SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Section
240.14a-11(c) or Section 240.14a-12
60 EAST 42ND ST. ASSOCIATES
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PRELIMINARY COPY
60 EAST 42ND ST. ASSOCIATES
C/O WIEN & MALKIN LLP
LINCOLN BUILDING
60 EAST 42ND ST.
NEW YORK, NEW YORK 10165-0015
July __, 1997
TO: PARTICIPANTS IN 60 EAST 42ND ST. ASSOCIATES:
60 East 42nd St. Associates ("Associates"), a New York partnership, was
formed in 1958 to acquire The Lincoln Building and underlying land at 60 East
42nd St., New York, New York (the "Premises"), subject to a Net Lease. The
investment in Associates is divided among seven Participating Groups. Each
Group has its own Agent, who also serves as a partner in Associates. Through
its Agent, each Group holds an undivided one-seventh interest (the "Property")
in Associates. Agent discretion, however, either as Agent or as a partner in
Associates, is virtually non-existent, as the Premises are held subject to the
Net Lease. Additionally, all significant transactions with respect to the
Premises or the Property must be consented to by 100% in interest of the
Participants in a Group, except that once 90% in interest of Participants in a
Group consent, then the Participation Agreement for each Group provides that
the remaining 10% in interest of dissenting or abstaining Participants may be
bought out at a nominal price.
As a result of resignations, retirements and deaths, none of the
successor agents listed in the Participating Agreements for each Group is
available to serve, and two of the Groups currently have no Agent.
Additionally, the remaining Agents believe that the vote required to
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permit significant transactions with respect to the Property or the Premises
should be changed, as the current provision allows a relatively small number
of Participants in any one Group to block a transaction that might otherwise
enjoy the broad support of all other Participants in that Group, or, if
applicable, all Participants generally.
This letter and the accompanying statement is a Solicitation of Consents
of the Participants in 60 East 42nd St. Associates (1) to the designation of
new successor Agents, including a simplified format for Agent designation in
the future, (2) to allow an Agent to serve as an agent for more than one
Group, and (3) to change the vote required for significant transactions
involving the Property or Premises from 100% in interest of each Group, with a
buy-out provision if consents from 90% in interest of such Group are obtained,
to 66 2/3% in interest, with no buy-out provision. Each of these changes to
the Participating Agreements is intended to provide better for the continued
long-term needs of your investment.
This solicitation is being made by Peter L. Malkin, Stanley Katzman, John
L. Loehr, Richard A. Shapiro and Thomas N. Keltner, Jr., as Agents on behalf
of Associates. We are requesting your cooperation by consenting to the
proposals, each of which is discussed in more detail in the attached
Statement.
The Participating Agreement for each Group requires the consent of 75% in
interest of the Participants in that Group to designate new successor Agents
for the Group, and 100% in interest of the Participants in that Group to
approve each of the other two proposals. Each of the
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proposals will be put into place on a Group-by-Group basis as and when the
requisite consents are received for a Group.
If you have any questions concerning this Solicitation of Consents,
please communicate with Stanley Katzman, Howard E. Peskoe or Alvin Silverman,
partners in Wien & Malkin LLP, by mail at 60 East 42nd Street, New York, New
York 10165, by phone at 212-687-8700, or by fax at 212-986-7679.
This Solicitation of Consents will terminate sixty days after the date of
this letter, and therefore, your cooperation will be greatly appreciated by
signing, dating and immediately returning the colored copy of the Consent in
the enclosed envelopes provided for your convenience. Once given, a Consent
may not be revoked. This Solicitation may be extended by the Agents for an
additional ninety days.
Sincerely,
__________________
Peter L. Malkin
Enclosures
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PRELIMINARY COPY
60 East 42nd St. Associates
c/o Wien & Malkin LLP
60 East 42nd Street
New York, New York 10165
60 EAST 42ND ST. ASSOCIATES
STATEMENT ISSUED BY THE AGENTS IN CONNECTION WITH THE
SOLICITATION OF CONSENTS OF THE
PARTICIPANTS
Dated __________, 1997
This Statement is issued in connection with the solicitation of Consents
of the Participants in 60 East 42nd St. Associates ("Associates") by Peter L.
Malkin, Stanley Katzman, John L. Loehr, Richard A. Shapiro and Thomas N.
Keltner, Jr., as Agents (the "Agents") for participants in Associates.
Associates was formed to own The Lincoln Building and underlying land
(collectively the "Premises") located at 60 East 42nd Street, New York, New
York, subject to a net lease (the "Net Lease") to Lincoln Building Associates
(the "Net Lessee"). Each Agent holds a one-seventh interest (the "Property")
in Associates on behalf of a group of Participants represented by that Agent.
The Agents are requesting the consent of the participants in Associates
(the "Participants") to each of the following proposals:
(1) The designation of new successor Agents;
(2) An amendment to the Participating Agreements (as later defined)
to eliminate the requirement that no person may serve as Agent for more than
one group of Participants; and
(3) An amendment to the Participating Agreements to change the
percentage of Participation interests required to approve any sale, mortgage,
transfer, or lease arrangement with respect to the Property or the Premises
from 100%, with an opportunity to buy out the interests of dissenting or
abstaining Participants if 90% of Participation interests approve of the
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transaction, to 66 2/3%, with no opportunity to buy out the interests of
dissenting or abstaining Participants.
The Agents recommend approval of each of these proposals, which are
discussed in greater detail in Section II, below.
With respect to the designation of new successor Agents, the Agents note
that two Agents have recently retired, and none of the successor Agents named
in the Participating Agreements are available to serve.
As to the second proposal -- permitting a person to serve as agent for
more than one group of Participants - the Agents believe that this change will
simplify the administration of Associates, and that no group of Participants
would be disadvantaged if its Agent also acts as Agent for another group of
Participants. Agent discretion in most areas is virtually non-existent,
inasmuch as the Premises are held subject to the Net Lease and in those few
instances when a decision from Associates is called for with respect to the
Property or the Premises, the Agent for any group is restricted in the actions
he or she can take without consent of the Participants of that group. Even if
an Agent acted for more than one group, the Agent would act independently for
each group based solely on that group's vote.
Finally, regarding the change in the voting percentage to 66 2/3% for each
group to approve certain transactions involving the Property or the Premises,
the Agents feel that the current requirement, which, in effect, acts as a high
super-majority approval of 90%, unfairly allows a small number of Participants
within any one group to block a significant transaction that might otherwise
enjoy broad support either among the Participants of that group, or, if
applicable, among all groups of Participants. Under the new proposal, just
under 34% of the Participant interests in any one group would be required to
block a significant transaction involving the Property or the Premises, rather
than the 10.1% that can do so presently.
It is anticipated that this Statement and the accompanying form of
Consent will be mailed to the Participants on ______, 1997. The solicitation
of Consents will terminate on _______, 1997 unless extended by the Agents, but
in no event later than _________________. The Agents will advise all
Participants of
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the results of the solicitation no later than 90 days after the termination
date noted above or any extension thereof.
I. BACKGROUND
Associates, a New York partnership, was organized on September 25, 1958
for the purpose of acquiring title to the Premises subject to the Net Lease.
Associates is comprised of seven investment groups of Participants, each of
which is a party to a participating agreement ("Participating Agreement")
between an agent ("Agent") and his investor Participants. Through its Agent,
each of the seven Participant groups owns a one-seventh interest (the
"Property") in Associates, representing $1,000,000 in interests of the
original $7,000,000 cash investment in Associates. Each Agent also serves as a
partner in Associates.
The original partners in Associates were the late Lawrence A. Wien, the
late Harry B. Helmsley, Alvin S. Lane, the late Henry W. Klein, the late
William F. Purcell, Alvin Silverman and Fred Linden. Peter L. Malkin, Stanley
Katzman, John L. Loehr, Richard A. Shapiro and Thomas N. Keltner, Jr. are the
current partners in Associates, and each serves as Agent to one of the five
groups of Participants that has an Agent. The Agent position is currently
vacant for two of the seven groups.
The terms of each Participating Agreement are identical to all others.
Under each of the Participating Agreements between an Agent and his respective
group, and supplements thereto, Participants have the right to approve or
disapprove certain proposed actions by their Agent, including the sale,
mortgage or transfer of the Property or the Premises or any amendments to the
Net Lease. Since an Agent is restricted in the actions he or she can take with
respect to the Property or the Premises without consent of the Participants of
the group he or she acts for, and the Premises are held subject to the Net
Lease, Agent discretion in most areas is virtually non-existent. There is no
specific term of office of any Agent, and Agents receive no compensation for
their service.
The percentage of Participants (based on Participation interests held)
required to approve each proposal discussed in this Statement is described in
SECTION V. - TERMS OF SOLICITATION OF CONSENTS.
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II. DISCUSSION OF PROPOSALS
A. DESIGNATION OF SUCCESSORS TO THE AGENTS
Paragraph Sixth of each Participating Agreement provides that, in the
event of the resignation, removal, death, incompetency or other disability of
an Agent, he shall be succeeded by certain persons in the order listed therein
or by any other person of full age designated in writing by the holders of at
least 75% of the Participations in that group. The individuals designated as
successor Agents in each Participating Agreement are the same in all
Participating Agreements. Additionally, all of the Participating Agreements
currently provide that no Agent may serve in that capacity for more than one
group.
Recently, two agents retired, leaving two groups with no Agent. Moreover,
as a result of resignations, retirement or death, no successor Agent named in
the Participating Agreements is available to serve at this time. In the
circumstances, it is necessary to designate new successors for the two retired
agents and to designate new successors for each Agent in order to provide for
the long-term future of the investment.
The Agents recommend that each group of Participants approve the
following as successor Agents for its group: (a) any individual who, at the
time of his or her designation as Agent, is a partner in Wien & Malkin LLP or
any successor thereto("W&MLLP"); (b) any individual who, at the time of his or
her designation as Agent, is associated with or employed by W&MLLP and has
appropriate business experience and qualifications as determined by the
Chairman of the Executive Committee of W&MLLP; (c) Anthony E. Malkin; and (d)
Scott D. Malkin. The order of succession shall be determined by Peter L.
Malkin or, failing such determination, by the Executive Committee of W&MLLP.
Currently, Peter L. Malkin serves as Chairman of the Executive Committee. Upon
approval of the designation of new successor Agents by Participants of the two
groups that currently have no Agent, it is currently anticipated that Anthony
E. Malkin and Scott D. Malkin, or one of them, will be named as Agent for one
(or both, if permitted pursuant to the second proposal) of those groups.
The Participants' consent to the designation of a category of persons
qualified to act as successor Agents, such as is represented by partners
(category (a) above) and selected
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associates or employees (category (b) above) of W&MLLP, will provide greater
assurance of the continued availability of individuals who are eligible to
serve as Agents as vacancies occur in the future. Designation of categories of
appropriate individuals also will reduce the need to conduct solicitations to
approve new successor Agents, thus eliminating the expensive, burdensome and
time-consuming process of a consent solicitation.
W&MLLP has continuously provided supervisory, accounting, professional
and various other services to Associates since Associates was formed in 1958.
The Agents, each of whom is a partner in W&MLLP, believe that their firm's
experience in providing services to Associates uniquely qualifies its
partners, and employees or associated persons of W&MLLP selected by the
chairman of its Executive Committee, to serve as successor Agents.
Anthony E. Malkin and Scott D. Malkin are sons of Peter L. Malkin and
each is a graduate of Harvard College and experienced in real estate. After
receiving law and business degrees from Harvard University, Scott D. Malkin
has been actively involved in leading real estate ownership and development in
the United States and Europe for the past twelve (12) years. Anthony E. Malkin
has served for the past eight (8) years as President of W&M Properties, Inc.,
the real estate management firm owned by him and Peter L. Malkin. During his
tenure at W&M Properties, Inc., Anthony E. Malkin has initiated over
$200,000,000 in property acquisitions, and $255,000,000 in property-related
financing transactions, and has had primary responsibility for day-to-day
management and operation of office, residential and industrial properties
located throughout the Eastern United States.
B. PERMITTING AN AGENT TO SERVE AS THE AGENT FOR MORE THAN ONE GROUP
OF PARTICIPANTS
Paragraph Sixth of each Participating Agreement provides that no
Agent shall serve as the Agent for more than one group of Participants. Each
group of Participants is requested to consent to an amendment to its
Participating Agreement to permit an Agent to represent more than one group of
Participants.
This amendment to the Participating Agreements will eliminate the
need for seven different Agents at all times and will simplify administration.
This change will not affect the voting
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power of each Participant within the Participating group in which he or she is
a member.
An individual designated as Agent for more than one group of
Participants will be bound to act for each such group separately. When consent
of each group of Participants is requested by the Agents in the future, an
Agent acting for more than one group will not be authorized to act on a given
matter for any group not approving the matter in question, even if such Agent
is authorized to act with respect to such matter by another group for which
the Agent also acts.
If 100% consent is received from Participants in two or more groups
permitting an Agent to represent more than one group, one Agent thereafter
will represent those groups. Depending on which of the groups of Participants
consent, Peter L. Malkin (or, if he fails to act, the Executive Committee of
W&MLLP) will decide which Agent will represent the consenting groups. However,
no individual will be able to act as Agent for all groups. Accordingly, there
will always be at least two different Agents among all the Participating
groups. If 100% consent is not received as to any group, the non-consenting
group will continue to be represented by a separate Agent.
C. CHANGING THE PERCENTAGE FOR PARTICIPANT APPROVAL
Pursuant to the terms of the Participating Agreement for each group
of Participants, the Agent has the power to deal with the Property as though
he was the sole owner thereof subject to the terms of the Participating
Agreement. Pursuant to paragraph FOURTH of the Participating Agreement:
The Agent shall not agree to sell, mortgage or transfer The
Property, nor to modify any existing Lease [the Net Lease]
affecting the aforesaid premises, nor to make any new lease
affecting the same, without the consent of the parties owning
one hundred percent (100%) of The Property.
Moreover, pursuant to a supplement to the Participating Agreement, each
Agent acknowledges that Paragraph FOURTH also limits, to the same extent, the
Agent's ability to join the other Agents, in their capacity as partners in
Associates, and sell, mortgage or transfer the Premises.
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Paragraph FOURTH, however, also provides that if, in connection with any
matter for which 100% consent of Participants is required, the Agent has
received consents from 90% of the group's Participation interests, the Agent
is authorized to purchase the interest of any non-consenting Participants for
a stipulated price of (a) the book value of the Participant's interest or (b)
$100.00, whichever is greater. Prior to exercising this right, however, the
Agent must provide to such non-consenting Participants written notice and an
opportunity to consent to the action. Because of the existence of this buy-out
provision, the effective vote required to authorize an Agent to act on behalf
of a group pursuant to paragraph FOURTH is 90%. (The full text of Paragraph
FOURTH is included as Appendix A to this Statement.)
Each group of Participants in requested to consent to an amendment to its
Participating Agreement to modify paragraph FOURTH to read as follows:
The Agent shall not agree to sell, mortgage or transfer The
Property, nor to modify any existing Lease affecting the
aforesaid premises, nor to make any new lease affecting the
same, without the consent of the parties owning sixty-six and
two-thirds percent (66 2/3%) of The Property.
The balance of paragraph FOURTH, dealing with the buy-out provision,
would be eliminated. Because paragraph FOURTH limits an Agents' ability to act
with respect to the Property or the Premises, this change would alter the vote
required to authorize an Agent to act either in his capacity as Agent on
behalf of a group or as a partner in Associates. This change, however, would
not affect paragraph SIXTH of the Participating Agreement, which allows for
removal of Agents and designation of new Agents by a 75% vote of interests.
As Associates is now constituted, in order for Associates to undertake
any significant actions with respect to the Property, in effect consent of 90%
of all Participation interests in each group is required. Similarly, consent
of 90% of all Participation interests in any one group is required to
authorize an Agent, in his capacity as a partner in Associates, to join the
other partners in Associates to take an action with respect to the Premises.
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As a result, just over 10% of any one group, representing $101,000 of
interests, can effectively block an action approved by all the other members
of that group, and, if applicable, all members of all the other groups. This
provides an opportunity for a relatively small percentage of Participants to
block a significant transaction that might otherwise enjoy the overwhelming
support of all Participants in a group, or, as applicable, all other
Participants. If the proposed amendment is adopted by all groups, then for any
one group to block significant actions approved by all other groups with
respect to the Property, at least $334,000 worth of interests in such group
must agree not to consent to the proposed action. Similarly, $334,000 worth of
interests in any one group must agree not to consent to a proposed action with
respect to the Premises to prohibit an Agent from joining other Agents acting
in their capacity as partners in Associates.
Additionally, the buy-out provision will be eliminated. As a practical
matter, however, the Agents believe that this provision is of little value to
Participants, because the current book value of an original $10,000
participation has a negative balance of [$6,392.00] as of [June 30], 1997
(computed by dividing Associates' negative equity of [$4,474,094] by the
original $7,000,000 cash investment). Accordingly, under the terms of the
buy-out provision, if 90% of the Participation interests in any group consent
to a future transaction involving the Property or the Premises, any dissenting
or abstaining Participant of that group would only be entitled to a payment of
$100.00 for his or her Participation interest.
If 100% consent is received from Participants in any one group of
Participants permitting a change in the percentage vote required for approval
of significant transactions involving the Property or the Premises, then the
participating Agreement for that group will be amended. If 100% consent to
this amendment is not received as to any group of Participants, such group
will continue to operate under the existing paragraph FOURTH. Accordingly,
when consent of Participants is sought in the future, those groups which have
consented to the 66 2/3% requirement will be appropriately designated in the
Consent Solicitation and those groups which have retained the 100% consent
requirement with the buy-out provision will be similarly designated. However,
if some groups consent to the amendment, and others do not, the ability of the
Participants within the non-consenting groups to block transactions will be
greater than that held by the Participants in the consenting groups.
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Associates is presently considering certain significant transactions with
respect to the Property and the Premises, including, but not limited to,
refinancing the mortgage applicable to the Premises and amending and extending
the Net Lease in connection with an improvement program for various building
systems and public areas. Any such transaction proposed in the future would be
required to be approved by the Participants of each group. If this proposed
amendment to the Participating Agreement is approved by any group, any such
vote on such future transactions would be conducted in accordance with new
Paragraph FOURTH for such group.
III. POTENTIAL CONFLICTS OF INTEREST
A. CERTAIN OWNERSHIP OF PARTICIPATIONS:
As of June 30, 1997, the Agents beneficially owned, directly or
indirectly, the following Participations:
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<TABLE>
<CAPTION>
Name & Address Amount of
of Beneficial Beneficial Percent
Title of Class Owner Ownership Of Class
-------------- -------------- ---------- --------
<S> <C> <C> <C>
Participations Thomas N. Keltner, Jr. $ 2,500.00 .036%
in Partnership 1111 Park Avenue
Interests New York, N.Y. 10128
John L. Loehr $ 5,000.00 .071%
286 Alpine Circle
River Vale, N.J. 07675
Peter L. Malkin $40,833.34 .583%
21 Bobolink Lane
Greenwich, CT 06830
</TABLE>
At such date, Peter L. Malkin owned of record, as trustee or
co-trustee but not beneficially, $55,714 of Participations and his wife owned
$35,000 of Participations. Mr. Malkin disclaims any beneficial ownership of
such Participations. Richard A. Shapiro owns as custodian a $5,000
Participation but he disclaims any beneficial ownership of such Participation.
The wife of one member of W&MLLP owns an aggregate of $10,000 of
Participations, or approximately .142% of the outstanding Participations. Her
husband disclaims any beneficial ownership in those Participations.
Scott D. Malkin owns of record and beneficially $33,334 of
Participations, or .476% of the outstanding Participations. Anthony E. Malkin
owns of record and beneficially $25,833 of Participations, or .369% of the
outstanding Participations.
B. RELATIONSHIPS WITH NET LESSEE
Peter L. Malkin, one of the Agents, also is a partner in the Net
Lessee and owns 5.00% of the partnership interests in the Net Lessee, and his
wife owns 2.5% of the partnership interests in the Net Lessee. Additionally,
he acts as trustee for certain trusts owning 12.08% of the partnership
interests in the Net Lessee. Peter L. Malkin disclaims any beneficial
ownership in the partnership interests in the Net Lessee held by his wife and
such trusts.
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As a consequence of (a) one of the Agents and certain of the
proposed successor Agents being partners in the Net Lessee, and (b) the
current and certain potential future Agents being members of W&MLLP (which
represents Associates and the Net Lessee), certain actual or potential
conflicts of interest may arise with respect to the management and
administration of the business of Associates. However, under the respective
Participating Agreements, and supplements thereto, certain transactions
require the prior consent from Participants owning a specified interest under
the Agreements in order for the Agents to act on their behalf. Such
transactions include (a) modifications and extensions of the Net Lease, (b)
the granting of a new, and the extending or modifying of a new or existing,
mortgage loan secured by the Property or the Premises, or (c) a sale or other
disposition of the Property, the Premises, or substantially all of Associates'
other assets. The interest, if any, of each Agent in Associates and in Net
Lessee, as a partner therein, arises solely from ownership of Participations
in Associates and direct or indirect partnership interests in the Net Lessee.
The Agents, as investors in Associates, receive no extra or special benefit
not shared on a pro rata basis with all other Participations in Associates or
partners in the Net Lessee. Any Agent who is a Partner in W&MLLP is entitled
to receive a pro rata share of any legal fees or other remuneration paid to
W&MLLP for professional services rendered to the Net Lessee or to Associates,
as described below.
W&MLLP receives $180,000 annually from the Net Lessee for acting as
supervisor of the Net Lessee's partnership agreement and additional
compensation of 10% of distribution of cash profit of Net Lessee in excess of
$400,000 per annum.
C. W&MLLP SERVICES TO ASSOCIATES
Each of the current Agents is a member of W&MLLP, which firm
receives compensation from Associates for providing various supervisory
services to Associates. In consideration for such supervisory services, W&MLLP
receives payment of $24,000 a year and an additional payment of 10% of cash
available for distribution to Participants in excess of 14% on the original
cash investment of Associates. From Associates' payments to it, W&MLLP pays
all disbursements of Associates relating to W&MLLP's supervisory services to
Associates, including accounting and other professional fees, filing and
search fees, and certain document preparation and mailing costs. During the
fiscal year ended December 31, 1996,
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Associates paid W&MLLP $236,528 in consideration of the various supervisory
services rendered.
W&MLLP also acts as legal counsel to Associates, and provides
certain legal services in addition to the supervisory services described
above. As legal counsel to Associates, W&MLLP participated in the preparation
of this Consent Solicitation Statement and will receive compensation for its
services. During the fiscal year ended December 31, 1996, Associates paid
W&MLLP $_________ in consideration of legal services rendered.
IV. FEES AND EXPENSES
All fees and expenses relating to the solicitation of Consents hereunder,
including those of third parties hired by W&MLLP to assist in the preparation
of this Consent Statement, will be advanced by W&MLLP and then reimbursed by
Associates by deducting such amounts from overage rent otherwise available for
distribution to Participants.
V. TERMS OF SOLICITATIONS OF CONSENTS
The Participating Agreement between an Agent and the Participants in that
Agent's group requires that consents be received from the following percentage
of Participants to approve each proposal described in this Statement:
1. As to the designation of new successor Agents, referred to in
Section II.A. above - 75% in interest of the Participants in a group.
2. As to the amendment to the Participation Agreements to permit an
Agent to represent more than one group of Participants, referred to in Section
II.B. above - 100% in interest of the Participants in a group, although two or
more groups must so consent to implement the proposal.
3. As to the amendment to the Participation Agreement to change the
percentage of Participant interests required to approve certain actions by its
Agent with respect to the Property or the Premises, referred to in Section
II.C. above - 100% in interest of the Participants in a group, with such
proposal to be implemented for any group so consenting.
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On June 30, 1997, there were a total of 740 Participants in the seven
groups. Each Participant's voting percentage in his or her group is determined
by a fraction, the numerator of which is the face amount of the participation
owned and the denominator of which is the group's original $1,000,000
investment in Associates. At December 31, 1996, no person held Participations
aggregating more than 5% of the total outstanding Participations.
The solicitation of consents will terminate 60 days after the date of
this letter, but may be extended by the Agents through _________________.
There is no record date establishing the identity of the Participants entitled
to vote for the proposals. Holders of Participations as of June 30, 1997 will
be recognized as entitled to vote. However, if any Participation is
transferred before the consent with respect to that Participation is given,
the transferee will be entitled to vote. If consent to the proposals has been
given prior to the transfer of a Participation, however, the transferee will
be bound by the vote of the transferor.
W&MLLP has been authorized by the Agents to solicit the consents of
Participants by mail, fax, telephone and telegram after the mailing of this
Statement. Forms of Consent that are signed and returned without a choice
indicated as to any proposal for which consent is sought will be deemed to
constitute a consent to the applicable proposal or proposals, as the case may
be, and will be binding on each Participant as if such Participant had
actually indicated such choice on such form. If the Consent is returned
undated, it will be deemed dated as of the date received by the Agents.
The Agents recommend that Participants consent to each of the proposals.
PLEASE NOTE THAT A VOTE TO ABSTAIN IS TREATED THE SAME AS A VOTE TO
DISAPPROVE.
Participations are not traded on an established securities market, nor
are they readily tradeable on a secondary market or the substantial equivalent
thereof. Based on Associates' transfer records, Participations are sold by
holders from time to time in privately negotiated transactions, and, in many
instances, Associates is unaware of the prices at which such transactions
occur (other than certain intra-family transfers involving Participations
owned by members of W&MLLP or their families). However, Associates has been
advised that sales prices during the
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past two calendar years for an original $10,000 Participation were $20,000.
If you have any question or desire any additional information concerning
this consent solicitation, please communicate with Stanley Katzman, Howard E.
Peskoe or Alvin Silverman, partners in Wien & Malkin LLP, by mail at 60 East
42nd Street, New York, New York 10165-0015, by phone at 212-687-8700, or by
fax at 212-986- 7679.
PLEASE SIGN, DATE AND IMMEDIATELY RETURN THE COLORED COPY OF THE CONSENT
IN THE ENCLOSED ENVELOPE. ONCE GIVEN, CONSENT MAY NOT BE REVOKED.
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Appendix A
The full text of existing Paragraph FOURTH of each Participating
Agreement is as follows:
"The Agent shall not agree to sell, mortgage or transfer The Property
[the undivided one-seventh interest of Agent as partner in Associates],
nor to modify any existing Lease affecting the aforesaid premises, nor to
make any new lease affecting the same, without the consent of the parties
owning one hundred percent (100%) of The Property.
If the consents of parties owning at least ninety per cent (90%) of The
Property have been obtained, the Agent or his designee (herein called
"purchaser") shall have the absolute right to purchase the entire
interest of any party who has not given such consent within ten (10) days
after the mailing by the Agent of a written request therefor. The price
shall be the original cost of the interest, less any capital repaid
thereon, but under no circumstances shall such price be less than One
Hundred Dollars ($100.00). The mailing by the purchaser, by registered
mail, of a certified check for such price, at any time within ninety (90)
days after such ten (10) day period, directed to such non-consenting
party at his last known address, shall effect the sale and transfer to
the purchaser of the interest of such party in The Property. The Agent is
hereby irrevocably appointed attorney-in-fact for such party to execute
any papers and to take any other action necessary to evidence such sale
and transfer. The purchaser shall then accept the transfer in writing,
and shall thereupon be a member of the joint venture with the same rights
and liabilities as the parties hereto."
