn, the amount of cash available
for distribution to the Limited Partners. Accordingly, the Purchaser has also
estimated liquidation value per Unit, as described below. Finally, Limited
Partners should note that the general partners of the Partnership may seek to
"liquidate" the Partnership by means of an extraordinary transaction that would
not necessarily involve the sale of individual Partnership properties. In a
communication to Limited Partners dated November 6, 1997, the general partners
stated: "The General Partners are actively considering a variety of plans to
enhance to value and liquidity of the Units. These plans include the possible
conversion of the Partnership into an actively traded real estate investment
trust, where the General Partners believe that the trading price should be
greater than the current trading price in the secondary market for the Units."
The Purchaser has no further information regarding the current plans of the
general partners with respect to any such transaction, nor can the Purchaser
predict the price per Unit that Limited Partners could achieve in connection
therewith.
-20-
<PAGE>
The Purchase Price represents 80% of the Purchaser's estimate of net
asset value per Unit ("NAV Estimate") and 84% of the Purchaser's estimate of
liquidation value per Unit. The Purchaser prepared its NAV Estimate based on a
hypothetical sale of all of the Partnership's properties at their estimated
aggregate value (based upon the Appraisal Information) and the distribution to
the partners of the gross proceeds of that sale, together with the Partnership's
cash and other assets (net of existing liabilities). The Purchaser's NAV
Estimate does not take into account: (i) real estate transaction costs that
would be incurred on a sale of the Partnership's properties, such as brokerage
commissions and other selling and closing expenses; (ii) timing considerations;
or (iii) costs associated with winding up the Partnership.
NAV Estimate. The Purchaser was furnished with the Appraisal
Information in connection with the discussions between the Purchaser, Northstar
and Presidio described in Section 12 ("Background of the Offer"). The Purchaser
derived an estimate of net asset value per Unit by using the Appraiser's
conclusions as to the value of each of the Partnership's properties contained in
the Appraisal Information and adjusting such amount to reflect the Partnership's
other assets and liabilities. Specifically, the Purchaser added receivables and
cash and cash equivalents shown on the Partnership's unaudited balance sheet at
September 30, 1997 and subtracted accounts payable and accrued expenses,
distributions payable and amounts due to affiliates. After deducting 5% of
aggregate net asset value to account for the general partners' share of
Partnership distributions, the Purchaser derived an NAV Estimate of
$54,292,390.00 or $146.04 per Unit.
The paragraphs that follow describe certain matters pertaining to the
Appraisal Information that may be relevant to Limited Partners in making a
judgment as to the reliability of the property values derived by the Appraiser
and any estimate of net asset value based thereon. While the Purchaser has no
reason to believe that any of the Appraisal Information is incorrect, the
Purchaser cannot take responsibility for the accuracy or completeness of the
Appraisal Information (including without limitation the accuracy, completeness
or appropriateness of the underlying assumptions and methodology employed by the
Appraiser) or for any failure of the Partnership to disclose events which may
have occurred and may affect the significance or accuracy of any such
information but which are unknown to the Purchaser.
The description that follows is derived in its entirety from the
Appraisal Information. In connection with its appraisals, the Appraiser
indicates that it generally conducted a physical inspection of the subject
property, the interior of the improvements and the surrounding area, reviewed
economic and demographic trends in the neighborhood and the region and
considered the competitive market in the local area. The Appraiser's reports
indicate that, in general, its valuations were derived by utilizing the Sales
Comparison or the Income Capitalization approaches, depending on the Appraiser's
view of which approach was most appropriate on a property-by-property basis.
According to the Appraiser, the Sales Comparison Approach involves an estimate
of value derived by comparing the subject property with similar, recently sold
properties in the surrounding or competing area. This approach relies on the
principle of substitution, which holds that when a property is replaceable in
the market, its value tends to be set at the cost of acquiring an equally
desirable substitute property, assuming that no costly delay is encountered in
making the substitution. The Income Capitalization Approach derives an estimate
of value by converting the anticipated economic benefits of owning property into
a value estimate through capitalization. This approach is based on the principle
of "anticipation," which holds that investors recognize the relationship between
an asset's income and its value. In order to value the economic benefits of a
property, potential income and expenses must be estimated, and the most
appropriate capitalization method must be selected. The two most common methods
of converting net income into value are direct capitalization and discounted
cash flow analysis. In direct capitalization, net operating income is divided by
an overall rate extracted from market sales to indicate a value. In the
discounted cash flow method, anticipated future net income streams and a
reversionary value are discounted to an estimate of net present value at a
chosen yield rate (internal rate of return).
-21-
<PAGE>
The cover letters from the Appraiser included in the Appraisal
Information state that the Appraiser's value opinions are qualified by certain
assumptions, limiting conditions, certifications and definitions, which are more
particularly described in its reports. The Appraiser states that, in accordance
with an agreement between the Appraiser and the Partnership, its report is the
result of a limited process in that certain allowable departures from specific
guidelines of the Uniform Standards of Professional Appraisal Practice were
invoked and the reliability of the value conclusion provided may be impacted to
the degree there is departure from specific guidelines of USPAP.
Liquidation Value. In estimating liquidation value per Unit, the
Purchaser adjusted its NAV Estimate by deducting from that amount a reserve
equal to 5% of the projected property selling prices, which represents the
Purchaser's estimate of the costs of brokerage commissions, title costs, legal
fees, real estate transfer taxes and other disposition expenses (but does not
include any estimate of the costs of conducting a consent solicitation in order
to obtain the Limited Partners' approval for property sales, as may be required
by the Partnership Agreement or of the costs of winding up the Partnership,
because of the difficulty of estimating those amounts). The result of $139.39
per Unit represents the Purchaser's estimate of the aggregate net liquidating
proceeds (before provision for the costs described in the parenthetical to the
preceding sentence) that could be realized in an orderly liquidation of the
Partnership, based on the assumptions implicit in the calculations described
above. Northstar has informed the Purchaser that a former affiliate of the
general partners was advised by the Appraiser in late 1996 that a methodology
providing for a 17.5% discount of the Partnership's pre-liquidation value (in
addition to the 5% reserve for liquidation costs taken by the Purchaser)
constituted a reasonable means of determining the total net liquidation proceeds
of the Partnership in connection with a bulk sale of the Partnership's
properties, given the then current state of the real estate market. The
Purchaser cannot take responsibility for the appropriateness of the methodology
described in the preceding sentence.
The Purchaser's analysis of liquidation value described above is merely
theoretical and does not itself reflect the value of the Units because (i) there
is no assurance that any such liquidation in fact will occur in the foreseeable
future; and (ii) any liquidation in which the estimated values described above
might be realized would take an extended period of time (at least a year and,
quite possibly, significantly longer), during which the Partnership would
continue to be exposed to the risk of fluctuation in asset values because of
changing market conditions and other factors.
Preliminary NAV Estimate. Prior to its receipt of the Appraisal
Information, the Purchaser estimated net asset value on a preliminary basis by
reviewing publicly available financial information relating to the Partnership
for the fiscal year ended December 31, 1996 and the nine months ended September
30, 1997, in order to determine an adjusted net income (reduced by an amount
intended to reflect normal capital expenditures and operating expenses) of
$5,352,384.00, and then capitalized that amount at 10%, which the Purchaser
believes represents an appropriate capitalization rate for a real estate
portfolio such as the Partnership's. The Purchaser then adjusted such amount to
reflect the Partnership's other assets and liabilities and deducted the general
partners' 5% share of Partnership distributions in the manner described above
under "NAV Estimate." As a result of that review process, the Purchaser derived
a preliminary estimate of net asset value of $62,510,887.00, or $168.15 per
Unit. These calculations are based on rough estimates and the values resulting
therefrom may not be indicative of actual values to any extent. It should be
noted that investors may disagree as to the appropriate capitalization rate to
be applied. The utilization of a lower capitalization rate results in a higher
estimate of aggregate value. The Purchaser believes that the NAV Estimate
derived from the Appraisal Information is likely to represent a closer
approximation of net asset value per Unit because the Appraisal Information was
based upon an individual review and analysis of each Partnership property, while
the Purchaser's preliminary estimate was based solely upon publicly available
information regarding the Partnership as a whole, although there can be no
assurance that either estimate is correct.
-22-
<PAGE>
SECTION 14. CONDITIONS OF THE OFFER.
Notwithstanding any other term of the Offer, the Purchaser will not be
required to accept for payment or to pay for any Units tendered if all
authorizations, consents, orders or approvals of, or declarations or filings
with, or expiration of waiting periods imposed by, any court, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign, necessary for the consummation of the transactions
contemplated by the Offer shall not have been filed, occurred or been obtained.
Furthermore, notwithstanding any other term of the Offer and in addition to the
Purchaser's right to withdraw the Offer at any time before the Expiration Date,
the Purchaser will not be required to accept for payment or pay for any Units
not theretofore accepted for payment or paid for and may terminate or amend the
Offer as to such Units if, at any time on or after the date of the Offer and
before the acceptance of such Units for payment or the payment therefor, any of
the following conditions exists:
(a) a preliminary or permanent injunction or other order of
any federal or state court, government or governmental authority or
agency shall have been issued and shall remain in effect which (i)
makes illegal, delays or otherwise directly or indirectly restrains or
prohibits the making of the Offer or the acceptance for payment,
purchase of or payment for any Units by the Purchaser, (ii) imposes or
confirms limitations on the ability of the Purchaser effectively to
exercise full rights of ownership of any Units, including, without
limitation, the right to vote any Units acquired by the Purchaser
pursuant to the Offer or otherwise on all matters properly presented to
the Partnership's Limited Partners, (iii) imposes or confirms
limitations on the ability of the Purchaser to fully exercise the
voting rights conferred pursuant to its appointment as proxy in respect
of all tendered Units which it accepts for payment, or (iv) requires
divestiture by the Purchaser of any Units (except, in any such case, as
expressly contemplated by the Agreement);
(b) there shall be any action taken, or any statute, rule,
regulation or order proposed, enacted, enforced, promulgated, issued or
deemed applicable to the Offer by any federal or state court,
government or governmental authority or agency, which might, directly
or indirectly, result in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above;
(c) any change or development shall have occurred or been
threatened since the date of the Offer to Purchase, in the business,
properties, assets, liabilities, financial condition, operations,
results of operations, or prospects of the Partnership, which is
outside the ordinary course of the Partnership's business or may be
materially adverse to the Partnership, or the Purchaser shall have
become aware of any fact that does or may have a material adverse
effect on the value of the Units;
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) any limitation
by any governmental authority on, or other event which might affect,
the extension of credit by lending institutions or result in any
imposition of currency controls in the United States, (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States, (v) a material change in United States or other currency
exchange rates or a suspension or a limitation on the markets thereof,
or (vi) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening
thereof;
(e) the Partnership's general partners shall not have
consented in writing to, and shall not have taken all other action that
the Purchaser deems necessary, in the Purchaser's judgment, for the
-23-
<PAGE>
admission of the Purchaser to the Partnership, as of the next quarterly
admission date following the consummation of the Offer, as a substitute
Limited Partner in accordance with the Partnership Agreement and
applicable law;
(f) the Partnership's general partners shall not have
furnished to the Purchaser such information as is necessary, in the
Purchaser's judgment, to verify that the persons purporting to transfer
Units to the Purchaser pursuant to the Offer are in fact the owners of
such Units as reflected on the Partnership's books and records;
(g) the Partnership's general partners shall have caused the
Partnership to impose unreasonable transfer, substitution or similar
fees, including, without limitation, those that would otherwise apply
to: (i) the tender of Units by holders pursuant to the Offer, (ii) the
transfer of such Units to the Purchaser or (iii) the admission of the
Purchaser as a substitute Limited Partner in respect of such Units;
(h) 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 or the Partnership or causing any material diminution of the
benefits to be derived by the Purchaser as a result of the transactions
contemplated by the Offer;
(i) 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, or (iii) declared or paid any
distribution, other than in cash, on any of its partnership interests,
or (iv) the Partnership or any of the Partnership's general partners
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;
(j) a tender offer or exchange offer for some or all of the
Units is made or publicly announced or proposed to be made,
supplemented or amended by any person other than the Purchaser; or
(k) the general partners of the Partnership 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 Limited Partners.
The foregoing conditions are for the sole benefit of the Purchaser and
may be asserted by the Purchaser regardless of the circumstances giving rise to
such conditions or may be waived by the Purchaser in whole or in part at any
time and from time to time in its sole discretion. Any determination by the
Purchaser concerning the events described above will be final and binding upon
all parties. If the Purchaser, in its sole discretion, waives the condition
contained in the foregoing paragraph (g), then the Purchaser will, to the extent
of such waiver, pay all applicable fees referred to in such paragraph.
-24-
<PAGE>
SECTION 15. CERTAIN LEGAL MATTERS.
General. Except as set forth in this Section 15, the Purchaser is not,
based on its review of publicly available filings by the Partnership with the
Commission and other publicly available information regarding the Partnership,
aware of any licenses or regulatory permits that would be material to the
business of the Partnership, taken as a whole, and that might be adversely
affected by the Purchaser's acquisition of Units as contemplated herein, or any
filings, approvals or other actions by or with any domestic or foreign
governmental authority or administrative or regulatory agency that would be
required prior to the acquisition of Units by the Purchaser pursuant to the
Offer as contemplated herein. While there is no present intent to delay the
purchase of Units tendered pursuant to the Offer pending receipt of any such
additional approval or the taking of any such action, there can be no assurance
that any such additional approval or action, if needed, would be obtained
without substantial conditions or that adverse consequences might not result to
the Partnership's business, or that certain parts of the Partnership's business
might not have to be disposed of or other substantial conditions complied with
in order to obtain such approval or action, any of which could cause the
Purchaser to elect to terminate the Offer without purchasing Units thereunder.
The Purchaser's obligation to purchase and pay for Units is subject to certain
conditions, including conditions related to the legal matters discussed in this
Section 15.
Antitrust. The Purchaser does not believe that the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, is applicable to the acquisition
of Units contemplated by the Offer.
Margin Requirements. The Units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, those regulations generally are not applicable to the Offer.
State Laws. The Purchaser is not aware of any jurisdiction in which the
making of the Offer is not in compliance with applicable law. If the Purchaser
becomes aware of any jurisdiction in which the making of the Offer would not be
in compliance with applicable law, the Purchaser will make a good faith effort
to comply with any such law. If, after such good faith effort, the Purchaser
cannot comply with any such law, the Offer will not be made to (nor will tenders
be accepted from or on behalf of) Limited Partners residing in such
jurisdiction. In those jurisdictions whose securities or blue sky laws require
the Offer to be made by a licensed broker or dealer, the Offer shall be made on
behalf of the Purchaser, if at all, only by one or more registered brokers or
dealers licensed under the laws of that jurisdiction.
SECTION 16. FEES AND EXPENSES.
Except as set forth in this Section 16, the Purchaser will not pay any
fees or commissions to any broker, dealer or other person for soliciting tenders
of Units pursuant to the Offer. The Purchaser has retained Harris Trust Company
of New York to act as Depositary and Beacon Hill Partners, Inc. to act as
Information Agent in connection with the Offer. The Purchaser will pay the
Depositary and Information Agent reasonable and customary compensation for their
services in connection with the Offer, plus reimbursement for out-of-pocket
expenses, and will indemnify the Depositary and Information Agent against
certain liabilities and expenses in connection therewith, including liabilities
under the federal securities laws. The Purchaser will also pay all costs and
expenses of printing and mailing the Offer and its legal fees and expenses.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained herein or in the
Assignment of Partnership Interest and, if given or made, such information or
representation must not be relied upon as having been authorized.
-25-
<PAGE>
The Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1 (including exhibits), pursuant to Rule 14d-3 under the Exchange
Act, furnishing certain additional information with respect to the Offer, and
may file amendments thereto. The Schedule 14D-1 and any amendments thereto,
including exhibits, may be inspected and copies may be obtained at the same
places and in the same manner as set forth in the Introduction of the Offer to
Purchase (except that they will not be available at the regional offices of the
Commission).
OLYMPIA INVESTORS, L.P.
March 12, 1998
-26-
<PAGE>
SCHEDULE I
EXECUTIVE OFFICERS AND DIRECTORS OF OLYMPIA-GP INC.
AND AMERICAN PROPERTY INVESTORS, INC.
The name and positions of the executive officers and directors of the
Olympia General Partner, the general partner of the Purchaser, and American
Property Investors, Inc. ("API"), the general partner of the sole stockholder of
the Olympia General Partner. The business address of each such executive officer
and director (other than Messrs. Icahn and Hirsch) is 100 South Bedford Road,
Mount Kisco, N.Y. 10549. The business address of Messrs. Icahn and Hirsch is c/o
Icahn Associates Corp., 767 Fifth Avenue, 47th Floor, New York, New York 10153.
Each such executive officer and director is a citizen of the United States of
America.
Name Position
- ---- --------
Carl C. Icahn Director and Chairman of the Board (API)
Alfred D. Kingsley Director (API)
William A. Leidesdorf Director (API)
Jack G. Wasserman Director (API)
John P. Saldarelli Vice President, Secretary and Treasurer (API);
Treasurer, Secretary and Director
(Olympia General Partner)
Henry J. Gerard Vice President, Assistant Secretary and
Director (Olympia General Partner)
Martin L. Hirsch Vice President (API); Vice President and
Director (Olympia General Partner)
The following sets forth with respect to each executive officer and
director of the Olympia General Partner and API such person's (a) name, (b)
present principal occupation or employment and the name, principal business and
address of any corporation or other organization in which such employment or
occupation is conducted and (c) material occupations, positions, offices or
employments during the last five years, giving the starting and ending dates of
each and the name, principal business and address of any business corporation or
other organization in which such occupation, position, office or employment was
carried on.
CARL C. ICAHN. Carl C. Icahn has been Chairman of the Board of
Directors of API since November 15, 1990. Mr. Icahn is also President and a
director of Starfire Holding Corporation (formerly Icahn Holding Corporation), a
Delaware corporation ("SHC"), and Chairman of the Board and a director of
various of SHC's subsidiaries, including ACF Industries, Inc., a New Jersey
corporation ("ACF"). SHC is primarily engaged in the business of holding, either
directly or through subsidiaries, a majority of the common stock of ACF and its
address is 100 South Bedford Road, Mount Kisco, New York 10549. Mr. Icahn has
also been Chairman of the Board of Directors of ACF since October 29, 1984 and a
director of ACF since June 29, 1984. ACF is a railroad freight and tank car
leasing, sales and manufacturing company. He has also been Chairman of the Board
of Directors and President of Icahn & Company, Inc. since 1968. Icahn & Company,
Inc. is a registered broker-dealer and a member of the National Association of
Securities Dealers. In 1979, Mr. Icahn acquired control and presently serves as
Chairman of the Board of Directors of Bayswater Realty & Capital Corp., which is
a real estate investment and development company ("Bayswater"). ACF, Icahn &
Company, Inc. and Bayswater are deemed to be directly or indirectly owned and
controlled by Mr. Icahn. Mr. Icahn was Chief Executive Officer and member of the
Office of the Chairman of Trans World Airlines, Inc. ("TWA") from November 8,
1988 to January 8, 1993; Chairman of the Board of Directors of TWA from January
3, 1986 to January 8, 1993; and a director of TWA from September 27, 1985 to
January 8, 1993. Mr. Icahn also has substantial equity interests in and controls
various partnerships and corporations which invest in publicly traded
securities.
I-1
<PAGE>
ALFRED D. KINGSLEY. Alfred D. Kingsley has served as a director of API
since November 15, 1990. He was also Vice Chairman of the Board of Directors of
TWA from February 1, 1989 to January 8, 1993 and a member of the Office of the
Chairman from November 8, 1988 to January 8, 1993. Mr. Kingsley was a director
of TWA from September 27, 1985 to January 8, 1993. He also was a director and
executive officer and Director of Research at Icahn & Co., Inc. and related
entities from 1968 until December 1994. He also has been Vice Chairman of the
Board of Directors of ACF since October 29, 1984 and a Director of ACF since
June 29, 1984. Mr. Kingsley has also been a Senior Managing Director of Greenway
Partners, L.P. since May 1993, which invests in publicly traded securities.
WILLIAM A. LEIDESDORF. William A. Leidesdorf has served as a director
of API since March 26, 1991. Since April 1995, Mr. Leidesdorf has acted as an
independent real estate investment banker. From January 1, 1994 through April
1995, Mr. Leidesdorf was Managing Director of RFG Financial, Inc., a commercial
mortgage company. From September 30, 1991 to December 31, 1993, Mr. Leidesdorf
was Senior Vice President of Palmieri Asset Management Group. From May 1, 1990
to September 30, 1991, Mr. Leidesdorf was Senior Vice President of Lowe
Associates, Inc., a real estate development company, where he was involved in
the acquisition of real estate and the asset management workout and disposition
of business areas. He also acted as the Northeast Regional Director for Lowe
Associates, Inc. From June 1985 to January 30, 1990, Mr. Leidesdorf was Senior
Vice President and stockholder of Eastdil Realty, Inc., a real estate company,
where he was involved in the asset management workout, disposition of business
and financing areas. During the interim period form January 30, 1990 through May
1, 1990, Mr. Leidesdorf was an independent contractor for Eastdil Realty, Inc.
on real estate matters.
JACK G. WASSERMAN. Jack G. Wasserman has served as a director of API
since December 3, 1993. Mr. Wasserman is an attorney and a member of the New
York State Bar and has been with the New York based law firm of Wasserman,
Schneider & Babb since 1966, where he is currently a senior partner.
JOHN P. SALDARELLI. John P. Saldarelli has served as a director,
Secretary and Treasurer of the Olympia General Partner since February 1998. He
has also served as Vice President, Secretary and Treasurer of API since March
18, 1991. Mr. Saldarelli was also President of Bayswater Realty Brokerage Corp.
from June 1987 until November 19, 1993 and Vice President of Bayswater Realty &
Capital Corp. from September 1979 until April 15, 1993.
HENRY J. GERARD. Mr. Gerard has served as a director, Vice President
and Assistant Secretary of the Olympia General Partner since February 1998. He
has also served as Vice President and Controller of API since March 18, 1991.
From January 1988 to May 1991, he was a Vice President API, a provider of
financial services. From 1981 through 1987 he was a controller at Interstate
Properties, a commercial real estate developer/operator.
MARTIN L. HIRSCH. Mr. Hirsch has served as a director and Vice
President of the Olympia General Partner since February 1998. He has also served
as Vice President of API since March 18, 1991. From January 1986 to January 1991
he was a vice president at Integrated Resources, Inc.
I-2
<PAGE>
Manually signed facsimile copies of the Assignment of Partnership
Interest will be accepted. The Assignment of Partnership Interest and any other
required documents should be sent or delivered by each Limited Partner or such
Limited Partner's broker, dealer, bank, trust company or other nominee to the
Depositary as set forth below.
THE DEPOSITARY FOR THE OFFER IS:
Harris Trust Company of New York
BY MAIL:
Wall Street Station
P.O. Box 1023
New York, New York 10268-1023
BY HAND/OVERNIGHT DELIVERY:
Receive Window
Wall Street Plaza
88 Pine Street, 19th Floor
New York, New York 10005
CONFIRM BY TELEPHONE:
(212) 701-7624
Questions and requests for assistance or for additional copies of the
Offer to Purchase and the Assignment of Partnership Interest may be directed to
the Information Agent at its telephone number and address listed below. You may
also contact your broker, dealer, bank, trust company or other nominee for
assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
BEACON HILL PARTNERS, INC.
90 Broad Street
New York, New York 10004
(212) 843-8500 (Collect)
or
(800) 301-8755 (Toll Free)
<PAGE>
ASSIGNMENT OF PARTNERSHIP INTEREST
to Tender Units of Limited Partnership Interest
of
High Equity Partners L.P. -- Series 88
Pursuant to the Offer to Purchase
Dated March 12, 1998
As Amended From Time to Time
of
OLYMPIA INVESTORS, L.P.
================================================================================
THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
APRIL 8, 1998, UNLESS THE OFFER IS EXTENDED.
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Limited Partners desiring to tender their Units should complete and
sign this Assignment of Partnership Interest, and forward it to the Depositary
at one of the addresses set forth below together with all certificates
representing their interests in Units tendered ("Certificates"). Instructions
for completing this Assignment of Partnership Interest are included herein,
along with a pre-addressed envelope to the Depositary.
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
By Mail: To Confirm: By Hand/Overnight
Delivery:
Wall Street Station (212) 701-7624 Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19th Floor
New York, New York 10005
If you have any questions or need assistance in completing this
Assignment of Partnership Interest, please call the Information Agent, Beacon
Hill Partners, Inc. at (212) 843-8500 (collect) or (800) 301-8755 (toll free).
Delivery of this Assignment of Partnership Interest or any other
required documents to an address other than those set forth above does not
constitute valid delivery.
PLEASE CAREFULLY READ THE ACCOMPANYING INSTRUCTIONS
Capitalized terms used herein and not defined shall have the meanings
given to them in the Olympia Investors, L.P. Offer to Purchase Limited
Partnership Units of High Equity Partners L.P. -- Series 88, dated March 12,
1998 (as it may be amended from time to time, the "Offer to Purchase").
The undersigned hereby tenders to Olympia Investors, L.P., a Delaware
limited partnership (the "Purchaser"), the number of the
undersigned's units of limited partnership interest specified in the signature
box (together with the Certificates, "Units") in High Equity Partners L.P.
- -Series 88, a Delaware limited partnership (the "Partnership"), at a price of
$120.00 per Unit, net to the seller in cash, without interest, less the amount
of distributions per Unit, if any (other than distributions of Adjusted Cash
from Operations, as defined in the Partnership Agreement), made by the
Partnership from the date of the Offer to Purchase until the Payment Date, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
receipt of which is hereby acknowledged, and in this Assignment of Partnership
Interest (which, together with any supplements or amendments, collectively
constitute the "Offer"). The Purchaser reserves the right to transfer or assign,
in whole or from time to time in part, to one or more persons, the right to
purchase Units tendered pursuant to the Offer, but any such transfer or
assignment will not relieve the Purchaser of its obligations under the Offer or
prejudice the rights of tendering Limited Partners to receive payment for Units
validly tendered and accepted for payment pursuant to the Offer. Limited
Partners who tender their Units will not be obligated to pay any commissions or
Partnership transfer fees in connection with such tender.
<PAGE>
The undersigned understands that if more than 148,500 Units are validly
tendered prior to or on the Expiration Date and not properly withdrawn, the
Purchaser will, upon the terms of the Offer, accept for payment from among those
tendered Units 148,500 Units on a pro rata basis based upon the number of the
tendered Units with adjustments to avoid purchases of certain fractional Units
and subject to the transfer requirements of the Partnership Agreement.
Subject to and effective upon acceptance for payment of and payment for
the Units tendered hereby, the undersigned hereby sells, assigns, and transfers
to or upon the order of the Purchaser all right, title, proxy and interest in
and to all of the Units tendered hereby (including the related Certificates),
including, without limitation, all rights in, and claims to, any voting rights,
rights to be substituted as a Limited Partner of the Partnership, Partnership
profits and losses, cash distributions and other benefits of any nature
whatsoever distributable or allocable or otherwise to such tendered Units under
the Partnership Agreement; provided, that if proration of tendered Units is
required as described in Section 1 of the Offer to Purchase, this Assignment of
Partnership Interest shall be effective to transfer to the Purchaser only that
number of the undersigned's Units as is accepted for payment and thereby
purchased by the Purchaser. The undersigned understands that upon acceptance for
payment of and payment for the Units tendered by the undersigned, the Purchaser
will seek admission to the Partnership as a Limited Partner in substitution for
the undersigned as to all Units tendered by the undersigned. If, however,
proration of tendered Units is required and as a result the Purchaser accepts
for payment and thereby purchases less than all of the undersigned's Units
tendered hereby, the undersigned may continue to be a Limited Partner with
respect to Units tendered by the undersigned that are not purchased. By
executing and delivering this Assignment of Partnership Interest, the
undersigned, being a tendering Limited Partner, expressly intends the Purchaser
to become a Limited Partner.
<PAGE>
The undersigned understands and hereby acknowledges and agrees that the
Purchaser shall be entitled to (i) deduct from the Purchase Price all
distributions of cash or other property from the Partnership (other than
distributions of Adjusted Cash from Operations) attributable to the transferred
Units that are made on or after March 12, 1998, without regard to whether the
record date for any such distribution may be a date after or prior to the date
of transfer and (ii) receive all Partnership distributions after the Payment
Date.
By executing and delivering this Assignment of Partnership Interest, a
tendering Limited Partner irrevocably appoints the Purchaser, its general
partner and any designees of the Purchaser and of each of them as such Limited
Partner's proxies, with full power of substitution, to the full extent of such
Limited Partner's rights with respect to the Units tendered by such Limited
Partner and accepted for payment by the Purchaser including, without limitation,
to deliver such Units and transfer ownership of such Units on the Partnership's
books maintained by the general partners of the Partnership and to become a
substituted Limited Partner and to receive all benefits and otherwise exercise
all rights of beneficial ownership of such Units and as a Limited Partner of the
Partnership, all in accordance with the terms of the Offer. All such proxies
shall be considered irrevocable and coupled with an interest in the tendered
Units. Such appointment will be effective when, and only to the extent that, the
Purchaser accepts such Units for payment. Upon such acceptance for payment
pursuant to the Offer, all prior proxies given by such Limited Partner with
respect to such Units will be revoked without further action, and no subsequent
proxies may be given nor any subsequent written consent executed (and, if given
or executed, will not be deemed effective). The Purchaser, its general partner
and any designees of the Purchaser will, with respect to the Units for which
such appointment is effective, be empowered to exercise all voting and other
rights of such Limited Partner as they in their sole discretion may deem proper
at any meeting of Limited Partners or any adjournment or postponement thereof,
by written consent in lieu of any such meeting or otherwise. The Purchaser may
assign such proxy to any person with or without assigning the related Units with
respect to which such proxy was granted. The Purchaser reserves the right to
require that, in order for a Unit to be deemed validly tendered, immediately
upon the Purchaser's payment for such Unit, the Purchaser must be able to
exercise full voting rights with respect to such Unit and other securities,
including voting at any meeting of Limited Partners.
<PAGE>
By executing and delivering the Assignment of Partnership Interest, a
tendering Limited Partner also irrevocably constitutes and appoints the
Purchaser, its general partner and any designees of the Purchaser as the Limited
Partner's attorneys-in-fact, each with full power of substitution to the full
extent of the Limited Partner's rights with respect to the Units tendered by the
Limited Partner and accepted for payment by the Purchaser. Such appointment will
be effective when, and only to the extent that, the Purchaser accepts the
tendered Units for payment. Upon such acceptance for payment, all prior powers
of attorney granted by the Limited Partner with respect to such Units will,
without further action, be revoked, and no subsequent powers of attorney may be
granted (and if granted will not be effective). Pursuant to such appointment as
attorneys-in-fact, the Purchaser, its general partner and any designees of the
Purchaser each will have the power, among other things, (i) to seek to transfer
ownership of such Units on the Partnership's books (and execute and deliver any
accompanying evidences of transfer and authenticity any of them may deem
necessary or appropriate in connection therewith, including, without limitation,
any documents or instruments required to be executed under a "Transferor's
(Seller's) Application for Transfer" created by the NASD, if required), (ii)
upon receipt by the Depositary (as the tendering Limited Partner's agent) of the
Purchase Price, to receive any and all distributions made by the Partnership,
and to receive all benefits and otherwise exercise all rights of beneficial
ownership of such Units in accordance with the terms of the Offer, (iii) to
execute and deliver to the Partnership and/or its general partners a change of
address form instructing the Partnership to send any and all future
distributions to which the Purchaser is entitled pursuant to the terms of the
Offer, in respect of tendered Units to the address specified in such form, and
(iv) to endorse any check payable to or upon the order of such Limited Partner
representing a distribution to which the Purchaser is entitled pursuant to the
terms of the Offer, in each case on behalf of the tendering Limited Partner. If
legal title to the Units is held through an IRA or KEOGH or similar account, the
Limited Partner understands that this Assignment of Partnership Interest must be
signed by the custodian of such IRA or KEOGH and the Limited Partner hereby
authorizes and directs the custodian of such IRA or KEOGH to confirm this
Assignment of Partnership Interest. This Power of Attorney shall not be affected
by the subsequent mental disability of the Limited Partner, and the Purchaser
shall not be required to post bond in any nature in connection with this Power
of Attorney. The Purchaser may assign such Power of Attorney to any person with
or without assigning the related Units with respect to which such Power of
Attorney was granted.
The undersigned hereby represents and warrants that the undersigned
owns the Units tendered hereby and has full power and authority to validly
tender, sell, assign and transfer the Units tendered hereby and that when the
same are accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale or transfer thereof, and such Units will not be
subject to any adverse claims and that the transfer and assignment contemplated
herein are in compliance with all applicable laws and regulations. The
undersigned further represents and warrants that the undersigned is a "United
States person," as defined in section 7701(a)(30) of the Internal Revenue Code
of 1986, as amended (the "Code"), or if the undersigned is not a United States
person, the undersigned does not own beneficially or of record more than 5% of
the outstanding Units. Upon request, the undersigned will execute and deliver
any additional documents deemed by the Depositary or the Purchaser to be
necessary or desirable to complete the assignment, transfer and purchase of
Units tendered hereby and otherwise in order to complete the transactions,
transfers and admissions to the Partnership contemplated herein.
The undersigned understands that a tender of Units pursuant to the
procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer. All
authority herein conferred or agreed to be conferred shall survive the death or
incapacity of the undersigned, and any obligation of the undersigned hereunder
shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
The undersigned recognizes that under certain circumstances set forth
in the Offer to Purchase, the Purchaser may not be required to accept for
payment any of the Units tendered hereby. If any tendered Units are not
purchased for any reason, the Assignment of Partnership Interest shall be
effective to transfer to the Purchaser only that number of Units as is accepted
and thereby purchased by the Purchaser, and the Certificates (or, if necessary,
new certificates) representing such unpurchased Units shall be returned.
Upon acceptance of Units by the Purchaser, the Purchaser agrees to be
bound by all of the terms and provisions of the Partnership Agreement.
<PAGE>
SIGN HERE TO TENDER YOUR UNITS
PLEASE BE SURE TO COMPLETE ALL APPLICABLE BLANKS
By executing this document in the space provided below, the undersigned
hereby: (i) evidences the Limited Partner's agreement to and acceptance of all
of the terms, provisions and matters set forth in this Assignment of Partnership
Interest and in the Offer to Purchase and (ii) tenders the number of Units
specified below pursuant to the terms of the Offer. The undersigned hereby
acknowledges and certifies, under penalty of perjury, to all of the foregoing
and that the information and representations set forth below and provided in
Boxes A, B and C of this Assignment of Partnership Interest, which have been
duly completed by the undersigned, are true and correct as of the date hereof.
<TABLE>
<CAPTION>
<S> <C>
X Address:
------------------------------------------ ----------------------------------------------------
Signature of Limited Partner - Date
------------------------------------------ ----------------------------------------------------
Printed Name of Limited Partner (Include Zip Code)
(The address provided above must be the registered
X address of the Limited Partner.)
------------------------------------------
Signature of Limited Partner - Date
Telephone (Day) ( )
----------------------------------------- ----- ------------------------------
Printed Name of Limited Partner Telephone (Eve) ( )
----- ------------------------------
Capacity (Full Title):________________________ Total Number of Number of Units
Units Owned: Tendered:
-------------- -------------
- --------------------------------------------------------------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
Authorized
Signature: Name of Eligible Institution:
------------------------------------------ ------------------------
Name: Address:
------------------------------------- ---------------------------------------------
Date: Telephone:( )
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</TABLE>
<PAGE>
TAX CERTIFICATES
BOX A
SUBSTITUTE FORM W-9
(See Instruction 4)
The person signing this Assignment of Partnership Interest hereby
certifies to the Purchaser under penalties of perjury:
Part 1 - The Taxpayer Identification Number (TIN) furnished in the space below
is the correct TIN of the Limited Partner;
TIN:
----------------------
Part 2 - If no TIN is provided in the space above and this box |_| is checked,
the Limited Partner has applied for a TIN, a TIN has not been issued to the
Limited Partner and either (i) the Limited Partner has mailed or delivered an
application to receive a TIN to the appropriate Internal Revenue Service ("IRS")
Center or Social Security Administration office or (ii) the Limited Partner
intends to mail or deliver an application in the near future and it is
understood that if the Limited Partner does not provide a TIN to the Purchaser
within 60 days, 31% of all reportable payments made to the Limited Partner
thereafter will be withheld until a TIN is provided to the Purchaser; and
Part 3 - Unless this box |_| is checked, the Limited Partner is NOT subject to
backup withholding either because the Limited Partner (i) is exempt from
backholding, (ii) has not been notified by the IRS that the Limited Partner is
subject to backup withholding as a result of a failure to report all interest or
dividends or (iii) has been notified by the IRS that such Limited Partner is no
longer subject to backup withholding.
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<PAGE>
BOX B
FIRPTA AFFIDAVIT - CERTIFICATE OF NON-FOREIGN STATUS
Under Section 1445(c)(5) of the Code and Treas. Reg. 1.1445-IIT(d), a
transferee of a U.S. real property interest must withhold tax if the transferor
is a foreign person. To inform the Purchaser that no withholding is required
with respect to the Limited Partner's interest in the Partnership, the person
signing this Assignment of Partnership Interest hereby certifies the following
under penalties of perjury:
Part 1 - Unless this box |_| is checked, the Limited Partner is a U.S. citizen
or a resident 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 Code and Income Tax
Regulations);
Part 2 - The name of the Limited Partner is ________________________________;
Part 3 - The Limited Partner's Social Security Number (for individuals) or
Employer Identification Number (for non- individuals) is
_________________________; and
Part 4 - The Limited Partner's home address (in the case of an individual) or
office address (in the case of an entity) is
- ---------------------------------------------------------------------------- .
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STATEMENT OF DESTROYED, LOST OR STOLEN CERTIFICATE(S)
(If Required - See Instruction No. 8)
TO BE COMPLETED ONLY IF YOU CANNOT LOCATE YOUR CERTIFICATES
The undersigned person(s) hereby represents, warrants, acknowledges and agrees
under penalty of perjury as follows:
I am the lawful owner of Certificate(s) representing the number of
Units referred to above. The Certificate(s) has (have) not been endorsed,
cashed, negotiated, transferred, assigned, or otherwise disposed of. I have made
a diligent search for the Certificate(s) and have been unable to find it (them),
and make this Statement to the Purchaser, the Partnership and the general
partners thereof for the purpose of inducing the acceptance of tender of the
Certificate(s) without surrender of the Certificate(s), and hereby agree to
surrender the Certificate(s) for cancellation should I at any time find the
Certificate(s). In consideration of the proceeds of tendering the Units and the
Certificate(s), I agree to completely indemnify, protect and save harmless the
Purchaser, the Partnership, the general partners thereof, the Depositary, and
each of their respective agents and affiliates, and any other party to the
transaction (collectively, the "Obligees") from and against all loss, costs and
damages, including, without limitation, court costs and attorneys' fees, which
they may be subject to or liable for in respect of the cancellation and
replacement of the Certificate(s), and the distribution of the proceeds of the
Certificate(s). The rights accruing to the Obligees under the preceding
sentences shall not be limited by the negligence, inadvertence, accident,
oversight or their failure to inquire into, contest, or litigate any claim,
whenever such negligence, inadvertence, accident, oversight, breach or failure
may occur or have occurred.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
X Address:
------------------------------------------ ----------------------------------------------------
Signature of Limited Partner - Date
------------------------------------------ ----------------------------------------------------
Printed Name of Limited Partner (Include Zip Code)
(The address provided above must be the registered
X address of the Limited Partner.)
------------------------------------------
Signature of Limited Partner - Date
Telephone (Day) ( )
----------------------------------------- ----- ------------------------------
Printed Name of Limited Partner Telephone (Eve) ( )
----- ------------------------------
Capacity (Full Title):________________________ Total Number of Number of Units
Units Owned: Tendered:
-------------- -------------
- --------------------------------------------------------------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
Authorized
Signature: Name of Eligible Institution:
------------------------------------------ ------------------------
Name: Address:
------------------------------------- ---------------------------------------------
Date: Telephone:( )
------------------------------------- ----- ------------------------------------
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</TABLE>
<PAGE>
INSTRUCTIONS FOR COMPLETING
ASSIGNMENT OF PARTNERSHIP INTEREST
for
HIGH EQUITY PARTNERS L.P. -- SERIES 88
Forming Part of Terms and Conditions of the Offer
FOR ASSISTANCE IN COMPLETING THIS ASSIGNMENT OF PARTNERSHIP INTEREST,
PLEASE CALL: BEACON HILL PARTNERS, INC. AT (212) 843-8500 (COLLECT) OR
(800) 301-8755 (TOLL FREE).
1. Delivery of Assignment of Partnership Interest. For convenience in
responding to the Offer, a pre-addressed envelope has been enclosed with the
Offer to Purchase. To ensure the Depository's receipt of the Assignment of
Partnership Interest along with any and all Certificates, it is suggested that
you use an overnight courier or, if the Assignment of Partnership Interest is to
be delivered by United States mail, that you use certified or registered mail,
return receipt requested. The method of delivery of the Assignment of
Partnership Interest and all other required documents is at the option and risk
of the tendering Limited Partner and delivery will be deemed made only when
actually received by the Depositary. In all cases, sufficient time should be
allowed to assure timely delivery.
To be effective, a properly completed and duly executed original
Assignment of Partnership Interest along with any and all Certificates, any
required signature guarantees and any other required documents must be received
by the Depository at one of its addresses set forth below prior to 12:00
Midnight, New York City time on Wednesday April 8, 1998, unless extended (the
"Expiration Date").
By Mail: HARRIS TRUST COMPANY OF NEW YORK
Wall Street Station
P.O. Box 1023
New York, New York 10268-1023
By Hand/Overnight Delivery: HARRIS TRUST COMPANY OF NEW YORK
Receive Window
Wall Street Plaza
88 Pine Street, 19th Floor
New York, New York 10005
To Confirm: (212) 701-7624
Please note that a tendering beneficial owner of Units whose Units are
owned of record by an IRA or other qualified plan will not receive direct
payment of the Purchase Price; rather, payment will be made to the custodian of
such account or plan.
2. Signatures on Assignment of Partnership Interest. If the Assignment of
Partnership Interest is signed by the registered holder(s) of the Units tendered
hereby, the signature(s) must correspond exactly with the name(s) as shown on
the records of the Partnership without alteration, enlargement or any change
whatsoever.
If the Assignment of Partnership Interest is signed by trustees,
executors, administrators, guardians, attorneys-in-fact, agents, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Depositary and the Purchaser of their authority so to act must be submitted (see
Instruction 3). With respect to most trusts, generally only the signature of the
named trustee will be required. For Units held in a custodial account for
minors, only the signature of the custodian will be required.
For IRA custodial accounts, the beneficial owner should return the
executed Assignment of Partnership Interest to the Depository as specified in
Instruction 1 herein. Such Assignment of Partnership Interest will then be
forwarded by the Depository to the custodian for additional execution. Such
Assignment of Partnership Interest will not be considered duly completed until
after it has been executed by the custodian.
If any tendered Units are registered in different names, it will be
necessary to complete, sign and submit as many separate Assignment of
Partnership Interests as there are different registrations of certificates.
All signatures on the Assignment of Partnership Interest must be
medallion guaranteed by a commercial bank, savings bank, credit union, savings
and loan association or trust company having an office, branch or agency in the
United States, a brokerage firm that is a member of a registered national
securities exchange or member of the National Association of Securities Dealers,
Inc. (each, an "Eligible Institution").
<PAGE>
3. Documentation Requirements. In addition to information required to be
completed on the Assignment of Partnership Interest, additional documentation
may be required by the Purchaser under certain circumstances including, but not
limited to those listed below. Questions on documentation should be directed to
Beacon Hill Partners, Inc. at (212) 843-8500 (collect) or (800) 301-8755 (toll
free).
Deceased Owner (Joint Tenant) Certified copy of death certificate.
Deceased Owner (Others) Certified copy of death certificate (See also
Executor/Administrator/Guardian below).
<TABLE>
<CAPTION>
<S> <C>
Executor/Administrator/Guardian (a) Certified copies of court appointment documents for executor or administrator dated
within 60 days of the date of execution of the Assignment of Partnership
Interest; and
(b) Copy of applicable provisions of the will (title page, executor(s)' powers, asset
distribution); OR
(c) Certified copy of estate distribution documents.
Attorney-In-Fact Current power of attorney.
Corporations/Partnerships Certified copy of corporate resolution(s) (with raised corporate
seal) or other evidence of authority to act. Partnerships should furnish
copy of their partnership agreement.
Trust/Pension Plans Copy of cover page of the trust or pension plan, along with
copy of the section(s) setting forth names and powers of trustee(s) and
any amendments to such sections or appointment of successor trustee(s).
All signatures must be medallion guaranteed.
</TABLE>
4. U.S. Persons. A limited Partner who or which is a United States citizen or
a resident alien individual, a domestic corporation, a domestic partnership, a
domestic trust or a domestic estate (collectively, "United States persons") as
those are defined in the Code and Income Tax Regulations, should follow the
instructions with respect to certifying Boxes A and B.
Taxpayer Identification Number. To avoid 31% federal income tax
withholding, the Limited Partner or other payee must provide the Depository with
the Limited Partner's correct TIN in the blanks provided for that purpose in
Boxes A and B. In the case of an individual person, such person's social
security number is his or her TIN.
WHEN DETERMINING THE TIN TO BE FURNISHED, PLEASE NOTE : Individual
accounts should reflect their own TIN; joint accounts should reflect the TIN of
the person whose name appears first; trust accounts should reflect the TIN
assigned to the Trust; custodial accounts for the benefit of minors should
reflect the TIN of the minor; corporations or other businesses should reflect
the TIN assigned to that entity.
Substitute Form W-9 - Box A. Each tendering Limited Partner is required
to provide the Depositary with a correct TIN on Substitute Form W-9 and to
certify, under penalties of perjury, that (i) the TIN provided on Substitute
Form W-9 is correct (or that such Limited Partner is awaiting a TIN) and (ii)
the Limited Partner either (a) is exempt from backup withholding, (b) has not
been notified by the IRS that the Limited Partner is subject to backup
withholding as a result of a failure to report all interest or dividends or (c)
has been notified by the IRS that the Limited Partner is no longer subject to
backup withholding. Failure to provide the information on the form may subject
the tendering Limited Partner to 31% federal income tax withholding on the
payments made to the Limited Partner or other payee with respect to Units
purchased pursuant to the Offer.
The box in Box A, Part 2 of the form may be checked if the tendering
Limited Partner has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, backup
withholding, if applicable, will begin 7 days after the Depositary receives an
Awaiting TIN Certification and will continue until the Limited Partner's TIN is
provided to the Depositary. If within 60 days the Depositary receives the
Limited Partner's TIN on a new IRS Form W-9 or copy of the Substitute Form W-9
provided above, the Depositary will return amounts withheld through the date
such IRS Form W-9 or Substitute Form W-9 is received.
<PAGE>
DO NOT CHECK THE BOX IN BOX A, PART 3 UNLESS YOU HAVE BEEN NOTIFIED BY
THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING.
FIRPTA Affidavit - Box B. To avoid potential withholding of tax
pursuant to Section 1445 of the Code in an amount equal to 10% of the purchase
price for Units purchased pursuant to the Offer, plus the amount of any
liabilities of the Partnership allocable to such Units, each Limited Partner who
or which is a United States person must complete the FIRPTA Affidavit stating,
under penalties of perjury, such Limited Partner's TIN and address, and that
such Limited Partner is not a foreign person. Tax withheld under Section 1445 of
the Code is not an additional tax. If withholding results in an overpayment of
tax, a refund may be obtained from the IRS. CHECK THE BOX IN BOX B, PART 1 ONLY
IF YOU ARE NOT A U.S. PERSON AS DESCRIBED THEREIN.
5. Foreign Persons. In order for a Limited Partner who is a foreign person
(i.e., not a United States person as defined in Instruction 4 above) to qualify
as exempt from 31% backup withholding, such foreign Limited Partner must
complete and deliver to the Depository, along with the Assignment of Partnership
Interest, Substitute Form W-8 which can be obtained from the Information Agent.
6. Conditional Tenders. No alternative, conditional or contingent tenders will
be accepted.
7. Number of Units Tendered; Minimum Tenders; Partial Tenders. ASSIGNMENTS OF
PARTNERSHIP INTEREST WHICH HAVE BEEN DULY EXECUTED, BUT WHERE NO INDICATION IS
MARKED IN THE "NUMBER OF UNITS TENDERED" COLUMN IN THE SIGNATURE BOX, SHALL BE
DEEMED TO HAVE TENDERED ALL UNITS PURSUANT TO THE OFFER. ALL UNITS REPRESENTED
BY CERTIFICATES DELIVERED TO THE DEPOSITORY WILL BE DEEMED TO HAVE BEEN TENDERED
UNLESS OTHERWISE INDICATED. If fewer than all the Units evidenced by any
Certificate submitted are to be tendered, new Certificate(s) for the remainder
of the Units that were evidenced by the old Certificate(s) will be sent to the
tendering Limited Partner as soon as practicable after the expiration of the
Offer. A Limited Partner may tender any or all of the Units owned by that
Limited Partner, provided, however, in order for the transfer to be valid, a
minimum of 10 Units or, if Units are tendered by an IRA or KEOGH, 4 Units, must
be sold pursuant to the Offer and provided further that a Limited Partner must
sell all of his Units if he would otherwise retain less than 10 Units or, in the
case of an IRA or KEOGH, 4 Units (8 Units for residents of Iowa). No fractional
Units will be purchased (except from a Limited Partner who is tendering all of
the Units owned by that Limited Partner). All tendering Limited Partners, by
execution of the Assignment of Partnership Interest (or facsimile thereof),
waive any right to receive any notice of the acceptance of their Units for
payment.
8. Statement of Destroyed, Lost or Stolen Certificate(s). If the Limited
Partner is unable to locate any of the Certificates representing Units to be
tendered, the Limited Partner must complete, sign and have medallion guaranteed
the Statement of Destroyed, Lost or Stolen Certificate(s) (the "Statement") set
forth above.
9. Assignee Status. Assignees must provide documentation to the Depository
which demonstrates, to the satisfaction of the Purchaser, such person's status
as an assignee.
10. Validity of Assignment of Partnership Interest. All questions as to the
validity, form, eligibility (including time of receipt) and acceptance of
Assignment of Partnership Interest will be determined by the Purchaser and such
determination will be final and binding. The Purchaser's interpretation of the
terms and conditions of the Offer (including these Instructions for the
Assignment of Partnership Interest) also will be final and binding. The
Purchaser will have the right to waive any irregularities or conditions as to
the manner of tendering. And any irregularities in connection with tenders must
be cured within such time as the Purchaser shall determine unless waived by it.
The Assignment of Partnership Interest will not be valid unless and
until any irregularities have been cured or waived. Neither the Purchaser, the
Depository nor the Information Agent are under any duty to give notification of
any defects in an Assignment of Partnership Interest and will incur no liability
for failure to give such notification.
11. Requests for Assistance and Additional Copies. Questions or requests for
assistance may be directed to the Information Agent, Beacon Hill Partners, Inc.
at (212) 843-8500 (collect) or (800) 301-8755 (toll free). Copies of the Offer
to Purchase and the Assignment of Partnership Interest may be obtained from the
Information Agent by calling either number.
12. Inadequate Space. If the space provided herein is inadequate, additional
information may be provided on a separate schedule signed and attached hereto.
IMPORTANT: A PROPERLY COMPLETED AND DULY EXECUTED ASSIGNMENT OF
PARTNERSHIP INTEREST (ALONG WITH AND ANY AND ALL CERTIFICATES, AND ANY REQUIRED
SIGNATURE GUARANTEES AND ANY OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE
DEPOSITARY ON OR PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME ON WEDNESDAY, APRIL
8, 1998, UNLESS EXTENDED.
<PAGE>
IMPORTANT TAX INFORMATION
Under federal income tax law, in order to prevent backup withholding on
amounts payable to a Limited Partner whose tendered Units are accepted for
payment, such Limited Partner is required to provide the Depositary with such
Limited Partner's correct TIN on Substitute Form W-9 above or otherwise
establish a basis for exemption from backup withholding. If the Depositary is
not provided with the correct TIN, the Limited Partner or other payee may be
subject to penalties imposed by the IRS. In addition, payments that are made to
such Limited Partner or other payee with respect to Units purchased pursuant to
the Offer may be subject to backup withholding.
Certain Limited Partners (including, among others, all corporations and
certain foreign persons) are not subject to these backup withholding and
reporting requirements. Exempt Limited Partners should indicate their exempt
status on Substitute Form W-9. In order for a foreign person to qualify as an
exempt recipient, that Limited Partner must deliver to the Depositary a
Substitute Form W-8, signed under penalties of perjury, attesting to that
Limited Partner's exempt status.
If backup withholding applies, the Depositary is required to withhold
31% of any reportable payments made to the Limited Partner or other payee.
Backup withholding is not an additional tax. Rather, the federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of tax withheld. If withholding results in an overpayment of taxes, a refund may
be obtained from the IRS.
<PAGE>
[American Real Estate Partners, L.P. Letterhead]
FOR IMMEDIATE RELEASE
---------------------
Contact: Information Agent:
Beacon Hill Partners, Inc.
(212) 843-8500
AN AFFILIATE OF AMERICAN REAL ESTATE PARTNERS, L.P.
---------------------------------------------------
INITIATES TENDER OFFERS
-----------------------
Mount Kisco, N.Y., March 12, 1998 - American Real Estate Partners, L.P. (NYSE:
ACP) announced today that Olympia Investors, L.P., a Delaware limited
partnership affiliated with American Real Estate Partners, L.P. is initiating
tender offers (the "Offers") for units of limited partnership interest ("Units")
in the following limited partnerships:
Up to 160,000 Units of Integrated Resources High Equity Partners,
Series 85 at a purchase price per Unit of $95.00;
Up to 235,000 Units of High Equity Partners L.P. - Series 86 at a
purchase price per Unit of $85.00; and
Up to 148,500 Units of High Equity Partners L.P. - Series 88 at a
purchase price per Unit of $117.00.
The Units sought constitute approximately 40% of the outstanding Units of each
Partnership. The purpose of the Offers is to enable Olympia to acquire a
significant interest in each Partnership for investment purposes. The Offers are
not subject to financing.
American Real Estate Partners, L.P. is a master limited partnership primarily
engaged in acquiring and managing real estate investments, with a primary focus
on office, retail, industrial, hotel and residential properties.
100 South Bedford Road o Mount Kisco, NY 10549
914-242-7700 o 914-242-9282 (Fax)
<PAGE>
$117.00 PER UNIT OFFER TO PURCHASE
To Unitholders in High Equity Partners L.P. - Series 88:
Olympia Investors, L.P., a Delaware limited partnership (the
"Purchaser"), is offering to purchase up to 148,500 of the outstanding units of
limited partnership interest ("Units") in High Equity Partners L.P. - Series 88
(the "Partnership") for a purchase price of $117.00 per Unit, net to the seller
in cash, without interest, less the amount of distributions per Unit, if any
(other than distributions of Adjusted Cash from Operations, as defined in the
Partnership's Partnership Agreement), made by the Partnership from the date
hereof until the Payment Date (as defined in the attached Offer to Purchase
dated March 12, 1998), upon the terms and subject to the conditions set forth in
the Offer to Purchase, and the related Assignment of Partnership Interest (which
together constitute the "Offer").
Unless extended by the Purchaser, the Offer is effective until
midnight, New York City time, on April 8, 1998. The Offer is not conditioned
upon any minimum number of Units being tendered; however, in order for a tender
to be valid, (i) a minimum of 10 Units or, if Units are tendered by an
Individual Retirement Account or a Keogh Plan, 4 Units, must be sold pursuant to
the Offer, and (ii) to the extent such tender is a partial tender, after the
sale of Units pursuant to the Offer, you must continue to hold at least 10 Units
or, if Units are tendered by an Individual Retirement Account or a Keogh Plan, 4
Units (8 Units for an IRA or Keogh Plan for Iowa residents and 10 Units for all
South Carolina residents).
The materials included in this package include important information
concerning the Purchaser, the terms and conditions of the Offer, tax
implications and instructions for tendering your Units. It is important that you
take some time to read carefully the enclosed Offer to Purchase, the Assignment
of Partnership Interest and other accompanying materials in order to evaluate
the Offer being made by the Purchaser.
You must decide whether to tender your Units based on your own
particular circumstances, including your judgment of the value of your Units
taking into account their upside potential and risks. You should consult with
your advisors about the financial, tax, legal and other implications to you of
accepting the Offer.
If you desire additional information regarding the Offer or need
assistance in tendering your Units, you may call Beacon Hill Partners, Inc.,
which is acting as Information Agent for the Offer. Informed and courteous
agents are available to assist you.
BEACON HILL PARTNERS, INC.
90 Broad Street
New York, New York 10004
(212) 843-8500 (Collect)
or
(800) 301-8755 (Toll Free)
March 12, 1998 OLYMPIA INVESTORS, L.P.
<PAGE>
AGREEMENT
Dated March 6, 1998
The parties to this agreement are Presidio Capital Corp., a corporation
organized in the British Virgin Islands ("Presidio"), American Real Estate
Holdings L.P., a Delaware limited partnership ("AREH") and Olympia Investors,
L.P., a Delaware limited partnership ("Olympia").
Presidio, directly or indirectly, controls the general partners of each
of Integrated Resources High Equity Partners, Series 85, a California limited
partnership ("HEP 85"), High Equity Partners L.P. - Series 86, a Delaware
limited partnership ("HEP 86"), and High Equity Partners L.P. - Series 88, a
Delaware limited partnership ("HEP 88" and collectively with HEP 85 and HEP 86,
the "Partnerships"). On the date of this agreement, AREH and its affiliates
beneficially own 1,657 units of limited partnership interest ("Units") of HEP
85, 3,243Units of HEP 86 and 2,346 Units of HEP 88. Olympia, a newly-formed
Delaware limited partnership affiliated with AREH, wishes to make tender offers
(the "Offers") to acquire up to approximately 40% of the outstanding Units of
each of the Partnerships and, in that connection, proposes to file with the
Securities and Exchange Commission (the "Commission") a Tender Offer Statement
on Schedule 14D-1 relating to each Offer (collectively, the "Schedule 14D-1's")
substantially in the forms set forth on schedule A.
The parties agree as follows:
1. Offers. (a) Olympia intends to file the Schedule 14D-1's with the
Commission, and to cause the related Offers to Purchase, Assignments of
Partnership Interest and Cover Letters included as exhibits to such Schedule
14D-1's (such Offers to Purchase,
<PAGE>
Assignments of Partnership Interest and Cover Letters, together with any
amendments or supplements thereto or any other communications proposed to be
sent to holders of Units of any Partnership being collectively referred to as
the "Offering Materials") to be mailed to holders of Units, on or before the
fifth business day following delivery by the Partnerships to Olympia of the
Lists referred to in section 1(b) hereof. Olympia shall cause each Offer to
expire on or before May 12, 1998 (the date on which an Offer expires in
accordance with this sentence, as the same may be extended in accordance with
the proviso set forth below, the "Final Expiration Date"); provided, however,
that the Final Expiration Date with respect to any Offer may be extended, upon
notice by Olympia to Presidio, under the following circumstances: (i) if there
is in effect, on such date, any preliminary or permanent injunction or other
order of any federal or state court, government or governmental authority or
agency of the type described in paragraph (a) of Section 14 of the applicable
Offer to Purchase (such preliminary or permanent injunction or other order being
hereinafter referred to as an "Injunction"), the Final Expiration Date of such
Offer may be extended to the earliest practicable date on which such Offer may
expire in accordance with the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated by the commission
thereunder (the Exchange Act and such rules and regulations being hereinafter
collectively referred to as the "Rules"), following the vacation or dissolution
of such Injunction and the dissemination to limited partners of additional
Offering Materials containing any necessary disclosure relating thereto; (ii)
subject to clause (i) above, if there is pending, on such date, any action or
proceeding of the type described in paragraph (h) of Section 14 of the
applicable Offer to Purchase, the Final Expiration Date of such Offer may be
extended to the earlier of (A) the earliest practicable date on which such Offer
may expire in accordance
2
<PAGE>
with the Rules following the final resolution of such action or proceeding and
the dissemination to limited partners of additional offering Materials
containing any necessary disclosure relating thereto or (B) June 11, 1998; (iii)
the Final Expiration Date of such Offer may be extended to the earliest
practicable date on which such Offer may expire in accordance with the Rules
following the dissemination to limited partners of additional Offering Materials
prepared for the purpose of complying with comments by the staff of the
Commission, provided that Olympia uses its best efforts to comply with such
comments expeditiously; or (iv) in the event that a competing offer for Units is
commenced by a third party bidder who is not affiliated with AREH (a "Competing
Offer"), the Final Expiration Date of such Offer may be extended, on one or more
occasions, to the earliest practicable date on which such Offer may expire in
accordance with the Rules following an increase in the offering price to a price
equal to or higher than the price offered by the competing bidder and the
dissemination to limited partners of amended Offering Materials disclosing such
increase, provided, however, that if such Competing Offer is for less than 5% of
the outstanding Units of a Partnership, the Final Expiration Date may not be
extended for more than ten business days beyond June 11, 1998 pursuant to this
clause (iv). Presidio will not unreasonably withhold or delay its consent to any
request by Olympia to extend the Final Expiration Date of any Offer, for any
reason other than those set forth in the immediately preceding sentence,
provided that such request does not seek to extend such Final Expiration Date
beyond June 11, 1998.
(b) Concurrently herewith, Presidio has caused the Partnerships to
furnish Olympia with lists, as of the most recent practicable date and in
computer readable form, of the names, addresses and numbers of Units held by
limited partners of the Partnerships (the "Lists"),
3
<PAGE>
together with such computer processing data as is necessary to make use of such
computer readable Lists and printouts of such Lists for verifications purposes.
AREH shall not, and shall cause its affiliates, agents and representatives not
to, use the Lists for any purpose other than to acquire Units pursuant to the
Offers.
(c) Olympia shall make all decisions regarding the conduct of the
Offers and the acquisition and transfer of Units pursuant thereto, including
without limitation decisions regarding any change in the terms or waiver of any
of the conditions thereof; provided, however, that, without obtaining the prior
written approval of Presidio, Olympia shall not amend or otherwise modify the
terms of any Offer: (i) to increase the number of Units of any Partnership
sought to be purchased in such Offer to a number in excess of 40% of the
outstanding Units of such Partnership; or (ii) in a manner that violates or is
inconsistent with its obligations under this agreement. Olympia shall provide
Presidio with copies of Offering Materials describing any proposed change in the
terms of, or waiver of any condition to, an Offer not less than two business
days prior to the date such Offering Materials are first mailed to holders of
Units. Each party shall, and shall cause its affiliates to, comply with the
Rules in connection with the Offers.
(d) Presidio will not, and will cause its affiliates not to, directly
or indirectly, purchase or otherwise acquire beneficial ownership of Units in
any Partnership, enter into any agreement with a third party to purchase or
otherwise acquire beneficial ownership of any Units in any Partnership, or make
any offer to purchase or otherwise acquire beneficial ownership of, or solicit
any offer to sell, Units in any Partnership, at any time commencing on the date
hereof through and including the Final Expiration Date of the Offer with respect
to such Partnership.
2. Standstill. (a) Prior to the Standstill Expiration Date (as
hereinafter defined),
4
<PAGE>
except to the extent AREH or its affiliates is invited to do otherwise by
Presidio, AREH shall not, and shall not permit any of its affiliates to,
directly or indirectly:
(i) acquire, announce an intention to acquire, offer or propose to
acquire, solicit an offer to sell or agree to acquire, by purchase, by gift, by
joining a partnership, a limited partnership, a syndicate or any group or
otherwise (other than any partnership, limited partnership, syndicate or group
consisting solely of AREH and its affiliates and, in such event, only to the
extent permitted pursuant to section 2(b) below), (A) any Units in any
Partnership or (B) any assets, businesses or properties of any Partnership;
(ii) participate in the formation or encourage the formation of, or
join or in any way participate with, any partnership, limited partnership,
syndicate, group or other person or entity that beneficially owns or seeks to
acquire beneficial ownership of Units in any Partnership for the purpose of
beneficially owning or acquiring beneficial ownership of any such Units (other
than any group consisting solely of AREH and its affiliates);
(iii) solicit, or participate in the solicitation of, proxies or become
a participant in any election contest (the terms used in this section 2.3 having
the respective meanings given them to Regulation 14A under the Exchange Act)
with respect to any Partnership;
(iv) initiate, propose or otherwise solicit limited partners for the
approval of one or more proposals with respect to any Partnership or induce any
other person to initiate any such proposal;
(v) seek the removal of any general partner of any Partnership or seek
to have called any meeting of limited partners of any Partnership;
(vi) deposit any Units of any Partnership in a voting trust or subject
them to
5
<PAGE>
a voting agreement or other agreement or arrangement with respect to voting
(other than this agreement or any agreement or arrangement solely among AREH and
its affiliates); or
(vii) otherwise act, alone or in concert with others, to seek to
control the management, policies or affairs of any Partnership or solicit,
propose, seek to effect or negotiate with any other person or entity (including,
without limitation, any Partnership) with respect to any form of business
combination or other extraordinary transaction with any Partnership or any of
its general partners; solicit, make or propose, or negotiate with any other
person or entity with respect to, or announce an intent to make, any tender
offer or exchange offer for any Units in any Partnership; publicly disclose an
intent, purpose, plan or proposal with respect to any Partnership or any
securities or assets of any Partnership that would violate the provisions of
this section 2; or assist, participate in, facilitate or solicit any effort or
attempt by any person or entity to do or seek to do any of the foregoing.
(b) Notwithstanding the provisions of section 2(a):
(i) AREH and its affiliates: may conduct the Offers, and acquire Units
pursuant to the Offers, in accordance with section 1 hereof and may exercise
their rights and perform their obligations under this Agreement;
(ii) Olympia and/or any Permitted Transferee may acquire from any
Partnership, as a distribution from the Partnership, any securities or other
assets or properties the Partnership distributes to its partners in any such
distribution.
(iii) Except as to the matters expressly referred to in section 2(a)
and except as provided in section 5, Olympia and any Permitted Transferee of
Units shall be entitled to exercise their rights as a limited partner of each
Partnership in which they own Units, including, without
6
<PAGE>
limitation, the rights to access books and records of the Partnership and to
vote.
(iv) Neither AREH nor any affiliate of AREH shall be deemed to have
violated section 2 of this Agreement in the event that such person acquires
beneficial ownership of Units of any Partnership pursuant to a transaction in
which such person acquires another entity, in circumstances in which the
principal purpose of such transaction is not to acquire Units of such
Partnership or otherwise to circumvent the intent of this agreement, provided
that the number of Units so acquired, together with the aggregate number of
Units of such Partnership acquired by AREH or any affiliate of AREH in any other
transactions permitted pursuant to this paragraph (iv), represent a de minimis
amount of the total outstanding Units of such Partnership.
(v) AREH and its affiliates may acquire, offer or propose to acquire,
or agree to acquire one or more assets, businesses or properties of any
Partnership if, prior to AREH or any affiliate taking action with respect to
such acquisition, the general partners of the Partnership owning such assets,
businesses or properties or their affiliates have publicly announced such
Partnership's intention to offer such assets, businesses or properties for sale
or to solicit offers for the purchase thereof or have retained a broker for such
purpose.
(c) For purposes of this agreement, "Standstill Expiration Date", with
respect to any Partnership, shall mean the earliest to occur of: (i) the third
anniversary of the date hereof; (ii) the date of a Default (as hereinafter
defined) by Presidio in its obligation to purchase Units of such Partnership
pursuant to the buy/sell agreements set forth in section 4 hereof; and (iii) the
closing date of the purchase by Olympia and/or any affiliate of Units from
Presidio pursuant to the buy/sell agreements set forth in section 4 hereof.
7
<PAGE>
3. Restrictions on Transfer
3.1 Transfers to be made only as Permitted or Required
by this Agreement. Olympia and its affiliates shall not, directly or indirectly,
sell, assign, transfer, pledge or otherwise encumber or dispose of
(collectively, "transfer") any Units any of them acquires pursuant to the
Offers, except as specifically permitted or required by this agreement. Any
other purported transfer shall be void and of no effect. The foregoing
provisions shall not be deemed to prohibit (a) the transfer of the capital stock
or other equity interest in Olympia, AREH or any of their respective affiliates
in circumstances in which the principal purpose of such transfer is not to
dispose of Units or otherwise to circumvent the intent of this agreement; or (b)
the pledge of any Units acquired pursuant to the Offers or any capital stock or
other equity interest in Olympia, AREH or any such affiliates from being pledged
to collateralize or otherwise support general corporate or partnership
obligations of Olympia, AREH or such affiliate existing of the date or incurred
during the term of this agreement, provided that the foregoing shall not relieve
Olympia, AREH or such affiliate from its obligations to fully perform its
undertakings hereunder and provided further that any direct pledgee of Units
shall agree to be bound by the provisions of this agreement to the same extent
as Olympia is so bound as a condition to foreclosing upon such Units.
3.2 Permitted Transfers. Olympia and its affiliates may,
at any time or from time to time, transfer some or all of the Units they acquire
pursuant to the Offers (or the right to acquire Units pursuant to the Offers) to
any of their affiliates (Olympia and each such affiliate being hereinafter
referred to as a "Permitted Transferee"). No transfer to a Permitted Transferee
shall be effective, however, unless the Permitted Transferee agrees, in a
writing that is reasonably
8
<PAGE>
satisfactory to Presidio, to be bound by all the terms of this agreement to the
same extent that Olympia and AREH are so bound.
3.3 Termination of Restrictions. The provisions of
section 3.1 shall terminate, as to a Partnership, on the earlier to occur of:
(a) the third anniversary of this agreement; or (b) the closing of any purchase
of Units of such Partnership by Olympia or an affiliate upon exercise of the
buy/sell provisions set forth in section 4 hereof. In addition, the provisions
of section 3.1 shall not apply to any of the Partnerships at any time following
the occurrence and during the continuance of a Default by Presidio in its
obligation to purchase Units of one or more Partnerships upon exercise of the
buy/sell provisions set forth in section 4 hereof. If Units are transferred to a
third party other than a Permitted Transferee at any time when the restrictions
on transfer do not apply (as provided in the immediately preceding sentence) or
transferred to any third party following the termination of such restrictions,
the transferee will not be bound by any of the obligations applicable to the
transferor of such Units under this Agreement.
4. Call; Buy/Sell
4.1 Call. At any time after the Final Expiration Date
and before the ninety-first day following the Final Expiration Date, Presidio
shall have the option (the "Call Option") to purchase 50% (but not less than
50%) of the Units in each Partnership acquired pursuant to the Offers by Olympia
and its affiliates for a price determined in accordance with schedule 4.1. The
Call Option will be exercisable only by written notice by Presidio to Olympia
and AREH, which notice must be given, if at all, prior to the expiration of such
option.
4.2 Buy/Sell. (a) Either Olympia or Presidio may
initiate buy/sell procedures with respect to one or more Partnerships at any
time commencing on the Buy/Sell
9
<PAGE>
Effective Date (as hereinafter defined) through and including the Standstill
Expiration Date. Anything herein to the contrary notwithstanding, buy/sell
procedures may not be instituted more than once with respect to any Partnership
(except that the delivery of a Buy/Sell Offer that is rescinded pursuant to
section 4.2(d) hereof shall not constitute the institution of buy/sell
procedures for this purpose). Such buy/sell procedures shall cover, in the case
of Olympia, all Units of a Partnership acquired by Olympia and/or any Permitted
Transferee pursuant to an Offer (other than Units purchased by Presidio upon
exercise of the Call Option) and all other Units owned by Olympia or any
affiliate of Olympia at the time the buy/sell procedures are initiated
(collectively, the "Olympia Covered Units") and, in the case of Presidio, all
Units of such Partnership acquired by Presidio or any affiliate of Presidio upon
exercise of the Call Option (collectively, the "Presidio Covered Units").
(b) Either Olympia or Presidio may initiate the buy/sell procedures
with respect to one or more Partnerships by delivering to the other a written
offer (the "Buy/Sell Offer") stating the buy/sell price on a per Unit/per
Partnership basis (which buy/sell price shall be payable solely in cash and
shall not exceed, for any Partnership, the net asset value per Unit for such
Partnership as of the date of the Buy/Sell Offer (the "Maximum Price")) and
other material terms and conditions on which the initiating party is willing to
purchase all, but not less than all, Olympia Covered Units or Presidio Covered
Units, as the case may be, of such Partnership. The non-initiating party shall
then be obligated to elect to sell Units to the initiating party at the per Unit
price and upon the other terms and conditions set forth in the Buy/Sell Offer,
or to purchase Units from the initiating party upon such terms and conditions.
(If the Buy/Sell Offer relates to more than one Partnership, the non-initiating
party may, in its discretion, elect to buy Units of one
10
<PAGE>
Partnership and sell Units of another, subject to Section 4.2(c) below). The
non-initiating party shall have fifteen days from the date the Buy/Sell Notice
is delivered to it (the "Reply Period") to decide whether to buy or sell.
Failure to notify the initiating party of such decision at or prior to the end
of the Reply Period shall be deemed a decision to buy Units. Notwithstanding the
foregoing, in the event that the non-initiating party wishes to buy Units of a
Partnership but believes that the buy/sell price named in the Buy/Sell Offer
exceeds the Maximum Price for such Partnership, the non-initiating party shall
notify the initiating party during the Reply Period of its election to buy such
Units at the Maximum Price, which notice (the "Appraisal Notice") shall set
forth the Maximum Price (in the opinion of the non-initiating party) and shall
name an appraiser with a minimum of ten years experience in the appraisal of
properties of the type owned by the Partnership(s) whose Units are subject to
appraisal (a "Qualified Appraiser"). If the parties cannot agree upon the
Maximum Price, the initiating party shall name a Qualified Appraiser (and shall
so notify the non-initiating party in writing) within ten days following its
receipt of the Appraisal Notice, and the two Qualified Appraisers shall choose a
third impartial Qualified Appraiser (the "Impartial Appraiser") within ten days
following selection of the second Qualified Appraiser. If the initiating party
fails timely to select (and to notify the non-initiating party of its selection
of) a Qualified Appraiser in accordance the immediately preceding sentence, the
Qualified Appraiser selected by the non-initiating party shall select the
Impartial Appraiser. The Impartial Appraiser so selected shall perform an
appraisal to determine the Maximum Price of Units of the Partnership(s) subject
to the dispute between the parties and shall present the results of such
appraisal and his determination of the Maximum Price to the parties in writing
within 90 days following such appraiser's selection. The determination of such
Impartial Appraiser shall be
11
<PAGE>
final and binding on the parties hereto. Each party shall bear any costs and
expenses of the Qualified Appraiser selected by such party and Presidio shall
bear 50% and AREH shall bear 50% of the costs and expenses of the Impartial
Appraiser.
(c) If Presidio or an affiliate does not exercise the Call Option with
respect to one or more Partnerships (and, as a result, there are no Presidio
Covered Units of such Partnership(s)) or if, at the time buy/sell procedures are
initiated, Presidio and its affiliates collectively own more than 15% of the
outstanding Units of the Partnership(s) with respect to which such buy/sell
procedures are initiated, then, notwithstanding the provisions of section 4.2
hereof to the contrary: (i) if AREH or an affiliate initiates buy/sell
procedures with respect to such Partnership(s), AREH or such affiliate may
require Presidio to buy the Units of such Partnership(s) covered by AREH's or
such affiliate's Buy/Sell Offer at the Maximum Price then applicable to such
Units, and (ii) if Presidio initiates buy/sell procedures with respect to such
Partnership(s), AREH and its affiliates may, in their discretion, elect to sell
the Units covered by Presidio's Buy/Sell Offer at the Maximum Price then
applicable to such Units or to retain such Units. The appraisal procedures set
forth in paragraph (b) above shall apply to buy/sell procedures governed by this
paragraph (c), if applicable.
(d) As used herein, "Buy/Sell Effective Date" shall mean, as to Units
of any Partnership, the earlier to occur of: (a) the six-month anniversary of
the Final Expiration Date; and (b) the date on which Presidio gives notice (in
accordance with Section 8.7 hereof) to Olympia and AREH of a proposal by or on
behalf of the general partners of any Partnership or any affiliate of such
general partners to effect a "roll-up" transaction (within the meaning of Item
901 of Regulation S-K promulgated by the Commission under the Exchange Act)
involving such
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<PAGE>
Partnership (it being agreed by Presidio that it will not permit any such
"roll-up" transaction to be consummated less than sixty days following the
giving of such notice (in accordance with Section 8.7 hereof) to Olympia and
AREH). Any notice given pursuant to clause (b) of the immediately preceding
sentence shall set forth, in reasonable detail, all material terms of the
"roll-up" transaction being proposed. Notwithstanding the foregoing, in the
event that Presidio makes a Buy/Sell Offer at a time when either the purchase or
sale of Units by Olympia or its affiliates pursuant to the buy/sell procedures
set forth in this section 4 would cause Olympia or any such affiliate to incur
liability under Section 16(b) of the Exchange Act, Olympia may so notify
Presidio (which notice shall state the earliest date (the "Trigger Date") on
which Olympia or such affiliate could commit either to purchase or sell Units
without incurring such liability, provided that such Trigger Date shall not be
more than six months and one day following the date of Presidio's Buy/Sell
Offer), in which event Presidio's Buy/Sell Offer shall be deemed to be rescinded
for all purposes of this agreement, and Presidio may not initiate another
Buy/Sell Offer prior to the Trigger Date. Olympia may not cause a Buy/Sell Offer
to be rescinded pursuant to this section 4.2(c) more than once.
4.3 Closing. The closing of any purchase and sale of Units of a
Partnership upon exercise of the Call Option or pursuant to the buy/sell
procedures, as the case may be, shall be held in New York City during normal
business hours at a place and date specified by Presidio in writing to Olympia
and AREH, but not fewer than 10 days or more than 30 days after: (x) the
exercise of the Call Option or with respect to such Partnership; or (y) the end
of the Reply Period following delivery of a Buy/Sell Offer covering such
Partnership (or, if an Appraisal Notice is timely given relating to Units of
such Partnership, then the final determination by the Impartial
13
<PAGE>
Appraiser of, or the mutual agreement of the parties as to, the Maximum Price).
Once scheduled, such closing shall not be postponed or adjourned except by
mutual consent of the parties hereto. At such closing, (a) the party selling
Units shall deliver to the party purchasing Units instruments of transfer with
respect to the Units being sold, which instruments shall be substantially in the
form set forth in schedule 4.3, and (b) the party purchasing Units shall pay the
full purchase price for the Units being purchased by wire transfer of
immediately available funds to an account specified in writing by party selling
Units at least two days before the closing. As used herein, a "Default" by
Presidio in its obligation to purchase Units upon exercise of the buy/sell
procedures means the failure by Presidio timely to schedule a closing for such
purchase as required by this section 4.3 or to pay the full purchase price for
any or all of the Units required to be purchased by Presidio at such closing in
the manner required by this section, provided that Olympia and/or any Olympia
affiliate owning the Units required to be purchased at such closing are ready,
willing and able to perform their obligations to transfer such Units to
Presidio. Anything herein to the contrary notwithstanding, if, between the date
a Buy/Sell Offer is made and the date of the closing pursuant to this section
4.3, a transaction has been consummated as a result of which the Units required
to be transferred at such closing (and all other Units of the subject
Partnership) have been exchanged for or converted into another security, the
party required to sell such Units shall deliver at the closing the securities so
received by it in connection with such exchange or conversion and the purchase
price payable to such party shall be unaffected by such exchange or conversion.
5. Agreement to Vote. If, at any time or from time to time before the
Standstill Expiration Date, the general partners of a Partnership submit to the
limited partners of that
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Partnership a proposal that would result in such limited partners receiving
securities that, upon consummation of the proposal, are listed on a national
securities exchange or NASDAQ, AREH shall cause all the Units in that
Partnership owned by AREH or any affiliate of AREH and not theretofore purchased
by Presidio to be voted in favor of the proposal.
6. Neutrality. Presidio will not, and will not cause or permit its
affiliates to, take any action that would result in the conditions to the Offers
set forth in Section 14 of each Offer to Purchase not to be satisfied and will
not, and will not cause or permit its affiliates to, actively oppose the Offers,
but rather will take, and will cause its affiliates to take, a neutral stance
with respect thereto, except that in the case of (i) a competing third party bid
(i.e., a bid made by or on behalf of a party other than AREH or an affiliate or
Presidio or an affiliate that is not topped by Olympia) made prior to the
expiration date of the Offers or (ii) the occurrence of any event materially
adversely affecting the Offers, Presidio or any affiliate of Presidio may change
any recommendation they have made to limited partners with respect to the Offers
to reflect such competing bid or the occurrence of such event. In furtherance
and not in limitation of the foregoing, Presidio will cause the general partners
of the Partnerships to admit Olympia or a Permitted Transferee as a limited
partner of each Partnership in which it purchases Units pursuant to an Offer
upon delivery of each Partnership's standard transfer paperwork, such admission
to be effective as of the first day of the calendar quarter next following the
date of such delivery by Olympia. Presidio shall cause each of the Partnerships
to waive applicable transfer fees in connection with transfers to Olympia or a
Permitted Transferee of Units acquired pursuant to the Offers.
7. Termination. (a) Anything herein to the contrary notwithstanding,
Olympia
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and AREH shall have the right to terminate this agreement, by giving written
notice of such termination to Presidio (without any liability on the part of any
party hereto to any other party hereto, other than liability for breaches
occurring prior to such termination), in the event that Presidio and/or any
affiliate of Presidio fails or refuses to comply with (a) any comment made by
the staff of the Commission to amend the Offers to the extent necessary to
include Presidio and/or affiliate of Presidio as co-bidders and to make any
related disclosures in the Offering Materials or (b) any other reasonable
comment made by the staff relating to the Offers which comment applies to and
contemplates the taking of certain action or making certain disclosures by
Presidio and/or any affiliate of Presidio (and, in the case of clause (a) or (b)
above, after counsel for Presidio has had reasonable opportunity to persuade the
staff of the correctness of Presidio's position on such matter, if different
than that of the staff). The obligations of Presidio pursuant to section 6
hereof will survive such termination.
(b) Anything herein to the contrary notwithstanding, Presidio shall
have the right to terminate this agreement (without any liability on the part of
any party hereto to any other party hereto, other than liability for breaches
occurring prior to such termination), by giving written notice of such
termination to AREH and Olympia, at any time on or after the sixty-first day
following the entry of an Injunction (but in no event prior to June 11, 1998),
provided that the Final Expiration Date has not occurred and such Injunction
remains in effect on the date Presidio terminates such agreement.
8. Miscellaneous
8.1 Definitions. As used in this agreement: the terms
"affiliate" and "control" have the respective meanings given them in Rule 12b-2
under the Exchange Act; the
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terms "beneficially own," "beneficial ownership" and "group" have the respective
meanings given them in Rule 13d-3 under the Exchange Act; the term "Partnership"
refers to each of the Partnerships (as defined in the preface to this agreement)
and also includes each entity whose securities are issued to limited partners of
a Partnership pursuant to a transaction of the type described in section 5
hereof; and the term "Unit" refers to Units of each Partnership (as defined in
the preface to this agreement) and also includes any securities of the type
described in section 5 hereof issued to limited partners of a Partnership in
exchange for Units.
8.2 Benefit. This agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of the parties.
Notwithstanding the foregoing, no party may assign its rights or obligations
under this Agreement without obtaining the prior written consent of the other
parties; provided, however, that any party may assign its right or obligation to
purchase or sell Units pursuant to Section 4 hereof, provided that such
assignment will not relieve the assigning party of any liability hereunder.
8.3 Governing Law; Jurisdiction. This agreement shall be governed by
and construed in accordance with the law of the state of NewYork applicable to
agreements made and to be performed wholly in New York. Any litigation based on,
or arising out of, under or in connection with this Agreement or the
consummation of the transactions contemplated hereby shall be brought and
maintained exclusively (to the extent permitted under applicable law) in the
courts of the State of New York, New York County or in the United States
District Court for the Southern District of New York. The parties expressly and
irrevocably submit to the jurisdiction of the courts of the State of New York,
New York County, and of the United States District Court for the Southern
District of New York for the purpose of any such litigation as set forth
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such litigation. Each of the parties irrevocably consents to the service of
process by registered mail, postage prepaid, or by personal service within or
without the State of new York.
8.4 Remedies. The parties to this agreement will be irreparably damaged
if this agreement is not specifically enforced. If any dispute arises under this
agreement concerning any transfer of Units or any other right or obligation,
that right or obligation shall be enforceable in a court of equity by an
injunction or a decree of specific performance without any bond or other
security being required. These remedies shall not be exclusive, and shall be in
addition to any other remedies the parties may have.
8.5 Separability. If any provision of this agreement, or the
application of any provision to any person or circumstance, shall for any reason
or to any extent be invalid or unenforceable, the remainder of this agreement
and the application of that provision to other persons or circumstances shall
not be affected, but shall be enforced to the full extent permitted by law.
8.6 Waiver. The failure of a party to insist upon strict adherence to
any term of this agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this agreement. Any waiver must be in writing.
8.7 Notices. Any notice or other communication under this agreement
shall be in writing and shall be considered given when delivered by hand. Notice
may also be given by electronic facsimile transmission, but in such case will be
deemed given only when received by the addressee. Notices shall be directed to
the parties at their respective addresses set
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forth below (or such other address as the party to be notified may have
requested in writing): (a) if to Presidio, to it c/o Northstar Capital Partners
LLC, 527 Madison Avenue, New York, New York 10022, Attn: Richard Sabella (Tel.
No. (212)319-3400; Fax No. (212)319-4557), with a copy to: Edward W. Kerson,
Esq., Proskauer Rose LLP, 1585 Broadway, New York, New York 10036 (Tel. No.
(212)969-3290; Fax No. (212)969-2900) ; and (b) if to AREH or Olympia, to it c/o
Icahn Associates Corp., 767 Fifth Avenue, 47th Floor, New York, New York 10153,
Attn: Martin L. Hirsch (Tel. No. (212)702-4343; Fax No. (212)750-5841) with a
copy to: Theodore Altman, Esq., Gordon Altman Butowsky Weitzen Shalov & Wein,
114 W. 47th Street, New York, New York 10036 (Tel. No. (212)626-0812; Fax No.
(212)626-0799).
8.8 Counterparts. This agreement may be executed in counterparts, each
of which shall be considered an original, but both of which together shall
constitute the same instrument.
8.9 Complete Agreement. This agreement contains a complete statement of
all the arrangement between the parties with respect to its subject matter,
supersedes all existing agreements between them relating to that subject matter
and cannot be changed or terminated orally. Except as expressly set forth
herein, there are no contracts, arrangements, understandings or relationships
between the parties hereto with respect to the Units.
8.10 Joint and Several Liability. AREH shall be jointly and severally
liable for the obligations of AREH and of its affiliates (including Olympia)
hereunder (and, in this regard, any action or inaction required hereunder to be
taken or not taken, or which AREH is required to cause or prevent or not permit
by such affiliate shall be deemed to be an obligation of both such affiliate and
AREH hereunder), and Presidio shall have the right to enforce this
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Agreement with respect to all such matters directly against AREH, without first
being required to file suit or seek recourse of any kind against any other
person. Presidio shall be jointly and severally liable for the obligations of
Presidio and its affiliates (including the general partners of each Partnership)
hereunder (and, in this regard, any action or inaction required hereunder to be
taken or not taken, or which Presidio is required to cause or prevent or not
permit by such affiliate shall be deemed to be an obligation of both such
affiliate and Presidio hereunder), and AREH and Olympia shall have the right to
enforce this Agreement with respect to all such matters directly against
Presidio, without first being required to file suit or seek recourse of any kind
against any other person.
8.11 Delivery of Offering Materials. Presidio hereby agrees on behalf
of the Partnerships and their general partners that, for purposes of compliance
by Olympia (and any affiliates who are co-bidders in the Offers) with Rule
14d-3(a)(2) and (b) of the Rules, Olympia may hand deliver a copy of its
Schedule 14D-1's together with all exhibits thereto and any amendments thereto
to the Partnerships c/o Edward W. Kerson, Esq., Proskauer Rose, LLP, 1585
Broadway, New York, New York 10036 and shall send a copy of such materials to
the Partnerships at their principal executive offices for delivery on the next
business day.
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IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed by their duly authorized representatives as of the date first above
written.
PRESIDIO CAPITAL CORP.
By: /s/ Richard Sabella
-----------------------
Name: Richard Sabella
Title:
OLYMPIA INVESTORS, L.P.
By: Olympia-GP, Inc.
By: /s/ Martin L. Hirsch
-----------------------
Name: Martin L. Hirsch
Title: Vice President
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: American Property Investors, Inc.
By: /s/ Martin L. Hirsch
-----------------------
Name: Martin L. Hirsch
Title: Vice President
[Signature Page of Agreement, dated March 6, 1998, among Presidio Capital Corp.,
Olympia Investors, L.P. and American Real Estate Holdings L.P.]
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Schedule 4.1
The purchase price per Unit payable upon exercise of the Call Option will be the
sum of : (i) the Purchase Price per Unit (as hereinafter defined); and (ii)
Expenses per Unit (as hereinafter defined). The Purchase Price per Unit will
equal the lesser of (A) the price per Unit paid by Olympia in the Offers or (B)
$110.68 per Unit for Units of HEP 85, $99.97 per Unit for Units of HEP86, and
$124.13 per Unit for Units of HEP 88. Notwithstanding the foregoing, in the
event that Olympia increases its offering price per Unit in order to equal or
top a competing bidder, then the Purchase Price per Unit will equal the price
per Unit paid by Olympia in the Offers. Expenses per Unit will equal (i) the sum
of all out-of-pocket costs and expenses incurred by Olympia and its affiliates
(including attorneys fees and expenses) with respect to the Offers and the
purchase and transfer to Olympia or an affiliate of Units purchased pursuant
thereto, including without limitation the fees and expenses of Beacon Hill
Partners (the information agent for the Offer)(including without limitation fees
and expenses incurred in connection with telephone calls to limited partners of
the Partnerships), Harris Trust Company (the depositary for the Offer), printing
and mailing expenses, Commission filing fees, and any out-of-pocket costs and
expenses attributable to the admission of Olympia or an affiliate as a
substitute limited partner (but will not include (x) any costs and expenses or
attorneys fees and expenses attributable to the negotiation, execution and
delivery of this agreement or any litigation arising out of or in connection
with this agreement or the Offers or (y) the Purchase Price per Unit) divided by
(ii) the total number of Units of the Partnerships purchased by Olympia and its
affiliates pursuant to the Offers.
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