SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
-----------------------
AETNA REAL ESTATE ASSOCIATES, L.P.
(NAME OF SUBJECT COMPANY)
AETNA REAL ESTATE ASSOCIATES, L.P.
(NAME OF PERSON FILING STATEMENT)
Units of Limited Partnership Depository Units
(TITLE OF CLASS OF SECURITIES)
008171 1 10 0
(CUSIP NUMBER OF CLASS OF SECURITIES)
Paul L. Abbott Daniel R. Leary
AREA GP CORPORATION AETNA/AREA CORPORATION
3 World Financial Center, 29th Floor 242 Trumbull Street
New York, New York 10022 Hartford, Connecticut 06156
(212) 526-3237 (860) 275-2178
(NAME, ADDRESS, AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON(S)
FILING STATEMENT)
Copies to:
Patrick J. Foye, Esq. John D. Capers, Esq.
SKADDEN, ARPS, SLATE, KING & SPALDING
MEAGHER & FLOM 191 Peachtree Street, N.E.
919 Third Avenue Atlanta, Georgia 30303-1763
New York, New York 10022 (404) 572-4600
(212) 735-2274
======================================================================
ITEM 1. SECURITY AND SUBJECT COMPANY
The subject company is Aetna Real Estate Associates,
L.P., a Delaware limited partnership (the "Partnership"). The
general partners of the Partnership (the "General Partners")
are AREA GP Corporation, a Delaware corporation ("AREA GP"),
and Aetna/AREA Corporation, a Connecticut corporation
("Aetna/AREA"). The address of the principal executive
offices of (i) each of the Partnership and AREA GP is 3 World
Financial Center, 29th Floor, New York, New York 10285 and
(ii) Aetna/AREA is 242 Trumbull Street, Hartford, Connecticut
06156. The title of the class of equity securities to which
this statement relates is the outstanding Limited Partnership
Depositary Units of the Partnership (the "Units").
ITEM 2. TENDER OFFER OF THE BIDDER
This statement relates to the unsolicited tender
offer being made by Acorn Hill Partners L.L.C., a Delaware
limited liability company (the "Bidder"), disclosed in a
Tender Offer Statement on Schedule 14D-1, dated October 30,
1996, (the "Schedule 14D-1"), to purchase from holders of
Units ("Unitholders") up to 3,176,136, or approximately 25%,
of the outstanding Units of the Partnership, upon the terms
and subject to the conditions set forth in the Offer to
Purchase dated October 30, 1996 (the "Offer to Purchase") and
the Letter of Transmittal (the "Letter of Transmittal" and
together with the Offer to Purchase, the "Acorn Offer").
Neither the Bidder nor any of its affiliates are affiliated
with the Partnership or its General Partners and the Acorn
Offer was not solicited by the Partnership. The Schedule 14D-
1 states that the principal place of business of the Bidder is
located at 1301 Avenue of the Americas, 38th Floor, New York,
New York 10019.
ITEM 3. IDENTITY AND BACKGROUND
(a) The name and business address of the
Partnership, which is the person filing this statement, are
set forth in Item 1 above.
(b)(1) The Partnership does not have any directors
or executive officers. The General Partners responsible for
the management of Partnership's business are AREA GP and
Aetna/AREA. Except as described below, there are no material
contracts, agreements, arrangements and understandings or any
actual or potential conflicts of interest between the General
Partners or their respective affiliates and the Partnership,
its executive officers, directors or affiliates.
The General Partners and their affiliates have
received or will receive certain types of compensation, fees,
or other distributions in connection with the operations of
the Partnership. The arrangements for payment of compensation
and fees were not determined in arms-length negotiations with
the Partnership. The General Partners are entitled to receive
an investment portfolio fee based on the net asset value of
the Partnership's investments. The fee is payable quarterly
from available cash flow and is equal to 2.5% per annum of net
asset value (the "Investment Portfolio Fee"). For the six
months ended June 30, 1996, Aetna/AREA and AREA GP earned fees
of $980,721 and $1,441,111, respectively. For the year ended
December 31, 1995, Aetna/AREA and AREA GP were entitled to
fees of $1,925,626 and $2,888,439, respectively, totalling
$4,814,066.
During the year ended December 31, 1995, $403,479
was paid to Aetna Life Insurance Company, an affiliate of
Aetna/AREA, primarily as reimbursement for insurance expense
previously paid on behalf of the Partnership by Aetna Life
Insurance Company to persons not affiliated with the
Partnership.
AREA GP and Aetna/AREA, as General Partners, and
their respective officers and directors, are each entitled to
indemnification under certain circumstances from the
Partnership pursuant to provisions of the Amended and Restated
Limited Partnership of the Partnership, dated as of January
14, 1987 (the "Partnership Agreement").
In addition, under the terms of the Partnership
Agreement, upon the removal of the General Partners by the
Unitholders or upon the resignation of the General Partners
within 120 days after the occurrence of a "Removal Event," as
described herein, the General Partners will be entitled to
receive termination compensation, which will be payable with
interest over a five-year period and will be secured by the
assets of the Partnership. The amount of such termination
compensation could be substantial. The Partnership Agreement
deems a "Removal Event" to have occurred if, without the
consent of the General Partners, there occurs or is approved,
by the approval of Limited Partners or otherwise, (a) the
merger or consolidation of the Partnership, (b) the
liquidation or dissolution of the Partnership, (c) the
disposition by the Partnership of any interest in a property
owned by the Partnership or a loan made by the Partnership to
a property, or (d) the election of any Person as a general
partner of the Partnership. The holder or holders of a
majority of Units may take any of the above actions without
the consent of the General Partners at a meeting of the
Partnership.
(b)(2) Other than a Standstill Agreement, dated as
of August 14, 1996 (the "Standstill Agreement"), by and
between the Partnership and Liquidity Financial Group, L.P.,
an affiliate of the Bidder ("Liquidity"), limiting Liquidity
and any of its affiliates from, among other things, acquiring
more than 25% of the outstanding Units, to the best knowledge
of the Partnership, except as described above, there are no
material contracts, agreements, arrangements and
understandings or any actual or potential conflicts of
interest between the Partnership or its affiliates and the
Bidder, its executive officers, directors or affiliates. The
Bidder has agreed to become bound by the terms of the
Standstill Agreement.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) Following receipt of the Acorn Offer the General
Partners reviewed and considered the Acorn Offer and explored
various possible alternative courses of action which might be
available to the Partnership in response to the Acorn Offer.
THE PARTNERSHIP, IN LIGHT OF ALL RELEVANT CIRCUMSTANCES,
DETERMINED THAT THE ACORN OFFER IS INADEQUATE, NOT IN THE BEST
INTERESTS OF EITHER THE PARTNERSHIP OR UNITHOLDERS AND
STRONGLY RECOMMENDS THAT UNITHOLDERS REJECT IT.
(b) The Partnership reached the conclusion set
forth in Item 4(a) after considering a variety of factors,
including, but not limited to, the following:
(i) The price per Unit offered by the Bidder does
not reflect the value inherent in the Units. Unitholders
should refer to Note 2 to the Consolidated Financial
Statements contained in the Partnership's 1995 Annual
Report, which is incorporated in its entirety herein by
reference, for a discussion of Current Value Reporting,
which is used to calculate the NAV. The price being
offered by the Bidder pursuant to the Acorn Offer is less
than 65% of NAV of $15.55 per Unit as of June 30, 1996,
the latest quarterly independent appraisal of NAV. The
Partnership's NAV was calculated assuming a hypothetical
sale at June 30, 1996 of all the Partnership's properties
at a price based upon independent appraisals of the
Partnership's properties as of June 30, 1996 adjusted for
the Partnership's current assets and liabilities.
(ii) The book value of each Unit, as of June 30,
1996, was $16.04, over 60% greater than the Acorn Offer.
The book value represents the portion of the excess of
the Partnership's assets over its liabilities, as
determined in accordance with generally accepted
accounting principles, which is attributable to the
Units. Book value does not necessarily reflect the fair
market value of a Unit or the amount which a Unitholder
would ultimately receive if the Partnership were
liquidated, both of which may be higher or lower than
book value.
(iii) To date, Unitholders who did not elect to
participate in the Dividend Reinvestment Program ("DRIP")
have received total cash distributions ranging from $5.72
to $9.95 per original Unit, depending on the date such
Unitholders were admitted to the Partnership, including
$1.85 per Unit in return of capital payments. The
Partnership is currently paying a quarterly cash
distribution of $0.18, or $0.72 annually, per Unit.
Unitholders who sell their Units to the Bidder will lose
their right to receive future quarterly distributions
from operations. Furthermore, Unitholders who sell their
Units to the Bidder will lose the right to future
distributions from future sales of Partnership
properties.
(iv) The Bidder is making the Acorn Offer with a
view to making a profit. Accordingly, there is a
conflict of interest between their desire to purchase the
Units at a low price and Unitholders' desire to sell
their Units at a high price.
(v) As stated by the Bidder in the Offer to
Purchase, if the Acorn Offer is successful, the Bidder
may be in a position to influence control over the
Partnership and to influence voting decisions and may
seek to remove the General Partners.
ITEM 5. PERSONS RETAINED, EMPLOYED, OR TO BE COMPENSATED
The Partnership has retained MacKenzie Partners,
Inc. to assist with communications with Unitholders with
respect to, and to provide other services to the Partnership
in connection with, the Acorn Offer. The Partnership will pay
MacKenzie Partners, Inc. reasonable and customary fees for its
services, reimburse it for reasonable expenses, and provide
customary indemnities. Neither the Partnership nor any person
acting on its behalf has employed, retained, or compensated or
intends to employ, retain, or compensate any other person or
class of persons to make solicitations or recommendations to
Unitholders on its behalf concerning the Acorn Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO
SECURITIES
(a) Neither the Partnership nor either of the
General Partners has effected any transactions in the Units
during the past 60 days. Except as described below, the
Partnership is not aware of any other transactions in the
Units during the past 60 days by any of the General Partners'
executive officers, directors, affiliates, or subsidiaries.
(b) Neither the Partnership nor, to the knowledge
of the Partnership, any of the General Partners' executive
officers, directors, affiliates, or subsidiaries intends to
tender Units owned by them in the Acorn Offer.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT
COMPANY
(a) None.
(b) None.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
The NAV per Unit, calculated in accordance with the
Partnership Agreement, is summarized as of June 30, 1996 and
December 31, 1995 and 1994 as follows:
June 30, December 31, December 31,
1996 1995 1994
-------- ----------- -----------
Limited Partners' $200,188,727 $196,192,156 $192,598,338
capital - current
value basis
Cash to be (2,290,418) (2,290,418) (2,290,418)
distributed to ------------ ----------- ------------
Limited Partners
$197,898,309 $193,901,738 $190,307,920
============ ============ ============
Units Outstanding 12,724,547 12,724,547 12,724,547
Net asset value $ 15.55 $ 15.24 $ 14.96
per unit
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
(a)(1) Form of letter from the Aetna Real Estate
Associates, L.P. to Unitholders,
dated November 1, 1996.
(c)(1) Letter Agreement, dated as of August 14, 1996,
as amended as of October 8, 1996, by and between
Aetna Real Estate Associates, L.P. and
Liquidity Financial Group, L.P.
(c)(2) Letter Agreement, dated as of October 28, 1996,
by and between the Acorn Hill Partners L.L.C.
and Aetna Real Estate Associates, L.P.
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: November 1, 1996
AETNA REAL ESTATE ASSOCIATES, L.P.
By: Aetna/AREA Corporation
General Partner
By: /s/ Daniel R. Leary
---------------------------
Name: Daniel R. Leary
Title: President
By: AREA GP Corporation
General Partner
By: /s/ Paul S. Abbott
---------------------------
Name: Paul L. Abbott
Title: President
EXHIBIT INDEX
Exhibit Description Page
(a)(1) Form of letter from Aetna Real Estate
Associates, L.P. to the Unitholders,
dated November 1, 1996.
(c)(1) Letter Agreement, dated as of August 14,
1996, as amended as of October 8, 1996,
by and between Aetna Real Estate Asso-
ciates, L.P. and Liquidity Financial
Group, L.P.
(c)(2) Letter Agreement, dated as of October 28,
1996 by and between Acorn Hill Partners
L.L.C. and Aetna Real Estate Associates, L.P.
Exhibit (a)(1)
AETNA REAL ESTATE ASSOCIATES, L.P
November 1, 1996
Dear Unitholder:
You will be receiving, if you have not already received, materials describ-
ing an unsolicited partial tender offer (the "Acorn Offer") being made
for your Limited Partnership Depository Units ("Units") of Aetna Real
Estate Associates, L.P. (the "Partnership") at $10 per Unit by Acorn
Hill Partners L.L.C. (the "Bidder"). Neither the Bidder nor any of
its affiliates are affiliated with the Partnership or its general
partners and the Offer was not solicited by the Partnership.
THE PARTNERSHIP, IN LIGHT OF ALL RELEVANT CIRCUMSTANCES, HAS
DETERMINED THAT THE ACORN OFFER IS INADEQUATE, NOT IN THE BEST
INTERESTS OF EITHER THE PARTNERSHIP OR UNITHOLDERS AND THE
PARTNERSHIP STRONGLY RECOMMENDS THAT UNITHOLDERS REJECT IT. The
Partnership reached this conclusion after considering a variety of
factors, including, but not limited to, the following:
* THE PRICE PER UNIT OFFERED BY THE BIDDER DOES NOT REFLECT THE
VALUE INHERENT IN THE UNITS. THE PRICE BEING OFFERED BY THE
BIDDER PURSUANT TO THE ACORN OFFER IS LESS THAN 65% OF THE
PARTNERSHIP'S NET ASSET VALUE ("NAV") OF $15.55 PER UNIT AS OF
JUNE 30, 1996. The Partnership's NAV was calculated assuming a
hypothetical sale at June 30, 1996 of all the Partnership's
properties at a price based upon independent appraisals of the
Partnership's properties as of June 30, 1996 adjusted for the
Partnership's current assets and liabilities.
* THE BOOK VALUE OF EACH UNIT, AS OF JUNE 30, 1996, WAS $16.04,
over 60% greater than the Acorn Offer.
* IF YOU ACCEPT THE ACORN OFFER YOU WILL NO LONGER RECEIVE CASH
DISTRIBUTIONS. To date, Unitholders who did not elect to
participate in the Dividend Reinvestment Program ("DRIP") have
received total cash distributions ranging from $5.72 to $9.95 per
original Unit, depending on the date you were admitted to the
Partnership, including $1.85 per Unit in return of capital
payments. The Partnership is currently paying a quarterly cash
distribution of $0.18, or $0.72 annually, per Unit. Unitholders
who sell their Units to the Bidder will lose their right to receive
future quarterly distributions from operations. Furthermore,
Unitholders who sell their Units to the Bidder will lose the
right to future distributions from future sales of Partnership
properties.
* THE BIDDER IS MAKING THE ACORN OFFER WITH A VIEW TO MAKING A
PROFIT. Accordingly, there is a conflict of interest between
its desire to purchase the Units at a low price and Unitholders'
desire to sell their Units at a high price.
THE PARTNERSHIP STRONGLY RECOMMENDS THAT YOU REJECT THE ACORN OFFER.
Attached is the Partnership's response to the Acorn Offer which has
been filed with the Securities and Exchange Commission and is being
mailed to all Unitholders. While we suggest you read the attached
Schedule 14D-9 (the "Response") in its entirety, you should be aware
that Item 4 of the Response sets forth the recommendation of the
Partnership with respect to the Acorn Offer and the background and
reasons for the position taken by the Partnership.
We will, of course, continue to keep you informed of significant
events concerning the Partnership. Should you have any questions
concerning this letter, please contact MacKenzie Partners,
Inc. which is assisting the Partnership in responding to your
inquiries, toll free at (800) 322-2885.
Very truly yours,
Paul L. Abbott Daniel R. Leary
President President
AREA GP Corporation Aetna/AREA Corporation
General Partner General Partner
Exhibit (c)(1)
AETNA REAL ESTATE ASSOCIATES, L.P.
3 World Financial Center - 29th Fl.
New York, N.Y. 10285
August 14, 1996
Personal and Confidential
Brent Donaldson
Liquidity Fund
2200 Powell Street, Suite 700
Emoryville, CA 96408
Dear Mr. Donaldson:
The purpose of this letter is to set forth our
understanding with regard to any proposed acquisition of
outstanding units of limited partnership interests
("Units") of Aetna Real Estate Associates, L.P., a
Delaware limited partnership (the "Partnership"), from
holders of Units (each a "Unitholder" and collectively,
the "Unitholders") by Liquidity Financial Group ("you")
or any person who is your Affiliate (as defined below).
In response to your request dated June 6, 1996 and
in consideration of the agreements set forth in this
letter agreement, the Partnership agrees to provide you a
current list of the names and addresses of the
Unitholders along with the number of Units owned by each
of them in a computer readable from reasonably requested
by you. You agree that you may only use the list to
acquire up to 25% (including Units acquired through all
other means) of the Partnership's outstanding Units.
You represent and warrant that on the date hereof
you beneficially own not more than five thousand (5,000)
Units. You also agree that prior to the second
anniversary of the date of this letter agreement, neither
you nor any person who is your Affiliate (as defined
under Rule 405 of the Securities Act of 1933, as amended)
and, in addition including any person you or your
affiliate has an advisory relationship with who you will
procure to be bound by the terms of this agreement) will,
without the prior written consent of the Partnership,
which may be withheld for any reason, directly or
indirectly, (i) in any manner including, without
limitation, by tender offer (whether or not pursuant to a
filing made with the Securities and Exchange Commission),
acquire, attempt to acquire or make a proposal to
acquire, directly or indirectly, more than 25% (including
Units acquired through all other means) of the
outstanding Units of the Partnership from any Unitholder,
Unitholders or otherwise, (ii) seek or propose to enter
into, directly or indirectly, any merger, consolidation,
business combination, sale or acquisition of assets,
liquidation, dissolution or other similar transaction
involving the Partnership, (iii) make, or in any way
participate, directly or indirectly, in any
"solicitation" of "proxies" or "consents" (as such terms
are used in the proxy rules of the Securities and
Exchange Commission) to vote, or seek to advise or
influence any person with respect to the voting of any
voting securities of the Partnership, (iv) form, join or
otherwise participate in a "group" (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) with respect to any
voting securities of the Partnership, (v) disclose to any
third party any intention, plan or arrangement
inconsistent with the terms of this letter agreement or
(vi) loan money to, advise, assist or encourage any
person in connection with any action inconsistent with
the terms of this letter agreement.
You also agree during such two year period that the
Partnership shall be entitled in its absolute sole
discretion to deny any proposal or request, directly or
indirectly, to amend, waive or terminate any provision of
this letter agreement. In addition, you agree that you
will notify the Partnership at least five days before
initiating any communication with Unitholders and provide
the Partnership a copy of such communication (if written)
with such notice.
You have advised us that, if requested by us, you
will incorporate in any communication with Unitholders a
statement as to the net asset value per unit as
determined by the Partnership. In addition, if you
commence a tender offer for less than 5% of the
outstanding Units, you will include verbatim the
following language in any such communication:
"TENDER OFFERS OF THIS NATURE ARE NOT REQUIRED TO
COMPLY WITH CERTAIN RULES AND REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION. Accordingly,
this tender offer does not need to comply with
certain disclosure requirements and rules governing
tender offers set forth in the Securities Exchange
Act of 1934."
In addition, you hereby represent, warrant and
covenant to the Partnership that any tender offer to
purchase Units commenced by you will be conducted in
compliance with Section 14(e) (misleading statements),
Rule 14d-7 (additional withdrawal rights), Rule 14d-8
(pro rata requirements), Rule 14c-1 (unlawful tender
offer practices) and Rule 14e-3 (non-public information)
of the Exchange Act, notwithstanding that such tender
offer may be for less than 5.0% of the outstanding Units.
You understand that the general partners of the
Partnership may consider from time to time selling all or
substantially all of the assets of the Partnership or
entering into any other transaction determined by the
general partners to be in the best interests of the
Unitholders and the Partnership. The result of any such
transaction, if approved by a majority vote of the
Unitholders, might be the dissolution and liquidation of
the Partnership in accordance with the partnership
agreement. Accordingly, in order to avoid disrupting any
possible sale of all or substantially all of the
Partnership's assets or any other transaction determined
by the general partners to be in the best interests of
the Unitholders and the Partnership and any required vote
of Unitholders, you agree that, prior to the two-year
anniversary of the date of this letter agreement, all
Units obtained by you pursuant to any means will be voted
by you on all issues in the same manner as by the
majority of all other Unitholders who vote on any such
proposal.
If at any time during such two year period you are
approached by any third party concerning participation in
any transaction involving the assets, businesses or
securities of the Partnership or involving any action
inconsistent with the terms of this letter agreement, you
will promptly inform the Partnership of the nature of any
such contact and the parties thereto and you may inform
such third party that this letter agreement requires you
to do so notify the Partnership. You shall not, without
the prior written consent of the Partnership, disclose to
any third party the list of Unitholders' names, addresses
and number of Units held that was provided to you by the
Partnership.
You will not sell any units owned by you prior to
the second anniversary of the date of this letter
agreement, unless each buyer or transferee agrees in
writing with the Partnership to be bound by the terms and
conditions of this letter agreement until such second
anniversary.
We each hereby acknowledge that we are aware, and
that we will advise our respective Affiliates of our
respective responsibilities under the securities laws. We
each agree that the other of us or our respective
Affiliates, as the case may be, shall be entitled to
equitable relief, including injunctive relief and
specific performance, in the event of any breach of the
provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
In case any provision in or obligation under this
letter agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or
impaired thereby.
This letter agreement shall be governed by the laws
of the State of New York without giving effect to
principles of conflicts of law thereof. This letter
agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together
constitute one and the same instrument.
If you agree with the foregoing, please sign and
return two copies of this letter agreement, which will
constitute our agreement with respect to the subject
matter of this letter agreement.
Very truly yours,
AREA GP Corporation
By: /s/ Robert J. Hellman
Name: Robert J. Hellman
Title: Vice President
Confirmed and agreed to as of
the date first above written
LIQUIDITY FINANCIAL GROUP
By: /s/ Brent Donaldson
Name: Brent Donaldson
Title: President
[Liquidity Financial Group, L.P. letterhead]
AETNA REAL ESTATE ASSOCIATES, L.P.
Page 2 paragraph 1
. . . (iv) form, join or otherwise participate in a
"group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act") with respect to any voting securities of
the Partnership, except that those affiliates bound by
this agreement will not be deemed to have violated this
agreement and formed a "group" solely by acting in
accordance with this agreement.
Exhibit (c)(2)
Acorn Hill Partners L.L.C.
1301 Avenue of the Americas
38th Floor
New York, NY 10019
October 28, 1996
Aetna Real Estate Associates, L.P.
AREA GP Corporation
3 World Financial Center
29th Floor
New York, New York 10285
Attention: Paul L. Abbott
Re: Contemplated Tender Offer
Gentlemen:
Acorn Hill Partners L.L.C. ("Bidder") anticipates
making a tender offer on Schedule 14D-1 to investors in Aetna
Real Estate Associates, L.P. (the "Partnership"), of which AREA
GP Corporation is a general partner ("you"). Bidder will be
advised by Liquidity Financial Advisors (LFA) and, therefore,
will agree to become subject to the terms of the Letter Agreement
dated August 14, 1996 between the Partnership and an affiliate of
LFA. Bidder hereby requests your agreement to recognize Bidder,
or cause Bidder to be recognized, as a Registered Owner of Units
upon Bidder's payment for Units pursuant to the contemplated
tender offer, subject to compliance with the Partnership
Agreement, applicable partnership law and the requirements of the
transfer agent for the Partnership's Units. Capitalized terms
used but not otherwise defined herein shall have the meanings
ascribed to them in the Offer to Purchase, which is an exhibit to
the Schedule 14D-1.
Please sign below to indicate your agreement and
covenant to effect the foregoing terms.
Very truly yours,
ACORN HILL PARTNERS L.L.C.
By: AP-GP Prom Partners Inc., its
Managing Member
By:/s/ Richard Mark
Name: Richard Mark
Title: Vice President
Accepted and Agreed to this
29th day of October, 1996
AREA GP Corporation
By: /s/ Paul L. Abbott
Name: Paul L. Abbott
Title: President
