Common use of Certain Federal Income Tax Matters Clause in Contracts

Certain Federal Income Tax Matters. The following summary is a general discussion of certain of the federal income tax consequences of a sale of Units pursuant to the Offer. The summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), applicable Treasury regulations thereunder, administrative rulings, and judicial authority, all as of the date of the Offer. All of the foregoing are subject to change, and any such change could affect the continuing accuracy of this summary. This summary does not discuss all aspects of federal income taxation that may be relevant to a particular Unitholder in light of such Unitholder's specific circumstances or to certain types of Unitholders subject to special treatment under the federal income tax laws (for example, foreign persons, dealers in securities, banks, insurance companies and tax-exempt organizations), nor (except as otherwise expressly indicated) does it describe any aspect of state, local, foreign or other tax laws. Sales of Units pursuant to the Offer will be taxable transactions under applicable state, local, foreign and other tax laws. UNITHOLDERS SHOULD CONSULT THEIR 19 24 RESPECTIVE TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO EACH SUCH UNITHOLDER OF SELLING UNITS PURSUANT TO THE OFFER. In general, a Unitholder will recognize gain or loss on a sale of Units pursuant to the Offer equal to the difference between (i) the Unitholder's "amount realized" on the sale and (ii) the Unitholder's adjusted tax basis in the Units sold. The amount of a Unitholder's adjusted tax basis in such Units will vary depending upon the Unitholder's particular circumstances. The "amount realized" with respect to a Unit will be a sum equal to the amount of cash received by the Unitholder of the Unit pursuant to the Offer (that is, the Purchase Price), plus the amount of the Partnership's liabilities allocable to the Unit (as determined under Code Section 752). The gain or loss recognized by a Unitholder on a sale of a Unit pursuant to the Offer generally will be treated as a capital gain or loss if the Unit was held by the Unitholder as a capital asset. That capital gain or loss will be treated as long-term capital gain or loss if the tendering Unitholder's holding period for the Unit exceeds one year. Under current law, long-term capital gains of individuals are taxed at a maximum marginal federal income tax rate of 28 percent, whereas the maximum marginal federal income tax rate for ordinary income of such persons is approximately 39.6 percent. Capital losses are deductible only to the extent of capital gains, except that individual taxpayers may deduct up to $3,000 of capital losses in excess of the amount of their capital gains against ordinary income. Excess capital losses generally can be carried forward to succeeding years (a corporation's carry-forward period is five years and an individual taxpayer can carry forward such losses indefinitely). If any portion of the amount realized by a Unitholder is attributable to "unrealized receivables" (which includes depreciation recapture) or "substantially appreciated inventory" as defined in Code Section 751, then a portion of the Unitholder's gain or loss may be ordinary rather than capital. A tendering Unitholder will be allocated a pro rata share of the Partnership's taxable income or loss for the year of the sale with respect to the Units sold in accordance with the provisions of the Partnership Agreement concerning transfers of Units. Such allocation and any cash distributed by the Partnership to the Unitholder for that year will affect the Unitholder's adjusted tax basis in Units and, therefore, the amount of such Unitholder's taxable gain or loss upon a sale of Units pursuant to the Offer. Under Code Section 469, individuals and certain types of corporations generally are able to deduct "passive activity losses" in any year only to the extent of the person's passive activity income for that year. Substantially all post-1986 losses of Unitholders from the Partnership are passive activity losses. Unitholders may have "suspended" passive activity losses from the Partnership (i.e., post-1986 net taxable losses in excess of statutorily permitted "phase-in" amounts and which have not been used to offset income from other passive activities). If a Unitholder sells less than all of its Units pursuant to the Offer, a loss recognized by that Unitholder can be currently deducted (subject to the other applicable limitations) to the extent of the Unitholder's passive income from the Partnership for that year plus any other passive activity income for that year, and a gain recognized by a Unitholder upon the sale of Units can be offset by the Unitholders' current or "suspended" passive activity losses (if any) from the Partnership and other sources. If, on the other hand, a Unitholder sells 100 percent of its Units pursuant to the Offer, any "suspended" losses and any losses recognized upon the sale of the Units will be offset first against any other net passive gain to the Unitholder from the sale of the Units and any other net passive activity income from other passive activity investments, and the balance of any "suspended" net losses from the Units will no longer be subject to the passive activity loss limitation and, therefore, will be deductible by such Unitholder from its other income (subject to any other applicable limitations). Section 708(b) of the Code (and related Treasury Department regulations) provides that a partnership terminates for federal income tax purposes if there is a sale or exchange of 50 percent or more of the total interests in the partnership capital and profits within a twelve-month period. Accordingly, it is possible that transfers made pursuant to the Offer combined with others transfers within a twelve-month period could cause a termination of the Partnership for income tax purposes. In the event of a termination, the Partnership would 20 25 be treated for income tax purposes as if it had made a liquidating distribution of its assets to the remaining partners and the new partners, followed by a recontribution of the assets to a "new" partnership. The Purchaser believes that this distribution and recontribution of assets should not result in the recognition of current gain or loss by the partners. A partner receiving a liquidating distribution from a partnership recognizes gain only to the extent that the cash distributed to such partner exceeds the tax basis that the distributee partner has in its partnership interest. The "new" partnership created upon the deemed recontribution of assets by the partners would be treated as having acquired its assets on the date of the deemed recontribution. A new depreciation recovery period would begin on such date, and the Partnership would be required to depreciate its properties over a greater period of time than is currently being used; accordingly, the aggregate present value of the Partnership's future depreciation deductions would be reduced. In addition, a Section 708(b) termination of the Partnership could require the Partnership to make certain complex allocations (pursuant to Sections 737 and 704(c) of the Code) of future Partnership income and loss to take into account the amount of gain or loss inherent in each Partner's share of each asset that is deemed to have been recontributed to the Partnership following the Section 708(b)

Certain Federal Income Tax Matters. The following summary is a general discussion of certain of the federal income tax consequences of a sale of Units pursuant to the Offer. The summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), applicable Treasury regulations thereunder, administrative rulings, and judicial authority, all as of the date of the Offer. All of the foregoing are is subject to change, and any such change could affect the continuing accuracy of this summary. This summary does not discuss all aspects of federal income taxation that may be relevant to a particular Unitholder Unit Holder in light of such UnitholderUnit Holder's specific circumstances or to certain types of Unitholders subject to special treatment under the federal income tax laws (for example, foreign persons, dealers in securities, banks, insurance companies and tax-exempt organizations)circumstxxxxx, nor (except as otherwise expressly indicated) does it describe any aspect of state, local, foreign or other tax laws. Sales of Units pursuant to the Offer will may be taxable transactions under applicable state, local, foreign and other tax laws. UNITHOLDERS UNIT HOLDERS SHOULD CONSULT THEIR 19 24 RESPECTIVE TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO EACH SUCH UNITHOLDER THE UNIT HOLDER OF SELLING UNITS PURSUANT TO THE OFFER. In general, a Unitholder Unit Holder will recognize gain or loss on a sale of Units pursuant to the Offer equal to the difference between (i) the UnitholderUnit Holder's "amount realized" on the sale and (ii) the UnitholderUnit Holder's adjusted tax basis in the Units sold. The amount of a UnitholderUnit Holder's adjusted tax basis in such Units a Unit will vary depending upon the UnitholderUnit Holder's particular circumstances, and it will include the amount of the Partnership's liabilities allocable to the Unit (as determined under Code Section 752). The "amount realized" with respect to a Unit will be a sum equal to the amount of cash received by the Unitholder of Unit Holder for the Unit pursuant to the Offer (that is, the Purchase Pricepurchase price), plus the amount of the Partnership's liabilities allocable to the Unit (as determined under Code Section 752). The gain or loss recognized by a Unitholder Unit Holder on a sale of a Unit pursuant to the Offer generally will be treated as a capital gain or loss if the Unit was held by the Unitholder Unit Holder as a capital asset. That Gain with respect to Units held for more than one year will be taxed, for federal income tax purposes, at a maximum long-term capital gain rate of 15 percent. Gain with respect to Units held one year or less will be taxed at ordinary income rates. It should also be noted that the Taxpayer Relief Act of 1997 imposed depreciation recapture of previously deducted straight-line depreciation with respect to real property at a rate of 25 percent (assuming eligibility for long-term capital gain treatment). A portion of the gain realized by a Unit Holder with respect to a disposition of the Units may be subjected to this 25 percent rate to the extent that the gain is attributable to depreciation recapture inherent in the properties of the Partnership. If any portion of the amount realized by a Unit Holder is attributable to such Unit Holder's share of "unrealized receivables" or "substantially appreciated inventory items" as defined in Code Section 751, a corresponding portion of such Unit Holder's gain or loss will be treated as long-term capital ordinary gain or loss if loss. It is possible that the tendering Unitholderbasis allocation rules of Code Section 751 may result in a Unit Holder's holding period for recognizing ordixxxx income with respect to the portion of the Unit exceeds one year. Under current law, long-term Holder's amount realized on the sale of a Unit that is attributable to such items while recognizing a capital gains loss with respect to the remainder of individuals are taxed at a maximum marginal federal income tax rate of 28 percent, whereas the maximum marginal federal income tax rate for ordinary income of such persons is approximately 39.6 percentUnit. Capital losses are deductible only to the extent of capital gains, except that individual taxpayers who are natural persons may deduct up to $3,000 per year of capital losses in excess of the amount of their capital gains against ordinary income. Excess capital losses generally can be carried forward to succeeding years (a "C" corporation's carry-forward period is five years and an individual taxpayer can carry forward such losses indefinitely). If any portion of the amount realized by a Unitholder is attributable to "unrealized receivables" (which includes depreciation recapture) or "substantially appreciated inventory" as defined in Code Section 751, then a portion of the Unitholder's gain or loss may be ordinary rather than capital. A tendering Unitholder will be allocated a pro rata share of the Partnership's taxable income or loss for the year of the sale with respect to the Units sold in accordance with the provisions of the Partnership Agreement concerning transfers of Units. Such allocation and any cash distributed by the Partnership to the Unitholder for that year will affect the Unitholder's adjusted tax basis in Units and, therefore, the amount of such Unitholder's taxable gain or loss upon a sale of Units pursuant to the Offer. Under Code Section 469, individuals individuals, S corporations and certain types of closely-held corporations generally are able to deduct "passive activity losses" in any year only to the extent of the person's passive activity income for that year. Substantially all post-1986 losses of Unitholders Unit Holders from the Partnership are passive activity losses. Unitholders Unit Holders may have "suspended" passive activity losses from the Partnership (i.e., post-1986 net taxable losses in excess of statutorily permitted "phase-in" amounts and which have not been used to offset income from other passive activities). If a Unitholder Unit Holder sells less than all of its Units interest in the Partnership pursuant to the Offer, a passive loss recognized by that Unitholder Unit Holder can be currently deducted (subject to the other applicable limitations) to the extent of the UnitholderUnit Holder's passive income from the Partnership for that year plus any other net passive activity income for that year, and a any gain recognized by a Unitholder Unit Holder upon the sale of Units can be offset by the Unitholders' Unit Holder's current or "suspended" passive activity losses (if any) from the Partnership and other sources. If, on the other hand, a Unitholder Unit Holder sells 100 percent of its Units interest in the Partnership pursuant to the Offer, any "suspended" passive activity losses from the Partnership and any passive activity losses recognized upon the sale of the Units will be offset first against any other net passive gain to the Unitholder from the sale of the Units and any other net passive activity income from the Unit Holder's other passive activity investments, and the balance of any "suspended" net passive activity losses from attributable to the Units Partnership will no longer be subject to the passive activity loss limitation and, therefore, will be deductible by such Unitholder Unit Holder from its other "ordinary" income (subject to any other applicable limitations). Section 708(b) If more than 1,140 Units are Properly Tendered, some tendering Unit Holders may not be able to sell 100 percent of the Code (and related Treasury Department regulations) provides that a partnership terminates for federal income tax purposes if there is a sale or exchange of 50 percent or more of the total interests in the partnership capital and profits within a twelve-month period. Accordingly, it is possible that transfers made their Units pursuant to the Offer combined with others transfers within a twelve-month period could cause a termination because of proration of the Partnership for income tax purposes. In the event number of a termination, the Partnership would 20 25 Units to be treated for income tax purposes as if it had made a liquidating distribution of its assets to the remaining partners and the new partners, followed by a recontribution of the assets to a "new" partnership. The Purchaser believes that this distribution and recontribution of assets should not result in the recognition of current gain or loss purchased by the partners. A partner receiving a liquidating distribution from a partnership recognizes gain only Purchaser, unless the Purchaser amends the Offer to increase the extent that the cash distributed number of Units to such partner exceeds the tax basis that the distributee partner has in its partnership interest. The "new" partnership created upon the deemed recontribution of assets by the partners would be treated as having acquired its assets on the date of the deemed recontribution. A new depreciation recovery period would begin on such date, and the Partnership would be required to depreciate its properties over a greater period of time than is currently being used; accordingly, the aggregate present value of the Partnership's future depreciation deductions would be reduced. In addition, a Section 708(b) termination of the Partnership could require the Partnership to make certain complex allocations (pursuant to Sections 737 and 704(c) of the Code) of future Partnership income and loss to take into account the amount of gain or loss inherent in each Partner's share of each asset that is deemed to have been recontributed to the Partnership following the Section 708(b)purchased.

Certain Federal Income Tax Matters. The following summary is a general discussion of certain of the federal income tax consequences of a sale of Units pursuant to the Offer. The summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), applicable Treasury regulations thereunder, administrative rulings, and judicial authority, all as of the date of the Offer. All of the foregoing are is subject to change, and any such change could affect the continuing accuracy of this summary. This summary does not discuss all aspects of federal income taxation that may be relevant to a particular Unitholder Unit Holder in light of such UnitholderUnit Holder's specific circumstances or to certain types of Unitholders subject to special treatment under the federal income tax laws (for example, foreign persons, dealers in securities, banks, insurance companies and tax-exempt organizations)circumstxxxxx, nor (except as otherwise expressly indicated) does it describe any aspect of state, local, foreign or other tax laws. Sales of Units pursuant to the Offer will may be taxable transactions under applicable state, local, foreign and other tax laws. UNITHOLDERS UNIT HOLDERS SHOULD CONSULT THEIR 19 24 RESPECTIVE TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO EACH SUCH UNITHOLDER THE UNIT HOLDER OF SELLING UNITS PURSUANT TO THE OFFER. In general, a Unitholder Unit Holder will recognize gain or loss on a sale of Units pursuant to the Offer equal to the difference between (i) the UnitholderUnit Holder's "amount realized" on the sale and (ii) the UnitholderUnit Holder's adjusted tax basis in the Units sold. The amount of a UnitholderUnit Holder's adjusted tax basis in such Units a Unit will vary depending upon the UnitholderUnit Holder's particular circumstances, and it will include the amount of the Partnership's liabilities allocable to the Unit (as determined under Code Section 752). The "amount realized" with respect to a Unit will be a sum equal to the amount of cash received by the Unitholder of Unit Holder for the Unit pursuant to the Offer (that is, the Purchase Pricepurchase price), plus the amount of the Partnership's liabilities allocable to the Unit (as determined under Code Section 752). The gain or loss recognized by a Unitholder Unit Holder on a sale of a Unit pursuant to the Offer generally will be treated as a capital gain or loss if the Unit was held by the Unitholder Unit Holder as a capital asset. That Gain with respect to Units held for more than one year will be taxed, for federal income tax purposes, at a maximum long-term capital gain rate of 15 percent. Gain with respect to Units held one year or less will be taxed at ordinary income rates. It should also be noted that the Taxpayer Relief Act of 1997 imposed depreciation recapture of previously deducted straight-line depreciation with respect to real property at a rate of 25 percent (assuming eligibility for long-term capital gain treatment). A portion of the gain realized by a Unit Holder with respect to a disposition of the Units may be subjected to this 25 percent rate to the extent that the gain is attributable to depreciation recapture inherent in the properties of the Partnership. If any portion of the amount realized by a Unit Holder is attributable to such Unit Holder's share of "unrealized receivables" or "substantially appreciated inventory items" as defined in Code Section 751, a corresponding portion of such Unit Holder's gain or loss will be treated as long-term capital ordinary gain or loss if loss. It is possible that the tendering Unitholderbasis allocation rules of Code Section 751 may result in a Unit Holder's holding period for recognizing ordixxxx income with respect to the portion of the Unit exceeds one year. Under current law, long-term Holder's amount realized on the sale of a Unit that is attributable to such items while recognizing a capital gains loss with respect to the remainder of individuals are taxed at a maximum marginal federal income tax rate of 28 percent, whereas the maximum marginal federal income tax rate for ordinary income of such persons is approximately 39.6 percentUnit. Capital losses are deductible only to the extent of capital gains, except that individual taxpayers who are natural persons may deduct up to $3,000 per year of capital losses in excess of the amount of their capital gains against ordinary income. Excess capital losses generally can be carried forward to succeeding years (a "C" corporation's carry-forward period is five years and an individual taxpayer can carry forward such losses indefinitely). If any portion of the amount realized by a Unitholder is attributable to "unrealized receivables" (which includes depreciation recapture) or "substantially appreciated inventory" as defined in Code Section 751, then a portion of the Unitholder's gain or loss may be ordinary rather than capital. A tendering Unitholder will be allocated a pro rata share of the Partnership's taxable income or loss for the year of the sale with respect to the Units sold in accordance with the provisions of the Partnership Agreement concerning transfers of Units. Such allocation and any cash distributed by the Partnership to the Unitholder for that year will affect the Unitholder's adjusted tax basis in Units and, therefore, the amount of such Unitholder's taxable gain or loss upon a sale of Units pursuant to the Offer. Under Code Section 469, individuals individuals, S corporations and certain types of closely-held corporations generally are able to deduct "passive activity losses" in any year only to the extent of the person's passive activity income for that year. Substantially all post-1986 losses of Unitholders Unit Holders from the Partnership are passive activity losses. Unitholders Unit Holders may have "suspended" passive activity losses from the Partnership (i.e., post-1986 net taxable losses in excess of statutorily permitted "phase-in" amounts and which have not been used to offset income from other passive activities). If a Unitholder Unit Holder sells less than all of its Units interest in the Partnership pursuant to the Offer, a passive loss recognized by that Unitholder Unit Holder can be currently deducted (subject to the other applicable limitations) to the extent of the UnitholderUnit Holder's passive income from the Partnership for that year plus any other net passive activity income for that year, and a any gain recognized by a Unitholder Unit Holder upon the sale of Units can be offset by the Unitholders' Unit Holder's current or "suspended" passive activity losses (if any) from the Partnership and other sources. If, on the other hand, a Unitholder Unit Holder sells 100 percent of its Units interest in the Partnership pursuant to the Offer, any "suspended" passive activity losses from the Partnership and any passive activity losses recognized upon the sale of the Units will be offset first against any other net passive gain to the Unitholder from the sale of the Units and any other net passive activity income from the Unit Holder's other passive activity investments, and the balance of any "suspended" net passive activity losses from attributable to the Units Partnership will no longer be subject to the passive activity loss limitation and, therefore, will be deductible by such Unitholder Unit Holder from its other "ordinary" income (subject to any other applicable limitations). Section 708(b) If more than 1,180 Units are Properly Tendered, some tendering Unit Holders may not be able to sell 100 percent of the Code (and related Treasury Department regulations) provides that a partnership terminates for federal income tax purposes if there is a sale or exchange of 50 percent or more of the total interests in the partnership capital and profits within a twelve-month period. Accordingly, it is possible that transfers made their Units pursuant to the Offer combined with others transfers within a twelve-month period could cause a termination because of proration of the Partnership for income tax purposes. In the event number of a termination, the Partnership would 20 25 Units to be treated for income tax purposes as if it had made a liquidating distribution of its assets to the remaining partners and the new partners, followed by a recontribution of the assets to a "new" partnership. The Purchaser believes that this distribution and recontribution of assets should not result in the recognition of current gain or loss purchased by the partners. A partner receiving a liquidating distribution from a partnership recognizes gain only Purchaser, unless the Purchaser amends the Offer to increase the extent that the cash distributed number of Units to such partner exceeds the tax basis that the distributee partner has in its partnership interest. The "new" partnership created upon the deemed recontribution of assets by the partners would be treated as having acquired its assets on the date of the deemed recontribution. A new depreciation recovery period would begin on such date, and the Partnership would be required to depreciate its properties over a greater period of time than is currently being used; accordingly, the aggregate present value of the Partnership's future depreciation deductions would be reduced. In addition, a Section 708(b) termination of the Partnership could require the Partnership to make certain complex allocations (pursuant to Sections 737 and 704(c) of the Code) of future Partnership income and loss to take into account the amount of gain or loss inherent in each Partner's share of each asset that is deemed to have been recontributed to the Partnership following the Section 708(b)purchased.

Certain Federal Income Tax Matters. The following summary is a general discussion of certain of the federal income tax consequences of a sale of Units pursuant to the Offer. The This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), applicable Treasury regulations thereunder, administrative rulings, practice and procedures and judicial authority, all as of the date of the Offer. All of the foregoing are subject to change, and any such change could affect the continuing accuracy of this summary. This summary does not discuss all aspects of federal income taxation that may be relevant to a particular Unitholder Limited Partner in light of such UnitholderLimited Partner's specific circumstances or to certain types of Unitholders Limited Partners subject to special treatment under the federal income tax laws (for example, foreign persons, dealers in securities, banks, insurance companies and tax-exempt organizations), nor (except as otherwise expressly indicated) does it describe any aspect of state, local, foreign or other tax laws. Sales of Units pursuant to the Offer will be taxable transactions for federal income tax purposes, and also may be taxable transactions under applicable state, local, foreign and other tax laws. UNITHOLDERS LIMITED PARTNERS SHOULD CONSULT THEIR 19 24 RESPECTIVE TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO EACH SUCH UNITHOLDER LIMITED PARTNER OF SELLING UNITS PURSUANT TO THE OFFER. In general, a Unitholder Limited Partner will recognize gain or loss on a sale of Units pursuant to the Offer equal to the difference between (i) the UnitholderLimited Partner's "amount realized" on the sale and (ii) the UnitholderLimited Partner's adjusted tax basis in the Units sold. The amount of a UnitholderLimited Partner's adjusted tax basis in such Units will vary depending upon the UnitholderLimited Partner's particular circumstances. The "amount realized" with respect to a Unit will be a sum equal to the amount of cash received by the Unitholder of Limited Partner for the Unit pursuant to the Offer (that is, the Purchase Price), ) plus the amount of the Partnership's liabilities allocable to the Unit (as determined under Code Section 752). The gain or loss recognized by a Unitholder Limited Partner on a sale of a Unit pursuant to the Offer generally will be treated as a capital gain or loss if (as is generally expected to be the case) the Unit was held by the Unitholder Limited Partner as a capital asset. That capital gain or loss will be treated as long-term capital gain or loss if the tendering UnitholderLimited Partner's holding period for the Unit Units exceeds 18 months. If the tendering Limited Partner's holding period for the Units exceeds one yearyear but not more than 18 months, the capital gain or loss will be treated as mid-term capital gain or loss. Under current law, long-term and mid-term capital gains of individuals and other non-corporate taxpayers are taxed at a maximum marginal federal income tax rate rates of 28 percent20% and 28%, respectively, whereas the maximum marginal federal income tax rate for ordinary income of such persons is approximately 39.6 percent39.6%. Capital losses are deductible only to the extent of capital gains, except that individual non-corporate taxpayers may deduct up to $3,000 of capital losses in excess of the amount of their capital gains against ordinary income. Excess capital losses generally can be carried forward to succeeding years (a corporation's carry-carry forward period is five years and an individual a non- corporate taxpayer can carry forward such losses indefinitely); in addition, a corporation is permitted to carry back excess capital losses to the three preceding taxable years, provided the carryback does not increase or produce a net operating loss for any of those years. If any portion of the amount realized by a Unitholder Limited Partner is attributable to "unrealized receivables" (which includes depreciation recapture) or "substantially appreciated inventory" as defined in Code Section 751, then a portion of the UnitholderLimited Partner's gain or loss may be ordinary rather than capital. A tendering Unitholder Limited Partner will be allocated a pro rata share of the Partnership's taxable income or loss for the year of the sale with respect to the Units sold in accordance with the provisions of the Partnership Agreement concerning transfers of Units. Such allocation and any cash distributed by the Partnership to the Unitholder Limited Partner for that year will affect the UnitholderLimited Partner's adjusted tax basis in Units and, therefore, the amount of such UnitholderLimited Partner's taxable gain or loss upon a sale of Units pursuant to the Offer. Under Code Section 469, individuals and certain types of corporations a non-corporate taxpayer or personal service corporation generally are able to can deduct "passive activity losses" in any year only to the extent of the person's passive activity income for that year. Closely held corporations may not offset such losses against so-called "portfolio" income. Substantially all post-1986 losses of Unitholders Limited Partners from the Partnership are passive activity losses. Unitholders Limited Partners may have "suspended" passive activity losses from the Partnership (i.e., post-1986 net taxable losses in excess of statutorily permitted "phase-in" amounts and which have not been used to offset income from other passive activities). If a Unitholder Limited Partner sells less than all of its his Units pursuant to the Offer, a loss recognized by that Unitholder Limited Partner can be currently deducted (subject to the other applicable limitations) to the extent of the UnitholderLimited Partner's passive income from the Partnership for that year plus any other passive activity income for that year, and a gain recognized by a Unitholder Limited Partner upon the sale of Units can be offset by the Unitholders' Limited Partner's current or "suspended" passive activity losses (if any) from the Partnership and other sources. If, on the other hand, a Unitholder Limited Partner sells 100 percent 100% of its his Units pursuant to the Offer, any "suspended" losses and any losses recognized upon the sale of the Units will be offset first against any other net passive gain to the Unitholder Limited Partner from the sale of the Units and any other net passive activity income from other passive activity investments, and the balance of any "suspended" net losses from the Units will no longer be subject to the passive activity loss limitation and, therefore, will be deductible by such Unitholder Limited Partner from its his other income (subject to any other applicable limitations). Section 708(b) A tendering Limited Partner must sell all of his Units to receive these tax benefits. Because the Offer is being made for less than all of the Code (and related Treasury Department regulations) provides outstanding Units, there can be no assurance that a partnership terminates for Limited Partner which tenders all of his Units will in fact sell all of his Units pursuant to the Offer. Limited Partners (other than tax-exempt persons, corporations and certain foreign persons) who tender Units may be subject to 31% backup withholding unless those Limited Partners provide a taxpayer identification number ("TIN") and certify that the TIN is correct or properly certify that they are awaiting a TIN. A Limited Partner may avoid backup withholding by properly completing and signing the Substitute Form W-9 included as part of the Assignment of Partnership Interest. If a Limited Partner who is subject to backup withholding does not properly complete and sign the Substitute Form W-9, the Purchaser will withhold 31% from payments to such Limited Partner. A Limited Partner who tenders Units must file an information statement with his federal income tax purposes if there is a sale or exchange of 50 percent or more return for the year of the total interests sale which provides the information specified in Treasury Regulation Section 1.751-1(a)(3). The selling Limited Partner also must notify the partnership capital Partnership of the date of the transfer and profits the names, addresses and TINs of the transferor and transferee within 30 days of the date of the transfer (or, if earlier, by January 15 of the following calendar year). Xxxx realized by a twelve-month period. Accordingly, it is possible that transfers made foreign Limited Partner on the sale of a Unit pursuant to the Offer combined with others transfers within will be subject to federal income tax. Under Code Section 1445, the transferee of an interest held by a twelve-month period could cause foreign person in a termination partnership which owns United States real property generally is required to deduct and withhold a tax equal to 10% of the amount realized on the disposition. In order to comply with this requirement, the Purchaser will withhold 10% of the amount realized by a tendering Limited Partner unless the Limited Partner properly completes and signs the FIRPTA Affidavit included as part of the Assignment of Partnership for Interest certifying the Limited Partner's TIN, that such Limited Partner is not a foreign person and the Limited Partner's address. Amounts withheld would be creditable against a foreign Limited Partner's federal income tax purposes. In liability and, if in excess thereof, a refund could be obtained from the event of Internal Revenue Service by filing a termination, the Partnership would 20 25 be treated for U.S. income tax purposes as if it had made a liquidating distribution of its assets to the remaining partners and the new partners, followed by a recontribution of the assets to a "new" partnership. The Purchaser believes that this distribution and recontribution of assets should not result in the recognition of current gain or loss by the partners. A partner receiving a liquidating distribution from a partnership recognizes gain only to the extent that the cash distributed to such partner exceeds the tax basis that the distributee partner has in its partnership interest. The "new" partnership created upon the deemed recontribution of assets by the partners would be treated as having acquired its assets on the date of the deemed recontribution. A new depreciation recovery period would begin on such date, and the Partnership would be required to depreciate its properties over a greater period of time than is currently being used; accordingly, the aggregate present value of the Partnership's future depreciation deductions would be reduced. In addition, a Section 708(b) termination of the Partnership could require the Partnership to make certain complex allocations (pursuant to Sections 737 and 704(c) of the Code) of future Partnership income and loss to take into account the amount of gain or loss inherent in each Partner's share of each asset that is deemed to have been recontributed to the Partnership following the Section 708(b)return.

Certain Federal Income Tax Matters. The following summary is a general discussion of certain of the federal income tax consequences of a sale of Units pursuant to the Offer. The summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), applicable Treasury regulations thereunder, administrative rulings, and judicial authority, all as of the date of the Offer. All of the foregoing are subject to change, and any such change could affect the continuing accuracy of this summary. This summary does not discuss all aspects of federal income taxation that may be relevant to a particular Unitholder Unit Holder in light of such UnitholderUnit Holder's specific circumstances or to certain types of Unitholders subject to special treatment under the federal income tax laws (for example, foreign persons, dealers in securities, banks, insurance companies and tax-exempt organizations)circumstances, nor (except as otherwise expressly indicated) does it describe any aspect of state, local, foreign or other tax laws. Sales of Units pursuant to the Offer will be taxable transactions under applicable state, local, foreign and other tax laws. UNITHOLDERS UNIT HOLDERS SHOULD CONSULT THEIR 19 24 RESPECTIVE TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO EACH SUCH UNITHOLDER THE UNIT HOLDER OF SELLING UNITS PURSUANT TO THE OFFER. .. In general, a Unitholder Unit Holder will recognize gain or loss on a sale of Units pursuant to the Offer equal to the difference between (i) the UnitholderUnit Holder's "amount realized" on the sale and (ii) the UnitholderUnit Holder's adjusted tax basis in the Units sold. The amount of a UnitholderUnit Holder's adjusted tax basis in such Units a Unit will vary depending upon the UnitholderUnit Holder's particular circumstances, and it will include the amount of the Partnership's liabilities allocable to the Unit (as determined under Code Section 752). The "amount realized" with respect to a Unit will be a sum equal to the amount of cash received by the Unitholder of Unit Holder for the Unit pursuant to the Offer (that is, the Purchase Price), plus the amount of the Partnership's liabilities allocable to the Unit (as determined under Code Section 752). The gain or loss recognized by a Unitholder on a sale of a Unit pursuant to the Offer generally will be treated as a capital gain or loss if the Unit was held by the Unitholder as a capital asset. That capital gain or loss will be treated as long-term capital gain or loss if the tendering Unitholder's holding period for the Unit exceeds one year. Under current law, long-term capital gains of individuals are taxed at a maximum marginal federal income tax rate of 28 percent, whereas the maximum marginal federal income tax rate for ordinary income of such persons is approximately 39.6 percent. Capital losses are deductible only to the extent of capital gains, except that individual taxpayers may deduct up to $3,000 of capital losses in excess of the amount of their capital gains against ordinary income. Excess capital losses generally can be carried forward to succeeding years (a corporation's carry-forward period is five years and an individual taxpayer can carry forward such losses indefinitely). If any portion of the amount realized by a Unitholder is attributable to "unrealized receivables" (which includes depreciation recapture) or "substantially appreciated inventory" as defined in Code Section 751, then a portion of the Unitholder's gain or loss may be ordinary rather than capital. A tendering Unitholder will be allocated a pro rata share of the Partnership's taxable income or loss for the year of the sale with respect to the Units sold in accordance with the provisions of the Partnership Agreement concerning transfers of Units. Such allocation and any cash distributed by the Partnership to the Unitholder for that year will affect the Unitholder's adjusted tax basis in Units and, therefore, the amount of such Unitholder's taxable gain or loss upon a sale of Units pursuant to the Offer. Under Code Section 469, individuals and certain types of corporations generally are able to deduct "passive activity losses" in any year only to the extent of the person's passive activity income for that year. Substantially all post-1986 losses of Unitholders from the Partnership are passive activity losses. Unitholders may have "suspended" passive activity losses from the Partnership (i.e., post-1986 net taxable losses in excess of statutorily permitted "phase-in" amounts and which have not been used to offset income from other passive activities). If a Unitholder sells less than all of its Units pursuant to the Offer, a loss recognized by that Unitholder can be currently deducted (subject to the other applicable limitations) to the extent of the Unitholder's passive income from the Partnership for that year plus any other passive activity income for that year, and a gain recognized by a Unitholder upon the sale of Units can be offset by the Unitholders' current or "suspended" passive activity losses (if any) from the Partnership and other sources. If, on the other hand, a Unitholder sells 100 percent of its Units pursuant to the Offer, any "suspended" losses and any losses recognized upon the sale of the Units will be offset first against any other net passive gain to the Unitholder from the sale of the Units and any other net passive activity income from other passive activity investments, and the balance of any "suspended" net losses from the Units will no longer be subject to the passive activity loss limitation and, therefore, will be deductible by such Unitholder from its other income (subject to any other applicable limitations). Section 708(b) of the Code (and related Treasury Department regulations) provides that a partnership terminates for federal income tax purposes if there is a sale or exchange of 50 percent or more of the total interests in the partnership capital and profits within a twelve-month period. Accordingly, it is possible that transfers made pursuant to the Offer combined with others transfers within a twelve-month period could cause a termination of the Partnership for income tax purposes. In the event of a termination, the Partnership would 20 25 be treated for income tax purposes as if it had made a liquidating distribution of its assets to the remaining partners and the new partners, followed by a recontribution of the assets to a "new" partnership. The Purchaser believes that this distribution and recontribution of assets should not result in the recognition of current gain or loss by the partners. A partner receiving a liquidating distribution from a partnership recognizes gain only to the extent that the cash distributed to such partner exceeds the tax basis that the distributee partner has in its partnership interest. The "new" partnership created upon the deemed recontribution of assets by the partners would be treated as having acquired its assets on the date of the deemed recontribution. A new depreciation recovery period would begin on such date, and the Partnership would be required to depreciate its properties over a greater period of time than is currently being used; accordingly, the aggregate present value of the Partnership's future depreciation deductions would be reduced. In addition, a Section 708(b) termination of the Partnership could require the Partnership to make certain complex allocations (pursuant to Sections 737 and 704(c) of the Code) of future Partnership income and loss to take into account the amount of gain or loss inherent in each Partner's share of each asset that is deemed to have been recontributed to the Partnership following the Section 708(b).