OFFER TO PURCHASE FOR CASH
7,500 UNITS
OF
BOSTON FINANCIAL APARTMENT ASSOCIATES LIMITED PARTNERSHIP
AT $25.00 NET PER UNIT BY
EQUITY RESOURCE LEXINGTON FUND LIMITED PARTNERSHIP,
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THIS OFFER WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON APRIL 5, 2001, UNLESS THE OFFER IS EXTENDED.
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Equity Resource Lexington Fund, Limited Partnership, a Massachusetts limited
partnership ("Lexington Fund" or the "Purchaser"), hereby offers to purchase
7,500 units ("Units") of limited partnership interests in Boston Financial
Apartment Associates Limited Partnership, a Delaware limited partnership (the
"Partnership"). Lexington Fund is offering to pay a purchase price of $25.00 for
each Unit, net to the seller in cash, without interest, less the amount of any
distributions declared or paid from any source by the Partnership with respect
to the Units after March 5, 2001 (without regard to the record date), upon the
terms and subject to the conditions set forth in this Offer to Purchase (the
"Offer to Purchase") and in the Agreement of Sale, as each may be supplemented
or amended from time to time (which together constitute the "Offer") and less
any transfer fee charged by the general partner of the Partnership. Neither
Lexington Fund nor Equity Resources Group, Inc., Lexington Fund's manager, is an
affiliate of the Partnership or BFTG Residential Properties Inc., the general
partner of the Partnership. The Units sought to be purchased pursuant to the
Offer represent, to the best knowledge of the Purchaser, approximately 34.2% of
all Units outstanding as of the date of the Offer.
The Offer is subject to certain conditions described in this Offer to Purchase.
See "THE OFFER--Section 15--Conditions of the Offer." The Offer is not
conditioned upon the valid tender of any minimum number of Units. If more than
7,500 Units are validly tendered and not withdrawn, the Purchaser will accept
for purchase up to 7,500 Units, on a pro rata basis, subject to the terms and
conditions described in the Offer to Purchase, see "THE OFFER--Section
15--Certain Conditions of the Offer." A limited partner of the Partnership (a
"Limited Partner") may tender any or all Units owned by that Limited Partner (A
Limited Partner owning 5 or less Units must tender all or none of its Units).
The Offer is subject to certain risks described in this Offer to Purchase. See
"THE OFFER--Introduction--Risk Factors."
IMPORTANT
Any Limited Partner desiring to tender any or all of the Units held by that
Limited Partner should complete and sign the Agreement of Sale accompanying this
Offer to Purchase, in accordance with the instructions set forth in the
Agreement of Sale, and mail or deliver the Agreement of Sale and any other
required documents to Equity Resources Group, Inc., the manager of the
Purchaser, at the address set forth on the back cover of this Offer to Purchase,
or request his or her broker, dealer, commercial bank, credit union, trust
company or other nominee to effect the transaction for him or her.
BFTG RESIDENTIAL PROPERTIES INC., THE GENERAL PARTNER OF THE PARTNERSHIP, HAS
NOT ADVISED THE PURCHASER THAT IT IS MAKING ANY RECOMMENDATION TO ANY LIMITED
PARTNER AS TO WHETHER OR NOT TO TENDER UNITS PURSUANT TO THE OFFER TO PURCHASE.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION OR ANY REPRESENTATION
ON BEHALF OF THE PURCHASER OR TO PROVIDE ANY INFORMATION OTHER THAN AS CONTAINED
IN THIS OFFER TO PURCHASE OR IN THE AGREEMENT OF SALE. NO RECOMMENDATION,
INFORMATION, OR REPRESENTATION MAY BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Direct questions or requests for assistance or additional copies of this Offer
to Purchase or the Agreement of Sale to:
EQUITY RESOURCES GROUP, INC.
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TABLE OF CONTENTS
SUMMARY TERM SHEET........................................................................................
INTRODUCTION.............................................................................................1
RISK FACTORS.............................................................................................3
TENDER OFFER.............................................................................................5
Section 1. Terms of the Offer..........................................................................5
Section 2. Acceptance for Payment and Payment for Units................................................5
Section 3. Procedures for Tendering Units..............................................................5
Section 4. Withdrawal Rights...........................................................................7
Section 5. Extension of Tender Period; Termination; Amendment..........................................7
Section 6. Certain Tax Consequences....................................................................8
Section 7. Purpose and Effects of the Offer............................................................8
Section 8. Future Plans................................................................................9
Section 9. Past Contacts and Negotiations With General Partner.........................................9
Section 10. Certain Information Concerning the Partnership ............................................ 9
Section 11. Background and Reasons for the Offer.......................................................14
Section 12. Certain Information Concerning the Purchaser...............................................14
Section 13. Source and Amount of Funds ............................................................... 15
Section 14. Voting Power ............................................................................. 15
Section 15. Certain Conditions of the Offer............................................................15
Section 16. Certain Legal Matters and Required Regulatory Approvals....................................15
Section 17. Fees and Expenses..........................................................................16
Section 18. Miscellaneous..............................................................................16
SCHEDULE 1
Information with respect to the Managers of Equity Resources Group, Inc.
the Manager of Purchaser (Equity Resources Lexington Fund) ..................................S-1
SCHEDULE 2
Properties Owned by the Partnership ..........................................................S-2
SUMMARY TERM SHEET
Equity Resource Lexington Fund, a Massachusetts limited partnership
("Lexington Fund") is offering to purchase 7,500 units ("Units") of limited
partnership interests in Boston Financial Apartment Associates L.P., a Delaware
limited partnership (the "Partnership") for $25.00 per Unit, net to the seller
in cash, less the amount of any distributions declared or paid from any source
by the Partnership with respect to the Units after March 5, 2001, and less any
transfer fee charged by the general partner of the Partnership. The following
are some questions you, as a Limited Partner, may have, and the answers to those
questions. We urge you to read carefully the remainder of this Offer to Purchase
and the accompanying documents because the information in this summary is not
complete, and additional information is contained in the remainder of this Offer
to Purchase.
WHO IS OFFERING TO BUY MY UNITS?
Lexington Fund is offering to purchase 7,500 Units. Lexington Fund is a
Massachusetts Limited Partnership whose manager is Equity Resources Group, Inc.,
a Massachusetts corporation which is engaged in real estate investment and
consulting. See "THE OFFER--Section 12--Certain Information Concerning the
Purchaser."
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
Lexington Fund is seeking to purchase 7,500 Units of limited
partnership interests in the Partnership. This represents 34.2% of the
Partnership's outstanding units. See "INTRODUCTION."
HOW MUCH ARE YOU OFFERING TO PAY FOR MY SECURITIES AND WHAT IS THE FORM
OF PAYMENT? WILL I HAVE TO PAY FEES OR COMMISSIONS?
Lexington Fund is offering to pay $25.00 per Unit, net to you less the
amount of any distributions declared or paid from any source by the Partnership
with respect to your Units after March 5, 2001 and less any transfer fee charged
by the general partner of the Partnership. The transfer fee charged by the
general partner is $10 per unit with a minimum fee of $75 per transaction (not
per unit). If you tender your Units in the offer, you will not have to pay any
brokerage fees, commissions or similar expenses. See "INTRODUCTION."
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
The Purchaser expects that approximately $187,500 (exclusive of fees
and expenses) will be required to purchase 7,500 Units, if tendered. The
Purchaser will obtain those funds from capital contributions from its members,
which have an aggregate net worth substantially in excess of the amount required
to purchase the 7,500 Units. See "THE OFFER--Section 13--Source and Amount of
Funds."
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE
OFFER?
We do not think our financial condition is relevant to your decision
whether to tender in the offer because the form of payment is cash, and we have
sufficient financial resources relative to the consideration to be paid in the
offer. Additionally, the offer is not subject to any financing condition. See
"THE OFFER--Section 13--Source and Amount of Funds."
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, Eastern Time, on April 5,
2001, to decide whether to tender your units in the offer. In addition, if we
decide to extend the offering period or to include a subsequent offering period
or periods in the offer as described below, you will have an additional
opportunity to tender your units. See "THE OFFER--Section 3--Procedures for
Tendering Units."
CAN THE OFFER BE EXTENDED OR AMENDED AND UNDER WHAT CIRCUMSTANCES?
Yes, we may elect to extend the offer:
- to extend the period of time during which the offer is open;
- upon the failure of a Limited Partner to satisfy any of the conditions
specified in Section 15, to delay the acceptance for payment of, or
payment for, any Units; and
- to amend the offer in any respect (including, without limitation, by
increasing or decreasing the offer price).
In addition, we may also elect to provide a "subsequent offering
period" for the offer. A subsequent offering period, if any, will be an
additional opportunity for you to tender your units (if you have not already
done so) and receive the offer price following the expiration of the offer. If
you do not tender your units during the initial
offering period or the subsequent offering period, if any, you will not have the
opportunity to accept the offer. See "THE OFFER--Section 5--Extension of Tender
Period; Subsequent Offering Period; Termination; Amendment."
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED OR IF YOU DECIDE TO
INCLUDE A SUBSEQUENT OFFERING PERIOD?
If we decide to extend the offer, we will send each Limited Partner
notification of the extension, not later than 9:00 a.m., Eastern Time, on the
business day after the day on which the offer was scheduled to expire. In
addition, if we decide to include a subsequent offering period, we will send
each Limited Partner notification of the extension not later than 9:00 a.m.,
Eastern Time on the next business day after the expiration date of the initial
offering period. See "THE OFFER--Section 5--Extension of Tender Period;
Subsequent Offering Period; Termination; Amendment."
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
We are not obligated to purchase any units in the offer if we have not
confirmed to our reasonable satisfaction that, upon purchase of the units, we
will be entitled to receive all distributions, from any source, from the
Partnership after March 5, 2001, and that the Partnership will change the
address associated with the holder of the units to our address. See "THE
OFFER--Section 15--Certain Conditions of the Offer."
HOW DO I TENDER MY UNITS?
In order to tender your units properly, you must properly complete and
execute an Agreement of Sale and deliver it to our address set forth on the back
cover of the offer to purchase not later than the time the offer expires. See
"THE OFFER--Section 3--Procedures for Tendering Units."
HOW DO I WITHDRAW PREVIOUSLY TENDERED UNITS?
To withdraw your units after you have tendered them, you must deliver a
properly executed written notice of withdrawal (or a facsimile of one) with the
required information to us while you still have the right to withdraw the units.
See "THE OFFER--Section 4--Withdrawal Rights."
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED UNITS?
You can withdraw units at any time until the offer has expired, and, if
we have not accepted your units for payment by 10 days after the expiration
date, you can withdraw them at any time after the date until we accept units for
payment. See "THE OFFER--Section 4--Withdrawal Rights."
WHAT DOES THE PARTNERSHIP THINK OF THE OFFER?
We have not been informed by BFTG Residential Properties Inc., the
general partner of the Partnership, that it is making any recommendation to you
as to whether or not to tender units pursuant to the offer.
WILL THERE BE ANY CHANGE TO THE PARTNERSHIP OR MY UNITS IF I DECIDE NOT
TO TENDER MY UNITS?
It is expected that following the offer, the business and operations of
the Partnership will be continued substantially as they are currently being
conducted today. We are acquiring the units for investment purposes only, not
with a view toward affecting management of the Partnership. You should note,
however, that if we purchase an additional 7,500 units, we and our affiliates
will own 45% of the outstanding units. Although this would not represent a
majority interest, this increase in ownership would give us and our affiliates
increased control over any vote of the limited partners. See "THE OFFER--Section
8--Future Plans" and "--Section 14--Voting Power."
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
PARTNERSHIP SPECTRUM, a national reporting service covering limited
partnerships, reported no activity for Units on the informal market "matching
service" between September 1, 1999 and October 31, 2000. See "RISK FACTORS."
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?
You can call Equity Resources Group, Inc., our manager, who is acting
as the information agent for the offer, at (▇▇▇) ▇▇▇-▇▇▇▇ or e-mail them at
▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
INTRODUCTION
Equity Resource Lexington Fund, a Massachusetts limited partnership
("Lexington Fund" or the "Purchaser"), is offering to purchase 7,500 units
("Units") of limited partnership interests in Boston Financial Apartment
Associates Limited Partnership, a Delaware limited partnership (the
"Partnership"). Lexington Fund is offering to pay $25 for each Unit, net to the
seller in cash, without interest, and less any transfer fee charged by the
general partner of the Partnership and less the amount of any distributions
declared or paid from any source by the Partnership with respect to the Units
after March 5, 2001 (without regard to the record date, the "Offer Price"), upon
the terms and subject to the conditions set forth in this Offer to Purchase (the
"Offer to Purchase") and in the Agreement of Sale, as each may be supplemented
or amended from time to time (which together constitute, the "Offer"). The
transfer fee charged by the General Partner is $10 per unit with a minimum fee
of $75 per transaction (not per unit).
The Units sought to be purchased pursuant to the Offer represent, to
the best knowledge of the Purchaser, approximately 34.2% of the Units
outstanding as of the date of the Offer. Neither Lexington Fund nor its manager
Equity Resources Group, Inc., is an affiliate of the Partnership. The Offer to
Purchase is not conditioned upon the valid tender of any minimum number of
Units. If more than 7,500 Units are validly tendered and not withdrawn, the
Purchaser will accept for purchase up to 7,500 Units, on a pro rata basis,
subject to the terms and conditions described in this Offer to Purchase, see
"OFFER--Section 15--Certain Conditions of the Offer." A limited partner of the
Partnership (a "Limited Partner") may tender any or all Units owned by that
Limited Partner (a Limited Partner owning 5 or less Units must tender all or
none of its Units).
PAYMENT OF THE OFFER PRICE
For those Limited Partners who accept the Offer, a cash payment for
Units will be made to those Limited Partners within ten (10) business days
following the expiration date of the Offer, as long as Lexington Fund has
received from those Limited Partners a properly completed and duly executed
Agreement of Sale and assurances from the general partner of the Partnership
that the address applicable to the holder of those Units will be changed to the
Purchaser's address. The Purchasers may accept only a portion of the Units
tendered by a Limited Partner in the event a total of more than 7,500 Units are
tendered.
MARKET VALUE OF THE UNITS
PARTNERSHIP SPECTRUM, a national reporting service covering limited
partnerships, reported no activity for Units on the INFORMAL MARKET "MATCHING
SERVICE" between September 1, 1999 and October 31, 2000. The Purchaser and its
affiliates have purchased 70 Units in the Partnership during the past twelve
months at a price of $20.00 per Unit. The Purchaser and its affiliates' last
purchase was made on December 8, 2000.
NO SELLING COMMISSIONS
Units sold in the informal market "matching service" usually require
payment of a selling commission of the greater of $200 or 8.75%. If you accept
the Offer, however, you will NOT pay any selling commission.
PURPOSE OF THE OFFER
The purpose of the Offer is to allow the Purchaser to benefit from any one or a
combination of the following:
- any cash distributions, whether these distributions are classified as a
return on, or a return of, capital, from the operations in the ordinary
course of the Partnership;
- any distributions of net proceeds from the sale of assets by the
Partnership;
- any distributions of net proceeds from the liquidation of the
Partnership;
- any cash from any redemption of the Units by the Partnership, and
- any proceeds that may be received by the Limited Partners or by the
Partnership as a result of any litigation. The Purchaser is not aware
of any current or pending litigation involving the Partnership.
The Offer is not conditioned upon the valid tender of any minimum
number of the Units. If more than 7,500 Units are tendered and not withdrawn,
the Purchaser will accept up to 7,500 of the tendered Units on a pro rata basis,
subject to the terms and conditions described in this Offer to Purchase.
Regardless of the number of Units tendered in the Offer, any Limited Partner
tendering 5 or fewer units will be exempt from proration, as long as that
Limited Partner tenders all of that Limited Partner's units. See "THE
OFFER-Section 15--Certain Conditions of the Offer. The Purchaser expressly
reserves the right, in its sole discretion and for any reason, to terminate the
Offer at any time and to waive any or all of the conditions of the Offer,
although the Purchaser does not presently intend to do so.
CERTAIN INFORMATION ABOUT THE PARTNERSHIP
The Partnership is subject to the information and reporting
requirements of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), and, in accordance with that act, is required to file reports and other
information with the Securities and Exchange Commission (the "SEC") relating to
its business, financial condition and other matters. These reports and other
information may be inspected at the public reference facilities maintained by
the SEC at room ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇, and is available for inspection and copying at the regional offices of
the SEC located in Northwestern Atrium Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and at 7 World Trade Center, 13th Floor, New
York, New York 10048. Copies of these materials can also be obtained from the
Public Reference Room of the SEC in Washington, D.C. at prescribed rates or from
the SEC's Website at ▇▇▇▇://▇▇▇.▇▇▇.▇▇▇.
The Purchaser has filed with the SEC a Tender Offer Statement on
Schedule TO (including exhibits) pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, which provides certain additional
information with respect to the Offer. The Schedule TO and any amendments to the
Schedule TO, including exhibits, may be inspected and copies may be obtained
from the SEC in the manner specified above.
According to publicly available information, there were 21,915 Units
issued and outstanding on September 30, 2000, held by 2,197 Limited Partners.
Information contained in this Offer to Purchase which relates to, or
represents statements made by, the Partnership, has been derived from
information provided in reports and other information filed with the SEC by the
Partnership.
Limited Partners are urged to read this Offer to Purchase and the
accompanying Agreement of Sale carefully before deciding whether to tender their
Units in the Offer.
2
RISK FACTORS
Before making a decision whether or not to accept the Offer, you should consider
the following Risk Factors:
IN MAKING THE OFFER, THERE HAS BEEN NO THIRD PARTY VALUATION OR APPRAISAL.
No independent party has been retained by Lexington Fund or any other person to
evaluate or render any opinion to Limited Partners with respect to the fairness
of the Offer Price, and no representation is made as to any fairness or other
measures of value that may be relevant to Limited Partners. In making the Offer,
Lexington Fund has not based its valuation of the properties owned by the
Partnership on any third-party appraisal or valuation and it is uncertain
whether the Offer Price reflects the value that would be realized upon the sale
of Units by a Limited Partner to a third party. We urge Limited Partners to
consult their own financial and tax advisors in connection with the Offer.
THE OFFER PRICE MAY NOT REPRESENT FAIR MARKET VALUE OF UNITS.
There is no established or regular trading market for Units, nor is there
another reliable standard for determining the fair market value of the Units.
The Offer Price does not necessarily reflect the price that Limited Partners
might receive in an open market sale of Units. Those prices could be higher than
the Offer Price.
THE OFFER PRICE DOES NOT TAKE INTO ACCOUNT ANY FUTURE PROSPECTS OF THE
PARTNERSHIP.
The Offer Price is speculative in nature and does not ascribe any value to
potential future improvements in the operating performance of the Partnership's
properties.
THE OFFER PRICE MAY NOT REPRESENT THE VALUE THAT A LIMITED PARTNER MIGHT RECEIVE
UPON A LIQUIDATION OF THE PARTNERSHIP.
Although a liquidation of the Partnership is not anticipated in the near future,
you might receive more value if you retain Units until the Partnership is
liquidated. The actual proceeds which might be obtained upon liquidation of the
Partnership are highly uncertain and could be more than the Offer Price. Limited
Partners are not required to accept the Offer and tender their Units.
THERE MAY BE CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER.
Lexington Fund is making the Offer with a view toward making a profit.
Accordingly, there is a conflict between Lexington Fund's desire to acquire your
Units at a low price and your desire to sell your Units at a high price.
Lexington Fund's intent is to acquire the Units at a discount to the value
Lexington Fund might ultimately realize from owning the Units. Although
Lexington Fund cannot predict the future value of the Partnership assets on a
per Unit basis, the Offer Price could differ significantly from the net proceeds
that could be realized from a current sale of the properties owned by the
Partnership or that may be realized upon future liquidation of the Partnership.
WE MAY CONDUCT FUTURE OFFERS AT A HIGHER PRICE.
It is possible that we may conduct a future offer at a higher price than the
Offer Price. That decision will depend on, among other things, the performance
of the Partnership, prevailing economic conditions and our interest in acquiring
additional Units.
IF YOU ACCEPT THE OFFER AND SELL YOUR UNITS, YOU MAY RECOGNIZE TAXABLE GAIN ON
YOUR SALE.
A sale of Units in the Offer will be a taxable sale, with the result that you
will recognize taxable gain or loss measured by the difference between the
amount realized on the sale and your adjusted tax basis in the Units you
transfer to us. The tax consequences of the Offer to a particular Limited
Partner may be different from those of other Limited Partners and we urge you to
consult your own tax advisor in connection with the Offer.
3
IF YOU ACCEPT THE OFFER AND SELL YOUR UNITS, YOU WILL LOSE THE RIGHT TO RECEIVE
TO SHARE IN THE FUTURE PROFITS OF THE PARTNERSHIP.
Limited Partners who sell their Units will be giving up the opportunity to
participate in any future potential benefits associated with ownership of Units,
including the right to participate in any future distribution of cash or
property.
THE OFFER WILL INCREASE OUR STAKE IN THE PARTNERSHIP.
Lexington Fund and its affiliates currently own 2,365 units, representing 10.8%
of the Partnership's outstanding Units. If Lexington Fund purchases an
additional 7,500 Units, Lexington Fund and its affiliates will own 45% of the
Partnership's outstanding Units. Although this would not represent a majority
interest, this increase in ownership would give Lexington Fund and its
affiliates increased control over any vote of the Limited Partners.
4
THE OFFER
SECTION 1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer, the
Purchaser will accept for payment and pay for up to 7,500 Units that are validly
tendered on or prior to the Expiration Date (as defined below). The term
"Expiration Date" means 12:00 midnight, Eastern Time, on April 5, 2001, unless
the Purchaser extends the period of time for which the Offer is open, in which
event the term "Expiration Date" shall mean the latest date on which the Offer,
as so extended by the Purchaser, shall expire.
The Offer is conditioned on satisfaction of certain conditions. See
"Offer--Section 15--Certain Conditions of the Offer," which sets forth in full
the conditions of the Offer. Purchaser, in its sole discretion, for any reason,
may terminate the Offer by providing notice of termination as set forth in
Section 5 of this Offer to Purchase. The Purchaser will not be required to
accept for payment or to pay for any Units tendered, and may amend or terminate
the Offer if:
- the Purchaser shall not have confirmed to its reasonable
satisfaction that, upon purchase of the Units, the Purchaser will be
entitled to receive all distributions, from any source, from the
Partnership after March 5, 2001, and that the Partnership will
change the address applicable to the holder of the Units tendered in
the Offer to Purchaser's address;
- the Agreement of Sale is not properly completed and duly executed.
SECTION 2. PRORATION; ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS.
If not less than 7,500 Units are validly tendered and not properly
withdrawn prior to the Expiration Date, the Purchaser, upon the terms and
subject to the conditions of the Offer, will accept for payment all of those
Units so tendered.
If more than 7,500 Units are validly tendered and not properly
withdrawn on or prior to the Expiration Date, the Purchaser, upon the terms and
subject to the conditions of the Offer, will accept for payment 7,500 Units so
tendered, on a pro rata basis, with appropriate adjustments to avoid tenders of
fractional Units and purchases that would violate the Partnership's Agreement of
Limited Partnership. Regardless of the number of Units tendered in the Offer,
any Limited Partner tendering 5 or fewer units will be exempt from proration, as
long as that Limited Partner tenders all of that Limited Partner's units.
In the event that proration is required, the Purchaser will determine
the precise number of Units to be accepted and will announce the final results
of proration as soon as practicable, but in no event, later than five (5)
business days following the Expiration Date. Purchaser will not pay for any
Units tendered until after the final results of proration have been determined.
If, prior to the Expiration Date, the Purchaser increases the Offer
Price, the increased Offer Price will be paid for all Units accepted for payment
pursuant to the Offer, whether or not those Units were tendered prior to such
increase.
SECTION 3. PROCEDURES FOR TENDERING UNITS.
VALID TENDER. For Units to be validly tendered pursuant to the Offer, a properly
completed and duly executed Agreement of Sale must be received by Lexington Fund
at its address set forth on the back cover of this Offer to Purchase, on or
prior to the Expiration Date and not withdrawn prior to the Expiration Date. A
Limited Partner may tender any or all Units owned by that Limited Partner (a
Limited Partner owning 5 or less Units must tender all or none of its Units).
The delivery of the Agreement of Sale will be deemed made only when
actually received by Lexington Fund. Sufficient time should be allowed by a
Limited Partner electing to tender Units in the Offer to ensure timely delivery.
5
BACKUP FEDERAL INCOME TAX WITHHOLDING. A tendering Limited Partner must verify
that Limited Partner's correct taxpayer identification number or social security
number, as applicable, and make certain warranties and representations that it
is not subject to backup federal income tax withholding as set forth in the
Agreement of Sale.
TENDERS BY BENEFICIAL HOLDERS. A tender of Units can only be made by the
Registered Owner of those Units, and the party whose name appears as Registered
Owner must tender those Units on behalf of any beneficial holder, as set forth
in the "Instructions" to the Agreement of Sale.
DETERMINATION OF VALIDITY; REJECTION OF UNITS; WAIVER OF DEFECTS; NO OBLIGATION
TO GIVE NOTICE OF DEFECTS. All questions as to the form of documents and
validity, eligibility (including time of receipt), and acceptance for payment of
any tender of Units will be determined by the Purchaser, in its sole discretion,
which determination will be final and binding on all parties.
OTHER REQUIREMENTS. By executing and delivering the Agreement of Sale, a
tendering Limited Partner (who does not properly withdraw acceptance of the
Offer prior to the Expiration Date) irrevocably appoints the Purchaser as that
Limited Partner's proxy, with full power of substitution. All proxies are
irrevocable and coupled with an interest in the tendered Units and empower the
Purchaser to exercise all voting and other rights of such Limited Partner as it
in its sole discretion may deem proper at any meeting of Limited Partners. The
complete terms and conditions of the proxy are set forth in the Agreement of
Sale.
By executing and delivering the Agreement of Sale, a tendering Limited
Partner also irrevocably constitutes and appoints the Purchaser and its
designees as the Limited Partner's attorneys-in-fact. This appointment will be
effective upon Purchaser's payment for the Units. The complete terms and
conditions of the Power of Attorney are set forth in the Agreement of Sale.
By executing and delivering the Agreement of Sale, a tendering Limited
Partner will irrevocably assign to the Purchaser and its assignees all right,
title, and interest that the Limited Partner has to the Units, including,
without limitation, any and all distributions made by the Partnership after
March 5, 2001, regardless of the fact that the record date for any such
distribution may be a date prior to the Expiration Date and whether those
distributions are classified as a return on, or a return of, capital. The
complete terms and conditions of the assignment of the Units are set forth in
the Agreement of Sale.
By executing the Agreement of Sale, a tendering Limited Partner
represents that either:
- the Limited Partner is not a "plan" subject to Title 1 of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), or an entity deemed to hold "plan assets"
within the meaning of 29 C.F.R Section ▇▇▇▇-▇-▇▇▇ of any "plan"; or
- the tender and acceptance of Units pursuant to the applicable
Offer will not result in a nonexempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code.
By executing the Agreement of Sale, a tendering Limited Partner also
agrees that regardless of any provision in the Partnership's Agreement of
Limited Partnership which provides that a transfer is not effective until a date
subsequent to the date of any transfer of Units under the Offer, the Offer Price
will be reduced by any distributions with respect to the Units after March 5,
2001, whether those distributions are classified as a return on, or a return of,
capital.
Limited Partners will not have any appraisal or dissenters' rights with
respect to or in connection with the Offer.
6
SECTION 4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Units made
pursuant to the Offer are irrevocable. Units tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date. In the event that the
Offer is extended beyond the Expiration Date, the Units tendered may be
withdrawn at any time.
In order for a withdrawal to be effective, a signed, written or
facsimile transmission notice of withdrawal must be timely received by the
Purchaser at its address set forth on the last page of this Offer to Purchase.
Any notice of withdrawal must specify the name of the person who tendered the
Units to be withdrawn, and the number of Units to be withdrawn. Any Units
properly withdrawn will be deemed not validly tendered for purposes of the
Offer, but may be re-tendered at any subsequent time prior to the Expiration
Date by following the procedures described in Section 3.
All questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding.
SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT.
The Purchaser expressly reserves the right, in its sole discretion, at
any time:
- to extend the period of time during which the Offer is open;
- to terminate the Offer;
- upon the failure of a Limited Partner to satisfy any of the
conditions specified in Section 15, to delay the acceptance for
payment of, or payment for, any Units; and
- to amend the Offer in any respect (including, without limitation,
by increasing or decreasing the Offer Price).
Any extension, termination, or amendment will be followed as promptly
as practicable by a mailing notifying each Limited Partner, the mailing in the
case of an extension to be issued no later than 9:00 a.m., Eastern Time, on the
next business day after the previously scheduled Expiration Date, in accordance
with Rule 14e-1(d) under the Exchange Act.
If the Purchaser makes a material change in the terms of the Offer or
the information concerning the Offer or waives a material condition of the
Offer, the Purchaser will extend the Offer to the extent required by the rules
and regulations of the SEC. The minimum period during which an Offer must remain
open following a material change in the terms of the Offer or of information
concerning the Offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
relative materiality of the change in the terms or information. With respect to
a change in price or a change in percentage of securities sought, however, a
minimum ten-business-day period is generally required to allow for adequate
dissemination to security holders and for investor response. As used in this
Offer, "business day" means any day other than a Saturday, Sunday, or a federal
holiday and consists of the time period from 12:01 a.m. through 12:00 midnight,
Eastern Time.
The Purchaser may elect, in its sole discretion, to provide a
subsequent offering period (a "Subsequent Offering Period"), subject to the
conditions set forth in Rule 14d-11 of the Exchange Act. A Subsequent Offering
Period, if one is provided, is not an extension of the Offer. A Subsequent
Offering Period would be an additional period of time from three business days
to up to twenty business days following the expiration of the Offer, in which
Limited Partners may tender (but not withdraw) Units not tendered during the
Offer. Any decision to provide a Subsequent Offering Period will be announced no
later than 9:00 a.m., Eastern Time, on the next business day after the
expiration of the Offer. The Purchaser will announce the approximate number of
Units which have been tendered as of the expiration of the Offer and such Units
will be immediately accepted and promptly paid for. If ▇▇▇▇▇▇▇▇▇ decides to
provide for a Subsequent Offering Period, and that period is for a period of
time which is less than fifteen business days, the Purchaser may extend (and
re-extend) such Subsequent Offering Period up to
7
an aggregate of fifteen business days. Each of the Offer Conditions must either
be satisfied or waived prior to the commencement of any Subsequent Offering
Period.
Rule 14d-7 of the Exchange Act provides that no withdrawal rights apply
to Units tendered during a Subsequent Offering Period or Units tendered in the
Offer and accepted for payment. During a Subsequent Offering Period, the
Purchaser will promptly purchase and pay for any Units tendered at the same
price paid in the Offer.
SECTION 6. CERTAIN TAX CONSEQUENCES
A sale of Units in the Offer will be a taxable sale, with the result
that you will recognize taxable gain or loss measured by the difference between
the amount realized on the sale and your adjusted tax basis in the Units you
transfer to us.
LIMITED PARTNERS SHOULD CONSULT THEIR RESPECTIVE TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES TO EACH LIMITED PARTNER OF SELLING UNITS PURSUANT TO
THE OFFER.
SECTION 7. PURPOSE AND EFFECTS OF THE OFFER.
The Purchaser is making the Offer for investment purposes with a view
towards making a profit. The Purchaser's intent is to acquire the Units at a
discount to the value that the Purchaser might ultimately realize from owning
the Units. No independent party has been retained by the Purchaser to evaluate
or render any opinion with respect to the fairness of the Offer Price and no
representation is made as to the fairness of the Offer Price.
The Purchaser established the Offer Price based on its own independent
analysis of the Partnership. In determining the estimated value of the Units,
the Purchaser reviewed the Partnership's original prospectus, the Agreement of
Limited Partnership, the Partnership's Annual Report on Form 10-KSB for the year
ended December 31, 1999 ("1999 10-K") and the Partnership's Quarterly Report on
Form 10-Q for the period ended September 30, 2000 ("September 30, 2000 10-Q").
Other measures of value may be relevant to a Limited Partner, and all
Limited Partners are urged to carefully consider all of the information
contained in the Offer to Purchase and Agreement of Sale and to consult with
their own advisors (tax, financial, or otherwise) in evaluating the terms of the
Offer before deciding whether to tender Units. The Offer is being made as a
speculative investment by the Purchaser based on its belief that there is
inherent underlying value in the assets of the Partnership. The purpose of the
Offer is to allow the Purchaser to benefit to the greatest extent possible from
any one or a combination of the following:
- any cash distributions, whether those distributions are classified
as a return on, or a return of, capital, from the operations in the
ordinary course of the Partnership;
- any distributions of net proceeds from the sale of assets by the
Partnership;
- any distributions of net proceeds from the liquidation of the
Partnership;
- any cash from any redemption of the Units by the Partnership, and
- any proceeds that may be received by the Limited Partners or by
the Partnership as a result of litigation (the Purchaser is not
aware of any current or pending litigation involving the
Partnership).
PRICE RANGE OF UNITS; DISTRIBUTIONS.
LACK OF PUBLIC MARKET. At present, privately negotiated sales and sales through
intermediaries (e.g., through the trading system operated by the American
Partnership Board, which publishes sell offers by holders of Units) are the only
means available to a Limited Partner to liquidate an investment in Units (other
than by accepting the Offer) because the Units are not listed or traded on any
national securities exchange or quoted on NASDAQ. The Purchaser and its
affiliates have purchased 70 Units in the Partnership during the past twelve
months at a price of $20.00 per Unit. The Purchaser and its affiliates' last
purchase was made on December 8, 2000.
8
SECTION 8. FUTURE PLANS.
FUTURE PLANS OF THE PURCHASER. The Purchaser is acquiring the Units pursuant to
the Offer for investment purposes. However, the Purchaser and its affiliates may
acquire additional Units through private purchases, one or more future tender
offers, or by any other means deemed advisable. Those future purchases may be at
prices higher or lower than the Offer Price.
FUTURE PLANS OF THE PARTNERSHIP. Except as otherwise set forth in this Offer to
Purchase, it is expected that following the Offer, the business and operations
will be continued substantially as they are currently being conducted. For a
description of the Partnership's business, Limited Partners are urged to review
the 1999 10-K and September 30, 2000 10-Q.
SECTION 9. PAST CONTACT AND NEGOTIATIONS WITH GENERAL PARTNER.
Since 1982, and continuing until the date of this Offer, various
affiliates of the Purchaser have engaged in ongoing conversations and exchanges
of correspondence with various affiliates of the Partnership and affiliates of
the general partner of the Partnership with regard to these affiliates'
ownership of Units and other partnership interests in which the general partner
of the Partnership is affiliated. These conversations have principally involved
requests to obtain the list of Limited Partners and other information concerning
the Partnership. NO DISCUSSIONS HAVE TAKEN PLACE BETWEEN THE PURCHASER AND ITS
AFFILIATES AND AFFILIATES OF THE PARTNERSHIP WITH REGARD TO THIS OFFER.
SECTION 10. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP.
Except as otherwise indicated, information contained in this Section 10
is based upon filings made by the Partnership with the SEC. Although the
Purchaser has no information that any statements contained in this Section 10
are untrue, the Purchaser is not assuming any responsibility for the accuracy or
completeness of any information contained in this Section 10 which is derived
from those filings, or for any failure by the Partnership to disclose events
which may have occurred and may affect the significance or accuracy of any
information but which are unknown to the Purchaser.
GENERAL. The Partnership was organized on July 21, 1981 under the laws of the
State of Delaware. Its principal executive offices are located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇. Its telephone number is (▇▇▇) ▇▇▇-▇▇▇▇.
THE PARTNERSHIP'S PRIMARY BUSINESS IS REAL ESTATE OWNERSHIP AND RELATED
OPERATIONS. The Partnership was formed for the benefit of its Limited Partners,
to make equity investments in other limited partnerships which own and operate
multi-family residential properties which are assisted by federal, state or
local government agencies. The Partnership's investment portfolio currently
consists of the following limited partnerships:
- Bear Creek (Asheville, North Carolina)
- Buttonwood Tree (Wichita, Kansas)
- Chelsea Village (Indianapolis, Indiana)
- Park Hill (Lexington, Kentucky)
- Pheasant Ridge (Moline, Illinois)
- The ▇▇▇▇▇ of Castleton (Indianapolis, Indiana)
- Westport Plaza (Chico, California)
- Wood bridge (Bloomington, Indiana)
- Youngstoun (Hagerstown, Maryland)
ORIGINALLY ANTICIPATED TERM OF PARTNERSHIP; ALTERNATIVES. According to the
Partnership's Prospectus dated July 21, 1981, the Partnership was organized to
invest in equity investments in other limited partnerships. The Partnership
currently owns limited partnership interests in nine limited partnerships.
SELECTED FINANCIAL AND PROPERTY-RELATED DATA. Set forth below is a summary of
certain financial and statistical information with respect to the Partnership,
all of which has been excerpted or derived from the 1999 10-K and September 30,
2000 10-Q. More comprehensive financial and other information is included in
those reports and other documents filed by the Partnership with the SEC, and the
following summary is qualified in its entirety by
9
reference to those reports and other documents and all the financial information
and related notes contained in those reports.
BOSTON FINANCIAL APARTMENT ASSOCIATES LIMITED PARTNERSHIP
SELECTED FINANCIAL DATA
FROM FORM 10-QSB FOR PERIOD ENDING SEPTEMBER 30, 2000 (UNAUDITED)
BALANCE SHEET
ASSETS
Cash and cash equivalents $172,291
Interest receivable $23,057
Marketable securities, at fair value $1,480,518
Investments in Local Limited Partnerships --
----------
Total Assets $1,675,866
==========
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accounts payable to affiliate $70,826
Accounts payable and accrued expenses $37,512
----------
Total Liabilities $108,338
Partners' Equity $1,567,528
----------
Total Liabilities and Partners' Equity $1,675,866
==========
STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2000 and 1999 (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
September 30, September 30 September 30, September 30,
2000 1999 2000 1999
-------------- ------------- -------------- -------------
REVENUE:
Distribution income $10,000 -- $138,391 $189,235
Investment $19,891 $14,335 $81,869 $46,347
Other $225 $775 $1,425 $1,550
-------------- ------------- -------------- -------------
Total Revenue $30,116 $15,110 $221,685 $237,132
-------------- ------------- -------------- -------------
EXPENSES:
General and administrative $30,962 $20,465 $105,616 $83,845
Management fees -- -- -- $18,924
(related party)
Total Expenses $30,962 $20,465 $105,616 $102,769
-------------- ------------- -------------- -------------
Income (Loss) before equity in income of
Local Limited Partnership ($846) ($5,355) $116,069 $134,363
Equity in income of Local Limited
Partnership $45,891 -- $9,008 --
-------------- ------------- -------------- -------------
Net Income (Loss $45,045 $(5,355) $125,077 $134,363
============== ============= ============== =============
Net Income (Loss) allocated:
To General Partners $417 $(268) $5,894 $6,718
To Limited Partners $44,628 ($5,087) $119,183 $127,645
-------------- ------------- -------------- -------------
$45,045 $(5,355) $125,077 $134,363
============== ============= ============== =============
Net Income (Loss) per Limited Partnership
Unit (21,915 Units) $2.04 $(0.23) $5.44 $5.82
============== ============= ============== =============
10
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2000 and 1999 (Unaudited)
2000 1999
---- ----
Net cash provided by (used for) operating activities $29,914 $(57,497)
Net cash used for investing activities ($16,776) ($43,763)
Net cash used for financing activity ($3,200,000) --
------------- -----------
Net decrease in cash and cash equivalents ($3,186,862) ($101,260)
Cash and cash equivalents, beginning $3,359,153 $159,298
------------- -----------
Cash and cash equivalents, ending $172,291 $58,038
============= ===========
11
FROM FORM 10-KSB FOR YEAR ENDING DECEMBER 31, 1999
BALANCE SHEET
ASSETS
Cash and cash equivalents $3,359,153
Interest receivable $12,664
Marketable securities, at fair value $1,055,252
Investment in Local Limited Partnerships $246,883
-----------
Total Assets $4,673,952
===========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Accounts payable to affiliate (Note 6) $7,156
Accounts payable and accrued expenses $37,180
============
Total Liabilities $44,336
Partners' Equity $4,629,616
------------
Total Liabilities and Partners' Equity $4,673,952
============
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1999 and 1998
1999 1998
---- ----
REVENUE:
Distribution income $126,726 $198,606
Investment $63,439 $53,747
Other $1,955 $7,825
---------- ----------
Total Revenue $192,120 $260,178
---------- ----------
EXPENSES:
General and administrative expenses (includes
reimbursements to affiliates in the amounts of
$62,410 and $64,244, respectively) $109,653 $112,156
Management Fees, related party $18,924 $19,860
---------- ----------
Total Expenses $128,577 $132,016
---------- ----------
Income before equity in income of Local
Limited Partnerships and loss on
disposition $63,543 $128,162
---------- ----------
Equity in income of Local Limited
Partnerships $3,509,392 --
---------- ----------
Net Income $3,572,935 $128,162
========== ==========
Net Income allocated:
To General Partners $38,271 $6,408
To Limited Partners $3,534,664 $121,754
---------- ----------
$3,572,935 $128,162
========== ==========
Basic income before equity in income
of Local Limited Partnership and loss
on disposition of Interest allocated
to the Limited Partners per
Limited Partnership Unit (21,915 Units) $2.75 $5.56
========== ===========
Equity income and loss on disposition
of interest allocated to the Limited
Partners per Limited Partnership Unit
(21,915 Units) $158.54 --
========== ==========
Basic Net Income per Limited Partnership
Unit (21,915 Units) $161.29 $5.56
========== ==========
12
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1999 and 1998
1999 1998
---- ----
Cash flows from operating activities:
Net income $3,572,935 $128,162
Adjustments to reconcile net income
to net cash used for operating activities:
Equity in income of Local Limited Partnerships ($3,509,392) --
Distribution income included in cash distributions
received from Local Limited Partnerships ($126,726) ($198,606)
Gains on sales of marketable securities ($846) ($821)
Increase (decrease) in cash arising from changes in
operating assets and liabilities:
Interest receivable ($1,306) $1,834
Other assets $1,475 $51
Accounts payable to affiliates $1,943 $103
Accounts payable and accrued expenses $4,255 ($1,950)
---------- -----------
Net cash used for operating activities ($57,662) ($71,227)
---------- -----------
Cash flows from investing activities:
Purchases of marketable securities ($1,096,704) ($1,124,016)
Proceeds from sales and maturities of
marketable securities $964,986 $1,013,095
Cash distributions received from Local
Limited Partnerships $3,389,235 $198,606
---------- -----------
Net cash provided by investing activities $3,257,517 $87,685
---------- -----------
Net increase in cash and cash equivalents $3,199,855 $16,458
Cash and cash equivalents, beginning $159,298 $142,840
---------- -----------
Cash and cash equivalents, ending $3,359,153 $159,298
========== ===========
13
OTHER INFORMATION. The Partnership is subject to the reporting requirements of
the Exchange Act and accordingly is required to file reports and other
information with the SEC relating to its business, financial results and other
matters. These reports and other documents may be inspected at the SEC's Public
Reference Section, Room 1024, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇,
where copies may be obtained at prescribed rates, and at the regional offices of
the SEC located in the Citicorp Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and 7 World Trade Center, New York, New York 10048.
Copies should be available by mail upon payment of the SEC's customary charges
by writing to the SEC's principal offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇. The SEC also maintains a web site that contains reports, proxy and
other information filed electronically with the SEC, the address of which is
▇▇▇▇://▇▇▇.▇▇▇.▇▇▇.
CASH DISTRIBUTIONS HISTORY. The Partnership has made cash distributions to
Limited Partners of $124 per Unit in 2000 (through November 28, 2000). That
distribution was comprised partially of cash flow from operations and the sale
of properties owned by local limited partnerships in 1999. Prior to the 2000
distribution, the last distribution made by the Partnership was on July 11, 1996
($5 per Unit).
SECTION 11. BACKGROUND AND REASONS FOR THE OFFER.
The Purchaser is in the business of acquiring fractional investment
interests for long-term retention and seeks to purchase the Units in furtherance
of that strategy. The Purchaser and its affiliates have been in this business
since 1981. The Units acquired as a result of the Offer will be held as
long-term investments and not with a view to a resale. The Purchaser does not
acquire general partner interests nor is it engaged in property management. The
Purchaser does not currently intend to establish control of the Partnership in
the future through subsequent tender offers or other purchasers of Units.
SECTION 12. CERTAIN INFORMATION CONCERNING THE PURCHASER.
The Purchaser is a Massachusetts limited partnership which was
organized for the purpose of acquiring the Units pursuant to the Offer. The
Manager of the Purchaser is Equity Resources Group, Inc., a Massachusetts
corporation ("ERG" or "Bidder"), which is controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇. ▇▇▇
is engaged in real estate investment and consulting. The Purchaser's and ERG's
offices are located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. For certain
information concerning the members of ERG, see Schedule 1 to this Offer to
Purchase.
Except as otherwise set forth in this Offer to Purchase,
- neither the Purchaser nor, to the best knowledge of the Purchaser,
any of the persons listed on Schedule 1, or any affiliate of the
Purchaser beneficially owns or has a right to acquire any Units;
- neither the Purchaser nor, to the best knowledge of the Purchaser,
any of the persons listed on Schedule 1, or any affiliate of the
Purchaser or any member, director, executive officer, or subsidiary
of any of the foregoing has effected any transaction in the Units;
- neither the Purchaser nor, to the best knowledge of the Purchaser,
any of the persons listed on Schedule 1 or any affiliate of the
Purchaser has any contract, arrangement, understanding, or
relationship with any other person with respect to any securities of
the Partnership, including but not limited to, contracts,
arrangements, understandings, or relationships concerning the
transfer or voting thereof, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against
loss, or the giving or withholding of proxies, consents, or
authorizations;
- there have been no transactions or business relationships which
would be required to be disclosed under the rules and regulations of
the SEC between any of the Purchasers, or, to the best knowledge of
the Purchaser, any of the persons listed on Schedule 1 or any
affiliate of the Purchaser, on the one hand, and the Partnership or
affiliates, on the other hand; and
- there have been no contracts, negotiations, or transactions
between the Purchaser or to the best knowledge of the Purchaser, any
of the persons listed on Schedule 1 or any affiliate of the
Purchaser, on the one hand, and the Partnership or its affiliates,
on the other hand, concerning a merger, consolidation or
acquisition, tender offer (other than as described in Section 8 of
this Offer) or other
14
acquisition of securities, an election or removal of the General
Partner, or a sale or other transfer of a material amount of assets.
SECTION 13. SOURCE AND AMOUNT OF FUNDS.
The Purchaser expects that approximately $187,500 (exclusive of fees
and expenses) will be required to purchase 7,500 Units, if tendered. The
Purchaser will obtain those funds from capital contributions from its members,
which have an aggregate net worth substantially in excess of the amount required
to purchase the 7,500 Units. No third-party financing is required in connection
with the Offer. Because the only consideration in the Offer is cash, and in view
of the relatively small amount of consideration payable in relation to the
financial capability of the Purchaser and its affiliates, Purchaser believes the
financial condition of Purchaser is not material to a decision by Limited
Partners whether to tender Units in the Offer.
SECTION 14. VOTING POWER.
The Purchaser and its affiliates currently own 2,365 units,
representing 10.8% of the Partnership's outstanding Units. If the Purchaser
purchases an additional 7,500 Units, the Purchaser and its affiliates will own
45% of the Partnership's outstanding Units. Although this would not represent a
majority interest, this increase in ownership would give the Purchaser and its
affiliates increased control over any vote of the Limited Partners.
SECTION 15. CERTAIN CONDITIONS OF THE OFFER
Purchaser, in its sole discretion, for any reason, may terminate the
Offer by providing notice of termination as set forth in Section 5 of this Offer
to Purchase. The Purchaser will not be required to accept for payment or to pay
for any Units tendered, and may amend or terminate the Offer if:
- the Purchaser shall not have confirmed to its reasonable
satisfaction that, upon purchase of the Units, the Purchaser will be
entitled to receive all distributions, from any source, from the
Partnership after March 5, 2001, and that the Partnership will
change the address associated with the holder of the Units to
Purchaser's address;
- the Agreement of Sale is not properly completed and duly executed.
The foregoing conditions are for the sole benefit of the Purchaser and
its affiliates and may be asserted by the Purchaser regardless of the
circumstances (including, without limitation, any action or inaction by the
Purchaser or any of its affiliates) giving rise to that condition, or may be
waived by the Purchaser, in whole or in part, from time to time in its sole
discretion. The failure by the Purchaser at any time to exercise these rights
will not be deemed a waiver of those rights, which rights will be deemed to be
ongoing and may be asserted at any time and from time to time. Any determination
by the Purchaser concerning the events described in this Section 15 will be
final and binding upon all parties.
SECTION 16. CERTAIN LEGAL MATTERS AND REQUIRED REGULATORY APPROVALS.
Except as set forth in this Offer to Purchase, based on its review of
filings made by the Partnership with the SEC and other publicly available
information regarding the Partnership, the Purchaser is not aware of any
licenses or regulatory permits that would be material to the business of the
Partnership, taken as a whole, and that might be adversely affected by the
Purchaser's acquisition of Units in the Offer. In addition, the Purchaser is not
aware of any filings, approvals, or other actions by or with any domestic,
foreign, or governmental authority or administrative or regulatory agency that
would be required prior to the acquisition of Units by the Purchaser pursuant to
the Offer. Should any approval or other action be required, there can be no
assurance that any additional approval or action, if needed, would be obtained
without substantial conditions or that adverse consequences might not result to
the Partnership's business, or that certain parts of the Partnership's or the
Purchaser's business might not have to be disposed of or held separate or other
substantial conditions complied with in order to obtain that approval. The
Purchaser's obligation to purchase and pay for Units is subject to certain
conditions. See "THE OFFER--Section 15--Certain Conditions of the Offer."
15
ANTITRUST. Under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and the rules and regulations that have been
promulgated under the HSR Act by the Federal Trade Commission (the "FTC"),
certain acquisition transactions may not be consummated until information and
documentary material has been furnished for review by the Antitrust Division of
the Department of Justice (the "Antitrust Division") and the FTC and certain
waiting period requirements have been satisfied. The Purchaser does not
currently believe any filing is required under the HSR Act with respect to its
acquisition of Units contemplated by the Offer.
STATE TAKEOVER LAWS. The Purchaser has not attempted to comply with any
state takeover statutes in connection with the Offer. The Purchaser reserves the
right to challenge the validity or applicability of any state law allegedly
applicable to the Offer, and nothing in the Offer, nor any action taken in
connection with the Offer, is intended as a waiver of that right. In the event
that any state takeover statute is found applicable to the Offer, the Purchaser
might be unable to accept for payment or purchase Units tendered pursuant to the
Offer or be delayed in continuing or consummating the Offer. In that case, the
Purchaser may not be obligated to accept for purchase, or pay for, any Units
tendered.
SECTION 17. FEES AND EXPENSES
Equity Resources Group, Inc. has been retained by the Purchaser to act
as the Information Agent in connection with the Offer. The Information Agent
will receive reasonable and customary compensation for its services in
connection with the Offer and will be indemnified against certain liabilities
and expenses in connection with its service as the Information Agent.
Except as set forth in this Section 17, the Purchaser will not pay any
fees or commissions to any broker, dealer or other person for soliciting tenders
of Units pursuant to the Offer. Brokers, dealers, commercial banks, trust
companies, and other nominees, if any, will, upon request, be reimbursed by the
Purchaser for customary clerical and mailing expenses incurred by them in
forwarding materials to their customers.
SECTION 18. MISCELLANEOUS.
THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON
BEHALF OF) LIMITED PARTNERS IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER
OR THE ACCEPTANCE OF UNITS TENDERED IN THE OFFER WOULD NOT BE IN COMPLIANCE WITH
THE LAWS OF THAT JURISDICTION. THE PURCHASER IS NOT AWARE OF ANY JURISDICTION
WITHIN THE UNITED STATES IN WHICH THE MAKING OF THE OFFER OF THE ACCEPTANCE OF
UNITS TENDERED IN THE OFFER WOULD BE ILLEGAL.
In any jurisdiction where the securities, blue sky, or other laws
require the Offer to be made by a licensed broker or dealer, the Purchaser will
withdraw the Offer. The Purchaser has filed with the SEC, the Schedule TO,
together with exhibits, pursuant to Rule 14d-1 of the General Rules and
Regulations under the Exchange Act, furnishing information with respect to the
Offer, and may file amendments to that Schedule TO. The Schedule TO and any
amendments to that Schedule TO, including exhibits, may be examined and copies
may be obtained from the SEC as set forth above in "Introduction."
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained in this Offer to
Purchase or in the Agreement of Sale and, if given or made, any information or
representation must not be relied upon as having been authorized. Neither the
delivery of the Offer to Purchase nor any purchase pursuant to the Offer shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Purchaser or the Partnership since the date as of which
information is furnished or the date of this Offer to Purchase.
EQUITY RESOURCES GROUP, INC.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
16
SCHEDULE 1
INFORMATION REGARDING THE MANAGERS
OF EQUITY RESOURCES GROUP, INC.
Set forth in the table below are the names of the members of Equity
Resources Group, Inc., the Manager of the Purchaser and their present principal
occupations and five (5) year employment histories. Each individual is a citizen
of the United States and the business address of each person is ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Executive Vice President and Principal, Equity Resources
Group Inc., 1992-Present General Partner, Equity Resource
Lexington Fund Limited Partnership, 1999-Present
Mr. ▇▇▇▇▇▇▇▇▇▇▇▇ began working at Equity Resources Group,
Inc. (ERG) in 1985. In 1989, Mr. ▇▇▇▇▇▇▇▇▇▇▇▇ became ERG's
Chief Investment Officer, with primary responsibility for
the valuation and negotiation of investment acquisitions
for various Equity Resource Funds. In 1992, Mr.
▇▇▇▇▇▇▇▇▇▇▇▇ became Executive Vice President and Principal
of ERG. In addition to being the General Partner of Equity
Resource Lexington Fund, Mr. ▇▇▇▇▇▇▇▇▇▇▇▇ is a Co-General
Partner of various Equity Resources Funds.
Equity Resources Lexington Fund Limited Partnership was formed under
Massachusetts law in August 2000 for the purpose of providing a secondary market
for real estate limited partnership interests. Its predecessor entity, Equity
Resource Group, Inc., was formed under Massachusetts law in March 1981 for the
purpose of providing financial consulting services in the field of real estate
limited partnerships syndicated through private placement offerings. The
corporation's functions include advising real estate developers, investors and
syndicators in the areas of financial analysis, negotiation and the structuring
of investment entities.
S-1
SCHEDULE 2
PROPERTIES OWNED BY THE PARTNERSHIP
For a summary of the Properties owned by the Partnership, see Section
10 of the Offer.
S-2
EQUITY RESOURCES GROUP, INC.
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇