<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 14, 1997
REAL ESTATE ASSOCIATES LIMITED III
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(Exact name of Registrant as specified in charter)
California 2-68983 95-3547611
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
9090 Wilshire Boulevard
Suite 201
Beverly Hills, California 90211
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Address of Principal Executive Offices
Registrant's telephone number, including area code: 310/278-2191
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Page 1 of 9
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ITEM 5. OTHER EVENTS.
The Registrant recently became aware through several of its Limited
Partners that an entity identified as Equity Resource Fund XX was apparently
conducting a tender offer for Units in the Registrant pursuant to an "Offer to
Purchase," dated February 7, 1997 and expiring March 7, 1997. Registrant has no
further information about this "Offer to Purchase" or Equity Resource Fund XX.
Within days of confirming that Limited Partners were receiving the "Offer to
Purchase," the General Partners, on behalf of the Registrant by letter
transmitted on or about February 14, 1997, advised the Limited Partners that the
General Partners expressed no opinion regarding this offer, but urged the
Limited Partners to consult with their tax advisors about the tax consequences
that could result from a sale of their Units. Copies of the "Offer to
Purchase" and the Registrant's letter are attached hereto as exhibits.
EXHIBITS
The following exhibits are attached to this Current Report and thereby
made a part thereof:
1. Copy of the Equity Resource Fund XX "Offer to
Purchase" documents as received from Registrant's
Limited Partners.
2. Copy of Registrant's letter to the Limited Partners,
transmitted on or about February 14, 1997.
Page 2 of 9
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATED: February 25, 1997
REAL ESTATE ASSOCIATES LIMITED III,
A CALIFORNIA LIMITED PARTNERSHIP
BY: NATIONAL PARTNERSHIP INVESTMENTS CORP.,
A CALIFORNIA CORPORATION,
A GENERAL PARTNER
BY: /S/ MARK L. WALTHER
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ITS: EXECUTIVE VICE PRESIDENT
AND GENERAL COUNSEL
Page 3 of 9
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EXHIBIT 1
OFFER TO PURCHASE
LIMITED PARTNERSHIP INTERESTS IN:
REAL ESTATE ASSOCIATES LIMITED III
FOR
$75 PER UNIT
Equity Resource Fund XX ("Fund XX"), a Massachusetts Limited Partnership,
hereby offers to the limited partners of Real Estate Associates Limited III
("Real Estate III") to purchase up to a total of 550 limited partner units
("Units" or "Interests") at a price of $75 per unit.
The Partnership Interests will be bought on a "first-come, first-buy" basis.
Fund XX is offering to buy these Units for investment purposes and not with a
view to their resale. Fund XX is in the business of acquiring fractional
investment interests for long-term retention. It is managed by Equity Resources
Group, Incorporated ("ERG"), which has, since 1981 through the various
investment funds (the "Funds") it manages, acquired fractional interests in
over 1,000 partnerships.
Those limited partners who wish to accept the offer of Fund XX should sign the
enclosed Assignment Forms and return them in the envelope provided. Payment
will be made by Fund XX upon receipt of the properly executed Assignment Forms.
ALL TRANSFER COSTS AND FEES WILL BE PAID BY EQUITY RESOURCE FUND XX. The
acceptance of an offer cannot be withdrawn.
Fund XX is not affiliated with the General Partner of Real Estate III.
However, other Funds managed by ERG currently own Units in Real Estate III and
in other partnerships affiliated with it.
The purchase offer of $75/Unit has been determined by Fund XX by applying a
discount to its estimate of the net asset value of the Units. Limited partners
who choose not to sell their Units may receive either more or less than $75 for
each Unit at a future liquidation of the Partnership. Before accepting this
offer, each limited partner should consult with his-her accountant due to the
potentially adverse tax consequences associated with a sale of the Units.
The date of this offer is February 7, 1997. It will expire on March 7, 1997.
If you have any questions regarding this offer, please call (617) 876-4800.
TO ACCEPT the enclosed offer of $75/Unit, please execute the enclosed
Assignment Forms and return them in the enclosed envelope.
QUESTIONS CONCERNING THIS OFFER SHOULD BE DIRECTED TO
617-876-4800
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TO ACCEPT THIS OFFER, PLEASE FILL OUT THE ASSIGNMENT
FORMS IN ACCORDANCE WITH THE INSTRUCTIONS BELOW
INSTRUCTIONS
PAGE TWO: ASSIGNMENT OF LIMITED PARTNERSHIP INTERESTS
PLEASE ENTER:
(A) THE NUMBER OF UNITS THAT YOU WISH TO SELL.
(B) PRINT FULL REGISTERED NAME OF UNIT HOLDER(S) ("ASSIGNOR(S)") (FOR
EXAMPLE: "MARY SMITH" OR "ANNE & BOB SMITH, JTWROS"). IF UNITS ARE HELD IN
PARTNERSHIPS, TRUSTS, RETIREMENT ACCOUNTS OR OTHER ENTITIES, PLEASE INDICATE
(FOR EXAMPLE: "ABC CORP. PENSION PLAN, JANE SMITH, CUSTODIAN" OR "JOHN SMITH,
TRUSTEE UGMA FBO SARAH SMITH TRUST")
(C) MAILING ADDRESS FOR PAYMENT
(D) TELEPHONE NUMBER (AND FAX NUMBER IF AVAILABLE)
(E) SIGNATURE OF REGISTERED HOLDER(S) OF UNITS ("ASSIGNOR(S)")
(F) SOCIAL SECURITY OR TAX ID NUMBER
- -------------------------------------------------------------------------------
(G) APPLICABLE ONLY TO CUSTODIANS AND TRUSTEES - PLEASE COMPLETE AND
PROVIDE DOCUMENTS ASSIGNING AUTHORITY (FOR EXAMPLE: CORPORATE RESOLUTIONS OR
TRUST AGREEMENTS)
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PAGE THREE: POWER OF ATTORNEY FORM
PLEASE ENTER:
(H) PRINT FULL REGISTERED NAME OF UNIT HOLDER(S) ("ASSIGNOR(S)") AS ON
PART (B), PAGE TWO.
(I) SIGNATURE(S) OF REGISTERED HOLDER(S) OF UNITS ("ASSIGNOR(S)")
(AND/OR JOINT HOLDERS, CUSTODIAN(S) OR TRUSTEE(S) WHEN APPLICABLE).
(J) SIGNATURE GUARANTEE IS NECESSARY ONLY IF SELLING MORE THAN 20
UNITS AND CAN BE OBTAINED BY THE OFFICER OF A NATIONAL BANK OR TRUST COMPANY OR
A MEMBER FIRM OF A STOCK EXCHANGE.
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PLEASE MAIL THE SIGNED ASSIGNMENT FORM AND THE POWER OF
ATTORNEY (PAGES 2 AND 3) IN THE ENVELOPE PROVIDED TO:
EQUITY RESOURCES GROUP
14 STORY STREET
CAMBRIDGE, MA 02138
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ASSIGNMENT OF LIMITED PARTNERSHIP INTERESTS
1. DEFINED TERMS
The defined terms used in this Assignment shall, unless the context
otherwise requires, have the meanings specified in this Section 1.
"ASSIGNEE" refers to Equity Resource Fund XX or its designee.
"EFFECTIVE DATE" refers to the effective date of this Assignment as the
date on which seller executes documents.
"ASSIGNOR/LIMITED PARTNER" refers to the assignor/limited partner
identified herein.
"PARTNERSHIP" refers to REAL ESTATE ASSOCIATES LIMITED III
"ERG" refers to Equity Resources Group Incorporated, a Massachusetts
corporation.
"PURCHASE PRICE" refers to $75 per unit, net of the Transfer Fee and
other specified expenses, payable by Assignee to the Limited Partner for the
Units, as set forth herein.
"UNITS" refers to the number of units of limited partnership interests
in the Partnership indicated herein. Each unit is defined as equaling an
original subscription amount of $5,000.
2. ASSIGNMENT OF UNITS
The Limited Partner hereby irrevocably assigns all of the Limited
Partner's right, title, and interest in and to the Units to Assignee, and hereby
directs the Partnership to recognize Assignee as a substitute limited partner
of the Partnership. In consideration of the assignment of the Units by the
Limited Partner to Assignee, Assignee hereby agrees to pay to the Limited
Partner the Purchase Price. To be legally binding upon Assignee, this
Assignment must be duly executed by the Limited Partner and returned to the
Assignee. Additionally, Assignor assigns to the Assignee the Assignor's right to
pursue any legal or other action of recovery against any person or entity which
might be liable in any way to the Assignor as a result of his purchase and
ownership of the limited partnership interest being assigned. Any damages or
recoveries resulting from such actions, whether initiated by the Assignee or by
other parties will be due and payable to the Assignee.
3. PROCEDURE FOR PAYMENT FOR THE UNITS
The Limited Partner and Assignee agree that payment for the Units shall
be made as follows. The Limited Partner shall forward this Assignment, duly
executed by the Limited Partner, with the Limited Partner's signature
guaranteed together with the certificate, if any, representing the Limited
Partner's Units, directly to Equity Resources Group, Inc., 14 Story Street,
Cambridge, MA 02138. Full payment will be issued upon the acceptance of the
Assignee into the Partnership.
4. LIMITED PARTNER'S REPRESENTATIONS AND WARRANTIES
The Limited Partner hereby represents and warrants to Assignee and to
the Partnership that:
(I) The Limited Partner has the full right, power, and authority
to execute this Assignment and to sell the Units to Assignee;
(II) The Units are owned by the Limited Partner free and clear of
any and all liens, encumbrances, charges, and assessments;
(III) Upon transfer of the Units to Assignee pursuant to this
Assignment, Assignee will, as a result, receive good and marketable title to
the Units, free and clear of any and all liens, encumbrances, claims, charges,
assessments, and restrictions whatsoever (other than restrictions on transfer
imposed by the Partnership Agreement of the Partnership and restrictions on
transfer generally imposed on securities under Federal or state securities
laws); and
(IV) In deciding to sell the Units to Assignee, the Limited Partner
has not relied upon any representation or warranty made by Assignee or any
agent of Assignee with respect to the value of the Units or the income tax
consequences of the sale of the Units.
5. EFFECTIVE DATE OF ASSIGNMENT; ALLOCATION OF DISTRIBUTIONS
The Limited Partner agrees that from and after the Effective Date,
Assignee shall be entitled to all distributions made by the Partnership with
respect to the Units, including any distributions attributable to periods or
events occurring prior to the Effective Date. This includes any tax benefits
(such as losses, credits, or income) which may have accrued, but not been
realized, in the year this Assignment is effective. This assignment also
includes the rights to any benefits which may accrue as a result of any
litigation or settlement which involves this Partnership. Should the Limited
Partner receive any distribution by the Partnership from or after the Effective
date, the Limited Partner agrees to duly endorse the check or checks
representing such distribution payable to the order ERG, and to transmit such
check or checks to ERG within two days of its or their receipt by the Limited
Partner.
6. LIMITED PARTNER'S GRANT OF PROXY
(a) The Limited Partner hereby constitutes and appoints ERG as the
proxy of the Limited Partner to exercise all voting and other rights of the
Limited Partner pursuant to the Partnership Agreement of the Partnership and
applicable law, including, without limitation, (i) the right to attend and vote
at meetings of the limited partners of the Partnership in the place and stead
of the Limited Partner; (ii) the right to execute consents and waivers and to
otherwise act for the Limited Partner with respect to any matter submitted to
the limited partners of the Partnership for approval or consent; (iii) the right
to inspect the books and records of the Partnership pursuant to the Partnership
Agreement of the Partnership or otherwise in the place and stead of the Limited
Partner; and (iv) the right to request an accounting of the affairs of the
Partnership in the place and stead of the Limited Partner.
(b) The Limited Partner authorizes ERG, as proxy pursuant to the
foregoing, to substitute any other person to act under this proxy, to revoke
any such substitution, and to file this proxy and any substitution or
revocation with the general partner of the Partnership.
(c) The proxy granted herein by the Limited Partner to ERG is
irrevocable and shall extend for as long as Assignee or its assigns hold the
Units.
7. AGREEMENTS OF ASSIGNEE
Assignee hereby accepts and adopts each and every provision of the
Partnership Agreement of the Partnership and agrees to be bound thereby.
Assignee further constitutes and appoints the general partner of the
Partnership, with full power of substitution, its true and lawful attorney, for
it and in its name, place and stead, to make execute, sign, acknowledge, swear
to, deliver, record and file any documents or instruments which may be
considered necessary or desirable by the general partner of the Partnership to
carry out fully the provisions of the Partnership Agreement, including, without
limitation, an amendment or amendments to the Partnership Agreement or
Certificate of Limited Partnership of the Partnership for the purpose of
admitting Assignee as a limited partner to the Partnership.
8. ASSIGNEE'S REPRESENTATIONS AND WARRANTIES
Assignee hereby represents and warrants to the Partnership and to the
Limited Partner that:
(I) Assignee has the full right, power, and authority to execute
this Assignment;
(II) Assignee has no need for liquidity with respect to its
investment in the Units; and
(III) Assignee has a net worth (excluding from the computation thereof
homes, home furnishings, and personal automobiles) of in excess of $200,000.
9. INDEMNIFICATION
The Limited Partner agrees to indemnify and hold Assignee and the
Partnership harmless from and against, and to reimburse Assignee and/or the
Partnership on demand for, any damage, loss, cost, or expense (including
attorneys' fees and costs of Investigation incurred in defending against and/or
settling such damage, loss, cost or expense) reasonably incurred by Assignee
and/or the Partnership arising out of or in connection with any
misrepresentation, breach of warranty, or failure to perform or violation of any
agreement or covenant on the part of the Limited Partner under this Assignment.
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10. MISCELLANEOUS
(a) Limited Partner More Than One Person. If the Limited Partner is
more than one person, then and in such event, the obligations of the Limited
Partner under this Assignment shall be joint and several and the
representations, warranties, and covenants herein contained shall be deemed to
be made by and binding upon each such person and his heirs, executors,
administrators, successors, and assigns.
(b) Further Assurances. Each of the Parties hereto agrees to promptly
execute and deliver any and all further agreements, documents, or instruments
necessary to effectuate this Assignment and the transaction referred to herein
or reasonable requested by the other party to perfect or evidence its or his
rights hereunder.
(c) Commissions and Taxes. The Limited Partner shall be solely
responsible for the payment of any brokerage commissions asserted to be due as
a result of the transfer of Units made by this Assignment by any broker
claiming to represent or act for the Limited Partner. The Limited Partner shall
also pay any Federal, state, or local income, sales, or transfer tax that is
assessed or asserted to be due from any party hereto on account of the transfer
of the Units made by this Assignment.
(d) Survival of Representations and Warranties. The representations,
warranties, covenants and agreements contained in this Agreement shall survive
the transfer of the Units made by this Assignment and the payment of the
consideration therefore.
(e) Attorneys' Fees; Venue of Actions. Should either party hereto
commence any proceeding to enforce the provisions of this Assignment, then and
in such event, the prevailing party in any such proceeding or action shall be
entitled to reimbursement of its or his costs, including attorney's fees,
incurred in the investigation and prosecution of such proceeding or action. The
parties agree that the proper venue for any such action shall be in the
County of Middlesex, Commonwealth of Massachusetts, and the Limited Partner
hereby consents to the jurisdiction over the Limited Partner by the state and
Federal courts of or in the Commonwealth of Massachusetts, County of Middlesex
in connection with any proceeding or action brought under this Assignment.
(f) Severability. Any provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining provisions of this Agreement
or affecting the validity or enforceability of any provisions of this Agreement
in any other jurisdiction.
IN WITNESS WHEREOF, ERG and the Limited Partners have executed this
Assignment as of the Effective Date.
<TABLE>
<S> <C>
(A) NUMBER OF UNITS OWNED: NUMBER OF UNITS TO BE TRANSFERRED -ALL-
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(B)
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Assignor(s) (Full Registered Name of Unit Holder(s))
(C) Mailing Address:
(F)
- ---------------------------------------------- -----------------------------------
Street Social Security/Taxpayer No. of Assignor
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City State Zip Security/Taxpayer No. of Joint Assignor
(D)
-----------------------------------------
Telephone Number (And Fax Number if Available)
(E)
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Signature of Assignor Signature of Joint Assignor or
Custodian/Trustee
Date , 199 Date , 199
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Limited Partner's Signature Guarantee Jnt Assignor's or Custodian/
Trustee Signature Guarantee
(G) CUSTODIAN(S) OR TRUSTEE(S) INFORMATION
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Name of Custodian(s) or Trustee(s)
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Address
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City, State, Zip
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Telephone #
- ---------------------------------------------- ----------------------------------------
Account Number for EQUITY RESOURCES GROUP
</TABLE>
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POWER OF ATTORNEY
In conjunction with the Assignor's (seller's) Assignment of Limited Partnership
Interests dated as of event date herewith, Seller irrevocably constitutes and
appoints James E. Brooks, Mark S. Thompson, and Eggert Dagbjartsson, or any of
them, to be Seller's true and lawful special attorneys-in-fact, with full power
of substitution to exercise in the name, place and stead of Seller any and all
rights, interests, powers, and duties with respect to or arising out of the
Seller's limited partnership interest in:
REAL ESTATE ASSOCIATES LIMITED III (the "Partnership or Units"),
which Units have been assigned to EQUITY RESOURCE FUND XX (Fund XX), pursuant
to the Assignment of Limited Partnership Interests. This Power of Attorney
shall include without limitation, (1) the right to execute on behalf of Seller,
all assignments, certificates, documents and instruments that may be required
for the purpose of transferring the units owned by Seller, (2) the right to
require or receive any information or report with respect to the partnerships'
books and records, (3) the right to endorse and cash any check made payable by
the partnership to Seller on or after the date hereof, and (4) the right, if
the Units are held in an IRA, pension, or brokerage account, to contact the
Seller's custodian and direct him to facilitate in the transfer of the Units
from the Seller to Equity Resource Fund XX. This Power of Attorney is part of
and hereby incorporated in the application for transfer. This Power of Attorney
shall not be affected by the subsequent mental disability of the undersigned,
as principal, and Equity Resources Group, Inc. shall not be required to post
bond in any nature in connection with this Power of Attorney. This Power of
Attorney shall also serve as a Letter of Authorization directing the Assignor's
custodian(s) and trustee(s) to sign any documents necessary to facilitate the
transfer of the units being assigned in conjunction with this Power of Attorney
as required by the herein named attorneys-in-fact.
<TABLE>
<S> <C>
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(H) PRINT Assignor (Registered Name) PRINT Joint Assignor or Custodian/Trustee
- ---------------------------------------------- -------------------------------------------
(I) SIGNATURE of Assignor SIGNATURE Jnt Assignor or Custodian/Trustee
Date , 199 Date , 199
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(J) Signature Guarantee Signature Guarantee
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</TABLE>
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EXHIBIT 2
[REAL ESTATE ASSOCIATES LIMITED III LETTERHEAD]
RE: Real Estate Associates Limited III
Dear Investor:
Several limited partners have called or written us to tell us that they
have received an unsolicited tender offer to buy their interest in REAL III.
The buyers represent that these purchases would be for investment purposes only.
While the General Partners are unable to value the interests because of
a lack of market for them, limited partners should be aware of the tax
consequences of a sale of their interests.
Most of the limited partners have negative capital account balances
with respect to their interests in REAL III. Our accountants tell us that on
average, the negative capital account balance for a $5,000 investor at the end
of December 1996 was approximately $8,880. This means that an investor would
recognize gain from the sale of his REAL III interest in an amount equal to
approximately $8,955 (the "$8,880 negative capital account balance plus the $75
cash sales price). This gain would be "passive" and would be offset by passive
losses which such investor may have from REAL III (suspended from prior years)
or other sources. The maximum suspended losses from REAL III per $5,000 unit
are approximately $3,534. Unless a limited partner has suspended or current
losses from other sources, a substantial portion of the gain would still be
subject to tax liability.
PLEASE CONSULT WITH YOUR TAX ADVISOR ABOUT THE IMPACT OF SUCH A SALE ON
YOUR OWN PARTICULAR SITUATION.
Sincerely,
National Partnership Investments Corp.
/s/ Charles H. Boxembaum /s/ Bruce E. Nelson
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Charles H. Boxembaum Bruce E. Nelson
Chairman of the Board President
