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)
------------------------------------------------------------------------
(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:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) Aggregate number of securities to which transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and determined):
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) Total fee paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[ ] Fee paid previously with preliminary materials.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) Form, Schedule or Registration Statement No.:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) Filing Party:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) Date Filed:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
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") was formed in 1958 to acquire
The Lincoln Building and underlying land at 60 East 42nd St., New York, New
York ("Property"), subject to a Net Lease. The investment was originally
divided into seven Participating Groups in Associates, each with its own
Agent. Agent discretion, however, is virtually non-existent, as the Property
is held subject to the Net Lease. Additionally, all significant transactions
with respect to the Property must be consented to by 100% in interest of the
Participants in each 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 permit
significant transactions 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
<PAGE>
the broad support of all other Participants. 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 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 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,
2
<PAGE>
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
3
<PAGE>
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 "Property") 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").
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 from 100%, with an
opportunity to buy out the interests of dissenting or abstaining Participants
if 90% of Participation interests approve of the transaction, to 66 2/3%, with
no opportunity to buy out the interests of dissenting or abstaining
Participants.
<PAGE>
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 Property is held subject to the Net Lease and in those few
instances when a decision from Associates is called for, 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, 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 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, 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 the results of the solicitation no later than 90 days after
the termination date noted above or any extension thereof.
2
<PAGE>
I. BACKGROUND
Associates, a New York partnership, was organized on September 25, 1958
for the purpose of acquiring title to the Property 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. Each of the seven
Participant groups owns a one-seventh interest in Associates, representing
$1,000,000 in interests of the original $7,000,000 cash investment 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, Participants have the right to approve or disapprove certain proposed
actions by their Agent, including the sale, mortgage or transfer of the
Property or any amendments to the Net Lease. Since an Agent is restricted in
the actions he or she can take without consent of the Participants of the
group he or she acts for, and the Property is 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.
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
4
<PAGE>
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 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.
4
<PAGE>
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 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
5
<PAGE>
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 Partnership interest
in Associates 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 [the undivided one-seventh interest of Agent as
partner in Associates], 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.
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.)
6
<PAGE>
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. This change 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. 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 as well as 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 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, at least $334,000 worth of
interests in such group must agree not to consent to the proposed action.
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, any dissenting or abstaining
Participant of that group would only be entitled to a payment of $100.00 for
his or her Participation interest.
7
<PAGE>
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, 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.
Associates is presently considering certain significant transactions with
respect to the Property, including, but not limited to, refinancing the
mortgage applicable to the Property 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:
8
<PAGE>
<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.
9
<PAGE>
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, 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 (c)
a sale or other disposition of the Property 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, Associates paid W&MLLP $236,528 in
consideration of the various supervisory services rendered.
10
<PAGE>
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, 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.
On June 30, 1997, there were a total of 740 Participants in the
seven groups. Each Participant's voting percentage in his or
11
<PAGE>
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 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
12
<PAGE>
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.
13
<PAGE>
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."
14
<PAGE>
APPENDIX B
CONSENT
SOLICITED BY PETER L. MALKIN, STANLEY KATZMAN, JOHN L. LOEHR,
RICHARD A. SHAPIRO AND THOMAS N. KELTNER, JR.
AS AGENTS (THE "AGENTS")
ON BEHALF OF 60 EAST 42ND ST. ASSOCIATES
As a Participant in 60 East 42nd St. Associates, the owner of The Lincoln
Building at 60 East 42nd St., New York, New York, I hereby take the following
action in response to the Agent's Solicitation as outlined in the Consent
Solicitation Statement issued by the Agents in connection with the
Solicitation of Consents of the Participants dated July ____, 1997:
I. CONSENT WITHHOLD CONSENT
------- ----------------
[ ] Consent to [ ] Disapprove of
and Approve of
[ ] Abstain From
Consenting To
the designation of the successor Agents, as described in Section II.A of the
Statement.
II. CONSENT WITHHOLD CONSENT
------- ----------------
[ ] Consent to [ ] Disapprove of
and Approve of
[ ] Abstain From
Consenting To
to permitting an Agent to act as an agent for more than one group, as
described in Section II.B of the Statement.
III. CONSENT WITHHOLD CONSENT
------- ----------------
[ ] Consent to [ ] Disapprove of
and Approve of
[ ] Abstain From
Consenting To
changing the vote required to permit an Agent to engage in significant
transactions, as described in Section II.C of the Statement.
1
<PAGE>
The Agents recommend that Participants consent to each of the above
proposals. PLEASE NOTE THAT A VOTE TO ABSTAIN IS TREATED THE SAME AS A VOTE TO
DISAPPROVE.
The solicitation of Consents will terminate on __________, but may be
extended until __________.
The matters for which Consents are being solicited are more fully
described in the Statement, receipt of which is hereby acknowledged and which
is incorporated herein by reference.
IF THIS FORM IS SIGNED AND RETURNED WITHOUT A CHOICE INDICATED AS TO ANY
INDIVIDUAL PROPOSAL OR PROPOSALS, CONSENT WILL BE DEEMED TO HAVE BEEN GIVEN AS
TO SUCH PROPOSAL OR PROPOSALS AS IF SUCH CONSENT WAS ACTUALLY INDICATED ON THE
FORM. IF THE CONSENT IS RETURNED UNDATED, IT WILL BE DEEMED DATED AS OF THE
DATE RECEIVED BY THE AGENTS. ONCE GIVEN, THE CONSENT (OR DEEMED CONSENT) MAY
NOT BE REVOKED.
Date: ____________, 1997 ____________________
Signature
____________________
Also Print Name Here
2
