UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13-E3/A
RULE 13E-3 TRANSACTION STATEMENT UNDER SECTION 13(e)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)
DECADE COMPANIES INCOME PROPERTIES-A LIMITED PARTNERSHIP
(Name of the Issuer)
DECADE COMPANIES INCOME PROPERTIES-A LIMITED PARTNERSHIP
JEFFERY L. KEIERLEBER
(Name of Persons Filing Statement)
Limited Partnership Interests
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
Mr. Michael Sweet
Decade Companies Income Properties
N19 W24130 Riverwood Dr., Suite 100
Waukesha WI 53188
(262) 522-8990
Copy to:
Conrad G. Goodkind, Esq.
Walter J. Skipper, Esq.
Quarles & Brady LLP
411 East Wisconsin Ave.
Milwaukee, WI 53202
(414) 277-5000
(Name, Address, and Telephone Numbers of Persons Authorized to Receive Notices
and Communications on Behalf of Persons Filing Statement)
This statement is filed in connection with (check the appropriate box):
[ ] The filing of solicitation materials or an information statement
subject to Regulation (Section240.14a-1 through
240.14b-2), Regulation 14C (Section 240.14c-1 through 240.14c-101) or
13e-3(c) (Section 240.13e-3(c)) under the Securities Exchange Act of 1934
("the Act").
[ ] The filing of a registration statement under the Securities Act of
1933.
[ X ] A tender offer.
[ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are
preliminary copies: [ ]
Check the following box if the filing is a final amendment reporting the results
of the transaction: [ ]
SCHEDULE 13E-3
This Amendment No. 1 to Schedule 13E-3 amends the Schedule 13E-3 originally
filed by Decade Companies Income Properties - A Limited Partnership, a limited
partnership organized in the State of Wisconsin (the "Partnership") and
Jeffrey L. Keierleber (an affiliate of the Partnership and its General Partner)
("Keierleber"). This Amendment No. 1 to Schedule 13E-3 relates to the tender
offer, severally and not jointly, by the Partnership and Keierleber to purchase,
in aggregate, up to 3,500 Limited Partnership Interests (the "Interests"), at a
price of $910.00 per Interest, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated July 15, 2003 (the "Offer to Purchase") and
in the related Letter of Acceptance (which together constitute the "Offer").
Amendment No. 1 to the Offer to Purchase dated August 8, 2003 ("Amendment No.
1") will be sent to all Limited Partners of the Partnership. Amendment No. 1 is
filed being filed as an exhibit to this Amendment No. 1 to Schedule 13E-3.
The Offer is subject to the terms and conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal, as amended or supplemented
by Amendment No. 1 thereto. Except as amended hereby, the Schedule
13E-3 filed by the Partnership and Keierleber on July 16, 2003 remains in
effect.
The Schedule 13E-3 is hereby supplemented and amended as follows:
Item 1. Summary Term Sheet
The information set forth in the Offer to Purchase under "Summary Term Sheet"
is hereby amended by the information in Amendment No. 1 under "Previous Offers
by the Offerors to Purchase Interests" and "Update on
Payment of Purchase Price," which is incorporated herein by reference.
Item 4. Terms of the Transaction
The information set forth in the Offer to Purchase under "Summary Term Sheet,"
"The Offer," The Offer-Introduction-
Background," "The Offer-Introduction-Post Offer Plans," "The
Offer-Introduction-Determination of the Purchase Price,"
"The Offer-Introduction-Interests of Certain Persons in the Offer," "The
Offer-Introduction-Certain Effects of the Offer,"
"The Offer-Risk Factors," "The Offer-Fairness of the Transaction; Reports,
Opinions, Appraisals and Certain Negotiations; No Approvals Required; No
Appraisal Rights," "The Offer-Certain Federal Income Tax Consequences,"
"The Offer-Number of Interests; Expiration Date; Extension of the Offer," "The
Offer-Procedure for Tendering
Interests," "The Offer-Withdrawal Rights," "The Offer-Payment of the Purchase
Price," "The Offer-Certain Conditions
of the Offer" and "The Offer-Extension of Tender Period; Termination;
Amendments"is hereby amended by the
information in Amendment No. 1 under "Previous Offers by the Offerors to
Purchase Interests," "Wisconsin Filings
Completed, "The Offer," "Update on Payment of Purchase Price" and "Conditions
to the Offer," which is incorporated
herein by reference.
Item 6. Purposes of the Transaction and Plans or Proposals
The information set forth in the Offer to Purchase under "Summary Term Sheet,"
"The Offer-Introduction-Background,"
"The Offer-Introduction-Purpose of Offer," "The Offer-Introduction-Post Offer
Plans," "The Offer-Introduction-
Interests of Certain Persons in the Offer," "The Offer Introduction-Certain
Effects of the Offer," "The Offer-Risk
Factors" and "The Offer-Past Contacts, Transactions or Negotiations;
Transactions and Agreements Concerning the
Interests" is hereby amended by the information in Amendment No. 1 under
"The Offer," which is incorporated herein
by reference.
Item 7. Purposes, Alternatives, Reasons and Effects
The information set forth in the Offer to Purchase under "The
Offer-Introduction-Purpose of Offer," "The Offer-
Introduction-Certain Effects of the Offer," "The Offer-Introduction-Post Offer
Plans," "The Offer-Introduction-
Interests of Certain Persons in the Offer," "The Offer-Risk Factors," "The
Offer-Certain Federal Income Tax
Consequences,"is hereby amended by the information in Amendment No. 1 under
"The Offer" and "Update on
Payment of Purchase Price," which is incorporated herein by reference.
Item 8. Fairness of the Transaction
The information contained in the Offer to Purchase under "The
Offer-Introduction-Determination of the Purchase Price,"
and "The Offer-Fairness of the Transaction; Reports, Opinions, Appraisals and
Certain Negotiations; No Approvals
Required; No Appraisal Rights" is hereby amended by the information in
Amendment No. 1 under "Update on Payment
of Purchase Price," which is incorporated herein by reference.
Item 10. Source and Amounts of Funds or Other Consideration
The information set forth in the Offer to Purchase under "Summary Term Sheet,"
"The Offer-Source and Amount of
Funds" and "The Offer-Persons/Assets, Retained, Employed, Compensated or Used"
is hereby amended by the
information in Amendment No. 1 under "Source of Funds," which is incorporated
herein by reference.
Item 15. Additional Information
The information set forth in the Offer to Purchase and the Letter of Acceptance
is hereby amended by the
information in Amendment No. 1, which is incorporated herein by reference.
Item 16. Exhibits
(a)(1)(A) Amendment No. 1 to the Offer to Purchase Dated July 15, 2003.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this
statement, is true complete and correct.
DECADE COMPANIES,
GENERAL PARTNER,
DECADE COMPANIES INCOME
PROPERTIES
/s/ Jeffery L. Keierleber
Jeffery L. Keierleber,
General Partner,
Decade Companies
/s/ Jeffery L. Keierleber
Jeffery L. Keierleber
Date: August 8, 2003
AMENDMENT NO. 1 TO THE OFFER TO PURCHASE DATED JULY 15, 2003
DECADE COMPANIES INCOME PROPERTIES, A LIMITED PARTNERSHIP
August 8, 2003
Offer to Purchase Cash Consideration
Up to 3,500 Limited Partnership Interests
At a Purchase Price of $910 Per Interest
The offer, proration period and withdrawal rights expire at 12:00
midnight,
Milwaukee time, on August 13, 2003, unless the offer is extended.
The Offer to Purchase Interests is made by and on the terms and
conditions contained in (a) the Offer to Purchase dated July 15,
2003 and in the related Letter of Acceptance (which together
constitute the "Offer"), and (b) this Amendment (consisting of a
cover page and pages S-2 through S-7 (the "Amendment No. 1") which
amends and supplements the Offer as of the date hereof.
IT IS IMPORTANT THAT AMENDMENT NO. 1 BE READ IN CONJUNCTION WITH
THE OFFER.
August 8, 2003
To all Limited Partners of Decade Companies Income Properties - A
Limited Partnership ("DCIP"):
INTRODUCTION
As we approach the tender offer Expiration Date, August 13,
2003, and in addition to the information set forth in the Offer
to Purchase dated July 15, 2003 and the related Letter of
Acceptance (collectively, the "Offer"), all limited partners of
Decade Companies Income Properties (the "Partnership" or "DCIP")
should carefully consider the following information in this
Amendment No. 1 dated August 8, 2003, which amends and
supplements the information in the Offer to Purchase, in deciding
whether to tender their Limited Partnership Interests
("Interests"). This letter supplements the Offer and provides
additional information you should consider.
The Partnership hereby invites its limited partners to
tender their Interests at $910.00 per Interest and urges limited
partners to review the information contained in the original
Offer to Purchase, the Letter of Acceptance and in this letter.
PREVIOUS OFFERS BY THE OFFERORS TO PURCHASE INTERESTS
In the Offer to Purchase, we have referenced that the
Offerors considered the price paid in previous offers conducted
within the last three years. Among other things, this includes an
offer conducted by the Offerors that commenced on April 8, 2002
(the "2002 Offer") and under which the Offerors purchased an
aggregate of 5,809.097 Interests at $895.00 per Interest. In the
2002 Offer, the Offerors offered to purchase up to an aggregate
of 7,700 Interests at a purchase price of $895.00 per Interest,
upon substantially similar terms as those pursuant to this Offer.
Additional information regarding this offer by the Offerors can
be found in the Offer to Purchase under the section entitled
"Offer - Introduction - Significant Partnership Events."
WISCONSIN FILINGS COMPLETED
As noted in the Offer to Purchase, the Offerors were required to
make certain filings with the Department of Financial
Institutions in the State of Wisconsin and have requested an
exemption from certain filing requirements under Wis. Stat.
Chapter 552. The Offerors have made those filings and on August
4, 2003 received an exemption order and received confirmation
that the Wisconsin Commissioner of Securities of the Department
of Financial Institutions will not object to the terms of the
Offer. The State of Wisconsin has not passed on and does not
opine on the terms or the fairness of the Offer.
THE OFFER
The Offer to Purchase indicated that the Offer is being
conducted severally and not jointly by DCIP and Mr. Keierleber.
By this, we meant that although DCIP and Mr. Keierleber are both
offering to purchase Interests separately tendered in this Offer.
DCIP has no liability or obligations with respect to that portion
of the Interests for which Mr. Keierleber has offered to purchase
in the Offer. You may not have any recourse against DCIP if Mr.
Keierleber fails to purchase any specific amount of Interests in
the Offer. Mr. Keierleber is participating in the Offer primarily
to facilitate the funding of the Offer. DCIP does not have
sufficient cash funds to undertake the entire Offer on its own.
DCIP and Mr. Keierleber have offered to purchase an
aggregate of 3,500 Interests in the Offer, or 34.1 % of the
issued and outstanding Interests (and 98.1 % of the issued and
outstanding Interests not owned by Mr. Keierleber or his
affiliates). Based upon past experience, the Offerors believe
that not every Limited Partner will tender. The Offerors may
increase the number of Interests being bought by up to 2% of the
outstanding Interests without extending the Expiration Date under
Rule 13e-4, and they will most likely do so if more than 3,500
Interests are tendered in the Offer. See the section entitled
"Procedure for Tendering Interests - Proration" contained in the
Offer to Purchase.
The reason that both DCIP and Mr. Keierleber determined to
commence the Offer at this time was to (i) provide Limited
Partners with an opportunity to sell Interests at a price higher
than reported transactions in the last three years, (ii) reduce
the number of Limited Partners below 300, which will allow DCIP
to terminate its reporting obligations under the Securities
Exchange Act of 1934, and (iii) provide Limited Partners with
another opportunity to sell their Interests because of events
that occurred after the completion of the 2002 Offer. Subsequent
to the completion of the 2002 Offer, two Office Buildings were
purchased on July 30, 2002 to replace The Meadows II Apartments,
which was sold on January 30, 2002. One consequence of the
purchase of the Office Buildings and its operating results was
the suspension of cash distributions during the third quarter of
2002 and thereafter.
If for any reason the Offerors determine to change the
amount of the Purchase Price or the number of Interests subject
to the Offer, the Offerors will extend the term of the Offer for
an additional 10 business days from the date the Offerors make
such a determination.
The Offerors have agreed to pay any brokerage fees or
similar expenses in connection with the Offer. However, the
Offerors will not pay any fees that are payable in respect of
custodial or other beneficiary accounts, if any. Limited Partners
will be required to pay any such fees associated with tendering
their Interests in the Offer.
The Offerors hereby amend the Offer to Purchase by changing
all references to "Certain Federal Income Tax Consequences" in
the Offer to Purchase from "Certain Federal Income Tax
Consequences" to "Material Federal Income Tax Consequences."
UPDATE ON PAYMENT OF PURCHASE PRICE
Limited Partners should be aware that the Purchase Price may
be less than the fair market value or the ultimate liquidation
value of the Interests.
The Offerors concluded that the Purchase Price was fair
based on the various factors discussed in the Offer to Purchase,
which are further expanded upon below, and on the fairness
opinion that the Offerors obtained in connection with the Offer,
which also concludes that the Purchase Price is fair to Limited
Partners. The Offerors reasonably believe that the terms of the
Offer are fair to unaffiliated Limited Partners, principally
because it provides an opportunity for Limited Partners to
receive cash for their Interests on a voluntary basis at a price
that exceeds the reported third party trading prices of the
Interests since January 1, 1999. The fairness opinion previously
attached to the Offer to Purchase supported the Offerors
conclusion.
The Offerors have listed in the section of the Offer to
Purchase entitled "Offer - Introduction - Certain Effects of the
Offer" numerous effects that the offer may have on Limited
Partners, mostly applicable to Limited Partners who are not
affiliated to the Offerors. The Offerors considered all such
effects of the Offer on the unaffiliated Limited Partners in
determining whether to conduct the Offer.
The Offerors listed several factors in the Offer to Purchase
upon which they based their determination of the Purchase Price.
These factors are further explained as follows, along with
additional factors considered by the Offerors:
The voluntary nature of the transaction
- Limited Partners are not required to
tender in the Offer and the Offerors are
willing to accept the Interests tendered
in the Offer. The General Partners
considered that the amount of the
Purchase Price offered in the Offer,
which is above all prior transaction
prices, may influence a Limited
Partner's decision on whether to tender
in the Offer.
The Interests are not registered on any
registered securities exchange or on the
NASDAQ over-the-counter market - there
is not a readily available market for
the Interests so that Limited Partners
have limited liquidity for their
Interests. The General Partners believed
that because there is no market or
liquidity for the Interests, it would be
beneficial for the Limited Partners to
have an opportunity to receive cash for
their investment in DCIP if they so
chose.
The liquidation value is uncertain at
this time -the potential liquidation
value of the Partnership is uncertain at
this time because of the fluctuating
real estate markets in those areas where
the Partnership has properties and
because of the varying occupancy rates
in the Partnership's properties. The
General Partners considered that because
the liquidation value of the Partnership
is uncertain, i.e. that the liquidation
value may be lower in the future than it
is now, it may be beneficial for Limited
Partners to have an opportunity to
receive in the Offer a definite cash
value for their Interests.
In determining the fairness of the
transaction to Limited Partners, the
Offerors did not consider the net book
value or going concern value of the
Partnership, because the net book value
amount under accounting rules does not
correlate to any market value and the
going concern value was difficult to
calculate with any certainty.
There were no firm offers by
unaffiliated third parties of which the
Offerors are aware for the merger or
consolidation of Partnership, the sale
or transfer of all of the Partnership's
assets or the purchase of Interests
which would enable the holder to control
the Partnership upon which the Offerors
could evaluate the fairness of the
transaction.
The Offerors intend to promptly pay for
all Interests tendered in the Offer upon the Expiration
Date. Limited Partners should expect to receive payment
within one or two days of the Expiration Date. However, it
may take the Offerors additional time after the Expiration
Date to calculate the Interests to be accepted if the
Offerors receive numerous tenders within the last few days
before the Expiration Date. In such event, Limited Partners
should expect to receive payment within 5 days of the
Expiration Date.
CONDITIONS OF THE OFFER
The Offer to Purchase contains a section entitled "Certain
Conditions of the Offer." That section discusses certain
conditions under which the Offerors may not be required to
accept tendered Interests, or terminate or amend the Offer.
Among other things, the first paragraph of that section
states that the Offerors may terminate or amend the Offer if
certain events occur regardless of the circumstances giving
rise thereto (including any action or omission to act by the
Offerors). We are deleting this reference to acts and
omission by the Offerors, and Limited Partners should
understand that the Offerors may not act or fail to act in
any way that may allow the Offerors to amend or terminate
the Offer.
If we choose to waive any material
condition to the Offer as listed in the Offer to Purchase,
we will notify Limited Partners of such waiver and will
extend the term of the Offer if so required by the
securities laws.
In the Offer to Purchase, we state that
the conditions of the Offer "may be waived by the Offerors,
in whole or in part, at anytime and from time to time in its
reasonable discretion." However, other than any necessary
regulatory approvals, all of the conditions listed in the
Offer to Purchase will be waived or satisfied prior to the
Expiration Date of the Offer.
SOURCE OF FUNDS
In the Offer to Purchase, we indicated
that DCIP had received an unwritten but binding commitment
from an affiliate to finance the transaction. By this we
meant that DCIP has negotiated and agreed upon the terms of
a promissory note with an affiliate, the material terms of
which were included in the Offer to Purchase, but that the
promissory note had not been executed. DCIP anticipates that
the promissory note will be signed before the Expiration
Date. If DCIP's financing expectations or the terms of the
promissory note change prior to the Expiration Date, DCIP
will notify the Limited Partners.
DECADE COMPANIES LETTERHEAD
August 8, 2003
Re: Decade Companies Income Properties
Offer to Purchase Limited Partnership
Interests
Amendment No. 1
Dear Investor:
Enclosed with this letter is Amendment No. 1 to the Offer to
purchase your Interests for cash consideration of $910 per
Interest. The Amendment includes important information that
you should consider.
The Offer to Purchase your Interests expires at 12:00
midnight, Milwaukee, Wisconsin time of Wednesday, August 13,
2003 (unless otherwise extended by the Offerors). If you
have not already accepted the Offer, and wish to do so, you
must sign and timely return the Letter of Acceptance that
was included with the Offer to Purchase.
If desired, our fax machine (262-522-8999) will be available
to receive your Letter of Acceptance after office hours
through 12:00 midnight, Milwaukee, Wisconsin time on
Wednesday, August 13, 2003.
If you have already returned the Letter of Acceptance, no
further action is required on your part. As noted in the
Amendment, the Offerors intend to promptly pay for all
Interests tendered in the Offer upon the Expiration Date.
The results of the Offer through August 7, 2003 were as
follows:
Number ofNumber of
Limited Partners
Interests Partners
Tendering 956.56 86
Not tendering or no response
2,610.63 332
Subtotal 3,567.19 418
Owned directly and beneficially by Mr. Keierleber
6,694.32 4
Total 10,261.51 422
If you need another copy of the Offer to Purchase or the
Letter of Acceptance, please call me at (262) 522-8990.
Very truly yours,
/s/ Michael Sweet
Michael Sweet
Partnership Manager
MS/Enclosure
CORRESPONDENCE
LETTERHEAD OF QUARLES & BRADY
Writer's Direct Dial: 414.277.5119
E-Mail: wjs@quarles.com
August 8, 2003
VIA FACSIMILE AND VIA EDGAR
Julia E. Griffith, Esq.
United States Securities and Exchange Commission
Washington, D.C. 20549-0303
RE: Decade Companies Income Properties - A Limited
Partnership (`1DCIP") Schedule TO-I/Schedule 13E-3
File No. 005-47179
Filed July 16, 2003
Dear Ms. Griffith:
This letter is in response to your letter dated August 2, 2003
(that we received on
August 4, 2003) with comments on the Schedule TO-I/Schedule 13E-3 filings
that were
made by DCIP and Mr. Jeffrey Keierleber on July 16, 2003. For your
reference, your
comment, along with our response, is copied below.
Schedule TO
1. It is not clear what you mean when you say that the Schedule
TO relates to the tender offer "severally and not jointly" by
Decade Properties and Jeffrey Keierleber. Please revise your
document to clarify this point.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-3, as attached. By
this, we meant that although DCIP and Mr. Keierleber are
both offering to purchase Interests separately tendered in
this offer, DCIP has no liability or obligations with respect
to that portion of the Interests for which Mr. Keierleber has
offered to purchase in the Offer. Limited Partners may not
have any recourse against DCIP if Mr. Keierleber fails to
purchase any specific amount of Interests in the Offer.
Offer to Purchase. Cover Page
2. We note that you are offering to purchase up to 3,500
Limited Partnership Interests pursuant to the offer. Clarify
your disclosure by stating what percentage of the total
number of partnership interests this represents. Further, we
note your disclosure in the Summary Term Sheet that you
are "currently offering to purchase all of the outstanding
Interests, except those owned by Jeffery Keierleber, and
therefore, no proration is necessary." Please reconcile these
two statements, which do not appear to be consistent.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-3, as attached.
DCIP and Mr. Keierleber have offered to purchase an
aggregate of 3,500 Interests in the Offer, or 34.1 % of the
issued and outstanding Interests (and 98.1 % of the issued
and outstanding Interests not owned by Mr. Keierleber). If
more than 3,500 Interests are tendered in the Offer, the
Offerors may increase the number of Interests being bought
by up to 2% of the outstanding Interests without extending
the Expiration Date under Rule 13e-4, and they will most
likely do so if more than 3,500 Interests are tendered in the
Offer. Based upon current results and past experience, we
do not believe more than 3,500 Interests will tender.
3. Revise your document to include a discussion of how you will
conduct the offer if more than 3,500 Interests are tendered.
See Rule 13e-4(f)(3). You may do this by means of a cross-
reference.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-3, as attached.
Additionally, please see the disclosure in the Offer to
Purchase regarding proration of tendered Interests in the
section entitled "The Offer - Procedure for Tendering
Interests - Proration".
4. Confirm your understanding that, pursuant to Rule 13e-
4(e)(3), if there is a change in the amount of securities sought,
you must extend the offer for ten business days from the date
of the change.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-3, as attached.
Additionally, DCIP confirms to the SEC that it will extend
the offer for ten business days from the date of a change
pursuant to Rule 13e-4(e)(3), if it changes the amount of
the securities it seeks in the Offer as permitted by Rule 13e-
4.
5. Refer to the disclosure that shareholders will not be required
to pay brokerage fees or similar expenses in connection with
the transaction. Clarify that this does not include fees which
may be payable in respect to custodial or other beneficiary
accounts.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-3, as attached.
The Offerors have indicated that they will not pay any fees
payable in respect to custodial or other beneficiary
accounts.
Summary Term Sheet
Factors in Determining the Purchase Price, page iv
6. Revise the disclosure concerning the per interest price paid in
previous offers to include the information that the previous
offer was also conducted by Mr. Keierleber and Decade, and
give the date (April, 2002) of the prior offering.
Response:
Please see Amendment No. 1 to the Offer to Purchase dated
August 8, 2003,
at page S-2, as attached. The Offerors have indicated that the
previous Offer was also conducted by Mr. Keierleber and
DCIP.
7. Revise your Summary to prominently disclose that the
purchase price may be less than the fair market value and
the ultimate liquidation value of the Interests.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-3, as attached.
The Offerors have disclosed that the purchase price may be
less than the fair market value and the ultimate liquidation
value of the Interests.
Conditions to the Ofer, page v
8. We note your disclosure that you will not accept tenders
that would cause Limited Partners to be holders of fewer
than three interests, or two interests in the case of an IRA.
Supplementally furnish us with your well-reasoned legal
analysis of how this comports with Rule 13e-4(f)(8), or
revise your offer to comply with the rule.
Response:Although DCIP understands that Rule 13e-4(f)(8)
requires it to make the offer open to all holders of the
Interests, Section 9.1 of the Partnership Agreement
prohibits IRAs, pension/profit-sharing plans or participants
in a reinvestment plan from holding less than three full
Interests, or two full interests in the case of an IRA.
Consequently, DCIP cannot accept any partial tenders that
would cause these types of Limited Partners to holder fewer
than two or three Interests, as applicable, without violating
the terms of the Partnership Agreement. DCIP has made
this a condition in all of its previous tender offers and the
Staff has reviewed every tender offer over the last years.
Introduction, page 2
Purpose of the Offer, page 11
9. Provide support for your assertion that the passage of the
Sarbanes Oxley Act will have a material adverse effect on
the partnership. Quantify your response as much as
possible. We note in this regard that the aggregate cost of
Sarbanes Oxley compliance does not support your
statements.
Response:The Offer to Purchase never stated that "the
Sarbanes Oxley Act will have a material adverse effect on
the partnership." The referenced section of the Offer to
Purchase does state that "[t]he passage of the Sarbanes-
Oxley Act of 2002 has greatly increased reporting
requirements of public companies and with it the financial
burden of preparing and filing the reports." That section
goes on to reference GAO reports of the expected costs that
public companies will incur in connection with complying
with the new rules implemented under the Sarbanes-Oxley
Act. The Offerors have stated that the purpose of the Offer
is to allow DCIP to terminate its registration under the
Securities Exchange Act of 1934, which will consequently
reduce the annual operating costs of the Partnership.
Post Offer Plans, page 11
10. Refer to the disclosure concerning additional purchases of
interests in privately negotiated transactions. Confirm your
understanding of the applicability of Rule 14e-5 to the
offer.
Response:DCIP and Mr. Keierleber confirm their
understanding of the applicability of Rule 14e-5 to the
Offer. None of the privately negotiated transactions
referenced on page 11 to the Offer to Purchase occurred
after the Offerors publicly announced the Offer and DCIP
and Mr. Keierleber undertake to not participant in any
privately negotiated transactions for the purchase of
Interests until after the Expiration Date of the Offer. DCIP
and Mr. Keierleber also represent that none of its privately
negotiated transactions referenced in this section, at any
time, were in violation of Rule 14e-5.
Determination of the Purchase Price, page 13
11. Disclose how, in the absence of a market price or a
liquidation value for the interests, the offeror was able to
conclude that the price offered in the transaction is fair to the
holders of the interests.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-4, as attached.
Additionally, please see the section of the Offer to Purchase
entitled "Offer - Introduction - Determination of the
Purchase Price" for other factors and estimates used by the
Offerors in concluding that the Purchase Price is fair to
Limited Partners. The Offerors primarily rely on the
fairness opinion obtained in connection with their
conclusion that the Purchase Price is fair to Limited
Partners.
12. Please revise your disclosure to discuss, in detail, each
filing person's purpose for engaging in the transaction, and
their reasons for undertaking the transaction at this
particular time. See Item 1013(a) and (c) of Regulation M-
A. Consider Instruction 1 to Item 1013 of Regulation M-A
in drafting your disclosure, and keep in mind that the effect
of the transaction is not the same as the purpose.
Response:Please see the section of the Offer to Purchase
entitled "Offer - Introduction - Purpose of the Offer" on
page 11, and Amendment No. 1 to the Offer to Purchase
dated August 8, 2003, at page S-3, as attached. The reason
that both DCIP and Mr. Keierleber determined to
commence the Offer at this time was to (i) provide Limited
Partners with an opportunity to sell Interests at a price
higher than reported transactions in the last three years, (ii)
reduce the number of Limited Partners below 300, which
will allow DCIP to terminate its reporting obligations under
the Securities Exchange Act of 1934, and (iii) provide
Limited Partners with another opportunity to sell their
Interests because of events that occurred after the
completion of the prior offer conducted by the Offerors that
commenced on April 8, 2002 (the "2002 Offer").
Subsequent to the completion of the 2002 Offer, two Office
Buildings were purchased on July 30, 2002 to replace The
Meadows II Apartments, which was sold in January 30,
2002. One consequnce of the purchase of the Office
Buildings and the operating results was the suspension of
cash distributions during the third quarter of 2002 and
thereafter. Although the Offerors acknowledge that the
effect of the Offer may not be the same as the purpose, the
Offerors do maintain that one of the reasons they are
entering into the Offer is so that DCIP can terminate its
registration obligations under the Securities Act of 1934,
which also is an effect of the Offer.
13. The factors supporting the transaction must be explained in
enough detail for investors to understand them. Conclusory
statements or listing of generalized areas of consideration,
such as the statements listed below, are not acceptable. Please
revise your document to explain how each of the factors listed
support or do not support the decision to approve the going
private transaction. The list below is illustrative rather than
exhaustive; please make changes as appropriate throughout
your documents.
"The General Partner has considered the voluntary nature
of the transaction"
"The General Partner also considered that the Interests are
not traded on any registered securities exchange or on the
NASDAQ..."
"The General Partner also determined that the liquidation
value of the Partnership's property is uncertain at this
time..."
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at pages S-4 and S-5, as
attached. These pages of Amendment No. 1 specifically
address how the factors identified in the Offer to Purchase
support or do not support the Partnership's decision to go
private.
14. Revise your disclosure to describe the General Partner's
consideration of the impact of the proposed transaction on
the unaffiliated interest holders.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-4, as attached.
The Offerors reasonably believe that the terms of the Offer
are fair to unaffiliated Limited Partners, principally because
it provides an opportunity for Limited Partners to receive
cash for their Interests on a voluntary basis at a price that
exceeds the reported third party trading prices of the
Interests since January 1, 1999.
15. Instruction (3) to Item 1014 of Regulation M-A provides
that "conclusory
statements ... will not be sufficient disclosure for Item
1014(b)." The discussion of factors considered in
determining the fairness of the proposed transaction should
therefore address the factors set forth in general instruction
(2) to item 1014 of Regulation M-A. Expand your
discussion to explain in greater detail why the General
Partner rejected each factor, and to state specifically how
the General Partner determined the transaction to be fair. If
the General Partner's conclusion was that none of the
omitted factors were material, please disclose the bases for
such conclusions. _See Question and Answer 21 in
Exchange Act Release No. 17719 (April 13, 1981).
Response:Some of the factors listed in instruction (2) to
Item 1014(b) have already been addressed in the Offer to
Purchase in the section entitled "Offer - Introduction -
Determination of the Purchase Price" and "Fairness of the
Transaction; Reports, Opinions, Appraisals and Certain
Negotiations; No Approvals Required; No Appraisal
Rights." Those factors include the (i) current and historical
market prices, which are all sited in Appendix B to the
Offer to Purchase, (ii) purchase prices paid in previous
purchases disclosed in response to Item 1002(f), and (iii)
the fairness opinion obtained by the Offerors in connection
with the Offer. Please also see Amendment No. 1 to the
Offer to Purchase dated August 8, 2003, at pages S-3 and
S-4, as attached for additional disclosures concerning why
the Offerors did not rely on the other factors listed in
instruction (2) to Item 1014(b).
16. Revise your disclosure to include a discussion of Mr.
Keierleber's reasons for entering into the transaction, and
his reasons for undertaking the transaction now.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003 as attached. Beyond those
factors stated in response to Comment No. 12, Mr.
Keierleber is participating in the Offer primarily to
facilitate the funding of the Offer. DCIP does not have
sufficient cash funds to undertake the entire Offer on its
own.
Certain Effects of the Offer, page 15
17. It is not clear what you mean by the statement "The interest
of Mr. Keierleber in the net book value of the Partnership will
decrease from $55 per Interest to $41 per Interest as a result
of the Partnership's purchase and retirement of 100 Interests."
Please revise.
Response: This information is meant to be responsive to
instruction 3 of Item 1013. As instructed in the Offer to
Purchase in this section, you should refer to Annex A-5 for
an explanation of how the book value of the Partnership per
Interests decreases for all Limited Partners, including Mr.
Keierleber, as a result of the Offer. This means that under
GAAP the book value changes because DCIP is purchasing
(and retiring) 100 Interests in the Offer and increasing its
debt in so doing.
Certain Federal Income Tax Consequences, page 30
18. You are responsible for disclosing all of the material tax
consequences of your transaction. With this in mind, delete
the word "Certain" from this heading.
Response:
Please see Amendment No. 1 to the Offer to Purchase dated
August 8,
2003, at page S-3, as attached where we delete the word
"certain" and replace it with the word "material".
Fairness Opinion, page 43
19. Please supplementally send us a copy of the board books and
any other materials prepared by The Valuations Group to
assist the General Partner in evaluating the proposed
transaction.
Response: Please see the attached materials to this letter.
Additionally, please see the summary of these materials in
the Offer to Purchase.
20. In your discussion of recent sales of securities, specifically
reference the tender offer conducted by Mr. Keierleber in
April of 2002.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-2, as attached.
Procedures for Tendering Interests, page 54
21. Your statement that you expect to forward cash to the
Limited Partners within five business days of the
Expiration Date may not comport with the prompt payment
requirements of Rule 13e-4(f)(5). Expand your disclosure
to explain the payment mechanism and the reasons you
believe you will require five days to complete payment.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, on page S-5, as attached.
Payment of the Purchase Price, page 57
22. Amend your disclosure to state that you will pay for
tendered interests "promptly" following the expiration of
the offer, as required by Rule 13e-4(f)(5), rather than "as
promptly as practicable," as the disclosure now states.
Make conforming changes throughout your document.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-5, as attached.
Certain Conditions of the Offer, page 58
23. The disclosure in the first paragraph of this Section states
that for the offeror to be able to terminate the offer, one of
the listed offer conditions must have been triggered or the
offeror has made the secondary determination that the
occurrence of the event makes it inadvisable to proceed
with the offer. We agree that once an offer condition is
implicated, the company has the right to decide whether to
go forward with the offer. However, if it decides to proceed
in the face of a triggered offer condition, we believe this
constitutes a waiver of that condition. As you know, the
waiver of a material offer condition may require an
extension of the offer and dissemination of new offer
materials to option holders. Please confirm your
understanding supplementally.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-5, as attached.
We confirm our understanding that a waiver of a material
condition to the Offer may require an extension of the Offer
and dissemination of new Offer materials to Limited
Partners.
24. A tender offer may be conditioned on a variety of events
and circumstances, provided that they are not within the
direct or indirect control of the bidder, and are drafted with
sufficient specificity to allow for objective verification that
the conditions have been satisfied. With this in mind,
amend the first paragraph of this section to exclude actions
or omissions to act by the bidder.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-5, as attached,
where we have deleted the reference to any action or
omission to act by the Offerors from the Offer to Purchase.
25. In this regard, please amend subparagraph (d) to state with
greater specificity what market conditions would trigger the
condition.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-5, as attached,
which revises the disclosure.
26. The statement that the conditions may be waived by the
Offerors "in whole or in part at any time and from time to
time in its reasonable discretion" implies that conditions
may be waived after expiration. Revise the disclosure to
clarify that all conditions, other than regulatory approvals,
will be satisfied or waived prior to expiration.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-5, as attached,
which revises the disclosure.
Borrowed Funds, page 63
27. It is not clear what you mean when you say that the
Partnership has received an "unwritten but binding"
commitment from an affiliate to finance the transaction.
Confirm that you have made all of the disclosures required
by Item 1007 of Regulation M-A, and that the affiliate in
question is not a filing person by virtue of its financing the
transaction.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-5, as attached,
which revises the disclosure. We confirm that we have
made all disclosures required by Item 1007 and that the
affiliate is not a filing person by virtue of its financing.
Past Contacts, Transactions or Negotiations; Transactions and Agreements
Concerning
the Interests, page 64
28. Revise this section to include a discussion of the April,
2002 tender offer, including disclosure of the terms of that
offer.
Response:Please see Amendment No. 1 to the Offer to
Purchase dated August 8, 2003, at page S-2, as attached.
Very truly yours,
QUARLES & BRADY LLP
/s/ Walter J. Skipper
Walter J. Skipper
Attachments
cc: Mr. Michael G. Sweet
Conrad G. Goodkind, Esq.