EXHIBIT (a)(2)
Equity Resource Lexington Fund
44 Brattle Street
Cambridge, MA 02138
May 2, 2002
Offer To Purchase Units in
Urban Improvement Fund Limited 1973-II
for $200 Per Unit
Dear Limited Partner:
Enclosed with this letter is an offer to purchase limited partnership units in
Urban Improvement Fund Limited 1973-II (the "Partnership") for $200 per unit
[See "THE OFFER-Introduction"]. This offer expires on June 2, 2002. If you are
interested in selling your units, please read the enclosed offer carefully.
FACTORS TO CONSIDER IN EVALUATING THIS OFFER
o Highest Offer Price
To the best of the Purchaser's knowledge, $200 per unit is the highest
price offered for units in the Partnership over the past two-year period.
The offer price is net to the seller and the Purchaser will pay all
transfer fees associated with the sale of your units.
o The Partnership is Primarily Invested in Government-Subsidized Housing
The Partnership currently holds limited partnership interests in nine
limited partnerships (the "Local Partnerships"). The Local Partnerships
primarily own low-income housing projects that are subject to government
regulations limiting the amount of money that the Local Partnerships can
distribute to the Partnership. Government regulations also limit the
properties' rent levels and may limit the Local Partnerships' ability to
refinance or sell these properties.
o Opportunity for Liquidity
The Lexington Fund's offer provides liquidity to limited partners and will
give them an opportunity to liquidate this investment. The Partnership has
been in existence for 29 years. Given the long-term nature of the leases
encumbering the Partnership's properties, the Purchaser anticipates that
the Partnership will continue to operate for the foreseeable future. By
selling your limited partnership units, you give yourself the opportunity
to place the proceeds from a sale into other, potentially better
performing, investments. You may also simplify your tax returns by
eliminating future K-1 reporting for this Partnership.
o Offer Price May Not Represent the Full Value of Your Units
No independent party has been retained by the Purchaser or any other person
to evaluate or render any opinion to limited partners with respect to the
fairness of the offer price, and no representation is made as to any
fairness or other measures of value that may be relevant to limited
partners. Limited partners should note that the general partner of the
Partnership calculated a liquidation value of $270 per unit in June 2001
and the Purchaser believes that there have been no material changes in the
Partnership since that time. The Purchaser considered that valuation in
determining its offer price. [See "THE OFFER-Section 7-Purpose and Effects
of the Offer"]
Because of the two-tiered nature of the Partnership, the
government-regulated income restrictions and the potential inability to
sell or refinance a portion of the Partnership's assets,
the Purchaser was unable to calculate a net asset value (NAV) for units and
the Purchaser's offer price may be viewed as speculative in nature. As a
result, it is uncertain whether the offer price reflects the value that
would be realized upon the sale of units by a limited partner to a third
party. [See "THE OFFER-Introduction-Market Value of Units"]
o Conflict of Interest
The Purchaser is making the Offer with a view toward making a profit.
Accordingly, there is a conflict between the Purchaser's desire to acquire
your units at a low price and your desire to sell your units at a high
price. The Purchaser's intent is to acquire the units at a discount to the
value it might ultimately realize from owning the units.
o Effects of a Sale of Your Units
Limited partners who sell their units will be giving up the opportunity to
participate in any future potential benefits associated with ownership of
units, including the right to participate in any future distribution of
cash or property.
The Purchaser
The Lexington Fund is in the business of acquiring fractional investment
interests for long-term retention and seeks to purchase units in the Partnership
in advancement of that strategy. The units acquired as a result of this offer
will be held as long-term investments and not with a view to a resale. The
Lexington Fund does not acquire general partner positions and is not engaged in
property management.
Please read the enclosed offer carefully. It contains important information
concerning this offer, the Partnership and the Purchaser. If you wish to sell
your units, complete the enclosed Agreement of Sale according to the directions
on the agreement, sign where indicated and return it in the pre-addressed return
envelope.
If you have any questions, please call D.F. King & Company, the information
agent for this offer, toll-free at (800) 207-3158 or call them collect at (212)
493-6952.
Sincerely,
Equity Resource Lexington Fund LP