NOTIFICATION OF REPURCHASE OFFER
PURSUANT TO RULE 23C-3
1. Investment Company Act File Number 811-8110 Date of
Notification: May 26 1998
2. Exact name of investment company as specified in
registration statement:
SPECIAL SITUATIONS FUND III, L.P.
3. Address of principal execution office:
153 East 53rd Street
New York, NY 10022
A. [x] The notification pertains to a periodic
repurchase offer under paragraph (b) of Rule 23c-3.
B. [ ] The notification pertain to a
discretionary repurchase offer under paragraph (c) of Rule 23c-3.
C. [ ] The notification pertains to a periodic
repurchase offer under paragraph (b) of Rule 23c-3 and a
discretionary repurchase offer under paragraph (c) of Rule 23c-3.
By: /s/ Austin W. Marxe
Austin W. Marxe
Individual General Partner
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SPECIAL SITUATIONS FUND III, L.P.
153 East 53rd Street
New York, New York 10022
(212) 832-5300
NOTICE OF
OFFER TO REPURCHASE UNITS
May 22, 1998
General Information
Special Situations Fund III, L.P. (the "Fund")
is a Delaware limited partnership and is registered as an
investment company under the Investment Company Act of 1940 (the
"1940 Act"). The Individual General Partners of the Fund are
Austin W. Marxe, Stanley S. Binder, Vera Lavissiere Silverman and
Peter W. Williams.
The Fund, as a fundamental policy, offers to
repurchase Units from its Partners at intervals of six months on
June 30 and December 31 of each calendar year. The Fund has
established certain policies for the repurchase of Units pursuant
to the terms of its Agreement of Limited Partnership dated as of
October 21, 1993 (the "Partnership Agreement"). Capitalized
terms not otherwise defined herein shall have the meanings
ascribed to them in the Partnership Agreement.
Repurchase Offer
The Fund hereby offers to repurchase (the
"Repurchase Offer") up to 10% of the total number of Units
outstanding on June 30, 1998 (the "Repurchase Offer
Amount"), based upon the net asset value of such Units as of
such date. The computations for the redetermination of Units and
the net asset value per Unit with respect to this Repurchase
Offer are more fully described below. The number of Units
repurchased by the Fund is subject to increase by up to 2%,
as described under "Repurchase Procedures" below.
Repurchase Deadlines and Dates
The following table sets forth the key
deadlines and dates for the tender and payment of Units with
respect to this Repurchase Offer:
<TABLE>
Description Date
<S> <C>
Repurchase Request Deadline--the last
day to submit tenders of Units for June 16, 1998
repurchase and the last day to modify
or withdraw any tender submitted to the Fund
______________________________________________________________
Repurchase Pricing Date--the
effective date of the repurchase of June 30, 1998
Units and the day for determination of
the net asset value per Unit
________________________________________________________________
Repurchase Payment Deadline--the last day for
payment of repurchased Units July 7, 1998
_____________________________________________________________
The specific procedures for the repurchase of Units pursuant
to this Repurchase Offer are more fully set forth below. A
Partner who tenders Units will be subject to the risk of
a decline in the value of the Fund during the 14-day period
between the Repurchase Request Deadline and the Repurchase
Pricing Date.
Repurchase Procedures
Tenders by Partners. The enclosed Repurchase
of Units Tender Form must be completed and received by the Fund
no later than June 16, 1998 (the "Repurchase Request
Deadline"), in order to be effective. A Partner may tender any
or all of the Units owned by such Partner. A Partner will be
entitled to withdraw or modify any tender of Units by written
notice received by the Fund prior to the Repurchase
Request Deadline but may not thereafter withdraw or modify
any tender of Units.
Oversubscriptions. In the event that the
number of Units tendered by Partners exceeds the Repurchase Offer
Amount, the Individual General Partners may, in their sole
discretion, increase the number of Units to be repurchased by up
to 2% of the number of Units outstanding on June 30, 1998
(the "Repurchase Pricing Date"). If this Repurchase Offer is
oversubscribed, Units tendered by Partners will be repurchased
pro rata in accordance with the number of Units tendered by
each Partner.
Redetermination of Units. In order to
maintain a fixed price per Unit of $25,000 for the repurchase of
a Unit, the Fund will redetermine the number of Units held
by each Partner on the Repurchase Pricing Date (immediately
before any repurchases or additional sales of Units) to reflect
allocations of Profit or Loss of the Fund. As a result,
the number of Units owned by each Partner will equal the
balance in such Partner's Book Capital Account on the Repurchase
Pricing Date divided by $25,000. By way of example only, if the
net asset value of a Unit is $37,500 immediately prior to such
redetermination, a Partner will be credited with 1.5 Units for
each Unit owned on the Repurchase Pricing Date. As a convenience
to Partners, the enclosed Repurchase of Units Tender Form allows
a Partner to tender a specified number of Units or a specified
percentage of such Units, in each case at $25,000 per Unit.
Payment for Units. The Fund will make cash
payments for repurchased Units no later than July 7, 1998 (the
"Repurchase Payment Deadline"). No fees will be payable by
Partners in connection with repurchases of their Units.
Suspension of Repurchase Offer. The Fund may
suspend or postpone this Repurchase Offer pursuant to a vote of a
majority of the Independent General Partners and only (i) for any
period during which an emergency exists as a result of which
disposal by the Fund of securities owned by it is not reasonably
practicable, or during which it is not reasonably practicable for
the Fund to fairly determine the value of its net assets, or
(ii) for such other periods as the Securities and Exchange
Commission may by order permit for protection of the Partners.
Computation of Net Asset Value
As of the close of business on May 20, 1998, the
net asset value of a Unit held by a Limited Partner was
$26,784.16. The Fund will compute its net asset value and the
net asset value of such a Unit daily during the period from
June 9, 1998, through June 15, 1998. A Partner may
obtain information concerning the net asset value of the Fund or
of a Unit held by a Limited Partner on any date by calling the
Fund at telephone number (212) 832-5300, Attention: Rose
Miloscio.
A Partner's dated and executed Repurchase of
Units Tender Form must be received by the Fund on or prior to
June 16, 1998, in order to be effective. For convenience,
the Fund has enclosed a self-addressed envelope. Any Partners
who have any questions concerning this Offer to Repurchase Units
should call Austin W. Marxe, at telephone number (212) 832-5300.
/s/Austin W. Marxe
Austin W. Marxe
Managing Individual General Partner
<PAGE>
SPECIAL SITUATIONS FUND III, L.P.
REPURCHASE OF UNITS TENDER FORM
Special Situations Fund III, L.P.
153 East 53rd Street
New York, NY 10022
Attention of Austin W. Marxe
Dear Sirs:
Reference is made to the Notice of Offer to
Repurchase Units (the "Notice") of Special Situations Fund III,
L.P. (the "Fund") dated May 22, 1998. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to them
in the Notice.
The undersigned hereby tenders Units for
repurchase, at a price of $25,000 per Unit, as follows (complete
one of the following):
____________ Number of Units
or
____________ % of Units
The number or percentage of Units tendered herein will
represent Units owned by the undersigned on the Repurchase
Pricing Date June 30, 1998.
THIS REPURCHASE OF UNITS TENDER FORM MUST BE
COMPLETED AND RECEIVED BY THE FUND ON OR BEFORE JUNE 16,
1998, IN ORDER TO BE EFFECTIVE.
(To be signed and dated on the reverse side)
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If the Partner is an Individual:
_______________________________ ___________________
Print Name(s)
_______________________________ ____________________
Signature(s)
_____________________________
Date
If the Partner is an Entity:
______________________________
Name of Entity
By ____________________________
Print Name ____________________
Print Title _____________________
________________________________
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