July 14, 2005
TO HOLDERS OF UNITS OF
AMERICAN REPUBLIC REALTY FUND I
Re: Offer to Purchase Units for $200 Per Unit
Dear Unit Holder:
This letter is to inform you that we have extended our OFFER TO PURCHASE up
to 1,500 Units of limited partnership interests in AMERICAN REPUBLIC REALTY FUND
I (the "Partnership") at a cash purchase price of $200 per Unit, without
interest, less the amount of distributions made to you after the date of the
Offer and less any transfer fees imposed by the Partnership for each transfer,
which the Partnership advises us are $50 per transfer (regardless of the number
of units transferred).
The Offer is now scheduled to expire on August 1, 2005.
In addition, certain information regarding the Purchaser's financial
condition and operating results is set forth in Appendix B included herewith.
Please consider the following points, which are discussed in greater detail in
the Offer to Purchase that was sent to you previously, as amended and
supplemented to date:
o The Offer is $25 per Unit (14%) more than the highest prior
third-party offer for Units of which Purchaser is aware (which we made
on July 2, 2004), based on a review of public SEC filings. In a
private purchase, the Purchaser's affiliate acquired a substantial
block of Units for $225 per Unit, in October 2004.
o The Partnership's reported 2004 revenue is down by more than $219,000
compared to 2003 revenue and vacancy at its properties has increased.
o The Partnership will not be required to terminate before December 31,
2012, unless a majority of the limited partners approve an earlier
dissolution or an event occurs that would require a dissolution,
according to the Partnership's limited partnership agreement, and,
according to the Partnership's public reports, the termination date
can be extended if certain events occur.
o You may be able to obtain a tax benefit by selling if you have
accumulated passive losses that you can use once you have disposed of
your investment in the Partnership; you should consult your tax
advisor about this possibility.
We urge you to read the Offer to Purchase completely and to return your
completed Agreement of Transfer and Letter of Transmittal promptly (blue form)
in the envelope provided.
You will get this letter even if we have received your agreement. For
answers to any questions you might have regarding these materials or our Offer,
or assistance in the procedures for accepting our Offer and tendering your
Units, please contact us at (800) 611-4613.
Very truly yours,
EVEREST PROPERTIES II, LLC
Appendix B
Everest Properties II, LLC
Balance Sheets
(unaudited)
Dec 31, '03 Dec 31, '04 Jun 30, '05
------------- ------------- -------------
ASSETS
Current Assets
Cash and Equivalents 1,071,906 2,967,542 4,779,162
Other Current Assets 856,808 702,306 1,239,333
------------- ------------- -------------
Total Current Assets 1,928,714 3,669,848 6,018,495
Total Fixed Assets 76,007 44,101 105,635
Other Assets
Investments 4,320,516 3,642,449 4,484,948
Loans Receivable 814,104 767,541 576,007
Prepaid Expenses 28,199 17,607 19,976
------------- ------------- -------------
Total Other Assets 5,162,819 4,427,597 5,080,931
------------- ------------- -------------
TOTAL ASSETS 7,167,540 8,141,546 11,205,061
============= ============= =============
LIABILITIES & EQUITY
Liabilities 228,769 218,800 211,972
Equity
Members Capital 3,886,910 5,938,772 1,938,772
Retained Earnings 0 0 1,983,973
Net Income 3,051,862 1,983,973 7,070,344
------------- ------------- -------------
Total Equity 6,938,772 7,922,745 10,993,089
------------- ------------- -------------
TOTAL LIABILITIES & EQUITY 7,167,541 8,141,545 11,205,061
============= ============= =============
Everest Properties II, LLC
Profit and Loss Statements
(unaudited)
Jan - Dec '03 Jan - Dec '04 Jan - Jun '05
---------------------------------------------
Ordinary Income/Expense
Income 4,855,839 2,921,021 959,274
Expense 3,860,199 3,156,994 1,441,381
------------- ------------- -------------
Net Ordinary Income 995,640 (235,973) (482,107)
Other Income/Expense
Total Other Income 2,619,056 2,563,730 7,726,473
Total Other Expense 562,834 343,788 174,025
------------- ------------- -------------
Net Other Income 2,056,222 2,219,942 7,552,448
------------- ------------- -------------
Net Income 3,051,862 1,983,969 7,070,341
============= ============= =============