UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant x[X]

Filed by a Party other than the Registrant ¨[  ]

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DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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THE PROVO GROUP, INC.DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP

1100 Main Street, Suite 1830

Kansas City, Missouri 64105

REQUEST FOR AFFIRMATIVE CONSENT OF LIMITED PARTNERS

June 15, 2015

Dear Limited Partner:

IMPORTANT: Biennial

As discussed more fully in the attached Consent to Sale

As a Limited Partner inSolicitation Statement, DiVall Insured Income Properties 2 Limited Partnership (“DiVall 2” or(the “Partnership”) is soliciting the “Partnership”) we are providing you and our otheraffirmative consent of Limited Partners an opportunity to consent to a sale of all of the Partnership’s properties and thea subsequent liquidation and dissolution of the Partnership (“Proposed Sale and Dissolution”(collectively, the “Transaction”). This consent solicitationWe believe that the Transaction is made on behalfin the best interests of the Partnership by The Provo Group, Inc., as General PartnerLimited Partners. Please read the Consent Solicitation Statement carefully before filling out the attached Consent Card.

Holders of the Partnership.

During the consent solicitation process in May 2001, we expressed to our Limited Partners that if the holdersmore than 50% of a majority of ourthe outstanding Limited Partnership units did not consent to the Proposed Sale and Dissolution (in 2001, 74% voted against such sale and dissolution) proposed at that time that we would circulate a new consent every two years to provide the Limited Partners’ additional opportunities to consent to the sale of our properties and dissolution of the Partnership. We conducted similar consent processes in 2003, 2005, 2007, 2011 and 2013, and in each instance the holders of a majority of our outstanding Limited Partnership units did not voted in favor of such a sale and dissolution. In 2009, the holders of a majority of our outstanding Limited Partnership units voted, in response to the Partnership’s consent solicitation, to extend the term of the Partnership to November 30, 2020.

On or about June 15, 2015, we began mailing a Notice of Internet Availability (“Notice”) of the Partnership’s Consent Solicitation Materials (as defined below) to you and the other Limited Partners informing you that the Consent Statement, Consent Card, our 2014 Annual Report on Form 10-K, and voting instructions are available on the Internet atwww.divallproperties.com/relations.php. As is more fully described in the Notice, Limited Partners may choose to access the Consent Solicitation Materials on the Internet, or may request to receive a paper copy of the Consent Solicitation Materials at no charge by July 10, 2015 to facilitate timely delivery. The request can be made via telephone at 1-800-547-7686 (DiVall Investor Relations), e-mail toedevera@phxa.com, or the Internet atwww.divallproperties.com/newsletter.php. This hard copy election will apply to future consent packages by us as well. If you print the on-line Consent Card, please call DiVall Investor Relations at 1-800-547-7686 for your specific investor label information that must be included on the Consent Card prior to executing and mailing.

No meeting will be held in connection with this 2015 solicitation of consents from the Limited Partners. To be counted, a properly executed, signed and labeled Consent Card must be received by the independent voting tabulator Phoenix American Financial Services, Inc.Interests (the “TabulatorUnits”), located at 2401 Kerner Blvd, San Rafael, CA 94901, on or before July 31, 2015.

must approve the Transaction. Only Limited Partners of record at the close of business on May 31, 2015March 23, 2018, will be entitled to vote by executingnotice of, and returning a Consent Card.to participate in, the vote. A vote “FOR” the Proposed Sale and Dissolution will authorize the Partnership to proceed with the Proposed Sale and Dissolution.

Because the Proposed Sale and Dissolution requiresABSTAIN or any failure of a majority of our Units to provide “FOR” consents to pass, a vote to “ABSTAIN” and the failureLimited Partner to return a signed Consent Card enclosed wouldwill have the same effect as a vote “AGAINST”.

Although we are circulating consents to poll theIf Limited Partners the General Partner recommends a vote“AGAINST” the Proposed Sale and Dissolution.

If we do not receiveholding a majority of consents foroutstanding Units approve the Proposed Sale and Dissolution by July 31, 2015,Transaction, we will continue to operateaggressively pursue the Partnership . . . business as usual. We will also circulate a new consent in two years to again poll Limited Partner preferences regarding the potentialfinal sale of all of the PropertiesPartnership’s properties on substantially the terms described in the Consent Solicitation Statement.

Your affirmative consent is important. Please sign and date the dissolution ofenclosed Consent Card and return it promptly in the Partnership. If, however, more than 50% of all outstanding Limited Partnership units consent to the Proposed Sale and Dissolution, we will move forward with a competitive bid process to sell the Properties and liquidate and dissolve the Partnership.enclosed return envelope. You may revoke your Consent Card in writing.

Very truly yours,

THE PROVO GROUP, INC., as General Partner of

DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP

DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP

1100 MAIN STREET, SUITEMain Street, Suite 1830

KANSAS CITY, MISSOURIKansas City, Missouri 64105

CONSENT SOLICITATION STATEMENT

June 15, 2015April [●], 2018

General Information

This Consent Solicitation Statement is being furnished to holders (“Limited Partners”) of limited partnership interests (the “Units”) in DiVall Insured Income Properties 2 Limited Partnership, a Wisconsin limited partnership (“Partnership”) is engaged in the business of owning and operating its investment portfolio of commercial real estate. The Partnership owns 11 properties (collectively the “Properties” and individually a “Property”). All of the Properties are leased on a triple-net basis with the Partnership as lessor and the operator of a business as a tenant (collectively the “Leases,” individually a “Lease”). All of the tenants operate as fast-food, family style or casual/theme restaurants (such as Wendy’s, Applebee’s, etc.).

The Partnership’s Agreement of Limited Partnership dated as of November 20, 1987, and amended (the “Partnership Agreement”) provides that the Partnership will be dissolved on November 30, 2020, or earlier upon the prior occurrence of any of the following events: (i) the disposition of all properties of the Partnership; (ii) the written determination by the General Partner that the Partnership’s assets may constitute “plan assets” for purposes of ERISA; (iii) the agreement of Limited Partners owning a majority of the outstanding units to dissolve the Partnership; or (iv) the dissolution, bankruptcy, death, withdrawal, or incapacity of the last remaining General Partner, unless an additional General Partner is elected previously by a majority of the Limited Partners.

During the second and third quarters of 2001, 2003, 2005, 2007, 2011 and 2013, consent solicitations were circulated (each being a “Prior Consent”), which if approved would have authorized the sale of the Partnership’s Properties and dissolution of the Partnership. A majority of the Limited Partners (as defined below) did not vote in favor of any of the Prior Consents. During the third quarter of 2009, consent solicitations were circulated (the “2009 Consent”) to extend the term of the Partnership ten years to November 30, 2020. A majority of the Limited Partners voted in favor of the extension. Therefore, the Partnership’s term was extended and it continues to operate as a going concern.

This Consent Statement is being furnished to holders (“Limited Partners”) of Limited Partnership units (the “Units”) in the Partnership, in connection with the solicitation of written affirmative consents by the Partnership to approve a sale of all of the Properties, which would result in the liquidationPartnership’s properties, either on an individual or group basis, and dissolution ofto subsequently liquidate and dissolve the Partnership (the(collectively, the “Proposed Sale and DissolutionTransaction”). No meeting of Limited Partners will be held in connection with this solicitation of affirmative consents from the Limited Partners.

Consents for the Proposed Sale and Dissolution are solicited

This consent solicitation is made on behalf of the Partnership by The Provo Group, Inc. (the “General Partner”), the sole general partner of the Partnership, (the “to implement the General Partner”).Partner’s recommendation in favor of the Transaction. Solicitation of affirmative consents other than by mail may be made by telephone, facsimile or in person by regularly employed officers, agentsemployees and employeesagents of the General Partner, who will not receive additional compensation for their efforts. We also may make arrangements with brokers, banks and other custodians, nominees, fiduciaries and limited partners of record to forward solicitation material to the beneficial owners of Units held of record by such persons. The total cost of soliciting the Consentsaffirmative consents will be borne by the Partnership.

Only Limited Partners of record at the close of business on May 31, 2015March 23, 2018, will be entitled to vote by executing signing and returning a properly labeledthe enclosed Consent Card. A vote “FOR”“For” the Proposed Sale and DissolutionConsent will authorize the Partnership to proceed with the Proposed Sale and Dissolution.

Because the Proposed Sale and Dissolution requires a majority of “FOR” consents to pass, a vote to “ABSTAIN” and the failure to return a Consent Card will have the same effect as a vote “AGAINST”.Transaction. To be counted, a properly executed, signed and labeled Consent Card must be received by the independent voting

tabulatortabulators Phoenix American Financial Services, Inc. (the “Tabulator”), which is located at 2401 Kerner Blvd., San Rafael, CA 94901, on or before July 31, 2015.May [18], 2018, unless the General Partner in its sole discretion elects to extend to a later date (such date, as it may be extended, the “Consent Deadline”). Failure of a Limited Partner to return a signed Consent Card or voteForthe Transaction will constitutehave the same effect as a vote “AGAINST”AGAINST the Proposed Sale and Dissolution.Transaction.

A Limited Partner may revoke its Consent Card at any time prior to July 31, 2015, or other conclusionthe earlier of (i) the Consent solicitation process (whichever is earlier),Deadline, or (ii) the time at which the Requisite Consents (as defined below) have been received, by mailing a properly executed Consent Card bearing a later date or by mailing a signed, written notice of revocation to the attention of the General Partner or the Tabulator. Revocation of a Consent Card will be effective upon receipt by the General Partner or the Tabulator of either (i) an instrument revoking the Consent Card, or (ii) a duly executed Consent Card bearing a later date. This Consent Statement and Consent Card were first made available to Limited Partners on or about June 15, 2015. Once the General Partner hasRequisite Consents have been received, Consent Cards from a majority of the Limited Partners voting either “FOR” or “AGAINST” the Proposed Sale and Dissolution, the General Partner may declare the Consent solicitationSolicitation process concluded and proceed to complete the Transaction.

Under Section 6.6 of the Partnership’s Amended Agreement of Limited Partnership (the “Partnership Agreement”), in connection with the sale of all or substantially all of the Partnership’s properties (the “Proposed Sale”), the Partnership will be bound by the results of such process. In any event, unlesspay the General Partner electsa fee equal to 3% of the total purchase price received from any prospective buyer (the “Disposition Fee”). Otherwise, none of the General Partner or the principal executive of the General Partner has any direct or indirect interest in the Transaction, including the Proposed Sale.

Summary of Terms

This Consent Solicitation Statement is being furnished to in connection with the Transaction. The General Partner has not negotiated definitive terms of the Transaction with any third party. However, as further described in this Consent Solicitation Statement the General Partner expects to effect the Transaction in accordance with the following parameters:

INTRODUCTION

General Information

The Partnership owns 10 parcels of real property that will be offered for sale if the Transaction is approved by the Limited Partners pursuant to this consent solicitation (collectively, the “Properties,” and individually, a “Property”). Each occupied Property is subject to a triple net lease between the Partnership as lessor and the operator of a Wendy’s or Applebee’s restaurant as tenant (collectively, the “Leases,” and individually, a “Lease”). The Property located in Martinez Georgia is currently vacant and has been held for sale since December 15, 2016.

The Partnership owns the buildings and land and all improvements for all the Properties. In addition, the Partnership has entered into a ground lease for its property located in Santa Fe, New Mexico that is operated as a Kentucky Fried Chicken restaurant, which includes an option whereby the Partnership may extend the ground lease for two additional ten year periods. This ground lease is set to expire on June 30, 2018, and the Partnership does not intend to exercise its option to extend this ground lease. As a result, the deadlineSanta Fe, New Mexico property is not included among the 10 Properties that would be sold if the Transaction is approved by the Limited Partners pursuant to this consent solicitation.

The Partnership is hereby soliciting written affirmative consents from each Limited Partner to approve the Transaction.

Based on the appraisals for each Property received from CBRE, Inc. (“CBRE”) in August and September 2017, the General Partner estimated at the end of 2017 that the net asset value of the consent solicitation,Partnership, after deducting anticipated costs and expenses of the Consent solicitation processesTransaction, was approximately $380 per Unit. The current net asset value of the Partnership, after deducting anticipated costs and expenses of the opportunityTransaction, is also estimated to vote by returning a Consent Card, will end on July 31, 2015.be approximately $380 per Unit.See “Background and Recommendations of the General Partner - Appraised Values,” below.

Important Notice Regarding

Section 10.2 of the Internet AvailabilityPartnership Agreement provides that the General Partner may not, among other things, (i) sell all or substantially all of Consent Materialsthe assets of the Partnership, or (ii) dissolve the Partnership, without the Requisite Consents. The total number of outstanding Units as of March 23, 2018, was 46,280.3. Each Unit is entitled to one vote. There is no established trading market for the Consent Solicitation. A full setUnits.

Beneficial Ownership of Consent Solicitation Materials is not being mailedthe Issued and Outstanding Units

As of March 23, 2018, the Partnership had 1,245 Limited Partners of record and 46,280.3 Units outstanding. Based on information known to Limited Partners. This Consent Statement, the Consent Card, voting instructions, and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, are available on-line atwww.divallproperties.com/relations.php. Under rules issued byPartnership or filed with the U.S. Securities and Exchange Commission (the “SEC”), we are providing Internet access to our Consent Solicitation Materials and a Consent Card, as noted in our Notice of Internet Availability (the “Notice”) mailed to Limited Partners on or around June 15, 2015. In addition, an investor may elect to receive a paper copy of the full set of Consent Solicitation Materials and or a Consent Card at no charge by July 10, 2015 to facilitate timely delivery. The request can be made via telephone at 1-800-547-7686 (DiVall Investor Relations), e-mail toedevera@phxa.com, or the Internet atwww.divallproperties.com/newsletter.php. If a Limited Partner prints the on-line Consent Card, they must call DiVall Investor Relations at 1-800-547-7686 for their specific investor label information that is to be included on the Consent Card prior to executing, signing and mailing. This election will apply to future consent packages by us as well.

BACKGROUND AND RECOMMENDATIONS OF THE GENERAL PARTNER

Background of Partnership

The Partnership is a limited partnership organized under the Wisconsin Uniform Limited Partnership Act pursuant to the Partnership Agreement. As of December 31, 2014, the Partnership consisted of one General Partner and 1,519 Limited Partners owning an aggregate of 46,280.3 Units. The Units were sold commencing February 23, 1988, pursuant to a Registration Statement on FormS-11 filed under the Securities Act of 1933 (Registration33-18794) as amended. On June 30, 1989, the former general partners exercised their option to extend the offering period to a date no later than February 22, 1990. On February 22, 1990, the Partnership closed the offering at 46,280.3 Units. The Units are not currently traded on any exchange or other public market.

Through this Consent process, the General Partner is seeking an indication from the Limited Partners whether they want to pursue a sale of all of the Properties, and the liquidation and dissolution of the Partnership.

The Partnership Agreement provides in Section 2.2 that the Partnership will terminate and dissolve on November 30, 2020. Section 10.2 of the Partnership Agreement provides that the agreement may be amended upon the vote of the Limited Partners holding more than 50% of the outstanding Units. The total number of outstanding Units as of May 31, 2015, was 46,280.3 Units. Each Unit is entitled to one vote.

As of May 31, 2015, the Partnership had 1,499 record holders of Unitspersons identified in the Partnership. The following table sets forth certain information with respect to such beneficial ownership as of May 31, 2015. Based on information known to the Partnership and filed with the SEC, the following persons are known to beneficially own 5% or more of the outstanding Units as follows:of March 23, 2018:

(b) As of May 31, 2015,March 23, 2018, neither the General Partner did not own any Units. The following chart identifies the beneficial ownership ofnor the person that preformsperforms the functions of the principal executive of the General Partner.Partner was the beneficial owner of any Units.

Cautionary Note Regarding Forward-Looking Statements

(c) Management knows of no contractual arrangements, the operation or the terms of which may at a subsequent date result in a change in control of the Partnership, except for provisions in the PMA.

Forward-Looking Statements

This Consent Solicitation Statement contains forward-looking statements. When used in this Consent Solicitation Statement the words “believes,” “anticipates,” “intends,” “expects” and similar expressions are intended to identify forward-looking statements; however, not all forward-looking statements will contain such expressions. Such statements are subject to a number of risks and uncertainties, including but not limited to those risks described in the Partnership’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2015.uncertainties. Actual results or events in the future could differ materially from those described in the forward-looking statements as a result of these and othersuch risks, including the inability of the general partnerGeneral Partner to find a suitable purchaser for the properties,Properties, the inability to agree on an acceptable purchase price or contract terms, a decrease in the financial performance of the properties,Properties, the discovery of an environmental condition impacting one or more of the properties,Properties, an economic downturn in the markets in which the propertiesProperties are located and various other factors. The Partnership undertakes no obligation to publicly release any updates or revisions to forward-looking statements to reflect any future events or circumstances.

Proposed Property Sale and Dissolution of the Partnership

Through this Consent process, the General Partner is seeking an indication from the Partnership’s Limited Partners of whether they want the General Partner to commence the pursuit and sale of all of the Partnership’s Properties, which, if successful, would result in the subsequent liquidation and dissolution of the Partnership (as defined above, the “Proposed Sale and DispositionBACKGROUND AND RECOMMENDATIONS OF THE GENERAL PARTNER”).

The Partnership Agreement provides in Section 10.2 that the General Partner may not sell substantially all of the Properties without the approval of Limited Partners holding more than 50% of the Units.

The General Partner recommends a vote“AGAINST” the Proposed Sale and Dissolution as set forth below:

Description of Partnership’s Business

The operating revenue of the Partnership is engaged inderived from rent on the business of owning and operating its investment portfolio of commercial real estate properties (as defined above, the “Properties”). The Properties are leased on a triple net basis to, and operated primarily by, franchisors or franchisees of national, regional and local retail chains under long-term leases. The lessees are all fast food, family style, and casual/theme restaurants. At the date of this Consent Statement, the Partnership owned 11 Properties. Each of the Properties is described more fully under “The Properties” below.

The original lease terms for almost all of the Properties are from five to twenty years from the dates of their respective inception. Most of the Leases provide for minimum rents (“a “Base Rent” and a “Percentage Rent.” The tenant is required to pay the Base Rent on a monthly basis, as well as be responsible for all taxes, insurance, utilities, and day-to-day maintenance and repair obligations with respect to each Property. The tenant is required to pay Percentage Rent if the sales revenues generated by the Property (with certain adjustments) exceed certain levels measured on an annual basis. Percentage Rent, if applicable to a Property and if earned with respect to such Property, is usually payable annually. Generally, the only manner to increase net operating revenues with respect to the Partnership’s portfolio is for (i) Base Rents to increase, (ii) Percentage Rents to increase, or (iii) the Partnership to reduce expenses. Total operating rental income for the fiscal years ended December 31, 2017 and 2016, was approximately $1,484 million and $1,461 million, respectively.

Base Rents”) and additional rents based upon a percentage of gross sales in excess of specified breakpoints (“Percentage Rents”). The lessee is responsible for occupancy costs such as maintenance, insurance, real estate taxes, and utilities. The Partnership owns one restaurant, which is located on a parcel of land that it does not own,Base Rents in the Leases are generally fixed, but where it has entered into a long-term ground lease, as lessee, which is set to expire in 2018. The Partnership has thecertain Leases may increase if any option to extend is exercised by the ground lease for two additional ten year periods. The Partnership owns all improvements constructed ontenant. Base Rent increases generally occur upon the land (including the building and improvements) until the terminationrenewal of a Lease. Four of the ground lease, at which time all constructed improvements will becomeLeases provide the land owner’s property.tenant one more option to renew for five years. Following the January 2017 exercise of renewal options, five of the Leases no longer provide the tenant any option to renew. The tenant, a Kentucky Fried Chicken restaurant franchisee (“KFC”),average remaining term of the Leases is responsibleapproximately six and three-quarter years. The Lease for the $3,400 per month ground lease payment perProperty located in Martinez, GA expired on November 6, 2016, and that Property has been vacant since that time, and has been held for sale by the termsPartnership since December 2016.

Percentage Rents. Although most of its lease with the Partnership.

Thetenants appear to have increased or maintained the sales at the Properties in 2017, the General Partner has determineddoes not anticipate significant increases in Percentage Rents for 2018. Percentage Rents are generally viewed as a function of inflation, the overall success of the restaurant concept, and the success of the individual location. There is little that the leases are properly classifiedPartnership, as operating leases; therefore, rental income is reported whenlandlord, can do to positively affect the Percentage Rent earned on a straight-line basisat any of the Properties. Given the low inflation rate that has predominated in the U.S., and the costhighly competitive nature of the property, excludingquick service restaurant (“QSR”) sector, there is little indication that external forces will drive up the cost ofPercentage Rents in the land, is depreciated over its estimated useful life.

As of May 31, 2015, the aggregate Base Rents estimated to be received under the current operating leases for the Partnership’s Properties are as follows:near future, although confidence levels may translate into more dining out.

The Percentage Rents generated from operations of the Partnership’s Properties in 2014, 2013, and 2012 were approximately $501,000, $470,000 and $465,000, respectively.

Nine of the Partnership’s eleven Properties are leased to three significant tenants, Wendgusta, LLC (“Wendgusta”), Wendcharles I, LLC (“Wendcharles I”) and Wendcharles II, LLC (“Wendcharles II”), all three of whom are Wendy’s restaurant franchisees. The property lease(s) for the three tenants comprised approximately 56%, 15% and 8%, respectively, of the total 2014 Base Rents.

Expenses:Expenses. The General Partner believes that the expenses associated with managing the Partnership compare favorably with other partnerships managing similar portfolios in the industry. The General Partner believes that the expenses incurred by the Partnership in 2014 generally2017 represent the expected level of expenses.expenses (assuming that The Provo Group, Inc. continues managing the portfolio of Properties). Although the General Partner will continue to work to reduce expenses while retaining the quality of services, the General Partner does not predict significant reductions in expenses for the foreseeable future.

Background of Partnership

Since becoming the general partner of the Partnership effective February 8, 1993, The Provo Group, Inc. (“Provo”) has strived to maximize the value of the Partnership. Initially, Provo worked to (i) restore confidence in management, and (ii) provide accountability of the General Partner to the Limited Partners by appointing the Advisory Board, made up of limited partners and representatives of the broker/dealer community. Provo also initiated successful efforts to recover funds (the “Restoration”) from the former general partners (Gary DiVall and Paul Magnuson) and former accountants and attorneys for the Partnership. These efforts have resulted in the Partnership recovering approximately $1,229,000 in Restoration.

More recently, the General Partner, in consultation with the Advisory Board, has considered various means of maximizing Partnership value. Among the alternatives they have considered are (i) continuing to operate the Partnership’s business, (ii) transferring the Partnership’s assets to a real estate investment trust in a roll-up transaction, and (iii) selling the Properties, both individually and in bulk.

Appraisals

CBRE was selected to appraise the Properties by the General Partner because of its reputation in the industry and due to satisfaction with prior engagements of the firm. The General Partner and CBRE have no other current or on-going relationships. CBRE has significant experience with the valuation of restaurant and other real estate properties, and its staff includes Members of the Appraisal Institute (MAI) and persons with qualifications such as the SRPA designation and various state certifications. To the knowledge of the General Partner, many members of its staff also hold advanced degrees in finance, economics, real estate and restaurant and hospitality management. The market value appraisals of the Properties provided by CBRE were developed on, and prepared in conformance with the guidelines and recommendations in the Uniform Standards of Professional Appraisal Practice, the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. The appraisal process included inspections of the sites and buildings, gathering and analysis of comparable sales, rents and construction costs, and evaluation of the Properties under the “sales comparison approach” and “income capitalization approach.”

The Properties

The Properties and their individual original purchase prices and appraised values are as set forth below.

As of May 31, 2015,

The appraisals by CBRE were completed and delivered to the Partnership ownedin August and September 2017. As detailed above, the following properties:aggregate appraised value of the Properties is $18,075,000.

Liquidation Values

Recent Developments

Vacant Property – 4875 Merle Hay Rd, Des Moines, IA (Formerly Daytona’s All-Sports Café “Daytona’s”)

Daytona’s lease expired May 31, 2014Based on the appraised value of the Properties, the net asset value is determined by reducing the appraised value of the Properties and the tenant vacatedestimated fair market value of the premisesPartnership’s other assets by (i) the estimated transaction costs which would be incurred upon the sale of all of the Properties, including, without limitation, costs in connection with commissions, the Disposition Fee, title commitments and policies, surveys, environmental assessments, appraisals, legal fees and transfer taxes, and (ii) estimated expenses relating to the liquidation and dissolution of the Partnership. The General Partner believes the net asset value of the Partnership as of April [●], 2018, is approximately $380 per Unit.

In addition, the General Partner has projected distributions of net operating income earned for the period from January 1, 2018 through December 31, 2018 of approximately $14.04 per Unit. In accordance with historic Partnership practice, such amounts are expected to be paid quarterly on or about the same date. On January 24, 2014, the Partnership sent Daytona’s a 30-day Notice of Default for failureMay 15, 2018 (projected to pay its January rent. On February 3, 2014, the Partnership received payment for a portion of Daytona’s January rentbe $9.72 per Unit), August 15, 2018 (projected to be $2.16 per Unit) and real estate tax escrow payment. The 30-day Notice of Default expired on February 23, 2014. As of December 31, 2014 Daytona’s has not made its monthly rent or real estate tax escrow payments for February, March, April or May 2014. On May 29, 2014, the Partnership filed a motion for default judgment, which the tenant filed an answer denying all claims made against it. On July 10, 2014, the Partnership filed for summary judgment against the tenant for all amounts owing and as of December 31, 2014, and is still pursuing collection against the tenant.November 15, 2018 (projected to be $2.16 per Unit).

On July 8, 2014, the Partnership signed a listing agreement with a broker, Hubbell Commercial Brokers, L.C. On September 12, 2014, the Partnership signed a purchase agreement with Sundance, Inc., for the sale of the property at a sale price of $555,000. The Partnership completed the sale of the property on December 22, 2014 with net proceeds of approximately $490,000 paid to the Partnership.

Reason for Property Sale and Dissolution Consent

In 1998,Thus, the General Partner determined for a variety of reasons,believes that it was in the best interest of the Limited Partners could receive approximately (i) $380 per Unit in a liquidating distribution if the Properties are competitively marketed, each Property is sold, and the Partnership is liquidated, and (ii) $14.04 per Unit in income distributions prior to attemptor contemporaneously with the liquidating distribution, for total projected distributions of approximately $394.04 per Unit from now until liquidation. However, the final terms of the Transaction, and expenses incurred by the Partnership during the sale process and until the dissolution of the Partnership, will affect the amounts of any distributions made to the Limited Partners.

Reasons for the Transaction

The General Partner has determined that now is a good time to sell the Properties and then liquidate and dissolve the Partnership. The General Partner solicited and obtainedPartnership because the consent (the “1998 Consent”) of the holders of more than 50% of the Units to attempt to dispose of the Properties upon certain terms.

Although the Partnership made substantial effort to market the Properties during 1998, it did not receive a bid for the Properties which met the terms of the 1998 Consent. Though the Partnership has entertained some proposals to acquire the Properties over the past several years, none met the criteria established in the 1998 Consent, nor have they been of a nature that the General Partner believed warranted seeking the approval of the Limited Partners. The General Partner believes that the 1998 Consent is no longer operative, even if an offering to acquire the Properties was made to the Partnership on the terms outlined in such consent.

The General Partner is willing toPartnership’s assets may be guided by the preferences of the holders ofsold at a majority of the outstanding Units with respect to whether to actively market and sell the Properties for the purpose of liquidating the Partnership. Thus, as it did with each of the Prior Consents, the General Partner is soliciting the Limited Partners to determine their desires with respect to such potential course of action. If a majority of the Limited Partners do not consent to the sale of the Properties, which would result in the liquidation and dissolution of the Partnership, the General Partner intends to seek a similar consent every two years in order to remain informed as to whether the holders of Units want to dispose of the Properties and liquidate and dissolve the Partnership.

The term of the Partnership is currently set to expire on November 30, 2020.favorable price. The General Partner believes there are few investment alternatives availablethe following factors indicate that provide the stability and security of triple net leased properties without mortgage encumbrances. The Partnership has no debt on its Properties and therefore, no refinancing or sale pressures. The Partnership simply collects the rents on its leases (most of which have approximately 6 or more years remaining on their terms, pays its management and operating expenses, and distributes the balance to the Limited Partners. So long as the Properties remain leasedwill be highly valued by the market: (i) the extension of seven leases that occurred in 2017, resulting in the majority of the leases on the Properties extended until November 2026 or later, (ii) expected benefits of the new Tax Cuts and Jobs Act for pass-through entities, (iii) expected real estate market trends toward a higher yield environment, (iv) the current low interest rate environment tends to drive up the value of any asset (like the Properties) which generate a stream of income, (v) the General Partner’s belief that the U.S. economy is growing, and (vi) the generally stable group of tenants are viable,and QSR concepts that lease and utilize the investment returns should remain stable.

OverProperties. Certain of these positive factors may be somewhat offset by one Property having been vacant since the years, the Partnership has selectively sold properties wherefourth quarter of 2016. However, the General Partner believed it was receiving a fair price. In some instancesbelieves the market conditions are likely to produce strong interest in the Properties and result in positive sale terms for the Partnership and the potentially strong sales were motivated by a desire to improveenvironment outweighs the overall risk portfolio of the Partnership. Even if a majority of thepotential income Limited Partners does not consentmay receive if the Partnership were to the sale of all of the Properties, the General Partner may continue to “prune”own the portfolio on a selective basis.Properties.

DESCRIPTION OF THE PROPOSED SALE

If the holders of more than 50% of the Units vote “FOR”the proposed sale,Requisite Consents are received, the General Partner will proceed in good faithpromptly commence a procedure to solicit the sale of all the Properties on the terms generally set forth below and proceed

with the dissolution of the Partnership. If the Limited Partners do not authorize such sale, the General Partner will continue to manage the Partnership as a going concern and use its business judgment in an effort to enhance the value of the Partnership. Of course, the General Partner reserves the right at any time in the future, to seek the approval of the Limited Partners with respect to any disposition of all or substantially all of the Partnership’s Properties if the General Partner deems such disposition to be in the best interest of the Limited Partners.

Even if the holders of a majority of the Units vote “FOR” the Proposed Sale and Disposition, there is no assurance that a sale on the terms outlined in this Consent Statement could be consummated.

DESCRIPTION OF PROPOSED SALE OF PARTNERSHIP PROPERTIES and SUBSEQUENT DISSOLUTION OF THE PARTNERSHIP

If more than 50% of the Units vote in favor of this Consent, the General Partner will solicit competitive bids for the purchase of all the Partnership Properties. The General Partner will attemptSuch procedure, as described below, is designed to obtain a fair market price for the Properties. Upon completion of the sale of the Properties, the assets of the Partnership would be distributed to the Limited Partners, net of all normal and customary costs of such sale, and other reserves as the General Partner deems appropriate (if any). The General Partner believes that such a competitive bid process could reasonably be expected to result in total distributions (operating income and liquidation and dissolutionproceeds) to the Limited Partners of up to $394.04 per Unit.

Competitive Bid Process

As set forth above, the aggregate appraised value of all of the Partnership.Properties (the “Total Appraised Value”) is $18,075,000.

The General Partner has identified various parties (“Potential Buyers”) that the General Partner believes to have the capacity and interest to purchase all of the Partnership Properties. Promptly after receiving the Requisite Consents, the General Partner expects to solicit bids from the Potential Buyers. Additionally, the General Partner expects it will solicit bids by listing the Properties for sale through other means, such as advertisements in industry publications and may list the Properties through third party brokers or service providers.

The General Partner will request that each Potential Buyer sign a Confidentiality Agreement with the Partnership in order to receive a bid package. Such Confidentiality Agreement will restrict the Potential Buyers from utilizing any confidential information disclosed to them with respect to the Partnership or Partnership Properties for any purpose other than bidding on the purchase of all of the Properties. In addition, a Potential Buyer will agree in the Confidentiality Agreement not to purchase, or attempt to purchase, either directly or indirectly, more than 5% of the currently outstanding Units within the following two years, through any means without the express written consent of the General Partner.

Upon the Partnership’s receipt of the signed Confidentiality Agreement, the Partnership will deliver the Potential Buyer a bid package containing information about the Properties. The Potential Buyer will then also have access to additional information concerning the Properties located in an electronic “due diligence room.”

The Properties will be offered for sale pursuant to sealed bids (the “Bids”) from the Potential Buyers, to be held in escrow. Each Bid must be all cash, completely unconditional and accompanied by a deposit of at least $100,000 (the “Deposit”). No interest will be paid on any Deposit. If a Bid is accepted, the Deposit of that bidder will become non-refundable.

Approximately 30 days after the commencement of the sealed bid process, the General Partner will review the Bids to determine which Bid yields the highest aggregate price for all of the Properties (the “Total Price”) which is in excess of the “Minimum Purchase Price” (as defined below in “DESCRIPTION OF PROPOSED SALE - Purchase Price”). The General Partner will reserve the right to contact Potential Buyers to clarify their Bid and to offer them the option of increasing their Bid for all of the Properties to meet the Total Price,

If in which case such Potential Buyer may be selected as the Buyer (as defined below). The General Partner intends to notify the successful bidder on or about July 15, 2018, if its Bid has been accepted and will enter into a binding Sale Agreement with the successful bidder (the “Buyer”). The General Partner intends to effect the sale of the Properties to a single Buyer, and the General Partner expects that all of the Properties will be sold in the competitive bid process. Closing on the Proposed Sale and Dissolution passes,is expected to take place simultaneously in the offices of Polsinelli PC, 900 W. 48^thPlace, Suite 900, Kansas City, MO 64112 or at the title company on or before December 31, 2018, unless extended at the option of the General Partner, would solicit bids whichin its sole discretion.

Purchase Price

The minimum purchase price for all of the Properties will be 100% of the Total Appraised Value (the “Minimum Purchase Price”). The General Partner will require each Bid to include both: (i) a purchase price for all of the Properties in the aggregate,aggregate. The Total Appraised Value is $18,075,000. After deducting the projected ordinary and (ii) a purchase price for each ofnecessary expenses associated with the Properties individually. New appraisals for all ofProposed Sale, including the Partnership PropertiesDisposition Fee, and expenses associated with liquidation, the liquidating distribution to the Limited Partners would be secured andapproximately $380 per Unit, based upon a sale at the Minimum Purchase Price which equals the Total Appraised ValueValue. The General Partner anticipates additional net operating income distributions of $14.04 per Unit prior to the Properties would be the minimum asking price (the “Asking Price”). The last time appraisals were received was February 5, 2001, and included the values of 15 properties no longer owned by the Partnership, with an aggregate appraised value of $10,131,000. The internal December 31, 2014 net asset value for the Properties was $15,583,000, although there is no assurance that a third party appraiser would value the Properties at this aggregate value or that the Partnership would be able to solicit bids for such amount or the Asking Price.dissolution.

Certain fees, costs and expenses wouldwill be incurred by the Partnership in the sale processProposed Sale (the “Expenses”). Such Expenses may include (i) additional appraisal fees, (ii) title commitment and insurance fees, (iii) survey fees, (iv) environmental assessment fees, (v) legal fees, (v)(vi) brokerage fees/commissions (vi)(including the Disposition Fee), (vii) filing fees, and (vii)(viii) such other fees and expenses as are ordinary and necessary in connection with a large real estate transaction. The General Partner estimates such Expenses at approximately 5.5% of the total price.Total Price.

Following

Timing

If the consummationTransaction is approved, the General Partner intends to conduct the sale in an aggressive and efficient manner, resulting in timely distributions to Limited Partners. Accordingly, the General Partner has established the following projected timeline goals for completion of the saleProposed Sale:

The foregoing are the General Partner’s goals for and estimates of the time required for each step of the Transaction. Various delays may be encountered which could result in a later closing date or distribution date.

Nine of the Leases contain rights of first refusal, allowing lessees to match any purchase price within 30 days of notice. Under the schedule detailed above, these rights are not expected to have a significant impact on the timing of the Transaction.

Advantages to the Limited Partners

Maximizing Value. The General Partner believes that the Transaction will maximize the Partnership’s realization of value in the Properties. The Properties are generally initially leased under 20 year leases, with remaining lease terms on eight of the Properties currently extended until November 6, 2026. The remaining terms of the Leases, and the potentially stable cash flow from the Properties, are among the primary factors that a prospective buyer will evaluate in pricing the Properties. As the Leases mature or approach maturity, prospective buyers are likely to attribute a greater discount to the value of the Properties and, therefore, if the Partnership would incur additional expenses associatedcontinues to hold the Properties, the General Partner believes that the Properties’ fair market value may decrease.

Conditions for the Sale of Restaurant Properties. As the economic well-being of consumers has increased as a result of continued general improvement in the employment and strong financial markets, restaurants have maintained, and in some cased increased, customer traffic. As a result, in many real estate markets, prices for restaurant properties have been strong, and in some cases increasing. In addition, the low interest rate environment has resulted in improved values for “triple net” leased properties, the value of which generally move inversely with winding up the Partnership’s affairs, liquidating its assets and dissolving the Partnership. Those expenses may include, without limitation: (i) escheat fees; (ii) legal fees; (iii) consent solicitation fees; (iv) printing and postage expenses; (v) tax preparation and audit fees; (vi) investor servicing fees; (vii) taxes; and (viii) management and overhead fees; and (ix) supplies and other administrative expenses. The paymentinterest rates.

Lack of these expenses would reduce the amount available for distribution to the Limited Partners.

Effects on the Limited Partners

Advantagesan Established Trading Market:. There is currently no active or established trading market for Partnership Units. The values available to Limited Partners in the secondary market for their Units likely represent a discount from the pro rata value of the underlying assets of the Partnership, due in part to the lack of liquidity of the Units. The liquidation and dissolution of the PartnershipTransaction would provide aan efficient and cost effective manner for Limited Partners to realize the value of their Units without having to comply with the conditions and restrictions of selling its Units individually and without being subjectindividually. The General Partner believes that the Transaction is the most attractive opportunity for the Limited Partners to obtain the highest value of their Units because Properties will be sold in a competitive bid process.

Disadvantages to Limited Partners

There is no assurance that (i) the Partnership will be successful in obtaining a Bid or Bids equal to the normal secondary market discountMinimum Purchase Price, or (ii) the Partnership will be successful in consummating the Proposed Sale with any Buyer(s). If the Proposed Sale is not consummated, the subsequent dissolution contemplated by the Transaction will not occur, and relatively high transaction fees. Further, following liquidationthe Partnership will continue to own the Properties, and dissolution,from time to time will be required to incur expenses to lease, oversee and maintain the Properties and to identify lessees.

While the General Partner believes that the Transaction would be in the best interests of the Limited Partners wouldto maximize value, each Limited Partner should consider the following factors in evaluating the Transaction. Upon the completion of the liquidation, Limited Partners will no longer receive distributions of cash flows from operations since the Partnership will no longer be subject to anyoperating the Properties. However, Limited Partners will receive a distribution of the risk factors attendant tonet proceeds from the operation of a portfolio of triple-net based properties.

Disadvantages: The General Partner anticipates (but does not guarantee) that the portfoliosale of Properties, will continue to generate net distributable income in line with historical performance for at least the next seven to nine (7 - 9) years. This represents a cash returnafter deduction of approximately 5-6% of the internal December 31, 2014 Net Unit Value. Since the Partnership’s assets are depreciable real property, some of the distributable net income may be tax sheltered, leading to a slightly higher “after tax” rate of return. In today’s generally low interest rate environment, these returns compare favorably to alternative investments of similar risk profiles into which Limited Partners could re-invest their after-tax liquidation proceeds.

If the Partnership is liquidated, thecertain expenses and fees as described above. Limited Partners will be subject to capital gains taxes to the extent the net proceeds from the sale of Properties on aTransaction per Unit basis exceeds the Limited Partners’ adjusted tax basis in each Unit. Finally, Limited Partners will not benefit from future appreciation, if any, in the value of the Properties if the Properties are sold.

Effect on

Advantages to the General Partner

The Partnership Agreement providesand the Permanent Manager Agreement (the “PMA”) both provide for the General Partner to receive up to a 3% commission (“the Disposition Fee”) on the sale of any Partnership Propertiesproperties if it provides a substantial portion of the services in the sales effort. If the Proposed Sale and Dissolution passes, meaning the requisite consents were received and the Partnership is able to successfully sell the Properties and then liquidate and dissolve,occurs, the General Partner wouldwill collect such Disposition Fee and wouldearlier than it might otherwise if the Partnership remained an ongoing concern, but conversely the General Partner will not be entitled to future management fees as a resultfollowing liquidation of the liquidation and dissolution of the Partnership.

FEDERAL INCOME TAX CONSEQUENCES OF PROPOSED SALE and DISSOLUTIONTHE TRANSACTION

The following is a summary of the material Federal income tax consequences resulting from the sale of all of the Properties, and the subsequent liquidation and dissolution of the Partnership whichthat may affect a Limited Partner. This summary is included solely forPartner resulting from the information ofTransaction, including the Limited Partners.Proposed Sale and subsequent liquidation and dissolution. This summary is not intended as a substitute for careful tax planning, and consequences may vary according to each Limited Partner’s individual circumstances. Therefore each Limited Partner is urged to consult his or her own tax adviser concerning the specific tax consequences of the Proposed Sale and subsequent liquidation and dissolution of the Partnership to such Limited Partner.

This summary is based on the Internal Revenue Code of 1986, as amended (“Code”), as well as the applicable existing regulations there under,thereunder, judicial decisions and current administrative rules and practices. The following discussion does not discuss the impact, if any, state or local taxes may have on the Proposed Sale and the liquidation and dissolution of the Partnership. Furthermore, no assurance can be given as to the accuracy or completeness of this summary and there can be no assurance that the Internal Revenue Service will agree with the interpretations of the Code and the regulations set forth below. Each Limited Partner should be aware that the Code and the regulations are subject to change and in some instances may be given retroactive effect.

Taxation of Partnerships in General

An entity classified as a partnership for federal income tax purposes is not subject to federal income tax. Rather, aincome or loss “flows through” the partnership is an entity for which the items of income, gain, loss, deductions, and credits “flow through” to the partners, who are taxed in their individual capacitiesindividually on their distributiveallocable shares of the partnership’spartnership income, gain, loss andor deductions. However, the partnershipPartnership is a tax reporting entity that must file an annual return disclosing the partnership’sPartnership’s gain or loss. The tax treatment of partnershipPartnership items of taxable income or loss is generally determined at the partnershipPartnership level. However, each partner must account separately for its distributive share of the following partnership items: (1) short-term capital gains and losses, (2) long-term capital gains and losses, (3) gains and losses from sales or exchanges of property used in a trade or business or subject to involuntary conversion, (4) charitable contributions, (5) dividends for which there is a dividends-received deduction, (6) taxes paid or accrued to foreign countries and to U.S. possessions, (7) taxable income or loss, exclusive of items requiring separate computation, and (8) other items required to be stated separately either by Treas. Reg. §1.702-1 or because separate statement could affect the income tax liability of any partner,

including but not limited to the following: recovery of bad debts, prior taxes, and delinquency amounts, deductible investment expenses, alternative minimum tax adjustments and tax preference items, investment interest, and any items subject to a special allocation under the partnership agreement.

Each partner is required to treat partnershipPartnership items on its return in a manner consistent with the treatment of such items on the partnershipPartnership return and may be penalized for intentional disregard of the consistency requirement. Each partner must account for its distributiveallocable share of partnershipPartnership taxable income or loss in computing its income tax, whether or not any actual cash distribution is made to such partner during its taxable year. Such consistency requirement may be waived if the partner files a statement (IRS Form 8082) identifying the inconsistency or shows that it resulted from an incorrect schedule furnished by the partnership.

Basis of Partnership Interests

A partner’sLimited Partner’s basis in its Unit is equal to its cost for such Unit, (i) reduced by its allocable share of partnershipPartnership distributions, taxable losses and expenditures of the partnershipPartnership not deductible in computing its taxable income and not properly chargeable to its capital account, and (ii) increased by its allocable share of partnershipPartnership taxable profits, income of the partnership exempt from tax and additional contributions to the partnership.Partnership. For purposes of determining basis, an increase in a partner’sLimited Partner’s share of partnership liability is treated as a contribution of money by that partnerLimited Partner to the partnership.Partnership. Conversely, a decrease in its share of partnership liability is treated as distribution of money from the partnership.Partnership. Generally, a partnerLimited Partner may not take recourse liability into account in determining its basis except to the extent of any additional capital contribution it is required to make under the partnership agreement. However, if a partnershipPartnership asset is subject to a liability for which no partnerLimited Partner has any personal liability, in general, the partner’sLimited Partner’s allocable share of the nonrecourse liability will be taken into account to determine basis.

Effect of the Proposed Sale

The sale of Partnership Properties in connection with the liquidation and dissolution of the Partnership wouldProposed Sale will be a taxable event to the Limited Partners. Gain or loss on a sale of a property generally wouldwill be measured by the difference between the net amount realized (after deducting ordinary and necessary expenses of the sale) and the adjusted basis of the propertyassets that isare sold. Generally the amount realized is the sum of any money received, plus the fair market value of any property received, plus the amount of liability from which the Partnership is discharged as a result of the sale. The adjusted basis of property is generally the initial tax basis on the day the property was acquired less deductions, allowed or allowable, for depreciation.

A substantial portion of the property,assets to be sold, including building, land and equipment, which were held for more than one year are expected to be treated as “Code Section“section 1231 assets.” Code Section 1231 assets are property used in the trade or business of a character which is subject to the allowance for depreciation, held for more than one year, and real property used in the trade or business held for more than one year. Gains or losses from the sale of Code Sectionsection 1231 assets would be combined with any other Code Sectionsection 1231 gains or losses incurred by the Partnership in that year, and the Code Sectionsection 1231 gains or losses would be allocated to the Limited Partners as provided in the Partnership Agreement. Notwithstanding the foregoing, certain depreciation recapture rules may cause some or all of the gains realized upon the liquidation of the Partnership Properties to be taxed at the partner level as ordinary income under I.R.C. Section 1250(a) or at a 25% rate by virtue of the “unrecaptured I.R.C. Section 1250 gain” rules. Section 1250 recapture will only be applicable to DiVall’sthe Partnership’s taxable investors.

Effect of Dissolution and Liquidation

Generally, upon the dissolution and liquidation of a partnership, gain will be recognized by and taxable to a partner to the extent the amount of cash distributed to it exceeds the partner’s basis in its Unit at the time of distribution. Any gain or loss which a Limited Partner recognizes from a liquidating distribution is generally taxed as capital gain or loss. However, any income or loss allocatedreceived from the normal operations of the partnership during the year of liquidation, may constitute ordinary income or loss.

Any capital gain or loss will be treated as long-term if the Limited Partner has held its Units for more than twelve (12)eighteen months when the liquidation is consummated. For non-corporate limited partners, long-term capital gains are generally taxed at a 20% rate. This rate may be 0% depending on the individual taxpayer’s taxable income and applicable tax bracket. If the Limited Partner has held its Units for less than a year, any gain will be a short-term capital gain. Short-term capital gains are taxed as ordinary income. Capital losses generally are deductible only to the extent of capital gains plus, in the case of a non-corporate Limited Partner, up to $3,000 of ordinary income. Capital losses realized upon the liquidation may be utilized to offset capital gains from other sources and may be carried forward, subject to applicable limitations. If the selling partnerLimited Partner has a basis of zero and a deficit or negative capital account, itthe Limited Partner will realize additional income to the extent that it has been relieved of its obligation to repay the deficit or is subject to a qualified income offset.

Although the sale of a partnership interest (and the liquidation of the Partnership is treated as a sale of a partnership interest) generally gives rise to capital gain or loss, amounts received by a partner allocable to its share of unrealized receivables or substantially appreciated inventory may constitute ordinary income or loss. The term “unrealized receivables” includes any rights to income that have not been included in gross income under the method of accounting employed by the partnership (Treas. Reg. §1.751-1(c)).

Exempt Employee Trusts and Individual Retirement Accounts

Tax-exempt organizations, including trusts which hold assets of employee benefit plans, although not generally subject to federal income tax, are subject to tax on certain income derived from a trade or business carried on by the organization which is unrelated to its exempt activities. However, such unrelated business taxable income does not in general include income from real property, gain from the sale of property other than inventory, interest, dividends and certain other types of passive investment income that is derived from “debt-financed properties” as defined in Section 514 of the Code. Further, if, as the Partnership believes, the Properties are not characterized as “inventory,” and are not held primarily for sale to customers in the ordinary course of the Partnership’s business, the income from the sale of the Properties should not constitute unrelated business taxable income. Finally, the Partnership’s temporary investment of funds in interest-bearing instruments and deposits also should not give rise to unrelated business taxable income.

THE FOREGOING ANALYSIS CANNOT BE, AND IS NOT INTENDED AS, A SUBSTITUTE FOR CAREFUL TAX PLANNING. LIMITED PARTNERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THEIR OWN TAX SITUATIONS. THISSITUATIONS AND THE EFFECTS OF THE TRANSACTION MAY AFFECT SEVERALAS TO FEDERAL TAXES INCLUDING,INCLUDE, BUT NOT LIMITED TO, INCOME AND ESTATE TAXES.

DISTRIBUTION UPON LIQUIDATION OF THE PARTNERSHIP

Upon completion of the Proposed Sale, the Partnership will be dissolved and its business wound up in accordance with Article VIII of the Partnership Agreement, including the liquidation of the Partnership Properties.Agreement. The sale proceeds, after establishing any necessary cash reserves to cover liabilities, will be distributed to the Limited Partners and the General Partner in the manner set forth in the Partnership Agreement, although the distribution to the General Partner is expected to be limited to the minimum amount necessary to cover its tax obligations on its portion of the Partnership’s income resulting from the liquidation. TheIn addition, pursuant to the PMA, the General Partner wouldwill attempt to obtain commercial insurance covering liabilities which the Indemnification Trust of the Partnership was established to cover. If such insurance is available, the Partnership would use proceeds from the Indemnification Trust to purchase such insurance coverage and the balance of the Indemnification Trust would be distributed with the sale proceeds during liquidation. If such insurance coverage is unavailable at a reasonable cost, theup to $100,000 of Indemnification Trust wouldwill be maintained for a period past termination of the Partnership in keeping with terms of such Indemnification Trust, and the proceeds thereof would be subsequently distributed to the Limited Partners.