-----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, FiQK7yO8MsD2hMXqvM7MWKWALizveiwxUJkPW/rawB18SmJUD0mj+1cpjQ9skajX 1d9VRaIZ2nsgSkQNBScqMA== 0000931017-96-000061.txt : 19960319 0000931017-96-000061.hdr.sgml : 19960319 ACCESSION NUMBER: 0000931017-96-000061 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19960318 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GROWTH HOTEL INVESTORS CENTRAL INDEX KEY: 0000769129 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942964750 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-45555 FILM NUMBER: 96535790 BUSINESS ADDRESS: STREET 1: 1 INSIGNIA FINANCIAL PLAZA PO BOX 1089 STREET 2: C/O INSIGNIA FINANCIAL GROUP INC CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: 1 INSIGNIA FINANCIAL PLAZA PO BOX 1089 STREET 2: C/O INSIGNIA FINANCIAL GROUP INC CITY: GREENVILLE STATE: SC ZIP: 29602 FORMER COMPANY: FORMER CONFORMED NAME: MRI BUSINESS HOTEL INVESTORS 85 DATE OF NAME CHANGE: 19850819 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DEVON ASSOCIATES/NY/ CENTRAL INDEX KEY: 0001007974 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 100 JERICHO QUADRANGLE STREET 2: SUITE 214 CITY: JERICHO STATE: NY ZIP: 11753 BUSINESS PHONE: 5168220022 MAIL ADDRESS: STREET 1: 100 JERICHO QUADRANGLE STREET 2: STE 214 CITY: JERICHO STATE: NY ZIP: 11753 SC 14D1/A 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 (AMENDMENT No. 1) _______________________ GROWTH HOTEL INVESTORS, a California Limited Partnership (Name of Subject Company) DEVON ASSOCIATES CAYUGA ASSOCIATES L.P. FLEETWOOD CORP. (Bidders) LIMITED PARTNERSHIP ASSIGNEE UNITS (Title of Class of Securities) NONE (CUSIP Number of Class of Securities) _______________________ Michael L. Ashner Devon Associates Edward Mattner Cayuga Associates L.P. Fleetwood Corp. 100 Jericho Quadrangle 114 West 47th Street Suite 214 19th Floor Jericho, New York 11735-2717 New York, New York 10036 (516) 822-0022 (212) 921-3340 Copies to: Mark I. Fisher G. David Brinton Rosenman & Colin LLP Rogers & Wells 575 Madison Avenue 200 Park Avenue New York, New York 10022-2585 New York, New York 10166 (212) 940-8877 (212) 878-8276 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidders) (Continued on following pages) (Page 1 of 8 Pages) CUSIP NO. NONE 14D-1 Page 2 of 8 Pages 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Devon Associates 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] 3. SEC Use Only 4. Sources of Funds (See Instructions) WC; OO 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) of 2(f) [ ] 6. Citizenship or Place of Organization New York 7. Aggregate Amount Beneficially Owned by Each Reporting Person 1 Unit 8. Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares (See Instructions) [ ] 9. Percent of Class Represented by Amount in Row (7) Less than 1% 10. Type of Reporting Person (See Instructions) PN CUSIP NO. NONE 14D-1 Page 3 of 8 Pages 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Cayuga Associates L.P. 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] 3. SEC Use Only 4. Sources of Funds (See Instructions) WC; OO 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) of 2(f) [ ] 6. Citizenship or Place of Organization Delaware 7. Aggregate Amount Beneficially Owned by Each Reporting Person 0 Units* 8. Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares (See Instructions) [X]* 9. Percent of Class Represented by Amount in Row (7) 0 10. Type of Reporting Person (See Instructions) PN _______________ * Does not include 1,077 Units owned by QALA III Associates, a New York general partnership and affiliate of Cayuga Associates L.P. CUSIP NO. NONE 14D-1 Page 4 of 8 Pages 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Fleetwood Corp. 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] 3. SEC Use Only 4. Sources of Funds (See Instructions) WC; OO 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) of 2(f) [ ] 6. Citizenship or Place of Organization Delaware 7. Aggregate Amount Beneficially Owned by Each Reporting Person 0 Units** 8. Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares (See Instructions) [X]** 9. Percent of Class Represented by Amount in Row (7) 0 10. Type of Reporting Person (See Instructions) CO _____________ ** Does not include 55 Units owned by LTBD, Inc., a Delaware corporation and affiliate of Fleetwood Corp. AMENDMENT No. 2 TO SCHEDULE 14D-1 This Amendment No. 2 further amends and supplements the Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") filed with the Commission on February 15, 1996 by Devon Associates, a New York general partnership (the "Purchaser"), as amended and supplemented by Amendment No. 1 to the Schedule 14D-1 filed with the Commission by the Purchaser on March 8, 1996, relating to the offer of the Purchaser to purchase up to 15,000 of the outstanding limited partnership assignee units ("Units") of Growth Hotel Investors, a California limited partnership (the "Partnership"), at a purchase price of $705 per Unit, net to the seller in cash, upon the terms set forth in the Offer to Purchase dated February 15, 1996 and the related Letter of Transmittal (which collectively constitute the "Offer"), to include the information set forth below. Terms not otherwise defined herein shall have the meaning ascribed to them in the Schedule 14D-1 and the Offer to Purchase. Item 10. Additional Information. Item 10(f) is hereby amended by adding after the only sentence thereof the following sentence: "Reference is hereby also made to Supplement No. 1, a copy of which is attached hereto as Exhibit (a)(5), and which is incorporated herein in its entirety by reference." Item 11. Material to be Filed as Exhibits. Item 11 is hereby amended by adding the following, which are attached as exhibits: (a)(5) Supplement No. 1 to Offer to Purchase dated March 18, 1996. (c)(2) Memorandum of Understanding, dated March 15, 1996. (z)(iii) Letter, dated March 12, 1996, from Promus to the Partnership and Growth Hotel Investors II, a California limited partnership. (z)(iv) Letter, dated March 15, 1996, from Promus to the Partnership and Growth Hotel Investors II, a California limited partnership. 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: March 18, 1996 DEVON ASSOCIATES By: Cayuga Associates L.P. By: Cayuga Capital Corp., its General Partner By: /s/ Michael L. Ashner Name: Michael L. Ashner Title: President By: Fleetwood Corp. By: /s/ Edward E. Mattner Name: Edward E. Mattner Title: President CAYUGA ASSOCIATES L.P. By: Cayuga Capital Corp., its General Partner By: /s/ Michael L. Ashner Name: Michael L. Ashner Title: President FLEETWOOD CORP. By: /s/ Edward E. Mattner Name: Edward E. Mattner Title: President Exhibit Index Sequentially Exhibit No. Description Numbered Page (a)(5) Supplement No. 1 to Offer to Purchase 9 dated March 18, 1996 (c)(2) Memorandum of Understanding, dated 12 March 15, 1996 (z)(iii) Letter, dated March 12, 1996, from Promus to the Partnership and Growth Hotel Investors II, a California limited partnership* (z)(iv) Letter, dated March 15, 1996 from Promus 24 to the Partnership and Growth Hotel Investors II, a California limited partnership * Incorporated by reference to Exhibit(c)(15) to Schedule 14D-9 filed with the Commission by Growth Hotel Investors on February 29, 1996 in connection with the Offer, and amended by Amendment No.1 thereto filed with the Commission on March 7, 1996 and Amendment No.2 thereto dated March 13, 1996 EXHIBIT (a)(v Supplement to Offer to Purchase Up to 15,000 Units of Limited Partnership Assignee Units of GROWTH HOTEL INVESTORS, a California Limited Partnership for $705 Net Per Unit by DEVON ASSOCIATES THE OFFER, WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MARCH 25, 1996 UNLESS EXTENDED. LIMITED PARTNERS MAY WITHDRAW UNITS THAT HAVE ALREADY BEEN TENDERED BY FOLLOWING THE PROCEDURES SET FORTH BELOW IN THIS SUPPLEMENT. Devon Associates, a New York general partnership (the "Purchaser") hereby supplements and amends its offer (the "Purchaser's Offer") to purchase up to 15,000 of the outstanding Limited Partnership Assignee Units ("Units") of Growth Hotel Investors, a California limited partnership ("GHI"), for $705 per Unit, upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 15, 1996, in this Supplement, and in the related Letter of Transmittal, as each may be supplemented or amended from time to time. I. EXTENSION OF THE PURCHASER'S OFFER On March 7, 1996, the Purchaser agreed to extend its offer to March 25, 1996, in conjunction with expedited discovery being conducted in two class and derivative action lawsuits entitled Wallace, et al. v. Devon Associates, et al. and R&S Asset Partners, et al. v. Devon Associates, et al., filed in, respectively, the Supreme Court of New York and the Superior Court for the State of California against the Purchaser, Montgomery Realty Company-85 (the "General Partner"), which is the general partner of GHI and the managing general partner of Growth Hotel Investors II ("GHI II" and together with GHI, the "Partnerships"), and various affiliated or related persons and entities (the "Actions"). The Plaintiffs in the Actions assert claims for, inter alia, breaches of fiduciary duty and aiding and abetting such breaches and seek, among other things, to require the General Partner to explore and pursue all transactions that would maximize the value of the Units of the Partnerships, including the solicitation of offers to purchase all, or substantially all, of the 28 properties directly or indirectly owned by the Partnerships (the "Properties"). Each of the Properties is operated as a Hampton Inn Hotel under a license agreement with Hampton Inns, Inc. ("Hampton"). In addition, 18 of the Hampton Inn Hotels are owned in a joint venture with Hampton in which the Partnerships, through Growth Hotel Investors Combined Fund No. 1, own an 80% interest and Hampton owns a 20% subordinated interest. II. RECEIPT OF OFFER FROM PROMUS HOTEL CORPORATION TO PURCHASE ALL PROPERTIES OWNED BY THE PARTNERSHIPS On March 12, 1996, the Partnerships advised the Purchaser that they had received from Promus Hotel Corporation ("Promus") an offer (the "Promus Offer") to purchase, through a subsidiary of Promus, all of the Properties owned directly or indirectly by the Partnerships free and clear of all debts and encumbrances for an aggregate purchase price of $147,400,000 in cash. As of December 31, 1995, the Properties were encumbered by indebtedness having an aggregate principal balance of approximately $55,600,000 (approximately $18,500,000 and $37,100,000 of which are attributable to interests owned by GHI and GHI II, respectively). Furthermore, the amount ultimately distributed to limited partners (as of December 31, 1995, there were outstanding 36,932 Units and 58,982 Units in GHI and GHI II, respectively) if the Promus Offer was closed would be increased by the amount of net current assets of each Partnership (as of December 31, 1995, GHI and GHI II had net current assets of approximately $4,300,000 and $5,400,000, respectively) and decreased as a result of the general partners' entitlement to receive 2% of the proceeds distributed by each Partnership. Based on the information set forth above, the allocation of the purchase price among the Properties in the manner set forth in the Promus Offer and assuming that the Partnerships incur liquidation costs equal to 3% of the purchase price, the Purchaser estimates that GHI limited partners would receive approximately $938 per Unit if the Promus Offer was closed on the foregoing terms. However, the Promus Offer is subject to a number of substantial conditions described below and, accordingly, there can be no assurance that a transaction with Promus will be consummated or, if consummated, that it will close on the terms referred to above. The Promus Offer is contingent on satisfaction of the following conditions: (1) a 30-day due diligence period and satisfaction with respect to title, survey, environmental matters, alcoholic beverage control matters, third party consents, governmental approvals, engineering matters, physical condition of the properties, financial statements, litigation, compliance with law, labor matters, insurance, taxes, employee benefit matters, intellectual property, material contracts, antitrust, compliance with standards manual and other customary matters regarding the assets to be purchased; (2) receipt of governmental and other required consents and approvals; and (3) documentation of the purchase transactions on terms and conditions satisfactory to all parties within a reasonable time. The Promus Offer expires at 5:00 p.m. on March 31, 1996. Promus, an affiliate of Hampton, is a publicly-traded corporation and the franchisor and operator of the Embassy Suites, Hampton Inn, Hampton Inn & Suites and Homewood Suites hotel brands. Promus has indicated that it believes its offer represents substantially greater value to the limited partners of GHI than the Purchaser's Offer. III. PROPOSED SETTLEMENT OF THE ACTIONS AND THE GENERAL PARTNER'S AGREEMENT TO SOLICIT ADDITIONAL OFFERS FOR THE PROPERTIES On March 15, 1996, the parties to the Actions entered into an agreement to settle the Actions and all claims that were asserted, or could have been asserted, in the Actions for inter alia, the following consideration: (1) the General Partner's agreement to take any such actions as are reasonably necessary and consistent with its fiduciary duties to procure offers for the purchase of the Properties which maximize the value of the Units. If after taking such actions, the General Partner determines, consistent with its fiduciary duties, to accept an offer or offers to purchase all or substantially all of the Properties, it will prepare a proposed plan of liquidation for each Partnership and submit such proposals to a vote of the Unitholders. Thereafter, such plans shall be implemented if approved by a majority of outstanding Units in the Partnerships, as required by the Partnership Agreements of the Partnerships; (2) the General Partner's agreement to allow counsel for the Plaintiffs in the Actions ("Plaintiffs' Counsel") to comment upon the solicitation process. The General Partner will make available to Plaintiffs' Counsel all materials and correspondence sent by the General Partner in connection with the solicitation of interested bidders and sent by the General Partner in response to any offers or expression of interest, and all correspondence received by the General Partner in response to any solicitation and any offer which was not solicited; and (3) the Purchaser's agreement to mail this Supplement to all limited partners. As set forth above, pursuant to the terms of the agreement to settle the Actions, the General Partner will now solicit offers from any and all parties (including Promus) that may be interested in purchasing all, or substantially all, of the Properties. If any such offers are forthcoming, such offers could result in the receipt by limited partners of amounts in excess of that provided by the Purchaser's Offer or the current Promus Offer. However, there can be no assurance that any offers other than the Promus Offer will be received, or, if received, that such offers will be accepted. IV. PROCEDURES FOR THE WITHDRAWAL OF UNITS PREVIOUSLY TENDERED IN ACCORDANCE WITH SECTION 4 OF THE OFFER TO PURCHASE, LIMITED PARTNERS WHO HAVE TENDERED UNITS PURSUANT TO THE PURCHASER'S OFFER AND WHO NOW WISH TO WITHDRAW THEIR UNITS, MAY DO SO BY DELIVERING TO THE PURCHASER A WRITTEN NOTICE OF WITHDRAWAL ON OR PRIOR TO MARCH 25, 1996. TO BE EFFECTIVE, ANY SUCH NOTICE OF WITHDRAWAL MUST SPECIFY THE NAME OF THE PERSON WHO TENDERED THE UNITS, MUST BE SIGNED BY THE PERSON(S) WHO SIGNED THE LETTER OF TRANSMITTAL IN THE SAME MANNER AS THE LETTER OF TRANSMITTAL WAS SIGNED. IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE, PLEASE CONTACT THE HERMAN GROUP, INC. AT (800) 530-4966. DEVON ASSOCIATES March 18, 1996 EXHIBIT (z)(iii SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES R & S ASSET PARTNERS, a Florida General Partnership, and JESSIE B. SMALL, on their own behalves, on behalf of all others similarly situated, and derivatively on behalf of the Nominal Defendants, Plaintiffs, Civil No. BC145220 Action No. 1 v. DEVON ASSOCIATES, CAYUGA ASSOCIATES, L.P., CAYUGA CAPITAL CORP., FLEETWOOD CORP., CARL C. ICAHN, MICHAEL L. ASHNER, MARTIN LIFTON, ARTHUR N. QUELER, INSIGNIA FINANCIAL GROUP, INC., IFGP, CORP., NATIONAL PROPERTIES INVESTORS, INC., NPI EQUITY INVESTMENTS II, INC., FOX REALTY INVESTORS, PORTFOLIO REALTY ASSOCIATES, L.P., EMMET J. CASHIN, JR., JAROLD A. EVANS, W. PATRICK MCDOWELL, APOLLO REAL ESTATE ADVISORS, L.P., and MONTGOMERY REALTY COMPANY-85, Defendants, - and - GROWTH HOTEL INVESTORS, a California Limited Partnership and GROWTH HOTEL INVESTORS II, a California Limited Partnership, Nominal Defendants. SUPREME COURT FOR THE STATE OF NEW YORK COUNTY OF NEW YORK - ---------------------------------------- WILLIAM WALLACE, MILDRED WALLACE, EDITH G. MARTIN, PAUL ALLEMANG and GWEN ALLEMANG, on behalf of themselves and all others similarly situated, and derivatively on behalf of GROWTH HOTEL INVESTORS, a California Limited Partnership, and GROWTH HOTEL INVESTORS II, a California Limited Partnership, Plaintiffs, Index No. 96/00866 Action No. 2 - against - DEVON ASSOCIATES, MONTGOMERY REALTY 85, GHI ASSOCIATES, CAYUGA ASSOCIATES L.P., CAYUGA CAPITAL CORP., INSIGNIA FINANCIAL GROUP, INC., L.P. and FLEETWOOD CORP., Defendants, - and - GROWTH HOTEL INVESTORS, a California Limited Partnership and GROWTH HOTEL INVESTORS II, a California Limited Partnership, Nominal Defendants. - ---------------------------------------- MEMORANDUM OF UNDERSTANDING The parties to the class and derivative actions entitled R&S Asset Partners, et. al. v. Devon Associates, et al., Civil No. 145220, and William Wallace, et al v. Devon Associates, et al., Index No. 96/00866, pending, respectively, in the Superior Court of the State of California for the County of Los Angeles and in the Supreme Court for the State of New York, County of New York (the "Actions"), by their attorneys or principals, have reached an agreement in principle providing for the proposed settlement of the Actions on the terms and subject to the conditions set forth below. This Memorandum of Understanding embodies the principal terms of the proposed agreement (the "Settlement") by and between counsel representing the plaintiffs ("Plaintiffs' Counsel"), suing derivatively on behalf of the two California limited partnerships named as nominal defendants in the Actions, Growth Hotel Investors ("GHI") and Growth Hotel Investors II ("GHI II") (collectively, the "Partnerships"), and directly on behalf of themselves and a putative class consisting of all holders of limited partnership assignee units ("Units") of the Partnerships (the "Class" or "Unitholders), and the principals or counsel for defendants DEVON ASSOCIATES, CAYUGA ASSOCIATES, L.P., CAYUGA CAPITAL CORP., FLEETWOOD CORP., CARL C. ICAHN, MICHAEL L. ASHNER, MARTIN LIFTON, ARTHUR N. QUELER, INSIGNIA FINANCIAL GROUP, INC. (referred to in Action No. 2 as "Insignia Financial Group, Inc., L.P."), IFGP, CORP., NATIONAL PROPERTIES INVESTORS, INC., NPI EQUITY INVESTMENTS II, INC., FOX REALTY INVESTORS, PORTFOLIO REALTY ASSOCIATES, L.P., EMMET J. CASHIN, JR., JAROLD A. EVANS, W. PATRICK MCDOWELL, APOLLO REAL ESTATE ADVISORS, L.P., and MONTGOMERY REALTY COMPANY-85 (referred to in Action No. 2 as "Montgomery Realty-85"), and GHI ASSOCIATES (Plaintiffs and Defendants are referred to collectively as the "Parties"). 1. The Parties will in good faith execute an appropriate stipulation of settlement (the "Stipulation of Settlement") and such other documentation as may be required to obtain court approval of the Settlement upon the terms set forth in this Memorandum of Understanding and such other terms to which the Parties may hereafter agree. The Stipulation of Settlement will expressly provide, inter alia, that all Defendants have denied, and continue to deny, that they have committed any wrongdoing or violations of law or of any fiduciary or other obligation, and that they are entering into the Stipulation of Settlement solely because the proposed Settlement will eliminate the burden, expense and risk of further litigation. The Stipulation of Settlement will expressly provide, inter alia, for a release by Plaintiffs, the Class and the Partnerships of all claims arising out of or relating to the outstanding tender offers of Devon Associates for Units (the "Tender Offers") and any and all claims, whether direct or derivative, which have been or could have been asserted in the Actions. In exchange for the settlement of the Actions and release of all claims made therein, the Defendants agree to provide the following. 2. Defendant Montgomery Realty Company-85, the general partner of the Partnerships (the "General Partner"), agrees to take any such actions as are reasonably necessary and consistent with its fiduciary duties to procure offers for the purchase of the assets (or the underlying real estate) of the Partnerships which maximize the value of the Units. In connection therewith, the General Partner shall deal fairly and in good faith with persons or entities expressing an interest in making a bona fide offer to purchase the assets or underlying real estate of the Partnerships, and, consistent with the General Partner's fiduciary duties and subject to execution and compliance with customary confidentiality agreements, will provide all bona fide offerors with access to the Partnerships' books and records for purposes of due diligence. If after taking such actions, the General Partner determines, consistent with its fiduciary duties, to accept an offer or offers to purchase all or substantially all of the Partnerships' assets or underlying real estate, it will, consistent with its fiduciary duties and contractual obligations to others, prepare a proposed plan of liquidation for each Partnership and submit such plans to a vote of the Unitholders and, thereafter, shall implement such plans if approved by the holders of the requisite number of outstanding Units in the Partnerships as required by the Amended and Restated Partnership Agreements of the Partnerships (the "Partnership Agreements"). To the extent anything in this paragraph 2 or in any paragraph of this Memorandum of Understanding conflicts with the express obligations of the General Partner set forth in the Partnership Agreements, the Partnership Agreements shall govern. 3. The General Partner shall make available to Plaintiffs' Counsel all materials and correspondence (a) sent by the General Partner in connection with the solicitation of interested bidders, (b) sent by the General Partner in response to any offers or expressions of interest; and (c) all correspondence received by the General Partner in response to any solicitation and any offers which were not solicited. The General Partner agrees to allow Plaintiffs' Counsel to comment upon the solicitation process. 4. Upon the execution of this Memorandum of Understanding, Devon Associates will mail to all Unitholders copies of the Supplemental Disclosure that is attached hereto as Exhibit A. 5. The consummation of the Settlement is expressly conditioned upon the entry of a final order dismissing the Actions and the entry of an order barring with prejudice and without costs any and all class and derivative claims arising out of or relating to the Tender Offers and any and all claims, direct or derivative, that have been or could have been asserted in the Actions, in any other forum or proceeding, against the Defendants, their subsidiaries, parents, affiliates, predecessors, officers, directors, agents, successors or assigns, or the employees, agents, representatives, officers or directors of any of them, by or on behalf of the Class, the Partnerships or all persons or entities who own Units, as well as their successors and assigns (whether express, by implication or by operation of law). 6. The Parties will present the Stipulation of Settlement either to the Superior Court of California or to the Supreme Court of New York (the "Court") for approval as soon as practicable, and will use their best efforts to obtain Final Approval of the Settlement (defined below) and the dismissal of the Actions with prejudice and without costs to any party (except such attorneys' fees and expenses as may be awarded by the Court and the expenses of notice as provided in paragraph 11 hereof). Final Approval of the Settlement shall not be deemed to have taken place until the Court shall have approved the Settlement and the dismissal of the Actions with prejudice and without costs, final judgment has been entered, and the time for all appeals therefrom shall have expired ("Final Approval"). 7. Prior to the submission of a Stipulation of Settlement and supporting papers to the Court, Plaintiffs shall be entitled to conduct such additional investigation and reasonable discovery (whether formal or informal) to further confirm the fairness and reasonableness of the Settlement as they deem reasonably necessary under the circumstances. The Parties and their counsel will cooperate in arranging for such discovery in an expeditious manner at mutually convenient times. 8. The Settlement reflected in this Memorandum of Understanding is subject to approval of the Court. In the event the Court declines to approve this Settlement, this Memorandum of Understanding, together with any Stipulation of Settlement and any order approving the representative Plaintiffs shall be null and void and shall have no continuing effect, and no reference to the fact of a proposed settlement or the terms thereof shall be made to any court or shall be used in any proceeding against the Defendants or the Plaintiffs as a concession of liability or lack thereof or for any purpose whatsoever by any person or entity. 9. This Memorandum of Understanding shall in no event be construed or be deemed to be evidence of an admission or concession on the part of any Defendant with respect to any claim or any fault or liability or damages whatsoever. Each Defendant denies any and all wrongdoing of any kind whatsoever in connection with the Partnerships, denies any liability in the Actions, and does not concede any infirmity in the defenses which each Defendant may assert. Each Defendant is entering into this Memorandum of Understanding solely to avoid further expense, inconvenience, and delay and to dispose of expensive, burdensome and protracted litigation. 10. Notwithstanding any other paragraph hereof, the Defendants will pay the reasonable out-of-pocket costs and expenses of notification to the Class of this Settlement, regardless of whether Final Approval of the Settlement is obtained. 11. The consummation of the Settlement is subject to the completion by Plaintiffs of discovery described above, final agreement as to appropriate Stipulation(s) of Settlement, and such other documentation as may be required to effect Final Approval of the Actions. The Settlement contemplated by this Memorandum of Understanding will not be binding upon any party until such discovery has been completed and appropriate Stipulation(s) of Settlement have been signed, the Settlement and the Dismissal of the Actions with prejudice and without costs has been obtained, and judgments are final. This Memorandum of Understanding shall be null and void and of no force and effect should any of these conditions not be met or should Plaintiffs' Counsel reasonably determine that any Party has failed to act in material compliance with their obligations hereunder. In that event, this Memorandum of Understanding shall not be deemed to prejudice in any way the positions of the Parties or any Defendants with respect to the Actions. In all events, this Memorandum of Understanding shall not be deemed, utilized or offered to prejudice in any way the position of any of the Parties or any Defendants with respect to the Actions or otherwise. 12. Except as may be provided for in paragraph 7 above, all dates for the service of responsive pleadings or for the taking of any other action in connection with the Actions are hereby adjourned without date, subject to reinstatement upon reasonable notice to the Parties. Dated: New York, New York March 14, 1996 WECHSLER HARWOOD HALEBIAN & FEFFER LLP By: _____________________________ Andrew D. Friedman, Esq. Attorneys for Plaintiffs R&S Asset Partners and Jessie B. Small 805 Third Avenue, 7th Floor New York, New York 10022 (212) 935-7400 GOODKIND LABATON RUDOFF & SUCHAROW, LLP By: ______________________________ Lynda J. Grant, Esq. Attorneys for Plaintiffs William and Mildred Wallace, Edith G. Martin and Paul and Gwen Allemang 100 Park Avenue New York, New York 10017 (212) 907-0700 BEIGEL SCHY LASKY RIFKIND FERTIK & GELBER By: _____________________________ Leigh Lasky, Esq. Attorneys for Defendants Devon Associates, Cayuga Associates, L.P., Cayuga Capital Corp., Michael L. Ashner, Martin Lifton, Arthur N. Queller, Apollo Real Estate Advisors, L.P. Emmet J. Cashin, Jr., Jarold A. Evans and W. Patrick McDowell 750 Lexington Avenue New York, New York (212) 705-5300 NIXON, HARGRAVE, DEVANS & DOYLE LLP By: _______________________________ Adam B. Gilbert, Esq. Attorneys for Defendants Montgomery Realty Company-85 Growth Hotel Investors, Growth Hotel Investors II and GHI Associates 437 Madison Avenue New York, New York 10022 (212) 940-3000 ROGERS & WELLS By: ______________________________ David Schulz, Esq. Attorneys for Defendants Fleetwood Corp. and Carl C. Icahn 200 Park Avenue New York, New York 10166 (212) 878-8000 PROSKAUER ROSE GOETZ & MENDELSOHN LLP By: _____________________________ Thomas C. Moore, Esq. Attorneys for Defendants Insignia Financial Group, Inc., IFGP, Corp., National Properties Investors, Inc. NPI Equity Investments II, Inc. and Fox Realty Investors 1585 Broadway New York, New York 10036 (212) 969-3000 PORTFOLIO REALTY ASSOCIATES, L.P. By: _____________________________ W. Patrick McDowell EXHIBIT (z)(v [PROMUS HOTEL CORPORATION LETTERHEAD] March 15, 1996 Via Facsimile Growth Hotel Investors Attn: General Partner One Insignia Financial Plaza Greenville, South Carolina 29602 Growth Hotel Investors II Attn: General Partner One Insignia Financial Plaza Greenville, South Carolina 29602 Ladies and Gentlemen: This is to inform you that the Board of Directors of Promus Hotel Corporation approved our offer to you dated March 11, 1996 and amended March 12, 1996. Enclosed is a breakdown of the valuations that were the basis of our offer on a per property basis. Our offer is for the package of 28 hotels and we want to discuss allocation of the purchase price to maximize advantage to all parties. We wish to meet with you at your earliest convenience to appropriately allocate the offer among the partnerships as well. Although we do not have the information necessary to be completely confident as to the value of our offer on a "per unit" basis, based upon your estimated $101,500.00 distribution upon consummation of our offer, and 95,914 units of the two partnerships outstanding, we calculate an estimated $1,058.24 per unit for the limited partners of both GHI and GHI II if an equal amount were to be distributed for each unit. We are confident that we can finance the proposed purchase with one of our lenders and our existing credit facilities. Our offer is not contingent on obtaining financing. We further believe that in the event of a prompt meeting to fully discuss relevant information we may be able to reduce the due diligence period to under 30 days since we are familiar with many of the hotels. It is our desire to meet with you as soon as possible so that we both may adequately define our offer in order for you to make a fully informed comparison between the value of our offer and other outstanding offers and describe the difference to your unit holders. Since we believe our offer represents a very advantageous proposal to your partnerships, we would hope that the parties can come to a prompt meeting of the minds and closing of this transaction. Very truly yours, /s/ Michael D. Rose MDR/de Attachment PROMUS HOTEL CORPORATION Growth Hotel Investors & Growth Hotel Investors II Property Listing & Purchase Price Property Name Purchase Price Memphis - Sycamore View 3,427,834 Columbia, SC 5,641,771 Spartanburg, SC 2,297,904 N. Little Rock, AR 4,720,498 Amarillo, TX 3,988,328 Greenville, SC 4,732,242 Charleston, SC 5,042,739 Memphis - Poplar, TN 7,750,115 Atlanta - Roswell, GA 6,512,365 Dallas - Richardson, TX 4,678,741 Nashville - Briley, TN 6,155,509 Greensboro, NC 6,580,390 Birmingham, AL 6,249,461 San Antonio, TX 3,803,509 Madison Heights, MI 3,870,129 Chapel Hill, NC 8,543,591 Mountain Brook, AL 5,825,253 Atlanta - Northlake, GA 5,702,944 North Dallas 8,511,711 Syracuse 2,842,905 Brentwood 6,132,185 Aurora 5,873,889 Albuquerque North 6,964,874 Kansas City 5,570,852 Eden Prairie 5,089,980 Dublin 4,659,283 St. Louis 5,270,980 Colorado Springs 2,960,018 TOTAL PORTFOLIO VALUE 147,400,000 -----END PRIVACY-ENHANCED MESSAGE-----