FORUM GROUP INC, SC 14D1, 1995-10-16

FORUM GROUP INC
SC 14D1, 1995-10-16
SOCIAL SERVICES

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

--------------------

SCHEDULE 14D-1
TENDER OFFER STATEMENT
(Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934)
(Amendment No. 1)
and
Amendment**
to
SCHEDULE 13D

FORUM RETIREMENT PARTNERS, L.P.
(Name of Subject Company)

FORUM GROUP, INC.
(Bidder)

Preferred Depositary Units Representing
Preferred Limited Partners' Interests 349 851 105
(Title of Class of Securities) (CUSIP Number of Class of Securities)

--------------------
Dennis L. Lehman
Senior Vice President and Chief Financial Officer
Forum Group, Inc.
11320 Random Hills Road
Fairfax, Virginia 22030
(703) 277-7000

(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications on Behalf of the Persons Filing Statement)

Copies to:

Robert A. Profusek, Esq.
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, New York 10022
(212) 326-3800

Calculation of Filing Fee
================================================================================
Transaction valuation Amount of Filing Fee
- --------------------------------------------------------------------------------
$16,576,603.31* $3,315.32
================================================================================

* For purposes of calculating fee only. This amount assumes the purchase of
5,857,457 preferred depositary units representing preferred limited
partners' interests in Forum Retirement Partners, L.P., at $2.83 net in cash
per unit. The amount of the filing fee calculated in accordance with
Regulation 240.0-11 of the Securities Exchange Act of 1934 equals 1/50 of 1%
of the value of the units to be purchased.

[x] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2).

Amount Previously Paid: $2,928.73 Filing Parties: Forum Group, Inc.
Form or Registration No.: Schedule 14D-1 Forum A/H, Inc.
Date Filed: October 2, 1995
- ---------------
** This Schedule constitutes Amendment No. 8 to the Schedule 13D originally
filed by Forum Group, Inc. on August 24, 1993.
<PAGE> 2
=====================
CUSIP No. 349 851 105 14D-1
=====================

================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Forum Group, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*

WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION

Indiana
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

9,427,791
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)

61.7%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON

CO
================================================================================

*SEE INSTRUCTIONS BEFORE FILLING OUT!

-2-
<PAGE> 3
=====================
CUSIP No. 349 851 105 14D-1
=====================

================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Forum A/H, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*

AF WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION

Delaware
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

61.7%
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON

CO
================================================================================

*SEE INSTRUCTIONS BEFORE FILLING OUT!

-3-
<PAGE> 4
This Amendment No. 1 supplements and amends the Schedule 14D-1 Tender
Offer Statement and amendment to Schedule 13D (the "Schedule 14D-1") relating
to a tender offer by Forum Group, Inc., an Indiana corporation (the
"Purchaser"), to purchase any and all of the outstanding preferred depositary
units (the "Units") representing preferred limited partners' interests in Forum
Retirement Partners, L.P., a Delaware limited partnership, at $2.83 per Unit,
net to the seller in cash, on the terms and subject to the conditions set forth
in the Purchaser's Offer to Purchase dated October 2, 1995 (the "Offer to
Purchase"), the Supplement dated October 16, 1995 (the "Supplement") to the
Offer to Purchase and the related Letter of Transmittal. A copy of the
Supplement is filed as Exhibit (a)(9) hereto.

ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.

Item 3 of the Schedule 14D-1 is hereby supplemented and amended by
adding the following:

(a)-(b) The information set forth in "Additional Information
Concerning the Background of the Offer -- Interests of Certain Persons in the
Offer" in the Supplement is incorporated herein by reference. Pursuant to
General Instruction B to Schedule 14D-1, the information set forth in Item 3 in
the Partnership's Schedule 14D-9 Solicitation/Recommendation Statement, a copy
of which is filed as Exhibit (g)(2) hereto, is incorporated herein by
reference.

ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

Item 4 of the Schedule 14D-1 is hereby supplemented and amended by
adding the following:

(a) The information set forth in "Increase in the Offer Price" in
the Supplement is incorporated herein by reference.

ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.

Item 11 of the Schedule 14D-1 is hereby supplemented and amended by
adding the following exhibits:

99.(a) (9) Supplement dated October 16, 1995 to the Offer to Purchase
dated October 2, 1995

99.(a)(10) Text of Press Release issued by the Purchaser on
October 16, 1995

99.(g) (2) Schedule 14D-9 Solicitation/Recommendation Statement
dated October 16, 1995

-4-
<PAGE> 5
SIGNATURE

After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.

Dated: October 16, 1995

FORUM GROUP, INC.

By Troy B. Lewis
-----------------------------------
Troy B. Lewis,
Attorney-in-Fact*

*Pursuant to a Power of Attorney
previously filed with the
Securities and Exchange Commission

-5-
<PAGE> 6
SIGNATURE

After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.

Dated: October 16, 1995

FORUM GROUP, INC.

By Troy B. Lewis
-----------------------------------
Troy B. Lewis,
Attorney-in-Fact*

*Pursuant to a Power of Attorney
previously filed with the
Securities and Exchange Commission

-6-
<PAGE> 7
INDEX TO EXHIBITS

EXHIBITS
----------
<S> <C>
99.(a) (9) Supplement dated October 16, 1995 to the Offer to Purchase
dated October 2, 1995

99.(a) (10) Text of Press Release issued by the Purchaser on October 16,
1995

99.(g) (2) Schedule 14D-9 Solicitation/Recommendation Statement dated
October 16, 1995
</TABLE>

-7-

<PAGE> 1
- --------------------------------------------------------------------------------
SUPPLEMENT DATED OCTOBER 16, 1995 RELATING
TO THE OFFER TO PURCHASE DATED OCTOBER 2, 1995
- --------------------------------------------------------------------------------

OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING PREFERRED DEPOSITARY UNITS
REPRESENTING PREFERRED LIMITED PARTNERS' INTERESTS
IN
FORUM RETIREMENT PARTNERS, L.P.
AT
$2.83 NET PER PREFERRED DEPOSITARY UNIT
BY
FORUM GROUP, INC.

***************************************************************************
* *
* THE OFFER HAS BEEN EXTENDED. THE OFFER AND WITHDRAWAL RIGHTS *
* WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, *
* NOVEMBER 10, 1995, UNLESS THE OFFER IS FURTHER EXTENDED. *
* *
***************************************************************************

Forum Group, Inc. has increased its $2.50 per Unit offer price and is
now offering to purchase any and all of the outstanding Units not now
beneficially owned by it at $2.83 per Unit, without interest, net to the seller
in cash. All Units validly tendered, including Units tendered prior to the
date hereof, and not withdrawn prior to the expiration of the Offer will be
purchased at the $2.83 per Unit price, assuming the Offer is consummated. See
"Increase in the Offer Price."

THE BOARD OF DIRECTORS OF THE GENERAL PARTNER OF FORUM RETIREMENT
PARTNERS, L.P. (WITH THE DIRECTOR AFFILIATED WITH THE PURCHASER ABSTAINING),
BASED UPON THE UNANIMOUS RECOMMENDATION OF A SPECIAL COMMITTEE COMPRISED OF THE
INDEPENDENT MEMBERS OF THE BOARD OF DIRECTORS, HAS DETERMINED THAT THE OFFER IS
FAIR TO UNITHOLDERS (OTHER THAN FORUM GROUP, INC. AND ITS AFFILIATES) AND
RECOMMENDS THAT SUCH UNITHOLDERS ACCEPT THE OFFER AND TENDER ALL OF THEIR UNITS
PURSUANT TO THE OFFER. SEE "CERTAIN DETERMINATIONS BY THE FRI BOARD."

The Offer is not conditioned on any minimum number of Units being
tendered. The Offer is conditioned on, among other things, (i) the absence of
certain litigation, orders, or other legal matters and (ii) the absence of a
material adverse change (or any development involving a prospective material
adverse change) in the business, financial condition, results of operations, or
prospects of the Partnership. See "The Offer -- Certain Conditions of the
Offer" in the Offer to Purchase. The purchase of Units pursuant to the Offer
may result in the delisting of the Units from trading on the American Stock
Exchange and the Partnership no longer filing reports and other information
under the Securities Exchange Act of 1934, as amended, and would reduce the
number of Units that might otherwise trade publicly as well as the number of
Unitholders. Any of these effects could adversely affect the liquidity or
prices realizable in sales of the Units following the completion of the Offer.
See "Special Factors -- Certain Effects of the Offer" in the Offer to Purchase.

Procedures for tendering Units are set forth in "The Offer --
Procedures for Tendering Units" in the Offer to Purchase. Tendering
Unitholders should continue to use the Letter of Transmittal and the Notice of
Guaranteed Delivery previously delivered with the Offer to Purchase.
Unitholders who have already tendered Units using the Letter of Transmittal
need not complete another Letter of Transmittal or take any additional action
for their Units to be tendered pursuant to the Offer. Any questions or
requests for assistance or additional copies of this Supplement to Offer to
Purchase, the Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery, and other related materials may be directed to the
Information Agent at its address and telephone numbers set forth on the back
cover of this Supplement to Offer to Purchase.

THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
--------------------

The Information Agent for the Offer is:

MACKENZIE PARTNERS, INC.
<PAGE> 2
To the Holders of Preferred Depositary Units
of Forum Retirement Partners, L.P.:

INTRODUCTION

The following information supplements the Offer to Purchase dated
October 2, 1995 (the "Offer to Purchase") of Forum Group, Inc. (the
"Purchaser") pursuant to which the Purchaser is offering to purchase any and
all of the outstanding preferred depositary units (the "Units") representing
preferred limited partners' interests in Forum Retirement Partners, L.P., a
Delaware limited partnership (the "Partnership"), not now beneficially owned by
the Purchaser, on the terms and subject to the conditions set forth in the
Offer to Purchase, this Supplement, and the related Letter of Transmittal
(which together constitute the "Offer"). The Partnership's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"),
which contains additional information concerning the Offer, is being mailed to
Unitholders together with this Supplement.

Except as set forth in this Supplement, the terms and conditions set
forth in the Offer to Purchase and related Letter of Transmittal remain
applicable in all respects to the Offer, and this Supplement should be read in
conjunction with the Offer to Purchase and related Letter of Transmittal.
Certain capitalized terms used herein without definition have the meanings
ascribed to such terms in the Offer to Purchase.

INCREASE IN THE OFFER PRICE

The Purchaser has increased its $2.50 per Unit offer price and is now
offering to purchase any and all of the outstanding Units not now beneficially
owned by it at $2.83 per Unit, without interest, net to the Seller in cash.
All Units validly tendered, including Units tendered prior to the date hereof,
and not withdrawn prior to the expiration of the Offer will be purchased at the
$2.83 per Unit price, assuming the Offer is consummated.

Based on the increased offer price, the Purchaser estimates that the
maximum amount of funds required to purchase Units pursuant to the Offer and to
pay related costs and expenses will be approximately $16.9 million. See "The
Offer -- Fees and Expenses" in the Offer to Purchase. The Purchaser presently
anticipates that all amounts required for the purchase of Units and to pay
related costs and expenses will be funded from the Purchaser's existing cash
balances.

EXTENSION OF THE OFFER

In connection with the increase in the offer price, the Purchaser has
extended the Offer. Upon the terms and subject to the conditions of the Offer,
the Purchaser will accept for payment, and thereby purchase, all Units validly
tendered prior to the Expiration Date and not properly withdrawn in the manner
described under the caption "The Offer -- Withdrawal Rights" in the Offer to
Purchase. The term "Expiration Date" means 12:00 midnight, New York City time,
on Friday, November 10, 1995, unless the Purchaser, in its sole discretion,
extends the period of time for which the Offer is open, in which event the term
"Expiration Date" will mean the latest time and date on which the Offer, as so
extended by the Purchaser, expires. For a description of the Purchaser's right
to extend the period of time during which the Offer is open, see "The Offer --
Terms of the Offer" in the Offer to Purchase.

Procedures for tendering Units are set forth under the caption "The
Offer -- Procedure for Tendering Units" in the Offer to Purchase. Procedures
for the withdrawal of previously tendered Units are set forth under the caption
"The Offer -- Withdrawal Rights" in the Offer to Purchase.

ADDITIONAL SPECIAL FACTORS

Certain Determinations by the FRI Board. Based upon the unanimous
recommendation of the Special Committee comprised of independent members of the
FRI Board, the FRI Board (with the director affiliated with the Purchaser
abstaining) has determined that the Offer is fair to Unitholders (other than
the Purchaser and its affiliates) and recommends that such Unitholders accept
the Offer and tender all of their Units pursuant to the Offer.

Fairness Opinion. Robert A. Innamorati & Co., the financial advisor
to the Special Committee, has delivered to the Special Committee its written
opinion dated October 13, 1995 to the effect that the proposed cash
consideration to be received by Unitholders (other than the Purchaser and its
affiliates) pursuant to the Offer is fair to such Unitholders, from a financial
point of view.

<PAGE> 3
The determinations by the FRI Board and the fairness opinion delivered
by Robert A. Innamorati & Co. are discussed in detail in the Schedule 14D-9, a
copy of which is being mailed to Unitholders together with this Supplement. A
copy of the fairness opinion is attached to the Schedule 14D-9. The
information set forth Item 4 of the Schedule 14D-9 and the fairness opinion
attached to the Schedule 14D-9 are incorporated herein by reference.
UNITHOLDERS ARE URGED TO READ THE SCHEDULE 14D-9 AND THE COPY OF THE FAIRNESS
OPINION ATTACHED THERETO CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR
UNITS PURSUANT TO THE OFFER.

ADDITIONAL INFORMATION CONCERNING THE BACKGROUND OF THE OFFER

Shortly after the commencement of the Offer, the Special Committee and
its financial advisor requested and received certain financial information from
the Purchaser and the General Partner, including certain projections with
respect to the results of operations and cash flows of the Partnership.
Information regarding those projections is set forth under the caption "Certain
Financial Projections" in Item 8 of the Schedule 14D-9 and is incorporated
herein by reference.

On October 5, 1995, certain executives of the Purchaser met with the
Special Committee and its financial and legal advisors to discuss the financial
condition, results of operations, and prospects of the Partnership. Following
the meeting, the Special Committee's financial advisor requested and received
certain additional information from the Purchaser.

On October 13, 1995, a number of telephone conversations took place
between representatives of the Special Committee and representatives of the
Purchaser. Initially, representatives of the Purchaser were informed that the
Special Committee's financial advisor would likely be able to render a fairness
opinion at an offer price of $2.75 per Unit but that the Special Committee
would not recommend the Offer at that price. Representatives of the Purchaser
were also informed that the Special Committee requested the Purchaser to
increase its offer price to at least $2.90 per Unit. Representatives of the
Purchaser subsequently informed the Special Committee that, although the
Purchaser continued to believe that its initial tender offer price of $2.50 per
Unit was fair, the Purchaser would be willing to increase its offer price from
$2.50 to $2.75 per Unit if the FRI Board remained neutral with respect to the
Offer and would increase the offer price to $2.83 per Unit if the FRI Board
recommended that Unitholders accept the Offer and tender all of their Units
pursuant to the Offer. The Purchaser was subsequently informed that the FRI
Board would recommend that Unitholders accept the Offer and tender all of their
Units at an offer price of $2.83 per Unit if the Offer were to be held open
until Friday, November 10, 1995. The Offer was subsequently so amended.

CERTAIN OTHER MATTERS RELEVANT TO THE OFFER

Interests of Certain Persons in the Offer. As disclosed in the Offer
to Purchase, Brian C. Swinton, one of the executive officers of the Purchaser,
beneficially owns 9,800 Units. The Purchaser has been advised by Mr. Swinton
that he presently intends to tender his Units pursuant to the Offer.

Additional information with respect to interests of the Purchaser and
the officers and directors of the General Partner that present them with actual
or potential conflicts of interest in connection with the Offer is set forth in
Item 3 of the Schedule 14D-9 and is incorporated herein by reference.

Filings with the Commission. The Purchaser has filed with the
Commission a Tender Offer Statement on Schedule 14D-1 and has filed with the
Commission a Transaction Statement on Schedule 13E-3, together with exhibits in
each case, pursuant to Rules 14d-3 and 13e-3, respectively, with the Exchange
Act, furnishing certain additional information with respect to the Offer. Such
Statements and amendments thereto, including exhibits, may be examined and
copies may be obtained at the places and in a manner set forth under "Certain
Information Concerning the Partnership" in the Offer to Purchase (except they
will not be available in the regional offices of the Commission).

FORUM GROUP, INC.

October 16, 1995

-2-

<PAGE> 4
Facsimile copies of the Letter of Transmittal will be accepted. The Letter of
Transmittal and Depositary Receipts for Units and any other required documents
should be sent by each Unitholder or his broker, dealer, commercial bank, trust
company, or nominee to the Depositary at the address set forth below:

--------------------

The Depositary for the Offer is:

AMERICAN STOCK TRANSFER & TRUST COMPANY

--------------------

By Mail, Hand or Overnight
Courier:

American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005

By Facsimile Transmission:
(718) 234-5001

For Information or Confirmation by Telephone:
(718) 921-8200

--------------------

Any questions or requests for assistance or additional copies of this
Supplement to Offer to Purchase, the Offer to Purchase, the Letter of
Transmittal, and the Notice of Guaranteed Delivery may be directed to the
Information Agent at the telephone numbers and location listed below. You may
also contact your broker, dealer, commercial bank, or trust company for
assistance concerning this Offer.

The Information Agent for the Offer is:

MACKENZIE PARTNERS, INC.

156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
Call Toll Free (800) 322-2885

<PAGE> 1

FOR IMMEDIATE RELEASE

For Information Contact:
Dennis Lehman, CFO
(703) 277-7036

FORUM GROUP INCREASES OFFER FOR FORUM RETIREMENT
PARTNERS UNITS TO $2.83 AND EXTENDS OFFER

Fairfax, Virginia, October 16, 1995 -- Forum Group, Inc. (NASDAQ Small
Cap:FOUR) announced today that, following discussions with representatives of a
Special Committee of the Board of Directors of Forum Retirement, Inc., the
general partner of Forum Retirement Partners, L.P. (AMEX:FRL), Forum Group
increased the offer price in its cash tender offer for any and all outstanding
units representing limited partners' interests in Forum Retirement Partners
from $2.50 to $2.83 per unit, net to the seller in cash.

Based upon the unanimous recommendation of the Special Committee
comprised of the independent members of the Board of Directors of Forum
Retirement, Inc., the Board of Directors of Forum Retirement, Inc. (with the
director affiliated with Forum Group abstaining) has determined that the $2.83
offer is fair to unitholders (other than Forum Group and its affiliates) and
recommends that unitholders accept the $2.83 offer and tender all of their
units pursuant to the offer. An independent investment banking firm retained
by the Special Committee has advised the Special Committee that the cash
consideration to be received by unitholders (other than Forum Group and its
affiliates) pursuant to the tender offer is fair to such unitholders, from a
financial point of view.

In connection with the increase in the offer price, the offer has been
extended and will now expire at 12:00 midnight, New York City time, on Friday,
November 10, 1995, unless further extended.

Forum Group expects to file with the Securities and Exchange
Commission later today a supplement to the Offer to Purchase which was
previously filed with the Commission and mailed to unitholders in connection
with the tender offer. Copies of the Supplement, together with the Schedule
14D-9 Solicitation/Recommendation Statement to be filed by Forum Retirement
Partners with the Commission, will also be mailed to unitholders. The
Supplement and the Schedule 14D-9 contain important information concerning the
tender offer and the recommendation of the Board of Directors of the Forum
Retirement, Inc.

Procedures for tendering units are set forth in the Offer to Purchase
previously mailed to unitholders. Tendering unitholders should continue to use
the Letter of Transmittal and the Notice of Guaranteed Delivery delivered with
the Offer to Purchase. Unitholders who have already tendered units using the
Letter of Transmittal need not complete another Letter of Transmittal or take
any additional action. All units validly tendered, including units already
tendered, and not withdrawn prior to the expiration of the offer will be
purchased at the $2.83 per unit price, assuming the tender offer is
consummated.

MacKenzie Partners, Inc. is acting as Information Agent for the tender
offer and American Stock Transfer & Trust Company is the Depositary.

* * * * *

<PAGE> 1

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

---------------

SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to
Section 14(d) of the Securities Exchange Act of 1934

---------------

FORUM RETIREMENT PARTNERS, L.P.
(Name of Subject Company)

FORUM RETIREMENT, INC.
FORUM RETIREMENT PARTNERS, L.P.
(Name of Persons Filing Statement)

PREFERRED DEPOSITARY UNITS REPRESENTING
PREFERRED LIMITED PARTNERS' INTERESTS
(Title of Class of Securities)

349 851 105
(CUSIP Number of Class of Securities)

RICHARD A. HUBER
SECRETARY
FORUM RETIREMENT, INC.
11320 RANDOM HILLS ROAD
SUITE 400
FAIRFAX, VIRGINIA 22030
(703) 277-7000
(Name, address and telephone number of person authorized to receive notice
and communications on behalf of person filing statement)

With a copy to:
Jeffery B. Floyd, Esq.
Vinson & Elkins L.L.P.
1001 Fannin, Suite 2300
Houston, Texas 77002
(713) 758-2222

================================================================================

<PAGE> 2
ITEM 1. SECURITY AND SUBJECT COMPANY.

The subject company is Forum Retirement Partners, L.P., a Delaware
limited partnership (the "Partnership"). The title and class of security to
which this Statement on Schedule 14D-9 (this "Statement") relates are preferred
depositary units representing preferred limited partners' interests (the
"Units") of the Partnership. The address of the principal executive offices of
the Partnership is 11320 Random Hills Road, Suite 400, Fairfax, Virginia
22030.

ITEM 2. TENDER OFFER OF FORUM GROUP.

This Statement relates to the tender offer made by Forum Group, Inc.,
an Indiana corporation ("Forum Group"), to purchase any and all of the issued
and outstanding Units not beneficially owned by it at a price of $2.83 per
Unit, without interest, net to the Seller in cash, on the terms and conditions
set forth in Forum Group's Offer to Purchase dated October 2, 1995 (the "Offer
to Purchase"), the Supplement dated October 16, 1995 to the Offer to Purchase
(the "Supplement"), and the related Letter of Transmittal (which together
constitute the "Offer") and disclosed in Forum Group's Tender Offer Statement
on Schedule 14D-1 dated October 2, 1995, as amended by Amendment No. 1 thereto
dated October 16, 1995 (as amended, the "Schedule 14D-1"), filed with the
Securities and Exchange Commission (the "Commission"). Copies of the Offer to
Purchase, the Supplement, and the related Letter of Transmittal are filed
herewith as Exhibits 1, 2, and 3, respectively. The address of the principal
executive offices of Forum Group as set forth in the Schedule 14D-1 is 11320
Random Hills Road, Suite 400, Fairfax, Virginia 22030. Holders of Units are
referred to herein as "Unitholders."

ITEM 3. IDENTITY AND BACKGROUND.

(a) This Statement is being filed by the Partnership and Forum
Retirement, Inc., the sole general partner of the Partnership and a Delaware
corporation (the "General Partner"). The address of the principal executive
offices of the General Partner is 11320 Random Hills Road, Suite 400, Fairfax,
Virginia 22030. The name and business address of the Partnership are set
forth in Item 1 above.

(b) Certain contracts, agreements, arrangements and
understandings, and certain actual or potential conflicts of interest, between
the Partnership or the General Partner or their affiliates and (1) certain of
the Partnership's or the General Partner's executive officers, directors or
affiliates or (2) Forum Group, its executive officers, directors or affiliates,
are described below.

BACKGROUND.
A description of certain transactions between the Partnership and
Forum Group prior to the commencement of the Offer is set forth in the Offer to
Purchase under the heading "Background of the Offer," which section is
incorporated herein by reference.

AFFILIATIONS WITH FORUM GROUP.
Unitholders should be aware that Forum Group, the officers of the
General Partner, and certain members of the General Partner's Board of
Directors, have interests that are described below that present them with
actual or potential conflicts of interest in connection with the Offer.

Control of the General Partner. The General Partner is and has been a
wholly owned subsidiary of Forum Group since the Partnership's inception in
1986. Consequently, Forum Group has at all times had the ability, as a matter
of Delaware corporate law, to elect all of the directors of the General Partner
although, pursuant to the partnership agreement of the Partnership (the
"Partnership Agreement"), at least a majority of the members of the General
Partner's Board must be persons who are not directors, officers, employees,
affiliates, or greater than 1% shareholders of the General Partner or any of
its affiliates ("Independent Directors"). See "Item 8. Additional Information
to be Furnished - Certain Litigation against Forum Group and the General
Partner" for a discussion of certain litigation involving, among other things,
the propriety under the Partnership Agreement of the composition

-2-
<PAGE> 3
of the General Partner's Board. In addition, Donald J. McNamara, President and
Chairman of the Board of the General Partner, has various relationships, with
one of the two investment entities which together control a majority of Forum
Group's capital stock, and all of the other officers of the General Partner are
also officers of Forum Group. As a result of the foregoing circumstances,
Forum Group has an interest in the Offer that may be deemed to present an
actual or potential conflict of interest.

Ownership of Units. As of September 29, 1995, Forum Group
beneficially owned an aggregate of 9,427,791 Units, or 61.7% of the total
number of Units outstanding. According to Forum Group's Schedule 14D-1, as of
September 29, 1995, Brian C. Swinton, one of the executive officers of Forum
Group, beneficially owned 9,800 Units and Mr. Swinton shares voting and
dispositive power with respect to such Units with his spouse.

Management Agreement. Forum Group manages and operates each of the
Partnership's nine retirement communities (the "Properties") pursuant to a
long-term management contract entered into in connection with the formation of
the Partnership (as amended, the "Management Agreement"). The term of the
Management Agreement is coterminous with the term of the Partnership (which
continues in existence until December 31, 2087 or until its earlier termination
pursuant to the terms of the Partnership Agreement) unless the term of the
Management Agreement is sooner terminated as provided therein. Either party
may terminate the Management Agreement upon 30 days' prior written notice if
the other party fails substantially to perform in accordance with the terms
thereof through no fault of the terminating party and if the other party does
not cure the failure within that 30-day period. Additionally, the Management
Agreement provides that the Partnership may terminate the Management Agreement
without cause upon (i) the simultaneous withdrawal or removal of the General
Partner as the general partner of the Partnership and (ii) the affirmative vote
of at least 80% in interest of the Unitholders. As of September 29, 1995,
Forum Group beneficially owned an aggregate of 9,427,791 Units, or 61.7% of the
total number of Units outstanding. Accordingly, even absent the purchase of
additional Units pursuant to the Offer, Forum Group has sufficient voting power
to prevent any attempt by Unitholders to remove the General Partner or to
terminate the Management Agreement without cause. In addition, the Management
Agreement provides for the termination of the manager (presently Forum Group)
in certain circumstances involving monetary defaults under the then-outstanding
indebtedness of the Partnership's affiliated operating partnership which owns
substantially all of the Partnership's assets and the vote of the holders of at
least two-thirds of the principal amount of such indebtedness.

Pursuant to the Management Agreement, Forum Group is entitled to
receive management fees in respect of the Properties, payable quarterly, in an
amount equal to 8% of the Partnership's gross operating revenues. All
management fees payable since the formation of the Partnership in 1986 through
December 31, 1993 were deferred. At December 31, 1993, deferred management
fees totaled approximately $15,780,000. Management fees are no longer
deferrable from and after January 1, 1994 and unpaid management fees for such
periods bear interest at the rate of 12% per annum. Forum Group received
management fees totaling approximately $3,767,000 for calendar year 1994 and
$1,957,000 for the first six months of calendar year 1995. Deferred management
fees generally will be paid quarterly at a rate of 50% of any excess revenues
of the Partnership, after the deduction of operating expenses, capital
expenditures, provisions for fixed asset reserves and other reasonable cash
reserves, and a provision for a quarterly distribution at an annual rate of
$1.35 per Unit, and after payment of current management fees. Deferred
management fees are also payable to Forum Group out of net proceeds to the
Partnership from sales and refinancing of the Partnership's properties
("Capital Transaction Proceeds") after making distributions of Capital
Transaction Proceeds in an amount sufficient (i) to meet Limited Partners' tax
liabilities, (ii) together with all prior distributions of Capital Transaction
Proceeds, to repay Limited Partners' capital contributions, and (iii) together
with all prior distributions of Capital Transaction Proceeds and net cash flow,
to pay a 12% cumulative, simple annual return on the Limited Partners'
respective unrecovered capital contributions. As of the date of this
Statement, Forum Group has received no payments in respect of deferred
management fees.

In the event of the termination of the Management Agreement in
accordance with the terms thereof, whether in connection with the removal or
withdrawal of the General Partner or otherwise, Forum Group would be entitled
immediately upon termination to receive all unpaid management fees (plus
interest thereon as described above) for prior periods, including without
limitation any deferred management fees, together with any reimbursements then
due to it under the Management Agreement. Such fees would be due regardless of
the levels of distribution made to holders of Units and would constitute a
liability of the Partnership (and therefore be entitled to priority over equity

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<PAGE> 4
interests upon the liquidation of the Partnership). The Management Agreement
is filed herewith as an exhibit and is incorporated herein by reference.

Option Agreement. Pursuant to an option agreement (the "Option
Agreement") entered into at the time of the Partnership's formation, Forum
Group has the option to purchase, for a price equal to the appraised fair
market value thereof, any of the properties which the Partnership determines to
sell. Accordingly, consummation of any transaction to sell any of the
properties would be subject to, among other limitations, the election of Forum
Group not to exercise such option. In addition, under the Partnership
Agreement any sale of all or substantially all of the assets of the Partnership
requires the affirmative vote of at least a majority in interest of the
Unitholders. As of September 29, 1995, Forum Group beneficially owned 61.7% of
the total number of Units outstanding. Accordingly, even absent the purchase
of additional Units pursuant to the Offer, Forum Group has sufficient voting
power to prevent any sale of all or substantially all of the Partnership's
assets. Under the Option Agreement, the Partnership also has an option,
subject to certain limitations and restrictions, to purchase up to 15
additional retirement communities developed by Forum Group or any wholly owned
(or in certain circumstances partly owned) affiliate of Forum Group at the
lower of the appraised value of the retirement communities or the sum of 115%
of the costs incurred in connection with development of the retirement
communities and an amount equal to net operating losses incurred between
completion and the purchase. The Option Agreement is filed herewith as an
exhibit and is incorporated herein by reference.

Other. Pursuant to the Partnership Agreement, the Partnership
reimburses Forum Group for general and administrative costs incurred on behalf
of the Partnership. The reimbursement has amounted to less than $200,000 for
each year since the Partnership's formation. In connection with the bankruptcy
proceedings of Forum Group and certain of its affiliates (not including the
Partnership or the General Partner), Forum Group rejected a lease agreement
between Forum Group and Forum Retirement Operations, L.P., which was then an
affiliated operating partnership of the Partnership ("Operations"), pursuant to
which Forum Group leased one of the Properties. The rejection was authorized
by the bankruptcy court on June 10, 1991, and on August 15, 1992, Operations
filed an application for allowance and payment of an administrative claim,
which was denied by the bankruptcy court on February 5, 1992. On February 14,
1992, Operations appealed. On February 5, 1993, a settlement agreement (the
"Settlement Agreement") was entered into by and among the Partnership,
Operations, the General Partner, and Forum Group providing for the payment to
the Partnership by Forum Group of $125,000 and the allowance by Forum Group of
a general unsecured claim in favor of the Partnership in the amount of
$1,237,609, which was satisfied by the issuance of 63,612 shares of common
stock of Forum Group to Operations. These shares of common stock were sold
pursuant to a tender offer effected in 1993 by three investment entities which
together controlled a majority of Forum Group's capital stock for cash in the
amount of $3.62 per share. The Settlement Agreement also provided that,
commencing with the last quarter of 1992, general and administrative costs
incurred by Forum Group on behalf of the Partnership would be reimbursed at a
rate of $180,000 per annum.

The Partnership Agreement provides that the General Partner and its
officers, directors, agents, and employees will not be liable to the
Partnership or any limited partner for any error in judgment or breach of
fiduciary duty that does not constitute (i) a breach of that person's duty of
loyalty to the Partnership, as that duty of loyalty may be specified in or
modified by the Partnership Agreement, (ii) an act or omission not in good
faith or which involves intentional misconduct or a knowing violation of law,
or (iii) a transaction from which an improper personal benefit is derived. The
Partnership Agreement also provides that the Partnership will indemnify the
General Partner and its affiliates, directors, officers, employees, and agents,
to the full extent permitted by law, against liabilities, costs, and expenses
(including legal fees and expenses) incurred by the indemnified persons in
connection with litigation or threatened litigation as a result of its status
as the general partner of the Partnership or an affiliate, officer, employee,
or agent of the General Partner where (x) the indemnified person acted in good
faith and in a manner it believed in good faith to be in, or not opposed to,
the best interests of the Partnership and, with respect to a criminal
proceeding, had no reasonable cause to believe its conduct was unlawful and (y)
the indemnified person's conduct did not constitute willful misconduct. The
Partnership is authorized to purchase insurance against liabilities asserted
against and expenses incurred by the foregoing persons in connection with the
Partnership's activities, whether or not the Partnership would have the power
to indemnify those persons against those liabilities under the provisions
described above. The Partnership has purchased such insurance, the annual
premium for which was $170,000 for the current policy period. The Partnership
Agreement provides that the Partnership may enter into

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<PAGE> 5

contracts with the foregoing persons or adopt written procedures pursuant to
which arrangements are made for the advancement of expenses, the funding of the
Partnership's indemnity obligations, and other procedures regarding
indemnification as are appropriate. As a result of such provisions, the
limited partners have more limited rights against the General Partner and its
affiliates than they would have absent the limitations in the Partnership
Agreement.

The General Partner has entered into indemnification agreements with
each of its directors (including the directors who serve on the Special
Committee described in Item 4). These indemnification agreements provide for,
among other things, (i) the indemnification by the General Partner of the
indemnified persons thereunder to the extent permitted by Delaware law, (ii)
the advancement of attorneys' fees and other expenses, and (iii) the
establishment, upon approval by the General Partner's Board, of trusts or other
funding mechanisms to fund the General Partner's indemnification obligations
thereunder. Forum Group has also entered into indemnification agreements with
each of the directors of the General Partner (including the directors who serve
on the Special Committee described in Item 4). These indemnification
agreements provide for, among other things (i) the indemnification by Forum
Group of the indemnified persons thereunder to the extent permitted by Indiana
law, (ii) the advancement of attorneys' fees and other expenses, and (iii) the
establishment, upon approval by the Board of Directors of Forum Group, of
trusts or other funding mechanisms to fund Forum Group's indemnification
obligations thereunder. The form of the Indemnification Agreements is filed
herewith an exhibit to this Statement, and is incorporated herein by reference.

Messrs. Sexton and Leslie are compensated for all services as a
director of the General Partner at the rate of $18,000 per year, payable
quarterly in advance, plus $1,500 for each Board or committee meeting attended
in person and $1,000 for each meeting attended telephonically. Mr. McNamara is
compensated for all services as a director at the rate of $15,000 per year,
payable quarterly in advance. During the year ended December 31, 1994, Messrs.
Sexton, Leslie and McNamara received $29,500, $29,500 and $15,000,
respectively, in total compensation for their service as a director of the
General Partner.

The Offer provides that upon acceptance for payment by Forum Group of
Units tendered pursuant to the Offer, each tendering Unitholder will be deemed
to have released Forum Group, the General Partner, and their respective
stockholders, affiliates, directors (including the directors who serve on the
Special Committee described in Item 4), officers, employees, agents, and
representatives from any and all claims, causes of action, and liabilities,
known or unknown, arising from or relating to the business affairs of, or any
transactions by or involving, or the purchase and ownership of securities of,
the Partnership, from the beginning of time through the date on which tendered
Units are accepted for payment, including without limitation, any claim, cause
of action, or liability arising from or relating to the subject matter of the
existing litigation described under "Item 8. Additional Information to be
Furnished - Certain Litigation against Forum Group and the General Partner."
This release may have the effect of releasing the directors of the General
Partner (including the directors who serve on the Special Committee described
in Item 4) from any liability for their actions as directors.

ITEM 4. THE SOLICITATION OR RECOMMENDATION.

(a) The Board of Directors of the General Partner, upon the
unanimous recommendation of a special committee of the Board of Directors
comprised of independent directors, has determined (with the director
affiliated with Forum Group abstaining) that the Offer is fair to the
Unitholders (other than Forum Group and its affiliates) and has recommended
that such Unitholders accept the Offer and tender all of their Units pursuant
to the Offer.

(b) Background of the Offer. Following certain conversations
between representatives of Forum Group and members of the General Partner's
Board, on August 28, 1995, Forum Group furnished the General Partner's Board
with a letter containing an analysis of the possible acquisition of additional
Units by Forum Group for $2.50 per Unit. The analysis contained in such letter
included information regarding historical trading prices for the Units, and two
hypothetical valuation cases showing valuations below the per Unit price being
offered in the Offer.

In response, on September 1, 1995, the Independent Directors of the
General Partner's Board furnished a letter to Forum Group, the text of which
was as follows:

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<PAGE> 6

"As the independent directors of the general partner of Forum
Retirement Partners, L.P. (the "Partnership"), we have reviewed your
memorandum of August 28, 1995, and thought it appropriate to respond.
We certainly appreciate your willingness to apprise us of Forum
Group's thoughts regarding acquiring the Preferred Depositary Units
("Units") in the Partnership not currently owned by Forum Group. Your
memorandum states that you have not yet decided whether to pursue any
particular course of action but would like feedback prior to such a
decision. The board of directors of the general partner has not
undertaken any evaluation of your hypothetical case or any
alternatives that may be available to the Partnership in the event
that Forum Group decides to pursue a transaction of the type set forth
in your hypothetical. As a result we cannot provide any views on your
hypothetical.

Discussions with Forum Group of any proposal it decides to make to the
general partner of the Partnership, however, should only occur with a
special committee of the independent directors of the general partner.
This special committee should be empowered to evaluate the
Partnership's prospects and alternatives and should be furnished by
Forum Group, as manager of the Partnership's properties, all relevant
information and projections concerning the Partnership's properties
and operations. If Forum Group decides to pursue a transaction, we
stand prepared to serve as the special committee to evaluate the
Partnership's alternatives with the assistance of independent legal
and financial advisors."

On September 23, 1995, Forum Group delivered to the General Partner's
Board a letter stating in part as follows:

"We are pleased to advise you that Forum Group, Inc. has decided to
initiate a tender offer to acquire, subject to certain conditions,
preferred depositary units representing limited partners' interests in
Forum Retirement Partners, L.P. at $2.50 per unit, net to the seller
in cash. The decision was made at a meeting of the Executive
Committee of the FGI Board of Directors earlier this evening. We
expect to make a public announcement with respect thereto prior to the
commencement of trading on Monday, September 25th, and will furnish
your counsel the formal tender offer documentation as soon as
reasonably possible."

On September 25, 1995, Forum Group made a press release that included
the text of the September 23, 1995 letter to the General Partner's Board and
delivered a letter to the Partnership, requesting that the Partnership furnish
to Forum Group the Partnership's Unitholder list, non-objecting beneficial
owners list, and security position listing for the purpose of disseminating the
Offer to Unitholders.

The General Partner's Board held a special meeting on September 25,
1995, and appointed a special committee (the "Special Committee") consisting of
the two directors, James C. Leslie and John F. Sexton, who are unaffiliated
with Forum Group or its shareholders. The General Partner's Board, among other
things, authorized and empowered the Special Committee to (i) review and
evaluate the terms of the Offer, (ii) if deemed appropriate by the Special
Committee, seek, evaluate, and negotiate alternatives to such Offer and take
such actions on behalf of the Partnership in connection therewith as deemed
necessary or advisable by the Special Committee, (iii) report to the entire
Board of Directors as to the results of the Special Committee's actions and
conclusions as to the fairness to the Unitholders from a financial point of
view of the Offer and, if applicable, any transaction referenced to in clause
(ii) above, and (iv) select and retain legal counsel and financial advisors.
After the General Partner's Board meeting on September 25, 1995, the
Partnership published a press release recommending that Unitholders take no
action with respect to the Offer until the Special Committee had completed its
review of the Offer and the General Partner's Board communicated with
Unitholders.

On September 28, 1995, the Special Committee held a meeting at which
John F. Sexton was elected Chairman of the Special Committee, and the Special
Committee engaged legal counsel and retained ROBERT A. INNAMORATI & CO.
("RAI&Co") as its financial advisor (see Item 5 below). The Special Committee
also determined that, in accordance with the terms of the Partnership
Agreement, it would provide Forum Group with the Partnership's Unitholder
list, non-objecting beneficial owners list, and security position listings for
the purpose of disseminating the Offer to Unitholders as requested by Forum
Group.

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In the following days the Special Committee and its financial advisor
requested and received certain information from Forum Group and the General
Partner, including projections prepared with respect to the results of
operations and cash flows of the Partnership by officers of the General
Partner and Forum Group (the "Projections"). See "Item 8. Additional
Information to be Furnished - Certain Financial Projections."

At a meeting held on October 5, 1995, the Special Committee met with
its legal counsel to discuss the status of the Special Committee's evaluation
of the Offer. The Special Committee, its financial advisor and its legal
counsel then met with certain executives of Forum Group, including the Chief
Financial Officer. The Special Committee's financial advisor questioned the
executives as to the Projections previously provided to the Special Committee
and the future prospects of the Partnership, as to their view of industry
trends, and as to other matters. The Special Committee and its financial
advisor also discussed with the Forum Group executives the Partnership's
ongoing expansion of its Properties and the financing of capital expenditures
of the Partnership related to expansion and otherwise, as well as the existence
and terms of the deferred management fees under the Management Agreement. At
the meeting, Forum Group executives confirmed that Forum Group had no current
intention to waive or release any of its contractual rights with respect to the
Partnership or its assets, including the Management Agreement and the Option
Agreement.

During the period between October 6 and October 13, the members of the
Special Committee reviewed and discussed with the financial advisor certain
financial and other information from Forum Group and the General Partner
concerning the Partnership, and the financial advisor requested additional
information from Forum Group and the General Partner and had several
discussions with Forum Group executives regarding such information.

On the morning of October 13, 1995, the Special Committee met with its
financial advisor and its legal counsel. At the meeting the Special
Committee's financial advisor, RAI&Co, made a presentation of its preliminary
valuation analysis, after which the Special Committee discussed RAI&Co's
presentation and other considerations regarding the Offer. The Special
Committee decided that Mr. Sexton, as Chairman of the Special Committee, should
discuss the terms of the Offer with Forum Group representatives in an effort to
seek reasonable assurances that the offer price represented Forum Group's best
price.

Following the meeting, Mr. Sexton spoke with a representative of Forum
Group and expressed the view that the Special Committee, having heard the
presentation earlier from its financial advisor, did not expect to recommend
the Offer at $2.50 to Unitholders. Mr. Sexton communicated that a fairness
opinion would likely be given at a price of $2.75 per Unit but that he did not
believe the Special Committee would recommend the Offer at that price. Mr.
Sexton also stated that the Special Committee would like for the offer price to
be increased to at least $2.90 per Unit. Mr. Sexton then conveyed the results
of his conversation to the other member of the Special Committee and the
Special Committee's legal counsel and financial advisor.

On the afternoon of October 13, a representative of Forum Group
telephoned the members of the Special Committee and indicated that Forum Group
would increase the offer price per Unit to $2.75 if the General Partner's Board
intended to remain neutral with respect to the Offer but would increase the
offer price per Unit to $2.83 if the Special Committee would recommend the
Offer at such price to the Unitholders.

The Special Committee then convened a meeting to discuss Forum Group's
proposal and after discussions, including concerns that Unitholders have ample
time to decide whether to tender their Units, unanimously determined that the
Offer at $2.83 per Unit is fair to Unitholders (other than Forum Group and its
affiliates) and resolved to recommend the Offer at $2.83 per Unit to the
General Partner's Board, conditioned upon receipt of a fairness opinion from
the Special Committee's financial advisor and upon Forum Group's agreement to
extend the Offer until November 10, 1995.

At a meeting of the General Partner's Board convened on the afternoon
of October 13, the General Partner's Board, based upon the unanimous
recommendation of the Special Committee, determined (with the director
affiliated with Forum Group abstaining), subject to receipt of a fairness
opinion from the financial advisor, that the Offer at $2.83 per Unit is fair to
Unitholders (other than Forum Group and its affiliates) and resolved to
recommend that such Unitholders accept the Offer and tender all of their Units
pursuant to the Offer.

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<PAGE> 8

Following the meeting of the General Partner's Board, the Special
Committee again met with its legal counsel and financial advisor and discussed
the outcome of the Special Committee's conversations with Forum Group and the
action of General Partner's Board. RAI&Co then made a presentation to the
Special Committee of its valuation analysis and orally delivered its opinion,
which was subsequently confirmed in writing as of that date, that the $2.83
cash consideration to be received by Unitholders (other than Forum Group and
its affiliates) pursuant to the Offer is fair to such Unitholders, from a
financial point of view.

Reasons for Recommendation. In making the determination and
recommendation set forth in paragraph (a) above, the Special Committee
considered various factors, including the following:

(i) the opinion of RAI&Co, delivered orally to the Special
Committee on October 13, 1995, and subsequently confirmed in writing as of that
date, that the cash consideration to be received by the Unitholders (other than
Forum Group and its affiliates) pursuant to the Offer is fair to such
Unitholders, from a financial point of view. A copy of the opinion of RAI&Co
(which Unitholders are urged to read carefully in its entirety) setting forth
certain of the assumptions made, matters considered, and limitations on the
review undertaken, is attached hereto as Annex A, and is incorporated herein by
reference;

(ii) the relationship between the price to be paid pursuant to the
Offer and the market prices and recent trading history of the Units on the
American Stock Exchange ("AMEX"), including the fact that the Offer will enable
Unitholders to realize a premium of approximately 42% over the closing sale
price of a Unit on the AMEX on September 22, 1995, the last trading day prior
to the press release announcing that Forum Group would commence the Offer, and
a price that is slightly above the 52-week high sales price of a Unit on the
AMEX;

(iii) the relationship between the price to be paid pursuant to the
Offer and the price paid in previous purchases by Forum Group;

(iv) the timing of the receipt of the cash consideration pursuant
to the Offer;

(v) the terms and conditions of the Offer, including Forum Group's
commitment to take any and all Units tendered and the fact that the Offer is
not conditioned on any minimum number of Units being tendered or upon any
merger or other transaction pursuant to which non-tendering Unitholders are
forced to convert their Units into cash or other consideration;

(vi) the possible reduction in the number of publicly-traded Units
upon completion of a tender offer and the resulting adverse effect on the
liquidity of the Units;

(vii) the Special Committee's knowledge of the business, results of
operations, properties, financial condition, and prospects of the Partnership;

(viii) the limited alternatives available to the Partnership due to
Forum Group's rights under the Management Agreement, the Option Agreement and
the Partnership Agreement; and

(ix) the economic limitations likely to be imposed on the
Partnership's operations, financing and future cash flows due to the fact that
the Partnership may possibly be taxed as an association taxable as a
corporation beginning in 1998.

In view of the wide variety of factors considered, the Special Committee did
not find it practical to, and did not, rank or otherwise attempt to assign
relative weights to the specific factors considered in making their
determination although the factors which received the greatest emphasis in the
Special Committee's discussions were the factors identified in paragraphs (i),
(ii), and (viii) above.

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<PAGE> 9

Opinion of Financial Advisor. On October 13, 1995, RAI&Co orally
advised the Special Committee of such firm's opinion that the proposed cash
consideration of $2.83 per Unit to be received by Unitholders (other than Forum
Group and its affiliates) pursuant to the Offer is fair to such Unitholders,
from a financial point of view. RAI&Co delivered its written opinion
confirming such oral advice as of October 13, 1995. A copy of RAI&Co's written
opinion, which Unitholders are urged to read in its entirety, setting forth
certain of the assumptions made, matters considered, and limitations on the
review undertaken, is attached hereto as Annex A. RAI&Co did not make or seek
to obtain appraisals from third parties of the Partnership's assets in
connection with its analysis of the Partnership. No limitations were imposed
by the Special Committee or the Board of Directors of the General Partner upon
RAI&Co with respect to the investigations made or the procedures followed by
RAI&Co in rendering its opinion, and management of the General Partner and
Forum Group cooperated with RAI&Co in its analysis of the Partnership. For
purposes of its opinion, RAI&Co assumed and relied upon, without independent
verification, the accuracy and completeness of the financial and other
information obtained by RAI&Co from public sources and from the General Partner
or its affiliates and advisors.

At a meeting of the Special Committee on the morning of October 13,
1995, RAI&Co reviewed, on a preliminary basis, a discounted cash flow analysis,
a capitalization of net operating income analysis, a market comparison analysis
and an acquisition premium analysis of the Partnership. RAI&Co's preliminary
analyses were further refined, partially in response to questions from members
of the Special Committee, and RAI&Co presented its final analysis to the
Special Committee at its meeting on the afternoon of October 13. The following
is a summary of RAI&Co's analyses:

1. Discounted Cash Flow Analysis. RAI&Co performed a discounted cash
flow analysis for the purpose of determining the equity value per Unit
of the Partnership based on the Projections for the fiscal years
ending December 31, 1995 through 2004 that were prepared by the
General Partner in good faith solely for internal use and provided to
RAI&Co. See "Item 8. Additional Information to be Furnished -
Certain Financial Projections" for a discussion of the Projections,
the material assumptions underlying the Projections, and certain
qualifications in respect thereto. RAI&Co performed a sensitivity
analysis by applying various discount and terminal value
capitalization rate assumptions to the Projections through years five,
seven, and ten, respectively. Discount rates of 12%, 15%, 18%, and
20% and terminal value capitalization rates of 10%, 11%, and 12% were
used. The discount and capitalization rates used by RAI&Co were
selected based on conversations with industry experts and an industry
periodical as well as in consideration of the Partnership's prospects
and other market- related factors. The Projections reflect projected
revenues of $60.8 million and net operating income (adjusted in
1999 to add back capital expenditures related to the expansion plan in
such year) of $12.0 million for the fiscal year ending December 31,
1999. The resulting value of the Units based on the Projections for
the fiscal year ending December 31, 1999 ranged from $1.30 to $2.55.
The Projections reflect projected revenues of $68.7 million and net
operating income of $14.8 million for the fiscal year ending December
31, 2001. The resulting value of the Units based on the Projections
for the fiscal year ending December 31, 2001 ranged from $1.66 to
$3.37. The Projections reflect projected revenues of $75.5 million
and net operating income of $16.4 million for the fiscal year ending
December 31, 2004. The resulting value of the Units based on the
Projections for the fiscal year ending December 31, 2004 ranged from
$1.60 to $3.56. Thus, the above calculations produced a valuation
range for the Units of $1.30 to $3.56 per Unit.

2. Capitalization of Net Operating Income Analysis. In its
capitalization of net operating income analysis, RAI&Co performed its
analysis based on actual reported net operating income for the
Partnership for the twelve-month period ended June 30, 1995 and on the
net operating income for the twelve-month period ending December 31,
1995 based on the Projections. RAI&Co applied capitalization rates
of 8%, 9%, 10%, 11%, 12%, and 13% to net operating income of $7.6
million for the twelve months ended June 30, 1995 to arrive at a range
of hypothetical enterprise values. RAI&Co then subtracted the debt as
of June 30, 1995 from the hypothetical enterprise value and added the
cash as of June 30, 1995 in order to arrive at hypothetical equity
values ranging from $15.1 million to $51.5 million. This resulted in
per Unit values ranging from $0.98 to $3.37. RAI&Co applied
capitalization rates of 8%, 9%, 10%, 11%, 12%, and 13% to projected
net operating income of $7.9 million for the twelve-month period
ending December 31, 1995 based on the Projections

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<PAGE> 10
to arrive at a range of hypothetical enterprise values. RAI&Co then
subtracted from the hypothetical enterprise value the projected debt
as of December 31, 1995 based on the Projections and added the
projected cash as of December 31, 1995 based on conservations with
management in order to arrive at hypothetical equity values ranging
from $17.2 million to $55.0 million. This resulted in per Unit values
ranging from $1.12 to $3.60. RAI&Co selected the capitalization rates
used in its analysis based on conversations with industry experts as
well as from information from an industry periodical.

3. Analysis of Comparable Publicly-Traded Companies. In its market
comparison analysis, RAI&Co selected 11 companies engaged in lines of
business similar to that of the Partnership. The 11 companies were
Beverly Enterprises, Inc., Advocat Inc., Genesis Health Ventures,
Inc., The Multicare Companies, Inc., Summit Care Corporation,
Geriatric & Medical Companies, Inc., GranCare, Inc., Community Care of
America, Inc., Retirement Care Associates, Inc., Sun Healthcare Group,
Inc. and Forum Group, Inc. RAI&Co noted that it was difficult to
select publicly-traded companies that could be used to establish
meaningful comparisons with the Partnership. RAI&Co calculated the
enterprise value (defined as market capitalization plus long-term debt
minus cash) of the 11 comparable companies. Two market
capitalizations for each comparable company were calculated: current
market capitalization (defined as current number of shares outstanding
multiplied by the current market price per share) and twelve-month
average market capitalization (defined as the average price per share
for the period multiplied by the average shares outstanding). The two
enterprise values for each comparable company were converted into
multiples of revenues; of earnings before interest, taxes,
depreciation and amortization ("EBITDA"); of earnings before interest
and taxes ("EBIT"); and of net income for each of the last reported
fiscal year and the most recent twelve-month period, in each case as
derived from the company's public filings. An adjusted peer average
for each data set was determined by eliminating the high and low
observations. Valuations were then calculated by applying the
Partnership's results for the year ended December 31, 1994, the twelve
months ended June 30, 1995 and the twelve-month period ending December
31, 1995 based on the Projections to arrive at implied values of the
Partnership based on each data set. Based on this analysis, RAI&Co
arrived at a value per Unit ranging from $2.55 to $2.95.

4. Acquisition Premium Analysis. RAI&Co analyzed premiums paid in
selected tender offers for cash of the equity interest in 18 public
companies completed between January 1, 1994 and October 3, 1995.
RAI&Co noted that it was difficult to select transactions that could
be used to establish meaningful comparisons. Only one of the 18
transactions involved a company in the retirement center or nursing
home industry. The total value of the 18 transactions analyzed ranged
from $14.4 million to $49.0 million. Only six were in the $15 million
to $25 million total value range, none of which were considered by
RAI&Co to be directly comparable to the Partnership. RAI&Co further
observed that the range of values for the various financial
measurements had no concentrations, but rather, were vastly divergent.
RAI&Co determined that the premiums of these completed or pending
transactions in relation to the market price prior to the date of
announcement of such transactions ranged from 17% to 225% one day
prior to announcement, 19% to 265% one week prior to announcement,
and 12% to 225% four weeks prior to announcement. RAI&Co noted that
the $2.83 per Unit cash to be paid in connection with the Offer would
result in a premium of 42% over the market price of $2.00 per Unit one
day prior to the announcement that Forum Group proposed to acquire all
the Units that it did not own, a premium of 51% over the market price
of $1.88 per Unit one week prior to the announcement, and a premium of
42% over the market price of $2.00 four weeks prior to the date of the
announcement.

The summary set forth above describes the material points of the more
detailed analyses performed by RAI&Co in arriving at its fairness opinion.
RAI&Co believes that its analyses must be considered as a whole and that
selecting portions of its analyses and of the factors considered by it, without
considering all factors and analyses, could create an incomplete view of the
processes underlying its opinion. The preparation of a fairness opinion is a
complex process involving subjective judgments and is not necessarily
susceptible to partial analysis or summary description. In its analysis,
RAI&Co made a number of assumptions, which include that business and economic
conditions would remain essentially the same as those existing currently.
Further, RAI&Co assumed that current management would remain with the
Partnership and would continue to manage the Partnership as it had in the past.
Any estimates contained in such assumptions are not necessarily indicative of
actual values, which may be

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<PAGE> 11

significantly more or less favorable than is set forth within. Estimates of
values of companies do not purport to be appraisals or necessarily reflect the
prices at which companies may actually be sold. Because such estimates are
inherently subject to uncertainty, none of the Partnership, the General
Partner, RAI&Co, or their affiliates assumes any responsibility for their
accuracy.

A copy of certain summaries of the analyses prepared by RAI&Co in
connection with its fairness opinion has been filed as an exhibit to this
Statement, and will be made available for inspection and copying at the
principal executive offices of the General Partner during regular business
hours by any interested Unitholder or his representative who has been so
designated in writing.

RAI&Co was selected as financial advisor to the Special Committee
because its principals have substantial experience in providing financial
advisory services in connection with mergers and acquisition, leveraged
buyouts, business valuations, recapitalizations, and private placements.
Moreover, as a result of the 1993 engagement by a special committee of the
Board of Directors of the General Partner of Mr. Innamorati, one of the
principals of RAI&Co, while he was employed at another investment banking
company, the members of the Special Committee believe that RAI&Co had a unique
experience with, and knowledge of, the Partnership. Except for Mr.
Innamorati's engagement described above, to the Partnership's knowledge, RAI&Co
has not had any material relationship with the Partnership or its affiliates
during the past two years.

ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.

By an engagement letter dated September 28, 1995, the Special
Committee retained the services of RAI&Co to act as financial advisor to the
Special Committee to assist the Special Committee in analyzing and evaluating
from a financial point of view the consideration offered by Forum Group and to
render a written fairness opinion with respect thereto. Under the engagement
letter, the General Partner agreed to pay RAI&Co a $15,000 non-refundable
engagement fee and a fee of $110,000 upon submission of its written opinion,
and to reimburse RAI&Co for certain expenses in an amount not to exceed
$15,000 without the prior written consent of the General Partner. In addition,
the engagement letter provides that the General Partner and the Partnership
will indemnify RAI&Co and its affiliates against certain liabilities arising
out of RAI&Co's engagement, including liabilities under the federal securities
laws.

Except as set forth above, none of the Special Committee, the General
Partner, the Partnership, or any persons acting on their behalf currently
intends to employ, retain, or compensate any person to make solicitations or
recommendations to the Unitholders.

ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.

(a) To the Partnership's knowledge, no transactions in the Units
have been effected during the past 60 days by the Partnership or the General
Partner, or by any director, executive officer, or affiliate thereof.

(b) To the Partnership's knowledge, none of the General Partner's
directors and officers own Units. In addition, according to Forum Group's
Schedule 14D-1, neither Forum Group nor any of its affiliates (except for Mr.
Swinton, an executive officer of Forum Group who presently intends to tender
his Units pursuant to the Offer) will tender any Units pursuant to the Offer.

ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.

(a) Except as described in Item 4 above, no negotiation is
underway or is being undertaken by the Partnership in response to the Offer
which relates to or would result in (i) an extraordinary transaction, such as a
merger or reorganization, involving the Partnership; (ii) a purchase, sale or
transfer of a material amount of assets by the Partnership; (iii) a tender
offer for or other acquisition of securities by or of the Partnership; or (iv)
any material change in the present capitalization or dividend policy of the
Partnership.

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<PAGE> 12

(b) Except as described in Item 4 above, there are no
transactions, board resolutions, agreements in principle or signed contracts in
response to the Offer, which relate to or would result in one or more of the
matters referred to in Item 7(a) above.

ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.

Certain Litigation against Forum Group and the General Partner. On
January 24, 1994, the Russell F. Knapp Revokable Trust ("Plaintiff") filed a
complaint (as amended, the "Iowa Complaint") in the United States District
Court for the Northern District of Iowa (the "Iowa District Court") against the
General Partner alleging breach of the Partnership Agreement, breach of
fiduciary duty, fraud, and civil conspiracy. On March 17, 1994, Plaintiff
amended the Iowa Complaint to add Forum Group as a defendant. The Iowa
Complaint alleged, among other things, that (i) Plaintiff held a substantial
number of Units, (ii) the General Partner's Board was not comprised of a
majority of Independent Directors as required by the Partnership Agreement and
as allegedly represented in the Partnership's 1986 Prospectus for its initial
public offering of the Units, (iii) the allegedly improper composition of the
General Partner's Board was a consequence of actions by Forum Group, (iv) the
General Partner's Board has approved and/or acquiesced in 8% management fees
being charged by Forum Group under the Management Agreement, whereas the Iowa
Complaint alleged that the "industry standard" for such fees was 4%, thereby
resulting in an "overcharge" to the Partnership estimated by Plaintiff at $1.8
million per annum, beginning in 1994, and (v) as a consequence of the allegedly
improper composition of the General Partner's Board, Forum Group and the
General Partner breached the Partnership Agreement and securities laws and
failed to discharge fiduciary duties. On April 4, 1995, the Iowa District
Court entered an order dismissing the Iowa Complaint for procedural reasons.

On June 15, 1995, the Plaintiff filed a complaint (the "Indiana
Complaint") in the United States District Court for the Southern District of
Indiana against Forum Group and the General Partner. The allegations set forth
in the Indiana Complaint are essentially the same as those included in the Iowa
Complaint, except that the Indiana Complaint omits the allegations of fraud (in
which Plaintiff claimed, in general, that Forum Group and the General Partner
knowingly made false representations that they would comply with the terms of
the Partnership's 1986 Prospectus and the Partnership Agreement with respect to
the selection of Independent Directors and with respect to the number of
directors on the General Partner's Board) included in the Iowa Complaint and
contains allegations of insider trading and oppression of minority Unitholders
(in which Plaintiff claims, in general, that Forum Group and the General
Partner have utilized their position of control and their access to inside
information to purchase Units at less than fair market value and engaged in a
course of conduct to force minority Unitholders to sell their Units at less
than fair market value) that were not included in the Iowa Complaint.

Plaintiff is seeking the restoration of certain former directors to
the General Partner's Board and the removal of certain other directors from the
General Partner's Board, an injunction prohibiting the payment of 8% management
fees, and unspecified compensatory and punitive damages.

The General Partner has previously stated that it believes there are
substantial defenses to the claims asserted by Plaintiff and that it intends
vigorously to defend against such claims. In accordance with the Partnership
Agreement, the Partnership reimbursed the General Partner for $68,000 and
$146,000 of litigation costs relating to those claims in the six months ended
June 30, 1995 and calendar year 1994, respectively.

Upon the acceptance for payment by Forum Group of Units tendered
pursuant to the Offer, each tendering Unitholder will be deemed to have
released Forum Group, the General Partner, and their stockholders, respective
affiliates, directors (including the directors serving on the Special
Committee), officers, employees, agents, and representatives from any and all
claims, causes of action, and liabilities, known or unknown, arising from or
relating to the business and affairs of, or any transactions by or involving,
or the purchase and ownership of securities of, the Partnership from the
beginning of time through the date on which tendered Units are accepted for
payment in accordance with the terms of the Offer, including without limitation
any claim, cause of action, or liability arising from or relating to the
subject matter of the litigation described above. Accordingly, tendering
Unitholders may be

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<PAGE> 13
waiving significant rights, including the right to participate in any judgment
for monetary damages or in any monetary or other settlement.

Certain Financial Projections. The Partnership does not as a matter
of course make public forecasts or projections as to future performance or
earnings. However, during the course of discussions with the Special
Committee's financial advisor, Forum Group and the General Partner participated
in the preparation of certain Projections relating to the Partnership's future
operations, which projections are not publicly available. The Projections were
prepared in good faith solely for internal use and not with a view to public
disclosure or compliance with published guidelines of the Securities and
Exchange Commission regarding projections or the guidelines established by the
American Institute of Certified Public Accountants regarding projections and
are included in this Statement only because such information was available to
Forum Group, the Special Committee and its financial advisor. The estimates
and assumptions underlying the Projections are inherently subject to
significant economic and competitive uncertainties and contingencies, all of
which are difficult to quantify and many of which are beyond the control of the
Partnership and the General Partner. Accordingly, there can be no assurance
that the Projections will be realized and it is likely that the Partnership's
future financial performance will vary from that set forth below, possibly by
material amounts. The General Partner and the Partnership do not presently
intend to update or publicly revise the Projections to reflect circumstances
existing or developments occurring after the preparation of such information or
to reflect the occurrence of unanticipated events. KPMG Peat Marwick, the
Partnership's independent auditor, has not examined, compiled, or otherwise
applied procedures to the Projections presented herein, and, accordingly, does
not express an opinion or any other form of assurance on the Projections.

SUMMARY OF TEN YEAR CONSOLIDATED FINANCIAL PROJECTIONS

<TABLE>
<CAPTION>
Year Ending December 31,
------------------------
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- ---- ---- ---- ---- ----

(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $49,138 $52,035 $55,112 $57,893 $60,821 $65,482 $68,710 $71,181 $73,316 $75,516

Operating
Expenses 35,335 37,003 38,541 40,420 42,067 44,871 46,384 47,961 49,400 50,882

Renewal and
Refurbish
Capital
Expenditures 2,558 1,715 3,231 3,555 4,382 4,329 4,459 4,593 4,730 4,872

Expansion
Capital
Expenditures 1,893 3,812 3,088 3,442 3,661 1,464 0 0 0 0

Management
Fees 3,931 4,163 4,409 4,631 4,866 5,239 5,497 5,694 5,865 6,041

Net Operating
Income 5,421 5,342 7,307 7,546 8,318 11,942 14,805 15,440 15,903 16,380

Total Debt
Service 5,844 5,844 5,844 5,844 5,844 5,844 5,844 5,844 5,844 5,844

Distributions 0 0 0 0 0 3,735 6,527 7,089 7,477 7,876
</TABLE>

The following assumptions were used in the preparation of the
Projections. Average occupancy is assumed to remain constant at 94% throughout
the periods shown. Average price per room per day is assumed to be $88.56

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<PAGE> 14

in 1995 and to increase 4.01% in 1996 and 3.00% per year thereafter. The
projections of expansion assume that 304 rooms are added and reflects funding
only from Partnership cash flows as available. These assumptions result in the
number of rooms available being projected as 1,622 in 1995; 1,717 in 1996; 1,722
in 1997; 1,790 in 1998; 1,812 in 1999; and 1,921 in 2000 and beyond. Operating
expenses (other than management fees) are assumed to be 71.91% of revenues in
1995 and 71.04% of revenues thereafter. Management fees are projected to equal
8.0% of revenues as provided by the Management Agreement. Capital expenditures
include amounts expected to be necessary for routine expenditures based on the
history of the Partnership's properties and for the Partnership's expansion
plan. The Partnership's debt balance is assumed to be $49,007,000 at December
31, 1995 with no additional borrowings during the ten-year period. The
Partnership's debt matures on January 1, 2001 and payments reflected in the
Projections through that date are in accordance with the Partnership's loan
covenants. Thereafter the Projections assume the same debt service amount.

The foregoing projections do not include income tax expense in that it
is assumed that the Partnership will continue to be treated as a partnership
and thus not subject to federal income taxes. The Internal Revenue Code of
1986, as amended, generally characterizes publicly traded partnerships that
conduct active trades or business as corporations for federal income tax
purposes. However, publicly traded partnerships existing on December 17, 1987
(such as the Partnership) were grandfathered and treated as partnerships for
federal income tax purposes until tax years beginning after December 31, 1997.
It is possible that the Partnership will be taxed as a corporation for federal
income tax purposes beginning in the 1998 tax year. In such case, its income,
gains, losses, deductions and credits would be reflected only on its tax return
rather than being passed through to the partners, and its net income would be
taxed as corporate rates. In addition, distributions made to partners would be
treated as taxable dividend income to the extent of the Partnership's current
and accumulated earnings and profits. On August 8, 1988, the General Partner was
authorized by the limited partners to do all things deemed necessary or
desirable to insure that the Partnership is not treated as a corporation for
federal income tax purposes. Assuming that the Partnership remains a publicly
traded partnership, alternatives available to avoid corporate taxation after
1998 include, among others, (i) selling or otherwise disposing of all or
substantially all of the Partnership's assets pursuant to a plan of liquidation,
(ii) converting the Partnership into a real estate investment trust or other
type of legal entity, and (iii) restructuring the Partnership to qualify as a
partnership primarily with passive rental income. While the Partnership
presently intends to seek to avoid being taxed as a corporation for federal
income tax purposes, there can be no assurance that it will be successful.

ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.

1. - Offer to Purchase (incorporated by reference to Exhibit
(a)(1) to Forum Group's Schedule 14D-1 dated October 2,
1995).

2. - Supplement to Offer to Purchase (incorporated by reference
to Exhibit (a)(9) to Forum Group's Amendment No. 1 to
Schedule 14D-1 dated October 16, 1995).

3. - Letter of Transmittal (incorporated by reference to Exhibit
(a)(2) to Forum Group's Schedule 14D-1 dated October 2,
1995).

4. - Letter to Unitholders dated October 16, 1995.

5. - Press release dated October 16, 1995 (incorporated by
reference to Exhibit (a)(10) to Forum Group's Amendment No.
1 to Schedule 14D-1 dated October 16, 1995).

6. - Fairness opinion of Robert A. Innamorati & Co. dated
October 13, 1995 (attached as Annex A hereto).

7. - Form of Indemnification Agreement between Forum Group and
the directors and officers of the General Partner.

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<PAGE> 15

8. - Form of Indemnification Agreement between Forum Retirement,
Inc. and its directors.

9. - Amended and Restated Agreement of Limited Partnership,
dated as of December 29, 1986, of the Partnership, as
amended (incorporated by reference to Exhibit 4(1) to the
Partnership's Registration Statement on Form S-2
(Registration No. 33-71498), dated November 10, 1993 (the
"Form S-2")).

10. - Depositary Agreement, dated as of December 29, 1986, by and
among the Partnership, Forum Retirement, Inc., the general
partner of the Partnership, as general partner and
attorney-in-fact of the limited partners, Manufacturers
Hanover Trust Company (which subsequently assigned its
interests thereunder to American Stock Transfer & Trust
Company) and all holders from time to time of depositary
receipts (incorporated by reference to Exhibit 10(6) to the
Form S-2).

11. - Recapitalization Agreement, dated as of October 6, 1994,
by and between Forum Group and the Partnership
(incorporated by reference to Exhibit 10(1) to the
Partnership's Current Report on Form 8-K dated
October 12, 1993).

12. - Letter Agreement, dated December 14, 1993, by and among
Forum Group, Forum A/H, Inc. and the Partnership
(incorporated by reference to Exhibit 2(3) of Amendment No.
1 to the Form S-2, dated December 21, 1993).

13. - Management Agreement, dated as of December 29, 1986 (the
"Management Agreement"), by and among the Partnership,
Forum Retirement Operations, L.P. ("Operations"), Forum
Health Partners 1-A, L.P., Foulk Manor Painters, L.P., and
Forum Group (incorporated by reference to Exhibit 10(1) to
the Form S-2).

14. - First Amendment to the Management Agreement, dated as of
September 20, 1986 (incorporated by reference to Exhibit
10(2) to the Form S-2).

15. - Second Amendment to the Management Agreement, dated as of
September 20, 1989 (incorporated by reference to Exhibit
10(3) to the Form S-2).

16. - Third Amendment to the Management Agreement, dated as of
May 27, 1992 (incorporated by reference to Exhibit 10(4) to
the Form S-2).

17. - Fourth Amendment to the Management Agreement, dated as of
November 9, 1993 (incorporated by reference to Exhibit
10(5) to the Form S-2).

18. - Option Agreement, dated as of December 29, 1986, by and
among Forum Group, Inc., the Partnership, and Operations
(incorporated by reference to Exhibit 2(1) to the Form
S-2).

19. - Presentation to the Special Committee of the Board of
Directors of the General Partner of the Partnership
delivered by Robert A. Innamorati & Co. on October 13,
1995.

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<PAGE> 16

SIGNATURE

After reasonable 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.

Dated: October 16, 1995

FORUM RETIREMENT PARTNERS, L.P.

By: Forum Retirement, Inc.
its General Partner

By: /s/ Richard A. Huber
----------------------------
Richard A. Huber
Secretary

FORUM RETIREMENT, INC.

By: /s/ Richard A. Huber
----------------------------
Richard A. Huber
Secretary

-16-
<PAGE> 17

ADDENDUM A

October 13, 1995

Special Committee of the Board of Directors
Forum Retirement, Inc.
8900 Keystone Crossing
Suite 200
P.O. Box 40498
Indianapolis, IN 46240

Attn : Mr. John Sexton
Mr. James Leslie

Gentlemen:

Forum Group, Inc. (the "Purchaser") has offered to purchase any and all of the
outstanding preferred depositary units (the "Units") representing preferred
limited partners' interests in Forum Retirement Partners, L.P. (the
"Partnership"), at a price of $2.83 per Unit net to the seller in cash (the
"Offer"). The Offer commenced on October 2, 1995 and is expected to be amended
no later than October 16, 1995 to reflect the foregoing price per Unit.

You have asked us whether, in our opinion, the proposed cash consideration to
be received by the holders of Units, other than the Purchaser and its
affiliates, (the "Unaffiliated Limited Partners") is fair to such
Unaffiliated Limited Partners, from a financial point of view.

In arriving at our opinion, we have reviewed the Offer to Purchase and
financial and other information that was publicly available or furnished to us
by Forum Retirement, Inc. (the "General Partner"), or its affiliates and
representatives, including certain financial projections for the Partnership
and information provided by the General Partner or its affiliates in
discussions therewith concerning the Partnership's business, operations and
future prospects. In addition, we have compared certain financial and
securities data of the Partnership with various other entities in similar
businesses whose securities are traded in public markets, reviewed other cash
tender offer transactions and conducted such other financial studies, analyses
and investigations as we deemed appropriate for purposes of this opinion.

In rendering the opinion set forth below, we have assumed and relied upon,
without independent verification: the accuracy and completeness of the
financial and other information obtained by us from public sources and that was
provided to us by the General Partner or its affiliates and representatives.
With respect to the financial projections supplied to us, we have assumed they

A-1
<PAGE> 18
Forum Retirement, Inc.
October 13, 1995
Page 2

have been reasonably prepared on the basis of the best currently available
estimates and judgments of the General Partner or its affiliates, and with
reasonable assumptions as to the future operating and financial performance of
the Partnership. We have neither made nor obtained any independent appraisal
of the assets or liabilities of the Partnership nor have we conducted any
physical inspection of the properties and facilities of the Partnership.

Our opinion is necessarily based on the status and condition of the Partnership
and economic, market, financial and other conditions as they exist on, and on
the information made available to us as of, the date of this letter. It should
be understood that, although subsequent developments may affect this opinion,
we do not have any obligation to update or revise this opinion.

This opinion is for the use of the General Partner's Special Committee and its
Board of Directors and is not to be quoted or referred to in whole or in part
in any written document, nor shall this letter be delivered to or relied upon
by any other person or used for any other purpose, except as provided and upon
the terms and conditions agreed to in the engagement agreement between the
General Partner and ROBERT A. INNAMORATI & CO., INC.

Based on the foregoing and such other factors as we deem relevant, we are of
the opinion that the proposed cash consideration to be received by the
Unaffiliated Limited Partners pursuant to the Offer is fair to such
Unaffiliated Limited Partners, from a financial point of view.

Very truly yours,

ROBERT A. INNAMORATI & CO., INC.

By:________________________________________
Robert A. Innamorati
President
A-2
<PAGE> 19
EXHIBIT INDEX

1. - Offer to Purchase (incorporated by reference to Exhibit
(a)(1) to Forum Group's Schedule 14D-1 dated October 2,
1995).

2. - Supplement to Offer to Purchase (incorporated by reference
to Exhibit (a)(9) to Forum Group's Amendment No. 1 to
Schedule 14D-1 dated October 16, 1995).

3. - Letter of Transmittal (incorporated by reference to Exhibit
(a)(2) to Forum Group's Schedule 14D-1 dated October 2,
1995).

4. - Letter to Unitholders dated October 16, 1995.

5. - Press release dated October 16, 1995 (incorporated by
reference to Exhibit (a)(10) to Forum Group's Amendment No.
1 to Schedule 14D-1 dated October 16, 1995).

6. - Fairness opinion of Robert A. Innamorati & Co. dated
October 13, 1995 (attached as Annex A hereto).

7. - Form of Indemnification Agreement between Forum Group and
the directors and officers of the General Partner.

<PAGE> 20

8. - Form of Indemnification Agreement between Forum Retirement,
Inc. and its directors.

14. - First Amendment to the Management Agreement, dated as of
September 20, 1986 (incorporated by reference to Exhibit
10(2) to the Form S-2).

15. - Second Amendment to the Management Agreement, dated as of
September 20, 1989 (incorporated by reference to Exhibit
10(3) to the Form S-2).

16. - Third Amendment to the Management Agreement, dated as of
May 27, 1992 (incorporated by reference to Exhibit 10(4) to
the Form S-2).

17. - Fourth Amendment to the Management Agreement, dated as of
November 9, 1993 (incorporated by reference to Exhibit
10(5) to the Form S-2).

18. - Option Agreement, dated as of December 29, 1986, by and
among Forum Group, Inc., the Partnership, and Operations
(incorporated by reference to Exhibit 2(1) to the Form
S-2).

19. - Presentation to the Special Committee of the Board of
Directors of the General Partner of the Partnership
delivered by Robert A. Innamorati & Co. on October 13,
1995.