PRRN14A 1 sir2_prrn14a032504.txt REV PROXY STMT SIR II LP SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) Securities Exchange Act of 1934 Filed by the Registrant [ ] Filed by a party other than the Registrant [X] Check the appropriate box: [X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12 SECURED INVESTMENT RESOURCES FUND, L.P. II (Name of Registrant as Specified in Its Charter) Everest Properties II, LLC Millenium Management, LLC (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of filing fee (Check the appropriate box): [X] No fee required [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transactions applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined.) (4) Proposed maximum aggregate value of transaction: (5) Total Fee paid: [ ] Fee paid previously with preliminary materials [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount previously paid: (2) Form, Schedule or Registration Statement No.: (3) Filing party: (4) Date filed: Everest Properties II, LLC Millenium Management, LLC 155 N. Lake Avenue, Suite 1000 Pasadena, CA 91101 March [_], 2004 Dear Limited Partner: Enclosed is a Solicitation of Consents seeking the approval by written consent (the "Consents") of the limited partners (the "Limited Partners") of Secured Investment Resources Fund, L.P. II, a Delaware limited partnership (the "Partnership"), to remove all current general partners and to continue the Partnership and elect Millenium Management, LLC, a California limited liability company ("Millenium") as the new general partner of the Partnership. According to the last filing made with the Securities and Exchange Commission ("SEC") by the Partnership, James R. Hoyt is the Individual General Partner, and Secured Investment Resources, II Inc., a Missouri corporation, is the Corporate General Partner, of the Partnership. The goal of Millenium in soliciting the Consents is to elect Millenium as the new general partner of the Partnership so that Millenium can: o Send Financial Reports to Limited Partners: Upon becoming the new general partner, Millenium will send you detailed financial reports about Partnership assets and operations which the current general partners have continuously withheld. o File Required Reports with the SEC: Millenium will file all the required financial reports with the SEC. The current general partners have not filed the required financial reports with the SEC for periods after 1999. We believe the Partnership is in serious violation of securities laws. o Investigate Claims: Although Millenium is currently not aware of any existing claims against the general partners, upon becoming your new general partner Millenium will investigate to determine whether or not there are any claims, such as claims for breach of fiduciary duty or breach of the Partnership Agreement, that should be brought against the Partnership's current general partners. o Reduce Management Fees and Expenses: Millenium will use its best efforts to reduce the property management and other fees paid by current general partners and its affiliates. o Liquidate The Partnership: Once Millenium has been able to take over the Partnership and analyze its situation, if Millenium deems it to be in the best interest of the Limited Partners, it will consider selling the properties and liquidating the Partnership (the Partnership Agreement currently provides that the Partnership does not have to be liquidated until the year 2046). You may have the following questions: Q: What is Millenium Asking Me to Vote Upon? A: Millenium is asking for your consent (1) to remove all of the current general partners of the Partnership, believed to be James R. Hoyt and Secured Investment Resources, II Inc.; and (2) elect Millenium Management, LLC, as the general partner of the Partnership. Q: Who is Millenium? A: Millenium is an affiliate of KM Investments, LLC, which owns limited partner units in the Partnership. Both Millenium and KM Investments are managed by Everest Properties II, LLC ("Everest"). Everest's management and its affiliates have substantial experience in investing in and managing limited partnerships. Everest, through its affiliated investment funds, has invested over Two Hundred Million Dollars in over four hundred partnership since 1996. Everest's affiliates own and/or operate over 3700 apartment units owned by various limited partnerships in fourteen states. Q: Why Should I Vote to Remove the Current General Partners? A: The current general partners have not sent any financial reports to you or filed the required financial reports with the SEC for periods after 1999. By their omissions, they have not only breached the Restated Certificate and Agreement of Limited Partnership (the "Partnership Agreement"), but we believe they have violated securities laws. The limited partners have a right to know the true income and expenses of the properties in which they have invested their hard-earned money. Without regular financial reporting, audits and financial statement certification, there is no safeguard against potential abuses or improprieties by the general partners. Q: What Do I Need to Do Now? A: After carefully reading and considering the information contained in this document, we are asking that you please complete, sign and date the enclosed YELLOW consent form by marking FOR each proposal herein and mailing it to us in the self-addressed envelope provided. Hopefully, after Millenium is elected as the general partner of the Partnership, we can work together to protect the remaining value of your investment in the Partnership. We urge you to carefully read the enclosed Consent Solicitation Statement in order to vote your interests. YOUR VOTE IS IMPORTANT. FAILURE TO VOTE, ABSTENTIONS AND BROKER NON-VOTES WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE PROPOSALS. Again, to be sure your vote is represented, please sign, date and return the enclosed YELLOW Consent of Limited Partner form as promptly as possible in the enclosed, prepaid envelope. If you have any questions, please do not hesitate to contact Ms. Stacey McClain at 626-585-5920. Very truly yours, Millenium Management, LLC SOLICITATION OF CONSENTS of LIMITED PARTNERS of Secured Investment Resources Fund, L.P. II by Everest Properties II, LLC and Millenium Management, LLC March [_], 2004 CONSENT SOLICITATION STATEMENT Everest Properties II, LLC ("Everest") and Millenium Management, LLC, a California limited liability company ("Millenium") are seeking the approval by written consent (the "Consents") of the limited partners (the "Limited Partners") of Secured Investment Resources Fund, L.P. II, a Delaware limited partnership (the "Partnership"), to remove all of the current general partners, believed to be James R. Hoyt ("Hoyt") and Secured Investment Resources, II Inc. ("SIRI"). Everest and Millenium are also seeking your approval to continue the Partnership with Millenium as the new general partner of the Partnership. The election of Millenium as a general partner is conditioned upon the approval of the removal of all of the current general partners. In the event that the current general partners are removed and the Limited Partners do not approve continuing the Partnership with Millenium as the new general partner, Millenium will initiate an additional consent solicitation to continue the Partnership with a different, new general partner. In the event that the Limited Partners do not elect to continue the Partnership with a new general partner after the removal of the current general partners, the Partnership will be dissolved and the assets of the Partnership will be liquidated pursuant to the Partnership Agreement. This Consent Solicitation Statement and the accompanying YELLOW Consent of Limited Partners form are first being mailed to Limited Partners on or about March [_], 2004. Limited Partners who are record owners of Limited Partnership Interests as of March 15, 2004 (the "Record Date") shall be sent this Consent Solicitation Statement. The reasons for Millenium's belief that it is important to replace the current general partners are set further in the introductory letter. Considerations other than those identified, such as investment and tax considerations, exist which should also be weighed in replacing the current general partners with Millenium. You are advised to read this entire Consent Solicitation Statement carefully and to consult with your investment and tax advisors before making a decision whether or not to consent. YOUR VOTE IS IMPORTANT. FAILURE TO VOTE WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE PROPOSALS. The Consents are solicited upon the terms and subject to the conditions of this Consent Solicitation Statement and the accompanying form of Consent. Removal of the current general partners and the election to continue the Partnership with Millenium as the new general partner requires the consent of the record holders of a majority of the outstanding limited partnership interests ("Limited Partnership Interests") of the Limited Partners (the "Required Consents"). If Millenium receives the Required Consents, it will become the new general partner, as provided in the Partnership Agreement. Section 16.2 of the Partnership Agreement provides that the vote of Limited Partners owning a majority of the Limited Partnership Interests may remove a general partner. Section 20.1.1 provides that the Limited Partners owning a majority of the Limited Partnership Interests may elect to continue the Partnership and elect a new general partner if an event of dissolution occurs by the removal of a general partner. Under the Partnership Agreement and Delaware law, Limited Partners do not have dissenters' rights of appraisal in connection with these Proposals. THIS SOLICITATION IS BEING MADE BY MILLENIUM AND EVEREST AND NOT ON BEHALF OF THE PARTNERSHIP. CONSENTS SHOULD BE DELIVERED TO MILLENIUM AND SHOULD NOT BE SENT TO THE PARTNERSHIP. THE SECURITIES AND EXCHANGE COMMISSION HAS NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. THIS SOLICITATION OF CONSENTS EXPIRES NO LATER THAN 11:59 P.M. PACIFIC TIME ON [_________], 2004, UNLESS EXTENDED. AVAILABLE INFORMATION The Partnership is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, consent solicitation statements and other information with the SEC. However, the Partnership has not filed any of the aforementioned documents with the SEC since 1999. Such reports, consent solicitation statements and other information filed with the SEC can be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. In addition, the SEC maintains a site on the World Wide Web portion of the Internet that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of such site is http://www.sec.gov. INFORMATION CONCERNING MILLENIUM AND EVEREST Millenium is a California limited liability company that was formed in 1998 for the purpose of seeking to become the general partner of other real estate limited partnerships and to invest in limited partnerships. Millenium does not own any Limited Partnership Interests, but Everest owns 132 units and other of its affiliates, Everest Management, LLC and KM Investments, LLC, own 20 and 32 units, respectively; which together represent 0.34% of the Limited Partnership Interests outstanding. The principal office of Millenium is 155 N. Lake Avenue, Suite 1000, Pasadena, CA 91101; telephone (626) 585-5920. Millenium, Everest Management and KM Investments are all managed by Everest. Everest, through affiliated investment funds, has invested over two hundred million dollars in over four hundred partnership since 1996. Everest's affiliates own and/or operate over 3700 apartment units owned by various limited partnerships in fourteen states. Everest and Millenium have the same officers. They do not own any Limited Partnership Interests. The following are the resumes of Everest's and Millenium's officers. The business address of each of the officers is 155 N. Lake Avenue, Suite 1000, Pasadena, CA 91101. W. Robert Kohorst. Mr. Kohorst has been the President of Everest since 1996. He is a lawyer by profession. From 1984 through 1990, Mr. Kohorst was the President of the Private Placement Group for Public Storage, Inc., a national U.S. real estate syndicator. Mr. Kohorst's responsibilities included all structuring, marketing, investor services and accounting services for private placement syndications for Public Storage, Inc., and its affiliates. Upon leaving Public Storage, Inc. in 1990, Mr. Kohorst was the Chief Executive Officer and principal of two businesses, Tiger Shark Golf, Inc., a golf equipment manufacturer, and Masquerade International, Inc., a manufacturer of costumes. In 1991 Mr. Kohorst co-founded KH Financial, Inc., which has been engaged in the acquisition of general partner interests, real estate companies and related assets. Mr. Kohorst has been the President of KH Financial, Inc. from its inception to the present. Mr. Kohorst holds a Juris Doctor from the University of Michigan and a Bachelor of Science degree in accounting from the University of Dayton. David I. Lesser. Mr. Lesser has been the Executive Vice President of Everest since 1996. He is a lawyer by profession. From 1979 through 1986, Mr. Lesser practiced corporate and real estate law with Kadison, Pfaelzer, Woodard, Quinn & Rossi and Johnsen, Manfredi & Thorpe, two prominent Los Angeles law firms. From 1986 through 1995, Mr. Lesser was a principal and member of Feder, Goodman & Schwartz and its predecessor firm, co-managing the firm's corporate and real estate practice. Between 1990 and 1992, Mr. Lesser was counsel to Howard, Rice, Nemerovski, Robertson, Canady & Falk. Mr. Lesser is also a Vice President of KH Financial, Inc. Mr. Lesser holds a Juris Doctor from Columbia University and a Bachelor of Arts degree from the University of Rochester. Christopher K. Davis Mr. Davis is a Vice President and the General Counsel of Everest, which he joined in 1998. He is a lawyer by profession. From 1991 to 1995, he practiced securities and corporate law with Gibson, Dunn & Crutcher, a prominent national law firm headquartered in Los Angeles. From 1995 through 1997, he served as Senior Staff Counsel and then Director of Corporate Legal of Pinkerton's, Inc., a worldwide provider of security, investigation and related services. At Pinkerton, Mr. Davis was responsible for directing the corporate section of the legal department. Mr. Davis holds a Juris Doctor from Harvard Law School and a Bachelor of Science degree in Business Administration from the University of California, Berkeley. Peter J. Wilkinson. Mr. Wilkinson is a Vice President and the Chief Financial Officer of Everest, which he joined in 1996. He is an accountant by profession. From 1981 through 1987, he worked for Deloitte Haskins and Sells and Coopers and Lybrand in London and Sydney in their audit divisions, gaining significant experience in a variety of industry segments. From 1987 to 1990, he was the company secretary and controller of Gresham Partners, an Australian investment bank where, in addition to being responsible for all financial, tax and administrative matters, he was involved with analyzing leveraged buyout, property finance and business acquisitions. Mr. Wilkinson joined BankAmerica in the United States and from 1991 to 1996 held a number of positions, culminating in being the Division Finance Officer for the Corporate Trust and Mortgage and Asset Backed divisions. In this capacity, he was responsible for presentation of all financial information and financial due diligence during their divestiture. Mr. Wilkinson holds a Bachelor of Science degree from Nottingham University and is an English chartered accountant. INFORMATION CONCERNING THE PARTNERSHIP Since the current general partners have not filed any of the required financial reports with the SEC for periods after the third quarter of 1999, there is little information available on the Partnership. Information contained in this section is based upon documents and reports publicly filed by the Partnership, including the Annual Report on Form 10-K for the fiscal year ended December 31, 1998 (the "Form 10-K"). Although Millenium has no information that any statements contained in this section are untrue, the Millenium has not independently investigated the accuracy of statements, and takes no responsibility for the accuracy, inaccuracy, completeness or incompleteness of any of the information contained in the Form 10-K or for the failure by the Partnership to disclose events which may have occurred and may affect the significance or accuracy of any such information. Secured Investment Resources Fund, L.P. II ("Partnership") is a Delaware limited partnership formed pursuant to the Delaware Revised Uniform Limited Partnership Act on July 1, 1986. James R. Hoyt is the Individual General Partner and Secured Investment Resources, II Inc., a Missouri corporation, is the Corporate General Partner. The Partnership has no predecessors or subsidiaries. The Partnership was formed with the intent to engage in the business of acquiring, improving, developing, operating and holding for investment, income producing properties with the objectives of (i) preserving and protecting the Partnership's capital; (ii) providing cash distributions from operation; (iii) providing capital growth through property appreciation; and (iv) increasing equity in property ownership by the reduction of mortgage loans on Partnership properties. The term of the partnership is sixty (60) years from the date of the Partnership Agreement, September 25, 1986, or the date of which all the assets acquired by the partnership are sold or converted to cash. The Partnership originally acquired eight properties, which included four apartment communities, three shopping centers and a health care facility. The General Partners feel that all of these properties met the Partnership's investment criteria and objectives. Since the inception of the Partnership, three properties (two apartment communities and one shopping center) have been sold. Outstanding Limited Partnership Interests According to the Partnership, there were 53,661 limited partnership units issued and outstanding at December 31, 1998. A Limited Partner is entitled to one vote for each Limited Partnership Interest owned by such Limited Partner. Millenium does not know if any person currently owns beneficially in excess of 5% of the outstanding Limited Partnership Interests. PROPOSALS AND SUPPORTING STATEMENT The Limited Partners are being asked to approve by written consent the following actions (the "Proposals") pursuant to the Partnership Agreement: (1) the removal of all of the current general partners of the Partnership, specifically, Hoyt and SIRI and any other person or entity currently serving as a general partner; and (2) the continuation of the Partnership with Millenium as the new general partner of the Partnership (which is conditioned upon the approval of Proposal 1 above). Removing the General Partner A review of documents and reports publicly filed by the Partnership and books and records available to partners indicates that the Partnership held real estate assets that, if they are still held by the Partnership, may be valuable. We note that these documents and records are from 1998 and 1999. The general partner has not filed any current reports or sent updated financial information to the Limited Partners for periods after 1999. If the Partnership has disposed of its assets, Millenium will seek to determine the details of such disposition and the use of any proceeds therefrom. If the Partnership still owns these assets, Millenium believes the Partnership should be exploring opportunities to maximize the value of these assets and concentrate on realizing potential cash returns to the Limited Partners on their original investment. If Millenium is elected as the new general partner, it plans to review the books and records of the Partnership and formulate specific plans to achieve these goals and objectives. Of course, Millenium cannot give any assurances that electing Millenium as the new general partner will result in attaining theses goals and objections. Millenium believes that removing the current general partners and electing Millenium as the new general partner will provide the Limited Partners with the best potential to realize the greatest potential cash returns to the Limited Partners in the near future. The goal of Millenium in soliciting the Consents is to elect itself as the new general partner of the Partnership so that it can: o Send Financial Reports to Limited Partners: Upon becoming the new general partner, Millenium will send you detailed financial reports about Partnership assets and operations which the current general partners have continuously withheld. o File Required Reports with the SEC: Millenium will file all the required financial reports with the SEC. The current general partners have not filed the required financial reports with the SEC for periods after 1999. We believe the Partnership is in serious violation of securities laws. o Investigate Claims: Although Millenium is currently not aware of any existing claims against the general partners, upon becoming your new general partner Millenium will investigate to determine whether or not there are any claims, such as claims for breach of fiduciary duty or breach of the Partnership Agreement, that should be brought against the Partnership's current general partners. o Reduce Management Fees and Expenses: Millenium will use its best efforts to reduce the property management and other fees paid by the Partnership, especially any fees paid to the current general partners and its affiliates. o Liquidate The Partnership: Once Millenium has been able to take over the Partnership and analyze its situation, if Millenium deems it to be in the best interest of the Limited Partners, it will solicit the votes of the limited partners to sell any remaining properties and liquidate the Partnership (the Partnership Agreement currently provides that the Partnership does not have to be liquidated until the year 2046). Admission of New General Partner If the Required Consents are obtained to remove the current general partners and elect Millenium as the new general partner, the current general partners will not retain any of the rights, powers or authority accruing to the general partner following their removal as general partners; provided, however, that the Partnership must purchase the current general partners' interest in the Partnership at its fair value on the date of such removal as provided in Section 17.4 of the Partnership Agreement. Millenium is unable to estimate the fair value of the current general partners' interest in the Partnership based on the information available to Millenium. Therefore, Millenium is unable to determine if the Partnership's obligation to purchase such interest would be material or would have a material effect on the Partnership's financial condition or operations. The purchase of these interests could affect the Partnership's ability to make distributions to Limited Partners in the future since they may deplete any liquid assets currently held by the Partnership. Further, Section 9.8 of the Partnership Agreement provides that if the general partners are removed from the Partnership, any portion of the Acquisition Fee, Property Management Fee, Partnership Management Fee, subordinated real estate commission, General Partners' Interest in Cash From Sales, Financing, Refinancing or Liquidation or any other fee or commission payable according to the provisions of Section 9 which is then accrued and due, but not yet paid, shall be paid by the Partnership to the general partners. Millenium is unable to determine if any such amounts are accrued but not paid or if this obligation of the Partnership would be material, have a material effect on the Partnership's financial condition or operations, or affect the Partnership's ability to make distributions. Millenium does not anticipate any circumstance under which Millenium would not desire to become the new general partner, however, Millenium reserves the right to withdraw before admission as the new general partner in the event of a material adverse change in the Partnership. A material adverse change would include bankruptcy, foreclosure or other material impairments on the value or operations of the Partnership's assets. If the current general partners are removed, Millenium withdraws, and no replacement general partner is elected, than a party appointed for such purpose shall wind up the affairs of the Partnership, shall sell all of the Partnership's assets as promptly as is consistent with obtaining the fair value thereof, and pay all liabilities and all costs of dissolution. VOTING PROCEDURE FOR LIMITED PARTNER Distribution and Expiration Date of Solicitation This Consent Solicitation Statement and the related Consent are first being mailed to Limited Partners on or about March [_], 2004. Limited Partners who are record owners of Limited Partnership Interests as of the Record Date may execute and deliver a Consent. A beneficial owner of Limited Partnership Interests who is not the record owner of such Limited Partnership Interests must arrange for the record owner of such Limited Partnership Interests to execute and deliver to Millenium a Consent form that reflects the vote of the beneficial owner. This solicitation of Consents will expire at 11:59 p.m. Pacific Time on the earlier to occur of the following dates (the "Expiration Date"): (i) [_____], 2004 or such later date to which Millenium determines to extend the solicitation, and (ii) the date the Required Consents are received. Millenium reserves the right to extend this solicitation of Consents for such period or periods as it may determine in its sole discretion from time to time; provided, however that it will not extend this solicitation past [____], 2004. Any such extension will be followed as promptly as practicable by notice thereof by written notice to the Limited Partners, as well as filing with the SEC. All Consents delivered to Millenium will remain effective until the Expiration Date, including during any extension thereof, unless validly revoked by a later dated Consent delivered to Millenium prior to the Expiration Date. No Consent will be considered effective longer than eleven months from the date it is given. Millenium reserves the right for any reason to terminate the solicitation of Consents at any time prior to the Expiration Date by filing an amendment to this Consent Solicitation Statement with the SEC. Voting Procedures and Required Consents The Consent of Limited Partner form included with this Consent Solicitation Statement is the ballot to be used by Limited Partners to cast their votes. For each Proposal, Limited Partners should mark a box adjacent to the Proposal indicating that the Limited Partner votes "For" or "Against" the Proposal, or wishes to "Abstain". All Consents that are properly completed, signed and delivered to Millenium, and not validly revoked prior to the Expiration Date, will be given effect in accordance with the specifications thereof. If none of the boxes on the Consent is marked, but the Consent is otherwise properly completed and signed, the Limited Partner delivering such Consent will be deemed to have voted "For" the Proposals. Each Proposal requires the consent of the record holders of a majority of the Limited Partnership Interests (the "Required Consents"). Accordingly, adoption of each Proposal requires the receipt without revocation of the Required Consents indicating a vote "For" the Proposal. Millenium is seeking approval of each of the Proposals. The continuation of the Partnership with Millenium as the new general partner is conditioned on the approval of the removal of the current general partners. Otherwise, no Proposal is conditioned on the approval of another Proposal. The failure of a Limited Partner to deliver a Consent or a vote to "Abstain" will have the same effect as if such Limited Partner had voted "Against" the Proposals. Limited Partnership Interests not voted on Consents returned by brokers, banks or nominees will have the same effect as Limited Partnership Interests voted against the Proposals. If Limited Partnership Interests to which a Consent relates are held of record by two or more joint holders or tenants in common, all such holders must sign the Consent. If a Consent is signed by a trustee, partner, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must so indicate when signing and must submit with the Consent form appropriate evidence of authority to execute the Consent. In addition, if a Consent relates to less than the total number of Limited Partnership Interests held in the name of such Limited Partner, the Limited Partner must state the number of Limited Partnership Interests recorded in the name of such Limited Partner to which the Consent relates. If a Consent is executed by a person other than the record owner, then it must be accompanied by a valid proxy duly executed by the record owner. All questions as to the validity, form, eligibility (including time of receipt), acceptance, and revocation of Consents, and the interpretation of the terms and conditions of this solicitation of Consents, will be determined by Millenium, subject to the provisions of the Partnership Agreement, as well as state and federal law. Neither Millenium, nor any of its affiliates, shall be under any duty to give any notification of any such defects, irregularities or waiver, nor shall any of them incur any liability for failure to give such notification. Deliveries of Consents will not be deemed to have been made until any irregularities or defects therein have been cured or waived. In the event Millenium determines to extend this solicitation of Consents in its sole discretion or this solicitation of Consents expires, Millenium will notify the Limited Partners as promptly as practicable thereafter by notice of such extension or the results of this solicitation of Consents by written notice to the Limited Partners, as well as filing an amendment to this Consent Solicitation Statement with the SEC, if required. Effectiveness; Potential Challenges Certain aspects of the procedure set forth for this solicitation are subject to uncertainty because such procedures are not defined by the Partnership Agreement or the Revised Uniform Limited Partnership Act that governs the Partnership. Therefore, such procedures may be challenged by the current general partners or other limited partners and may result in a delay or nullification of the effectiveness of the Consents. In particular, neither the Partnership Agreement nor applicable law conclusively establishes: the manner for getting the Record Date; who can receive and verify consents and revocations; and when does an action taken by written consent become effective. Millenium believes that its procedures for collection of consents and revocations, as well as determining the validity of the same, are valid but nonetheless may be subject to challenge by the current general partners or other limited partners due to ambiguity in the Partnership Agreement and the applicable law. Completion Instructions Limited Partners are requested to complete, sign and date the YELLOW Consent of Limited Partner form included with this Consent Solicitation Statement and mail, fax, hand deliver or send by overnight courier the original signed Consent to Millenium Management, LLC, 155 N. Lake Avenue, Suite 1000, Pasadena, CA 91101, Fax No.: 626-585-5929. Consents should be sent or delivered to Millenium at the address set forth on the back cover of this Consent Solicitation Statement. A prepaid, return envelope is included for your convenience. Power of Attorney Upon approval of a Proposal, Millenium will be expressly authorized to prepare any and all documentation and take any further actions necessary to implement the approved Proposal. Furthermore, each Limited Partner who votes for a Proposal described in this Consent Solicitation Statement, by signing the attached Consent, constitutes and appoints Millenium, acting through its officers and employees, as his or her attorney-in-fact for the purposes of executing any and all documents and taking any and all actions required under the Partnership Agreement or applicable law in order to implement the approved Proposal, including the execution of an amendment to the Partnership Agreement to reflect Millenium as the new general partner of the Partnership in accordance with the applicable Proposal. Revocation of Consents Consents may be revoked at any time prior to the Expiration Date, or a Limited Partner may change his vote on one or both Proposals, in accordance with the following procedures. For a revocation or change of vote to be effective, Millenium must receive prior to the Expiration Date a written notice of revocation or change of vote (which may be in the form of a subsequent, properly executed Consent) at the address set forth on the Consent. The notice must specify the name of the record holder of the Limited Partnership Interests and the name of the person having executed the Consent to be revoked or changed (if different), and must be executed in the same manner as the Consent to which the revocation or change relates or by a duly authorized person that so indicates and that submits with the notice appropriate evidence of such authority as determined by Millenium. A revocation or change of a Consent shall be effective only as to the Limited Partnership Interests listed on such notice and only if such notice complies with the provisions of this Consent Solicitation Statement. Millenium reserves the right to contest the validity of any revocation or change of vote and all questions as to validity (including time of receipt) will be determined by Millenium, subject to the provisions of the Partnership Agreement, as well as state and federal law. No Dissenters' Rights of Appraisal Under the Partnership Agreement and Delaware law, Limited Partners do not have dissenters' rights of appraisal in connection with these Proposals. Solicitation of Consents Neither the Partnership nor the current general partners are participants in this solicitation of Consents. Millenium will initially bear all costs of this solicitation of Consents, including fees for attorneys and the cost of preparing, printing and mailing this Consent Solicitation Statement, which are currently estimated to be $20,000. To date, Millenium has incurred fees and expenses for this solicitation of approximately $5,000. If Millenium is elected as the new general partner, Millenium will seek reimbursement for such costs from the Partnership to the extent allowed under Paragraph 10 of the Partnership Agreement. Paragraph 10.3 of the Partnership Agreement provides that the Partnership shall pay the general partner for expenses in connection with preparation of proxy statements and solicitations of proxies in connection therewith as well as the preparation and mailing of any reports the general partner of the Partnership deems in the best interest of the Limited Partners. In addition to the use of mails, certain regular employees of Everest may solicit Consents via telephone on behalf of Millenium and Everest, for which no additional compensation will be paid. Limited Partners are encouraged to contact Stacey McClain of Millenium at the telephone number set forth on the back cover of this Consent Solicitation Statement with any questions regarding this solicitation of Consents and with requests for additional copies of this Consent Solicitation Statement and form of Consent. SOLICITATION OF CONSENTS of LIMITED PARTNERS of Secured Investment Resources Fund, L.P. II a Delaware Limited Partnership Deliveries of Consents, properly completed and duly executed, should be made to Millenium Management, LLC at: 155 N. Lake Avenue, Suite 1000 Pasadena, CA 91101 Fax No.: 626-585-5929 Questions and requests for assistance about procedures for consenting or other matters relating to this solicitation may be directed to Stacey McClain at the address and telephone number listed below. Additional copies of this Consent Solicitation Statement and form of Consent may be obtained from Millenium as set forth below. No person is authorized to give any information or to make any representation not contained in this Consent Solicitation Statement regarding the solicitation of Consents made hereby, and, if given or made, any such information or representation should not be relied upon as having been authorized by Millenium or any other person. The delivery of this Consent Solicitation Statement shall not, under any circumstances, create any implication that there has been no change in the information set forth herein or in the affairs of Millenium or the Partnership since the date hereof. Everest Properties II, LLC Millenium Management, LLC 155 N. Lake Avenue, Suite 1000 Pasadena, CA 91101 (626) 585-5920 SOLICITED BY EVEREST PROPERTIES II, LLC MILLENIUM MANAGEMENT, LLC (Preliminary Form of Consent) CONSENT OF LIMITED PARTNER Secured Investment Resources Fund, L.P. II a Delaware Limited Partnership (the "Partnership") LIMITED PARTNERS WHO RETURN A SIGNED CONSENT BUT FAIL TO INDICATE THEIR APPROVAL OR DISAPPROVAL AS TO ANY MATTER WILL BE DEEMED TO HAVE VOTED FOR SUCH MATTER. THIS CONSENT IS VALID FROM THE DATE OF ITS EXECUTION UNTIL DULY REVOKED, BUT NO LONGER THAN ELEVEN MONTHS. THIS CONSENT FORM REVOKES ANY PREVIOUSLY EXECUTED CONSENT. The undersigned has received the Consent Solicitation Statement dated March [_], 2004 ("Consent Solicitation Statement") by Millenium Management, LLC, a California limited liability company ("Millenium") and Everest Properties II, LLC, a California limited liability company, seeking the approval by written consent of the following proposals: (1) the removal of all of the current general partners of the Partnership, specifically, James R. Hoyt, an individual, and Secured Investment Resources, II Inc., a Missouri corporation, and any other person or entity currently serving as a general partner; and (2) the continuation of the Partnership with Millenium as the new general partner of the Partnership (which is conditioned on the approval of proposal (1) above). Each of the undersigned, by signing and returning this Consent, hereby constitutes and appoints Millenium, acting through its officers and employees, as his or her attorney-in-fact for the purposes of executing any and all documents and taking any and all actions required under the Partnership Agreement or applicable law in order to implement an approved proposal; and hereby votes all limited partnership interests of the Partnership held of record by the undersigned as follows for the proposals set forth above, subject to the Consent Solicitation Statement. Proposal FOR AGAINST ABSTAIN 1. Removal of Current General Partners [ ] [ ] [ ] 2. Continuation of the Partnership [ ] [ ] [ ] with a new general partner, Millenium (Please sign exactly as your name appears on the Partnership's records. Joint owners should each sign. Attorneys-in-fact, executors, administrators, trustees, guardians, corporation officers or others acting in representative capacity should indicate the capacity in which they sign and should give FULL title, and submit appropriate evidence of authority to execute the Consent) Dated: _______________________, 2004 (Important-please fill in) ---------------------------------- Signature / Title ---------------------------------- Signature / Title ---------------------------------- Telephone Number