SUPPLEMENT TO
OFFER TO PURCHASE FOR CASH
UP TO 394,566 UNITS OF LIMITED PARTNERSHIP INTEREST
OF
AMERICAN INCOME PARTNERS III-B LIMITED PARTNERSHIP
AT
$1.60 NET PER UNIT
BY
ATLANTIC ACQUISITION LIMITED PARTNERSHIP
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THE OFFER, WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT 5:00
P.M., EASTERN TIME, ON OCTOBER 20, 1995, UNLESS EXTENDED.
--------------------------------------------------------------------------------
This Supplement to Offer to Purchase (this "Supplement") is being made in
connection with the proposed settlement of class action litigation hereinafter
described (the "Settlement"). The Purchaser hereby supplements and amends its
offer to purchase outstanding units (the "Units") of limited partnership
interest of American Income Partners III-B Limited Partnership, a
Massachusetts limited partnership (the "Partnership"), for the purchase price
of $1.60 per Unit (the "Purchase Price"), net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer
to Purchase dated August 18, 1995, the Supplementary Letter dated September
27, 1995, this Supplement and the related Letter of Transmittal, as each may
be supplemented or amended from time to time. Capitalized terms used in the
Offer to Purchase and this Supplement and not otherwise defined herein have
the meanings ascribed to them in the Offer to Purchase.
In accordance with the Settlement, the Purchase Price has been increased
from $1.50 per Unit, as specified in the Offer to Purchase, to $1.60 per Unit.
Further, the number of Units sought pursuant to the Offer has been decreased
to 394,566 Units, representing approximately 35% of the Units outstanding as
of August 10, 1995. In addition, the Offer has been extended and will now
expire at 5:00 p.m., Eastern time, on October 20, 1995 (the "Expiration Date")
unless further extended.
The Purchaser was recently organized by certain principals of American
Finance Group, the sponsor of the Partnership, and is related to the General
Partner. As principals of the Purchaser Messrs. ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇ may be deemed to be "co-bidders" with the
Purchaser. (See "THE TENDER OFFER--Section 11. Certain Information Concerning
the Purchaser.")
Each Unitholder should consider carefully the following factors:
. The Purchase Price was established by the Purchaser with the intention of
making a profit. Therefore, the Purchaser was motivated to set the lowest
price for Units to the extent consistent with its objective of acquiring
a sufficient number of Units to justify the effort and expense of
proceeding with the Offer. This conflicts with the desire of the
Unitholders tendering Units to receive the highest price therefor.
(Cover continued on following page.)
----------------
The Information Agent for the Offer is:
▇.▇. ▇▇▇▇ & Co., Inc.
----------------
The Depositary for the Offer is:
STATE STREET BANK AND TRUST COMPANY
----------------
G
. The Purchase Price of $1.60 per Unit is substantially less than the sum
of the Net Finance Value of $1.36 per Unit (using a 15% discount rate)
and the estimated residual value ("ERV") of $3.26 per Unit (for a total
of $4.62 per Unit). (If the Net Finance Value were calculated using a 9%
discount rate, the Net Finance Value would be $1.42 per Unit (for a total
of $4.68 per Unit).) (See "Section 13. Background of the Offer" for a
discussion of the Purchaser's determination of the Purchase Price, and
the related assumptions and other factors relating to such
determination.)
. The Purchaser and the General Partner are related parties and,
accordingly, have conflicts of interest with respect to the Offer. (See
"Section 10. Conflicts of Interest and Transactions with Affiliates and
Related Parties.")
. As a result of the Offer, the Purchaser could be in a position to
influence significantly all Partnership decisions on which Unitholders
may vote.
. Although the secondary market is limited, it may be possible for certain
of the Unitholders to obtain a higher price for their Units by selling
such Units in the secondary market.
. Unitholders who tender Units will not be entitled to any future
distributions from the Partnership, including, without limitation, any
distributions to be made to Unitholders upon liquidation of the
Partnership. (The distribution to tendering Unitholders of record as of
September 30, 1995 will either be assigned to the Purchaser or will
correspondingly reduce the Purchase Price.) The sum of such future
distributions is expected by the General Partner to exceed the Purchase
Price substantially.
. In deciding whether or not to tender their Units, Unitholders should
consider the relatively short time (presently anticipated to be December
31, 1998) until the Partnership's assets are liquidated, any liquidation
proceeds are distributed to the Unitholders and the Partnership
terminates.
October 3, 1995
To the Holders of Units of Limited Partnership Interest of American Income
Partners III-B Limited Partnership
This Supplement to Offer to Purchase (this "Supplement") amends and
supplements the Offer to Purchase dated August 18, 1995 and is being made in
connection with the proposed settlement of class action litigation hereinafter
described (the "Settlement").
INTRODUCTION
The following amends and supplements the Introduction to the Offer to
Purchase. (Cross-references in this Supplement are to Sections of the Offer to
Purchase, unless otherwise indicated. To the extent statements are made in
this Supplement which are inconsistent with statements made in the Offer to
Purchase, the statements herein shall control.)
Atlantic Acquisition Limited Partnership, a newly-formed Massachusetts
limited partnership (the "Purchaser"), hereby offers to purchase up to 394,566
of the outstanding Units (the "Units") of limited partnership interest of
American Income Partners III-B Limited Partnership, a Massachusetts limited
partnership (the "Partnership"), at a purchase price of $1.60 per Unit (the
"Purchase Price"), net to the seller in cash, without interest, upon the terms
and subject to the conditions set forth in the Offer to Purchase, as
supplemented hereby, and in the related Letter of Transmittal, as each may be
supplemented or amended from time to time (which together constitute the
"Offer").
In accordance with the Settlement, the Purchase Price has been increased
from $1.50 per Unit, as specified in the Offer to Purchase, to $1.60 per Unit.
Further, the number of Units sought pursuant to the Offer has been decreased
to 394,566 Units, representing approximately 35% of the Units outstanding as
of August 10, 1995. In addition, the Offer has been extended and will now
expire at 5:00 p.m., Eastern time, on October 20, 1995 (the "Expiration Date")
unless further extended. All references in the Offer to Purchase to the
Purchase Price shall mean $1.60 per Unit and all references to the Expiration
Date shall mean October 20, 1995.
The Purchaser was recently organized by certain principals of American
Finance Group, the sponsor of the Partnership, and is related to the General
Partner. It is expected that employees and other persons or entities related
to or affiliated with American Finance Group may become additional limited
partners of the Purchaser. (See "Section 10. Conflicts of Interest and
Transactions with Affiliates and Related Parties" and "Section 11. Certain
Information Concerning the Purchaser.")
Each Unitholder should carefully consider the following factors:
. The Purchase Price was established by the Purchaser with the intention of
making a profit. Therefore, the Purchaser was motivated to set the lowest
price for Units to the extent consistent with its objective of acquiring
a sufficient number of Units to justify the effort and expense of
proceeding with the Offer. This conflicts with the desire of the
Unitholders tendering Units to receive the highest price therefor.
. The Purchase Price of $1.60 per Unit is substantially less than the sum
of the Net Finance Value of $1.36 per Unit (using a 15% discount rate)
and the estimated residual value ("ERV") of $3.26 per Unit (for a total
of $4.62 per Unit). (If the Net Finance Value were calculated using a 9%
discount rate, the Net Finance Value would be $1.42 per Unit (for a total
of $4.68 per Unit).) (See "Section 13. Background of the Offer" for a
discussion of the Purchaser's determination of the Purchase Price, and
the related assumptions and other factors relating to such
determination.)
. The Purchaser and the General Partner are related parties and,
accordingly, have conflicts of interest with respect to the Offer. (See
"Section 10. Conflicts of Interest and Transactions with Affiliates and
Related Parties.")
1
. As a result of the Offer, the Purchaser could be in a position to
influence significantly all Partnership decisions on which Unitholders
may vote.
. Although the secondary market is limited, it may be possible for certain
of the Unitholders to obtain a higher price for their Units by selling
such Units in the secondary market.
. Unitholders who tender Units will not be entitled to any future
distributions from the Partnership, including, without limitation, any
distributions to be made to Unitholders upon liquidation of the
Partnership. (The distribution to tendering Unitholders of record as of
September 30, 1995 will either be assigned to the Purchaser or will
correspondingly reduce the Purchase Price.) The sum of such future
distributions is expected by the General Partner to exceed the Purchase
Price substantially.
. In deciding whether or not to tender their Units, Unitholders should
consider the relatively short time (presently anticipated to be December
31, 1998) until Partnership's assets are liquidated, any liquidation
proceeds are distributed to the Unitholders and the Partnership
terminates.
The Offer will provide Unitholders with an opportunity to liquidate their
investment without the usual transaction costs associated with market sales.
Unitholders may no longer wish to continue their investment in the Partnership
for a number of reasons, including:
. The absence of a formal trading market for Units, although there are some
limited resale mechanisms which may be available to Unitholders wishing
to sell their Units
. General disenchantment with long-term investments in limited partnerships
. The complexities and costs of preparing and filing personal federal,
state and local income tax returns resulting from an investment in the
Units, particularly for Unitholders with a small investment in the
Partnership
. For Unitholders which are IRAs or other qualified pension, profit-sharing
or stock bonus plans (collectively, "Qualified Plans"), the further
complexity and costs of preparing income tax returns, and the potential
tax liability, resulting from the generation by the Partnership of
"unrelated business taxable income"
. The opportunity to transfer Units without the commissions and other costs
normally associated with a transfer
. More immediate use for the cash tied up in an investment in the Units
As discussed in the Prospectus for the original offering of Units, the
Partnership was to be terminated upon the sale of its last remaining item of
equipment, which at present is expected to be by December 31, 1998.
The General Partner has advised the Purchaser that it expects that the third
quarter distributions from the Partnership to Unitholders of record on
September 30, 1995 will be approximately $0.3125 per Unit and distributed
prior to October 31, 1995. As noted in the Offer to Purchase, such
distributions with respect to tendered Units will either be made to the
Purchaser or, to the extent such distributions are made to the tendering
Unitholders, will correspondingly reduce the Purchase Price for such Units.
Whether or not the Offer is consummated, the Partnership will continue to be
managed by the General Partner in accordance with the investment objectives
and policies set forth in the Prospectus (to the extent still relevant). (See
"Section 9. Certain Information Concerning the Partnership--General
Information.") The General Partner did not consider alternative transactions
to the Offer because the General Partner believes it to be in the best
interest of the Unitholders who do not tender their Units for the Partnership
to continue to operate in the manner for which it was organized. Alternative
transactions would, in the judgment of the General Partner, result in material
changes in the original investment objectives and policies of the Partnership.
2
THE TENDER OFFER
"SECTION 2. PRORATION: ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS" is
hereby supplemented to include the following:
In the event that proration is required because the number of Units validly
tendered on or prior to the Expiration Date and not withdrawn exceeds 394,566
(which the Purchaser does not expect to be the case), the Purchaser will
announce the results of prorations promptly after such results become
available but in no event more than seven business days following the
Expiration Date.
"SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT" is hereby
supplemented to include the following:
The Purchaser intends to consummate the transactions contemplated by the
Offer if the conditions for closing, in the reasonable judgment of the
Purchaser, are satisfied.
"SECTION 6. CERTAIN FEDERAL INCOME TAX CONSEQUENCES" is hereby supplemented
as follows:
Because of the increase in the Purchase Price to $1.60 per Unit, it is now
estimated that a Unitholder who tenders Units that were acquired by such
Unitholder at the time of the Partnership's original offering of Units will
recognize a capital loss of $1.60 per Unit for federal income tax purposes.
"SECTION 9. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP" is hereby
supplemented by including the following information which is in addition to
that included in, and should be read in conjunction with, the Offer to
Purchase (an additional copy of the Offer to Purchase may be obtained by each
Unitholder upon request of the Information Agent):
In the opinion of AFG, the $4,800,602 carrying value of the equipment owned
by the Partnership at June 30, 1995 and summarized in Section 9 of the Offer
to Purchase does not exceed its fair market value.
AFG annually receives an estimated valuation of the Partnership's equipment
from an independent valuation company solely for the purpose of determining
whether or not the aggregate carrying value of the equipment for financial
statement purposes should be adjusted. The valuation company does not inspect
the equipment or consider the specific characteristics of the equipment, nor
does it estimate the expected value of the equipment at the end of the related
lease. These valuations generally are substantially higher than either the sum
of NFV and ERV or the carrying value. The Purchaser did not consider such
valuation in determining the Purchase Price. Instead, the Purchaser examined
the estimated residual value of the equipment after the related leases expire.
(See "Section 13. Background of the Offer--Establishment of Purchase Price.")
Major individual lessees that accounted for 10% or more of the Partnership's
$1,848,626 of lease revenue in 1994 are Northwest Airlines, Inc. ($493,661)
and Equicor, Inc. ($213,939).
Rents are payable to the Partnership monthly, quarterly or semi-annually and
no significant amounts are calculated on factors other than the passage of
time. The leases are accounted for as operating leases and are noncancelable.
Rents received prior to their due dates are deferred. At June 30, 1995 future
minimum rents of $1,471,220 were due as follows:
For the year ending June 30, 1996.............................. $ 807,029
1997........................................................... 513,480
1998........................................................... 150,711
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Total.......................................................... $1,471,220
==========
During 1994, the Partnership and other affiliated partnerships executed a
renewal lease agreement in connection with an MD-82 aircraft leased by
Northwest. Pursuant to the agreement, Northwest will continue to
3
lease the aircraft until July 31, 1997. The Partnership, which owns a 16%
interest in this aircraft, will receive $311,525 in lease revenue during the
years ending December 31, 1995 and 1996 and $181,723 during the year ending
December 31, 1997. Such rents are included in the future minimum rents above.
The Partnership re-leased the L1011-100 in which it owns a 26.21% interest
to Ing Aviation in 1994. This re-lease will generate approximately $621,000 in
additional lease revenue for the Partnership through December 1997.
During 1994, the Managing General Partner lowered the amount reserved
against potentially uncollectable rents to $60,000. This caused an increase in
lease revenue of $53,000 in 1994. It cannot be determined whether the
Partnership will recover any of past due rents in the future; however, the
Managing General Partner will pursue the collection of all such items.
The Partnership supplied the Purchaser with the following information
detailing the expiration dates of the Partnership's leases. The percentages
are based upon the Partnership's original cost of equipment remaining:
1995................................................................ 7.7%
1996................................................................ 6.4%
1997................................................................ 85.9%
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100.0%
At the end of each such lease, equipment generally is either renewed by the
current lessee, re-leased to a new lessee, or sold.
The schedule of distributions to the Unitholders set forth on page 13 of the
Offer to Purchase is based upon the assumption that the Units were purchased
on or before September 29, 1987 and continue to be held by the original
purchasers thereof.
The minimum investment in the Partnership was 100 Units ($2,500) or 80 Units
($2,000) for IRAs and other Qualified Plans. The schedule of distributions on
page 13 of the Offer to Purchase should be considered by each Unitholder in
terms of the actual number of Units purchased by such Unitholder.
Cash distributions do not represent and are not indicative of yield on
investment. Actual yield on investment cannot be determined with any certainty
until termination of the Partnership and will be dependent upon the collection
of future contracted rents, the amount of renewal and/or re-lease rents and
the residual values realized for each asset as of its disposal date. However,
Unitholders tendering their Units (assuming such Units were purchased on or
before September 29, 1987 and continue to be held by the original purchaser)
will receive total distributions (including the Purchase Price) of
approximately $24.19 per Unit, all of which will constitute a return of
capital.
"SECTION 10. CONFLICTS OF INTEREST AND TRANSACTIONS WITH AFFILIATES AND
RELATED PARTIES" is hereby supplemented to include the following:
The Loan or the Alternate Loan (as defined below) is expected to be serviced
by the Purchaser with cash distributions attributable to the Units it
acquires. Because the Loan or the Alternate Loan will relate to all AFG
Partnerships, the General Partner will have a conflict of interest in
determining whether to sell equipment of a particular Partnership or
Partnerships in order to service the Loan or the Alternate Loan.
"SECTION 12. SOURCE OF FUNDS" is hereby supplemented to include the
following:
As described in the Offer to Purchase, the Purchaser has received the
Commitment Letter from SunAmerica Life Insurance Company ("SunAmerica") to
provide for the Loan in an amount of approximately $28,000,000 in connection
with all the AFG Partnerships. (Because of the reduction in the percentage of
Units tendered for from 45% to 35%, the loan will be in the maximum amount of
approximately $21,778,000.)
4
Further, the Purchaser now has an alternative source of funds that it may
utilize in order to consummate the Offer. The balance of the funds not
obtained by the Purchaser from capital contributions from its partners may be
obtained from a term loan (the "Alternate Loan") to be provided by NatWest
Bank N.A. ("NatWest") concurrently with the consummation of the Offer pursuant
to the terms of a commitment letter (the "NatWest Commitment Letter") between
NatWest and the Purchaser. The Purchaser has not yet determined whether to
obtain the loan from NatWest or SunAmerica.
The terms of the the NatWest Commitment Letter are as follows. As is the
case with the proposed loan from SunAmerica, the Alternate Loan will be made
to the Purchaser in order to enable the Purchaser to consummate the Offer as
well as the Tender Offers for units of or representing limited partnership
interests of 20 other AFG Partnerships. NatWest has agreed to provide funds of
approximately $27,000,000 in connection with all the AFG Partnerships.
(However, because of the reduction in the percentage of Units tendered for
from 45% to 35%, the Alternate Loan is not expected to exceed $21,000,000.)
The Purchaser expects that the amount of the Alternate Loan, on a per Unit
basis, will approximate the amount that is available from the Loan. The
remainder of such funds required to purchase Units and to pay related fees and
expenses will be funded by the Purchaser from capital contributions from its
partners.
NatWest will have the right to sell-down a portion of its commitment to
another lender or lenders or to sell participations to another lender or
lenders. In the event of a sell-down, an agency administration fee (the
"Agency Administration Fee") in the amount of $40,000 per annum, payable
quarterly, is to be paid by the Purchaser.
The proceeds of the Alternate Loan will be used by the Purchaser solely to
fund the acquisition of the Tendered Units and to pay related costs and
expenses ("Offering Expenses") of up to $680,000 and the Upfront Fee (as
defined below).
There will be a separate drawdown of Alternate Loan proceeds for each
closing of a Tender Offer. Each drawdown shall be in a minimum amount of
$500,000 and no drawdown shall be made later than 90 days after the initial
drawdown.
The Alternate Loan will bear interest at the LIBOR (reserve adjusted) rate
plus 350 basis points (as of September 22, 1995, the rate on the Alternate
Loan would have approximated 9.25%). Payment of interest on the principal
amount outstanding under the Alternate Loan will be payable quarterly in
arrears based on a 360 day year. Within 90 days from the final drawdown of the
Alternate Loan, the Purchaser will hedge its interest rate risk through an
interest rate swap or cap with a counterparty acceptable to NatWest.
Each drawdown of the Alternate Loan will be payable in 16 consecutive
quarterly installments of principal (the "Scheduled Principal Payments") to be
calculated based on the projected amount of cash flow available from the
related AFG Partnership's firm term lease payments and to be agreed to by
NatWest and the other lenders, if any, prior to such drawdown. In addition, a
mandatory prepayment of principal outstanding on each drawdown (the "Mandatory
Prepayments") shall be made quarterly on the due date of each Scheduled
Principal Payment in an amount equal to the Distributable Cash Amount (as
defined below) for the immediately preceding calendar quarter. Such Mandatory
Prepayments shall be applied pro rata to the remaining Scheduled Principal
Payments with respect to each drawdown. "Distributable Cash Amount" means cash
received from all sources less current and accrued interest and principal
payments and less accounting, legal, printing and other third party expenses
("Operating Expenses") and any Agency Administration Fee. Operating Expenses
may not exceed $200,000 per year. The final maturity of each drawdown will be
four years from the closing of such drawdown. (See "Section 10. Conflicts of
Interest and Transactions With Affiliates and Related Parties" for a
discussion of certain conflicts of interest which will be created as a result
of the Purchaser's obligation to prepay the Alternate Loan with Distributable
Cash Amounts.)
The Purchaser shall also have the right to make optional prepayments of the
Alternate Loan at the end of each interest period in minimum principal amounts
of $250,000.
5
As security for the Alternate Loan, NatWest will have a first priority
security interest in the Tendered Units and all other assets of the Purchaser,
the stock of AAL, Inc., the interests of the general and limited partners in
the Purchaser and the collection account into which the Purchaser's
distributions from the AFG Partnerships will be paid. The obligations under
the Alternate Loan will be fully recourse to the Purchaser and to AAL, Inc.
The initial limited partners of the Purchaser will severally guarantee
repayment of that portion of the Alternate Loan drawn to cover Offering
Expenses. Otherwise, the Alternate Loan will be non-recourse to the limited
partners of the Purchaser. (The Loan from SunAmerica is non-recourse to the
limited partners of the Purchaser, as described in the Offer to Purchase.)
There will be various conditions precedent to the closing of the Alternate
Loan, including that the Tender Offer documentation shall be in full force and
effect; that all conditions under the Tender Offer materials precedent to the
consummation of the Tender Offers shall have been satisfied, including that
all necessary governmental, regulatory and other third party approvals shall
have been obtained; that the Purchaser shall have received cash proceeds
aggregating at least 10% of the aggregate Purchase Price of the Tendered Units
representing equity contributions from its partners and shall have utilized
such proceeds to purchase the Tendered Units and to pay any related fees and
expenses not funded through drawdowns; and that no material adverse event in
the judgment of NatWest and the other lenders, if any, shall have occurred
with respect to any of the AFG Partnerships or the Purchaser which would, in
turn, have a material adverse effect on the Purchaser's ability to service the
Alternate Loan. Accordingly, there is no assurance that any drawdowns of the
Alternate Loan will actually occur.
The Purchaser anticipates that the loan agreement governing the Alternate
Loan will contain certain customary representations and warranties,
affirmative and negative covenants, events of default and other terms and
conditions.
The Purchaser will pay an upfront fee (the "Upfront Fee") equal to 2% on the
amount of each drawdown to be paid at each drawdown. The maximum aggregate
Upfront Fee will be $353,750 and the minimum Upfront Fee will be $100,000. In
addition, an arrangement fee of $100,000 (the "Arrangement Fee") will be
payable if the closing of the Alternate Loan does not occur by October 15,
1995 or if the closing does occur by such date but the Purchaser does not draw
down any funds under the Alternate Loan by January 15, 1996, provided that (a)
no Arrangement Fee will be payable if NatWest declines to close the Alternate
Loan or to fund under the Alternate Loan because of a material adverse change
or for a reason other than breach by the Purchaser of a representation,
warranty or covenant or failure of a condition and (b) if NatWest or the
Purchaser declines to close the Alternate Loan or declines to fund under the
Alternate Loan because of litigation pending, threatened or commenced with
respect to the Tender Offers, the AFG Partnerships or the Alternate Loan, the
payment of the Arrangement Fee shall be postponed until the earliest of the
date of the expiration or termination of the NatWest Commitment Letter, the
date of termination of such litigation or January 15, 1996. If NatWest or the
Purchaser declines to close the Alternate Loan or declines to fund under the
Alternate Loan on or before January 15, 1996 because of such litigation, then
the arrangement fee payable by the Purchaser to NatWest shall be $50,000.
Further, the Purchaser will pay all legal fees and disbursements of NatWest
and any other lenders in connection with the closing of the Alternate Loan.
"SECTION 13. BACKGROUND OF THE OFFER" is hereby supplemented and amended as
follows:
In connection with the settlement of the class action litigation described
herein, the Purchaser agreed to increase the Purchase Price to $1.60 per Unit.
The Purchase Price continues to represent the price at which the Purchaser is
willing to purchase Units and is in an amount which the Purchaser expects will
enable it to realize a profit.
The Partnership's Net Finance Value or NFV was determined to be $1,538,196
or $1.36 per Unit. Certain financial information supplied to the SunAmerica
and NatWest employed a discount rate of 9%. If the Purchaser in calculating
NFV had applied a 9% discount rate to the NFV as opposed to 15%, the NFV would
be $1,600,800
6
or $1.42 per Unit. The Purchaser believes the discount rates utilized are
reasonable but other discount rates might also be deemed appropriate.
Unitholders should be aware that the lower the discount rate used the higher
the NFV.
For purposes of NFV, the Purchaser determined the amount of Distributable
Cash Flow ("DCF") based upon its estimates of contracted rents and other
relevant factors as of July 1, 1995.
The residual percentages that the Purchaser supplied to the SunAmerica and
NatWest showing AFG's historical track record with respect to residual
realization are shown in Schedule 1 to this Supplement (the "Percentages").
The Percentages were calculated by dividing residual proceeds (which include
sale, re-lease and renewal proceeds) of equipment of varying age by the
original cost of such equipment. In determining ERV, the Purchaser used a
subset of the AFG historical track record information that incorporated the
age data most closely related with the age of the Partnership's asset when the
related lease expires and no residual value was assigned to equipment off-
lease. Because the Percentages group assets of varying age, the Percentages
may be different from the residual percentages used by the Purchaser in
determining the ERV. The methodology described above was used in all cases
except for aircraft. The residual percentage used in estimating the residual
value of the Partnership's aircraft is shown below. The Purchaser believes
that the historical residual percentages supplied to SunAmerica and NatWest
with respect to aircraft are not appropriate as such percentages relate to
(i) specific types of aircraft which may be different from the Partnership's,
(ii) aircraft that were generally sold subject to lease (the Purchaser
accounted for any value of Partnership lease receivables in determining the
NFV), and (iii) aircraft generally sold in the 1980's when the market for used
aircraft was different from that which exists at present. Following are the
residual percentages applied to the Partnership's equipment (excluding
equipment sold or awaiting sale) for purposes of calculating ERV:
Aircraft............................................................... 59%
Communications......................................................... 3%
Computers & Peripherals................................................ 10%
Railroad............................................................... 7%
Manufacturing.......................................................... 39%
Materials Handling Equipment........................................... 21%
Medical................................................................ 6%
Motor Vehicles......................................................... 22%
Trailers/Intermodal Containers......................................... 20%
The Partnership's auditors evaluate the carrying value of the Partnership's
commercial aircraft solely for financial statement purposes. As part of this
evaluation, the auditors review an independent appraisal and perform their own
appraisal of the estimated value of the subject aircraft at the end of the
lease taking into consideration the specific characteristics of the aircraft.
The Purchaser did not consider these appraisals in determining Purchase Price.
If the Purchaser, in its calculation of ERV, had used the average of the
independent appraisal and auditors appraisal (using the mid-point when a range
was provided for as an appraised value) as provided for in conjunction with
the Partnership's 1994 audit, the present value of the estimated residual
value of the Partnership's equipment, based upon the same methodology used to
determine ERV, would be $3,833,594 or $3.26 per Unit. (As noted in the Offer
to Purchase, the Purchaser determined ERV to be $3,833,594 or $3.40 per Unit.)
No liquidation value for the Partnership has been calculated by the
Purchaser or the General Partner although the Purchaser believes, as indicated
by NFV and ERV, that liquidation would result in distributions to the
Unitholders in excess of the Purchase Price.
The default rate factor of 1.5% used in calculating NFV is based upon an
estimate of the historic default rate realized in general equipment
transactions sponsored by AFG and is not based upon the actual default rate
experienced by the Partnership.
7
For purposes of determining the present value of the Partnership's assets, a
Unitholder may consider adding NFV per Unit and ERV per Unit and compare such
total to the Purchase Price. The sum of NFV per Unit calculated using a
discount rate of 15% and ERV per Unit is $4.62 per Unit. The sum of NFV per
Unit calculated using a discount rate of 9% and ERV per Unit is $4.68 per
Unit. It should be noted that the Purchaser believes that the realization of
NFV is very predictable and that the realization of ERV is less predictable.
The Purchaser primarily considered NFV in determining the Purchase Price as it
believes that any lender to the Purchaser will determine the amount of its
loan based primarily on the Partnership's NFV.
"SECTION 14. CONDITIONS OF THE OFFER" is hereby amended as follows:
The Purchaser will purchase the Units tendered in accordance with the Offer
if, in the exercise of its reasonable judgment, it determines that the
conditions to the Offer have been satisfied.
"SECTION 15. CERTAIN LEGAL MATTERS" is hereby supplemented as follows:
On September 6, 1995, City Partnerships Co. ("CPC"), commenced an action in
the United States District Court for the District of Massachusetts against the
Purchaser, the General Partner and various affiliates. The action alleges,
among other things, that the Offer constitutes (1) a violation of the ▇▇▇▇▇▇▇▇
Act Amendments to the Securities Exchange Act of 1934; (2) breach of
provisions of the partnership agreements of the AFG Partnerships; and (3)
breach of fiduciary duty owed to the Unitholders of the AFG Partnerships. The
action, which has been brought as a class action on behalf of such
Unitholders, seeks to enjoin the Offer and monetary damages in an unspecified
amount.
A proposed settlement of this litigation (the "Settlement") has been reached
by the parties. The terms of the Settlement are set forth in a Notice of Class
Action Determination, Proposed Settlement and Hearing Thereon (the "Notice"),
a copy of which is being provided to the Unitholders as to Schedule 2 to this
Supplement, and a Stipulation of Settlement dated September 27, 1995 filed
with the Court. On September 27, 1995, the Court entered an order
preliminarily approving the Settlement and certifying the class for settlement
purposes. A final settlement hearing is presently scheduled to be held on
November 15, 1995, at 3:00 p.m., in the United States District Court for the
District of Massachusetts.
On September 7, 1995, ▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, who represented
that they are Unitholders of American Income Partners V-B Limited Partnership
and American Income Partners III-C Limited Partnership, respectively,
commenced an action in the Massachusetts Superior Court against the Purchaser,
the General Partner and various affiliates and related parties. The action
alleges, among other things, that the Offer constitutes a breach of fiduciary
duty owed to the Unitholders of the AFG Partnerships. The action, which has
been brought as a class action on behalf of such Unitholders, seeks to enjoin
the Offer as well as monetary damages in an unspecified amount. No hearing
dates are presently scheduled.
In connection with this Supplement, the Purchaser has filed with the
Commission an amended Schedule 14D-1, pursuant to Rule 14d-3 under the
Exchange Act, furnishing certain additional information with respect to the
Offer, and may file further amendments thereto. The Schedule 14D-1 and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained at the same places and in the same manner as set forth in Section 9
of the Offer to Purchase (except that they will not be available at the
regional offices of the Commission).
ATLANTIC ACQUISITION
LIMITED PARTNERSHIP
October 3, 1995
8
SCHEDULE 1
RESIDUAL PROCEEDS BY EQUIPMENT TYPE
RESIDUAL PROCEEDS AS
EQUIPMENT TYPE A PERCENTAGE OF OEC (1)(2)
-------------- --------------------------
Aircraft............................................. 75.22%
Commercial Printing.................................. 36.81%
Communications....................................... 9.64%
Computers & Peripherals.............................. 14.60%
Construction & Mining................................ 45.63%
Fitness.............................................. 20.12%
Furniture & Fixtures................................. 11.29%
General Purpose Plan/Warehouse....................... 35.38%
Railroad............................................. 68.75%
Manufacturing........................................ 44.42%
Materials Handling Equipment......................... 23.89%
Medical.............................................. 18.75%
Motor Vehicles....................................... 22.95%
Photocopying......................................... 12.16%
Research & Test...................................... 33.03%
Retail Store Fixtures................................ 18.65%
Tractors & Heavy Duty Trucks......................... 35.28%
Trailers/Intermodal Containers....................... 32.44%
Miscellaneous........................................ 15.61%
--------
(1) OEC = Original Equipment Cost
(2) Residual Proceeds includes all amounts received after initial lease
expiration. Such amounts are primarily re-lease, renewal and sale
proceeds. The figures include residual proceeds for equipment of varying
age.
9
SCHEDULE 2
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
------------------------------------------------
)
CITY PARTNERSHIPS CO., A New )
York General Partnership, on Behalf of )
Itself and All Others Similarly Situated, )
)
Plaintiff )
v. ) Civil Action No.
) 95-11990-PBS
ATLANTIC ACQUISITION LIMITED )
PARTNERSHIP, A Massachusetts )
Limited Partnership; AFG PROGRAMS, )
INC.; AAL, Inc., a Massachusetts )
Corporation; AMERICAN FINANCE )
GROUP, INC., a Delaware Corporation; )
AFG LEASING CORPORATION IV, )
INC., a Massachusetts Corporation; )
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; )
▇▇▇▇ ▇▇▇▇▇; and ▇▇▇▇▇ ▇▇▇▇▇, )
)
Defendants. )
)
------------------------------------------------
NOTICE OF CLASS ACTION DETERMINATION
PROPOSED SETTLEMENT AND HEARING THEREON
TO: ALL PERSONS AND ENTITIES WHO WERE UNITHOLDERS OF RECORD AS OF
AUGUST 10, 1995 OF LIMITED PARTNERSHIP UNITS IN ANY OF THE FOLLOWING
LIMITED PARTNERSHIPS:
American Income 4 Limited Partnership;
American Income 5 Limited Partnership;
American Income 6 Limited Partnership;
American Income 7 Limited Partnership;
American Income 8 Limited Partnership;
American Income Partners III-A Limited Partnership;
American Income Partners III-B Limited Partnership;
American Income Partners III-C Limited Partnership;
American Income Partners III-D Limited Partnership;
American Income Partners IV-A Limited Partnership;
American Income Partners IV-B Limited Partnership;
American Income Partners IV-C Limited Partnership;
American Income Partners IV-D Limited Partnership;
American Income Partners V-A Limited Partnership;
American Income Partners V-B Limited Partnership;
American Income Partners V-C Limited Partnership;
American Income Partners V-D Limited Partnership;
American Income Fund I-B, a Massachusetts Limited Partnership;
American Income Fund I-C, a Massachusetts Limited Partnership;
American Income Fund I-D, a Massachusetts Limited Partnership; and
American Income Fund I-E, a Massachusetts Limited Partnership.
THIS NOTICE RELATES TO A PROPOSED SETTLEMENT OF THE LITIGATION REFERRED TO
IN THE CAPTION. PLEASE READ THIS NOTICE CAREFULLY. YOUR RIGHTS WILL BE
AFFECTED BY THE PROCEEDINGS IN THIS LITIGATION.
THE PROPOSED SETTLEMENT, IN CONNECTION WITH A PENDING TENDER OFFER FOR
REDEMPTION OF THE UNITS, CALLS FOR THE PAYMENT OF A PREMIUM OF UP TO $1,500,000
TO THE UNITHOLDERS WHO TENDER THEIR UNITS, AND ALSO PROVIDES THAT CERTAIN
ADDITIONAL INFORMATION CONCERNING THE TENDER OFFER SHALL BE DISSEMINATED BY THE
DEFENDANTS TO THE UNITHOLDERS.
PLEASE BE ADVISED THAT:
1. This Notice is given pursuant to Rule 23 of the Federal Rules
of Civil Procedure and a Preliminary Order of the United States District
Court for the District of Massachusetts ("the Court") dated September
27, 1995 (the "Preliminary Order"), entered in the above class action
("the Action"), to notify you of the pendency of the litigation as a
class action under Rule 23(b)(3), the proposed settlement of the
litigation, the Court's certification of the class as defined below for
the purposes of this settlement, and of a settlement hearing (the
"Settlement Hearing") and your rights with respect thereto.
2. A proposed settlement of this litigation (the "Settlement")
has been reached by the parties. The proposed Settlement, the terms of
which are only summarized in this Notice, is embodied in an Amended
Stipulation of Settlement dated September 27, 1995 (the "Stipulation")
which has been filed with the Court.
3. The Settlement Hearing will be held on November 15, 1995, at
3:00 PM before the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇, United States District
Court Judge, at the United States District Courthouse, Post Office
Square, Boston, MA. The purpose of the hearing is to determine whether
the Settlement should be approved by the Court as fair, reasonable and
adequate and in the best interests of the Class (as defined below),
whether the Court should approve the application of plaintiff's counsel
for an award of attorneys' fees and reimbursement of expenses to
plaintiff's counsel, and whether final judgment should be entered
thereon.
4. Unless you properly request an exclusion from the Class (as
defined below) as set forth in Section II below, you will be bound by
the terms and conditions of the proposed Settlement described in more
detail in this Notice.
5. The proposed Settlement will become effective only if the
Court approves it. If the Court approves the proposed Settlement, and
you have not requested exclusion as provided in Section II you may be
forever barred from contesting the fairness, reasonableness or adequacy
of it, or from pursuing the Settled Claims (as defined below) against
the defendants.
The term "Defendants" means each and all of the following persons and
entities: Atlantic Acquisition Limited Partnership; AFG Programs, Inc.;
AAL, Inc.; American Finance Group, Inc.; AFG Leasing Corporation IV, Inc.;
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇; and ▇▇▇▇▇ ▇▇▇▇▇. The term "Individual
Defendants" means ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇.
I.
DESCRIPTION OF THE LITIGATION
A. History of the Litigation
On or about August 18, 1995, defendant Atlantic Acquisition Limited
Partnership ("Atlantic Limited"), a newly-formed Massachusetts limited
partnership, commenced a tender offer for up to 45% of the outstanding units in
the twenty-one partnerships listed herein (the "Subject Partnerships").
Defendant Atlantic Limited's tender offer prices differed with respect to each
of the Subject Partnerships, but each of the individual tender offers, except
for relevant partnership specific information, included essentially the same
information and financial disclosure to each of the unitholders.
On September 6, 1995 City Partnerships, Co. commenced a lawsuit in this
jurisdiction against Atlantic Limited and related entities in connection with
the Tender Offers for up to 45% of the outstanding units in said partnerships
scheduled to close on September 29, 1995. The complaint included claims against
Atlantic Limited and related entities for, inter alia, violation of Section
14(e) of the Securities and Exchange Act of 1934, breach of fiduciary duty by
certain of the general partners of the Subject Partnerships, and breach of the
partnership agreements.
-2-
B. Defendants' Denial of All Allegations
Each Defendant has at all times denied the allegations of wrongdoing and
the merits of any and all claims asserted in the Action.
THE FACTUAL STATEMENTS HEREIN ARE BASED ON INFORMATION PROVIDED TO THE COURT
BY COUNSEL FOR THE PARTIES AND DO NOT CONSTITUTE FINDINGS OF THE COURT.
THIS NOTICE IS NOT INTENDED TO BE, AND SHOULD NOT BE CONSTRUED AS, AN
EXPRESSION OF ANY OPINION BY THE COURT WITH RESPECT TO THE TRUTH OF THE
ALLEGATIONS IN THE LITIGATION OR THE MERITS OF THE CLAIMS OR DEFENSES ASSERTED.
THE PURPOSE OF THIS NOTICE IS TO ADVISE YOU OF THE PROPOSED SETTLEMENT OF THE
LITIGATION AND YOUR RIGHTS WITH REGARD TO IT.
C. Class Action Determination
For purposes of the proposed Settlement the Court has, by order dated
September 27, 1995, certified the following class (the "Class") for settlement
purposes:
All persons and entities who were unitholders of record as of August 10,
1995 of limited partnership units in any of the following limited
partnerships: American Income 4 Limited Partnership;
American Income 5 Limited Partnership;
American Income 6 Limited Partnership;
American Income 7 Limited Partnership;
American Income 8 Limited Partnership;
American Income Partners III-A Limited Partnership;
American Income Partners III-B Limited Partnership;
American Income Partners III-C Limited Partnership;
American Income Partners III-D Limited Partnership;
American Income Partners IV-A Limited Partnership;
American Income Partners IV-B Limited Partnership;
American Income Partners IV-C Limited Partnership;
American Income Partners IV-D Limited Partnership;
American Income Partners V-A Limited Partnership;
American Income Partners V-B Limited Partnership;
American Income Partners V-C Limited Partnership;
American Income Partners V-D Limited Partnership;
American Income Fund I-B, a Massachusetts Limited Partnership;
American Income Fund I-C, a Massachusetts Limited Partnership;
American Income Fund I-D, a Massachusetts Limited Partnership; and
American Income Fund I-E, a Massachusetts Limited Partnership.
Excluded from the Class are the Defendants, members of the immediate families of
each of the Individual Defendants, any entity in which any Defendant has a
controlling interest, and the legal representatives, heirs, successors,
predecessors in interest, or assigns of any of the Defendants. Also for purposes
of the proposed Settlement the Court has certified plaintiff City Partnership
Co. as the Class Representative.
II.
YOUR RIGHT TO BE EXCLUDED FROM THE CLASS
If you are a unitholder of one or more of the limited partnerships as
described above, and are not a Defendant herein, or other excluded person, you
are a member of the Class. You may request exclusion from the Class in writing
mailed by first class mail addressed to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
-3-
Your request for exclusion must clearly indicate that you request to be
excluded from the Class and must state: your name and address; and identify
the limited partnerships and the units thereof that you held as of record on
August 10, 1995. Also identify the record holder if you were the beneficial
holder, but not the holder of record. The request for exclusion will not be
effective unless all of the above information is provided and unless the
request for exclusion is postmarked no later than November 3, 1995.
If you request exclusion, you will not be bound by any judgment in this
Action, and will be free to pursue your own remedy, if any, against the
Defendants in this Action. If you request exclusion you may nevertheless
accept or decline the Tender Offer for your units of the limited partnerships.
Any Class Member who does not request exclusion may, if he or she desires,
enter an appearance through his or her counsel by sending such entry of
appearance to the above address.
All members of the Class who do not request to be excluded will
participate in and be bound by the proposed Settlement. If you wish to remain a
member of the Class, you need do nothing and your rights will be represented by
the following counsel for plaintiff and the Class ("Class Counsel"):
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LAW OFFICES OF ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
One Liberty Square ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
III.
REASONS FOR THE SETTLEMENT
Class Counsel obtained and analyzed thousands of pages of relevant
documents in expedited discovery during the prosecution of the litigation, and
had access to depositions of Defendants in this litigation. Class Counsel
produced to Defendants relevant documents concerning the litigation on an
expedited basis. Counsel also interviewed some of the Individual Defendants to
obtain information relevant to all partnerships, the General Partners, the
Individual Defendants and their affiliates, and Counsel relied upon certain
representations made during those interviews in reaching the settlement
described herein. Class Counsel and Counsel for Defendants have engaged in
extensive arm's length negotiations with respect to the settlement of claims of
the members of the Class. Class Counsel recognizes and acknowledges the expense
and length of time for continued proceedings necessary to prosecute the
litigation against the Defendants through trial and through potential appeals.
Class Counsel also have taken into account the applicable law, the uncertain
outcome and the risk of any litigation, especially in complex actions such as
this litigation, as well as the difficulties and delays inherent in such
litigation. Class Counsel have further taken into account the strengths and
uncertainties of the claims asserted in the litigation, the possible defenses to
the claims asserted and the substantial benefits of the Settlement for the
Class. Class Counsel have therefore determined that the Settlement is fair,
reasonable, adequate, and in the best interests of the Class.
Defendants have maintained throughout the litigation of this Action that
all allegations of wrongdoing and all claims asserted in the Action are without
merit. Defendants, however, desire that the Action be settled in order to
eliminate the cost and uncertainty of future litigation and to achieve the final
resolution and complete settlement of any and all of the Settled Claims (as
defined below).
IV.
SUMMARY OF THE PROPOSED SETTLEMENT
The following description of the proposed Settlement of the Action is
only a summary. Reference may be made to the text of the Stipulation, on file
with the Court, for a full statement of its provisions. The major terms of the
Settlement are as follows.
(a) In full and final disposition, settlement, discharge,
release, and satisfaction of any and all claims, individual, class or
derivative in nature, including those claims asserted in the Action,
that have been or could be asserted by or on behalf of any member of the
Class against any Defendant or a general partner of the Subject
Partnerships (as more fully defined in the term "Releasees" contained in
the Stipulation) with respect to any transaction or occurrence
constituting the subject matter of the Action ("Settled Claims," as
defined more fully below), Defendants agree to provide the following
consideration:
-4-
(b) The Defendants agree to disseminate a Supplement to the
Offers, provided herewith, providing additional information to each of
the unitholders in the Subject Partnerships, as defined in and attached
to the Stipulation, and as filed with the Court.
(c) Additionally, Defendants agree that the tender offer prices
will be increased to reflect a premium. Defendants agree to pay
unitholders a premium of $1,500,000 to be spread equally across all the
tendering unitholders of the Subject Partnerships, resulting in an
approximately 6.6% premium in the tender offer price for each limited
partnership.
(d) Defendants agree to purchase up to 35% of the outstanding
units of the Subject Partnerships.
The Amended Stipulation of Settlement is subject to the following
conditions and, except by mutual consent of the parties' counsel as provided
therein, shall be canceled and terminated unless:
(a) The Court shall enter a Final Judgment approving the
Settlement as fair and adequate to the Class; and
(b) The Court's Final Judgment becomes final, binding and
nonappealable, as set forth in the Amended Stipulation of Settlement.
This Notice is not intended to be a complete description of the
Stipulation. The Stipulation contains the full and complete terms of the
Settlement.
V.
EFFECT OF APPROVAL OF THE PROPOSED SETTLEMENT
If the Court approves the proposed Settlement, judgment will be entered:
(a) Approving the Settlement as fair, reasonable, adequate and
in the best interests of the Class; determining the reasonable amount of
attorneys' fees and reimbursement of costs and disbursements to be
awarded to Class Counsel, and retaining jurisdiction for the purposes of
effectuating the terms and provisions of the Settlement;
(b) Dismissing with prejudice, and releasing and discharging,
any and all claims, demands, rights, liabilities, and causes of action
of every nature and description whatsoever, including, without
limitation, individual, class or derivative claims, known or unknown,
asserted or that might have been asserted, including without limitation,
claims for negligence, gross negligence, breach of duty of care and/or
breach of duty of loyalty and/or breach of duty of candor, fraud,
negligent misrepresentation, breach of fiduciary duty, or violations of
any state or federal statutes, rules or regulations, whether directly,
in a representative capacity or in any other capacity, by any Class
Member against any of the Defendants or the Releasees arising out of,
relating to, or in connection with (i) any of the Subject Partnerships
and arising out of any of the Tender Offers; (ii) any of the acts,
omissions, misrepresentations, facts, events, matters, transactions or
occurrences referred to or which could have been referred to in the
complaint or in other pleadings filed in the litigation, including all
claims which were or could have been asserted in the litigation; (iii)
any filing with the Securities and Exchange Commission or other public
filing or statement relating to the Tender Offers; and/or (iv) the
terms, the fact, fairness, or adequacy of this Settlement.
VI.
TERMINATION OF PROPOSED SETTLEMENT
If there is no final Court approval of the proposed Settlement in this
case, or if for any reason there is a failure to satisfy any of the conditions
of the Stipulation, the Stipulation will become null and void, and the parties
will resume their former positions in this action.
VII.
APPROVAL OF APPLICATION FOR ATTORNEYS' FEES AND EXPENSES
If this Settlement is approved by the Court, in conjunction with the
Settlement Hearing, Class Counsel will request the Court to approve Class
Counsel's application for attorneys' fees and expenses, not to exceed $250,000,
in prosecuting this Action and securing a benefit for the members of the Class.
Members of the Class will not incur
-5-
any obligation for such fees and expenses, and the fees and expenses will
not be deducted from the premium to be paid to unitholders as a result of the
Settlement
VIII.
THE SETTLEMENT HEARING
IF YOU DO NOT WISH TO OBJECT TO THE PROPOSED SETTLEMENT OR REQUEST FOR
ATTORNEYS' FEES AND EXPENSES YOU NEED NOT APPEAR AT THE HEARING.
The Settlement Hearing will be held on November 15, 1995 at 3:00 PM
before the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇, U.S. District Court Judge, at the United
States District Courthouse, Post Office Square, Boston, MA:
(a) to determine whether the Settlement of the Action as set
forth in the Amended Stipulation of Settlement is fair, reasonable,
adequate and in the best interests of plaintiff and members of the Class
and should be approved by the Court;
(b) to determine whether an order and final judgment dismissing
the Action should be entered thereon; and
(c) to determine whether to approve Class Counsel's application
for attorneys' fees and expenses , incurred in this action, not to
exceed $250,000.
The Court may adjourn the Settlement Hearing, or any adjournment thereof,
without further notice to members of the Class other than by announcement at the
Settlement Hearing or any adjournment thereof. The Court reserves the right to
approve the Settlement as it may be modified by the parties or the Court,
according to its terms and conditions, with or without further notice to members
of the Class.
At the Settlement Hearing, any member of the Class, who has provided a
notice of appearance which is served and filed as hereinafter provided, may
object to or support the Settlement, or may object to or support the Court's
allowance of reasonable fees and expenses to Class Counsel for their services
and actual expenses incurred herein to be paid by the Defendants. However,
unless the Court in its discretion otherwise directs, members of the Class, and
all others (excluding the parties), shall not be heard or be entitled to oppose
the approval of the terms and conditions of the Settlement or (if approved) the
judgment to be entered thereon, or the allowance of fees and expenses to
plaintiff's counsel, and no papers, briefs, pleadings or other documents
submitted by any member of the Class, or any other person (excluding the
parties) shall be received and considered, except by order of the Court for good
cause shown, unless, no later than 10 days prior to the Settlement Hearing, such
person has served and filed the following documents in the manner provided
below:
(a) A Notice of Intention to Appear; and
(b) A detailed statement of such person's specific objections to
any matter before the Court, the grounds for such objections and any
reasons why such person desires to appear and to be heard, and enclosing
all documents and writings that such person desires the Court to
consider.
Such documents shall be filed with the Court, at the address noted above and
served by first class mail upon the following counsel:
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ PEABODY & BROWN
One Liberty Square ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Representing Plaintiff and the Class Representing Defendants
ANY CLASS MEMBER WHO DOES NOT OBJECT IN THE MANNER DESCRIBED HEREIN WILL BE
DEEMED TO HAVE WAIVED ANY OBJECTION, AND SHALL FOREVER BE FORECLOSED FROM
MAKING ANY OBJECTION TO THE PROPOSED SETTLEMENT.
-6-
IX.
SPECIAL NOTICE TO BROKERS, ▇▇▇▇▇ AND OTHER NOMINEES
Brokerage firms, banks or other persons or entities who are current
holders for the benefit of others of limited partnership units in the Subject
Partnerships are directed to send this Notice promptly to all such beneficial
owners. In the alternative, record holders may forward the names and addresses
of the members of the Class and beneficial owners to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
at the above address, who in turn will cause copies of this Notice to be sent by
Defendants to such persons or entities.
X.
FURTHER INFORMATION
For a more detailed statement of the matters involved in this
litigation, you are referred to the papers on file in this Action, including the
Stipulation, which may be inspected during regular business hours at the Office
of the Clerk of the United States District Court, Post Office Square, Boston,
PLEASE DO NOT CALL OR WRITE THE COURT DIRECTLY. IF YOU HAVE ANY QUESTIONS,
PLEASE CONTACT THE FOLLOWING COUNSEL REPRESENTING PLAINTIFF AND THE CLASS:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Dated: September 27, 1995 BY ORDER OF THE UNITED STATES
DISTRICT COURT FOR THE
DISTRICT OF MASSACHUSETTS
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