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BOND PURCHASE L.L.C.
P.O. Box 26730
Kansas City, MO 64196
June 26, 1998
To the Holders of Limited Partnership Interests in Real Estate
Associates Limited III.
RE: OFFER TO PURCHASE LIMITED PARTNERSHIP INTERESTS FOR $312.00
Dear Investor:
We are offering you an opportunity to sell your limited partnership
interests (the "Units") in Real Estate Associates Limited III (the
"Partnership") for cash in the amount of $312.00 per Unit (which amount will be
reduced by any cash distributions declared by the Partnership after the date of
this letter). Our offer provides you with an opportunity to sell your Units now
without the costly transfer fees and commission costs (typically up to 10%)
usually paid by the seller in secondary market sales. ALL TRANSFER COSTS AND
FEES WILL BE PAID BY BOND PURCHASE, L.L.C.
We believe that it is appropriate for investors to have financial choices.
Our offer gives you, the investor, the ability to make a decision about your
continued involvement with the Partnership. You may no longer wish to continue
with your investment in the Partnership for a number of reasons, including:
* NO FURTHER IRS FILING.
* HIGHEST OFFER - This offer is higher than the last reported trade of $304
(October 1, 1997 to December 31, 1997) in the secondary market.
* If you sell your units, 1998 will be the final year for which you receive
a K-1 tax form from the partnership.
* You may be able to realize a tax loss that would reduce your taxes for
1998.
* The Partnership was closed seventeen years ago in 1981. Your money has
been tied up for this long period with minimal return.
* More immediate use for the cash tied up in your investment in the Units.
* The absence of a formal trading market for the Units and their resulting
relative illiquidity.
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* The lack of any current cash distributions.
* General disenchantment with real estate investments, particularly
long-term investments in limited partnerships;
Our offer is limited to 570 of the 11,456 outstanding Units. If we were to
acquire more than this amount, the administrative costs of our offer would
become burdensome.
We will accept for purchase properly documented Units on a
"first-received, first-buy" basis. You will be paid promptly following
confirmation of a valid, properly executed Agreement of Transfer and other
required transfer documents. We will pay for all Partnership transfer fees and
costs. All tenders of Units will be irrevocable and may not be rescinded or
withdrawn.
We are real estate investors who are not affiliated with the Partnership
or the General Partners. The General Partners of the Partnership have not
analyzed, approved, endorsed or made any recommendation as to acceptance of the
offer. The purchase offer has been determined solely at the discretion of Bond
Purchase, L.L.C. and does not necessarily represent the true market value of
each unit. We are seeking to acquire Units for investment purposes only and not
with a view to their resale.
An Agreement of Transfer is enclosed which you can use to accept our
offer. Please execute page 3 of this document, as well as the Power of
Attorney. Obtain all other required signatures and return the documentation in
the enclosed envelope. Please note that all signatures must be medallion
guaranteed. The transfer cannot be processed without signatures that are
medallion guaranteed and failure to obtain them will result in needless delays.
In addition, place your Unit Certificate in the enclosed envelope. We encourage
you to act immediately if you are interested in accepting or offer as only 570
Units will be purchased.
OUR OFFER WILL EXPIRE AT 5:00 PM ON JULY 31, 1998, UNLESS EXTENDED.
Please call John Katzer at (816) 421-4670 if you have any questions.
Sincerely,
Bond Purchase, L.L.C.
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AGREEMENT OF TRANSFER
FOR LIMITED PARTNERSHIP INTERESTS IN
REAL ESTATE ASSOCIATES LIMITED III
Subject to and effective upon acceptance for payment, the undersigned (the
"Seller") hereby sells, assigns, transfers, conveys and delivers and irrevocably
directs any custodian or trustee to sell, assign, transfer, convey and deliver
(the "Transfer") to Bond Purchase, LLC or it's assigns, a Missouri limited
liability company (the "Purchaser"), all of the Seller's right, title and
interest in Partnership Units (the "Units") of Real Estate Associates Limited
III, (the "Partnership"), for $312.00 per Unit, net to the Seller in cash, which
amount shall be reduced by any distributions declared by the Partnership after
June 26, 1998.
Such Transfer shall include, without limitation, all rights in, and claims
to, any Partnership profits and losses, cash distributions, voting rights and
other benefits of any nature whatsoever distributable or allocable to such Units
under the Partnership's Certificate and Agreement of Limited Partnership, as
mended (the "Partnership Agreement"). The Seller hereby irrevocably constitutes
and appoints the Purchaser as the true and lawful agent and attorney-in-fact of
the Seller with respect to such Units, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to vote, inspect Partnership books and records or act in such manner
as any such attorney-in-fact shall, in its sole discretion, deem proper with
respect to such Units, to deliver such Units and transfer ownership of such
Units on the Partnership's books maintained by the General Partner of the
Partnership, together with all accompanying evidences of transfer and
authenticity to, or upon the order of, the Purchaser of the purchase price, to
receive all benefits and cash distributions, endorse Partnership checks payable
to Seller and otherwise exercise all rights of beneficial ownership of such
Units. The Purchaser shall not be required to post bond of any nature in
connection with this power of attorney.
The Seller hereby represents and warrants to the Purchaser that the Seller
owns such Units and has full power and authority to validly sell, assign,
transfer, convey and deliver such Units to the Purchaser, and that when any such
Units are accepted for payment by the Purchaser, the Purchaser will acquire
good, marketable and unencumbered title thereto, free and clear of all options,
liens, restrictions, charges, encumbrances, conditional sales agreements or
other obligations relating to the sale or transfer thereof, and such Units will
not be subject to any adverse claim. The Seller further represents and warrants
that the Seller is a "United States person", as defined in Section 7701 (a)(30)
of the Internal Revenue Code of 1986, as amended, or if the Seller is not a
United States person, that the Seller does not own beneficially or of record
more than 5% of the outstanding Units.
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Agreement of Transfer
Page 2
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity or liquidation of the Seller and any obligations of the
Seller shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. This agreement is irrevocable and may not be
withdrawn or rescinded.
Upon request, the Seller will execute and deliver, and irrevocably directs
any custodian to execute and deliver, any additional documents deemed by the
Purchaser to be necessary or desirable to complete the assignment, transfer and
purchase of such Units.
The Seller releases and discharges the General Partners, any IRA or KEOGH
Custodian, and their respective officers, shareholders, directors, employees
and agents from all causes of action, claims, or demands the Seller has or may
have against them resulting from their reliance on this Agreement of Transfer
or any of the terms and conditions contained herein.
The Seller hereby certifies, under penalties of perjury, that (1) the
number shown below on this form and the Sellers Taxpayer Identification Number
is correct and (2) Seller is not subject to backup withholding either because
Seller has not been notified by the Internal Revenue Service (the "IRS") that
Seller is subject to backup withholding as a result of a failure to report all
interest on dividends or the IRS has notified Seller that Seller is no longer
subject to backup withholding.
The Seller hereby also certifies, under penalties of perjury, that the
Seller, if an individual, is not a nonresident alien for purposes of U.S.
income taxation, and if not an individual, is not a foreign corporation,
foreign partnership, foreign trust, or foreign estate (as those terms are
defined in the Internal Revenue Code and Income Tax Regulations). The Seller
understands that this certification may be disclosed to the IRS by the
Purchaser and that any false statements contained herein could be punished by
fine, imprisonment, or both.
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Agreement of Transfer
Page 3
Date: ________ 1998
__________________________________ __________________________________
(Specify Number of Units Tendered: (Signature of Owner)
Indicate "ALL" if Number Not Available)
__________________________________
Place Medallion Guarantee
Stamp Here
__________________________________ __________________________________
(Your Telephone Number) (Signature of Co-Owner)
__________________________________
Place Medallion Guarantee
Stamp Here
__________________________________
(Your Social Security or Taxpayer ID Bond Purchase, LLC
Number) P.O. Box 26730
Kansas City, MO 64196
(816) 421-4670
FAX (816) 221-1829
__________________________________ Bond Purchase, LLC
(Name of IRA Custodian,
if applicable) BY: _______________________________
Its Authorized Representative
NOTE: All signatures on this agreement must be guaranteed by a member
from a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank, savings bank,
credit union, savings and loan association or trust company having an office,
branch or agency in the United States, which is a participant in the Security
Transfer Agent Medallion Program.
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POWER OF ATTORNEY/PROXY
In conjunction with the Assignor's (seller's) Assignment of Partnership Units
dated as of even date herewith, Seller irrevocably constitutes and appoints
David L. Johnson, William C. Teel and Christine Robinson, or any of them, to be
Seller's true and lawful special attorneys-in-fact, with full power of
substitution to exercise in the name, place and stead of Seller any and all
rights, interests, powers, and duties with respect to or arising out of the
Seller's interest in:
REAL ESTATE ASSOCIATES LIMITED III
which Units have been assigned to Bond Purchase. L.L.C. (the "Buyer") pursuant
to the Agreement of Transfer. This Power of Attorney shall include with
limitation, (1) the right to execute on behalf of Seller, all assignments,
certificates, documents and instruments that may be required for the purpose of
transferring the Units owned by the Seller, (2) the right to vote the Units or
to require or receive an information or report with respect to the
partnerships' books and records, (3) the right to endorse and cash any check
made payable by the partnership to Seller on or after the date hereof and (4)
the right, if the Units are held in an IRA account or pension account, to
contact the Seller's custodian and direct him to facilitate in the transfer of
the Units from the Seller to Buyer Fund. This Power of Attorney is part of and
hereby incorporated in the application for transfer. This Power of Attorney
shall not be affected by the subsequent mental disability of the undersigned as
principal, is irrevocable and coupled with an interest, and Buyer shall not be
required to post bond in any nature in connection with this Power of Attorney.
This Power of Attorney shall also serve as a Letter of Authorization directing
the Assignor's custodian(s) and trustee(s) to sign any documents necessary to
facilitate the transfer of the units being assigned in conjunction with this
Power of Attorney as required by the herein named attorneys-in-fact.
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PRINT Assignor (Registered Name) PRINT Joint Assignor or Custodian/Trustee
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SIGNATURE of Assignor SIGNATURE Jnt. Assignor or Custodian/Trustee
DATE , 199 DATE , 199
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Signature Medallion Guarantee Signature Medallion Guarantee
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