-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, hm7ZmWxX1uW02sYeEDW9ICArJSrRSNn5gDabfm8QF99i6iOwowZ7JeyOmaBYxsvm cQNk5YhhAN7vdhruK3HkdQ== 0000950110-95-000626.txt : 19950823 0000950110-95-000626.hdr.sgml : 19950823 ACCESSION NUMBER: 0000950110-95-000626 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19950822 SROS: NONE GROUP MEMBERS: HIGH RIVER LIMITED PARTNERSHIP GROUP MEMBERS: ICAHN CARL C ET AL GROUP MEMBERS: RIVERDALE INVESTORS CORP., INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND X LTD CENTRAL INDEX KEY: 0000312812 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 942577781 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-48302 FILM NUMBER: 95565856 BUSINESS ADDRESS: STREET 1: 13760 NOEL ROAD 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/A 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/A 1 SC 14D1/A 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 (Amendment No. 5)* MCNEIL REAL ESTATE FUND X, LTD. (Name of Subject Company [Issuer]) HIGH RIVER LIMITED PARTNERSHIP CARL C. ICAHN (Bidders) LIMITED PARTNERSHIP UNITS (Title of Class of Securities) 582568 20 0 (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 Amount of filing fee: $1,118.55 Valuation*: $4,376,952 - ------------------------------------------------------------------- * For purposes of calculating the fee only. This amount assumes the purchase of 60,791 units of limited partnership interest (the "Units") of the subject partnership for $92.00 per Unit (notwithstanding a subsequent reduction in the purchase price). 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. [x] 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: $1,118.55 Form or Registration No.: Schedule 14D-1, dated August 3, 1995 Filing Party: High River Limited Partnership & Carl C. Icahn Date Filed: August 4, 1995 *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). AMENDMENT NO. 5 TO SCHEDULE 14D-1 This Amendment No. 5 to Schedule 14D-1 amends and supplements the Tender Offer Statement on Schedule 14D-1 filed by High River Limited Partnership, a Delaware limited partnership ("High River"), Riverdale Investors Corp., Inc., a Delaware corporation ("Riverdale"), and Carl C. Icahn, a citizen of the United States (collectively, the "Reporting Persons"), with the U.S. Securities and Exchange Commission (the "Commission") on August 4, 1995, as amended by Amendment No. 1 filed with the Commission on August 9, 1995, Amendment No. 2 filed with the Commission on August 14, 1995, Amendment No. 3 filed with the Commission on August 18, 1995, and Amendment No. 4 filed with the Commission on August 21, 1995 (collectively, the "Statement"). All capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the Offer to Purchase dated August 3, 1995, as amended and supplemented from time to time (the "Offer to Purchase") and the related Assignment of Partnership Interest, as amended through August 7, 1995 (collectively with the Offer to Purchase, the "Offer"). Item 3. Past Contacts, Transactions or Negotiations with the Subject Company. Item 3(b) is hereby amended to add the following: (b) The information set forth in Section 13 of the Offer to Purchase, entitled "Background of the Offer," is incorporated herein by reference. Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder. Item 5(c) is hereby amended to add the following: The information set forth in the "INTRODUCTION" of the Offer to Purchase is incorporated herein by reference. Item 10. Additional Information. Item 10(e) is hereby amended and restated in its entirety as follows: (e) The information set forth in Section 13 of the Offer To Purchase, entitled "Background of the Offer," is incorporated herein by reference. Item 10(f) is hereby amended to add the following: (f) The information set forth in the Supplement to the Offer to Purchase dated August 21, 1995 and the Confirmation Letter dated August 21, 1995, copies of which are attached hereto as Exhibits 15 and 16, respectively, is incorporated herein by reference. Item 11. Materials to be Filed as Exhibits. The following documents are filed as exhibits to this Schedule 14D-1: (a) Exhibit 15 Supplement to the Offer to Purchase dated August 21, 1995 Exhibit 16 Confirmation Letter dated August 21, 1995 (g) Exhibit 17 Press Release dated August 22, 1995 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: August 22, 1995 HIGH RIVER LIMITED PARTNERSHIP By: Riverdale Investors Corp., Inc. Title: General Partner By: /s/ Robert J. Mitchell Robert J. Mitchell Title: Vice President and Treasurer RIVERDALE INVESTORS CORP., INC. By: /s/ Robert J. Mitchell Robert J. Mitchell Title: Vice President and Treasurer /s/ Carl C. Icahn Carl C. Icahn [Signature Page for Amendment No. 5 to McNeil Real Estate Fund X, Ltd. Schedule 14D-1] EXHIBIT INDEX Page Number ----------- Exhibit 15 Supplement to the Offer to Purchase dated August 21, 1995 Exhibit 16 Confirmation Letter dated August 21, 1995 Exhibit 17 Press Release dated August 22, 1995 EX-20.1 2 SUPPLEMENT TO OFFER EXHIBIT 15 Supplement to the Offer to Purchase for Cash Up To 60,791 Units Of Limited Partnership Interest in McNEIL REAL ESTATE FUND X, LTD. for $72.00 Net Per Unit by HIGH RIVER LIMITED PARTNERSHIP THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON SEPTEMBER 6, 1995, UNLESS THE OFFER IS EXTENDED. IMPORTANT HIGH RIVER LIMITED PARTNERSHIP, a Delaware limited partnership (the "Purchaser"), hereby supplements and amends its Offer to Purchase dated August 3, 1995, as amended on August 7, 1995. The Purchaser is offering to purchase up to 60,791 units of limited partnership interest ("Units") in McNEIL REAL ESTATE FUND X, LTD., a California limited partnership (the "Partnership"), at a purchase price of $72.00 per Unit (the "Purchase Price"), net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in: (i) the Offer to Purchase dated August 3, 1995, as amended on August 7, 1995; (ii) this Supplement thereto (such Offer to Purchase, as amended on August 7, 1995 and as amended and supplemented by this Supplement, the "Offer to Purchase"); and (iii) the related Assignment of Partnership Interest (which collectively constitute the "Offer"). Unless the context otherwise requires, capitalized terms used in this Supplement but not defined herein shall have the meanings ascribed to them in the Offer to Purchase. The bullets on the inside front cover page of the Offer to Purchase are hereby amended and restated in their entirety as follows: 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 net asset value per Unit of approximately $106.00 (exclusive of cash and cash equivalents equal to approximately $17.00 per Unit as of March 31, 1995) estimated by the Purchaser is greater than the Purchase Price. When determining the value of his Units and deciding whether to tender his Units pursuant to the Offer, a Limited Partner should consider BOTH the net asset value as estimated by the Purchaser and the cash and cash equivalents (which, due to its method of valuation of the Units, the Purchaser did not include in such net asset value). See "Introduction" and Section 13 of the Offer to Purchase. o If the Purchaser is successful in acquiring a substantial number of Units pursuant to the Offer, the Purchaser, which is controlled by Carl C. Icahn, will have the right to vote those Units and may thereby be in (continued on following page) -------------- For More Information or for Further Assistance, Please Call the Information Agent: D.F. King & Co., Inc. (212) 269-5550 (Collect) or (800) 628-8538 (Toll Free) August 21, 1995 (continued from previous page) 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. This means that (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 October 9, 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 but, while reserving such right, the Purchaser has no present intention of doing so. Such removal may require the Partnership to pay a fee to the Partnership's general partner and/or its affiliates and may result in acceleration of certain of the Partnership's debt obligations, which may have an adverse effect on the Partnership. See "Introduction" 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. INTRODUCTION The bullets in the "INTRODUCTION" of the Offer to Purchase are hereby amended and restated in their entirety as follows: 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. (continued on following page) --------------- Questions and requests for assistance or for additional copies of the Offer to Purchase, the Assignment of Partnership Interest and the Confirmation Letter may be directed to the Information Agent at the address and telephone numbers set forth on the back cover of this Supplement. No soliciting dealer fees or other payments to brokers for tenders are being paid by the Purchaser. 2 (continued from previous page) o If the Purchaser is successful in acquiring a substantial number of Units pursuant to the Offer, the Purchaser, which is controlled by Mr. Icahn, will have the right to vote those 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. This means that (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 October 9, 1998, and to use commercially reasonable efforts to liquidate and terminate the Partnership by December 31, 1999. In this regard, however, it should be noted that the Form 10-K states as follows: "In light of the depressed real estate market, the Partnership has not been able to liquidate all of its properties within the originally expected time frame of from five to ten years after their acquisition (i.e., between 1990 and 1996). The General Partner now expects to hold the Partnership's portfolio of real estate investments until such time as the real estate market and the performance of the Partnership's investments improves and permits the Partnership to achieve its capital preservation and capital gains objectives. There can be no assurance, however, that the properties' values will increase over an extended holding period." 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, it may, depending on the number of Units it acquires pursuant to the Offer, be in a position to influence control of the business of the Partnership. If the Purchaser acquires a substantial number of the outstanding Units, the Purchaser will be in a position to influence voting decisions with respect to the Partnership. The Purchaser may seek to remove the general partner of the Partnership but, while reserving such right, the Purchaser has no present intention of doing so. Such removal may require the Partnership to pay a fee to the Partnership's general partner and/or its affiliates and may result in acceleration of certain of the Partnership's debt obligations, which may have an adverse effect on the Partnership. o Based solely on financial and other information relating to the Partnership that is publicly available in its Form 10-K filed with the Commission, the Purchaser, solely for consideration with other information in connection with preparing a bid, estimated the net asset value per Unit to be approximately $106.00 (exclusive of cash and cash equivalents equal to approximately $17.00 per Unit as of March 31, 1995). When determining the value of his Units and deciding whether to tender his Units pursuant to the Offer, a Limited Partner should consider both the net asset value as estimated by the Purchaser and the cash and cash equivalents (which, due to its method of valuation of the Units, the Purchaser did not include in such net asset value). THE PURCHASER HAS RECENTLY VISITED CERTAIN OF THE PARTNERSHIP'S PROPERTIES. HOWEVER, 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 FOR DETERMINING TO WHAT EXTENT, IF ANY, THE PURCHASER'S ESTIMATE OF NET ASSET VALUE REPRESENTS THE TRUE NET ASSET VALUE OF EACH UNIT. See Section 13 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. 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. 3 THE OFFER Section 3. Procedure for Tendering Units. The first paragraph of Section 3 of the Offer to Purchase, entitled "Valid Tender", is hereby amended to read in its entirety as follows: VALID TENDER. To validly tender Units, a properly completed and duly executed Assignment of Partnership Interest, any other documents required by the Assignment of Partnership Interest (or facsimiles thereof) and the associated Certificates AS WELL AS AN EXECUTED COPY OF THE CONFIRMATION LETTER DATED AUGUST 21, 1995 (OR A FACSIMILE THEREOF) (THE "CONFIRMATION LETTER") 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. The fifth paragraph of Section 3 of the Offer to Purchase, entitled "Appointment as Proxy", is hereby amended by adding the sentence set forth below as the last sentence of such fifth paragraph: The proxy and power of attorney granted by a Limited Partner to the Purchaser upon his execution of the Assignment of Partnership Interest shall be effective from acceptance for payment of the Units tendered and shall remain effective and be irrevocable until August 1, 2005. Section 9. Certain Information Concerning the Partnership. Section 9 of the Offer to Purchase is hereby amended by adding the following immediately prior to the last paragraph of such Section 9: SELECTED FINANCIAL DATA
Years Ended December 31, ----------------------------------------------------------------------------------- Statements of Operations 1994 1993 1992 1991 1990 - ------------------------ ----------- ----------- ----------- ----------- ----------- Rental revenue ........................... $17,375,904 $16,217,889 $16,023,798 $15,745,075 $16,021,887 Gain on involuntary conversion ........... -- 268,434 192,168 -- -- Gain on disposition of real estate ....... -- -- -- 251,314 102,320 Total revenue ............................ 17,428,487 16,542,802 16,283,680 16,097,573 16,407,945 Loss on replacement of assets ............ -- -- (875,420) -- -- Loss on disposition of real estate ....... -- -- -- -- (961,912) Loss before extraordinary items .......... (1,199,904) (1,693,057) (2,101,133) (2,208,424) (4,048,150) Extraordinary items ...................... 292,539 (1,078,519) -- 900,506 1,535,227 Net loss ................................. (907,365) (2,771,576) (2,101,133) (1,307,918) (2,512,923) Net loss per limited partnership unit: Loss before extraordinary items ......... $ (10.25) $ (15.62) $ (24.66) $ (15.52) $ (28.45) Extraordinary items ..................... 2.06 (7.58) -- 6.33 10.79 ----------- ----------- ----------- ----------- ----------- Net Loss ................................ $ (8.19) $ (23.20) $ (24.66) $ (9.19) $ (17.66) =========== =========== =========== =========== =========== December 31, ----------------------------------------------------------------------------------- Balance Sheets 1994 1993 1992 1991 1990 - -------------- ----------- ----------- ----------- ----------- ----------- Real estate investments, net .......... $37,024,893 $45,705,474 $44,968,959 $46,339,058 $51,780,509 Total assets .......................... 48,379,933 50,632,244 48,958,917 49,620,579 57,287,853 Mortgage notes payable, net ........... 52,078,850 54,484,455 49,141,717 45,966,025 52,761,271 Partners' equity (deficit) ............ (7,442,274) (5,900,107) (2,304,044) 547,965 2,404,459 4 Six Months ended June 30, (in thousands, except per Unit data) -------------------- 1995 1994 ------ ------ (unaudited) Statements of Operations Data: Total Revenues .................................................................. $8,856 $8,552 Net Income (Loss) before extraordinary items, if any ............................ $ (379) $ (821) Net Income (Loss) allocated to limited partners ................................. $ (360) $ (502) Net Income (Loss) per limited partnership unit before extraordinary items, if any ................................................... $(2.66) $(5.88) Distributions per limited partnership unit ...................................... $ -- $ -- As of June 30, 1995 (in thousands, except per Unit data) -------------------- (unaudited) Balance Sheet Data: Total Assets .................................................................... $48,084 Total Liabilities ............................................................... $56,458 Limited Partners' Equity ........................................................ $(4,232) Limited partnership units outstanding ........................................... 135,030 Book Value per Unit ............................................................. $(31.34)
Competitive Conditions at Properties Students at nearby University of Arizona make up 91% of the tenants at Briarwood Apartments. The property commands rents $100 to $150 higher per month than its competition due to its excellent location near the university and a bike route to the university. Market occupancy rates in Tucson are averaging 95%. Due to the heavy student-tenant profile, occupancy at the property typically drops during the summer months, giving Briarwood an average occupancy rate four to five percentage points below market averages. Planned developments in the area are not expected to materially affect Briarwood due to its excellent location. All competitive centers in the Cave Spring Corners market area were renovated during the past five years. Consequently, base rental rates at Cave Spring Corners have been 10% to 15% below market. Due to a good location, occupancy has remained at 100%. Market occupancy is 95% to 98%. Cave Spring Corners is undergoing a major exterior renovation that will be completed in 1998. The renovation should allow the property to bring its rental rates up to market, and maintain its 100% occupancy rate. Occupancy rates at Coppermill Apartments mirror the local area average of 92%. Area occupancy rates are expected to be stable in the 92% to 93% range. Most properties in the immediate area, including Coppermill, were built by the same developer using identical floor plans. Thus, the local market is very price-sensitive. The average rent per square foot city-wide is $.54 per square foot. Because Coppermill's rental rates average $.48 per square foot, there is some room for rental rate increases, but usually only with units that have upgraded amenities that differentiate the units from the competition's. The Courts Apartments is operating in a difficult market. The local market area has been affected by severe layoffs at Boeing and a generally flat economy. The property is competing against newer and more attractive properties, many of which have recently been renovated. The property's exteriors are dated and lack curb appeal. Average occupancy has decreased each of the past two years to 86% for 1994. Market occupancy rates average 92%. Rental rates at The Courts are averaging $.66 per square foot, while many competitors, benefitting from newer buildings, are averaging $.69 to $.71 per square foot. The Partnership has placed The Courts on the market for sale. Competition for Iberia Plaza comes primarily from a retail center across the street from Iberia Plaza that was constructed in 1991. The new retail center charges an average rental rate of $10.00 per square foot as opposed to $5.50 at Iberia Plaza. Iberia Plaza remains 94% leased, but 84% of the leased space is "dark" or vacant. Substantial capital improvements are required to bring Iberia Plaza into condition to compete effectively with the property across the 5 street. The Partnership is negotiating with a prospective anchor tenant, and intends, pending completion of lease negotiations, to begin a capital improvement program at the property. La Plaza Business Center enters 1995 with an occupancy rate of 97%, higher than the average 92% occupancy rate for Las Vegas. However, La Plaza's occupancy is expected to drop below 75% early in 1995 as a major tenant vacates its space. La Plaza's tenant profile will likely change from a few, large tenants to more numerous, smaller tenants. This conversion will involve substantial tenant improvement costs. The Partnership intends to fund the tenant improvements as lease negotiations proceed with new tenants. Demand for office space in Las Vegas is expected to be strong in 1995. New construction in progress is aimed at the high-end of the market, and is not expected to compete with La Plaza. Lakeview Plaza is 100% leased. However, one of the property's anchor tenants will vacate its space in mid-1995. Management is evaluating whether to release the tenant from their lease, or allow the tenant to sublease its space. The local market area appears to be strong, with several national retailers looking for sites for additional stores in the area. There are also several, newer competing properties in very close proximity to Lakeview Plaza that have adversely affected sales of Lakeview Plaza's tenants. In 1993, the Partnership invested $860,000 of capital improvements at The Orchard Apartments. The property, as a result, has benefitted from improved curb appeal and improved financial performance. Orchard's occupancy rate is usually two percentage points above the 93% average occupancy rate of competitors in the Indianapolis submarket where Orchard is located. Rental rates at Orchard are comparable to its competitors. Recent and impending layoffs by major area employers are a concern. Parkway Plaza has a good location on the north side of Lafayette, Louisiana. There is no room for additional development in the immediate area; consequently, new developments are located across town from Parkway Plaza. The property is 97% leased, but the property's main anchor tenant has vacated its space. Although lease payments continue to be made, the vacant space generates no percentage rents and does not pull in shoppers to the property. The Partnership has placed Parkway Plaza on the market for sale. Quail Meadows Apartments is one of the nicer properties in the Wichita area. Both interiors and exteriors of the property are above average relative to the competition. However, the market in the Wichita area is soft. Area occupancy rates have decreased for the past three years and rental rates have been flat. Quail Meadows has maintained occupancy rates higher than market averages, but has not been able to increase rental rates despite significant capital improvements. The property relies on tenants from nearby McConnell Air Force Base, which has recently constructed new housing facilities and faces the possibility of Congressional military cutbacks. Also, the Wichita area has seen four consecutive years of record home sales. Occupancy rates in the Regency Park Apartments market area average 94%, slightly better than Regency Park's occupancy rate. Rental rates realized at Regency Park are also lower than its competitors. The property competes with numerous properties, some of which are newer or have more appeal to prospective tenants. Capital improvements made by the Partnership during 1993 and 1994 have allowed the property to close some of the gap between Regency Park and its competitors. The rental market in the area, however, remains price sensitive. Improvements in operating results generally are coming through improved occupancy rather than rate increases. Capital improvements placed in service since 1992 have allowed Sandpiper Apartments to more than double its contribution to Partnership Income in the past four years. Occupancy and rental rates are above market averages. Since 1992, the income level of Sandpiper's tenants has increased substantially. There is significant new construction under development in the market area. It is expected that the new construction will put downward pressure on market rent levels, but management expects that well-maintained Sandpiper will continue to compete effectively. Occupancy rates at Spanish Oaks Apartments have decreased two percentage points during the past two years due to competition with new construction, older properties that have been renovated, and rate hikes at Spanish Oaks. Net income from the property has continued to rise due to increased rental rates, but rental rates at Spanish Oaks remain below market averages. The interiors at Spanish Oaks will need to be updated to allow the property to raise its rents to current market levels. Also of concern is the reliance upon personnel employed or stationed at Fort Sam Houston Army Base for many of the property's tenants. 6 The following schedule shows lease expirations for each of the Partnership's commercial properties for 1995 through 2004:
Number of Square Annual % of Gross Expirations Feet Rent Annual Rent ----------- ------ -------- ----------- Real Estate Investments: Cave Spring Corners 1995 ........................... 4 7,948 $ 68,766 11% 1996 ........................... 3 96,667 251,468 40% 1997 ........................... 1 1,920 24,315 4% 1998 ........................... 2 6,255 42,154 7% 1999 ........................... 2 7,568 66,905 11% 2000 ........................... 0 -- -- -- 2001 ........................... 0 -- -- -- 2002 ........................... 0 -- -- -- 2003 ........................... 1 46,432 143,581 23% 2004 ........................... 0 -- -- -- Iberia Plaza 1995 ........................... 3 3,604 $ 20,435 4% 1996 ........................... 2 3,644 22,878 4% 1997 ........................... 3 4,008 22,402 4% 1998 ........................... 3 30,880 117,261 23% 1999 ........................... 2 2,400 17,990 3% 2000 ........................... 0 -- -- -- 2001 ........................... 0 -- -- -- 2002 ........................... 0 -- -- -- 2003 ........................... 1 79,902 271,667 52% 2004 ........................... 0 -- -- -- La Plaza 1995 ........................... 16 49,145 $661,152 46% 1996 ........................... 7 8,397 112,882 8% 1997 ........................... 3 3,819 53,224 4% 1998 ........................... 2 29,895 412,295 29% 1999 ........................... 2 3,496 52,754 4% Thereafter ..................... 0 -- -- -- Lakeview Plaza 1995 ........................... 3 4,941 $ 41,818 5% 1996 ........................... 3 10,844 118,038 14% 1997 ........................... 3 10,568 90,434 11% 1998 ........................... 1 33 4,800 1% 1999 ........................... 0 -- -- -- 2000 ........................... 0 -- -- -- 2001 ........................... 0 -- -- -- 2002 ........................... 0 -- -- -- 2003 ........................... 2 16,721 111,184 14% 2004 ........................... 2 121,942 455,705 55% Assets Held for Sale: Parkway Plaza 1995 ........................... 1 1,603 $ 9,618 2% 1996 ........................... 4 5,295 46,688 8% 1997 ........................... 3 4,326 25,479 4% 1998 ........................... 2 9,904 66,508 11% 1999 ........................... 0 -- -- -- 2000 ........................... 1 26,422 99,083 17% 2001 ........................... 0 -- -- -- 2002 ........................... 0 -- -- -- 2003 ........................... 1 79,902 279,657 48% 2004 ........................... 0 -- -- --
7 No residential tenant leases 10% or more of the available rental space. The following schedule reflects information on commercial tenants occupying 10% or more of the leasable square feet for each property:
Square Nature of Footage Annual Lease Business Use Leased Rent Expiration ------------ ------ -------- ---------- Real Estate Investments: Cave Spring Corners Department store .............................. 84,217 $192,000 1998 Grocery store ................................. 46,432 143,581 2003 Iberia Plaza Grocery store ................................. 26,445 89,913 1998 Discount department store ..................... 79,902 271,887 2003 La Plaza Governmental agency ........................... 24,747 318,877 1995 Governmental agency ........................... 28,829 397,840 1998 Lakeview Plaza Department store .............................. 78,337 253,000 2004 Grocery store ................................. 43,605 202,705 2004 Assets Held for Sale: Parkway Plaza Department store .............................. 26,422 99,083 2000 Discount department store ..................... 79,902 279,857 2003
Section 13. Background of the Offer. The first paragraph of Section 13 of the Offer to Purchase, entitled "Prior Contacts with the Partnership", is hereby amended to read in its entirety as follows: PRIOR CONTACTS WITH THE PARTNERSHIP. On or about July 27, 1995, Robert A. McNeil, Carol J. McNeil (the Chairman and Co-Chairman of the Partnership's general partner's corporate general partner) 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. Again, the McNeils urged Mr. Icahn to contact Scott Wallace. 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 Scott 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 McNeils delivered a letter to the Purchaser on August 9, 1995 claiming that the former counsel divulged confidential information concerning the McNeils' personal tax situation during the August 1, 1995 telephone conversation, that the Offer was based on confidential information and that the Partnership would not mail the Offer unless the Purchaser and Mr. Icahn signed a certificate concerning the purported confidential information. Later that day, the Purchaser and Mr. Icahn, through their counsel, responded to the McNeils stating, among other things, that the former counsel confirmed that he did not convey any confidential information, that Scott Wallace gave no indication that any of the information conveyed by the former counsel was confidential and that, in any event, the Purchaser was not aware that any information received from the former counsel was confidential. The McNeils nevertheless continued to refuse to mail. Therefore, on August 10, 1995, the Purchaser commenced an action in the United States District Court for the Southern District of New York against the Partnership's general partner, its corporate general partner, and the McNeils (collectively "Management"), as well as the Partnership and related partnerships (collectively with Management, the "Defendants") alleging Management breaches of fiduciary duty and that the Defendants' failure to mail the Offer violated the Securities and Exchange Commission's Rule 14d-5. On that same day, the Court, upon the Purchaser's application, issued a preliminary injunction. The Court found that "High River [the Purchaser] and the limited partners have been, and are being, irreparably harmed by defendants' failure timely to furnish the 8 limited partner lists or mail the tender offer materials to the limited partners. . . . [D]efendants are depriving plaintiff [the Purchaser] of its opportunity to tender and are depriving the limited partners of their opportunity to consider whether to sell their units as contemplated by the tender offer rules." The Court further found that "plaintiff has a likelihood of success on the merits. Regulation 14d-5 is clear in its requirements, and plaintiff appears likely to be able to demonstrate the defendants violated the provisions of that regulation." The Court 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 Partnership's general partner agree to cooperate in satisfying certain conditions of the Offer and to facilitate the transfer of Units, thereby enabling Limited Partners who wished to sell their Units pursuant to the Offer the opportunity to do so. On August 18, 1995, the Defendants in the above-described litigation served and filed a Counterclaim and Answer (the "Counterclaim"). Defendants' Counterclaim requests an injunction and alleges that the Offer was made in violation of federal securities laws, specifically Sections 10(b), 14(d) and 14(e) of the Exchange Act and the regulations promulgated thereunder, because it failed to disclose that the Purchaser based its Offer on confidential information. The Counterclaim also alleges that the Offer failed to disclose that the Purchaser seeks control of the Partnership and the related partnership Defendants, and that it failed to adequately disclose financial information pertaining to the Purchaser and the Purchaser's history of corporate acquisitions. The Purchaser denies the allegations and believes they are wholly without merit. The third paragraph of Section 13, entitled "Valuation Analysis", is hereby amended to read in its entirety as follows: VALUATION ANALYSIS. The Purchaser reviewed publicly available financial information relating to the Partnership for the fiscal year ended December 31, 1994 in order to determine an adjusted net income (reduced by an amount intended to reflect normal capital expenditures and operating expenses) of $7,197,541.00 and then capitalized that amount at 10.50%, which the Purchaser believes represents an appropriate capitalization rate for a real estate portfolio such as the Partnership's. That review process produced an estimated aggregate net asset value per Unit (exclusive of cash and cash equivalents equal to approximately $17.00 per Unit as of March 31, 1995) of approximately $106.00. When determining the value of his Units and deciding whether to tender his Units pursuant to the Offer, a Limited Partner should consider both the net asset value as estimated by the Purchaser and the cash and cash equivalents (which, due to its method of valuation of the Units, the Purchaser did not include in such net asset value). It should be noted that the Purchaser does not have access to any information concerning the Partnership or its properties other than information that is publicly available, that the Purchaser's foregoing 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. The following is hereby added as the last paragraph of Section 13: METHOD UTILIZED BY THE PURCHASER TO DETERMINE PURCHASE PRICE. In order to determine the Purchase Price, the Purchaser considered the information set forth above under "Valuation Analysis" and examined (i) information, dated as of July 27, 1995, from the Chicago Partnership Board, Inc. (the "Chicago Board") indicating asking prices per Unit ranging from $81.95 to $100.95 that were acceptable to possible sellers of Units; and (ii) a summary of the trading activity of the Units for the period April 1, 1995 through May 31, 1995 (the "Summary Period") appearing in the May/June 1995 issue of the Partnership Spectrum (the "Trading Summary"). The Trading Summary indicated that during the Summary Period an aggregate of 313 Units were traded in a total of 16 trades at a price range of $56.12 to $98.00 per Unit and at a weighted average of $86.66 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 9 the Trading Summary or in reports from the Chicago Board 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 or in reports from the Chicago Board. Initially, the publicly disseminated Purchase Price was $92.00 per Unit. Subsequently, however, the Purchaser determined, based primarily on further consideration of the substantial amount of Partnership borrowing and the high weighted average price per Unit reflected on the Trading Summary as compared to the Purchaser's estimate of net asset value per Unit, to decrease the Purchase Price to $72.00 per Unit notwithstanding the fact that such Purchase Price is less than the weighted average reflected on the Trading Summary and the prices reflected in the reports from the Chicago Board. Section 14. Conditions to the Offer. The last paragraph of Section 14 of the Offer to Purchase is hereby amended by adding the following as the last two sentences to 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). HIGH RIVER LIMITED PARTNERSHIP August 21, 1995 10 Manually signed facsimile copies of the Assignment of Partnership Interest and the Confirmation Letter will be accepted. The Assignment of Partnership Interest, the Confirmation Letter 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, the Assignment of Partnership Interest and the Confirmation Letter 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: D.F. KING & CO., INC. 77 Water Street New York, New York 10005 (212) 269-5550 (Collect) or (800) 628-8538 (Toll Free) EX-20.2 3 CONFIRMATION LETTER EXHIBIT 16 McNEIL REAL ESTATE FUND X, LTD. CONFIRMATION LETTER August 21, 1995 Dear Limited Partner: Reference is made to the Assignment of Partnership Interest (the "Assignment") sent to you by High River Limited Partnership (the "Purchaser") in connection with its tender offer to purchase units of partnership interest ("Units") of McNeil Real Estate Fund X, LTD. (the "Partnership"). This letter will evidence and confirm your understanding and agreement that: (i) the proxy and power-of-attorney now, heretofore or hereafter granted to the Purchaser by you in the Assignment (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, 2005; and (ii) 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 order to complete the tender of your Units to the Purchaser, you must sign the reverse side of this Confirmation Letter and return it immediately to the Depositary for the Offer, IBJ Schroder Bank & Trust Company, in the manner indicated on the reverse side hereof. Your failure to return this Confirmation Letter may result in the rejection of your tender. Unless otherwise defined herein, capitalized terms used herein shall have the meanings attributed to them in the Purchaser's Offer to Purchase dated August 3, 1995, as amended and supplemented. If you have any questions or need assistance in completing this Confirmation Letter, please call the Information Agent for the Offer, D.F. King & Co., Inc., at (212) 269-5550 (Collect) or at (800) 628-8538 (Toll Free). HIGH RIVER LIMITED PARTNERSHIP THIS LETTER MUST BE SIGNED ON THE REVERSE SIDE AND RETURNED TO THE DEPOSITARY TO COMPLETE YOUR TENDER McNEIL REAL ESTATE FUND X, LTD. CONFIRMATION LETTER TO: HIGH RIVER LIMITED PARTNERSHIP By executing this document in the space provided below, the undersigned Limited Partner of McNeil Real Estate Fund X, LTD. (or authorized person signing on behalf of the registered Limited Partner) hereby: (i) evidences and confirms the undersigned's understanding and agreement that: (a) the proxy and power-of-attorney now, heretofore or hereafter granted to the Purchaser by the undersigned in the Assignment of Partnership Interest (the "Assignment") (and all related and associated rights, authority and power) shall be effective from acceptance for payment of the Units tendered by the undersigned and shall remain effective and be irrevocable until August 1, 2005; and (b) 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; and (ii) evidences and confirms the undersigned's agreement to and acceptance of all of the terms, provisions and matters set forth in the Confirmation Letter, the Assignment and the Offer to Purchase. X_________________________________ ______________________________ Area Code and Telephone Number X_________________________________ Signature(s) of Limited Partners (SIGN HERE) (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 of the Assignment.) Date:_____________________________ In addition to signing your name above, PLEASE PRINT YOUR NAME(S) in the following space: ________________________________________________________ Capacity (Full Title):__________________________________ Unless otherwise defined herein, capitalized terms used herein shall have the meanings attributed to them in the Purchaser's Offer to Purchase dated August 3, 1995, as amended and supplemented. 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)
THIS LETTER MUST BE SIGNED AND RETURNED TO THE DEPOSITARY TO COMPLETE YOUR TENDER EX-99 4 PRESS RELEASE EXHIBIT 17 FOR IMMEDIATE RELEASE Contact: Tina Simms (212) 921-3355 HIGH RIVER TENDER OFFER EXTENDED August 22, 1995--High River Limited Partnership, a Delaware limited partnership controlled by Carl C. Icahn, announced today that it is extending the expiration date of its outstanding tender offers for ten McNeil real estate limited partnerships to September 6, 1995. High River said that it is also supplementing its existing offer to purchase to provide additional and updated information to unitholders. The supplements are being delivered today for mailing to unitholders. The offer is not subject to financing. -----END PRIVACY-ENHANCED MESSAGE-----