-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Oe0LzGiGd436JABfcD3P+H3NxWjD/zPxER9sCgTJo8Ghe/RklJst8qq2s1bRkEqr 8CwxN37l4Dc6kML9H/omqg== 0000950110-96-001087.txt : 19960923 0000950110-96-001087.hdr.sgml : 19960923 ACCESSION NUMBER: 0000950110-96-001087 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19960920 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND IX LTD CENTRAL INDEX KEY: 0000276326 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 942491437 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: 1934 Act SEC FILE NUMBER: 005-39644 FILM NUMBER: 96632533 BUSINESS ADDRESS: STREET 1: 13760 NOEL RD STE 700 STREET 2: LB70 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144485800 MAIL ADDRESS: STREET 1: 13760 NOEL ROAD SUITE 700 LB 70 CITY: DALLAS STATE: TX ZIP: 75240 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ICAHN CARL C ET AL CENTRAL INDEX KEY: 0000921669 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 100 SOUTH BEDFORD ROAD CITY: MT KISCO STATE: NY ZIP: 10549 BUSINESS PHONE: 9142427700 MAIL ADDRESS: STREET 1: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 SC 14D1 1 SCHEDULE 14D-1 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 AND AMENDMENT NO. 5 TO SCHEDULE 13D McNEIL REAL ESTATE FUND IX, LTD. (NAME OF SUBJECT COMPANY [ISSUER]) HIGH RIVER LIMITED PARTNERSHIP CARL C. ICAHN (BIDDERS) LIMITED PARTNERSHIP UNITS (TITLE OF CLASS OF SECURITIES) 582568 10 1 (CUSIP NUMBER OF CLASS OF SECURITIES) KEITH L. SCHAITKIN, ESQ. GORDON ALTMAN BUTOWSKY WEITZEN SHALOV & WEIN 114 WEST 47TH STREET, 20TH FLOOR 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 Valuation*: $18,366,840 Amount of filing fee: $3,674 - ------------------------------------------------------------------------------- * For purposes of calculating the filing fee only. This amount assumes the purchase of 102,038 Units of the Partnership (consisting of all outstanding Units other than Units owned by the Bidder and its affiliate) at $180.00 in cash per Unit. The amount of the filing fee, calculated in accordance with Rule 0-11(d) under the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the aggregate of the cash offered by the bidder. [ ] 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: ________________________________________________________________ * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 SCHEDULE 14D-1 CUSIP No. 582568 10 1 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON High River Limited Partnership 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 6,348 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) 5.8% 10. TYPE OF REPORTING PERSON (See Instructions) PN; GM 3 SCHEDULE 14D-1 CUSIP No. 582568 10 1 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Riverdale LLC 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 New York 7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,348 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) 5.8% 10. TYPE OF REPORTING PERSON (See Instructions) O; GM 4 SCHEDULE 14D-1 CUSIP No. 582568 10 1 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Unicorn Associates Corporation 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 New York 7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,784 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) 1.6% 10. TYPE OF REPORTING PERSON (See Instructions) CO; GM 5 SCHEDULE 14D-1 CUSIP No. 582568 10 1 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 8,132 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) 7.4% 10. TYPE OF REPORTING PERSON (See Instructions) IN; GM 6 ITEM 1. SECURITY AND SUBJECT COMPANY. (a) The name of the subject company is McNeil Real Estate Fund IX, Ltd., a California limited partnership (the "Partnership"). The address of the Partnership's principal executive offices is 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. (b) This statement on Schedule 14D-1 (the "Statement") relates to an offer to purchase any and all limited partnership units ("Units") of the Partnership, other than Units owned by High River and Unicorn (as hereinafter defined), for the purchase price of $180.00 per Unit, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated September 20, 1996 (the "Offer to Purchase"), and the related Assignment of Partnership Interest (collectively with the Offer to Purchase, the "Offer"), copies of which are attached hereto as Exhibits 1 and 2, respectively. This statement also constitutes Amendment No. 5 to the Schedule 13D filed by the Reporting Persons on November 15, 1996, as amended by Amendment No. 1 (the "Initial Filing"), filed with the Commission on November 20, 1995, as amended by Amendment No. 2 to the Initial Filing, filed with the Commission on November 20, 1995, as amended by Amendment No. 2 filed with the Commission on January 16, 1996, as amended by Amendment No. 3 filed with the Commission on May 24, 1996 and as amended by Amendment No. 4 filed with the Commission on August 5, 1996. According to publicly available information, there are 110,170 Units outstanding. (c) The information set forth in Section 13, entitled "Background of the Offer" of the Offer to Purchase is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. The persons filing this Statement are High River Limited Partnership, a Delaware limited partnership ("Purchaser"), Riverdale LLC, a New York limited liability company ("Riverdale"), which is the successor-in-interest to Riverdale Investors Corp., Inc., Unicorn Associates Corporation, a New York corporation ("Unicorn"), and Carl C. Icahn, a citizen of the United States of America (collectively, the "Reporting Persons"). The information set forth in Section 11, entitled "Information Concerning the Purchaser and Certain Affiliates of the Purchaser" and 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 13 of the Offer to Purchase, entitled "Background of the Offer," is incorporated herein by reference. ITEM 4. SOURCE OR AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) The information set forth in Section 12 of the Offer to Purchase, entitled "Source of Funds," is incorporated herein by reference. (b) The information set forth in Section 12 of the Offer to Purchase, entitled "Source of Funds," is incorporated herein by reference. (c) Not Applicable. ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. (a)-(c) The information set forth in the "INTRODUCTION", Section 8 of the Offer to Purchase, entitled "Future Plans of the Purchaser," and Section 10 of the Offer to Purchase, entitled "Voting by the Purchaser," is incorporated herein by reference. 7 (d)-(e) The information set forth in Section 8 of the Offer to Purchase, entitled "Future Plans of the Purchaser," is incorporated herein by reference. (f)-(g) The information set forth in Section 7 of the Offer to Purchase, entitled "Effects of the Offer," is incorporated herein by reference. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) The information set forth in Section 11 of the Offer to Purchase, entitled "Information Concerning the Purchaser and Certain Affiliates of the Purchaser," is incorporated herein by reference. (b) The information set forth in Section 11 of the Offer to Purchase, entitled "Information Concerning the Purchaser and Certain Affiliates of the Purchaser," 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 8 of the Offer to Purchase, entitled "Future Plans of the Purchaser-The Schofield Litigation" and in Section 13 of the Offer to Purchase, entitled "Background of the Offer," is incorporated herein by reference. ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth in the "INTRODUCTION" and in Section 16 of the Offer to Purchase, entitled "Fees and Expenses," is incorporated herein by reference. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. The information set forth in Section 11 of the Offer to Purchase, entitled "Information Concerning the Purchaser and Certain Affiliates of the Purchaser," is incorporated herein by reference. ITEM 10. ADDITIONAL INFORMATION. (a) None (b)-(d) The information set forth in Section 15 of the Offer to Purchase, entitled "Certain Legal Matters," is incorporated herein by reference. (e) The information set forth in Section 13 of the Offer to Purchase, entitled "Background of the Offer," is incorporated herein by reference. (f) The information set forth in the Offer to Purchase and the related Assignment of Partnership Interest, copies of which are attached hereto as Exhibits 1 and 2, respectively, is incorporated herein by reference. 11. MATERIALS TO BE FILED AS EXHIBITS. The documents listed below are filed (or incorporated by reference) as exhibits to this Schedule 14D-1: 8 As indicated below, certain exhibits are incorporated by reference to (i) the Tender Offer Statement on Schedule 14d-1 ("1995 Schedule 14d-1") originally filed by the Purchaser, Riverdale Investors Corp., Inc. and Carl C. Icahn on August 3, 1995 and the amendments thereto or (ii) the Schedule 13D (the "Schedule 13D") filed by the Purchaser, Riverdale Investors Corp., Inc., Unicorn Associates Corporation and Carl C. Icahn on November 15, 1995 and the amendments thereto. (a) Exhibit 1. Offer to Purchase, dated September 20, 1996 (filed herewith) Exhibit 2. Assignment of Partnership Interest and related instructions (filed herewith) Exhibit 3. Guidelines for Certification of Taxpayer Identification Number or Substitute Form W-9 (filed herewith) Exhibit 4. Form of Tombstone Advertisement dated September 20, 1996 (filed herewith) Exhibit 5. Press Release dated September 20, 1996 regarding the Offer (filed herewith) (b) Not applicable. (c) Exhibit 6. Letter, dated August 12, 1996, from the Purchaser to the Partnership and certain other Partnerships requesting a list of Limited Partners ("August 12 Letter") (filed herewith) Exhibit 7. Letter, dated August 19, 1996, from counsel to the Partnership to counsel to the Purchaser responding to the August 12, 1996 Letter (filed herewith) Exhibit 8. Complaint filed by the McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P. and McNeil Real Estate Fund XXV, L.P., as plaintiffs, against the Purchaser and certain of its affiliates, as defendants (filed herewith) 9 Exhibit 9. Letter Agreement, dated August 2, 1996, between the Purchaser and Herbert Beigel (filed on August 5, 1996 as Exhibit 1 to Amendment No. 4 of the Schedule 13D and incorporated by reference herein) Exhibit 10. Letter Agreement, dated September 19, 1996 between the Purchaser and Herbert Beigel (filed herewith) Exhibit 11. Demand letter, dated June 24, 1996, sent to Marco Schnabl, Patrick Foye and Ira Matetsky by Herbert Beigel, Andrew D. Friedman, Lawrence Kolker and Lynda J. Grant (filed on August 5, 1996 as Exhibit 2 to Amendment No. 2 to the Schedule 13D and incorporated by reference herein) Exhibit 12. Letter Agreement, dated August 24, 1995, by and among Carl C. Icahn, the Purchaser and McNeil Partners, L.P. (filed on August 25, 1995 as Exhibit 17 to Amendment No. 6 to the 1995 Schedule 14d-1 and incorporated by reference herein) Exhibit 13. Letter Agreement, dated September 7, 1995, by and among Carl C. Icahn, the Purchaser and McNeil Partners, L.P. (filed on September 8, 1995 as Exhibit 22 to Amendment No. 9 to the 1995 Schedule 4d-1 and incorporated by reference herein) Exhibit 14. Letter Agreement, dated September 12, 1995, by and among Carl C. Icahn, the Purchaser and McNeil Partners, L.P. (filed on September 12, 1995 as Exhibit 24 to Amendment 10 to the 1995 Schedule 14d-1 and incorporated by reference herein) Exhibit 15. Letter Agreement, dated September 15, 1995, among Carl C. Icahn, the Purchaser and McNeil Partners, L.P. (filed on September 15, 1995 as Exhibit 26 to Amendment 11 to the 1995 Schedule 14d-1 and incorporated by reference herein) Exhibit 16. Letter Agreement, dated September 15, 1995, by and among the Purchaser, Carl C. Icahn and McNeil Partners, L.P. (filed on September 18, 1995 as Exhibit 27 to Amendment 13 to the 1995 Schedule 14d-1 and incorporated by reference herein) Exhibit 17. Letter Agreement, dated September 17, 1995, by and among the Purchaser, Carl C. Icahn and McNeil Partners, L.P. (filed on September 18, 1995 as Exhibit 28 to Amendment 13 to the 1995 Schedule 14d-1 and incorporated by reference herein) Exhibit 18. Assignment and Assumption Agreement, dated October 6, 1995, between the Purchaser and Unicorn 10 (filed on October 11, 1995 as Exhibit 34 to Amendment 18 to the 1995 Schedule 14d-1 and incorporated by reference herein) Exhibit 19. Defendants' Answer to Complaint for Declaratory and Injunctive Relief filed by Purchaser and certain of its affiliates as defendants, against McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund, XXIV, L.P., and McNeil Real Estate Fund XXV, L.P., as plaintiffs (without exhibits) (filed herewith) Exhibit 20. Counterclaim of Purchaser for Injunctive and Other Relief re: Denial of Access to a Partner to Limited Partnership Records filed by Purchaser and certain of its affiliates as defendants, against McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund, XXIV, L.P., and McNeil Real Estate Fund XXV, L.P., as plaintiffs (filed herewith) Exhibit 21. Plaintiffs/Counter-Defendants' Answer to Counterclaim of Purchaser for Injunctice and Other Relief filed by McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund, XXIV, L.P., and McNeil Real Estate Fund XXV, L.P., as plaintiffs, against Purchaser and certain of its affiliates (without exhibits) (filed herewith) (d) and (e) Not applicable. 11 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: September 19, 1996 HIGH RIVER LIMITED PARTNERSHIP By: RIVERDALE LLC, General Partner By: /s/ ROBERT J. MITCHELL ----------------------------------------- Robert J. Mitchell Title: Vice President and Treasurer/Manager RIVERDALE LLC By: /s/ ROBERT J. MITCHELL ----------------------------------------- Robert J. Mitchell Title: Vice President and Treasurer/Manager /s/ CARL C. ICAHN ----------------------------------------- Carl C. Icahn UNICORN ASSOCIATES CORPORATION By: /s/ EDWARD MATTNER ----------------------------------------- Edward Mattner Title: President [Signature Page for McNeil Real Estate Fund IX, Ltd. Schedule 14D-1 and Amendment No. 5 to Schedule 13D] 12
EXHIBIT INDEX Page Number ----------- Exhibit 1. Offer to Purchase, dated September 20, 1996 Exhibit 2. Assignment of Partnership Interest and related instructions Exhibit 3. Guidelines for Certification of Taxpayer Identification Number or Substitute Form W-9 Exhibit 4. Form of Tombstone Advertisement dated September 20, 1996 Exhibit 5. Press Release dated September 20, 1996 regarding the Offer Exhibit 6. Letter, dated August 12, 1996, from the Purchaser to the Partnership and certain other Partnerships requesting a list of Limited Partners ("August 12 Letter") Exhibit 7. Letter, dated August 19, 1996, from counsel to the Partnership to counsel to the Purchaser responding to the August 12, 1996 Letter Exhibit 8. Complaint filed by the McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P. and McNeil Real Estate Fund XXV, L.P., as plaintiffs, against the Purchaser and certain of its affiliates, as defendants (without Exhibits) Exhibit 9. Letter Agreement, dated August 2, 1996, between the Purchaser and * Herbert Beigel (filed on August 5, 1996 as Exhibit 1 to Amendment No. [2] of the Schedule 13D and incorporated by reference herein) Exhibit 10. Letter Agreement, dated September 19, 1996 between the Purchaser and Herbert Beigel Exhibit 11. Demand letter, dated June 24, 1996, sent to Marco Schnabl, Patrick * Foye and Ira Matetsky by Herbert Beigel, Andrew D. Friedman, Lawrence Kolker and Lynda J. Grant 13
Exhibit 12. Letter Agreement, dated August 24, 1995, by and among * Carl C. Icahn, the Purchaser and McNeil Partners, L.P. Exhibit 13. Letter Agreement, dated September 7, 1995, by and among Carl C. * Icahn, the Purchaser and McNeil Partners, L.P. Exhibit 14. Letter Agreement, dated September 12, 1995, by and among Carl C. * Icahn, the Purchaser and McNeil Partners, L.P. Exhibit 15. Letter Agreement, dated September 15, 1995, among Carl C. Icahn, * the Purchaser and McNeil Partners, L.P. Exhibit 16. Letter Agreement, dated September 15, 1995, by and among the * Purchaser, Carl C. Icahn and McNeil Partners, L.P. Exhibit 17. Letter Agreement, dated September 17, 1995, by and among the * Purchaser, Carl C. Icahn and McNeil Partners, L.P. Exhibit 18. Assignment and Assumption Agreement, dated October 6, * 1995, between the Purchaser and Unicorn Exhibit 19. Defendants' Answer to Complaint for Declaratory and Injunctive Relief filed by Purchaser and certain of its affiliates as defendants, against McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund, XXIV, L.P., and McNeil Real Estate Fund XXV, L.P., as plaintiffs (without exhibits) Exhibit 20. Counterclaim of Purchaser for Injunctive and Other Relief re: Denial of Access to a Partner to Limited Partnership Records filed by Purchaser and certain of its affiliates as defendants, against McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund, XXIV, L.P., and McNeil Real Estate Fund XXV, L.P., as plaintiffs Exhibit 21. Plaintiffs/Counter-Defendants' Answer to Counterclaim of Purchaser for Injunctice and Other Relief filed by McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund, XXIV, L.P., and McNeil Real Estate Fund XXV, L.P., as plaintiffs, against Purchaser and certain of its affiliates (without exhibits) * Incorporated by reference. See Item 11.
14 EX-1 2 OFFER TO PURCHASE OFFER TO PURCHASE FOR CASH ANY AND ALL UNITS OF LIMITED PARTNERSHIP INTEREST IN McNEIL REAL ESTATE FUND IX, LTD. FOR $180.00 NET PER UNIT BY HIGH RIVER LIMITED PARTNERSHIP THE OFFER AND RELATED WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON OCTOBER 18, 1996, UNLESS THE OFFER IS EXTENDED. IMPORTANT HIGH RIVER LIMITED PARTNERSHIP, a Delaware limited partnership (the "Purchaser"), is offering to purchase any and all of the outstanding units of limited partnership interest ("Units") in McNEIL REAL ESTATE FUND IX, LTD., a California limited partnership (the "Partnership"), at a purchase price of $180.00 per Unit (the "Purchase Price"), net to the seller in cash, without interest, less the amount of distributions per Unit, if any, declared or made by the Partnership between August 15, 1996 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, as it may be supplemented or amended from time to time (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"). LIMITED PARTNERS WHO TENDER THEIR UNITS IN RESPONSE TO THE OFFER WILL NOT BE OBLIGATED TO PAY ANY COMMISSIONS OR PARTNERSHIP TRANSFER FEES. Because Carl C. Icahn controls the Purchaser, he may be deemed to be a "co-bidder" with the Purchaser. Any holder of Units (each, a "Limited Partner") 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 and the associated certificates of beneficial interest in the Partnership and the Limited Partners' copy of the Restated Certificate and Agreement of Limited Partnership executed by the Partnership's general partner and evidencing the Limited Partner's interest in Units (collectively, the "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, that in order for a tender to be valid, the tender must satisfy the minimum units requirements (the "Minimum Units Requirements") of the Partnership's partnership agreement (the "Partnership Agreement"). See Section 3 of the Offer to Purchase. For convenience, the relevant portions of the Partnership Agreement are set forth in Exhibit A to this Offer. (Continued on following page) ---------- For More Information or for Further Assistance, Please Call the Information Agent: BEACON HILL PARTNERS, INC. (212) 843-8500 (COLLECT) OR (800) 253-3814 (TOLL FREE) September 20, 1996 Limited Partners are urged to consider the following factors: o The Purchaser is making the Offer with a view to making a profit. Accordingly, there is a conflict between the desire of the Purchaser to purchase Units at the lowest possible price and the desire of the Limited Partners to sell their Units at the highest possible price. o The Purchase Price represents 75% of the liquidation value per Unit, and 68% of the net asset value per Unit, in each case, as estimated by the Purchaser. While the Purchaser believes that the actual current value of a Unit may be substantially less than its estimate of liquidation value, there is a substantial likelihood that the value realizable in an orderly liquidation could be greater than the estimated liquidation value. The Purchaser's estimate of liquidation value was based predominantly on publicly available information relating to the Partnership and its properties in the Partnership's Form 10-K for the fiscal year ended December 31, 1995 (the "Form 10-K ") and its Form 10-Q for the period ended June 30, 1996 and, to a lesser extent, on the non-public Due Diligence Information (as hereinafter defined) provided to the Purchaser in 1995. The Purchaser's calculations are based on rough estimates and the values resulting therefrom may not be indicative of actual values to any extent. The Purchaser has not conducted any appraisal of the Partnership's properties and has no independent basis whatsoever for determining the accuracy or completeness of the Partnership's publicly filed financial information or the Due Diligence Information. See Section 13 of the Offer to Purchase. No representation is made by the Purchaser or any affiliate of the Purchaser with respect to the fairness of the Purchase Price. o The Purchaser (together with an affiliate) currently owns approximately 7.4% of the outstanding Units and may thereby be in a position to 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 partner. The acquisition of additional Units pursuant to the Offer would enhance such voting influence. As a result (i) those who remain Limited Partners after the expiration of the Offer 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 partner require the consent of the Partnership's general partner prior to effectuation. Further, to the extent valid, Reorganization Transactions require a Supermajority Vote (as those terms are defined in the Partnership Agreement) and the consent of the Partnership's general partner prior to effectuation. See Section 10 of the Offer to Purchase. o The terms of the Partnership Agreement require the Partnership's general partner to begin to liquidate the Partnership's properties no later than November 12, 1998, and to use commercially reasonable efforts to liquidate and terminate the Partnership by December 31, 1999. If such a liquidation were to occur, Limited Partners who sell their Units to the Purchaser pursuant to the Offer will not participate in any such liquidation, which may be at a price higher than the Purchase Price. See "Introduction" and Section 9 of the Offer to Purchase. o The Purchaser may seek to remove the Partnership's general partner and/or its property manager, McNeil Real Estate Management, Inc. ("McREMI") (which is an affiliate of the Partnership's general partner). Such removal may require the Partnership to pay a fee and other payments to the Partnership's general partner and/or its affiliates (including McREMI) and may result in acceleration of certain of the Partnership's debt obligations, and/or the Partnership's incurrence of expenses pursuant to provisions of such debt obligation which may have an adverse effect on the Partnership. See "Introduction" and Section 8 of the Offer to Purchase. o As discussed in Section 6 of the Offer to Purchase, the sale of 50 percent or more of the Units in the Partnership over a period of twelve months will result in the termination of the Partnership for federal income tax purposes. Such a termination would result in lower depreciation deductions to the Partnership for the next few years. Accordingly, it is possible that the acquisition of Units pursuant to the Offer, when combined with other transfers within twelve months, will result in a termination of the Partnership for income tax purposes. In such a case, non-tendering Limited Partners may, depending on their individual circumstances, have a greater tax liability with respect to the Partnership than they would have had in the absence of a termination. See Section 6 of the Offer to Purchase. 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 on the front and back covers of the Offer to Purchase. No soliciting dealer fees or other payments to brokers for tenders are being paid by the Purchaser. THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. TABLE OF CONTENTS PAGE ---- INTRODUCTION ............................................................. 1 THE OFFER ................................................................ 3 Section 1. Terms of the Offer; Expiration Date ........................ 3 Section 2. Acceptance for Payment and Payment for Units ............... 3 Section 3. Procedure for Tendering Units .............................. 4 Section 4. Withdrawal Rights .......................................... 5 Section 5. Extension of Tender Period; Termination; Amendment ......... 6 Section 6. Certain Federal Income Tax Matters ......................... 6 Section 7. Effects of the Offer ....................................... 8 Section 8. Future Plans of the Purchaser .............................. 8 Section 9. Certain Information Concerning the Partnership ............. 10 Section 10. Voting by the Purchaser .................................... 19 Section 11. Information Concerning the Purchaser and Certain Affiliates of the Purchaser ................................ 20 Section 12. Source of Funds ............................................ 23 Section 13. Background of the Offer .................................... 23 Section 14. Conditions of the Offer. ................................... 26 Section 15. Certain Legal Matters. ..................................... 27 Section 16. Fees and Expenses .......................................... 28 SCHEDULE I--Information with respect to the executive officers/managers and the controlling member of the general partner of the Purchaser and the controlling stockholder and sole director and the executive officer of Unicorn Associates Corporation .. I-1 EXHIBIT A--Provisions of the Partnership Agreement relating to the Minimum Units Requirements .................................... A-1 i TO THE LIMITED PARTNERS OF MCNEIL REAL ESTATE FUND IX, LTD. INTRODUCTION High River Limited Partnership hereby offers to purchase any and all Units at the Purchase Price set forth above, net to the seller in cash, without interest, less the amount of distributions per Unit, if any, declared or made by the Partnership between August 15, 1996 and the date of payment of the Purchase Price by Purchaser, 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 IBJ Schroder Bank & Trust Company 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. Some Factors To Be Considered by Limited Partners. In considering the Offer, Limited Partners may wish to consider the following: o The Purchaser is making the Offer with a view to making a profit. Accordingly, there is a conflict between the desire of the Purchaser to purchase Units at the lowest possible price and the desire of the Limited Partners to sell their Units at the highest possible price. o The Purchaser, together with an affiliate, currently owns approximately 7.4% of the outstanding Units and may thereby be in a position to 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 partner. The acquisition of additional Units pursuant to the Offer would enhance such voting influence. As a result (i) those who remain Limited Partners after the expiration of the Offer 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 partner require the consent of the Partnership's general partner prior to effectuation. Further, to the extent valid, Reorganization Transactions require a Supermajority Vote (as those terms are defined in the Partnership Agreement) and the consent of the Partnership's general partner prior to effectuation. See Section 10 of the Offer to Purchase. o The terms of the Partnership Agreement require the Partnership's general partner to begin to liquidate the Partnership's properties no later than November 12, 1998, and to use commercially reasonable efforts to liquidate and terminate the Partnership by December 31, 1999. If such a liquidation were to occur, Limited Partners who sell their Units to the Purchaser pursuant to the Offer will not participate in any such liquidation, which may be at a price higher than the Purchase Price. o Although the Purchaser is making the Offer for investment purposes and with a view toward making a profit, it may, based upon the number of Units it currently owns (together with an affiliate) and the number of Units it acquires pursuant to the Offer, be in a position to influence control of the Partnership and may seek to remove the Partnership's general partner and/or McREMI. Such removal may require the Partnership to pay a fee and other payments to the Partnership's general partner and/or its affiliates and may result in acceleration of certain of the Partnership's debt obligations, and/or the Partnership's incurrence of expenses pursuant to provisions of such debt obligations, which may have an adverse effect on the Partnership. See Section 8 of the Offer to Purchase. o The Purchase Price represents 75% of the liquidation value per Unit, and 68% of the net asset value per Unit, in each case, as estimated by the Purchaser. While the Purchaser believes that the actual current value of a Unit may be substantially less than its estimate of liquidation value, there is a substantial likelihood that the value realizable in an orderly liquidation could be greater than the estimated liquidation value. The 1 Purchaser's estimate of liquidation value was based predominantly on publicly available information relating to the Partnership and its properties in the Partnership's Form 10-K and its Form 10-Q for the period ended June 30, 1996 and, to a lesser extent, on the non-public Due Diligence Information provided to the Purchaser in 1995. The Purchaser's calculations are based on rough estimates and the values resulting therefrom may not be indicative of actual values to any extent. The Purchaser has not conducted any appraisal of the Partnership's properties and has no independent basis whatsoever for determining the accuracy or completeness of the Partnership's publicly filed financial information or the Due Diligence Information. See Section 13 of the Offer to Purchase. No representation is made by the Purchaser or any affiliate of the Purchaser with respect to the fairness of the Purchase Price. o As discussed in Section 6 of the Offer to Purchase, the sale of 50 percent or more of the Units in the Partnership over a period of twelve months will result in the termination of the Partnership for federal income tax purposes. Such a termination would result in lower depreciation deductions to the Partnership for the next few years. If the acquisition of Units pursuant to the Offer, when combined with other transfers within twelve months, results in a termination of the Partnership, non-tendering Limited Partners may, depending on their individual circumstances, have a greater tax liability with respect to the Partnership than they would have had in the absence of a termination. See Section 6 of the Offer to Purchase. 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 Riverdale LLC, a New York limited liability company ("Riverdale"). Riverdale is controlled by Mr.Icahn. See Section 11 of the Offer to Purchase for a description of the Purchaser's business. Conditions. The Offer is not conditioned on financing or on any minimum number of Units being tendered. Certain other conditions, however, do apply. See Section 14 of the Offer to Purchase. Outstanding Units. According to publicly available information, there are 110,170 Units issued and outstanding, which, on February 16, 1996, were held by 4,896 Limited Partners. The Purchaser and its affiliate beneficially own 8,132 (or approximately 7.4% of the outstanding) Units. See Section 11 of the Offer to Purchase. 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. 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 DUE DILIGENCE INFORMATION (AS DEFINED IN THE PORTION OF SECTION 13 OF THE OFFER TO PURCHASE ENTITLED "DETERMINATION OF THE PURCHASE PRICE"). ALTHOUGH THE PURCHASER HAS NO INFORMATION THAT ANY STATEMENTS OR INFORMATION CONTAINED IN THE OFFER TO PURCHASE BASED UPON SUCH DOCUMENTS, REPORTS AND DUE DILIGENCE 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 DUE DILIGENCE 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. 2 THE OFFER SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the conditions of the Offer, the Purchaser will accept (and thereby purchase) any and all 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 of the Offer to Purchase. For purposes of the Offer, the term "Expiration Date" shall mean 12:00 midnight, New York City time, on October 18, 1996, 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 of the Offer to Purchase 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. The Purchaser will, upon the terms and subject to the conditions of the Offer, accept for payment and pay for any and all of the Units so tendered, 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 partner. The Purchaser will purchase all Units so tendered and not withdrawn, upon the terms and subject to the conditions of the Offer. The Offer is not conditioned upon financing or upon a minimum number of Units being tendered, but is conditioned on satisfaction of certain other conditions. See Section 14 of the Offer to Purchase, 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 Offer to Purchase and the related Assignment of Partnership Interest will be mailed pursuant to Rule 14d-5 under the Exchange Act. The Purchaser has requested that the Partnership furnish it with a list of holders of Units for the purpose of disseminating the Offer to such holders. If the Partnership complies with such request, then the Purchaser will cause such mailing to be made; otherwise, the Partnership is required by the Exchange Act and the rules thereunder to cause such mailing to be made. 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 any and all Units validly tendered and not withdrawn in accordance with the procedures specified in Section 4 of the Offer to Purchase, as promptly as practicable following the Expiration 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, if followed by the signed original) and any other documents required by the Assignment of Partnership Interest. See Section 3 of the Offer to Purchase. 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. If any tendered Units are not purchased for any reason, the Certificates associated with such Units will be returned, without expense to such tendering Limited Partner, as promptly as practicable following the expiration, 3 termination or withdrawal of the Offer. 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 of the Offer to Purchase, 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 of the Offer to Purchase; 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 and any other documents required by the Assignment of Partnership Interest (or facsimiles thereof, if followed by a signed original) and the associated 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. In all cases, the signature of the Limited Partner on the Assignment of Partnership Interest must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial bank, savings bank, credit union, savings and loan association or trust company having an office, branch or agency in the United States. See Instruction 1 to the Assignment of Partnership Interest. In order for a tendering Limited Partner to participate in the Offer, its 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 ASSOCIATED 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 its designees as the Limited Partner's 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 Partner's rights with respect to the Units tendered by the Limited Partner and accepted for payment by the Purchaser. Each such proxy shall be considered coupled with an interest in the tendered Units. 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 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, its general partner, and the designees of the Purchaser will, as to those Units, be empowered to exercise all voting and other rights of the Limited Partner as they, in their sole discretion, may deem proper at any meeting of Limited Partners, by written consent or otherwise. 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. The proxy and power-of-attorney granted by a Limited Partner to the Purchaser upon his execution of the Assignment of Partnership Interest (and all related and associated rights, authority and power) shall be effective from the acceptance for payment of the Units tendered and shall remain effective and be irrevocable until August 1, 2006. The Purchaser may assign such proxy and/or such power-of-attorney to any person with or without assigning the related Units with respect to which such proxy and/or power-of-attorney was granted. 4 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 in respect of the Units tendered and purchased pursuant to the Offer, other than those distributions declared or made between August 15, 1996 and the date of payment of the Purchase Price by the Purchaser. Power of Attorney. By executing and delivering the Assignment of Partnership Interest, a tendering Limited Partner also irrevocably appoints any person nominated by the Purchaser or any designee thereof (the "Agent") as the Limited Partner's attorney-in-fact with an irrevocable instruction to the Agent to execute all or any instruments of transfer and/or other documents in the Agent's discretion in relation to the Units tendered and to make all elections and do all such other acts and things as may, be necessary in connection with the acceptance of the Offer by the Limited Partner and to vest in the Purchaser, or as it may direct, the tendered Units. 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 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 the Instructions to the Assignment of Partnership Interest and Section 6 of the Offer to Purchase. 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 the Instructions to the Assignment of Partnership Interest and Section 6 of the Offer to Purchase. 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 November 18, 1996. For 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. 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. 5 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 of the Offer to Purchase 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 of the Offer to Purchase, 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 changing 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 of the Offer to Purchase; 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 changes 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. 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 6 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. Such adjusted tax basis will take into account the Partnership's liabilities allocable to the Units sold (as determined under Code Section 752 and the Treasury regulations promulgated thereunder), and will also be affected by allocations of income, gain or loss, and any cash distributions made by the Partnership with respect to the Units. 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 and the Treasury regulations promulgated thereunder). 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 Unit exceeds one year. Under current law, long-term capital gains of individuals and other non-corporate taxpayers are taxed at a maximum marginal federal income tax rate of 28%, 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 "substantially appreciated 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. 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 (e.g., dividends or interest). 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 its 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 its 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 its other income (subject to any other applicable limitations). A tendering Limited Partner must sell all of its Units to receive these tax benefits. 7 Section 708(b) of the Code provides that a partnership terminates for federal income tax purposes if there is a sale or exchange of 50 percent or more of the total interest in partnership capital and profits within a twelve-month period. Accordingly, it is possible that transfers made pursuant to the Offer, in combination with other transfers made within twelve months of the Offer, will result in a termination of the Partnership for federal income tax purposes. In the event of a termination, the Partnership would subsequently be treated for federal income tax purposes as a "new" partnership. Since the "new" partnership would be treated as having acquired its assets on the date of the termination, a new depreciation recovery period would begin on such date and the Partnership's properties would be required to be depreciated over a greater period than is currently being used, and accordingly, the aggregate present value of the Partnership's depreciation deductions would be reduced. 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 (which includes the Partnership's liabilities allocable to the tendered Units, as discussed above) 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 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 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' abilities 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 believes it is unlikely that the Units will be held of record by less than 300 persons following the purchase of Units tendered pursuant to the Offer. 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. SECTION 8. FUTURE PLANS OF THE PURCHASER. Future Plans. Although the Purchaser is making the Offer for investment purposes and with a view to making a profit, it may, based upon the number of Units it currently owns (together with an affiliate) and the number of Units it acquires pursuant to the Offer, be in a position to influence control of the Partnership and to influence voting decisions with respect to the Partnership. 8 The Purchaser is currently assessing the feasibility of removing the Partnership's general partner and/or McREMI. Removal of the Partnership's general partner requires the vote of Limited Partners holding a majority of the Units. Removal of the Partnership's general partner and/or McREMI may, under certain circumstances, require the Partnership to make certain payments to the Partnership's general partner and/or its affiliates (including McREMI) (collectively, the "Termination Payments") and may result in acceleration of certain of the Partnership's debt obligations and/or the Partnership's incurrence of expenses pursuant to provisions of such debt obligations, which may have an adverse effect on the Partnership. If the Purchaser concludes that it is feasible to remove the Partnership's general partner and/or McREMI or otherwise take action which would result in the Partnership's general partner and/or McREMI ceasing to act in their current capacities (such removal or cessation, a "Termination") without the imposition of Termination Payments, it will seek to do so. Absent the feasibility of the foregoing, the Purchaser will consider whether or not to seek Termination of the Partnership's general partner and/or McREMI. In connection with any such determination, the Purchaser will consider the overall costs associated with such Termination. In connection with any attempted Termination of the Partnership's general partner or McREMI, the Purchaser will seek its appointment or the appointment of another party as the successor general partner of the Partnership or the property manager of the Partnership, as the case may be. The Purchaser has not previously acted as the general partner or property manager of a limited partnership, such as the Partnership, which is engaged in the business of owning real estate and has not, at this time, sought to negotiate any arrangements with other parties to act in such capacities. Following the completion of the Offer, 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 consider selling some or all of the Units it currently owns or acquires pursuant to the Offer to persons not yet determined, which may include the Partnership's general partner and/or an affiliate of the Partnership's general partner. The Schofield Litigation. James F. Schofield, Gerald C. Gillett and Donna S. Gillett have instituted class and derivative actions (collectively, the "Schofield Litigation") in Superior Court of the State of California for the County of Los Angeles and United States District Court for the Southern District of New York against the general partner of the Partnership, its corporate general partner, McREMI and Robert A. McNeil and Carole J. McNeil (the "McNeils"), the Chairman and Co-Chairman, respectively, of the corporate general partner of the Partnership's general partner (collectively, the "Defendants"), together with the Partnership and fourteen other related partnerships (collectively, the "Partnerships") as nominal defendants, alleging that the Defendants have breached their fiduciary duty. Specifically, the Plaintiffs allege that the Defendants have caused the Partnerships to enter into several wasteful transactions that have no business purpose or benefit to the Partnerships and that have rendered the Units highly illiquid and artificially depressed the prices that are available for Units on the limited resale market. Plaintiffs also allege that Defendants have engaged in a course of conduct to prevent the acquisition of Units by Mr. Icahn by disseminating false, misleading and inadequate information. Plaintiffs further allege that Defendants have acted to advance their own personal interests at the expense of the Partnerships' public Unit holders by failing to sell Partnership properties and failing to make distributions to holders of Units and, thereby, have breached the Partnership Agreements. The Purchaser entered into a letter agreement (the "August 2 Agreement") with Herbert Beigel, plaintiffs' counsel ("Plaintiffs' Counsel") in the Schofield Litigation, on August 2, 1996 and amended the August 2 Agreement on September 19, 1996 (the August 2 Agreement, as so amended, the "Letter Agreement"). Pursuant to the Letter Agreement, among other things, the Purchaser agreed to commence tender offers (the "Tender Offers") within the next six months for any and all outstanding Units of the Partnership and eight of the other Partnerships. The Letter Agreement provides, among other things, that (i) the Purchaser will commence, as soon as possible, but in no event in more than six months, Tender Offers for any and all of the outstanding Units of such Partnerships at a price that is not less than 75% of the estimated liquidation value of the Units, which Tender Offers may be subject to such other terms and conditions as the Purchaser determines in its sole discretion; (ii) in the event that the Purchaser attains the positions of general partner in any of such Partnerships: (a) the Purchaser will take all actions necessary to cause a 25% reduction of fees of such Partnership(s), including the current management incentive distribution fee, (b) the Purchaser will not cause such Partnership(s) to take any action to discontinue the Schofield Litigation with respect to those claims asserted against the general partner which seek the receipt by the Partnerships of monies that the general partner claims it is owed 9 by the Partnerships and monies previously paid by the Partnerships to the general partner and its affiliates for fees they claimed were owed under the Partnership Agreements (the "Receivable Claims"), and (c) the Purchaser and Plaintiffs' Counsel will in good faith execute an appropriate Stipulation of Settlement based upon the terms of the Letter Agreement, which stipulation shall not include a settlement or provide a release of the Receivable Claims; and (iii) from and after the date of the Letter Agreement, Plaintiffs' Counsel will not enter into any settlement of the claims asserted in the Schofield Litigation which does not provide for all of the consideration contained in that certain demand letter, dated June 24, 1996 (the "Demand Letter"), sent by Plaintiffs' Counsel to counsel for the Partnerships in the Schofield Litigation. Such consideration consists of: (a) the general partner or its affiliates causing a 25% reduction of all general partner fees, including the management distribution fees, that are currently payable by such Partnership(s) to the general partner of such Partnership(s) and/or its affiliates; (b) the general partners waiving all claims for outstanding receivables claimed to be owed to them by the Partnership(s) and returning to the Partnerships all receivables actually paid in the last two years; and (c) the Defendants in the Schofield Litigation providing a liquidity option for the Limited Partners of such Partnerships by commencing, or causing the general partners to take all steps to solicit third parties to commence, tender offers for any and all, but in no event less than 40%, of the outstanding Unit of such Partnerships in an amount that exceeds the prices paid for the previous tender offers commenced by the Purchaser. The August 2 Agreement and Demand Letter were described in and filed as exhibits to an amendment to the Purchaser's Schedule 13D (the "Schedule 13D Amendment") relating to the Partnership filed with the Commission on August 5, 1996. See Section 13 of the Offer to Purchase. SECTION 9. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP. Information contained in this Section 9 is based upon documents and reports publicly filed by the Partnership. Although the Purchaser has no information that any statements contained in this Section 9 are untrue, the Purchaser cannot take responsibility for the accuracy or completeness of any information contained in this Section 9 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. The Partnership was organized under the laws of the State of California. Its principal executive offices are located at 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. Its telephone number is (214) 448-5800. The Partnership's primary business is real estate ownership and related operations. The primary purpose of the Partnership, as set forth in the Partnership Agreement, is "to invest in, hold, manage and dispose of real estate and real estate-related investments". Under the Partnership Agreement, the term of the Partnership will continue until December 31, 2005, unless sooner terminated as provided in the Partnership Agreement or by law. The terms of the Partnership Agreement require the Partnership's general partner to begin to liquidate the Partnership's properties no later than November 12, 1998, and to use commercially reasonable efforts to liquidate and terminate the Partnership by December 31, 1999. 10 At December 31, 1995, the Partnership's investment portfolio consisted of the following properties:
Description 1995 Date Property of Property Net Basis Debt Property Tax Acquired - -------- ----------- --------- ---- ------------ -------- Berkley Hills(1) Apartments $ 2,517,754 $ 3,255,924 $ 66,132 6/79 Madison, TN 251 units Cherry Hills(2) Apartments 4,624,405 4,634,041 80,477 6/80 Wichita, KS 348 units Forest Park Village(3) Apartments 4,056,519 6,192,845 182,342 12/79 Columbus, OH 376 units Heather Square Apartments 4,235,681 3,429,615 153,017 10/79 Dallas, TX 288 units Lantern Tree(4) Apartments 1,523,877 2,404,122 63,486 7/79 Omaha, NE 110 units Meridian West(5) Apartments 2,553,373 3,352,624 85,691 1/80 Puyallup, WA 181 units Pennbrook(6) Apartments 3,447,954 3,187,297 148,613 1/80 Dallas, TX 216 units Rockborough(7) Apartments 2,156,550 2,212,544 67,906 1/80 Addison, TX 136 units Rolling Hills(8) Apartments 4,100,405 6,685,297 80,137 9/79 Louisville, KY 400 units Ruskin Place(9) Apartments 2,911,102 4,581,309 165,054 12/79 Lincoln, NE 270 units Sheraton Hills Apartments 2,597,459 2,838,674 88,191 6/79 Nashville, TN 272 units Westgate(10) Apartments 2,956,800 5,893,110 145,457 12/79 Lansing, NY 264 units Westridge Apartments 2,311,872 50,667 1/80 Ft. Worth, TX 176 units Williamsburg(11) Apartments 2,440,411 2,723,420 59,283 12/79 ----------- ----------- ---------- Shreveport, LA 194 units $42,434,162 $51,390,822 $1,436,453 =========== =========== ==========
Total: Apartments--3,482 units (1) Berkley Hills Apartments is owned by Berkley Hills Associates which is wholly-owned by the Partnership and the General Partner. (2) Cherry Hills Apartments is owned by Cherry Hills Fund IX Limited Partnership which is wholly-owned by the Partnership. (3) Forest Park Village Apartments is owned by Forest Park Fund IX Associates Limited Partnership which is wholly-owned by the Partnership and the General Partner. (4) Lantern Tree Apartments is owned by Lantern Tree Fund IX Limited Partnership which is wholly-owned by the Partnership. (5) Meridian West Apartments is owned by Meridian West Fund IX Limited Partnership which is wholly-owned by the Partnership. (6) Pennbrook Apartments is owned by Pennbrook Fund IX Associates, L.P. which is wholly-owned by the Partnership and the General Partner. (7) Rockborough Apartments is owned by Rockborough Fund IX Limited Partnership which is wholly-owned by the Partnership. (8) Rolling Hills Apartments is owned by Rolling Hills Fund IX Associates L.P. which is wholly-owned by the Partnership and the General Partner. (9) Ruskin Place Apartments is owned by Ruskin Place Fund IX Associates which is wholly-owned by the Partnership and the General Partner. (10) Westgate Apartments (formerly known as Sherwood Forest Apartments) is owned by Sherwood Forest Fund IX Associates which is wholly-owned by the Partnership and the General Partner. (11) Williamsburg Apartments is owned by Williamsburg Fund IX Limited Partnership which is wholly-owned by the Partnership. 11 ACCUMULATED DEPRECIATION SCHEDULE. The basis and accumulated depreciation of the Partnership's real estate investments at December 31, 1995 and 1994 are set forth in the following tables:
Buildings and Accumulated Net 1995 Land Improvements Depreciation Book Value ---- ---------- ----------- ------------ ----------- Berkley Hills ...................... $ 246,988 $ 5,914,125 $ (3,643,359) $ 2,517,754 Madison, TN Cherry Hills ....................... 514,205 8,771,156 (4,660,956) 4,624,405 Wichita, KS Forest Park Village ................ 716,395 8,891,627 (5,551,503) 4,056,519 Columbus, OH Heather Square ..................... 853,746 7,294,403 (3,912,468) 4,235,681 Dallas, TX Lantern Tree ....................... 217,809 3,245,613 (1,939,545) 1,523,877 Omaha, NE Meridian Walk ...................... 253,167 4,838,970 (2,538,764) 2,553,373 Puyallup, WA Pennbrook .......................... 692,515 6,068,091 (3,312,652) 3,447,954 Dallas, TX Rockborough ........................ 427,932 3,595,458 (1,866,840) 2,156,550 Addison, TX Rolling Hills ...................... 557,249 8,594,002 (5,050,846) 4,100,405 Louisville, KY Ruskin Place ....................... 920,061 4,975,901 (2,984,860) 2,911,102 Lincoln, NE Sheraton Hills ..................... 296,531 6,211,692 (3,910,764) 2,597,459 Nashville, TN Westgate ........................... 390,482 6,093,518 (3,527,200) 2,956,800 Lansing, MI Westridge .......................... 345,265 4,269,089 (2,302,482) 2,311,872 Ft. Worth, TX Williamsburg ....................... 283,754 5,083,649 (2,926,992) 2,440,411 ---------- ----------- ------------ ----------- Shreveport, LA $6,716,099 $83,847,294 $(48,129,231) $42,434,162 ========== =========== ============ ===========
12
Buildings and Accumulated Net 1994 Land Improvements Depreciation Book Value ---- ---------- ------------ ------------- ----------- Berkley Hills .................... $ 246,968 $ 5,617,461 $ (3,347,169) $ 2,517,280 Cherry Hills ..................... 514,205 8,589,653 (4,318,464) 4,785,394 Forest Park Village .............. 716,395 8,446,693 (5,116,033) 4,047,055 Heather Square ................... 853,746 7,097,310 (3,600,447) 4,350,609 Lantern Tree ..................... 217,809 3,133,808 (1,791,815) 1,559,802 Meridian West .................... 253,167 4,755,163 (2,290,739) 2,717,591 Pennbrook ........................ 692,515 5,910,773 (3,018,815) 3,584,473 Rockborough ...................... 427,932 3,527,790 (1,685,438) 2,270,284 Rolling Hills .................... 557,249 8,052,914 (4,599,161) 4,011,002 Ruskin Place ..................... 920,061 4,771,531 (2,747,650) 2,943,942 Sheraton Hills ................... 295,531 5,887,264 (3,605,483) 2,578,312 Westgate ......................... 390,482 5,616,778 (3,282,595) 2,724,665 Westridge ........................ 345,265 4,060,462 (2,164,643) 2,241,084 Williamsburg ..................... 283,754 4,921,016 (2,705,711) 2,499,059 ---------- ----------- ------------ ----------- $6,716,099 $80,388,616 $(44,274,163) $42,830,552 ========== =========== ============ ===========
13 SCHEDULE OF MORTGAGES. The table below sets forth the mortgage notes of the Partnership at December 31, 1995 and 1994. All mortgage notes are secured by real estate investments:
Annual Monthly December 31, Mortgage Lien Interest Payments/ --------------------------- Property Position(a) Rates% Maturity Date(e) 1995 1994 -------- ------------- -------- ----------------- ----------- ----------- Berkley Hills First 8.750 $ 26,005 12/23 $ 3,255,924 $ 3,281,849 ----------- ----------- Cherry Hills First 8.150 39,353 07/03 4,748,209 4,829,752 Discount(b) (114,168) (126,376) ----------- ----------- 4,634,041 4,703,376 ----------- ----------- Forest Park Village First 9.125 59,732 01/98 6,192,845 6,325,750 ----------- ----------- Heather Square First 9.625 38,250 03/09 3,429,615 3,552,038 ----------- ----------- Lantern Tree First 8.150 20,416 07/03 2,463,353 2,505,657 Discount(b) (59,231) (65,563) ----------- ----------- 2,404,122 2,440,094 ----------- ----------- Meridian West First 8.150 28,471 07/03 3,435,223 3,494,217 Discount(b) (82,599) (91,430) ----------- ----------- 3,352,624 3,402,787 ----------- ----------- Pennbrook First 9.450 27,209 02/00 3,187,297 3,209,439 ----------- ----------- Rockborough First 8.150 18,789 07/03 2,267,055 2,305,987 Discount(b) (54,511) (60,339) ----------- ----------- 2,212,544 2,245,648 ----------- ----------- Rolling Hills First 9.250 55,389 11/24 6,685,297 6,729,342 ----------- ----------- Ruskin Place First 8.750 36,348 10/24 4,581,309 4,615,005 ----------- ----------- Sheraton Hills First(c) (d) (d) 10/98 2,838,674 2,880,859 ----------- ----------- Westgate First 8.000 44,114 09/23 5,893,110 5,948,596 ----------- ----------- Williamsburg First 8.150 23,128 07/03 2,790,518 2,838,440 Discount(b) (67,098) (74,271) ----------- ----------- 2,723,420 2,764,169 ----------- ----------- Total $51,390,822 $52,098,952 =========== ===========
- ---------- (a) The debt is non-recourse to the Partnership. (b) Mortgage discounts are based on an effective interest rate of 8.62%. (c) The mortgage encumbering Sheraton Hills Apartments, contains provisions which may give the lender the right to accelerate the mortgage debt as a result of the November 12, 1991, restructuring of the Partnership. The General Partner has requested that the lender waive its right to accelerate the mortgage debt. The lender may require the payment of fees or additional interest as a condition to granting such a waiver. In the event the waiver is not obtained and the mortgage debt is accelerated, the Partnership would be required to satisfy the outstanding mortgage debt, which totaled $838,674 at December 31, 1995. In such event, the Partnership will attempt to arrange alternative sources of mortgage financing. However, such refinancing may be at an interest rate which is higher or is otherwise on terms which are less favorable than those provided for by the current mortgage. Furthermore, if alternative financing cannot be obtained, the lender could foreclose on Sheraton Hills Apartments. Management believes the likelihood of this outcome is remote and accordingly has not reflected this balance as currently due. (d) The Sheraton Hills mortgage note bears interest at a variable rate, adjusted at six-month intervals equal to the six-month treasury bill weekly average rate plus 3.0% per annum, not to exceed 12.75% per annum. The monthly payment is also adjusted each six months so that the mortgage note will fully amortize over a period of 30 years. At December 31, 1995, the interest rate was 8.63% and the monthly payment was $23,748. 14 (e) Balloon payments on the Partnership's mortgage notes are due as follows: Property Balloon Payment Date -------- --------------- ----- Forest Park Village $5,831,000 01/98 Sheraton Hills 2,661,000 10/98 Pennbrook 3,059,000 02/00 Cherry Hills 3,875,000 07/03 Lantern Tree 2,010,000 07/03 Meridian West 2,804,000 07/03 Rockborough 1,850,000 07/03 Williamsburg 2,278,000 07/03 Scheduled principal maturities of the mortgage notes payable under existing agreements, before consideration of discounts of $377,607, are shown below. 1996 ............................................ $ 826,951 1997 ............................................ 902,235 1998 ............................................ 9,358,326 1999 ............................................ 812,434 2000 ............................................ 3,912,038 Thereafter ...................................... 35,956,445 ----------- $51,768,429 =========== Based on borrowing rates currently available to the Partnership for mortgage loans with similar terms and average maturities, the fair value of the mortgage notes payable was approximately $52,256,304 at December 31, 1995. 15 AVERAGE ANNUAL RENTAL RATE AND OCCUPANCY. The following table sets forth the properties' occupancy rate and rent per square foot for each of the last five years:
1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- Berkley Hills Occupancy Rate .................. 98% 98% 98% 94% 87% Rent Per Square Foot ............ $5.69 $5.35 $4.87 $4.48 $4.39 Cherry Hills Occupancy Rate .................. 89% 89% 81% 85% 92% Rent Per Square Foot ............ $5.75 $5.80 $5.05 $5.15 $4.90 Forest Park Village Occupancy Rate .................. 85% 92% 91% 91% 92% Rent Per Square Foot ............ $5.80 $5.57 $5.51 $5.38 $5.22 Heather Square Occupancy Rate .................. 99% 99% 97% 93% 93% Rent Per Square Foot ............ $7.00 $6.61 $6.20 $5.75 $5.58 Lantern Tree Occupancy Rate .................. 99% 99% 96% 97% 96% Rent Per Square Foot ............ $7.58 $7.07 $6.83 $6.41 $6.02 Meridian West Occupancy Rate .................. 93% 90% 92% 95% 96% Rent Per Square Foot ............ $7.18 $6.99 $7.35 $7.11 $6.89 Pennbrook Occupancy Rate .................. 98% 94% 97% 95% 87% Rent Per Square Foot ............ $7.62 $7.23 $7.03 $6.62 $6.05 Rockborough Occupancy Rate .................. 97% 99% 96% 93% 93% Rent Per Square Foot ............ $7.80 $7.40 $7.00 $6.67 $6.25 Rolling Hills Occupancy Rate .................. 94% 97% 90% 91% 93% Rent Per Square Foot ............ $4.66 $4.33 $3.95 $3.79 $3.69 Ruskin Place Occupancy Rate .................. 97% 96% 97% 96% 95% Rent Per Square Foot ............ $6.78 $6.47 $6.26 $6.10 $5.68 Sheraton Hills Occupancy Rate .................. 98% 97% 98% 94% 92% Rent Per Square Foot ............ $5.53 $5.14 $4.85 $4.37 $4.25 Westgate Occupancy Rate .................. 86% 92% 94% 94% 93% Rent Per Square Foot ............ $6.66 $6.51 $6.15 $6.11 $5.91 Westridge Occupancy Rate .................. 89% 96% 86% 92% 91% Rent Per Square Foot ............ $4.80 $4.64 $4.43 $4.48 $4.26 Williamsburg Occupancy Rate .................. 95% 99% 97% 95% 91% Rent Per Square Foot ............ $6.22 $5.86 $5.41 $4.96 $4.74
Occupancy rates represents all units leased divided by the total number of units of the property as of December 31 of the given year. Rent per square foot represents all revenue, except interest, derived from the property divided by the leasable square footage of the property. 16 SELECTED FINANCIAL DATA. Set forth below is a summary of certain financial information with respect to the Partnership, which has been excerpted or derived from the Form 10-K and the Partnership's Quarterly Report on the Form 10-Q for the six months ended June 30, 1996.
Years Ended December 31, ---------------------------------------------------------------------- 1995 1994 1993 1992 1991 ----------- ----------- ----------- ----------- ----------- STATEMENTS OF OPERATIONS Rental revenue $19,123,434 $18,202,306 $17,215,644 $16,487,239 $15,808,082 Total revenue 19,567,182 18,642,220 17,367,511 16,636,929 16,123,484 Loss before extraordinary items (328,996) (387,787) (1,320,829) (1,613,265) (1,927,436) Extraordinary items -- -- (31,055) 104,096 -- Net loss (328,996) (387,787) (1,351,884) (1,509,169) (1,927,436) Net loss per limited partnership unit: Loss before extraordinary items $ (9.19) $ (9.21) $ (19.30) $ (22.05) $ (16.62) Extraordinary items -- -- (.28) .94 -- ----------- ----------- ----------- ----------- ----------- Net Loss $ (9.19) $ (9.21) $ (19.58) $ (21.11) $ (16.62) =========== =========== =========== =========== ===========
December 31, ---------------------------------------------------------------------- 1995 1994 1993 1992 1991 ----------- ----------- ----------- ----------- ----------- BALANCE SHEETS Real estate investments, net ............ $42,434,162 $42,830,552 $42,133,962 $42,478,066 $42,764,914 Total assets ............................ 49,970,886 51,749,891 53,376,263 49,696,209 51,846,933 Mortgage notes payable, net ............. 51,390,822 52,098,952 52,610,769 46,917,274 44,846,933 Partners' equity (deficit) .............. (4,400,760) (3,001,001) (1,640,191) 519,560 2,700,630
Six Months Ended June 30, ------------------------------- 1996 1995 ---------- ---------- STATEMENTS OF OPERATIONS Rental revenue .............................................. $9,825,930 $9,421,015 Total revenue ............................................... 9,894,840 9,614,067 Loss before extraordinary items ............................. (465,466) (254,567) Extraordinary items ......................................... -- -- Net loss .................................................... (465,466) (254,567) Net loss per limited partnership unit: ...................... -- -- Loss before extraordinary items ............................. (11.31) (5.56) Extraordinary items ......................................... -- -- ---------- ---------- Net loss .................................................... (11.31) (5.56) ========== ==========
As of June 30, 1996 ------------- BALANCE SHEETS Real estate investments, net ............................... $39,067,970 Assets held for sale ....................................... 2,042,384 Total assets ............................................... 48,340,944 Mortgage notes payable ..................................... 51,007,280 Partners' equity (deficit) ................................. 5,399,613 17 COMPETITIVE CONDITIONS. A strong local economy has benefitted Berkley Hills Apartments. The property increased rental rates 6% over 1994 levels, in line with averages for the local area. Occupancy rates, too, have been comparable with the property's competition. Capital improvements at Berkley Hills have allowed the property to remain competitive with nearby apartment communities. The strong local economy, and the high occupancy rates are prompting new construction in the area; but to date, the new construction has not been located near Berkley Hills, and has been targeted to upscale single residents while Berkley Hills targets middle class families and singles. Cherry Hills Apartments is one of Wichita's finer apartment communities in terms of interior and exterior appearance. The well-maintained property's occupancy rate is several points above the average occupancy rate of its competitors. Rental rates, also, have typically been higher than the rates charged by the property's competitors. The Wichita area, however, has been a difficult market for apartment communities. Nearby McConnell Air Force Base has constructed new housing facilities for military personnel, upon which Cherry Hills relies for many of its tenants. Cuts in military spending may also impact McConnell Air Force Base and thereby impact Cherry Hills. Forest Park Village Apartments is currently in the midst of a four-year capital improvement program. Exterior renovations are largely complete, and interior upgrades are in process. The capital program is needed to allow the property to compete with numerous other apartment communities in the Northeast Columbus submarket. Forest Park Village represents a common property in the submarket, with no distinguishing characteristics other than basements in all its units. The submarket is very competitive, and many of the competing properties have been renovated in the past few years. The capital program will allow Forest Park Village to maintain its competitiveness;occupancy rate stood at 92% at year end. Occupancy rates in the submarket in which the property is located range from 92% to 95%. Forest Park Village represents a common property in the submarket, with no distinguishing characteristics other than basements in all its units. The submarket is very competitive, with many apartment communities competing for tenants. Many of the competing properties have been renovated in the past few years. To maintain its position in the submarket, Forest Park Village will need to be renovated as well. Occupancy rates at Heather Square Apartments typically run 2 or 3 percentage points above the market due to the excellent curb appeal of the property. The property also is able to command rental rates slightly higher than most of its competition. Competition is mixed in the Dallas submarket where Heather Square is located. As long as the local economy remains strong, it is anticipated that the property will do well in competition with both older properties and new construction under development. Annual absorption of apartment units has roughly equalled newly constructed units the past two years. Lantern Tree Apartments has maintained occupancy and rental rates higher than its competition due to spacious and attractive floor plans. The average area occupancy rate is 95%, but Lantern Tree usually exceeds that level. Depending on the size of the unit, rent per square foot at Lantern Tree averages 13% to 30% higher than its competition. The property appeals to single, upper-middle class residents. The principal competitive disadvantage of the property is that its location is set back from the main thoroughfare reducing its drive-by visibility. The economy in Meridian West Apartments' submarket has improved during the past year. The area's major employer, Boeing, has increased its activity in the area. As a result, rental and occupancy rates in the area are on the upswing. Meridian West's occupancy rate improved in 1995 over 1994. Management plans to increase rental rates and eliminate discounts in 1996. Meridian West competes primarily with better quality apartment communities, and thus the Partnership generally expects rental and occupancy rates lower than local market rates. Capital improvements placed in service during 1995 and 1994 were critical to allow the property to compete effectively with its better-quality competition. Occupancy rates at Pennbrook Apartments are in-line with the 95% average of the submarket where the property is located. Extensive capital improvements during 1991-1993 have positioned the property to compete effectively for the middle-class, single residents that dominate its resident profile. The Dallas market is expected to remain strong. For the past two years, new apartment construction has roughly equaled the number of apartment units absorbed by the market. Absorption is expected to lag construction in 1996, but the surplus will likely be limited to newer, high-quality apartment properties and should have little effect on Pennbrook. Pennbrook has been well maintained, and should compete effectively with the newer developments. Rockborough Apartments boasts excellent curb appeal, which has enabled the property to maintain occupancy levels a few percentage points above the 94% market average. Rockborough compares well to the established 18 apartment communities in the area. New construction is going in the area, but at rental rates substantially higher than the rates charged at Rockborough. The Dallas area economy is expected to remain strong. New apartment construction is expected to exceed absorption in 1996, but the surplus units will likely be limited to newer, high-quality apartment properties and should have little effect on Pennbrook. The area surrounding Rolling Hills Apartments is experiencing strong growth. Capital improvements at Rolling Hills the past two years have upgraded the property to compete more effectively with the high-quality apartment communities in the immediate area. Rolling Hills offers the largest floor plans in the area. The interiors of the units are dated, necessitating scheduled 1996 improvements to unit interiors. Occupancy rates are comparable to the market's 96% average, but average rental rates are lower than the market. Rolling Hills is a good quality property competing against even-better quality properties. Ruskin Place Apartments has steadily improved its performance over the past several years despite competitive pressures from newer apartment properties. The newer properties, and new construction in progress, have put upward pressure on local rental rates. Ruskin Place Apartments has been able to offer its units at lower, but still rising rental rates. This trend is expected to continue given the population increases and stable economic conditions in the local area. The Nashville economy is expected to remain strong through 1997, and developers are planning new apartment projects in the area of Sheraton Hills Apartments. Older properties, such as Sheraton Hills, have been able to increase rental rates an average of 6% to 7% since 1993. Although Sheraton Hills will not compete directly with the new construction, the new construction will tend to slow the increases in rental rates that older properties may expect in coming years. The capital improvements placed in service at Sheraton Hills over the past two years allow the property to compete effectively against older properties in the area. Westgate Apartments is in need of extensive capital improvements to compete effectively with other area apartment properties. The exterior and interiors of the units are dated and unattractive. Occupancy rates are averaging six percentage points lower than competing properties, and rental rates are averaging approximately 85% of the average rental rates charged by competing properties. Nine percent of Westgate's units are three and four bedroom floor plans, which are the only three and four bedroom units in the area. The property also has a good location in a desirable school district. The economy of the Fort Worth sub-market where Westridge Apartments is located remains weak due to the closing of nearby Carswell Air Force Base and layoffs at Lockheed. Weakness in the area economy has prevented any meaningful rental increases since 1990. Westridge is well maintained and offers attractive floor plans. The occupancy rate has averaged 5 percentage points higher than competitive properties in the area. The physical condition of Williamsburg Apartments is good, with only minor capital improvements needed. The property offers attractive floor plans with interiors that are being upgraded with new fixtures. The Shreveport market has experienced modest improvement over the past three years. Nearby Barksdale Air Force Base and a growing gambling industry provide the employment base for many of the property's tenants. The occupancy rate at Williamsburg usually exceeds market occupancy rates by two percentage points due to its excellent curb appeal. New apartment developments within a mile of the property are a concern. Additional information concerning the Partnership, its assets, operations and management is contained in its annual reports on the Form 10-K and quarterly reports on the Form 10-Q and other filings with the Commission. Such reports and filings are available for inspection at the Commission's principal office in Washington, D.C., and at its regional offices in New York, New York and Chicago, Illinois. SECTION 10. VOTING BY THE PURCHASER. Based upon the number of Units it currently owns (together with an affiliate) and the number of Units it acquires pursuant to the Offer, the Purchaser may be in a position to influence control of the Partnership and to influence voting decisions with respect to the Partnership and the Purchaser may seek to remove the Partnership's general partner and McREMI. Under the Partnership Agreement, Limited Partners holding a majority of the Units are entitled to remove the Partnership's general partner at any time for cause and, beginning on November 12, 1995, without cause. Such removal may require the Partnership to pay a fee and other payments to the Partnership's general partner and/or its affiliates and may result in acceleration of certain of the Partnership's debt obligations and/or the Partnership's 19 incurrence of expenses pursuant to provisions of such debt obligations, which may have an adverse effect on the Partnership. See Section 8 of the Offer to Purchase. 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. Reorganization Transactions require a Supermajority Vote (as those terms are defined in the Partnership Agreement) and the consent of the Partnership's general partner prior to effectuation. Generally, "Reorganization Transactions" are defined as transactions in connection with which any Limited Partners will be issued securities of any other entity in exchange for, or as a distribution with respect to, Units; "Supermajority Vote" is defined as the vote of the Limited Partners who own more than 80% of the total outstanding Units excluding Units held by Interested Persons; and "Interested Persons" are defined as, among others, persons who beneficially own 10% or more of the outstanding Units, excluding certain affiliates of the Partnership's general partner. SECTION 11. INFORMATION CONCERNING THE PURCHASER AND CERTAIN AFFILIATES OF THE PURCHASER. Riverdale is the general partner of the Purchaser, and Mr.Icahn is the controlling member of Riverdale. Unicorn Associates Corporation ("Unicorn") is a New York corporation indirectly wholly-owned by Mr. Icahn and of which he is the sole director. Unicorn purchased Units in the 1995 Offer from Limited Partners resident in California, pursuant to an assignment from the Purchaser of the right to purchase such Units. The business address of Mr.Icahn is 114 W. 47th Street, New York, New York 10036. The address of the principal office of each of the Purchaser, Riverdale and Unicorn is 100 South Bedford Road, Mount Kisco, New York 10549. Each of the Purchaser and Unicorn is primarily engaged in the business of investing in securities. Riverdale is primarily engaged in the business of investing in securities, including interests in real estate limited partnerships, and acting as general partner of the Purchaser. Mr.Icahn's present principal occupation or employment is set forth on ScheduleI attached hereto and is incorporated herein by reference. The name, position, citizenship, business address, present principal occupation or employment, material occupations, positions or employments during the past five years and the principal business address of any business corporation or other organization in which such occupation, position or employment was carried on, of each executive officer/manager of Riverdale and the executive officer of Unicorn are set forth on ScheduleI attached hereto and are incorporated herein by reference. Neither the Purchaser, Riverdale, Unicorn, Mr.Icahn, nor any executive officer/manager of Riverdale or executive officer of Unicorn has, during the past five years, (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) been 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 below and in Sections 8 and 13 of the Offer to Purchase, neither the Purchaser, Riverdale, Unicorn nor, to the best of the Purchaser's knowledge, any of the Persons listed on ScheduleI nor any affiliate of the foregoing (i) beneficially owns or has a right to acquire any Units, (ii) has effected any transaction in the Units in the past 60 days, or (iii) has any contract, arrangement, understanding or relationship with any other persons 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. The Purchaser and Unicorn currently own 8,132 (representing approximately 7.4% of the outstanding) Units. Of such Units, 6,348 are owned by the Purchaser and the balance are owned by Unicorn. Ten of such Units were purchased in an auction transaction utilizing the Chicago Partnership Board, Inc. on July 31, 1995 and the balance were purchased pursuant to the 1995 Offer. Set forth below is financial information with respect to the Purchaser. The Purchaser is not subject to periodic reporting requirements under the Exchange Act. The financial information set forth below is unaudited. The Purchaser does not prepare audited financial statements in the ordinary course of its business and, accordingly, such audited financial statements were not available or obtainable without unreasonable cost or expense. 20 HIGH RIVER LIMITED PARTNERSHIP BALANCE SHEET JUNE 30, 1996 (UNAUDITED) (IN 000'S) ASSETS: Cash and Cash Equivalents ....................................... $ 10,689 Marketable Securities ........................................... 419,409 Investment in Partnerships--Real Estate L.P. .................... 17,279 Investment in Partnership--Other ................................ 833 -------- Total Assets ................................................... $448,210 ======== LIABILITIES: Due to Brokers .................................................. $162,614 Securities Sold Not Yet Purchased at Market Value ............... 4,045 -------- Total Liabilities .............................................. $166,659 PARTNERS' CAPITAL ................................................ 281,551 -------- TOTAL LIABILITIES AND PARTNERS' CAPITAL .......................... $448,210 ======== 21 HIGH RIVER LIMITED PARTNERSHIP STATEMENT OF INCOME SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED) (IN 000'S) INCOME: Interest .......................................................... $ 99 Capital Gains ..................................................... 4,542 Dividends ......................................................... 7,532 Unrealized Loss on Securities ..................................... (3,152) ------- 9,021 ------- EXPENSE: Interest .......................................................... $ 4,079 Other ............................................................. 29 ------- 4,108 ------- NET INCOME ......................................................... $ 4,913 =======
22 SECTION 12. SOURCE OF FUNDS. The Purchaser expects that approximately $18,366,840 will be required to purchase 102,038 Units (consisting of the aggregate number of outstanding Units as of February 16, 1996, net of Units owned by the Purchaser and its affiliate), if tendered (exclusive of related fees and expenses). The Purchaser will obtain all of those funds from its liquid assets. SECTION 13. BACKGROUND OF THE OFFER. Prior Contacts with the Partnership. On or about July 27, 1995, the McNeils and Mr. Icahn spoke by telephone. Mr. Icahn told the McNeils that he had been informed that they were interested in selling the Partnership's general partner. The McNeils said that they were not interested in selling the Partnership's general partner but urged Mr. Icahn to contact their counsel, Scott Wallace. In the conversation with the McNeils, Mr. Icahn indicated that he intended to make a tender offer for Units and a joint tender offer was discussed. No agreements were reached. In the days that followed up to on or about August 1, 1995, Mr. Icahn participated in several telephone conversations with Mr. Wallace. The same subjects were explored and Mr. Icahn confirmed his intention to conduct a tender offer for Units. Again, no agreements were reached. One of these conversations, which took place on or about August 1, 1995 among Scott Wallace, Mr. Icahn and a former counsel for the Partnership, became a subject of the litigation described below. The Purchaser commenced a tender offer to purchase Units in the Partnership and nine other Partnerships on August 4, 1995 (the "1995 Offer" and together with the Purchaser's tender offers to purchase Units of the other Partnerships, the "1995 Offers"). On August 9, 1995, the McNeils delivered a letter to the Purchaser claiming that the former counsel divulged confidential information concerning the McNeils' personal tax situation during the August 1, 1995 telephone conversation, that the 1995 Offers were based on confidential information and that the Partnership would not mail the 1995 Offers unless the Purchaser and Mr. Icahn signed a certificate concerning the purported confidential information. On August 10, 1995, the Purchaser commenced an action in the United States District Court for the Southern District of New York (the "District Court") against the Partnership's general partner, its corporate general partner, and the McNeils (collectively "Management"), as well as the Partnership and the other Partnerships (collectively with Management, the "Defendants") alleging Management breaches of fiduciary duty and that the Defendants' failure to mail the 1995 Offers violated the Securities and Exchange Commission's Rule 14d-5. On that same day, the District Court, upon the Purchaser's application, issued a preliminary injunction against the Defendants and ordered the Defendants to either furnish the Purchaser with a list of the names and addresses of the Limited Partners or mail the Offer to the Limited Partners on the Purchaser's behalf. The Defendants elected to mail. On August 16, 1995, the Partnership, through its counsel, declined the Purchaser's request for a list of the Limited Partners, stating that the list was confidential and since the Purchaser was not a Limited Partner, such information was not required to be provided under applicable law. On August 17, 1995, the Purchaser sent a letter to the Partnership's general partner requesting that the general partner agree to cooperate in satisfying certain conditions of the 1995 Offers and to facilitate the transfer of Units. On August 18, 1995, the Defendants served and filed a Counterclaim and Answer (the "Counterclaim"). Defendants' Counterclaim sought an injunction and alleged that the 1995 Offers were made in violation of federal securities laws because, among other things, they failed to disclose that the Purchaser based its Offers on confidential information. This action was dismissed without prejudice in November 1995. In November 1995, the Purchaser filed a second complaint in the District Court alleging, among other things, that the Schedule 14d-9 filed by the Partnership's general partner in connection with the 1995 Offers was materially false and misleading in violation of federal securities laws and that the general partner wrongfully refused to admit the Purchaser as a limited partner to the Partnership and other Partnerships and asserting certain derivative claims on behalf of the Partnership and certain of the other Partnerships. The general partner subsequently admitted the Purchaser as a limited partner of the Partnership and such other Partnerships. This action was dismissed without prejudice on January 31, 1996. On August 22 and 23, 1995, Mr. Icahn and a representative met with the McNeils and their representatives regarding possible settlement of the pending litigation respecting the 1995 Offers. Those discussions involved, among other things, the possibility of a transaction pursuant to which Mr. Icahn or his affiliates would acquire substantially all of the interest in the Partnership's general partner and would acquire McREMI. In connection with those settlement discussions, the Partnership's general partner and the Purchaser agreed to a standstill arrangement whereby, among other things, the Purchaser agreed to extend the expiration date of the 1995 23 Offers and the Purchaser and its affiliates were permitted to conduct reasonable due diligence (the "Due Diligence") with respect to the Partnership's general partner, the Partnerships and their affiliates (subject to certain confidentiality obligations). The Purchaser, Mr. Icahn and their affiliates also agreed, subject to certain exceptions, that, prior to August 24, 1996, they would not attempt to acquire any securities of partnerships (other than the Partnerships) controlled by Robert A. McNeil, or propose to enter into business combinations with them or make proxy solicitations with respect thereto. From late August through September 19, 1995, representatives of Mr. Icahn engaged in a "due diligence" review of certain non-public information regarding McREMI, the Partnership's general partner, the Partnerships and their affiliates, involving meetings with senior management and others, telephone conferences and the exchange and review of documents. Between August 24 and September 19, 1995, Mr. Icahn and representatives of Mr. Icahn and his affiliates (including the Purchaser) and the McNeils, the Partnership's general partner and their representatives engaged in ongoing negotiations involving, among other things, discussion of: (i) a transaction in which an affiliate of Mr. Icahn would acquire substantially all of the interests in the Partnership's general partner and would acquire McREMI; (ii) potential modifications to the outstanding 1995 Offers; (iii) cooperation to be provided by the Partnership's general partner to facilitate the 1995 Offers; and (iv) agreements with respect to settlement of outstanding litigation, both among the parties and against the Partnership's general partner, McREMI and Mr. and Mrs. McNeil, among others, instituted following the commencement of the 1995 Offers. The negotiations and due diligence review involved extensive discussion of and negotiation concerning many facets of the financial condition, tax aspects, operations, and business of McREMI, the Partnership's general partner, the Partnerships and their affiliates. On September 19, 1995, these negotiations reached an impasse and were discontinued. Additional conversations after that date failed to result in a resumption of negotiations. On August 12, 1996, in anticipation of the commencement of the Offer and Tender Offers for Units of certain other Partnerships, the Purchaser sent a letter to the Partnership and the other Partnerships requesting lists of the names, current residence or business addresses and certain other information concerning the Limited Partners of the Partnership and such other Partnerships. On August 19, 1996, the Partnerships commenced an action against the Purchaser, Mr. Icahn and certain of their affiliates (collectively, the "Purchaser Defendants") in United States District Court for the Central District of California (the "California Federal Action") seeking, among other things, to declare that the Partnerships are not required to provide the Purchaser with a current list of the Limited Partners on the grounds that the Purchaser Defendants commenced a tender offer in violation of the federal securities laws by filing the Schedule 13D Amendment on August 5, 1996. See Section 8 of the Offer to Purchase. On August 19, 1996, the Partnerships, through their counsel, responded to the Purchaser's August 12 letter by refusing to provide the Purchaser with a current list of the Limited Partners for the reasons set forth above. On August 23, 1996, the Purchaser Defendants filed, among other documents, (a) an answer to the Partnerships' complaint in the California Federal Action denying the allegations contained therein and asserting four affirmative defenses; (b) a counterclaim seeking, among other things, injunctive relief requiring the Partnerships to either make available to the Purchaser a copy of the lists of Limited Partners or grant the Purchaser permission to inspect and copy such lists; and (c) an application for a temporary restraining order ("TRO") and a preliminary injunction seeking access to the lists of Limited Partners. On September 6, 1996, the Purchaser Defendants' TRO application was denied. On September 12, 1996, the Partnerships filed an answer to the Purchaser Defendants' counterclaim asserting six affirmative defenses and alleging that the Purchaser Defendants were denied access to the lists of Limited Partners because their requests for the lists were in connection with illegal tender offers. Discovery is currently underway in the California Federal Action and the matter is expected to go to trial in mid-October 1996. Trading History of the Units. The Trading Summary for the period April 1, 1996 through May 30, 1996 ("Summary Period") appearing in the May/June 1996 issue of the Partnership Spectrum ("Trading Summary") indicated that, during the Summary Period, an aggregate of 120 Units were traded in a total of 8 trades at a price range of $125 to $143.36 per Unit and at a weighted average of $139.29 per Unit. Limited Partners should be aware that the Form 10-K states as follows: "[t]here is no established public trading market for limited partnership units nor is one expected to develop." Therefore, the prices reflected in the Trading Summary may not accurately reflect the value of the Partnership's assets or of Units, and Limited Partners may or may not be able to sell their Units independently of the Offer at the prices reflected in the Trading Summary. Limited Partners should be aware that the Purchase Price in 24 the Offer is approximately 29% higher than the weighted average price for the Summary Period, as reflected in the Trading Summary. Determination of the Purchase Price. As described in Section 8 of the Offer to Purchase, the Purchaser agreed, in the Letter Agreement, to commence a Tender Offer for any and all Units of the Partnership (and certain other Partnerships) at a price that is not less than 75% of the estimated liquidation value of the Units. The Purchase Price represents 75% of the Purchaser's estimate of the Units' liquidation value, as determined using the methodology described below. In estimating liquidation value per Unit, the Purchaser first estimated net asset value ("NAV Estimate"). The Purchaser prepared its NAV Estimate based on a hypothetical sale (without taking into account any transaction costs) of all of the Partnership's properties at their estimated aggregate value and the distribution to the partners of the gross proceeds of that sale (net of existing indebtedness), together with the Partnership's cash and proceeds from temporary investments. The NAV Estimate prepared by the Purchaser 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. The Purchaser estimated the aggregate value of the Partnership's properties in a hypothetical sale by reviewing publicly available financial information relating to the Partnership for the fiscal year ended December 31, 1995 and six months ended June 30, 1996, in order to determine an adjusted net income (reduced by an amount intended to reflect normal capital expenditures and operating expenses) of $8,219,635, and then capitalized that amount at 10.5%, which the Purchaser believes represents an appropriate capitalization rate for a real estate portfolio such as the Partnership's. A sale of one of the Partnership's assets occurred subsequent to June 30, 1996. Since the financial information relating to the Partnership for the six month period ending June 30, 1996 did not reflect this event, the Purchaser made certain adjustments to its estimated NAV which included deducting the selling price, and adding cash proceeds and the mortgage receivable to its estimated NAV. As a result of that review process, the Purchaser derived an NAV Estimate of $29,073,125, or $263.89 per Unit (which includes cash and cash equivalents equal to approximately $2,880,314 or $26.14 per Unit). It should be noted that, while the Purchaser has access to certain non-public information ("Due Diligence Information") relating to the Partnership and its properties provided to it in 1995 in connection with its Due Diligence (as described above in this Section 13 under "Prior Contacts with the Partnership"), the Purchaser does not have access to more current information concerning the Partnership or its properties, other than information that is publicly available, that the Purchaser's calculations are based on rough estimates and that the values resulting therefrom may not be indicative of actual values to any extent. It should also be noted that investors may disagree as to the appropriate capitalization rate to be applied, and Limited Partners are advised that the utilization of a lower capitalization rate results in a higher estimate of aggregate value. In estimating liquidation value per Unit, the Purchaser adjusted its NAV Estimate by deducting from that amount a reserve equal to 4% of the projected property selling prices, which represents the Purchaser's estimate of the estimated costs of brokerage commissions, title costs, legal fees, real estate transfer taxes and other disposition expenses (assuming no prepayment penalties on indebtedness encumbering the properties). The Purchaser further adjusted its NAV Estimate to reflect the Partnership's other assets (excluding prepaid and deferred expenses) and liabilities. Specifically, the Purchaser added the amounts of cash segregated for security deposits, insurance proceeds receivable, accounts receivable and escrow deposits shown on the Partnership's unaudited balance sheet at June 30, 1996 and subtracted accounts payable, accrued property taxes, accrued interest, other accrued expenses and security deposits and deferred rental revenue. The result of $239.82 per Unit represents the Purchaser's estimate of the aggregate net liquidating proceeds (before provision for the costs described in the following sentence) that could be realized in an orderly liquidation of the Partnership, based on the assumptions implicit in the calculations described above. The Purchaser did not deduct any amounts in respect of the costs of conducting a consent solicitation in order to obtain the Limited Partners' approvals for the sales, as may be required by the Partnership Agreement, or winding up the Partnership, because of the difficulty of estimating those amounts. 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 fair market 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 and its partners would continue to be exposed to the risk of fluctuations in asset values because of changing market conditions and other factors. For any property sales in which the Partnership is required to indemnify the buyer for 25 matters arising after the closing, a portion of the sales proceeds could be held by the Partnership until all possible claims were satisfied, further extending the delay in the receipt by the Limited Partners of liquidating proceeds. Because of these factors, the Purchaser believes the actual current value of a Unit may be substantially less than its estimate of the liquidation value. Conversely, there is a substantial likelihood that the value realizable in an orderly liquidation could be greater than the estimated liquidation value. A reduction in either operating expenses or capital expenditures would result in a higher liquidation value under the method described above. Similarly, a higher liquidation value would result if a buyer applied lower capitalization rates (reflecting a willingness to accept a lower rate of return on its investment) to the net operating income generated by the Partnership's properties than the capitalization rates applied by the Purchaser. Furthermore, the analysis described above is based on a series of assumptions, some of which may not be correct. Accordingly, this analysis should be viewed merely as indicative of the Purchaser's approach to valuing Units and not as any way predictive of the likely result of any future transactions. 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, (iv) requires divestiture by the Purchaser of any Units, (v) causes any material diminution of the benefits to be derived by the Purchaser as a result of the transactions contemplated by the Offer, or (vi) might materially adversely affect the business, properties, assets, liabilities, financial condition, operations, results of operations or prospects of the Purchaser or the Partnership; (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; 26 (e) the Partnership's general partner 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 admission of the Purchaser to the Partnership, simultaneously with the consummation of the Offer, as a substitute Limited Partner in respect of the Units purchased in accordance with the Partnership Agreement and applicable law; (f) the Partnership's general partner shall not have furnished to the Purchaser such information as is necessary, in the Purchaser's judgment, to verify that the person purporting to transfer Units to the Purchaser pursuant to the Offer is in fact the owner of such Units as reflected on the Partnership's books and records; (g) the Partnership's general partner 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 and (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; (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 partner shall have authorized, proposed or announced its intention to propose any merger, consolidation or business combination transaction, acquisition of assets, disposition of assets or material change in its capitalization, or any comparable event not in the ordinary course of business; (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 partner 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. No assurance can be given that the Partnership's general partner will voluntarily take the actions referred to in paragraphs (e) and (f). Accordingly, in order to cause the Partnership's general partner to take such actions, the Purchaser may be required to take appropriate actions, including, without limitation, the commencement of litigation, the effect of which may be to delay payment for tendered Units (except to the extent, if any, that the Purchaser waives the applicable conditions). 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 27 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 of the Offer to Purchase. 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 IBJ Schroder Bank & Trust Company 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. 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). HIGH RIVER LIMITED PARTNERSHIP September 20, 1996 28 SCHEDULE I Set forth below are the name and position of: (i) the controlling member and each executive officer/manager of Riverdale LLC ("Riverdale"); and (ii) the controlling stockholder and sole director and the executive officer of Unicorn Associates Corporation ("Unicorn"). The business address of each of the controlling member and each executive officer/manager of Riverdale and the controlling stockholder and sole director and the executive officer of Unicorn is 114 W. 47th Street, New York, New York 10036. The controlling member and each executive officer/manager of Riverdale and the controlling stockholder and sole director and the executive officer of Unicorn are each citizens of the United States of America. Name Position ---- -------- Carl C. Icahn .................. Member (Riverdale); Controlling Stockholder and Sole Director (Unicorn) Edward E. Mattner .............. President/Manager (Riverdale); President, Secretary and Treasurer (Unicorn) Robert J. Mitchell ............. Vice President and Treasurer/Manager (Riverdale) The following sets forth the (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, of: (i) the controlling member and each executive officer/manager of Riverdale; and (ii) the controlling stockholder and sole director and the executive officer of Unicorn. Name Principal Occupations for the Last Five Years ---- --------------------------------------------- Carl C. Icahn ......... Mr. Icahn's present principal occupation is acting as President and a Director of Icahn Holding Corporation, a Delaware corporation ("IHC"), and Chairman of the Board and a Director of various of IHC's subsidiaries, including ACF Industries, Incorporated, a New Jersey corporation ("ACF"). IHC 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, N.Y. 10549. ACF is primarily engaged in the business of leasing, selling and manufacturing railroad freight and tank cars and its address is 3301 Rider Trail South, Earth City, Missouri 63045. Mr. Icahn has been President and a Director of IHC since August 1982 and has been a director of ACF since June 1984 and Chairman of the Board of ACF since October 1984. Mr. Icahn also maintains similar positions with various of ACF's affiliates, including: (i) since 1968, Mr. Icahn has been Chairman of the Board, President and a Director of Icahn & Co., Inc., a Delaware corporation (collectively with its predecessor companies by merger, ("Icahn & Co."), which is a registered broker-dealer and a member firm of the New York Stock Exchange, Inc. and whose address is 1 Wall Street Court, New York, N.Y. 10005; (ii) since November 1990, Mr.Icahn has been Chairman of the Board and a Director of American Property Investors, Inc., a Delaware corporation ("API") which is primarily engaged in the business of acting as general partner of American Real Estate Partners, L.P., and whose address is 90 South Bedford Road, Mount Kisco, N.Y. 10549; and (iii) from 1986 until January 1993, when he resigned, Mr. Icahn was a Director and Chairman of the Board of Trans World Airlines, Inc. ("TWA"), whose address is One City Centre, 515 N. Sixth Street, St. Louis, Missouri 63101. Since June 1993, Mr. Icahn has also served as a Director of Astrum International Corp., a Delaware holding company ("Astrum") whose principal subsidiaries are Samsonite Corporation, a manufacturer and distributor of luggage, Culligan International Company, a manufacturer of water purification and treatment equipment and McGregor Corporation, a manufacturer and I-1 distributor of apparel products and a licensor of apparel brand names. Astrum's address is 40301 Fisher Island Drive, Fisher Island, Florida 33129. Edward E. Mattner ..... Mr. Mattner's present principal occupation is acting as a securities trader for various affiliates of Mr. Icahn. Mr.Mattner has served in this capacity since May 1976. Robert J. Mitchell .... Mr. Mitchell's present principal occupation is acting as Senior Vice President Finance of ACF. ACF is primarily engaged in the business of leasing, selling and manufacturing railroad freight and tank cars and its address is 3301 Rider Trail South, Earth City, Missouri 63045. Mr. Mitchell has served as Executive Vice President Finance since March 1995 and also served as Secretary of ACF since August 1993, Treasurer from December 1984 to March 1995 and Assistant Secretary from September 1986 to August 1993. Mr. Mitchell has also served as Treasurer (since May 1988) and Chief Financial Officer (since March 1995) of American Railcar Industries, Inc., a subsidiary of ACF which is primarily engaged in the business of repairing, refurbishing, painting and maintaining railcars and in manufacturing and selling parts for railcars and other industrial purposes. The address of American Railcar Industries, Inc. is 3301 Rider Trail South, Earth City, Missouri 63045. Mr. Mitchell became the Treasurer of TWA, whose address is One City Centre, 515 N. Sixth Street, St. Louis, Missouri 63101, in 1987 and held that position until he resigned, effective as of January 5, 1993. From March 1982 until November 1984, Mr.Mitchell was a Vice President-Department Head of National Westminster Bank, USA, located at 175 Water Street, New York, N.Y. 10038. I-2 EXHIBIT A 12. ISSUANCE, TRANSFER, AND EXCHANGE OF CERTIFICATES 12.2. Registration of Units; Registration of Transfer and Exchange. (c) Limited Partners shall have the right to assign ten (10) or more whole Units, provided, however, unless prohibited by any applicable state securities law, three (3) Units may be acquired or retained by IRA or Keogh Plans, and provided further that a Limited Partner must assign all of his Units if he would otherwise retain less than the minimum amount. Every Certificate surrendered for registration of transfer or exchange shall be duly endorsed on the reverse side thereof, or be accompanied by a written instrument of transfer in form satisfactory to the General Partner or the Transfer Agent, as the case may be, duly executed by the Limited Partner or such Limited Partner's attorney duly authorized in writing. Every Certificate surrendered for registration of transfer shall be accompanied by a Transfer Application or other written instrument of acceptance to the same effect in form satisfactory to the General Partner or the Transfer Agent, as the case may be, duly executed by the transferee or such transferee's attorney duly authorized in writing. Notwithstanding anything to the contrary in this Paragraph 12, the General Partner, in its discretion and upon notice to the Limited Partners, may adopt an alternative procedure for the registration of Units and transfer of Units, including, without limitation, providing for uncertified securities. A-1 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: IBJ SCHRODER BANK & TRUST COMPANY By Mail: P.O. Box 84 Bowling Green Station New York, New York 10274-0084 Attn: Reorganization Operations Department By Hand/Overnight Delivery: One State Street New York, New York 10004 Attn: Securities Processing Window, Subcellar One, (SC-1) By Facsimile: (212) 858-2611 Confirm By Telephone: (212) 858-2103 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) 253-3814 (Toll Free) EX-2 3 ASSIGNMENT OF PARTNERSHIP INTEREST ASSIGNMENT OF PARTNERSHIP INTEREST TO TENDER UNITS OF LIMITED PARTNERSHIP INTEREST OF McNEIL REAL ESTATE FUND IX, LTD. FOR $180.00 NET PER UNIT PURSUANT TO THE OFFER TO PURCHASE DATED SEPTEMBER 20, 1996 AS AMENDED FROM TIME TO TIME OF HIGH RIVER LIMITED PARTNERSHIP THE OFFER AND RELATED WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON OCTOBER 18, 1996, UNLESS THE OFFER IS EXTENDED. Unitholders desiring to tender their Units should complete and sign this Assignment of Partnership Interest, and forward it to the Depositary at the address or facsimile number set forth below AND DELIVER ALL CERTIFICATES REPRESENTING THEIR INTERESTS IN UNITS TENDERED (THE "CERTIFICATES") TO THE DEPOSITARY AT THE ADDRESS SET FORTH BELOW. 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: IBJ SCHRODER BANK & TRUST COMPANY
By Mail: By Facsimile: To Confirm: By Hand/Overnight Delivery: P.O. Box 84 (212) 858-2611 (212) 858-2103 One State Street Bowling Green Station New York, New York 10004 New York, New York 10274-0084 Attn: Securities Processing Attn: Reorganization Operations Window, Subcellar One, Department (SC-1)
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN COMPLETING THE ASSIGNMENT OF PARTNERSHIP INTEREST, PLEASE CALL THE INFORMATION AGENT, BEACON HILL PARTNERS, INC., AT (800) 253-3814 (TOLL-FREE) OR AT (212) 843-8500 (COLLECT). DELIVERY OF THIS ASSIGNMENT OF PARTNERSHIP INTEREST OR ANY OTHER REQUIRED DOCUMENTS TO AN ADDRESS OTHER THAN THE ONE SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTION VIA FACSIMILE OTHER THAN AS 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 HIGH RIVER LIMITED PARTNERSHIP OFFER TO PURCHASE LIMITED PARTNERSHIP UNITS OF MCNEIL REAL ESTATE FUND IX, LTD. DATED SEPTEMBER 20, 1996 (AS IT MAY BE AMENDED FROM TIME TO TIME, THE "OFFER TO PURCHASE"). Ladies and Gentlemen: The undersigned hereby tenders to High River Limited Partnership, a Delaware limited partnership (the "Purchaser"), the number of the undersigned's units of limited partnership interest specified below (together with the Certificates to the extent of such units of limited partnership interest specified below, and all right, title and interest associated therewith, the "Units") in McNeil Real Estate Fund IX, Ltd., a California limited partnership (the "Partnership"), at a price of $180.00 per Unit (the "Purchase Price"), net to the seller and its assigns in cash, without interest, upon 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 Purchase Price will automatically be reduced by the aggregate amount of distributions per Unit, if any, made or declared by the Partnership between August 15, 1996, and the date of payment of the Purchase Price by the Purchaser. 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. 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 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. The undersigned understands that upon acceptance for payment of and payment for the tendered Units, the Purchaser will be entitled to seek admission to the Partnership as a Limited Partner in substitution for the undersigned as to all tendered Units. The undersigned irrevocably appoints the Purchaser, its general partner, and any designees of the Purchaser, as the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to exercise all voting and other rights with respect to the Units tendered by the undersigned and accepted for payment by the Purchaser, including without limitation, to deliver such Units and transfer ownership of such Units on the Partnership books maintained by the general partner 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. Such power-of-attorney and proxy shall be considered coupled with an interest in the tendered Units and is irrevocable. When the Units tendered hereby are accepted for payment pursuant to the Offer, all prior proxies and powers given by the undersigned with respect to the Units will, without further action, be revoked, and no subsequent proxies or powers may be given, and if given will not be effective. The Purchaser, its general partner and any designee of the Purchaser will, with respect to the Units, be empowered to exercise all voting and other rights of the undersigned as they, in their sole discretion, may deem proper, whether at any meeting of the Partnership's Limited Partners, by written consent or otherwise. The foregoing proxy and power may be exercised by the Purchaser or any of the other persons referred to above acting alone. The proxy and power-of-attorney granted by the undersigned to the Purchaser pursuant to this Assignment of Partnership Interest (and all related and associated rights, authority and power) shall be effective from acceptance for payment of the Units tendered and shall remain effective and be irrevocable until August 1, 2006. The Purchaser may assign such proxy and/or power-of-attorney to any person with or without assigning the related Units with respect to which such proxy and/or power-of-attorney was granted. In addition to and without limiting the generality of the foregoing, the undersigned hereby irrevocably (a) appoints any person nominated by the Purchaser, or any designee thereof (the "Agent"), as the undersigned's attorney-in-fact, with an 2 irrevocable instruction to the Agent to execute all or any instruments of transfer and/or other documents in the Agent's discretion in relation to the Units tendered hereby and to make all elections and do all such other acts and things as may in the opinion of the Agent be necessary or expedient for the purpose of, or in connection with, the undersigned's acceptance of the Offer and to vest in the Purchaser, or as it may direct, those Units as are purchased by the Purchaser; (b) authorizes and requests the Partnership and its general partner to take any and all acts as may be required to effect the transfer of the undersigned's Units to the Purchaser or the Purchaser's nominee and admit the Purchaser as a substitute Limited Partner in the Partnership; (c) authorizes the Purchaser and its designees to execute and deliver to the General Partner a change of address form instructing the General Partner 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 (d) agrees not to exercise any rights pertaining to the Units without the prior consent of the Purchaser. The undersigned hereby represents and warrants for the benefit of the Partnership and the Purchaser 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, or if the undersigned is not a United States Person, the undersigned does not own beneficially or of record more than 5 per cent 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. 3 SIGN HERE TO TENDER YOUR UNITS PLEASE BE SURE TO COMPLETE ALL SHADED AREAS LIMITED PARTNERS MUST ALSO COMPLETE BOX A AND BOX B ================================================================================ By executing this document in the space provided below, the undersigned Limited Partner (or authorized person signing on behalf of the registered Limited Partner) hereby: (i) evidences his agreement to and acceptance of all of the terms, provisions and matters set forth in this Assignment of Partnership Interest and in the Offer; 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 and B of this Assignment of Partnership Interest, which have been duly completed by the undersigned, are true and correct as of the date hereof. X Address: - ----------------------------------- -------------------------------- X - ----------------------------------- ---------------------------------------- Signature(s) of Limited Partners (Must be signed by registered Limited Partner(s) exactly as name(s) appear(s) on the Certificate(s) or in the Partnership's records. If signature is by an officer of a corporation, attorney-in-fact, agent, executor, administrator, trustee, guardian or other person(s) acting in fiduciary or representative capacity, please complete the line captioned "Capacity (Full Title)" and see Instruction 5.) Date: ------------------------------- In addition to signing your name(s) above, PLEASE PRINT YOUR NAME(S) in the following space: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Capacity (Full Title): ----------------------------- (The address to which a check and (if applicable) new certificate is to be sent should be filled in above. See Instructions 4 and 6.) ( ) -------------------------------- Area Code and Telephone Number Total Number of Units Owned:______________ Number of Units Tendered:____________ (See Instruction 4.) - -------------------------------------------------------------------------------- GUARANTEE OF SIGNATURE(S) (ALL SIGNATURES MUST BE SIGNATURE GUARANTEED--SEE INSTRUCTIONS 1 AND 5) Authorized Signature: Name of Firm: ---------------------------- ---------------------------- Name: Address: --------------------------------- --------------------------------- Date: Area Code and Tel. No.: --------------------------------- ------------------ ================================================================================ 4 ================================================================================ STATEMENT OF DESTROYED, LOST OR STOLEN CERTIFICATE(S) (IF REQUIRED - SEE INSTRUCTION NO. 11) TO BE COMPLETED ONLY IF YOU CANNOT LOCATE YOUR CERTIFICATES NAME & ADDRESS _________________________________________________________________ CITY/STATE/ZIP _________________________________________________________________ NUMBER OF UNITS OWNED_______________ PLEASE CHECK TO INDICATE IF YOU ARE MISSING EITHER OR BOTH OF THE FOLLOWING: UNIT CERTIFICATES _________ PARTNERSHIP AGREEMENT _________ 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 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, and make this Statement to the Purchaser, the Partnership, the general partner thereof and the transfer agent contemplated under the Partnership's partnership agreement (the "Transfer Agent") 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). I, in consideration of the proceeds of tendering the Units and the Certificate(s), agree to completely indemnify, protect and save harmless the Purchaser, the Partnership, the general partner thereof, the Transfer Agent, the Depository, 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. Signed and delivered this _____ day of _________, 1996. X____________________________________ X____________________________________ Signature(s) of Limited Partner(s) (Must be signed by registered Limited Partner(s) exactly as name(s) appear(s) in the Certificate(s) or in the Partnership's records. If signature is by an officer of a corporation, attorney-in-fact, agent, executor, administrator, trustee, guardian or other person(s) acting in fiduciary or representative capacity, please complete the line captioned "Capacity (Full Title)" and see Instruction 5.) Date: ________________________________ In addition to signing your name above, PLEASE PRINT YOUR NAME(S) in the following space:__________________________________________________________ Capacity (Full Title):__________________________________ ================================================================================ 5 IMPORTANT! LIMITED PARTNERS MUST ALSO COMPLETE BOTH BOX A AND BOX B BELOW. BOX A ================================================================================ SUBSTITUTE Form W-9 DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE Payer's request for Taxpayer Identification Number (TIN) Part 1--(a) Name (If joint names, list first and circle the name of the person or entity whose number you enter in Part 2 below). (See Guidelines if your name has changed.) (b) Business name (Sole Proprietors see Guidelines.) (c) Please check appropriate box: [ ] Individual/Sole Proprietor [ ] Corporation [ ] Partnership [ ] Other (d) Address (Number, Street, Apt. or Suite No., City, State and Zip Code). Part 3--Certification--Under penalties of perjury, I certify that: (a) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and (b) I am not subject to backup withholding because (i) I am exempt from backup withholding, (ii) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has notified me that I am no longer subject to backup withholding. Part 2--PLEASE PROVIDE YOUR TIN ON THE APPROPRIATE LINE BELOW AND CERTIFY BY SIGNING AND DATING BELOW. _____________________________ Social Security Number OR _____________________________ Employer Identification Number For Payees Exempt From Backup Withholding (See Part II of Guidelines) _____________________________ Part 3 Awaiting TIN [ ] Certification Instructions--You must cross out item (b) in Part 3 above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. SIGNATURE:_________________________ DATE:____________________ ================================================================================ 6 NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. ================================================================================ CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER (To be completed only if the box in Part 3 above is checked) I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (b) I intend to mail or deliver an application in the near future. I understand that (i) if I do not provide a taxpayer identification number within seven days after the Depositary receives my Awaiting TIN Certification, backup withholding, if applicable, will begin and continue until I furnish my taxpayer identification number, and (ii) if within sixty days the Depositary receives my taxpayer identification number on a new IRS Form W-9 or Substitute Form W-9, the Depositary will return amounts withheld through the date such IRS Form W-9 or Substitute Form W-9 is received. _____________________________________ _____________________________________ Signature Date ================================================================================ 7 BOX B ================================================================================ FIRPTA AFFIDAVIT--CERTIFICATE OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the transferee that withholding of tax is not required upon this disposition of a U.S. real property interest, the undersigned hereby certifies the following on behalf of the tendering Limited Partner named below: 1. The Limited Partner, if an individual, is not a nonresident alien for purposes of U.S. income taxation, and if not an individual, is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); 2. The name of the Limited Partner is _______________________________________; 3. The Limited Partner's Social Security Number (for individuals) or Employer Identification Number (for non-individuals) is ____________________; and 4. The Limited Partner's home address (in the case of an individual) or office address (in the case of an entity) is ____________________________________. I understand that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement I have made here could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete, and if the Limited Partner is not an individual, I further declare that I have authority to sign this document on behalf of the Limited Partner. ___________________________________________ ________________________________ Signature Date Title:_________________________________________________ ================================================================================ 8 INSTRUCTIONS TO ASSIGNMENT OF PARTNERSHIP INTEREST FOR MCNEIL REAL ESTATE FUND IX, LTD. FORMING PART OF TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. All signatures on the Assignment of Partnership Interest must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial bank, savings bank, credit union, savings and loan association or trust company having an office branch or agency in the United States, which is a participant in the Security Transfer Agent Medallion Program (each an "Eligible Institution"). 2. DELIVERY OF ASSIGNMENT OF PARTNERSHIP INTEREST. The Assignment of Partnership Interest is to be completed by all Limited Partners who wish to tender Units in response to the Offer. For a Limited Partner validly to tender Units, a properly completed and duly executed Assignment of Partnership Interest (or a facsimile thereof, if followed by the signed original), along with any and all Certificates, the required signature guarantees and any other required documents, must be received by the Depositary at one of its addresses set forth herein on or prior to the Expiration Date (as defined in the Offer to Purchase). 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. No alternative, conditional or contingent tenders will be accepted, and 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. 3. INADEQUATE SPACE. If the space provided herein is inadequate, additional information may be provided on a separate signed schedule attached hereto. 4. MINIMUM TENDERS/PARTIAL TENDERS. In order for a tender to be valid, a Limited Partner must satisfy the Minimum Units Requirements (as defined in the second paragraph of the Offer to Purchase). For further information regarding the Minimum Units Requirements, Limited Partners should refer to Exhibit A to the Offer to Purchase. If fewer than all the Units evidenced by any Certificate submitted are to be tendered, fill in the number of Units which are to be tendered in the box entitled "Number of Units Tendered." In such case, new Certificate(s) for the remainder of the Units that were evidenced by your old Certificate(s) will be sent to you, at the address set forth above, as soon as practicable after the expiration of the Offer. All Units represented by Certificates which are listed above and delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. 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 any of the Units tendered hereby are held of record by two or more joint holders, all such holders must sign the Assignment of Partnership Interest. 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 of their authority so to act must be submitted. 9 6. DELIVERY INSTRUCTIONS. The address to which a check and (if applicable) new Certificate should be sent (see Instruction 4) should be filled in next to the Limited Partner's signature. 7. WAIVER OF CONDITIONS. The Purchaser expressly reserves the absolute right, in its sole discretion, to waive any of the specified conditions of the Offer, in whole or in part, in the case of any Units tendered. 8. 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 at (800) 253-3814 (Toll-free). Copies of the Offer to Purchase and the Assignment of Partnership Interest may be obtained from the Information Agent by calling such number. 9. SUBSTITUTE FORM W-9. Each tendering Limited Partner is required to provide the Depositary with a correct taxpayer identification number ("TIN"), generally the Limited Partner's social security or federal employer identification number, on Substitute Form W-9, which is provided above. You must cross out item (b) in the Certification box on Substitute Form W-9 if you are subject to backup withholding. Failure to provide the information on the form may subject the tendering Limited Partner to 31 percent 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 Part 3 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 3 is checked, backup withholding, if applicable, will begin 7 days after the Depositary receives an Awaiting TIN Certification and will continue until you furnish your TIN. If within 60 days the Depositary receives your 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. 10. FIRPTA AFFIDAVIT. To avoid potential withholding of tax pursuant to Section 1445 of the Internal Revenue Code in an amount equal to 10 per cent 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 contained in the Assignment of Partnership Interest 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 Internal Revenue Code is not an additional tax. If withholding results in an overpayment of tax, a refund may be obtained from the IRS. 11. STATEMENT OF DESTROYED, LOST OR STOLEN CERTIFICATE(S). If you are unable to locate any of your Certificate(s), you must complete and sign the Statement of Destroyed, Lost or Stolen Certificate(s) set forth in the Assignment of Partnership Interest. IMPORTANT: THE ASSIGNMENT OF PARTNERSHIP INTEREST OR FACSIMILE COPY THEREOF (TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE. A FACSIMILE MUST BE FOLLOWED BY THE SIGNED ORIGINAL OF THE ASSIGNMENT OF PARTNERSHIP INTEREST AND SUCH REQUIRED DOCUMENTS. IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE COMPLETING THE ASSIGNMENT OF PARTNERSHIP INTEREST, PLEASE CALL THE INFORMATION AGENT, BEACON HILL PARTNERS, INC., AT (212) 843-8500 (COLLECT) OR AT (800) 253-3814 (TOLL-FREE). 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 such Limited Partner is an individual, the TIN is his or her social security number. If the Depositary is not provided with the correct TIN, the Limited Partner or other payee may be subject to penalties imposed by the Internal Revenue Service. 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 10 Substitute Form W-9. In order for a foreign person to qualify as an exempt recipient, that Limited Partner must submit to the Depositary a properly completed Internal Revenue Service Form W-8, signed under penalties of perjury, attesting to that Limited Partner's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions. If backup withholding applies, the Depositary is required to withhold 31 percent 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 Internal Revenue Service. PLEASE NOTE THAT 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. PURPOSE OF SUBSTITUTE FORM W-9. To prevent backup withholding on payments made to a Limited Partner or other payee with respect to Units purchased pursuant to the Offer, the Limited Partner is required to notify the Depositary of the Limited Partner's correct TIN by completing the Substitute Form W-9 provided above, and to certify (i) that the TIN provided on Substitute Form W-9 is correct (or that such Limited Partner is awaiting a TIN) and (ii) that the Limited Partner either (A) is exempt from backup withholding, (B) has not been notified by the Internal Revenue Service 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 Internal Revenue Service that the Limited Partner is no longer subject to backup withholding. Failure to provide the information requested on such Form or to make the certification requested may subject the tendering Limited Partner to 31 per cent federal income tax withholding on payments received by such Limited Partner (or other payee) with respect to Units that are accepted for payment pursuant to the Offer. WHAT NUMBER TO GIVE THE DEPOSITARY. The Limited Partner is required to give the Depositary the TIN (e.g., social security number or employer identification number) of the record owner of the Units. If the Units are held in more than one name or are not held in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 11 EX-3 4 TAX GUIDELINES GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. PURPOSE OF SUBSTITUTE FORM W-9 The Purchaser is required to file an information return with the IRS and, consequently, must get your correct TIN to report income paid to you. Use Substitute Form W-9 to give your correct TIN to the Depositary and, when applicable, (1) to certify the TIN you are giving is correct (or you are waiting for a number to be issued), (2) to certify you are not subject to backup withholding, or (3) to claim exemption from backup withholding if you are an exempt payee. Giving your correct TIN and making the appropriate certifications will prevent certain payments from being subject to backup withholding. WHAT IS BACKUP WITHHOLDING? Under certain conditions, the Purchaser or the Depositary must withhold and pay to the IRS 31% of payments made to you pursuant to the Offer. This is called "backup withholding." Payments that could be subject to backup withholding include interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding. If you give the Depositary your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return, your payments will not be subject to backup withholding. Payments you receive will be subject to backup withholding if: 1. You do not furnish your TIN to the Depositary, or 2. The IRS tells the Purchaser that you furnished an incorrect TIN, or 3. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or 4. You do not certify to the Depositary that you are not subject to backup withholding under 3 above (for reportable interest and dividend accounts opened after 1983 only), or 5. You do not certify your TIN. See the Part III instructions below for exceptions. Certain payees and payments are exempt from backup withholding and information reporting. See the Part II instructions below. HOW TO GET A TIN If you do not have a TIN, apply for one immediately. To apply, get Form SS-5, Application for a Social Security Number Card (for individuals), from your local office of the Social Security Administration, or Form SS-4, Application for Employer Identification Number (for businesses and all other entities), from your local IRS office. If you do not have a TIN, write "Applied For" in the space for the TIN in Part 2 of Substitute Form W-9, complete the certification, sign and date the form (an "Awaiting TIN Certification"), and give it to the Depositary. Backup withholding, if applicable, will begin 7 days after the Depositary receives an Awaiting TIN Certification and will continue until you furnish your TIN. If within 60 days the Depositary receives your TIN on a new IRS Form W-9 or copy of the Substitute Form W-9 provided herewith, the Depositary will return amounts withheld through the date such IRS Form W-9 or Substitute Form W-9 is received. NOTE: Writing "Applied For" on the form means that you have already applied for a TIN OR that you intend to apply for one soon. As soon as you receive your TIN, complete another Form W-9, include your TIN, sign and date the form and give it to the Depositary. PENALTIES FAILURE TO FURNISH TIN.--If you fail to furnish your correct TIN to the Depositary, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not due to willful neglect. CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. MISUSE OF TINS.--If either the Depositary or the Purchaser discloses or uses TINs in violation of Federal law, the Depositary or the Purchaser, as the case may be, may be subject to civil and criminal penalties. SPECIFIC INSTRUCTIONS NAME.--If you are an individual, you must generally enter the name shown on your social security card. However, if you have changed your last name, for instance, due to marriage, without informing the Social Security Administration of the name change, please enter your first name, the last name shown on your social security card, and your new last name. SOLE PROPRIETOR.--You must enter your individual name. (Enter either your SSN or EIN in Part 2.) You may also enter your business name or "doing business as" name on the business name line. Enter your name as shown on your social security card and business name as it was used to apply for your EIN on Form SS-4. PART I--TAXPAYER IDENTIFICATION NUMBER (TIN) If you are a sole proprietor, you may enter your SSN or EIN. Also see the chart below for further clarification of name and TIN combinations. If you do not have a TIN, follow the instructions under HOW TO GET A TIN above. PART II--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING If you are exempt from backup withholding, you should still complete this form to avoid possible erroneous backup withholding. Enter your correct TIN and write "Exempt" in Part 2, and sign and date the form. The following is a list of payees exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except item (9). For broker transactions, listed payees (1) through (13), and a person registered under the Investment Advisors Act of 1940 who regularly acts as a broker are exempt. Payments subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (1) through (7), except that a corporation that provides medical and health care services or bills and collects payments for such services is not exempt from backup withholding or information reporting. Only payees described in items (2) through (6) are exempt from backup withholding for barter exchange transactions, patronage dividends, and payments by certain fishing boat operators. (1) A corporation. (2) An organization exempt from tax under section 501(a), or an individual retirement plan (IRA), or a custodial account under section 403(b)(7). (3) The United States or any of its agencies or instrumentalities. (4) A State, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities. (5) A foreign government or any of its political subdivisions, agencies or instrumentalities. (6) An international organization or any of its agencies or instrumentalities. (7) A foreign central bank of issue. (8) A dealer in securities or commodities required to register in the U.S. or a possession of the U.S. (9) A futures commission merchant registered with the Commodity Futures Trading Commission. (10) A real estate investment trust. (11) An entity registered at all times during the tax year under the Investment Company Act of 1940. (12) A common trust fund operated by a bank under section 584(a). (13) A financial institution. (14) A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List. (15) A trust exempt from tax under section 664 or described in section 4947. Payments of dividends and patronage dividends generally not subject to backup withholding also include the following: o Payments to nonresident aliens subject to withholding under section 1441. o Payments to partnerships not engaged in a trade or business in the U.S. and that have at least one nonresident partner. If you are a nonresident alien or a foreign entity not subject to backup withholding, give the Depositary a completed Form W-8 Certificate of Foreign Status. PART III--CERTIFICATION For a joint account, only the person whose TIN is shown in Part 2 should sign. PRIVACY ACT NOTICE Section 6109 requires you to give your correct TIN to persons who must file information returns with the IRS to report interest, dividends, and certain other income, paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. You must provide your TIN whether or not you are required to file a tax return. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to a payer. Certain penalties may also apply. WHAT NAME AND NUMBER TO GIVE THE DEPOSITARY - -------------------------------------------------------------------------------- FOR THIS TYPE OF ACCOUNT GIVE NAME AND SSN OF: - -------------------------------------------------------------------------------- 1. Individual The individual 2. Two or more individuals The actual owner of the account (joint account) or, if combined funds, the first individual on the account(1) 3. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 4. a. The usual revocable savings The grantor-trustee(1) trust (grantor is also trustee) b. So-called trust account that The actual owner(1) is not a legal or valid trust under state law - -------------------------------------------------------------------------------- FOR THIS TYPE OF ACCOUNT GIVE NAME AND EIN OF: - -------------------------------------------------------------------------------- 5. Sole proprietorship The owner(3) 6. A valid trust, estate, or Legal entity(4) pension trust 7. Corporate The corporation 8. Association, club, religious, The organization charitable, educational, or other tax-exempt organization 9. Partnership The partnership 10. A broker or registered nominee The broker or nominee 11. Account with the Department The public entity of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments - -------------------------------------------------------------------------------- 1. List first and circle the name of the person whose number you furnish. 2. Circle the minor's name and furnish the minor's SSN. 3. You must show your individual name, but you may also enter your business or "doing business as" name. You may use either your SSN or EIN. 4. List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) NOTE: If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed. EX-4 5 DESCRIPTION TOMBSTONE ======================================================================================================================== This announcement is neither an offer to purchase nor a solicitation of an offer to sell Units. Each Offer is being made solely by the Offer to Purchase of High River Limited Partnership, dated September 20, 1996, and the related Assignment of Partnership Interest and is not being made to, nor will tenders be accepted from or on behalf of, Unitholders residing in any jurisdiction in which making or accepting the Offer would violate that jurisdiction's laws. In those jurisdictions where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be made on behalf of High River Limited Partnership, if at all, only by one or more registered brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash Notice of Offer to Purchase for Cash Any and All Units of Limited Partnership Interest Any and All Units of Limited Partnership Interest of of McNEIL PACIFIC INVESTORS FUND 1972 McNEIL REAL ESTATE FUND XV, LTD. at at $224.50 Net Per Unit $105.10 Net Per Unit ----------- ----------- Notice of Offer to Purchase for Cash Notice of Offer to Purchase for Cash Any and All Units of Limited Partnership Interest Any and All Units of Limited Partnership Interest of of McNEIL REAL ESTATE FUND IX, LTD. McNEIL REAL ESTATE FUND XX, L.P. at at $180.00 Net Per Unit $182.50 Net Per Unit ----------- ----------- Notice of Offer to Purchase for Cash Notice of Offer to Purchase for Cash Any and All Units of Limited Partnership Interest Any and All Units of Limited Partnership Interest of of McNEIL REAL ESTATE FUND X, LTD. McNEIL REAL ESTATE FUND XXIV, L.P. at at $85.50 Net Per Unit $277.50 Net Per Unit ----------- ----------- Notice of Offer to Purchase for Cash Notice of Offer to Purchase for Cash Any and All Units of Limited Partnership Interest Any and All Units of Limited Partnership Interest of of McNEIL REAL ESTATE FUND XI, LTD. McNEIL REAL ESTATE FUND XXV, L.P. at at $104.50 Net Per Unit $0.255 Net Per Unit ----------- ----------- Notice of Offer to Purchase for Cash Notice of Offer to Purchase for Cash Any and All Units of Limited Partnership Interest Any and All Units of Limited Partnership Interest of of McNEIL REAL ESTATE FUND XIV, LTD. McNEIL REAL ESTATE FUND XXVI, L.P. at at $95.00 Net Per Unit $0.096 Net Per Unit ----------- Notice of Offer to Purchase for Cash Any and All Units of Limited Partnership Interest of McNEIL REAL ESTATE FUND XXVII, L.P. at $6.19 Net Per Unit by HIGH RIVER LIMITED PARTNERSHIP None of the Offers is conditioned upon financing or upon any minimum number of units being tendered. High River Limited Partnership, a Delaware limited partnership (the "Purchaser") affiliated with Carl C. Icahn, is offering to purchase: (i) any and all of the outstanding units of limited partnership interest of McNeil Pacific Investors Fund 1972, a California limited partnership ("McNeil Pacific"), at a purchase price of $224.50 net per unit; (ii) any and all of the outstanding units of limited partnership interest of McNeil Real Estate Fund IX, Ltd., a California limited partnership ("McNeil IX"), at a purchase price of $180.00 net per unit; (iii) any and all of the outstanding units of limited partnership interest of McNeil Real Estate Fund X, Ltd., a California limited partnership ("McNeil X"), at a purchase price of $85.50 net per unit; (iv) any and all of the outstanding units of limited partnership interest of McNeil Real Estate Fund XI, Ltd., a California limited partnership ("McNeil XI"), at a purchase price of $104.50 net per unit; (v) any and all of the outstanding units of limited partnership interest of McNeil Real Estate Fund XIV, Ltd., a California limited partnership ("McNeil XIV"), at a purchase price of $95.00 net per unit; (vi) any and all of the outstanding units of limited partnership interest of McNeil Real Estate Fund XV, Ltd., a California limited partnership ("McNeil XV"), at a purchase price of $105.10 net per unit; (vii) any and all of the outstanding units of limited partnership interest of McNeil Real Estate Fund XX, L.P., a California limited partnership ("McNeil XX"), at a purchase price of $182.50 net per unit; (viii) any and all of the outstanding units of limited partnership interest of McNeil Real Estate Fund XXIV, L.P., a California limited partnership ("McNeil XXIV"), at a purchase price of $277.50 net per unit; (ix) any and all of outstanding units of limited partnership interest of McNeil Real Estate Fund XXV, L.P., a California limited partnership ("McNeil XXV"), at a purchase price of $0.255 net per unit; (x) any and all of the outstanding units of limited partnership interest of McNeil Real Estate Fund XXVI, L.P., a California limited partnership ("McNeil XXVI"), at a purchase price of $0.096 net per unit; and (xi) any and all of the outstanding units of limited partnership interest of McNeil Real Estate Fund XXVII, L.P., a Delaware limited partnership ("McNeil XXVII"), at a purchase price of $6.19 net per unit (each of McNeil Pacific, McNeil IX, McNeil X, McNeil XI, McNeil XIV, McNeil XV, McNeil XX, McNeil XXIV, McNeil XXV, McNeil XXVI and McNeil XXVII, a "Partnership" and collectively, the "Partnerships"), in each case, without interest thereon and less the amount of distributions per unit, if any, declared or made by the respective Partnership between August 15, 1996 and the date of payment of the purchase price for the units, upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase with respect to each Partnership, dated September 20, 1996 (each an "Offer to Purchase"), and in the related Assignment of Partnership Interest (each of which, together with any supplements or amendments, constitute an "Offer"). Outstanding units of a Partnership are referred to herein as "Units" and the holders of such Units are referred to herein as "Unitholders". - ------------------------------------------------------------------------------------------------------------------------- EACH OFFER, AND THE WITHDRAWAL RIGHTS WITH RESPECT THERETO, WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON OCTOBER 18, 1996, UNLESS SUCH OFFER IS EXTENDED. - ------------------------------------------------------------------------------------------------------------------------- The Purchaser and an affiliate currently own Units of each of the Partnerships other than McNeil XXVI. Although the Purchaser is making each Offer for investment purposes, it may, based upon the number of Units, if any, currently owned by it and such affiliate and the number of Units it acquires pursuant to each Offer, be in a position, and may later determine, to acquire or influence control of the business of each Partnership. Each Offer will expire at 12:00 midnight, New York City time, on Friday, October 18, 1996, unless and until the Purchaser, in its sole discretion, shall have extended the period of time for which such Offer is open (such date and time, as extended, the "Expiration Date"). If the Purchaser makes a material change in the terms of an Offer, or if it waives a material condition to an Offer, the Purchaser will extend such Offer and disseminate additional tender offer materials to the extent required by Rules 14d-4(c) and 14d-6(d) under the Securities and Exchange Act of 1934, as amended (the "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 Unitholders. Accordingly, if, prior to the Expiration Date, the Purchaser changes the number of Units being sought or 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 change is first published, sent or given to Unitholders, such Offer will be extended at least until the expiration of such ten business days. For purposes of each Offer, a "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. The period of time during which each Offer is open may be extended by the Purchaser, at any time and from time to time, by giving oral or written notice of such extension to the Depositary (as defined in the Offer to Purchase) and by making a public announcement thereof. For purposes of each Offer, the Purchaser will be deemed to have accepted for payment pursuant to such Offer, and thereby purchased, validly tendered Units if, as and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance of those Units for payment pursuant to such Offer. Tenders of Units made pursuant to each Offer are irrevocable, except that Unitholders who tender their Units in response to such Offer will have the right to withdraw their tendered Units at any time prior to the Expiration Date by sending a written or facsimile transmission notice of withdrawal to the Purchaser specifying the name of the person who tendered the Units to be withdrawn, which notice must be signed by person(s) who signed the Assignment of Partnership Interest in the same manner as the Assignment of Partnership Interest was signed. In addition, tendered Units may be withdrawn at any time after November 18, 1996, unless the tender has theretofore been accepted for payment as provided above. The Purchaser will take up and pay for any and all Units tendered to it pursuant to each Offer during the period during which such Offer remains open, with appropriate adjustments to avoid purchases that would violate the applicable Partnership Agreement. A request is being made to the Partnerships, pursuant to Rule 14d-5 under the Act, for the use of the list of Unitholders for the purpose of disseminating the Offers to Unitholders. Upon compliance by a Partnership with such request, the Tender Offer Documents with respect to such Partnership and, if required, other relevant materials will be mailed to record holders of Units and will be furnished to brokers, banks and similar persons whose names, or whose nominees, appear on the list of Unitholders, or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Units. Each of the Tender Offer Documents (as defined below) contains important information which should be read carefully before any decision is made with respect to such Offer. The terms of each Offer are more fully set forth in the Offer to Purchase with respect to such Offer and the related Assignment of Partnership Interest (the "Tender Offer Documents"). Questions and requests for assistance or requests for copies of each of the Tender Offer Documents may be directed to the Information Agent, as set forth below, and copies will be furnished promptly at the Purchaser's expense. No fees or commissions will be payable to brokers, dealers or other persons for soliciting tenders of Units pursuant to each Offer. Each of the Tender Offer Documents contains terms and conditions, and the information required by Rule 14d6(e)(1)(vii) under the Act, which are incorporated herein by reference. The Information Agent for the Offer is: BEACON HILL PARTNERS, INC. 90 Broad Street New York, New York 10005 (212) 843-8500 (Collect) or (800) 253-3814 (Toll Free) September 20, 1996 ==========================================================================================================================
EX-5 6 PRESS RELEASE EXHIBIT 5 FOR IMMEDIATE RELEASE Contact: Marc Weitzen (212) 626-0888 ICAHN UNIT INITIATES TENDER OFFERS September 20, 1996 - High River Limited Partnership, a Delaware limited partnership controlled by Carl C. Icahn, announced today that it is initiating tender offers (the "Offers") for 11 different limited partnerships operated by McNeil Partners L.P., as follows: Any and all units of McNeil Pacific Investors Fund 1972 at a purchase price per unit of $224.50, Any and all units of McNeil Real Estate Fund IX, Ltd., at a purchase price per unit of $180.00, Any and all units of McNeil Real Estate Fund X, Ltd., at a purchase price per unit of $85.50, Any and all units of McNeil Real Estate Fund XI, Ltd., at a purchase price per unit of $104.50, Any and all units of McNeil Real Estate Fund XIV, Ltd., at a purchase price per unit of $95.00, Any and all units of McNeil Real Estate Fund XV, Ltd., at a purchase price per unit of $105.10, Any and all units of McNeil Real Estate Fund XX, L.P., at a purchase price per unit of $182.50, Any and all units of McNeil Real Estate Fund XXIV, L.P., at a purchase price per unit of $277.50, Any and all units of McNeil Real Estate Fund XXV, L.P., at a purchase price per unit of $0.255, Any and all units of McNeil Real Estate Fund XXVI, L.P., at a purchase price per unit of $.096, Any and all units of McNeil Real Estate Fund XXVII, L.P., at a purchase price per unit of $6.19. The Offers are not subject to financing. EX-6 7 LETTER REQUESTING LIST OF LIMITED PARTNERS EXHIBIT 6 HIGH RIVER LIMITED PARTNERSHIP 100 South Bedford Road Mount Kisco, New York 10549 August 12, 1996 BY FAX AND FEDERAL EXPRESS To each of the Limited Partnerships listed below c/o McNeil Partners, L.P. 13760 Noel Road Suite 700, LB70 Dallas, Texas 75240 Re: Request for Records Dear Sirs: We are a limited partner of each of the following limited partnerships (the "Partnerships"): McNeil Pacific Investors Fund 1972 McNeil Real Estate Fund V, Ltd. McNeil Real Estate Fund IX, Ltd. McNeil Real Estate Fund X, Ltd. McNeil Real Estate Fund XI, Ltd. McNeil Real Estate Fund XIV, Ltd. McNeil Real Estate Fund XV, Ltd. McNeil Real Estate Fund XX, L.P. McNeil Real Estate Fund XXIV, L.P. McNeil Real Estate Fund XXV, L.P. We request permission to inspect and copy, no later than August 19, 1996, during normal business hours, a current list, for each Partnership, of the full name and last known business or residence address of each partner, set forth in alphabetical order together with the contribution and the share in profits and losses of each partner (collectively, the "Unitholder Lists"). The undersigned, or an affiliate of the undersigned, intends to make a tender offer for Units of each of the Partnerships. In lieu of inspecting the Unitholder Lists, the undersigned requests and would accept a list for each Partnership, in computer readable form, of the partners of such Partnership, showing, as of the most recent date available, the name and last known business or residence address of each partner, set forth in alphabetical order and the contribution and share of profits and losses of each partner, together with such computer processing data as is necessary to make use of such a computer readable list and a printout of such a list for verification purposes. August 12, 1996 Page 2 The undersigned hereby designates and authorizes Messrs. Gordon Altman Butowsky Weitzen Shalov & Wein, 114 West 47th Street, New York, New York 10036, (212) 626-0800, their partners and employees and any other persons designated by them, acting together, singly or in conjunction, to conduct the inspection and copying requested herein. Please advise Theodore Altman, Esq. of Gordon Altman Butowsky Weitzen Shalov & Wein where the information demanded herein will be made available. Very truly yours, HIGH RIVER LIMITED PARTNERSHIP By: Riverdale Investors Corp., Inc., General Partner By: /s/ EDWARD MATTNER ---------------------------------------- Edward Mattner President EX-7 8 RESPONSE LETTER--AUGUST 19, 1996 EXHIBIT 7 SKADDEN, ARPS, SLATE, MEAGHER & FLOM 919 Third Avenue New York 10028-3897 (212) 735-3000 FAX: (212) 735-2000 August 19, 1996 BY TELECOPY AND BY HAND Theodore Altman, Esq. Gordon, Altman, Butowsky Weitzen, Shalov & Wein 114 West 47th Street New York, New York 10036 Re: High River Request for Records Dear Ted: This is in response to the request dated August 12, 1996, submitted by your client, High River Limited Partnership to, and seeking lists of the limited partners of, each of the following partnerships (the "Partnerships"): McNeil Pacific Investors Fund 1972 McNeil Real Estate Fund V, Ltd. McNeil Real Estate Fund IX, Ltd. McNeil Real Estate Fund X, Ltd. McNeil Real Estate Fund XI, Ltd. McNeil Real Estate Fund XIV, Ltd. McNeil Real Estate Fund XV, Ltd. McNeil Real Estate Fund XX, L.P. McNeil Real Estate Fund XXIV, L.P. McNeil Real Estate Fund XXV, L.P. For the reasons set forth in the attached Complaint, filed on August 19, 1996 in the United States District Court of the Central District of California, the Partnerships are unable at this time to comply with your request. This will further confirm that you have agreed to accept service of this Complaint on behalf of each of the defendants named therein, viz., High River Limited Partnership, Riverdale Investors Corp., Inc., Carl C. Icahn, and Unicorn Associate Corporation. As indicated, a copy of the Complaint is enclosed herewith. Formal copies with the original Summonses will be hand-delivered tomorrow. Very truly yours, /s/ PATRICK J. FOYE ---------------------------- Patrick J. Foye enclosure EX-8 9 COMPLAINT EXHIBIT 8 FRANK ROTHMAN (CA State Bar No. 22890) HARRIET S. POSNER (CA State Bar No. 116097) STEVEN A. VELKEI (CA State Bar No. 160561) SKADDEN, ARPS, SLATE, MEAGHER & FLOM 300 South Grand Avenue, Suite 3400 Los Angeles, California 90071 (213) 687-5000 Attorneys for Plaintiffs McNEIL PACIFIC INVESTORS FUND 1972, LTD., McNEIL REAL ESTATE FUND V, LTD., McNEIL REAL ESTATE FUND IX, LTD., McNEIL REAL ESTATE FUND X, LTD., McNEIL REAL ESTATE FUND XI, LTD., McNEIL REAL ESTATE FUND XIV, LTD., McNEIL REAL ESTATE FUND XV, LTD., McNEIL REAL ESTATE FUND XX, L.P., McNEIL REAL ESTATE FUND XXIV, L.P. AND McNEIL REAL ESTATE FUND XXV, L.P. UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA McNEIL PACIFIC INVESTORS FUND 1972, LTD., ) McNEIL REAL ESTATE FUND V, LTD., ) McNEIL REAL ESTATE FUND IX, LTD., ) McNEIL REAL ESTATE FUND X, LTD., ) McNEIL REAL ESTATE FUND XI, LTD., ) McNEIL REAL ESTATE FUND XIV, LTD., ) McNEIL REAL ESTATE FUND XV, LTD., ) McNEIL REAL ESTATE FUND XX, L.P., ) McNEIL REAL ESTATE FUND XXIV, L.P. and ) Case No. 96-5680 McNEIL REAL ESTATE FUND XXV, L.P., ) ) COMPLAINT FOR Plaintiffs, ) DECLARATORY AND ) INJUNCTIVE RELIEF v. ) ) HIGH RIVER LIMITED PARTNERSHIP ) RIVERDALE INVESTORS CORP., INC., ) CARL C. ICAHN, and ) UNICORN ASSOCIATES CORPORATION, ) ) Defendants. ) Plaintiffs, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P. and McNeil Real Estate Fund XXV, L.P. (collectively, the "Partnerships"), by their attorneys, Skadden, Arps, Slate, Meagher & Flom, for their Complaint, allege as follows: JURISDICTION 1. The jurisdiction of this Court is invoked pursuant to 28 U.S.C. ss. 1332 (federal question jurisdiction); 15 U.S.C. ss. 78aa (jurisdiction over claims arising under the Securities Act of 1934); and 28 U.S.C. ss. 1367 (supplemental jurisdiction). SUMMARY OF COMPLAINT 2. This is an action to enjoin a manipulative attempt by affiliates of the well-known corporate raider, Carl Icahn, which have unlawfully announced their purported intention to conduct a series of tender offers for limited partnership units in the ten plaintiff California real estate limited partnerships. However, as a matter of law, defendants' unlawful announcement caused tender offers to be commenced two weeks ago, when Icahn and his affiliates disclosed their purported intentions in a publicly filed Schedule 13D. Yet the bidders failed to provide the unitholders with the required information to which they are entitled under the federal securities laws. One effect (or, indeed, possibly the intention) of defendants' unlawful announcement is to predispose the unitholders with specific promises concerning purported tender offers -- a manipulative device expressly barred by SEC Rules. Accordingly, having plainly failed to actually conduct tender offers in accordance with the prescribed rules, defendants should be enjoined to publicly announce the discontinuance and abandonment of the unlawful tender offers. Moreover, defendants' amended Schedule 13D was also unlawful because it contained materially false and misleading information. The Williams Act amendments to the Securities Exchange Act of 1934 were enacted, and rules of the Securities and Exchange Commission promulgated, precisely to preclude the sort of market manipulation resulting from defendants' misconduct. Accordingly, this misinformation should also be corrected. 3. On August 5, 1996, defendants High River Limited Partnership ("High River"). Riverdale Investors Corp., Inc. ("Riverdale"), Carl C. Icahn ("Icahn"), and Unicorn Associates Corporation ("Unicorn") (collectively, the "Icahn Group") filed an amended Schedule 13D with the SEC in which they described a commitment by High River to commence within the next six months tender offers for any and all outstanding limited partnership units in each of the Partnerships, with a minimum price calculated in accordance with a formula previously used in prior unsuccessful Icahn tender offers for the Partnerships. However, under the governing SEC Rules, a bidder's announcement that it will commence a tender offer for a given quantity of a security at a specified price or range of prices constitutes, in itself, the commencement of the tender offer. Thereupon, within five business days, the bidder (here, High River) is required to commence its full-fledged tender offer solicitation by providing the unitholders with full disclosure of the offer's terms (something High River has not done), or alternatively to withdraw the tender offer. Promises and disclosures of specifics concerning tender offers "to come" are simply not allowed. 4. Two full weeks have passed since August 5, 1996, yet High River has neither (i) disseminated tender offer materials to the Partnerships' unitholders, nor (ii) withdrawn or discontinued the tender offers. The tender offers, therefore, are technically ongoing, are manifestly unlawful and must be enjoined. The Icahn Group should, further, be restrained from commencing or continuing any further tender offers until they have formally withdrawn the technically ongoing (and unlawful) tender offers and the effects of the unlawful offers and disclosures have been full dissipated. 5. Additionally, the Icahn Group has recently served the Partnerships with demands for lists of unitholders, allegedly made pursuant to the California Limited Partnership Act. Admittedly, the Icahn Group's purpose in requesting these lists is to facilitate the illegal High River tender offers, which renders the request improper. The Partnerships are, accordingly, further entitled to a declaratory judgment that they are under no obligation to furnish the Icahn Group (or any other person or entity acting in concert with it) with the unitholder lists. PARTIES 6. Each of the plaintiff Partnerships (McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., and McNeil Real Estate Fund XXV, L.P.) is a California limited partnership. 7. Defendant High River is a Delaware limited partnership and is one of the bidders in the unlawful tender offers for the Partnerships. 8. Defendant Riverdale is a Delaware corporation and is the general partner of High River and is another bidder in the unlawful tender offers. 9. Defendant Icahn is a natural person who is another bidder in the unlawful tender offers. Upon information and belief, Icahn controls his co-defendants High River, Riverdale and Unicorn. 10. Defendant Unicorn is a New York corporation. 11. All the defendants have acted in concert in connection with all the matters that form the subject of this action. Defendants have jointly filed the Amendment to Schedule 13D that gives rise to their violations of the Securities Exchange Act and SEC Rules promulgated thereunder, and constitute a "group" within the meaning of Section 13(d) and the Rules thereunder. FACTS A. ICAHN'S PRIOR TENDER OFFERS. 12. On August 3, 1995, High River launched a series of ten unsolicited tender offers seeking to acquire up to 45% of the units in each of the ten Partnerships that are the plaintiffs herein. 13. Unitholders in each of the Partnerships overwhelmingly rejected High River's 1995 tender offers. When those tender offers closed on October 6, 1995, High River received tenders of less than approximately 10% of the outstanding limited partnership units in each of the Partnerships. 14. Soon after Icahn commenced his tender offers of last year, the proverbial bevy of class action law suits were reflexively filed in California, New York and Texas purportedly seeking to "protect" the Partnerships' unitholders. As the Partnerships allowed the Icahn's tender offers to be consummated without seeking judicial assistance to impede them, those purported "defenders" of unitholder interests found no occasion to do anything in connection with Icahn's tender offers that would justify any recovery, judicial relief, or, critically, any legal fees. While the actions in New York and Texas were abandoned by these class plaintiffs, they have expressed their intention to consolidate all their alleged grievances in a pending action in California state court, principally to press contrived claims of breach of fiduciary duty by the Partnerships and their general partner. B. THE 1996 SCHEDULE 13D AMENDMENT. 15. On August 5, 1996, the Icahn Group filed with the Securities and Exchange Commission Amendment No. 4 to its joint Schedule 13D with respect to the Partnerships. A copy of this Amendment to Schedule 13D is annexed hereto as Exhibit A. The contents of the amendment have routinely been placed on databases that are accessible throughout the United States, including this District, and have also been the subject of wire service coverage. 16. The Icahn Group's Amendment to Schedule 13D was filed for the purpose, inter alia. of disclosing the terms of an extraordinary letter agreement between High River and counsel for the purported class plaintiffs who, as noted above, have brought class or derivative claims against the Partnerships and their general partner. 17. Under Item 6 ("Contracts, Arrangements, Understandings or Relationships With Respect to the Issuer"), the Icahn Group disclosed: The Letter Agreement . . . provides, among other things, that . . . HIGH RIVER WILL COMMENCE, AS SOON AS POSSIBLE, BUT IN NO EVENT MORE THAN 6 MONTHS, THE TENDER OFFERS FOR ANY AND ALL OF THE OUTSTANDING UNITS OF THE PARTNERSHIPS AT A PRICE THAT IS NOT LESS THAN 75% OF THE ESTIMATED LIQUIDATION VALUE OF THE UNITS (AS DETERMINED BY UTILIZING THE SAME METHODOLOGY THAT WAS USED TO DETERMINE THE LIQUIDATION VALUES IN HIGH RIVER'S PREVIOUS TENDER OFFERS FOR THE PARTNERSHIPS), which Tender Offers may be subject to such other terms and conditions as High River determines in its sole discretion. . . . [Emphasis added.] 18. In apparent exchange for this unenforceable "promise," High River's letter agreement with the class plaintiffs also contained an unprecedented -- and probably illegal and unenforceable -- provision under which counsel for the putative class purportedly agreed not to settle the pending California state-court litigation against the Partnerships and their general partner for less than a specified (and exorbitant) amount of consideration. C. THE ICAHN GROUP'S FILING COMMENCED TENDER OFFERS. 19. As a matter of law, the disclosure made by the Icahn Group constituted the commencement of tender offers for any or all outstanding limited partnership units in each of the Partnerships. 20. SEC Rule 14-d2(a)(5), 15 C.F.R. ss. 240.14d-2(a)(5), provides that a tender offer is commenced for purposes of Section 14(d) at 12:01 a.m. on the date when "[t]he tender offer is first published or given to security holders by the bidder. . . . "Under Rules 14d-2(b) and (c), a public announcement by a bidder "shall be deemed to constitute the commencement of a tender offer" if the announcement includes "(1) [t]he identity of the bidder; (2) [t]he identity of the subject company; and (3) [t]he amount and class of securities being sought and the price or range of prices being offered therefor." 21. The Icahn Group's Amendment to Schedule 13D contained all the information sufficient to satisfy each and every element of Rule 14d-2, including the identity of the bidder (High River), the identity of the target (the Partnerships), the quantity of securities to be acquired (any and all limited partnership units), and the "range of prices" to be offered (not less than a stated percentage of the Partnership's liquidation values). The announced price range referred to methodology that had been expressly used and disclosed by High River in the 1995 tender offers for the same Partnerships, and therefore not only constituted part of the public record but was also known to the very unitholders whom the Icahn Group's disclosure was intended to reach and effect. 22. Accordingly, the Icahn Group's amended Schedule 13D constituted a "public announcement" of High River's commencement of tender offers for the Partnerships, effective August 5, 1996. Thereafter, within five (5) business days after August 5, 1996, i.e., by August 12, 1996, the Icahn Group was required either to (1) publicly announce that it had determined not to continue with the tender offers, or (2) disseminate all information to which unitholders are entitled to evaluate the tender offers and determine whether to tender. SEC Rule 14d-2(b), 15 C.F.R. ss. 240.14d-2(b). 23. The information that a tender offeror is required to disclose in commencing a tender offer is set forth in SEC Schedule 14D-1, and includes, among other things, a history of contacts between the bidder and target company; the source and amount of funds or other consideration to be offered; the purpose of the tender offer and plans or proposals of the bidder; and the bidder's financial condition -- i.e., the full panoply of information typically contained in an Offer to Purchase disseminated to Unitholders and in a Schedule 14D-1 filed with the SEC. 24. More than five business days have elapsed since August 5, 1996, and High River has neither announced the discontinuance of tender offers for the Partnerships, nor disseminated any disclosure concerning its offers on Schedule 14D-1 or otherwise. High River is, therefore, in violation of the SEC Rules governing tender offers: If the bidder make the subsequent announcement contemplated by the first option, the initial announcement will not be deemed to commence an offer. If the bidder complies with the filing, disclosure and dissemination requirements of the second option, the tender offer will commence on the date of such compliance, rather than the date of the earlier public announcement. . . . IF THE BIDDER EXERCISES NEITHER OPTION, THE TENDER OFFER COMMENCES ON THE DATE OF THE INITIAL ANNOUNCEMENT, RESULTING, HOWEVER, IN FILING AND DISCLOSURE VIOLATIONS. As a result, it is not anticipated that a bidder making such a public announcement will select the "do nothing" alternative. SEC Exchange Act Release No. 16384, Fed. Sec. L. Rep (CCH) P. 82.373. at 82.583 (Dec. 19, 1979) (emphasis added). D. HIGH RIVER'S DEMAND FOR UNITHOLDER LISTS. 25. On August 12, 1996, High River wrote to each of the Partnerships making a demand for lists of the unitholders of the unitholders in each Partnership. Specifically, High River's letter indicated: We request permission to inspect and copy, no later than August 19, 1996, during normal business hours, a current list, for each Partnership, of the full name and list known business or residence address of each partner, set forth in alphabetical order together with the contribution and the share in profits and losses of each partner (collectively, the "Unitholder Lists"). The undersigned, or an affiliate of the undersigned, INTENDS TO MAKE A TENDER OFFER FOR UNITS OF EACH OF THE PARTNERSHIPS. [Emphasis added.] A copy of High River's demand letter is annexed hereto as Exhibit B. 26. As demonstrated by the contents and timing of its August 12 letter, High River is seeking to obtain the unitholder lists for the purpose of facilitating tender offers for the Partnerships. However, as demonstrated above, the tender offers already commenced by High River and its affiliates are palpably illegal in that they are being conducted in gross violation of the applicable SEC Rules designed to prevent market manipulation and to ensure that unitholders receive all the information they need in order to make informed investment decisions. California state law, which under other circumstances might require the Partnerships to provide High River with the information it seeks, does not require the Partnerships to provide shareholder lists for the purpose, as here, of facilitating the conduct of tender offers that violate the federal securities laws and themselves must be enjoined. FIRST CLAIM FOR RELIEF [For Violation of Sections 14(d) and 14(c) Of The Exchange Act And The Rules and Regulations Promulgated Thereunder] 27. Plaintiffs repeat and reallege the allegations of the preceding paragraphs as if fully set forth herein. 28. Sections 14(d) and (e) of the Exchange Act, 15 U.S.C. ss. 78n(d)-(e), require that in connection with a tender offer, full disclosure must be made of the information specified in Section 14(d) and the rules and regulations promulgated thereunder, and make it unlawful to engage in any fraudulent, deceptive or manipulative act in connection with any tender offer. 29. Sections 14(d) and (e) and the SEC regulations thereunder are thus intended to insure that holders confronted with a tender offer are provided with all the information about the offeror and the offer necessary for them to make an informed investment decision whether to tender or hold their securities. 30. Under Rule 14d-2, High River commenced tender offers for all outstanding units of the Partnerships on August 5, 1996, yet High River (i) failed to disclose or disseminate to shareholders virtually any of the information required to be disclosed on Schedule 14D-1, (ii) has failed, as the only other permissible alternative, to announce within five business days that it was discontinuing the tender offers, and (iii) has allowed to remain on file at the Securities and Exchange Commission its Schedule 13D Amendment which unlawfully states that tender offers for the Partnerships will be commenced in the future at a specified price range. 31. Defendants' Schedule 13D purporting to disclose an intention to commence tender offers improperly conditions the Unitholders and interferes with trading in limited partnership units that would otherwise take place. As defendants, who are veteran, sophisticated tender offerors with years of experience in tender offer matters, well know, the avoidance of such manipulative abuses is the very purpose of Rule 14d-2. 32. By reason of the foregoing, defendants should be preliminarily and permanently enjoined from any further violations of the federal securities laws, including without limitation Sections 14(d) and (e) of the Exchange Act and the SEC Rules promulgated thereunder. In particular, High River and any other offeror should be mandatorily enjoined to promptly announce, pursuant to Rule 14d-2, that they are discontinuing the ongoing, unlawful tender offers for the Partnerships, without acquiring any units pursuant thereto. 33. The Partnerships and their limited partners have no adequate remedy at law. SECOND CLAIM FOR RELIEF [For Violation Of Section 13(d) Of The Exchange Act And The Rules And Regulations Promulgated Thereunder] 34. Plaintiffs repeat and reallege the allegations of the preceding paragraphs as if fully set forth herein. 35. Section 13(d) of the Exchange Act, 15 U.S.C. ss. 78m(d), and the SEC Rules promulgated thereunder make it unlawful for any person to file a Schedule 13D (including an amendment thereto) containing any materially false or misleading statement or omission. 36. Amendment No. 4 to the Icahn Group's Schedule 13D, filed August 5, 1996, is materially false, misleading and omissive in that it fails to disclose that under the SEC Rules, the filing of the Amended Schedule 13D constituted the commencement of tender offers with respect to each Partnership, and that the Icahn Group intended within five business days neither to discontinue the tender offers nor to disclose and disseminate the information required to be disclosed so that unitholders could make informed decisions as to whether to tender their units. 37. By reason of the foregoing, defendants should be preliminarily and permanently enjoined from any further violations of the federal securities laws, including without limitation Section 13(d) of the Exchange Act. In particular, defendants should be mandatorily enjoined promptly further to amend its Schedule 13D to disclose that on August 5, 1996, High River (and any other offerors) commenced tender offers for the Partnerships and that they have discontinued such tender offers without acquiring any units from any limited partners. 38. The Partnerships and their limited partners have no adequate remedy at law. THIRD CLAIM FOR RELIEF (Against High River For A Declatory Judgment That The Partnerships Are Not Required To Provide High River With Unitholder Lists To Aid It In Pursuing Its Illegal Tender Offers) 39. The Partnerships repeat and reallege the allegations of the preceding paragraphs as if fully set forth herein. 40. High River is a limited partner of such of the Partnerships. 41. On August 12, 1996, High River wrote to the Partnerships making a demand for lists of the unitholders in each Partnerships. 42. As demonstrated by the contents and timing of its August 12 letter, High River is seeking to obtain the unitholder lists for the express and conceded purpose of conducting tender offers for the Partnerships. However, as demonstrated above, the tender offers triggered by the filing of Schedule 13D on August 5, 1996 are palpably illegal in that they are being conducted in plain violation of the applicable SEC Rules designed to prevent market manipulation. Under California state law, the Partnerships should not be required to provide shareholder lists for the purpose of facilitating the conduct of tender offers that violate the federal securities laws and themselves must be enjoined. 43. By reason of the foregoing, the Partnerships are entitled to a declaratory judgment that High River is not entitled to be provided unitholder lists, or any other information, pursuant to High River's letter of August 12, 1996 or which would otherwise be used in connection with illegal tender offers or any attempt to profit form unlawful market manipulation. WHEREFORE, plaintiffs respectfully demand judgment: I. Declaring that defendant have violated Sections 14(d) and (e) and 13(d) of the Securities Exchange Act of 1934, 15 U.S.C. ss.ss. 78n(d)-(e), 78m(d), and the SEC Rules promulgated thereunder in connection with their commencement and continuation of tender offers for the Partnerships on and after August 5, 1996; II. Granting plaintiffs injunctive relief against defendants and defendants' respective officers, directors, employees, agents and affiliates, and all other persons acting in concert with defendants or on their behalf, directly or indirectly: (a) enjoining them from committing any further violations of the Securities Exchange Act and SEC tender offer rules in connection with the Partnerships and their affiliates; (b) commanding High River promptly to publicly disclose that it has discontinued its illegal tender offers for the Partnerships, without acquiring any units from any limited partners; (c) commanding the Icahn Group promptly further to amend its Schedule 13D to disclose that on August 5, 1996, it commenced tender offers for the Partnerships and that it has discontinued such tender offers without acquiring any units form any limited partners. III. Requiring defendants and their affiliates to divest themselves of all Partnership Units beneficially owned by them, acquired after the state of their unlawful tender offers and the filing of their false and misleading Schedule 13D; IV. Granting a declaratory judgment that the Partnerships are not required to provide High River with unitholder lists, or any other information, pursuant to High River's letter of August 12, 1996 or which would otherwise be used in connection with illegal tender offers or any attempt to profit from unlawful market manipulation; and V. Granting the Partnerships such other and further relief as the Court may deem just and proper, together with the costs, disbursements and attorneys' fees of this action. DATED: August 19, 1996 FRANK ROTHMAN HARRIET S. POSNER STEVEN A. VELKEI SKADDEN, ARPS, SLATE, MEAGHER & FLOM By: /s/ HARRIET S. POSNER ------------------------------------ Harriet S. Posner Attorneys for Plaintiffs McNEIL PACIFIC INVESTORS FUND 1972, LTD., McNEIL REAL ESTATE FUND V, LTD., McNEIL REAL ESTATE FUND IX, LTD., McNEIL REAL ESTATE FUND X, LTD., McNEIL REAL ESTATE FUND XI, LTD., McNEIL REAL ESTATE FUND XIV, LTD., McNEIL REAL ESTATE FUND XV, LTD., McNEIL REAL ESTATE FUND XX, L.P., McNEIL REAL ESTATE FUND XXIV, L.P. and McNEIL REAL ESTATE FUND XXV, L.P. EX-10 10 PURCHASER/BEIGEL LETTER AGREEMENT EXHIBIT 10 HIGH RIVER LIMITED PARTNERSHIP 100 SOUTH BEDFORD ROAD MT. KISCO, NEW YORK 10549 Mr. Herbert Biegel Beigel Lasky Rifkind Fertik Gelber & White 750 Lexington Avenue New York, New York 10022 September 19, 1996 Dear Mr. Beigel: Since we entered into our letter agreement of August 2, 1996 ("Letter Agreement"), McNeil Real Estate Fund V, Ltd. ("Partnership V"), one of the ten McNeil real estate partnerships which are the subject of the Letter Agreement (collectively, the "Partnerships"), filed proxy material disclosing a proposed sale of Partnership V's sole real estate property. The proxy material seeks limited partner approval for the sale of the property and for the liquidation of Partnership V. Last year McNeil sought to dissuade limited partners from tendering pursuant to High River's tender offers by suggesting that McNeil may initiate tender offers or cause the liquidation of all ten Partnerships. Except as regards Partnership V, however, no such transactions have been announced. In light of the above, it is agreed that High River will proceed with tender offers for nine of the Partnerships in accordance with the Letter Agreement but that it shall have no obligation to make a tender offer for Partnership V. In addition, this confirms our mutual understanding that liquidation value, as used in the Letter Agreement, refers to a value ("Value") obtained by deducting estimated liquidation costs from estimated net asset value and adjusting such Value to reflect the liquidation of the other assets and liabilities of the Partnership. The methodology used to estimate net asset value will be the same as was used in High River's tender offers last year, except that such estimate will include the cash and cash equivalents of each Partnership (whereas such items were excluded last year). Mr Beigel Page 2 Please confirm your agreement to the foregoing by signing this letter in the space indicated below. Very truly yours, HIGH RIVER LIMITED PARTNERSHIP By: Riverdale LLC, general partner By: /s/ EDWARD MATTNER ------------------------------ Edward Mattner AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN: BEIGEL LASKY RIFKIND FERTIK GELBER & WHITE By: /s/ HERBERT BEIGEL -------------------------- Herbert Beigel EX-19 11 DEFENDANTS' ANSWER TO COMPLAINT EXHIBIT 19 RONALD C. PETERSON (Bar No. 54312) ALEXANDER G. ARATO (Bar No. 140512) HELLER, EHRMAN, WHITE & McAULIFFE 601 South Figueroa Street, 40th Floor Los Angeles, California 90017-5758 Telephone: (213) 689-0200 Facsimile: (213) 614-1868 MICHAEL L. CHARLSON (Bar No. 122125) HELLER, EHRMAN, WHITE & McAULIFFE 525 University Avenue Palo Alto, California 94301-1900 Telephone: (415) 324-7000 Facsimile: (415) 324-0638 Attorneys for Counterclaimant HIGH RIVER LIMITED PARTNERSHIP; RIVERDALE INVESTORS CORP., INC.; CARL C. ICAHN; and UNICORN ASSOCIATES CORPORATION UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA McNEIL PACIFIC INVESTORS FUND ) CASE NO. 96-5680 SVW (CWx) 1972, LTD., McNEIL REAL ESTATE ) FUND V, LTD., McNEIL REAL ESTATE ) DEFENDANTS' ANSWER TO FUND IX, LTD., McNEIL REAL ) COMPLAINT FOR DECLARATORY ESTATE FUND X, LTD., MCNEIL REAL ) AND INJUNCTIVE RELIEF ESTATE FUND XI, LTD., McNEIL ) REAL ESTATE FUND XIV, LTD., ) McNEIL REAL ESTATE FUND XV, ) LTD., McNEIL REAL ESTATE FUND ) XX, L.P., McNEIL REAL ESTATE ) FUND, XXIV, L.P., and McNEIL ) REAL ESTATE FUND XXV, L.P., ) ) Plaintiffs, ) ) vs. ) ) HIGH RIVER LIMITED PARTNERSHIP, ) RIVERDALE INVESTORS CORP., INC., ) CARL C. ICAHN, and UNICORN ) ASSOCIATES CORPORATION, ) ) Defendants. ) - -------------------------------------) ) AND RELATED COUNTERCLAIMS ) ) - -------------------------------------) Defendants High River Limited Partnership ("High River"); Riverdale Investors Corp., Inc. ("Riverdale"); Carl C. Icahn ("Icahn"); and Unicorn Associates Corporation ("Unicorn") (the defendants being referred to collectively in this Answer as the "Defendants"), by and through their counsel, answer the Complaint for Declaratory and Injunctive Relief (the "Complaint") on file in this action, as follows: JURISDICTION 1. Answering the allegations in Paragraph 1 of the Complaint, Defendants admit that this Court has jurisdiction, pursuant to 28 U.S.C. ss. 1332 and 15 U.S.C. ss. 78aa, over the purported claims for violation of the federal securities acts that are asserted in the Complaint. Except as expressly admitted, Defendants deny the allegations in Paragraph 1 of the Complaint. SUMMARY OF ACTION 2. Answering the allegations in Paragraph 2 of the Complaint, Defendants admit that they have filed Schedules 13D with the Securities and Exchange Commission ("SEC") relating to Defendants' ownership of units of some of the plaintiff Partnerships, in compliance with federal statutory law and related SEC rules. Defendants further admit that plaintiffs purport to seek through their Complaint injunctive relief based on purported violations of the Williams Act, although Defendants aver that plaintiffs have failed properly to state such claims and/or that plaintiffs' purported claims are without merit. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 2 of the Complaint. Without limiting the generality of - 2 - the foregoing, Defendants expressly deny that they have violated the spirit or letter of the federal securities laws in any respect and aver that, to the contrary, the disclosures included in Defendants' SEC filings were precisely the sorts of disclosures contemplated by SEC rules. Defendants further aver that the allegations of Paragraph 2 of the Complaint, and plaintiffs' lawsuit generally, are part of an ongoing effort by the plaintiff Partnerships' general partner (a) to deny the limited partners of those partnerships rights that they clearly enjoy under California law and (b) to delay and interfere with proper efforts by Defendants and others, encouraged under California and federal law, (i) to enhance the value and liquidity of units of the plaintiff Partnerships and (ii) to limit or terminate certain improper practices of the general partner of the Partnerships that serve to enrich the general partner at the expense of the limited partners of the Partnerships. 3. Answering the allegations in Paragraph 3 of the Complaint, Defendants admit that on or about August 5, 1996, Defendants filed with the SEC an amendment to the Schedules 13D that relate to High River's ownership of certain of the plaintiff Partnerships; and Defendants aver that the documents speak for themselves. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 3 of the Complaint. Without limiting the generality of the foregoing, Defendants expressly deny that they have violated the spirit or letter of the federal securities laws (including those governing tender offers) in any respect. - 3 - 4. Answering the allegations in Paragraph 4 of the Complaint, Defendants admit that since August 5, 1996 and to the date of this Answer, neither High River nor any other Defendant has disseminated tender offer materials to the Partnerships' unitholders, although Defendants aver that this is because no tender offer has been commenced and so the notion that tender offer materials would or should have been disseminated is a non sequitur. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 4 of the Complaint. 5. Answering the allegations in Paragraph 5 of the Complaint, Defendants admit that High River, on or about August 12, 1996, made a request for a current list of partners of each of the plaintiff Partnerships. Defendants further admit that these requests were made pursuant to provisions of the California Uniform Limited Partnership Act (the "Old California Act"), in the case of those plaintiff Partnerships organized under that law, and pursuant to provisions of the California Revised Limited Partnership Act (the "New California Act") in the case of those plaintiff Partnerships organized under that law. Except as expressly admitted, Defendants deny the allegations in Paragraph 5 of the Complaint. Without limiting the generality of the foregoing, and as discussed more fully in Defendant High River's Counterclaim (filed concurrently with this Answer), Defendants aver that High River is a limited partner of each of the plaintiff Partnerships, that both the Old California Act and the New California Act include provisions granting partners the unconditional and unwaivable right to a current list of partners and that the plaintiff Partnerships' - 4 - denial to High River of a current list of partners is unlawful and without justification. PARTIES 6. Defendants admit the allegations in Paragraph 6 of the Complaint. 7. Answering the allegations in Paragraph 7 of the Complaint, Defendants admit that High River is a Delaware limited partnership. Except as expressly admitted, Defendants deny the allegations in Paragraph 7 of the Complaint. 8. Answering the allegations in Paragraph 8 of the Complaint, Defendants admit that Riverdale is a Delaware corporation. Except as expressly admitted, Defendants deny the allegations in Paragraph 8 of the Complaint. 9. Answering the allegations in Paragraph 9 of the Complaint, Defendants admit that Icahn is a natural person. Defendants further admit that defendant Icahn may be deemed to control the other Defendants. Except as expressly admitted, Defendants deny the allegations in Paragraph 9 of the Complaint. 10. Defendants admit the allegations in Paragraph 10 of the Complaint. 11. Answering the allegations in Paragraph 11 of the Complaint, Defendants admit that Defendants jointly filed an Amendment to Schedules 13D relating to High River's ownership of some of the plaintiff Partnerships. Defendants further admit that they may be deemed to constitute a "group" within the meaning of Section 13(d) of the Securities Exchange Act of 1934 and SEC Rules - 5 - promulgated thereunder. Except as expressly admitted, Defendants deny the allegations in Paragraph 11 of the Complaint. (PURPORTED) FACTS 12. Defendants admit the allegations in Paragraph 12 of the Complaint. 13. Answering the allegations in Paragraph 13 of the Complaint, Defendants admit that High River's 1995 tender offers for units of the Partnerships closed on or about October 6, 1995. Defendants further admit that High River received tenders of units in each of the plaintiff Partnerships as a result of High River's 1995 tender offer for units of the Partnerships. Except as expressly admitted, Defendants deny the allegations in Paragraph 13 of the Complaint. 14. Answering the allegations in Paragraph 14 of the Complaint, Defendants admit that, after High River's 1995 tender offers were commenced, one or more lawsuits was filed alleging, among other things, breaches by McNeil Partners of its fiduciary obligations to the plaintiff Partnerships. Except as expressly admitted, Defendants deny the allegations in Paragraph 14 of the Complaint. 15. Answering the allegations in Paragraph 15 of the Complaint, Defendants admit that on or about August 5, 1996, Defendants filed with the SEC amendments to the Schedules 13D that relate to High River's ownership of certain of the plaintiff Partnerships; and Defendants aver that the documents speak for themselves. Defendants further admit that Exhibit A to the Complaint is a copy of Amendment No. 4 to Defendants' Schedule 13D - 6 - relating to High River's ownership of units of plaintiff McNeil Real Estate Fund XXIV, L.P. Defendants aver that they are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in the final sentence of Paragraph 15, and on that basis deny the allegations contained in that sentence. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 15 of the Complaint. 16. Answering the allegations in Paragraph 16 of the Complaint, Defendants admit that on or about August 5, 1996, Defendants filed with the SEC amendments to the Schedules 13D that relate to High River's ownership of certain of the plaintiff Partnerships; and Defendants aver that the documents speak for themselves. Defendants further admit that High River has entered into an agreement (the contents of which have been included in a filing required to be made with the SEC) with counsel for persons who are suing the Partnerships; and Defendants aver that the agreement speaks for itself. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 16 of the Complaint. 17. Answering the allegations in Paragraph 17 of the Complaint, Defendants admit that on or about August 5, 1996, Defendants filed with the SEC amendments to the Schedules 13D that relate to High River's ownership of certain of the plaintiff Partnerships; and Defendants aver that the documents speak for themselves. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 17 of the Complaint. - 7 - 18. Answering the allegations in Paragraph 18 of the Complaint, Defendants admit that High River has entered into an agreement (the contents of which have been included in a filing required to be made with the SEC) with counsel for persons who are suing the Partnerships; and Defendants aver that the agreement speaks for itself. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 18 of the Complaint. 19. Defendants deny the allegations in Paragraph 19 of the Complaint. 20. Answering the allegations in Paragraph 20 of the Complaint, Defendants admit that the SEC has issued rules concerning the conduct of tender offers; and Defendants aver that those rules speak for themselves. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 20 of the Complaint. 21. Answering the allegations in Paragraph 21 of the Complaint, Defendants admit that on or about August 5, 1996, Defendants filed with the SEC amendments to the Schedules 13D that relate to High River's ownership of certain of the plaintiff Partnerships; and Defendants aver that the documents speak for themselves. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 21 of the Complaint. 22. Defendants deny the allegations in Paragraph 22 of the Complaint. 23. Answering the allegations in Paragraph 23 of the Complaint, Defendants admit that the SEC has issued rules concerning the conduct of tender offers; and Defendants aver that - 8 - those rules speak for themselves. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 23 of the Complaint. 24. Answering the allegations in Paragraph 24 of the Complaint, Defendants admit that more than five business days have elapsed since August 5, 1996. Defendants further admit that High River has not discontinued any tender offer for the Partnerships or disseminated information concerning any such tender offer, although Defendants aver that this is because no tender offer has been commenced and so the notion that a tender offer would or should have been discontinued or that materials would or should have been disseminated are non sequiturs. Defendants further admit that the SEC has issued rules concerning the conduct of tender offers; and Defendants aver that those rules speak for themselves. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 24 of the Complaint. 25. Answering the allegations in Paragraph 25 of the Complaint, Defendants admit that on August 12, 1996, High River exercised its unconditional statutory right to obtain a current list of partners of each of the plaintiff Partnerships. Defendants further admit that High River requested the partner lists in a letter, a copy of which is appended to the Complaint as Exhibit B; and Defendants aver that the request letter speaks for itself. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 25 of the Complaint. 26. Answering the allegations in Paragraph 26 of the Complaint, Defendants admit that High River may use any partner - 9 - list it may obtain in connection with a future tender offer for additional units of one or more of the plaintiff Partnerships, although Defendants aver that High River's purported motivation in seeking a list of its fellow partners is irrelevant as its statutory right to that list is unconditional. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 26 of the Complaint. Without limiting the generality of the foregoing, Defendants aver that the Partnerships' conceded withholding from High River of a current list of its fellow partners is in violation of unconditional mandates of California law and is wrongful and without justification. FIRST (PURPORTED) CLAIM FOR RELIEF [FOR (ALLEGED) VIOLATION OF SECTIONS 14(D) AND 14(E) OF THE EXCHANGE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER] 27. Defendants incorporate, as though fully set forth, its responses to Paragraphs 1 through 26 above. 28. Defendants aver that the assertions in Paragraph 28 of the Complaint purport to state propositions of law that do not require a response from Defendants. To the extent any assertion in Paragraph 28 constitutes a factual allegation, Defendants deny any and all such allegations that may be included in Paragraph 28 of the Complaint. 29. Defendants aver that the assertions in Paragraph 29 of the Complaint purport to state propositions of law that do not require a response from Defendants. To the extent any assertion in Paragraph 29 constitutes a factual allegation, Defendants deny any - 10 - and all such allegations that may be included in Paragraph 29 of the Complaint. 30. Defendants deny the allegations of Paragraph 30 of the Complaint. 31. Defendants deny the allegations of Paragraph 31 of the Complaint. 32. Defendants deny the allegations of Paragraph 32 of the Complaint. 33. Defendants deny the allegations of Paragraph 33 of the Complaint. Without limiting the generality of the foregoing, Defendants deny that the plaintiff Partnerships are entitled to any remedy or relief of any kind by reason of any act or omission of Defendants, or any of them. SECOND (PURPORTED) CLAIM FOR RELIEF [FOR (ALLEGED) VIOLATION OF SECTION 13(D) OF THE EXCHANGE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER] 34. Defendants incorporate, as though fully set forth, its responses to Paragraphs 1 through 33 above. 35. Defendants aver that the assertions in Paragraph 35 of the Complaint purport to state propositions of law that do not require a response from Defendants. To the extent any assertion in Paragraph 35 constitutes a factual allegation, Defendants deny any and all such allegations that may be included in Paragraph 35 of the Complaint. 36. Defendants deny the allegations of Paragraph 36 of the Complaint. - 11 - 37. Defendants deny the allegations of Paragraph 37 of the Complaint. 38. Defendants deny the allegations of Paragraph 38 of the Complaint. Without limiting the generality of the foregoing, Defendants deny that the plaintiff Partnerships are entitled to any remedy or relief of any kind by reason of any act or omission of Defendants, or any of them. THIRD (PURPORTED) CLAIM FOR RELIEF (AGAINST HIGH RIVER FOR A DECLARATORY JUDGMENT THAT THE PARTNERSHIPS (SUPPOSEDLY) ARE NOT REQUIRED TO PROVIDE HIGH RIVER WITH UNITHOLDER LISTS TO AID IT IN PURSUING ITS (ALLEGEDLY) ILLEGAL TENDER OFFERS) 39. Defendants incorporate, as though fully set forth, its responses to Paragraphs 1 through 38 above. 40. Defendants admit the allegations of Paragraph 40 of the Complaint. 41. Defendants admit the allegations of Paragraph 41 of the Complaint. 42. Answering the allegations in Paragraph 42 of the Complaint, Defendants admit that High River may use any partner list it may obtain in connection with a future tender offer for additional units of one or more of the plaintiff Partnerships, although Defendants aver that High River's purported motivation in seeking a list of its fellow partners is irrelevant as its statutory right to that list is unconditional. Except as expressly admitted or averred, Defendants deny the allegations in Paragraph 42 of the Complaint. Without limiting the generality of the foregoing, Defendants aver that the Partnerships' conceded - 12 - withholding from High River of a current list of its fellow partners is in violation of unconditional mandates of California law and is wrongful and without justification. 43. Defendants deny the allegations of Paragraph 43 of the Complaint. AFFIRMATIVE DEFENSES By alleging matters set forth below under the heading "Affirmative Defenses," Defendants do not thereby allege or admit that Defendants have the burden of proof with respect to any of these matters. As and for separate affirmative defenses, Defendants aver as follows: FIRST AFFIRMATIVE DEFENSE Defendants aver that the Complaint, and each and every purported claim for relief therein, fails to state a claim upon which relief may be granted. SECOND AFFIRMATIVE DEFENSE Defendants aver that this Court lacks subject matter jurisdiction over the Third Claim for Relief purportedly set forth in the Complaint. THIRD AFFIRMATIVE DEFENSE Defendants aver that the plaintiff Partnerships are not entitled to the declaration that they seek in their purported Third Claim for Relief because the statutory right of a limited partner of a California limited partnership to obtain a current list of its fellow partners is unconditional; and the plaintiff Partnerships have alleged that High River is a limited partner of each of the Partnerships. - 13 - FOURTH AFFIRMATIVE DEFENSE Defendants aver that, even if there were deficiencies in the disclosure documents they have filed with the SEC in connection with Defendants' ownership of units of the Partnerships (which there are not), the remedies that the plaintiff Partnerships seek, including without limitation divestiture by High River of its ownership interest in the Partnerships, are not authorized remedies for the purported statutory and regulatory violations that plaintiffs allege. WHEREFORE, Defendants respectfully pray that the Court: A. Deny the plaintiff Partnerships the declaratory and injunctive relief that the Partnerships seek by their Complaint; B. Grant Defendants relief on their Counterclaim, filed concurrently; C. Grant Defendants their costs of suit, including reasonable attorneys' and expert witness fees; and D. Grant Defendants such additional and further relief as the Court may deem just and proper. Dated: August __, 1996 HELLER, EHRMAN, WHITE & McAULIFFE By /s/ RONALD C. PETERSON ----------------------------------- Ronald C. Peterson Attorneys for Defendants HIGH RIVER LIMITED PARTNERSHIP; RIVERDALE INVESTORS CORP., INC.; CARL C. ICAHN; and UNICORN ASSOCIATES CORPORATION Of Counsel: THEODORE ALTMAN HOWARD S. KOH LISA A. STANCATI - 14 - GORDON ALTMAN BUTOWSKY WEITZEN SHALOV & WEIN 114 West 47th Street New York, New York 10036 Telephone: (212) 626-0800 Facsimile: (212) 626-0799 - 15 - EX-20 12 COUNTERCLAIM OF PURCHASER EXHIBIT 20 RONALD C. PETERSON (Bar No. 54312) ALEXANDER G. ARATO (Bar No. 140512) HELLER, EHRMAN, WHITE & McAULIFFE 601 South Figueroa Street, 40th Floor Los Angeles, California 90017-5758 Telephone: (213) 689-0200 Facsimile: (213) 614-1868 MICHAEL L. CHARLSON (Bar No. 122125) HELLER, EHRMAN, WHITE & McAULIFFE 525 University Avenue Palo Alto, California 94301-1900 Telephone: (415) 324-7000 Facsimile: (415) 324-0638 Attorneys for Counterclaimant HIGH RIVER LIMITED PARTNERSHIP UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA McNEIL PACIFIC INVESTORS FUND ) CASE NO. 96-5680 SVW (CWx) 1972, LTD., McNEIL REAL ESTATE ) FUND V, LTD., McNEIL REAL ESTATE ) COUNTERCLAIM OF HIGH RIVER FUND IX, LTD., McNEIL REAL ) LIMITED PARTNERSHIP FOR ESTATE FUND X, LTD., MCNEIL REAL ) INJUNCTIVE AND OTHER RELIEF ESTATE FUND XI, LTD., McNEIL ) RE DENIAL OF ACCESS TO A REAL ESTATE FUND XIV, LTD., ) PARTNER TO LIMITED McNEIL REAL ESTATE FUND XV, ) PARTNERSHIP RECORDS LTD., McNEIL REAL ESTATE FUND ) XX, L.P., McNEIL REAL ESTATE ) FUND, XXIV, L.P., and McNEIL ) REAL ESTATE FUND XXV, L.P., ) ) Plaintiffs, ) ) vs. ) ) HIGH RIVER LIMITED PARTNERSHIP, ) RIVERDALE INVESTORS CORP., INC., ) CARL C. ICAHN, and UNICORN ) ASSOCIATES CORPORATION, ) ) Defendants. ) - ----------------------------------------) HIGH RIVER LIMITED PARTNERSHIP, ) a Delaware limited partnership, ) ) Counterclaimant, ) ) vs. ) ) McNEIL PACIFIC INVESTORS FUND ) 1972, LTD., a California Limited ) Partnership, McNEIL REAL ESTATE ) FUND V, LTD., a California ) limited partnership; McNEIL REAL ) ESTATE FUND IX, LTD., a ) California limited partnership, ) McNEIL REAL ESTATE FUND X, LTD., ) a California limited ) partnership, McNEIL REAL ESTATE ) FUND XI, LTD., a California ) limited partnership, McNEIL REAL ) ESTATE FUND XIV, LTD., a ) California limited partnership, ) McNEIL REAL ESTATE FUND XV, ) LTD., a California limited ) partnership, McNEIL REAL ESTATE ) FUND XX, L.P., a California ) limited partnership, McNEIL REAL ) ESTATE FUND XXIV, L.P., a ) California limited partnership, ) and McNEIL REAL ESTATE FUND XXV, ) L.P., a California limited ) partnership, ) ) Counterdefendants. ) - ----------------------------------------) Counterclaimant HIGH RIVER LIMITED PARTNERSHIP, a Delaware limited partnership ("High River"), by and through its counsel, for its counterclaim in this action, alleges as follows: JURISDICTION 1. This Court has jurisdiction over the subject matter of this counterclaim pursuant to 28 U.S.C. ss.1367(a) (supplemental jurisdiction). This counterclaim is brought pursuant to Federal Rule of Civil Procedure 13(a) as the claims set forth herein arise out of the subject matter of the plaintiffs' claims and do not require for their adjudication the presence of any third parties. PREAMBLE 2. McNeil Partners, L.P. ("McNeil"), a Delaware limited partnership, is the general partner of each of the ten plaintiff limited partnerships in this action (collectively, the "Partnerships". McNeil caused the Partnerships to deny High River's demand for a list of each Partnership's partners and to bring this action against defendants for McNeil's own selfish purposes and not for any legitimate interest of the Partnerships or their limited partners. In doing so, McNeil has continued its pattern of abusing the Partnerships, their limited partners and their assets. McNeil's actions are intend to delay, disrupt and preclude the limited partners from an opportunity to sell their units of ownership to any persons who may threaten McNeil's entrenched position as general partner. McNeil's actions are part of a pattern of abuse tracing back to the inception of the Partnerships which have caused the limited partners to suffer - 1 - inordinate losses on their investments while McNeil continues in its unabated effort to line its pockets. 3. High River tendered an offer to purchase the Partnerships last year. At that time, High River was not a limited partner of the Partnerships. McNeil was so committed to resisting High River's tender offer that it broke the law in order to assure its continued control of the Partnerships. Despite the clear and unequivocal mandate of the federal rules regarding tender offers, McNeil refused to mail High River's tender offer to the limited partners or to provide a list of such partners so that High River could mail the offer directly to them. McNeil continued its refusal until the United States District Court for the Southern District of New York issued an injunction ordering McNeil to comply with its statutory obligations. A true and correct copy of the transcript of the proceedings before the United States District Court for the Southern District of New York is appended hereto as Exhibit "A" and is incorporated herein by this reference. 4. High River is now a limited partner of the Partnerships. But, McNeil continues to treat High River with the same impunity and utter disregard for High River's legal right (and McNeil's resulting legal obligations). 5. High River seeks immediate injunctive relief to compel each of the Partnerships to provide High River with a current list of its respective partners. Limited partners of California limited partnerships have a statutory right to a list of their fellow partners. High River's right to such lists is unconditional and guaranteed by statute -- specifically, depending - 2 - upon the partnership in issue, pursuant to Section 15510 or Section 15634 of the California Corporations Code -- and is not subject to reasonable dispute. 6. As set forth in greater detail below, High River has served a request for a unitholders' (i.e. limited partner) list (the "Lists") on the general partner for each of the Partnerships. The Partnerships, through their general partner, McNeil, has unequivocally refused to comply with the request by, among other conduct, commencing this action. The Partnerships' denial of High River's unconditional statutory right of access to the partnership lists sought by High River is unlawful and inexcusable. PARTIES 7. Counterclaimant High River is a limited partnership organized and in good standing under the laws of the State of Delaware. High River's principal place of business is in Mount Kisco, New York. 8. The counterdefendants are ten real estate limited partnerships organized and in good standing under the laws of the State of California: a. Counterdefendant McNEIL PACIFIC INVESTORS FUND 1972, Ltd., A California Limited Partnership ("McNeil 1972"), is a real estate limited partnership organized under the California Uniform Limited Partnership Act (Cal. Corp. Code ss.ss. 15501-33) (the "Old California Act") on or about September 30, 1971. Units of McNeil 1972 have been registered under the federal Securities Act of 1933 (the "1933 Act") with the Securities and Exchange Commission ("SEC") and are, therefore, - 3 - generally transferable among members of the investing public. McNeil 1972 is a reporting entity under provisions of the Securities Exchange Act of 1934 (the "1934 Act"). b. Counterdefendant McNEIL REAL ESTATE FUND V, LTD. ("McNeil V"), is a real estate limited partnership organized under the Old California Act on or about October 7, 1974. Units of McNeil V have been registered under the 1933 Act with the SEC and are, therefore, generally transferable among members of the investing public. McNeil V is a reporting entity under provisions of the 1934 Act. c. Counterdefendant McNEIL REAL ESTATE FUND IX, LTD. ("McNeil IX"), is a real estate limited partnership organized under the Old California Act on or about May 18, 1978. Units of McNeil IX have been registered under the 1933 Act with the SEC and are, therefore, generally transferable among members of the investing public. McNeil IX is a reporting entity under provisions of the 1934 Act. d. Counterdefendant McNEIL REAL ESTATE FUND X, LTD. ("McNeil X"), is a real estate limited partnership organized under the Old California Act on or about June 26, 1979. Units of McNeil X have been registered under the 1933 Act with the SEC and are, therefore, generally transferable among members of the investing public. McNeil X is a reporting entity under provisions of the 1934 Act. e. Counterdefendant McNEIL REAL ESTATE FUND XI, LTD. ("McNeil XI"), is a real estate limited partnership organized under the Old California Act on or about June 6, - 4 - 1980. Units of McNeil XI have been registered under the 1933 Act with the SEC and are, therefore, generally transferable among members of the investing public. McNeil XI is a reporting entity under provisions of the 1934 Act. f. Counterdefendant McNEIL REAL ESTATE FUND XIV, LTD. ("McNeil XIV"), is a real estate limited partnership organized under the Old California Act on or about May 14, 1982. Units of McNeil XIV have been registered under the 1933 Act with the SEC and are, therefore, generally transferable among members of the investing public. McNeil XIV is a reporting entity under provisions of the 1934 Act. g. Counterdefendant McNEIL REAL ESTATE FUND XV, LTD. ("McNeil XV"), is a real estate limited partnership organized under the Old California Act on or about June 28, 1984. Units of McNeil XV have been registered under the 1933 Act with the SEC and are, therefore, generally transferable among members of the investing public. McNeil XV is a reporting entity under provisions of the 1934 Act. h. Counterdefendant McNEIL REAL ESTATE FUND XX, L.P. ("McNeil XX"), is a real estate limited partnership organized under the California Revised Limited Partnership Act (Cal. Corp. Code ss.ss. 15611-723) (the "New California Act") on or about July 19, 1984. Units of McNeil XX have been registered under the 1933 Act with the SEC and are, therefore, generally transferable among members of the investing public. McNeil XX is a reporting entity under provisions of the 1934 Act. - 5 - i. Counterdefendant McNEIL REAL ESTATE FUND XXIV, L.P. ("McNeil XXIV"), is a real estate limited partnership organized under the New California Act on or about October 19, 1984. Units of McNeil XXIV have been registered under the 1933 Act with the SEC and are, therefore, generally transferable among members of the investing public. McNeil XXIV is a reporting entity under provisions of the 1934 Act. j. Counterdefendant McNEIL REAL ESTATE FUND XXV, L.P. ("McNeil XXV"), is a real estate limited partnership organized under the New California Act on or about February 15, 1985. Units of McNeil XXV have been registered under the 1933 Act with the SEC and are, therefore, generally transferable among members of the investing public. McNeil XXV is a reporting entity under provisions of the 1934 Act. McNeil 1972, McNeil V, McNeil IX, McNeil X, McNeil XI, McNeil XIV, McNeil XV, McNeil XX, McNeil XXIV and McNeil XXV are collectively referred to as the "Partnerships". HIGH RIVER'S DEMAND FOR LISTS OF THE PARTNERSHIPS' LIMITED PARTNERS 9. High River is a limited partner of each of the Partnerships. 10. High River has sought to obtain a list of unitholders of each Partnership. With respect to McNeil 1972, McNeil V, McNeil IX, McNeil X, McNeil XI, McNeil XIV and McNeil XV (collectively, the "Old California Act Partnerships"), High River's inspection rights are granted by Section 15510 of the California Corporations Code. With respect to McNeil XX, McNeil XXIV and McNeil XXV (collectively, the "New California Act Partnerships"), - 6 - High River's inspection rights are granted by Section 15634 of the California Corporations Code. 11. On or about August 12, 1996, High River sent a letter to McNeil Partners requesting permission to inspect and copy records of the Partnerships containing or constituting a current list of the full name and last known business or residential address of each unitholder of each of the Partnerships. High River's request letter sought access to the Partnerships' records not later than August 19, 1996. A true and correct copy of High River's request letter is appended hereto as Exhibit B and is incorporated herein by this reference. 12. Beginning one week after High River's request letter was transmitted to the Partnerships, High River, through counsel, made oral inquiries of the Partnerships, through their counsel concerning the Partnerships' intentions with respect to High River's request for records. The Partnerships responded to High River's request by commencing this action through their filing of their Complaint for Declaratory and Injunctive Relief (the "Complaint"). In the Complaint, and in correspondence from the Partnerships, the Partnerships confirm their unequivocal refusal to provide High River with the information High River seeks despite High River's statutory entitlement to that information. FIRST CLAIM FOR RELIEF Violation of Corporations Code Section 15510 (Against Defendants McNeil 1972, McNeil V, McNeil IX, McNeil X, McNeil XI, McNeil XIV and McNeil XV) 13. High River incorporates each and every allegation of Paragraphs 1 through 12, inclusive. - 7 - 14. Under Corporations Code Section 15510, each limited partner of a limited partnership organized under the Old California Act has an unqualified right to inspect and copy records of the partnership, including a current list of the partners. 15. As alleged above, High River has requested the opportunity to inspect and copy a current list of the Old California Act Partnerships. 16. Each of the Old California Act Partnerships has, in violation of Corporations Code Section 15510, denied High River access to the partnership records that High River has sought to inspect and copy. 17. High River has no just, speedy or adequate remedy at law for the Old California Act Partnerships' refusal to grant High River access to the partnership records it has sought. 18. High River seeks the issuance of a mandatory injunction directing each of the Old California Act Partnerships immediately to provide to High River a current list of the full name and last known business or residence address of each partner set forth in alphabetical order together with the contribution and the share in profits and losses of each partner of said partnership, or, in the alternative, to grant High River immediate access to such records so that the records may be inspected and copied by High River. SECOND CLAIM FOR RELIEF Violation of Corporations Code Section 15634 (Against McNeil XX, McNeil XXIV and McNeil XXV) - 8 - 19. High River incorporates each and every allegation of Paragraphs 1 through 12, inclusive. 20. Under Corporations Code Section 15634, each limited partner of a limited partnership organized under the New California Act has an unqualified right to a copy of certain records of the partnership, including a current list of the partners (as described in Corporations Code Section 15615(a)). 21. As alleged above, High River has requested a copy of a current list of the partners of New California Act Partnerships. 22. Each of the New California Act Partnerships has, in violation of Corporations Code Section 15634, denied High River's request for the Partnership records that it has sought. 23. The New California Act Partnerships' refusal to provide High River with the copy of their current lists of unitholders is in each case without justification. 24. High River has no just, speedy or adequate remedy at law for the New California Act Partnerships' refusal to provide High River with a copy of the partnership records it has sought. 25. High River seeks the issuance of a mandatory injunction directing each of the New California Act Partnerships immediately to provide to High River a copy of a current list of the full name and last known business or residence address of each partner set forth in alphabetical order together with the contribution and the share in profits and losses of each partner of said partnership, or, in the alternative, to grant High River immediate access to such records so that the records may be inspected and copied by High River. - 9 - 26. Further, because the refusal of the New California Act Partnerships to comply with the requirements of California Corporations Code ss. 15634(a) is without justification, High River is entitled to an award in an amount subject to proof that is sufficient to reimburse High River Partnership for the reasonable expense it has incurred, including attorneys' fees and costs, in connection with this action. PRAYER FOR RELIEF WHEREFORE, High River prays that: A. This Court, without delay, enter a temporary restraining order, preliminary injunction, permanent injunction and/or such other order as the Court deems appropriate, mandating the Partnerships' immediate compliance with Corporations Code Sections 15510 or 15634, as appropriate, including without limitation an order directing and requiring the Partnerships immediately either (i) to make available a copy of their respective current lists of limited partners (including their names and last known business or residential addresses), or (ii) to grant High River permission to inspect and copy their respective current lists of limited partners; B. This Court (i) determine, pursuant to Corporations Code Section 15634(g), that the actions by the New California Act Partnerships to deny High River access to a current unitholders list was without justification, and accordingly (ii) award to High River an amount of money sufficient to reimburse High River for the reasonable expenses incurred by it (including attorneys' fees) in connection with this action; - 10 - C. This Court enter final judgment in favor of High River and against each of the Partnerships on High River's counterclaims; D. This Court award High River its costs of suit, including without limitation reasonable attorneys' and expert witness fees; and E. The Court grant and award to High River such additional and further relief as it deems appropriate. Dated: August __, 1996 HELLER, EHRMAN, WHITE & McAULIFFE By /s/ RONALD C. PETERSON ----------------------------------- Ronald C. Peterson Attorneys for Counterclaimant HIGH RIVER LIMITED PARTNERSHIP OF COUNSEL: THEODORE ALTMAN HOWARD S. KOH LISA A. STANCATI GORDON ALTMAN BUTOWSKY WEITEN SHALOV & WEIN 114 West 47th Street, 20th Floor New York, New York 10036 Telephone: (212) 626-0800 Facsimile: (212) 626-0799 - 11 - EX-21 13 PLAINTIFFS/COUNTER-DEFENDANTS' ANSWER EXHIBIT 21 FRANK ROTHMAN (CA State Bar No. 22890) HARRIET S. POSNER (CA State Bar No. 116097) STEVEN A. VELKEI (CA State Bar No. 160561) SKADDEN, ARPS, SLATE, MEAGHER & FLOM 300 South Grand Avenue, Suite 3400 Los Angeles, California 90071 (213) 687-5000 Attorneys for Plaintiffs/Counterdefendants MCNEIL PACIFIC INVESTORS FUND 1972, et al. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION MCNEIL PACIFIC INVESTORS FUND ) Civil No. 96-5680 SVW (CWx), et al. ) ) PLAINTIFFS/COUNTER- Plaintiffs, ) DEFENDANTS' ANSWER TO ) COUNTERCLAIM OF HIGH RIVER v. ) LIMITED PARTNERSHIP FOR ) INJUNCTIVE AND OTHER RELIEF HIGH RIVER LIMITED ) PARTNERSHIP, et al. ) ) Defendants. ) ) - ------------------------------------) ) AND RELATED COUNTERCLAIMS ) - ------------------------------------) Plaintiffs/Counterdefendants McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Estate Fund XXIV, L.P., and McNeil Real Estate Fund XXV, L.P. (collectively, "Counterdefendants" or the "Partnerships") in answer to the Counterclaim of High River Limited Partnership ("High River") for Injunctive and Other Relief ("Counterclaim"), herein admit, deny and aver as follows: JURISDICTION 1. Paragraph 1 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations that are not conclusions of law, the Partnerships admit that paragraph 1 purports to invoke the jurisdiction of this Court under the statutes and rules specified. Except as specifically admitted, the Partnerships deny each and every allegation of paragraph 1 of the Counterclaim. PREAMBLE 2. The Partnerships admit that McNeil Partners, L.P. is the general partner of each of the Partnerships herein and that High River's demand for lists of the partners or unitholders in each Partnership (the "Unitholder Lists") was denied because the lists were requested in connection with illegal tender offers. Except as specifically admitted, the Partnerships deny each and every allegation of paragraph 2 of the Counterclaim. 3. Paragraph 3 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations of paragraph 3 that are not conclusions of law, the Partnerships admit that High River made an offer to purchase up to 45% of the limited partnership units of each of the Partnerships. The Partnerships further admit that High River sought a restraining order from the United States District Court for the Southern District of New York and aver that the transcript of the proceeding speaks for itself. Except as specifically admitted or averred, the Partnerships deny each and every allegation of paragraph 3 of the Counterclaim. 4. The Partnerships admit that High River is a unitholder in each of the Partnerships. Except as specifically admitted, the Partnerships deny each and every allegation of paragraph 4 of the Counterclaim. 5. Paragraph 5 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations of paragraph 5 that are not conclusions of law, the Partnerships admit that High River purports to seek injunctive relief, but specifically deny that the Counterclaim states a claim upon which relief can be granted. Except as specifically admitted or denied, the Partnerships deny each and every allegation of paragraph 5 of the Counterclaim. 6. Paragraph 6 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations that are not conclusions of law, the Partnerships admit that High River served a written demand for Unitholder Lists upon McNeil Partners, L.P. on August 12, 1996, and, as before, admit that High River's demand for the Unitholder Lists was denied because the lists were requested in connection with illegal tender offers. Except as specifically admitted or averred, the Partnerships deny each and every allegation of paragraph 6 of the Counterclaim. PARTIES 7. The Partnerships lack sufficient knowledge or information to form a belief as to the truth of the allegations contained in paragraph 7 of the Counterclaim, and, on that basis, deny each and every allegation contained in paragraph 7 of the Counterclaim. 8. Paragraph 8 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations that are not conclusions of law, the Partnerships admit that they are ten real estate limited partnerships organized and in good standing under the laws of the State of California. The Partnerships further admit that McNeil Pacific Investors Fund 1972, Ltd. was organized on or about September 30, 1971, that McNeil Real Estate Fund V, Ltd. was organized on or about October 7, 1974, that McNeil Real Estate Fund IX, Ltd. was organized on or about May 18, 1978, that McNeil Real Estate Fund X, Ltd. was organized on or about June 26, 1979, that McNeil Real Estate Fund XI, Ltd. was organized on or about June 6, 1980, that McNeil Real Estate Fund XIV was organized on or about May 14, 1982, that McNeil Real Estate Fund XV, Ltd. was organized on or about June 28, 1994, that McNeil Real Estate Fund XX, L.P. was organized on or about July 18, 1984, that McNeil Real Estate Fund XXIV, L.P. was organized on or about October 19, 1984, and that McNeil Real Estate Fund XXV, L.P. was organized on or about February 15, 1985. The Partnerships further admit that units of the Partnerships are registered under the Securities Act of 1933 and that the Partnerships are reporting entities under the provisions of the Securities Exchange Act of 1934. Except as specifically admitted, the Partnerships deny each and every allegation of paragraph 8 of the Counterclaim. 9. The Partnerships admit that High River is a unitholder in each of the Partnerships. Except as specifically admitted, the Partnerships deny each and every allegation of paragraph 9 of the Counterclaim. 10. Paragraph 10 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations that are not conclusions of law, the Partnerships admit that High River served a written demand for Unitholder Lists upon McNeil Partners, L.P. on August 12, 1996. Except as specifically admitted, the Partnerships deny each and every allegation of paragraph 10 of the Counterclaim. 11. The Partnerships admit that High River served a written demand for Unitholder Lists upon McNeil Partners, L.P. on August 12, 1996 and aver that the document speaks for itself. Except as specifically admitted or averred, the Partnerships deny each and every allegation of paragraph 11 of the Counterclaim. 12. Paragraph 12 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations that are not conclusions of law, the Partnerships admit that High River, through its counsel, made inquiries with respect to High River's request for records. The Partnerships further admit that they filed a Complaint for Declaratory and Injunctive Relief in this District and that the Partnerships denied High River's request for the Unitholder Lists. Except as specifically admitted, the Partnerships deny each and every allegation of paragraph 12 of the Counterclaim. FIRST CLAIM FOR RELIEF 13. The Partnerships, in answering paragraph 13 of the Counterclaim, incorporate by reference herein their answers to paragraphs 1 through 12 of the Counterclaim and make them a part hereof as if fully set forth. 14. Paragraph 14 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations that are not conclusions of law, the Partnerships deny each and every allegation of paragraph 14 of the Counterclaim. 15. The Partnerships admit that High River served a written demand for Unitholder Lists upon McNeil Partners, L.P. on August 12, 1996. Except as specifically admitted, the Partnerships deny each and every allegation of paragraph 15 of the Counterclaim. 16. Paragraph 16 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations that are not conclusions of law, the Partnerships admit that High River's demand for Unitholder Lists was denied because the lists were requested in connection with illegal tender offers. Except as specifically admitted, the Partnerships deny each and every allegation of paragraph 16 of the Counterclaim. 17. The Partnerships deny each and every allegation of paragraph 17 of the Counterclaim. 18. The Partnerships admit that High River purports to seek mandatory injunctive relief, but specifically deny that the Counterclaim states a claim upon which relief can be granted. Except as specifically admitted or denied, deny each and every allegation of paragraph 18 of the Counterclaim. SECOND CLAIM FOR RELIEF 19. The Partnerships, in answering paragraph 19 of the Counterclaim, incorporate by reference their answers to paragraphs 1 through 18 of the Counterclaim and make them a part hereof as if fully set forth. 20. Paragraph 20 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations that are not conclusions of law, the Partnerships deny each and every allegation of paragraph 20 of the Counterclaim. 21. The Partnerships admit that High River served a written demand for Unitholder Lists upon McNeil Partners, L.P. on August 12, 1996. Except as specifically admitted, the Partnerships deny each and every allegation of paragraph 21 of the Counterclaim. 22. Paragraph 22 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations that are not conclusions of law, the Partnerships admit that High River's demand for the Unitholder Lists was denied because the lists were requested in connection with illegal tender offers. Except as specifically admitted, the Partnerships deny each and every allegation of paragraph 22 of the Counterclaim. 23. The Partnerships deny each and every allegation of paragraph 23 of the Counterclaim. 24. The Partnerships deny each and every allegation of paragraph 24 of the Counterclaim. 25. The Partnerships admit that High River purports to seek mandatory injunctive relief, but specifically deny that the Counterclaim states a claim upon which relief can be granted. Except as specifically admitted or denied, deny each and every allegation of paragraph 25 of the Counterclaim. 26. Paragraph 26 of the Counterclaim contains conclusions of law to which the Partnerships are not required to plead. As to those allegations that are not conclusions of law, the Partnerships deny each and every allegation of paragraph 26 of the Counterclaim. AFFIRMATIVE DEFENSES FIRST AFFIRMATIVE DEFENSE (Failure to State a Claim) 27. The Counterclaim fails to state any claim upon which relief can properly be granted. SECOND AFFIRMATIVE DEFENSE (Unclean Hands) 28. High River's claims for equitable relief are barred by the equitable doctrine of unclean hands. THIRD AFFIRMATIVE DEFENSE (Illegal Purpose) 29. High River's claims for equitable relief are barred because the relief sought would further an illegal purpose. FOURTH AFFIRMATIVE DEFENSE (No Irreparable Injury) 30. To the extent High River has been injured, if at all, injury is not irreparable. FIFTH AFFIRMATIVE DEFENSE (Adequate Remedy at Law) 31. High River is not entitled to injunctive relief because it has an adequate remedy at law. SIXTH AFFIRMATIVE DEFENSE (Lack of Standing) 32. High River has no standing to obtain the relief sought in this case. PRAYER FOR RELIEF WHEREFORE the Partnerships pray: 1. That High River take nothing by its Counterclaim; 2. That said Counterclaim be dismissed in its entirety with prejudice and that judgment be entered for Counterdefendants; 3. That the Partnerships recover their attorneys fees, costs and disbursements; and 4. For such other and further relief as the Court may deem just and proper. Dated: September 12, 1996 FRANK ROTHMAN HARRIET S. POSNER STEVEN A. VELKEI SKADDEN, ARPS, SLATE, MEAGHER & FLOM By /s/ HARRIET S. POSNER --------------------------------- Harriet S. Posner Attorneys for Plaintiffs/Counterdefendants McNEIL PACIFIC INVESTORS FUND 1972, et al. PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES I am employed in the County of Los Angeles, State of California, I am over the age of 18 and not a party to this action; my business address is 300 South Grand Avenue, Suite 3400, Los Angeles, CA 90071. On September 12, 1996, I served the foregoing document(s) described as PLAINTIFF/COUNTERDEFENDANTS' ANSWER TO COUNTERCLAIM OF HIGH RIVER LIMITED PARTNERSHIP FOR INJUNCTIVE AND OTHER RELIEF by placing true copies thereof enclosed in sealed enveloped addressed to the parties identified below: Theodore Altman, Esq. Ron Peterson, Esq. Gordon, Altman, Butowsky, Alex Arato, Esq. Weitzen, Shalov & Wein Heller, Ehrman, White & McAuliffe 114 West 47th Street 601 South Figueroa Street, 40th Floor New York, NY 10036 Los Angeles, CA 90017-5704 [ ] (BY MAIL) I deposited such envelope with postage thereon fully prepaid in the United States mail at a facility regularly maintained by the United States Postal Service Los Angeles, California. [ ] (BY MAIL IN THE ORDINARY COURSE OF BUSINESS) I am readily familiar with the firms' practice for the collection and processing of correspondence for mailing with the United States Postal Service and the fact that the correspondence would be deposited with the United States Postal Service that same day in the ordinary course of business; on this date, the above-referenced correspondence was placed for deposit at Los Angeles, California and placed for collection and mailing following ordinary business practices. [ ] (BY PERSONAL SERVICE) [ ] By personally delivering copies to the person served. (STATE/FEDERAL) [ ] I personally caused to be delivered copies. [X] I declare under penalty of perjury under the laws of the State of California and the United States of America that the above is true and correct. Executed on September 12, 1996 at Los Angeles, California. Chris Tarazon /s/ CHRIS TARAZON -------------------------- ---------------------------- PRINT NAME SIGNATURE -----END PRIVACY-ENHANCED MESSAGE-----