UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
Commission File Number 0-15764
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
TEMPO-LP, INC.
(Exact name of registrant as specified in governing instrument)
Dean Witter/Coldwell Banker Tax
Exempt Mortgage Fund, L.P.
Delaware 58-1710934
(State of organization) (IRS Employer Identification No.)
TEMPO-LP, Inc.
58-1710930
(IRS Employer Identification No.)
2 World Trade Center, New York, NY 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 392-1054
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ X ]
State the aggregate market value of the voting stock held by
nonaffiliates of the registrant. N/A
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
PART I
ITEM 1. BUSINESS.
Dean Witter/Coldwell Banker Tax Exempt Mortgage Fund, L.P. (the
"Partnership"), is a limited partnership formed in August 1986 under the
Uniform Limited Partnership Act of the State of Delaware for the purpose
of investing in a portfolio of federally tax-exempt revenue bonds.
These bonds, which are commonly known as industrial development or revenue
bonds, are issued as special obligations of various state or local
governments or their agencies or authorities. The proceeds of such bonds
were used to fund mortgage loans to finance the construction and/or
ownership of income-producing multi-family residential properties. Each
of the revenue bonds is primarily secured by the real property financed
by the mortgage loan.
TEMPO-GP Inc. (the "General Partner"), a Delaware corporation which
is wholly-owned by Dean Witter, Discover & Co. ("DWD") is the sole
general partner of the Partnership. The General Partner manages and
controls the affairs of the Partnership. The terms of the transactions
between the Partnership and the General Partner and its affiliates are
set forth in Item 13 below.
TEMPO-LP Inc. (the "Limited Partner"), a Delaware corporation which
is wholly-owned by DWD, is the sole limited partner of the Partnership.
The Limited Partner assigned its interests in the Partnership to
investors; such interests are represented by assigned benefit
certificates ("ABCs"). The Limited Partner acts as nominee or agent for
the investors with respect to matters pertaining to the Partnership. The
Limited Partner has no power to conduct any other business or investment
activity. The Partnership and the Limited Partner are sometimes
collectively referred to herein as the "Registrants".
In 1986, the Partnership issued 7,454,110 units of ABCs with gross
proceeds from the offering of $149,082,200. The offering has been
terminated and no additional ABCs will be sold.
The proceeds from the offering were used to purchase ten series of
revenue bonds which funded the development of eight multi-family
residential properties (the "Properties"). The terms of the mortgage
loans funded by the revenue bonds mirror the terms of the corresponding
revenue bonds. The mortgage loans are obligations of the respective
owners of the properties and are collateralized by first mortgages on the
properties. The revenue bonds are non-recourse with respect to the
issuers of the bonds. The revenue bonds and the related mortgage loans
and properties are described in Item 2 and the footnotes to the financial
statements in Item 8.
In order to protect the tax-exempt status of the revenue bonds, the
owners of the Properties are required to enter into certain agreements
to own, manage and operate the Properties in accordance with the
requirements of the Internal Revenue Code.
The federally tax-exempt interest may be an item of tax preference
for purposes of the federal alternative minimum tax. The Partnership may
also generate other taxable income for all investors from time to time;
however, such amounts are expected to be nominal.
In December 1992, the Internal Revenue Service published proposed
and temporary regulations with respect to the modification of debt
instruments. If the regulations are adopted as currently written, they
would limit the type and degree of direct, indirect and implied
modifications that could be made by a bond owner or lender without
adversely affecting the tax-exempt status of the revenue bonds. It is
not clear at this time how the proposed regulations would affect the
Partnership with respect to revenue bonds secured by mortgages on
properties transferred to new borrowers. The regulations have not yet
been finalized.
The Partnership considers its business to include one industry
segment, investment in federally tax-exempt revenue bonds. Financial
information regarding the Partnership is set forth in the Partnership's
financial statements in Item 8 below.
The Partnership has the right to require the revenue bond issuers
to repurchase these bonds within approximately twelve to fifteen years
after completion of construction of the related properties. The
Partnership anticipates holding the revenue bonds for approximately
fourteen to seventeen years; however, the Partnership may retain these
bonds for a longer period of time if market conditions so warrant.
The issuers of the revenue bonds also have the right to prepay the
bonds approximately eight to ten years after their issuance.
The Partnership's business is indirectly affected by competition
to the extent that Properties may be subject to competition from
neighboring properties. Further information regarding competition in the
markets where the Properties are located is set forth in Item 7,
"Management's Discussion and Analysis of Financial Conditions and Results
of Operations".
The Registrants have no employees.
All of the Registrants' business is conducted in the United States.
<PAGE>
<TABLE>
ITEM 2. PROPERTIES.
The Registrants' principal offices are located at Two World Trade
Center, New York, New York 10048. The Registrants have no other offices.
The following table lists the revenue bonds the Partnership has
purchased and the corresponding mortgage loans and Properties:
<CAPTION>
Original Property Maturity
Bond/Loan Closing Location Occupancy Date
Property Principal date of Property at 12/31/95 of Bond/Loan
<S> <C> <C> <S> <C> <C>
Park at Landmark1 $ 34,650,000 3/12/87 Alexandria, VA 91% 6/1/08
Burlington Arboretum
Apartments 29,326,500 9/22/87 Burlington, MA 99% 9/22/11
SunBrook Apartments2 16,325,000 12/16/87 St. Charles 77% 12/1/11
County, MO
Pine Club Apartments 13,600,000 9/23/88 Orlando, FL 93% 9/1/12
Wildcreek Apartments 11,000,000 7/16/87 Clarkston, GA 97% 7/1/11
The Township in 10,800,000 11/14/88 Hampton, VA 93% 11/1/09
Hampton Woods
High Ridge Apartments 9,900,000 12/21/87 Albuquerque, NM 98% 12/1/11
Fountain Head 4,900,000 12/31/87 Kansas City, MO 98% 12/1/08
Apartments3
Total $130,501,500
<footnotes>
1. The Partnership and an affiliate of the General Partner each own a 50% interest in the entity
which owns the property. The property consists of land and two high-rise buildings containing
396 units.
2. The Partnership and an affiliate of the General Partner each own a 50% interest in the entity
which owns the property. The property consists of land and 30 buildings containing 476 units.
3. The Partnership and Fountain Head Partners, an unaffiliated party, each own a 50% interest in
the entity which owns the property. The property consists of land and eight buildings
containing 112 units.
</TABLE>
The carrying values and the terms of the revenue bonds and the
mortgage loans are described in the notes to the financial statements in
Item 8 below.
ITEM 3. LEGAL PROCEEDINGS.
Neither the Registrants nor any of the properties in which the
Partnership has an interest is subject to any material pending legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF ABC HOLDERS.
No matter was submitted during the fourth quarter of the fiscal
year to a vote of ABC holders.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S ASSIGNED BENEFIT CERTIFICATES AND
RELATED ABC HOLDER MATTERS.
An established public trading market for the ABCs does not exist,
and it is not anticipated that such a market will develop in the future.
Accordingly, information as to the market value of an ABC at any given
date is not available. However, the Partnership does allow the ABC
holders (the "Investors") to transfer their ABCs.
As of March 18, 1996, there were 8174 Investors.
The Partnership is a limited partnership and, accordingly, does not
pay dividends. It does, however, make quarterly distributions of cash
to its partners. Pursuant to the partnership agreement, distributable
cash, as defined, is paid 98% to the Investors and 2% to the General
Partner, until the Investors have received for each year, an annual
return of 9.5%. Thereafter, net income will be distributed 90% to the
Investors and 10% to the General Partner.
Repayments of revenue bond principal will generally be distributed
100% to the Investors. Payments of base and contingent interest (see
Note 4 to the financial statements in Item 8 below) on maturity or sale
of the bond will generally be distributed first; 98% to the Investors and
2% to the General Partner, until the Investors have received in the
aggregate $20.00 per ABC plus distributions sufficient to provide an
average cumulative noncompounded return of 9.5% per annum; and
thereafter, 90% to the Investors and 10% to the General Partner. During
the years ended December 31, 1995 and December 31, 1994, the Partnership
did not distribute any sale or financing proceeds.
During the year ended December 31, 1995, the Partnership paid cash
distributions aggregating $7,321,000 with $7,174,581 distributed to the
Investors and $146,419 to the General Partner. During the year ended
December 31, 1994, the Partnership paid cash distributions aggregating
$6,465,300 with $6,335,994 distributed to the Investors and $129,306 to
the General Partner. The distributions aggregated $0.96 per ABC in 1995
and $0.85 per ABC in 1994.
On February 10, 1996, the Partnership paid the fourth quarter
distribution of $2,236,233 to the Investors ($0.30 per ABC) and $45,637
to the General Partner.
The Partnership anticipates making regular distributions to its
partners in the future.
The sole shareholder of TEMPO L.P. Inc. was DWD.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA.
<CAPTION>
The following sets forth a summary of the selected financial data for
the Partnership:
Dean Witter/Coldwell Banker Tax Exempt Mortgage Fund, L.P.
Years ended December 31, 1995, 1994, 1993, 1992, and 1991
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Total revenues $7,923,777 $7,581,882 $6,431,393 $6,432,862 $5,830,989
1
Net income (loss) $7,559,369 $6,846,233 $(11,269,051) $5,097,284 $5,388,560
Net income (loss) per ABC $0.99 $0.90 $(1.48) $0.67 $0.71
Cash distributions
paid per ABC2 $0.96 $0.85 $.925 $1.00 $1.05
Total assets at
December 31 $110,588,908$110,442,773 $109,894,827 $127,847,448 $130,572,629
<footnotes>
1. Includes a $17.3 million loss on impairment recorded for the Park at Landmark and
Burlington Arboretum Apartments properties. See Note 4 to the Financial
Statements in Item 8.
2. Distributions paid to the Investors include a return of capital per ABC of $.925,
$.33 and $.34 for the years ended December 31, 1993, 1992 and 1991, respectively,
calculated as the excess of cash distributed per ABC over accumulated earnings
per ABC not previously distributed.
The above financial data should be read in conjunction with the financial
statements and the related notes appearing in Item 8.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Liquidity and Capital Resources
The Partnership raised $149,082,200 in a public offering of
7,454,110 ABCs which was terminated in 1987. The Registrants have no
plans to raise additional capital.
The Partnership has purchased ten series of revenue bonds, the
proceeds of which funded the development of the Properties. The
Partnership's acquisition program has been completed. No additional
investments are planned.
Cash flow generated by the Properties is the primary source of
all payments due the Partnership under the terms of the revenue bonds,
which are collateralized by the Properties.
The Partnership's business is indirectly affected by
competition to the extent that the Properties may be subject to
competition from neighboring properties.
Overall economic expansion has kept household formation
relatively strong and has stimulated demand for apartments. Stabilized
vacancies and rising rental rates have had a positive effect on operating
income at many apartment properties. The strengthening market conditions
for multifamily properties is leading to apartment construction in
several cities of the midwest and southeast. Nationally, multifamily
housing starts are at the highest level since 1990.
In 1995, Partnership cash flow from operations exceeded its
distributions and other cash requirements. The Partnership increased the
cash distribution rate from 4.25% to 5% beginning with the cash
distribution for the first quarter of 1995, which was paid in May 1995.
The Partnership increased the cash distribution rate to 6% beginning with
the cash distribution for the fourth quarter of 1995 which was paid in
February 1996. The Partnership expects to incur a modest cash flow
deficit in 1996 which will be funded from Partnership cash reserves.
The revenue bonds and the related mortgage loans and properties
are described in Note 4 to the financial statements in Item 8. The
payment status of each revenue bond is as follows:
Cash flow from the High Ridge Apartments, Township in Hampton
Woods Apartments and Burlington Arboretum Apartments properties enabled
their owners to pay debt service at effective interest rates of 8.30%,
9.18% and 6.54%, respectively. These payment rates exceeded the minimum
interest rates required on the respective loans. Such excess payments
were applied to base interest due under the respective loans. In 1996,
each of these properties is expected to operate at a modest cash flow
surplus after payment of minimum debt service and, therefore, should be
able to continue to pay a portion of base interest in 1996.
Cash flow from the Pine Club Apartments and Wildcreek
Apartments properties enabled their owners to pay minimum debt service.
Each property is expected to generate sufficient cash flow to fully pay
minimum debt service during 1996. The Partnership expects to begin to
receive additional base interest from Wildcreek in 1996.
During 1995, the Fountain Head property, which is owned 50%
each by the Partnership and Fountain Head Partners, an unaffiliated
party, operated at a cash flow deficit, and the owner was unable to pay
its required minimum debt service and the real estate tax escrow in full.
In addition, the property is not generating sufficient cash flow to pay
certain operating expenses on a current basis. As of December 31, 1995,
Fountain Head Partners has a remaining commitment to fund property
operating deficits of approximately $26,500 secured by a letter of credit
in favor of the Partnership. During 1996, the Partnership and Fountain
Head Partners expect to fund operating deficits; the Partnership's share
of such fundings is not expected to be material.
All of the cash flow generated by the SunBrook property (which
is partly owned by the Partnership) is paid to the Partnership. The
property operated at a modest cash flow deficit in 1995 and the owner was
not able to pay its minimum debt service. Cash flow from the property
is expected to be sufficient to fully pay minimum debt service in 1996.
All of the cash flow generated by the Park at Landmark property
(which is partly owned by the Partnership) is paid to the Partnership.
During 1995, the Partnership received $1,825,303 from the property; this
amount was less than required minimum debt service by $773,447. Cash
flow from the property is not expected to be sufficient to fully pay
minimum debt service in the foreseeable future.
Other assets decreased during 1995 due to the reimbursement of
costs of improvements at the Fountain Head property by Fountain Head
Partners and amortization of improvements at the Fountain Head and
SunBrook properties. See Note 4 to the financial statements.
On February 10, 1996, the Partnership paid the fourth quarter
cash distribution of $2,236,233 to the Investors ($0.30 per ABC) and
$45,637 to the General Partner.
Except as discussed above and in the financial statements, the
General Partner is not aware of any trends or events, commitments or
uncertainties that will have a material impact on liquidity.
Operations
Fluctuations in the Partnership's operating results for the
years ended December 31, 1995 compared to 1994 and 1994 compared to 1993
are primarily attributable to the following:
The increase in interest income from revenue bonds in 1995
compared to 1994 was primarily due to an increase in interest received
from the Park at Landmark property. The increase in 1994 compared to
1993 was primarily due to an increase in interest received from the Park
at Landmark and SunBrook properties.
The increase in interest income from short-term investments in
1995 compared to 1994 was primarily due to higher average balances
invested as well as higher average rates in 1995.
The decrease in general and administrative expense in 1995
compared to 1994 was primarily due to the absence in 1995 of debt
restructuring costs, and due to lower legal costs in 1995. The increase
in general and administrative expenses in 1994 compared to 1993 was
primarily due to the costs of restructuring the Burlington Arboretum debt
of approximately $255,000.
In 1993, the Partnership recorded a provision for loss on its
investments in the Park at Landmark and Burlington revenue bonds.
A summary of the markets in which the Properties are located
is as follows:
Burlington Arboretum Apartments, located in Burlington, MA, a
suburb of Boston, is in a market which has remained strong in 1995 with
a current vacancy rate of 3%. During 1995, occupancy at the property
increased from 98% to 99%. The owner raised rental rates at the property
by a total of approximately 15% during 1995. Rental rates are also
expected to increase in 1996.
The Park at Landmark property, located in Alexandria, VA,
operates in a weakening market experiencing a vacancy rate of 8%.
Competing apartment buildings are beginning to offer rental concessions
to attract new tenants to offset the effect of low demand for multifamily
units. During 1995, occupancy at the property decreased from 97% to 91%.
Effective January 1, 1995, the owner raised rental rates at the property
slightly.
Pine Club Apartments, located in Orlando, Fl, operates in a
market with a current vacancy rate of approximately 7%. The market is
strengthening due to employment growth in Orlando's service industries.
During 1995, occupancy at the property increased from 91% to 93% and the
owner was able to increase rental rates by approximately 5%. Newly
constructed apartments in this market will compete directly with Pine
Club Apartments; the impact of this competition is unknown at this time.
SunBrook Apartments, located in St. Charles County, MO, a
suburb of St. Louis, is in a market currently experiencing a 2% vacancy
rate. However, a slow-down in single-family home sales and retrenchment
of some corporate employers in this market decreased demand for furnished
apartments at the property. During 1995, average occupancy at the
property was 85%. Effective April 1, 1995, the owner raised rental rates
at the property by approximately 10%.
Wildcreek Apartments is located in Clarkston, GA, a suburb of
Atlanta. This market, with a current vacancy rate of approximately 5%,
is beginning to level off due to increased purchases of single-family
homes by prior apartment tenants. During 1995, occupancy at the property
increased from 90% to 97% and the owner was able to increase rental rates
by 15%. There is no new apartment construction in this sub-market
although construction is ongoing in the surrounding Atlanta area.
The Township in Hampton Woods property, located in Hampton, VA,
operates in a market which is primarily dependent on the defense
industry. The market remains reasonably stable at a vacancy rate of 7%
due to the maintenance of the military population in the area. During
1995, occupancy at the property remained at 93%. The owner raised rental
rates by approximately 3%. New apartment construction in the area may
have an impact on the property in the future.
High Ridge Apartments, located in Albuquerque, NM, operates in
a weakening market experiencing a current vacancy rate of 8%. Competing
apartment buildings are beginning to offer rental concessions to attract
new tenants to offset the effect of affordability of single-family homes.
Occupancy at the property remained at 98% during 1995 and the owner was
able to raise rental rates approximately 8%. New apartment units in this
market may have an adverse effect on the property in the future.
Fountain Head Apartments, located in Kansas City, MO, operates
in a market which has a vacancy rate of 5%. During 1995, occupancy
decreased slightly from 100% to 98%. New apartment units are under
construction, but they are not expected to adversely affect the property.
Rental rates remained stable during 1995.
Inflation
Inflation has been consistently low during the periods
presented in the financial statements and, as a result, has not had a
significant effect on the operations of the Partnership or its
properties.
<PAGE>
<TABLE>
<CAPTION>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
INDEX
<S> <C>
(a) Financial Statements
Independent Auditors' Report 12
Schedules of Investments at December 31, 1995 and 1994 13-16
Balance Sheets at December 31, 1995 and 1994 17
Statements of Operations for the years ended
December 31, 1995, 1994 and 1993 18
Statements of Partners' Capital for the years ended
December 31, 1995, 1994 and 1993 19
Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993 20
Notes to Financial Statements 21-33
TEMPO-LP, INC.
Independent Auditors' Report 34
Balance Sheets at December 31, 1995 and 1994 35
Note to Balance Sheets 36
All schedules other than those indicated above have been omitted because either
the required information is not applicable or the information is shown in the
financial statements or notes thereto.
/TABLE
<PAGE>
Independent Auditors' Report
To The Partners of
Dean Witter/Coldwell Banker Tax Exempt Mortgage Fund, LP
We have audited the accompanying balance sheets, including schedules of
investments, of Dean Witter/Coldwell Banker Tax Exempt Mortgage Fund, LP
(the "Partnership") as of December 31, 1995 and 1994, and the related
statements of operations, partners' capital, and cash flows for each of
the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Dean Witter/Coldwell Banker Tax
Exempt Mortgage Fund, LP as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for each of the three years
in the period ended December 31, 1995 in conformity with generally
accepted accounting principles.
/s/Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
March 20, 1996
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
SCHEDULE OF INVESTMENTS
December 31, 1995
Percentage Par Carrying
of Portfolio Maturity ($000) Value
Cash and cash equivalents and escrowed funds:
<S> <C> <C> <C> <C>
Tax-exempt variable Rate Demand
Notes of various issuers 1.0% 01/02/96 2,390 $ 1,125,000
Landmark New York Tax Free
Cash Reserve Money Market
Funds consisting of New York
Municipal obligations 4.6% 01/02/96 - 5,025,613
Cash (.1)% N/A - (153,414)
Total 5.5% 5,997,199
Revenue Bonds:
Burlington Arboretum Apartments
City of Burlington, MA
Housing Authority,
Series 1987, MB, 9.00% 21.7% 09/22/11 28,826 23,500,000
City of Burlington, MA
Housing Authority, Series
1989A, 9.00% 0.5% 09/22/11 500 500,000
22.2% 29,326 24,000,000
Park at Landmark
City of Alexandria, VA
MultiFamily Refunding
Revenue Bond, Series
1987A, 9.50% 15.2% 06/01/08 34,650 16,411,101
Pine Club Apartments
Orange County, FL
Multifamily Housing Revenue
Bond, Series 1988, 9.50% 12.6% 9/01/12 13,750 13,600,000
SunBrook Apartments
County of St. Charles, MO
Industrial Development
Authority Revenue Bond,
Series 1987, 9.25% 10.7% 12/01/11 16,330 11,590,748
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 1995
Percentage Par Carrying
of Portfolio Maturity ($000) Value
Revenue Bonds, continued:
<S> <C> <C> <C> <C>
Wildcreek Apartments
City of Clarkston, GA
Multifamily Housing
Revenue Bond,
Series 1987, 9.50% 10.2% 07/01/11 11,000 11,000,000
Township at Hampton Woods
Hampton, VA Redevelopment and
Housing Authority Multifamily
Mortgage Revenue Note,
Series 1988, 12.00% 10.0% 11/01/09 10,800 10,800,000
High Ridge Apartments
State of New Mexico
Mortgage Finance Authority
Multifamily Housing
Revenue Bond, Series
1987A, 9.25% 6.8% 12/01/11 7,400 7,400,000
State of New Mexico
Mortgage Finance
Authority Multifamily
Housing Revenue Bond,
Series 1987B, 9.25% 2.3% 12/01/11 2,500 2,500,000
9.1% 9,900 9,900,000
Fountain Head Apartments
Kansas City, MO Industrial
Development Authority
Multifamily Housing
Refunding Bond, Series
1987, 9.25% 4.5% 12/01/08 4,900 4,900,000
Total revenue bonds 94.5% 102,201,849
Total 100.0% $108,199,048
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
SCHEDULE OF INVESTMENTS
December 31, 1994
Percentage Par Carrying
of Portfolio Maturity ($000) Value
Cash and cash equivalents and escrowed funds:
<S> <C> <C> <C> <C>
Tax-exempt variable Rate Demand
Notes of various issuers 2.2% 01/02/95 2,390 $ 2,390,000
Landmark New York Tax Free
Cash Reserve Money Market
Fund consisting of New York
Municipal obligations 1.9% 01/02/95 - 2,072,669
Cash - N/A - 1,721
Total 4.1% 4,464,390
Revenue Bonds:
Burlington Arboretum Apartments
City of Burlington, MA
Housing Authority,
Series 1987, MB, 9.00% 21.9% 09/22/11 28,826 23,500,000
City of Burlington, MA
Housing Authority, Series
1989A, 9.00% 0.5% 09/22/11 500 500,000
22.4% 29,326 24,000,000
Park at Landmark
City of Alexandria, VA
MultiFamily Refunding
Revenue Bond, Series
1987A, 9.50% 15.7% 06/01/08 34,650 16,907,845
Pine Club Apartments
Orange County, FL
Multifamily Housing Revenue
Bond, Series 1988, 9.50% 12.7% 9/01/12 13,750 13,600,000
SunBrook Apartments
County of St. Charles, MO
Industrial Development
Authority Revenue Bond,
Series 1987, 9.25% 11.1% 12/01/11 16,330 11,884,600
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 1994
Percentage Par Carrying
of Portfolio Maturity ($000) Value
Revenue Bonds, continued:
<S> <C> <C> <C> <C>
Wildcreek Apartments
City of Clarkston, GA
Multifamily Housing
Revenue Bond,
Series 1987, 9.50% 10.2% 07/01/11 11,000 11,000,000
Township at Hampton Woods
Hampton, VA Redevelopment and
Housing Authority Multifamily
Mortgage Revenue Note,
Series 1988, 12.00% 10.0% 11/01/09 10,800 10,800,000
High Ridge Apartments
State of New Mexico
Mortgage Finance Authority
Multifamily Housing
Revenue Bond, Series
1987A, 9.25% 6.9% 12/01/11 7,400 7,400,000
State of New Mexico
Mortgage Finance
Authority Multifamily
Housing Revenue Bond,
Series 1987B, 9.25% 2.3% 12/01/11 2,500 2,500,000
9.2% 9,900 9,900,000
Fountain Head Apartments
Kansas City, MO Industrial
Development Authority
Multifamily Housing
Refunding Bond, Series
1987, 9.25% 4.6% 12/01/08 4,900 4,900,000
Total revenue bonds 95.9% 102,992,445
Total 100.0% $107,456,835
See accompanying notes to financial statements
/TABLE
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
BALANCE SHEETS
December 31, 1995 and 1994
1995 1994
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 5,255,586 $ 3,736,746
Investment in revenue bonds 102,201,849 102,992,445
Accrued interest receivable 543,723 733,012
Deferred bond selection fees, net 1,261,006 1,473,980
Escrowed funds 741,613 727,644
Other assets 585,131 778,946
$110,588,908 $110,442,773
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 865,304 $ 957,538
Partners' capital:
Assigned Benefit Certificates
(7,454,110 ABCs outstanding) 109,723,604 109,485,235
$110,588,908 $110,442,773
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF OPERATIONS
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
<S> <C> <C> <C>
Interest income:
Revenue bonds $7,756,457 $ 7,518,209 $ 6,356,460
Short-term investments 167,320 63,673 74,933
7,923,777 7,581,882 6,431,393
Expenses:
General and administrative 364,408 735,649 355,047
Provision for loss on investments - - 17,345,397
364,408 735,649 17,700,444
Net income (loss) $7,559,369 $ 6,846,233 $(11,269,051)
Net income (loss) allocated to:
Limited partner $7,408,182 $ 6,709,308 $(11,043,670)
General partner 151,187 136,925 (225,381)
$7,559,369 $ 6,846,233 $(11,269,051)
Net income (loss) per Assigned
Benefit Certificate $ .99 $ .90 $ (1.48)
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF PARTNERS' CAPITAL
Years ended December 31, 1995, 1994 and 1993
Limited General
Partner Partner Total
<S> <C> <C> <C>
Partners' capital (deficit) at
December 31, 1992 $127,678,100 $ (268,983) $127,409,117
Net loss (11,043,670) (225,381) (11,269,051)
Cash distributions (6,895,050) (140,714) (7,035,764)
Partners' capital (deficit) at
December 31, 1993 109,739,380 (635,078) 109,104,302
Net income 6,709,308 136,925 6,846,233
Cash distributions (6,335,994) (129,306) (6,465,300)
Partners' capital (deficit) at
December 31, 1994 110,112,694 (627,459) 109,485,235
Net income 7,408,182 151,187 7,559,369
Cash distributions (7,174,581) (146,419) (7,321,000)
Partners' capital (deficit) at
December 31, 1995 $110,346,295 $ (622,691) $109,723,604
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF CASH FLOWS
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 7,559,369 $ 6,846,233 $(11,269,051)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Amortization 790,596 786,005 1,053,736
Amortization of deferred bond selection fee 212,974 212,974 212,974
Decrease (increase) in accrued interest
receivable 189,289 (199,655) 179
Increase in escrowed funds (13,969) (129,796) (398,269)
(Decrease) increase in accounts payable
and other liabilities (92,234) 167,013 352,194
Provision for loss on investments - - 17,345,397
Net cash provided by operating activities 8,646,025 7,682,774 7,297,160
Cash flows from financing activities:
Cash distributions (7,321,000) (6,465,300) (7,035,764)
Other assets 193,815 (97,416) (561,335)
Net cash used in financing activities (7,127,185) (6,562,716) (7,597,099)
Increase (decrease) in cash and cash equivalents 1,518,840 1,120,058 (299,939)
Cash and cash equivalents at beginning
of year 3,736,746 2,616,688 2,916,627
Cash and cash equivalents at end of year $ 5,255,586 $ 3,736,746 $ 2,616,688
See accompanying notes to financial statements.
/TABLE
<PAGE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
1. The Partnership
Dean Witter/Coldwell Banker Tax Exempt Mortgage Fund, L.P. (the
"Partnership") is a limited partnership organized under the laws of
the State of Delaware on August 20, 1986. The Partnership is managed
by TEMPO-GP Inc. (the "General Partner"), a subsidiary of Dean Witter,
Discover & Co. ("DWD").
In 1986, the Partnership sold 7,454,110 units of Assigned Benefit
Certificates ("ABCs") for $149,082,200. The holders of ABC's (the
"Investors") were assigned limited partnership interests in the
Partnership by Tempo-LP Inc. (the "Limited Partner"). Tempo-LP Inc.
is a wholly-owned subsidiary of DWD and the sole limited partner in
the Partnership. No additional ABCs will be sold.
The proceeds from the offering were used to purchase federally tax-
exempt revenue bonds issued by various state or local governments or
their agencies or authorities. The proceeds of the bonds were used
to fund mortgage loans to finance the construction and/or ownership
of income-producing multi-family residential properties. Each of the
revenue bonds is secured by the real property financed by the related
mortgage loan.
2. Summary of Significant Accounting Policies
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting and tax purposes. The preparation
of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Generally, the investments in revenue bonds are accounted for as loans
collateralized by real estate, and are carried at cost. The
Partnership has acquired ownership interests in certain properties
collateralizing the bonds because the owners of such properties
defaulted on the bonds. At the date of acquisition of these ownership
interests, the Partnership adjusted the carrying value of the related
bonds to the net realizable value of the property if such amount was
lower than the book value of the bonds. Subsequently, for those bonds
which were written down to net realizable value, the Partnership
records annual amortization (netted against bond interest)
approximately equal to depreciation on the property.
The Partnership periodically evaluates the collectibility of both
interest and principal of its revenue bonds to determine whether they
are impaired. A revenue bond is considered to be impaired when, based
on current information and events, it is probable that the Partnership
will be unable to collect all amounts due according to the existing
contractual terms of the bonds. When a revenue bond is considered to
be impaired, the Partnership establishes a valuation allowance equal
to the difference between a) the carrying value of the bond, and b)
the present value of the expected cash flows from the bond at its
effective interest rate, or, for practical purposes, at the estimated
fair value of the real estate collateralizing the bond.
Because the process of determining impairment of the revenue bonds and
the appropriate level of the valuation allowance is based upon
projections of future economic events such as property occupancy
rates, rental rates, operating cost inflation and market
capitalization rates which are inherently subjective, the amounts
ultimately collected from the revenue bonds may differ materially from
their net carrying value at December 31, 1995. The cash flows used
in this process are based on good faith estimates and assumptions
developed by the Managing General Partner. Unanticipated events and
circumstances may occur and some assumptions may not materialize;
therefore, actual results may vary from the estimates and the variance
may be material.
Cash and cash equivalents consist of cash and highly liquid
investments with maturities, when purchased, of three months or less.
Bond selection fees paid to the General Partner were deferred and
allocated to individual investments purchased based on the relative
cost of the investments. The fees are amortized over the expected
life of the related investments, and the amortization expense is
netted against interest income from the investments.
Escrowed funds represent escrow payments by borrowers primarily for
real estate taxes, insurance and replacement reserves for four of the
Properties.
Net income (loss) per ABC is calculated by dividing net income (loss)
allocated to the Investors, in accordance with the Partnership
Agreement, by the number of ABCs outstanding.
No provision for income taxes has been made in the financial
statements, since any liability for such taxes is that of the
Investors rather than the Partnership.
The accounting policies used for tax reporting purposes differ from
those used for financial reporting as follows: (a) the Partnership's
initial offering costs are capitalized and (b) its losses on
impairment, amortization and provisions for uncollectible interest
will not be recognized until realized. The tax basis of the
Partnership's assets and liabilities is approximately $46,436,000
higher than the amounts reported for financial statement purposes,
Certain 1994 and 1993 amounts have been reclassified to conform to
1995 presentation.
3. Partnership Agreement
The Partnership Agreement provides that, for any given year,
distributable cash, as defined, is paid 98% to the Investors and 2%
to the General Partner, until the Investors have received an annual
return of 9.5% for that year. Thereafter, net income will be
distributed 90% to the Investors and 10% to the General Partner.
Repayments of revenue bond principal will generally be distributed
100% to the Investors. Payments of base and contingent interest (see
Note 4) on maturity or sale of the bond will generally be distributed
first; 98% to the Investors and 2% to the General Partner, until the
Investors have received, in the aggregate, $20.00 per ABC plus
distributions sufficient to provide an average cumulative
noncompounded return of 9.5% per annum; and thereafter, 90% to the
Investors and 10% to the General Partner.
Distributions paid to the Investors include a return of capital per
ABC of $.925, $.33 and $.34 for the years ended December 31, 1993,
1992 and 1991, respectively, calculated as the excess of cash
distributed per ABC over accumulated earnings per ABC not previously
distributed.<PAGE>
<TABLE>
<CAPTION>
4. Investment in Revenue Bonds
At December 31, 1995, the investment in revenue bonds consisted of the
following:
- Interest Rate -
Carrying Minimum Base
Property Name Location Amount Rate Rate Maturity
<S> <C> <C> <C> <C> <C>
Burlington
Arboretum Burlington, MA $24,000,000 5.35% 9.00% 9/22/11
Park at Landmark Alexandria, VA 16,411,101 7.50 9.50 6/01/08
Pine Club
Apartments Orlando, FL 13,600,000 7.50 9.50 9/01/12
SunBrook
Apartments St. Charles County, MO 11,590,748 7.25 9.25 12/01/11
Wildcreek
Apartments Clarkston, GA 11,000,000 7.50 9.50 7/01/11
The Township
in Hampton
Woods Hampton, VA 10,800,000 8.50 12.00 11/01/09
High Ridge
Apartments Albuquerque, NM 9,900,000 7.25 9.25 12/01/11
Fountain Head
Apartments Kansas City, MO 4,900,000 7.25 9.25 12/01/08
$102,201,849
</TABLE>
General description of bonds
The terms of each revenue bond mirror the terms of the mortgage loan
funded with proceeds from its issuance. The revenue bonds are
collateralized by first mortgages on the underlying projects, and are
non-recourse with respect to the issuers of the bonds.
As additional security for the bonds, the Partnership obtained letters
of credit from certain of the borrowers.
Each bond bears interest at a rate which is comprised of three
components: a minimum rate, a base rate, and a contingent rate.
The minimum interest rate is the contractual rate each borrower must pay
to avoid default. If a property generates cash flow from operations
after payment of interest at the minimum rate, interest is payable at the
base rate. Otherwise, interest at the base rate will be payable at
maturity of the bonds, or from proceeds from the sale or refinancing of
the property.
The terms of the Park at Landmark and Burlington Arboretum bonds limit
the base interest payable from sale or refinancing proceeds to $1,500,000
and $1,200,000, respectively.
The Partnership may also earn contingent interest, the amount of which
is based on the cash flow and sale or refinancing proceeds from the
underlying Properties. Such interest, combined with the stated interest
rates, may not exceed 16% (14% for the Burlington Arboretum bond).
There can be no assurance that the Partnership will be able to collect
any or all base or contingent interest provided for under the revenue
bonds. Interest income above the minimum rate is recorded only when the
Partnership is paid such interest in cash.
The principal of each revenue bond is payable in a lump sum at maturity.
The Partnership has the right to require the issuers of the bonds to
repurchase them within approximately twelve to fifteen years after
completion of construction, for bonds which funded construction, or the
date of acquisition, for bonds which funded the acquisition of developed
properties.
The issuers of the bonds also have the right to prepay the bonds
approximately eight to ten years after their issuance.
As more fully described below, in 1993 the Partnership provided valuation
allowances totaling approximately $17.3 million against the Park at
Landmark and Burlington Arboretum revenue bonds. No adjustments have
been required to these allowances through December 31, 1995. At December
31, 1995, after giving effect to these allowances, none of the
Partnership's revenue bonds are considered to be impaired, as defined in
Note 2 above. The Partnership may provide additional valuation
allowances, which could be material, in subsequent years if real estate
markets or economic conditions change.
The estimated fair value of the bonds at December 31, 1995 approximated
their carrying value.
The fair value estimate is based on the net present value of the
estimated future cash flows from the bonds, discounted at a rate based
on current lending rates and market conditions.
Park at Landmark
As a result of a default by the owner of the Park at Landmark property,
in 1990, the Partnership and an affiliate of the General Partner each
acquired a 50% ownership interest in Landmark Acquisition Corp., the
entity which owns the property. The Partnership also drew $1,000,000
against the letter of credit which the borrower had provided as
additional security, and applied the funds against the principal of the
bond. The Partnership receives all of the cash flow from the property,
which consists of land and 396 apartments in two high-rise buildings.
The Partnership recorded amortization charges of $496,744, $492,155 and
$759,886 in 1995, 1994 and 1993, respectively, which approximate the
depreciation expense on the property as recorded by the borrower in each
of those years.
The Partnership also recorded provisions for uncollectible interest of
$773,447, $1,074,591 and $1,808,589 in 1995, 1994 and 1993, respectively,
which amounts approximate accrued but unpaid interest on the revenue
bond. These amounts are recorded as a reduction of interest income from
revenue bonds.
In 1993, Landmark Acquisition Corp. determined that it was unlikely that
property cash flows would be sufficient to enable it to recover its
investment and, therefore, reduced the carrying value of the property to
$17.4 million, its net realizable value at December 31, 1993, and
recorded a loss. The Partnership determined that its investment was
similarly impaired and, accordingly, recorded a loss of $12,018,897, to
reduce the net carrying value of its investment to the net realizable
value of the property.
<PAGE>
<TABLE>
<CAPTION>
Summarized financial information for Landmark Acquisition Corp. is as
follows (in thousands):
December 31,
1995 1994
<S> <C> <C>
Land, building and improvements, net $ 16,658 $ 17,038
Other assets 220 253
Total assets $ 16,878 $ 17,291
Long-term debt and accrued interest $ 42,810 $ 41,885
Other liabilities 129 166
Total liabilities 42,939 42,051
Capital deficiency (26,061) (24,760)
Total liabilities and capital deficiency $ 16,878 $ 17,291
</TABLE>
<TABLE>
<CAPTION>
Years ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Revenues $ 3,488 $ 3,297 $ 3,113
Operating expenses 1,464 1,749 2,064
Interest expense 2,828 2,828 2,828
Loss on impairment of real
estate - - 12,460
Depreciation 497 492 760
4,789 5,069 18,112
Net loss $(1,301) $ (1,772) $(14,999)
</TABLE>
SunBrook Apartments
SunBrook Apartments was acquired by DWR SB Partnership ("DWR SB"), a
partnership owned 50% by the Partnership and 50% by an affiliate of the
General Partner, as part of a bankruptcy settlement in May 1992. The
Partnership receives all of the cash flow from the property, which
consists of land and 476 apartments in 30 buildings.
The Partnership recorded amortization charges of $426,616, $415,731 and
$375,611 in 1995, 1994 and 1993, respectively, which approximates the
depreciation expense on the property recorded by its owner in each of
those years.
In 1995 and 1993, the Partnership recorded provisions for uncollectible
interest of $40,214 and $350,290, respectively. In 1994, the Partnership
received approximately $42,000 more than required minimum debt service,
which was applied to reduce reserves previously taken on this loan.
<TABLE>
<CAPTION>
Summarized financial information for DWR SB is as follows (in thousands):
December 31,
1995 1994
<S> <C> <C>
Land, building and improvements, net $ 12,106 $ 12,380
Other assets 171 249
Total assets $ 12,277 $ 12,629
Long-term debt and accrued interest $ 17,171 $ 17,254
Other liabilities 77 95
Total liabilities 17,248 17,349
Capital deficiency (4,971) (4,720)
Total liabilities and capital deficiency $ 12,277 $ 12,629
</TABLE>
<TABLE>
<CAPTION>
Years ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Revenues $ 2,040 $ 2,071 $ 1,932
Other income 335 212 259
2,375 2,283 2,191
Operating expenses 1,015 1,057 1,304
Interest expense 1,184 1,184 1,184
Depreciation 427 416 376
2,626 2,657 2,864
Net loss $ (251) $ (374) $ (673)
</TABLE>
Fountain Head Apartments
Fountain Head Apartments, consisting of land and 112 apartments in eight
buildings, are owned by Fountain Head Acquisition Corp., which is owned
50% each by the Partnership and Fountain Head Partners, an unaffiliated
party. Pursuant to an agreement among the owners, through December 31,
1995, the Partnership had advanced $75,000 and Fountain Head Partners had
advanced $50,000 to Fountain Head Acquisition Corp to fund debt service
deficiencies. As of December 31, 1995, Fountain Head Partners is
obligated to fund an additional $26,500 of deficiencies, if necessary.
Fountain Head Partners did not pay its share of certain necessary
building improvement costs totalling $271,000 in 1994; the Partnership
paid these costs (included in other assets). The Partnership and
Fountain Head Partners had an arbitration hearing in which the
Partnership sought 50% reimbursement from Fountain Head Partners; the
arbitrators denied the Partnership's request for immediate reimbursement,
but permitted the Partnership to recover approximately $85,000 of the
total cost of the improvements from the property's replacement reserve,
and the remainder from the cash flow from the property before any
distributions are paid to the owners.
Burlington Arboretum Apartments
Burlington Arboretum Apartments, consisting of land and 312 apartments
in 16 buildings, is owned by Burlington Arboretum Limited Partnership
("the "Owner"). Because the Owner did not pay minimum interest in full
in 1991 and 1992, the Partnership drew down a total of $633,000 through
April 1993 from the letter of credit opened by the Owner as security. In
1993, the Owner paid required minimum debt service.
On May 6, 1993, the general partner of the Owner was replaced; the new
general partner committed a substantial amount of new capital, and the
Partnership agreed to attempt to modify the revenue bond and related
mortgage loan. However, the new general partner did not pay certain
taxes and other liabilities incurred prior to May 6, 1993 and, in
February 1994, the City of Burlington placed a lien on the property.
This lien represented an event of default on the revenue bond.
In March 1994, the Owner did not pay all of its minimum debt service and
required reserve payments; in response, the Partnership sent the Owner
a notice of default. Pursuant to a settlement between the Partnership
and the Owner, in April 1994, the Owner cured the defaults by paying the
March debt service shortfall and an additional $105,000 to the
Partnership. The Partnership then paid all past due taxes on behalf of
the Owner, and the tax lien was removed.
The debt was modified, effective with the September 1, 1994 payment. The
minimum interest rate was reduced from 7.25% to 5.35%, the earliest call
date was extended to 2006, and the requirement for an operating deficit
guaranty was eliminated. The base interest rate was unchanged, so the
Partnership expects to continue to receive all of the cash flow from the
property as interest.
The Partnership incurred costs of approximately $255,000 to remove the
tax lien and modify the debt; these costs were included in general and
administrative expenses in 1994.
In 1993, the Partnership determined that its investment in the revenue
bond was impaired and, accordingly, recognized a loss of $5,326,500 to
reduce the carrying value of the investment to $24,000,000, the estimated
net realizable value of the property at December 31, 1993.
Summarized financial information for the Burlington Arboretum Limited
Partnership is as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Land, building and improvements, net $25,994 $26,462
Other assets 1,475 1,615
Total assets $27,469 $28,077
Long-term debt, including accrued interest $31,504 $31,485
Other liabilities 936 907
Total liabilities 32,440 32,392
Capital deficiency (4,971) (4,315)
Total liabilities and capital deficiency $27,469 $28,077
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Years ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Rental revenues $3,655 $ 3,470 $ 3,367
Other income 46 43 419
3,701 3,513 3,786
Operating expenses 1,492 1,178 1,300
Interest expense 1,981 1,996 2,238
Depreciation and amortization 884 886 921
4,357 4,060 4,459
Net loss $ (656) $ (547) $ (673)
</TABLE>
Wildcreek Apartments
In 1995, Wildcreek paid the required minimum debt service and reserve
payments in full. At December 31, 1995, the Partnership is holding
approximately $259,000 as security for the bond in a segregated cash
account.
Pine Club Apartments
<TABLE>
<CAPTION>
Summarized financial information for the Pine Club Apartments Limited
Partnership, the owner of the property, is as follows (in thousands):
December 31,
1995 1994
<S> <C> <C>
Land, building and improvements, net $ 9,243 $ 9,922
Other assets 916 951
Total assets $10,159 $10,873
Long-term debt $13,600 $13,600
Other liabilities 1,550 1,451
Total liabilities 15,150 15,051
Capital deficiency (4,991) (4,178)
Total liabilities and capital deficiency $10,159 $10,873
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Years ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Revenues $ 1,815 $ 1,789 $ 1,722
Operating expenses 929 810 772
Interest expense 1,020 1,020 1,020
1,949 1,830 1,792
Loss before depreciation (134) (41) (70)
Depreciation 679 679 679
Net loss $ (813) $ (720) $ (749)
</TABLE>
Cash flow deficits at the property, which approximate losses before
depreciation, have been funded by the owner.
Additional security for the bond is provided by a $500,000 letter of
credit and a $250,000 guaranty by the owner/borrowers' partners. The
guaranty is secured by a special limited partnership interest in Phase
II of the development (in which the Partnership had no prior financial
interest), and certain of the developer's fees from such development.
The General Partner has a 6% special limited partnership interest in the
Phase II development.
The letter of credit will be released when the property achieves and
maintains certain levels of cash flow and satisfies other conditions.
Township in Hampton Woods
In July 1995, the Partnership was notified that the owner of the
property, American First REIT Inc. ("AFREIT"), was merged into Mid-
America Apartment Communities, Inc. REIT, without the Partnership's
consent. This represented a loan default, and a notice of default was
sent to AFREIT. In December 1995, the Partnership negotiated a
settlement with Mid-America in which Mid-America agreed to pay $108,000
in additional contingent interest (which was received in January 1996)
and the first allowable loan prepayment date was extended to June 1997.
5. Related Party Transactions
An affiliate of the General Partner performs bond servicing and
administrative functions, processes investor transactions and prepares
tax information for the Partnership. The Partnership incurred
approximately $516,000 in each of 1995, 1994 and 1993 for these
services. As of December 31, 1995, the affiliate was owed approximately
$16,000 for these services.
Another affiliate of the General Partner earned fees of $104,635,
$99,512 and $125,655 for the management of the Park at Landmark property
during 1995, 1994 and 1993, respectively. As of December 31, 1995, the
affiliate was owed approximately $8,400.
6. Cash Distribution
On February 10, 1996, the Partnership paid a cash distribution of
$2,236,233 to the Investors ($0.30 per ABC) and $45,637 to the General
Partner.
<PAGE>
Independent Auditors' Report
To the Board of Directors and
Stockholders of TEMPO-LP, Inc.:
We have audited the accompanying balance sheets of TEMPO-LP, Inc. (the
"Company") as of December 31, 1995 and 1994. These financial statements
are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the balance sheets are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the balance sheets.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall balance sheet presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, such balance sheets present fairly, in all material
respects, the financial position of TEMPO-LP, Inc. as of December 31,
1995 and 1994, in conformity with generally accepted accounting
principles.
/s/Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
March 20, 1996
<PAGE>
<TABLE>
<CAPTION>
TEMPO-LP, INC.
BALANCE SHEETS
December 31, 1995 and 1994
ASSETS 1995 1994
<S> <C> <C>
Cash $ 900 $ 900
Investment in Partnership, at cost 100 100
$1,000 $1,000
STOCKHOLDER'S EQUITY
Common stock, $1 par value, 1,000 shares
authorized and outstanding $1,000 $1,000
See accompanying note.
</TABLE>
<PAGE>
TEMPO-LP, INC.
NOTE TO BALANCE SHEETS
December 31, 1995 and 1994
1. Organization
TEMPO-LP, Inc. (the "Corporation"), was formed in April 1986 to be the
limited partner of the Dean Witter/Coldwell Banker Tax Exempt Mortgage
Fund, L.P. (the "Partnership"). The Partnership issued limited
partnership interests to the Corporation, which in turn assigned those
limited partnership interests to investors. Investors received assigned
benefit certificates to represent the limited partnership interests
assigned to them. The Corporation has had no activity since assignment
of the limited partnership interests in 1986.
The Corporation's capital stock is owned by Dean Witter, Discover & Co.
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS
The Partnership is a limited partnership which has no directors or
executive officers.
The directors and executive officers of both the General Partner
and Limited Partner are as follows:
Name Position
William B. Smith Chairman of the Board of Directors
E. Davisson Hardman, Jr. President and Director
Lawrence Volpe Controller, Assistant Secretary and
Director
Ronald T. Carman Secretary and Director
All of the directors have been elected to serve until the next
annual meeting of the shareholder of the General Partner and Limited
Partner or until their successors are elected and qualify. Each of the
executive officers has been elected to serve until his successor is
elected and qualifies.
William B. Smith, age 52, is a Managing Director of Dean Witter
Realty Inc. and has been with Dean Witter Realty Inc. since 1982.
He is an Executive Vice President of Dean Witter Reynolds, Inc.
E. Davisson Hardman, Jr., age 46, is a Managing Director of Dean
Witter Realty Inc. and has been with Dean Witter Realty Inc. since 1982.
Lawrence Volpe, age 48, is a Director and the Controller of Dean
Witter Realty Inc. He is a Senior Vice President and Controller of Dean
Witter Reynolds Inc., which he joined in 1983.
Ronald T. Carman, age 44, is a Director and the Secretary of Dean
Witter Realty Inc. He is a Senior Vice President and Associate General
Counsel of Dean Witter, Discover & Co. and of Dean Witter Reynolds, Inc.
which he joined in 1984.
There is no family relationship among any of the foregoing persons.
ITEM 11. EXECUTIVE COMPENSATION.
The General Partner is entitled to receive a share of cash
distributions, when and as cash distributions are made to the Limited
Partner and a share of taxable income or tax loss, if any . Descriptions
of such distributions and allocations are in Item 5 above. The General
Partner received cash distributions of $146,419, $129,306 and $140,714
during the years ended December 31, 1995, 1994 and 1993, respectively.
All of the distributions to the Limited Partner are assigned and
paid to the Investors.
Certain affiliates of the General Partner were paid certain fees
and reimbursed for certain expenses. Information concerning such fees
and reimbursements is contained in Note 5 to the financial statements in
Item 8 above.
The directors and executive officers of the General Partner and the
Limited Partner received no remuneration from the Partnership.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) No person is known to the Partnership to be the beneficial
owner of more than five percent of the ABCs.
(b) The executive officers and directors of the General Partner
and the Limited Partner do not own any ABCs as of March 31, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The General Partner's share of cash distributions and income or
loss is described in Item 5 above.
All of the outstanding shares of common stock of the General
Partner and the Limited Partner are owned by Dean Witter, Discover & Co.
Additional information with respect to the directors and executive
officers and compensation of the General Partner and Limited Partner is
contained in Items 10 and 11 above.
The General Partner and its affiliates were paid certain fees and
reimbursed for certain expenses. Information concerning such fees and
reimbursements is contained in Note 5 to the financial statements in Item
8 above. The Partnership believes that the payment of fees and the
reimbursement of expenses to the General Partner and its affiliates are
on terms as favorable as would be obtained from unrelated third parties.
The Park at Landmark property is owned by Landmark Acquisition
Corp. The Partnership owns 50% of the common stock of the corporation;
an affiliate of the General Partner owns the remaining 50%.
The SunBrook Apartments property is owned by DWR SB Partnership.
The Partnership owns 50% of DWR SB Partnership; an affiliate of the
General Partner owns the remaining 50%.
The Fountain Head Apartments property is owned by Fountain Head
Acquisition Corp. The Partnership owns 50% of the corporation; an
unaffiliated third party owns the remaining 50%.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K.
(a) Documents filed as a part of this report:
1. FINANCIAL STATEMENTS
Financial Statements of the Partnership (see Index to
Financial Statements as part of Item 8 of this Annual Report).
Financial Statements of TEMPO-LP, Inc. (see Index to Financial
Statements as part of Item 8 of this Annual Report).
2. SCHEDULES
Financial Statement Schedules of the Partnership and TEMPO-LP,
Inc. (see Index to respective Financial Statements as part of
Item 8 of this Annual Report).
3. EXHIBITS
(2) Not applicable.
(3)(a) (i) Certificate of Incorporation of TEMPO-LP, Inc.
Incorporated by reference to Exhibit 3(a) to
Registrants' Registration Statement, No 33-6216,
filed on June 4, 1986.
(ii) Certificate of Amendment of Certificates of
Incorporation of TEMPO-LP, Inc. Incorporated by
reference to Exhibit 3(a)(ii) to Pre-Effective
Amendment No. 1 to Registrants' Registration
Statement, No. 33-6216, filed on August 25, 1986.
(3)(b) Bylaws of TEMPO-LP, Inc. Incorporated by
reference to Exhibit 3(b) of Registrants'
Registration Statement, No. 33-6216, filed on
June 4, 1986.
(3)(c) Certificate of Limited Partnership of Dean
Witter/ Coldwell Banker Tax Exempt Mortgage Fund
L.P.Incorporated by reference to Exhibit 4(a)(i)
to Pre-Effective Amendment No. 1 to Registrants'
Registration Statement, No. 33-6216, filed on
August 25, 1986.
(3)(d) Form of Agreement of Limited Partnership.
Incorporated by reference to Exhibit D to
Registrants' Prospectus, dated October 8, 1986,
included in the Registrants' Registration
Statement No. 33-6216.
(4)(a) Certificate of Limited Partnership of Dean
Witter/ Coldwell Banker Tax Exempt Mortgage Fund
L.P. Incorporated by reference to Exhibit 4(a)(i)
to Pre-Effective Amendment No. 1 to Registrants'
Registration Statement, No. 33-6216, filed on
August 25, 1986.
(4)(b) Form of Assigned Benefit Certificate.
Incorporated by reference to Exhibit 4(c) to Pre-
Effective Amendment No. 1 to Registrants'
Registration Statement, No. 33-6216, filed on
August 25, 1986.
(4)(c) Revised Form of Assigned Benefit Certificate.
Incorporated by reference to Exhibit 4(c) to
Registrants' Annual Report on Form 10-K for the
fiscal year ended December 31, 1986.
(4)(d) Form of Assignment Agreement. Incorporated by
reference to Exhibit 4(d) to Registrants' Annual
Report on Form 10-K for the fiscal year ended
December 31, 1986.
(4)(e) Form of Agreement of Limited Partnership.
Incorporated by reference to Exhibit D to
Registrants' Prospectus, dated October 8, 1986,
included in the Registrants' Registration
Statement, No. 33-6216.
(9) Not applicable.
(10)(a) Mortgage bond, dated March 12, 1987, with respect
to Park at Landmark. Incorporated by reference
to Exhibit 10 (a) in Registrants' Report on Form
8-K, Commission File No. 0-15764, dated March 12,
1987.
(10)(b) Mortgage bond, dated July 16, 1987, with respect
to Wildcreek Apartments. Incorporated by
reference to Exhibit 10 (a) in Registrants'
Report on Form 8-K,Commission File No. 0-15764,
dated July 16, 1987.
(10)(c) Mortgage bond, dated September 22, 1987, with
respect to Burlington Arboretum Apartments.
Incorporated by reference to Exhibit 10 (a) in
Registrants' Report on Form 8-K,Commission File
No. 0-15764, dated September 22, 1987.
(10)(d) Mortgage bond, dated December 16, 1987, with
respect to SunBrook Apartments. Incorporated by
reference to Exhibit 10 (a) in Registrants'
Report on Form 8-K,Commission File No. 0-15764,
dated December 16, 1987.
(10)(e) Mortgage bond, dated December 21, 1987, with
respect to Highridge Apartments. Incorporated by
reference to Exhibit 10 (a) in Registrants'
Report on Form 8-K,Commission File No. 0-15764,
dated December 21, 1987.
(10)(f) Mortgage bond, dated December 31, 1987, with
respect to Fountain Head Apartments.
Incorporated by reference to Exhibit 10 (a) in
Registrants' Report on Form 8-K,Commission File
No. 0-15764, dated December 31, 1987.
(10)(g) Mortgage bond, dated September 23, 1988, with
respect to Pine Club Apartments. Incorporated by
reference to Exhibit 10 (a) in Registrants'
Report on Form 8-K,Commission File No. 0-15764,
dated September 23, 1988.
(10)(h) Mortgage bond, dated November 14, 1988, with
respect to Township in Hampton Woods Apartments.
Incorporated by reference to Exhibit 10 (a) in
Registrants' Report on Form 8-K,Commission File
No. 0-15764, dated November 14, 1988.
(10)(i) Amended mortgage bonds, dated July 29, 1994, with
respect to Burlington Arboretum Apartments.
Filed with this Form 10-K for fiscal year ended
December 31, 1995.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(16) Not applicable.
(18) Not applicable.
(21) Subsidiaries:
Landmark Acquisition Corp., a Virginia Corporation
SBA/DW/CBTemp. Inc., a Missouri Corporation
(22) Not applicable.
(23) Not applicable.
(24) Not applicable.
(27) Financial Data Schedules.
(28) Not applicable.
(99) Not applicable.
(b) No Forms 8-K were filed by the Partnership during the last quarter
of the period covered by this report.
(d) Financial Statements Schedule
(1) Financial statements of Burlington Arboretum Limited
Partnership, an apartment complex located in Burlington,
Massachusetts. <PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrants has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
By: TEMPO-GP, Inc.
Managing General Partner
By: /s/E. Davisson Hardman, Jr. Date: April 1, 1996
E. Davisson Hardman, Jr.
President
By: /s/Lawrence Volpe Date: April 1, 1996
Lawrence Volpe
Controller
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Partnership and in the capacities and on the dates indicated.
TEMPO-GP, Inc.
Managing General Partner
/s/William B. Smith Date: April 1, 1996
William B. Smith
Chairman of the Board of Directors
/s/E. Davisson Hardman, Jr. Date: April 1, 1996
E. Davisson Hardman, Jr.
Director
/s/Lawrence Volpe Date: April 1, 1996
Lawrence Volpe
Director
/s/Ronald T. Carman Date: April 1, 1996
Ronald T. Carman
Director
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrants has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
By: TEMPO-LP, Inc.
By: /s/E. Davisson Hardman, Jr. Date: April 1, 1996
E. Davisson Hardman, Jr.
President
By: /s/Lawrence Volpe Date: April 1, 1996
Lawrence Volpe
Controller
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Partnership and in the capacities and on the dates indicated.
TEMPO-LP, Inc.
/s/William B. Smith Date: April 1, 1996
William B. Smith
Chairman of the Board of Directors
/s/E. Davisson Hardman, Jr. Date: April 1, 1996
E. Davisson Hardman, Jr.
Director
/s/Lawrence Volpe Date: April 1, 1996
Lawrence Volpe
Director
/s/Ronald T. Carman Date: April 1, 1996
Ronald T. Carman
Director
<PAGE>
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
BURLINGTON ARBORETUM
LIMITED PARTNERSHIP
DECEMBER 31, 1995 AND 1994<PAGE>
<TABLE>
<CAPTION>
Burlington Arboretum Limited Partnership
TABLE OF CONTENTS
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS
BALANCE SHEETS 4
STATEMENTS OF OPERATIONS 5
STATEMENTS OF PARTNERS' DEFICIT 6
STATEMENTS OF CASH FLOWS 7
NOTES TO FINANCIAL STATEMENTS 8
SUPPLEMENTAL INFORMATION
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL
INFORMATION 14
SCHEDULES OF EXPENSES 15
/TABLE
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
Burlington Arboretum Limited Partnership
We have audited the accompanying balance sheets of Burlington
Arboretum Limited Partnership as of December 31, 1995 and 1994, and
the related statements of operations, partners' deficit and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Burlington Arboretum Limited Partnership as of December 31, 1995
and 1994, and the results of its operations, the changes in
partners' deficit and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
Boston, Massachusetts
February 16, 1996
<PAGE>
<TABLE>
<CAPTION>
Burlington Arboretum Limited Partnership
BALANCE SHEETS
December 31, 1995 and 1994
1995 1994
ASSETS
<S> <C> <C>
INVESTMENT IN REAL ESTATE
Land $ 2,074,884 $ 2,074,884
Buildings, improvements and
personal property, less
accumulated depreciation of
$5,563,878 and $4,731,848 23,918,733 24,387,172
25,993,617 26,462,056
OTHER ASSETS
Cash 172,005 268,613
Tenant accounts receivable 22,741 45,068
Reserve for replacements 110,525 96,666
Security deposits funded 272,741 249,606
Prepaid expenses and other assets 95,949 102,684
Mortgage costs, net of accumulated
amortization of $714,823 and
$663,197 800,945 852,570
1,474,906 1,615,207
$27,468,523 $28,077,263
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES APPLICABLE TO INVESTMENT
IN REAL ESTATE
Mortgage payable $29,326,500 $29,326,500
Deferred interest and related
fees on mortgage payable 2,041,122 2,011,796
Advances from general partner 350,267 350,267
Advances from Tempo - GP, Inc. 114,831 114,831
Accrued mortgage interest and
service fees 136,858 147,077
31,969,578 31,950,470
OTHER LIABILITIES
Accounts payable and accrued
expenses 137,962 137,311
Accrued management fees 55,350 45,266
Prepaid rent 5,847 10,274
Security deposits payable 270,478 249,178
469,637 442,029
32,439,215 32,392,500
PARTNERS' DEFICIT (4,970,692) (4,315,237)
$27,468,523 $28,077,263
See notes to financial statements
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Burlington Arboretum Limited Partnership
STATEMENTS OF OPERATIONS
Years ended December 31, 1995 and 1994
1995 1994
<S> <C> <C>
Revenue
Rental income $ 3,715,751 $ 3,555,001
Miscellaneous income 40,662 40,901
3,756,413 3,595,902
Less: Vacancies 30,834 53,820
Tenant concessions and
employee and model
apartments 29,639 72,110
3,695,940 3,469,972
Expenses
Rental 89,766 102,417
Administrative 200,454 109,095
Maintenance 540,552 344,390
Utilities 175,816 190,067
Security - 14,977
Insurance 82,844 76,975
Management fee 118,523 104,314
Real estate taxes 254,742 235,905
1,462,697 1,178,140
2,233,242 2,291,832
Other income (expenses)
Depreciation (832,030) (815,390)
Amortization (51,626) (70,471)
Interest income 5,584 3,405
Interest expense - mortgage (1,907,980) (1,892,987)
Mortgage servicing fees (73,319) (73,316)
Program management fee (29,327) (29,327)
Interest expense - other - (492)
Other income - 39,853
(2,888,698) (2,838,725)
NET LOSS $ (655,455) $ (546,893)
See notes to financial statements
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Burlington Arboretum Limited Partnership
STATEMENTS OF PARTNERS' DEFICIT
Years ended December 31, 1995 and 1994
1995 1994
<S> <C> <C>
Partners' deficit, beginning $4,315,237 $3,768,344
Net loss 655,455 546,893
Partners' deficit, ending $4,970,692 $4,315,237
See notes to financial statements
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Burlington Arboretum Limited Partnership
STATEMENTS OF CASH FLOWS
Years ended December 31, 1995 and 1994
1995 1994
<S> <C> <C>
Cash flows from operating activities
Net loss $ (655,455) $ (546,893)
Adjustments to reconcile net loss to net
cash provided by operating activities
Depreciation 832,030 815,390
Amortization 51,626 70,471
Decrease (increase) in tenant accounts
receivable 22,327 (19,277)
Decrease in accounts receivable - other - 38,732
(Decrease) increase in prepaid expenses
and other assets 6,735 (20,955)
Decrease in accounts payable and accrued
expenses (82,002) (179,994)
Decrease in accrued mortgage interest
and servicing fees (10,219) (36,214)
Increase in deferred interest and related
fees on mortgage payable 29,326 29,327
Increase (decrease ) in accrued management
fees 10,084 (7,837)
Decrease in prepaid rent (4,428) (18,162)
Increase in security deposits - net (1,835) (315)
Net cash provided by operating
activities 198,189 124,273
Cash flows from investing activities
Investment in real estate (280,938) (121,348)
Increase in reserve for replacements (13,859) (41,789)
Net cash used in investing
activities (294,797) (163,137)
Cash flows from financing activities
Repayment on letter of credit - (25,000)
Advances from general partner - 130,267
Advances from Tempo-GP, Inc. - 114,831
Net cash used in financing
activities - 220,098
NET INCREASE IN CASH (96,608) 181,234
Cash, beginning 268,613 87,379
Cash, ending $ 172,005 $ 268,613
Supplemental disclosure of cash flow information
Cash paid during the year for interest $1,918,202 $1,929,202
Significant non-cash investing activity investment
in real estate included in accounts payable $ 82,653 $ -
See notes to financial statements
/TABLE
<PAGE>
Burlington Arboretum Limited Partnership
NOTES TO FINANCIAL STATEMENTS
December 31, 1995 and 1994
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Burlington Arboretum Limited Partnership was organized under the
laws of the Commonwealth of Massachusetts on July 19, 1985, for
the purpose of constructing and operating a rental housing
project. The project consists of 312 units located in
Burlington, Massachusetts and is currently operating under the
name of Burlington Arboretum. The project contains both market
rate rental units and moderate and low-income rentals.
Each building of the project has qualified and been allocated
low-income housing credits pursuant to Internal Revenue Code
Section 42 (Section 42) which regulates the use of the project as
to occupant eligibility and unit gross rent, among other
requirements. Each building of the project must meet the
provisions of these regulations during each of fifteen
consecutive years in order to remain qualified to receive the
credits.
The project's low-income housing credits are contingent on its
ability to maintain compliance with applicable sections of
Section 42. Failure to maintain compliance with occupant
eligibility, and/or unit gross rent, or to correct non-compliance
within a specified time period could result in recapture of
previously taken tax plus interest. In addition, such potential
non-compliance may require an adjustment to the contributed
capital by the limited partner.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
<PAGE>
Burlington Arboretum Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995 and 1994
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES - Continued
Investment in Real Estate
Investment in real estate is carried at cost. Depreciation is
provided for in amounts sufficient to relate the cost of
depreciable assets to operations over their estimated service
lives using the straight-line method for financial reporting
purposes.
Mortgage Costs
Mortgage costs are amortized over the term of the mortgage using
the straight-line method.
Rental Income
Rental income is recognized as rentals become due. Rental
payments received in advance are deferred until earned. All
leases between the Partnership and tenants of the property are
operating leases.
Income Taxes
No provision or benefit for income taxes has been included in
these financial statements since the taxable income or loss
passes through to, and is reportable by, the partners
individually.
<TABLE>
<CAPTION>
NOTE B - INVESTMENT IN REAL ESTATE
Buildings, improvements and personal property at December 31,
1995 and 1994 are summarized as follows:
Category Useful Life 1995 1994
<S> <C> <C>
Buildings and improvements 40 years $28,316,788 $27,970,226
Personal property 5-10 years 1,165,823 1,148,794
29,482,611 29,119,020
Less accumulated depreciation 5,563,878 4,731,848
$23,918,733 $24,387,172
/TABLE
<PAGE>
Burlington Arboretum Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995 and 1994
NOTE C - MORTGAGE PAYABLE
The Partnership is obligated under the terms of a mortgage,
financed by the issuance of housing revenue bonds, to the
Burlington Housing Authority (a subdivision of the Commonwealth
of Massachusetts). The mortgage bears interest at the rate of 9%
(the Base Interest). Base Interest is payable monthly to the
extent of cash flow, but in no event at a rate less than 7.25%
(the Minimum Base Interest). In March 1994, the Partnership
shorted the interest payment due by approximately $45,000, which
caused the Partnership to be in default on the mortgage. On
April 28, 1994 the lender accepted the March 1994 payment as
payment in full and acknowledged that the mortgage was current.
Effective August 1, 1994, certain terms of the mortgage were
modified and the Minimum Base Interest rate was reduced from
7.25% to 5.35%.
Cumulative unpaid Base Interest up to $1,200,000 is deferred
until sale or refinancing of the project. Other unpaid Base
Interest is payable out of cash flow. Accrued Base Interest at
December 31, 1995 and 1994 was $1,847,567 and $1,847,567,
respectively. To the extent there is cash flow after the payment
of Base Interest at 9%, the Partnership is obligated to pay
additional interest, up to 20% of the excess cash flow, resulting
in a cumulative interest rate not to exceed 14%. Commencing in
1993, the Partnership will only accrue additional Base Interest
to the extent of cash flow due to the uncertainty of payment upon
maturity. During 1995 and 1994, additional Base Interest of $0
and $45,419 was incurred. The unrecorded Base Interest at
December 31, 1995 and 1994 amounted to $1,944,582 and $1,213,180,
respectively. Upon termination of the Partnership Agreement,
maturity or refinance of the mortgage, this additional Base
Interest may be required to be paid.
All unpaid principal and accrued interest are due on the earlier
of September 22, 2011 (maturity) or as noted under the bond
documents, the bond holder has the option to cause the bonds to
be prepaid on any interest payment date on or after September 22,
2003 (the First Mandatory Redemption Date).
<PAGE>
Burlington Arboretum Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995 and 1994
NOTE C - MORTGAGE PAYABLE - Continued
In connection with the change in the interest rate, as noted
above, the First Mandatory Redemption Date would be extended from
September 22, 2003 to January 1, 2006. The final maturity date
of the bonds will remain September 22, 2011. Such acceleration
requires specification by the lender, in writing, six months
prior to such date. In addition, the bond requirement that there
be a limited operating deficit letter of credit was eliminated.
Under the terms of the mortgage agreement, the Partnership is
also obligated to pay to the lender a monthly service fee of .25%
of the bonds outstanding. During 1995 and 1994, $73,319 and
$73,316, respectively, was charged to operations. In addition,
the Partnership pays an annual program management fee of .10% of
the bonds outstanding. During 1995 and 1994, $29,327 and $29,327
was charged to operations. As of December 31, 1995 and 1994,
$193,555 and $164,229, respectively, has been accrued and is
payable to the extent of available cash flow.
Under agreements with the mortgage lender, the Partnership is
required to make monthly escrow deposits for taxes, insurance and
replacement of project assets.
The liability of the Partnership under the mortgage is limited to
the underlying value of the real estate collateral plus other
amounts deposited with the lender or trustee.
Management believes it is not practical to estimate the fair
value of the mortgage because loans with similar characteristics
are not currently available to the Partnership.
NOTE D - RELATED PARTY TRANSACTIONS
Development Fee
The Partnership owes an affiliate $1,139,900, plus interest at
10%, for a development fee incurred in 1990. Such fee is due
upon sale or refinancing of the project. Due to the uncertainty
regarding the ultimate payment, the fee and accrued interest have
not been recorded as of December 31, 1995 and 1994.
<PAGE>
Burlington Arboretum Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995 and 1994
NOTE D - RELATED PARTY TRANSACTIONS - Continued
Management Fee
The Management Agreement is with an affiliate of the general
partner, Burlington Apartments, Inc. (BAI) for a fee of 5% of
gross collections. On November 1, 1994 BAI entered into a
subagent agreement for 3% of gross collections with a non-related
management company. Total management fees charged to operations
in 1995 and 1994 were $118,523 and $104,214.
One requirement of the change in the Minimum Base Interest rate,
as described in Note C, is that the general partner's 2% fee will
be accrued only if the property pays interest on the mortgage at
a rate of 7.25% for 12 consecutive months. Since this interest
payment level was not achieved in 1995 and 1994, the 2% fee has
not been accrued. The unpaid 2% management fee at December 31,
1995 was $55,350, which represents the 1993 fee of $45,266 and
December 1995 fee of $10,084.
During 1994, in conjunction with the change in the Base Minimum
Interest rate described in Note C, the general partner advanced
$105,267 on behalf of the Partnership. In addition, the general
partner paid the final installment on the line of credit of
$25,000. At December 31, 1995 and 1994, the amounts due the
general partner were $350,267, which are noninterest bearing and
due on demand.
NOTE E - ADVANCES FROM TEMPO-GP, INC.
In conjunction with the change in the mortgage described in Note
C, the bond servicer, Tempo-GP, Inc. advanced funds to the
Partnership to pay operating expenses. At December 31, 1995 and
1994, the amounts due to Tempo-GP, Inc. were $114,831, which are
non-interest bearing and due on demand.
NOTE F - CONCENTRATION OF CREDIT RISK
The Partnership maintains its cash balances in two Banks. The
balances are insured by the Federal Deposit Insurance Corporation
up to $100,000 by each bank. As of December 31, 1995, the
uninsured portion of the cash balances held at one of the banks
was $87,268.
<PAGE>
SUPPLEMENTAL INFORMATION<PAGE>
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL INFORMATION
To the Partners
Burlington Arboretum Limited Partnership
Our audits were made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental
information is presented for purposes of additional analysis and is
not a required part of the basic financial statements. The
supplemental information has been subjected to the auditing
procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
Boston, Massachusetts
February 16, 1996<PAGE>
<TABLE>
<CAPTION>
Burlington Arboretum Limited Partnership
SCHEDULES OF EXPENSES
Years ended December 31, 1995 and 1994
1995 1994
<S> <C> <C>
Rental
Rental salaries $ 34,216 $ 40,741
Advertising 13,969 13,972
Bad debts 33,729 45,884
Miscellaneous renting expenses 7,852 1,820
$ 89,766 $102,417
Administrative
Manager's salaries $ 64,924 $ 48,876
Office salaries 62,634 3,247
Legal 3,654 17,724
Telephone 7,894 6,632
Accounting 10,350 10,000
Trustee fees 5,874 2,676
Office supplies and expense 11,231 5,437
Postage 2,045 2,642
ISC administrative 15,179 -
Consulting fees - 6,731
Miscellaneous administrative 16,669 5,130
$200,454 $109,095
Maintenance
HVAC maintenance $ 3,047 $ 3,210
Decorating contract, salaries and
supplies 177,938 66,562
Cleaning contract 48,173 39,263
Maintenance salaries 72,880 56,263
Grounds maintenance and contract 57,879 27,986
Rubbish removal 25,546 24,836
Miscellaneous maintenance 16,289 8,489
Pool salaries and expenses 13,964 12,927
Repairs - general 44,357 52,351
Repairs - painting exterior - 34,570
Repairs - roof 2,153 350
ISC Maintenance 26,608 -
Fire maintenance 5,122 5,824
Motor vehicle insurance and expenses 7,370 5,280
Snow removal 12,516 5,110
Exterminating 903 858
Recreation services and supplies 22,621 511
Security contract and supplies 3,186 -
$540,552 $344,390
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Burlington Arboretum Limited Partnership
SCHEDULES OF EXPENSES - CONTINUED
Years ended December 31, 1995 and 1994
1995 1994
<S> <C> <C>
Utilities
Water and sewer $111,681 $128,839
Electricity 59,513 46,202
Gas heat 4,622 14,716
Cable television - 310
$175,816 $190,067
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Index for Dean Witter/Coldwell Banker Realty Tax Exempt Mortgage Fund, L.P.
Exhibit Description Sequential
No. Page No.
________ ____________ _________
<C> <S>
(3)(a) (i)* Certificate of Incorporation of TEMPO-LP, Inc. Incorporated
by reference to Exhibit 3(a) to Registrants' Registration
Statement, No 33-6216, filed on June 4, 1986.
(ii)* Certificate of Amendment of Certificates of Incorporation
of TEMPO-LP, Inc. Incorporated by reference to Exhibit
3(a)(ii) to Pre-Effective Amendment No. 1 to Registrants'
Registration Statement, No. 33-6216, filed on August 25,
1986.
(3)(b)* Bylaws of TEMPO-LP, Inc. Incorporated by reference to
Exhibit 3(b) of Registrants' Registration Statement, No. 33-
6216, filed on June 4, 1986.
(3)(c)* Certificate of Limited Partnership of Dean Witter/ Coldwell
Banker Tax Exempt Mortgage Fund L.P.Incorporated by
reference to Exhibit 4(a)(i) to Pre-Effective Amendment No.
1 to Registrants' Registration Statement, No. 33-6216, filed
on August 25, 1986.
(3)(d)* Form of Agreement of Limited Partnership. Incorporated by
reference to Exhibit D to
Registrants' Prospectus, dated October 8, 1986, included in
the Registrants' Registration Statement No. 33-6216.
(4)(a)* Certificate of Limited Partnership of Dean Witter/ Coldwell
Banker Tax Exempt Mortgage Fund L.P. Incorporated by
reference to Exhibit 4(a)(i) to Pre-Effective Amendment No.
1 to Registrants' Registration Statement, No. 33-6216, filed
on August 25, 1986.
(4)(b)* Form of Assigned Benefit Certificate. Incorporated by
reference to Exhibit 4(c) to Pre-Effective Amendment No. 1
to Registrants' Registration Statement, No. 33-6216, filed
on August 25, 1986.
(4)(c)* Revised Form of Assigned Benefit Certificate. Incorporated
by reference to Exhibit 4(c) to Registrants' Annual Report
on Form 10-K for the fiscal year ended December 31, 1986.
(4)(d)* Form of Assignment Agreement. Incorporated by reference to
Exhibit 4(d) to Registrants' Annual Report on Form 10-K for
the fiscal year ended December 31, 1986.
(4)(e)* Form of Agreement of Limited Partnership. Incorporated by
reference to Exhibit D to Registrants' Prospectus, dated
October 8, 1986, included in the Registrants' Registration
Statement, No. 33-6216.
(10)(a)* Mortgage bond, dated March 12, 1987, with respect to Park
at Landmark. Incorporated by reference to Exhibit 10 (a)
in Registrants' Report on Form 8-K, Commission File No. 0-
15764, dated March 12, 1987.
(10)(b)* Mortgage bond, dated July 16, 1987, with respect to
Wildcreek Apartments. Incorporated by reference to Exhibit
10 (a) in Registrants' Report on Form 8-K,Commission File
No. 0-15764, dated July 16, 1987.
(10)(c)* Mortgage bond, dated September 22, 1987, with respect to
Burlington Arboretum Apartments. Incorporated by reference
to Exhibit 10 (a) in Registrants' Report on Form 8-
K,Commission File No. 0-15764, dated September 22, 1987.
(10)(d)* Mortgage bond, dated December 16, 1987, with respect to
SunBrook Apartments. Incorporated by reference to Exhibit
10 (a) in Registrants' Report on Form 8-K,Commission File
No. 0-15764, dated December 16, 1987.
(10)(e)* Mortgage bond, dated December 21, 1987, with respect to
Highridge Apartments. Incorporated by reference to Exhibit
10 (a) in Registrants' Report on Form 8-K,Commission File
No. 0-15764, dated December 21, 1987.
(10)(f)* Mortgage bond, dated December 31, 1987, with respect to
Fountain Head Apartments. Incorporated by reference to
Exhibit 10 (a) in Registrants' Report on Form 8-K,Commission
File No. 0-15764, dated December 31, 1987.
(10)(g)* Mortgage bond, dated September 23, 1988, with respect to
Pine Club Apartments. Incorporated by reference to Exhibit
10 (a) in Registrants' Report on Form 8-K,Commission File
No. 0-15764, dated September 23, 1988.
(10)(h)* Mortgage bond, dated November 14, 1988, with respect to
Township in Hampton Woods Apartments. Incorporated by
reference to Exhibit 10 (a) in Registrants' Report on Form
8-K,Commission File No. 0-15764, dated November 14, 1988.
(10)(i) Amended mortgage bonds, dated July 29, 1994, with respect
Burlington Arboretum Apartments. Filed with this Form 10-K
for fiscal year ended December 31, 1995.
*incorporated by reference
</TABLE>
Exhibit (10)(i)
______________
THIS BOND DOES NOT CONSTITUTE A GENERAL
OBLIGATION OF THE BURLINGTON HOUSING AUTHORITY
OR TOWN OF BURLINGTON OR THE COMMONWEALTH OF
MASSACHUSETTS OR ANY POLITICAL SUBDIVISION
THEREOF BUT IS PAYABLE SOLELY FROM THE REVENUES
AND FUNDS PLEDGED FOR ITS PAYMENT IN ACCORDANCE
WITH THE TRUST INDENTURE REFERRED TO BELOW.
REGISTERED NUMBER R-2 REGISTERED
$500,000
BURLINGTON HOUSING AUTHORITY
RENTAL HOUSING REVENUE BOND
(BURLINGTON ARBORETUM APTS. 1987 PROJECT)
1989 Series A
INTEREST DATED MATURITY
RATE DATE DATE
As Described Below May 24, 1989 September 22, 2011
BURLINGTON HOUSING AUTHORITY (the Issuer), a public body
corporate and politic of The Commonwealth of Massachusetts
(the Commonwealth), for value received, hereby promises to
pay, solely from the sources and in the manner hereinafter
provided, to the order of
DEAN WITTER/COLDWELL BANKER
TAX EXEMPT MORTGAGE FUND, L.P.,
or registered assigns (the Owner), on the twenty-second day of
September, 2011 (or earlier as herein provided) the principal
amount of $500,000 and to pay interest on such principal
amount from the date hereof to the maturity date or the date
of earlier redemption at the rates of interest per annum or in
the amounts established as described below.
All capitalized terms not otherwise defined herein shall
have the meaning given such terms in the Indenture.
1. General Provisions. The principal of and premium, if
any, on this Bond shall be payable in lawful money of the
United States of America, without exchange or collection
charges, upon presentation and surrender of this Bond on the
maturity date (or earlier as herein provided) at the principal
office of Fleet National Bank, as trustee (the Trustee) under
a Trust Indenture, dated as of September 22, 1987, as
supplemented by the First Supplement to Trust Indenture, dated
as of May 24, 1989, and a Second Supplement to Trust
Indenture, dated as of July 1, 1994 (as supplemented, the
Indenture), by and among the Issuer, Burlington Arboretum
Limited Partnership, a Massachusetts limited partnership (the
Developer), and the Trustee. Interest on this Bond is payable
at the times set forth below until maturity or earlier
redemption. Prior to the Initial Remarketing Date (as
hereinafter defined), interest on this Bond will be paid on
behalf of the registered owner of this Bond to Tempo-GP, Inc.
(the New Servicer), successor to Coldwell Banker Commercial
Group, Inc. (the Prior Servicer) as servicer pursuant to a
Servicing Agreement, dated as of September 22, 1987 as amended
(the Servicing Agreement), among the Prior Servicer, the
Owner, the Developer and the Trustee, or any successor
servicer designated by the registered owner of the Bond (the
Prior Servicer, the New Servicer or any other successor
servicer being the Servicer). The Servicer or the Trustee, as
the case may be, shall transmit such interest payments to the
Owner by wire transfer or other means acceptable to the Owner
to such bank or account as Owner may request in writing. After
the Initial Remarketing Date, interest on the Bonds shall be
payable by the Trustee by check or draft mailed to the
respective Bondholders thereof at the addresses shown on the
registration books maintained by the Trustee as of the
fifteenth day of the calendar month preceding each Interest
Payment Date (a Record Date).
This Bond is the only bond of a duly authorized issue of
bonds of the Issuer, known as its "Rental Housing Revenue
Bonds (Burlington Arboretum Apts. 1987 Project) 1989 Series A"
(the Bond), issued as a single series and executed and
delivered by the Issuer pursuant to the Indenture. The Bond is
issued for the purpose of making an additional loan (the
Additional Project Loan) to the Developer pursuant to the
Indenture, in order to finance additional costs of the
acquisition, construction and equipping of a multifamily
residential rental project (the Project) to be located in the
Town of Burlington, Massachusetts.
The Issuer has previously authorized and issued bonds in
the principal amount of $28,826,500 pursuant to the Indenture.
This Bond is issued on a parity with those bonds now
outstanding, without preference, priority or distinction and
those bonds and this Bond are herein collectively called the
Bonds.
The Bonds are limited obligations of the Issuer, secured
by and payable solely from a lien on and pledge of repayments
by the Developer of the Project Loan as provided in the
Indenture, in a certain Promissory Note of the Developer,
dated September 22, 1987, as amended by a First Amendment to
Promissory Note, dated May 24, 1989, and a Second Amendment to
Promissory Note, dated July 1, 1994, in the original principal
amount of $28,826,500 (as amended, the Original Note), and in
a certain Promissory Note of the Developer, dated May 24,
1989, as amended by a First Amendment to Promissory Note,
dated July 1, 1994, in the principal amount of $500,000 (as
amended, the Additional Note), which Original Note and
Additional Note (collectively, the Note) has been assigned to
the Trustee, together with certain other funds described in
the Indenture. The Bonds are additionally secured by and
entitled to the benefits of (i) a First Mortgage and Security
Agreement, dated as of September 22, 1987, as amended by the
First Amendment thereto, dated as of May 24, 1989, and the
Second Amendment thereto, dated as of July 1, 1994 (as
amended, the Mortgage), between the Developer, as mortgagor
and the Issuer, as mortgagee, which Mortgage secures the Note,
which Mortgage and Note have been assigned by the Issuer to
the Trustee pursuant to an Assignment, dated as of September
22, 1987, a Supplemental Assignment, dated as of May 24, 1989,
and a Second Supplemental Assignment, dated as of July 1, 1994
(collectively, the Assignment), from the Issuer, as assignor,
to the Trustee, as assignee; (ii) by a First Assignment of
Rents and Leases, dated as of September 22, 1987, as amended
by the First Amendment thereto, dated as of May 24, 1989, and
the Second Amendment thereto, dated as of July 1, 1994 (as
amended, the Lease Assignment), between the Developer, as
assignor and the Issuer, as assignee, which Lease Assignment
has been assigned by the Issuer to the Trustee pursuant to the
Assignment; (iii) by an Assignment of Contract Documents,
dated as of September 22, 1987, as confirmed by a Confirmation
of Assignment of Contract Documents, dated as of July 1, 1994
(as confirmed, the Documents Assignment), between the
Developer, as assignor and the Issuer, as assignee, which
Documents Assignment has been assigned by the Issuer to the
Trustee pursuant to the Assignment; (iv) by a Construction
Loan Agreement, dated as of September 22, 1987, as amended by
a First Amendment thereto, dated as of May 24, 1989, and the
Second Amendment thereto, dated as of July 1, 1994 (as
amended, the Construction Loan Agreement), by and among the
Developer, the Trustee and the Servicer; (v) by a Loan
Guaranty Agreement, dated as of September 22, 1987, (the Loan
Guaranty Agreement), by Investors Management Group, Inc.
(IMG), Phillip H. Sloane and Jeffrey A. Kosow to the Trustee;
and (vi) by a Completion Guaranty Agreement, dated as of
September 22, 1987 (the Completion Guaranty), by IMG, Phillip
H. Sloane and Jeffrey A. Kosow to the Trustee. The Mortgage,
Note, Assignment, Lease Assignment, Documents Assignment,
Construction Loan Agreement, Loan Guaranty Agreement and
Completion Guaranty are herein referred to as the Loan
Documents. Reference is hereby made to the Indenture and the
Loan Documents, copies of which are on file with the Trustee,
for the provisions, among others, with respect to the nature
and extent of the rights, duties and obligations of the
Issuer, the Trustee, the Developer, the Owner and subsequent
Bondholders; the terms upon which the Bonds are issued and
secured; the collection and disposition of revenues; a
description of the properties and interests pledged; the
modification or amendment of the Indenture or any of the Loan
Documents; and other matters, to all of which the owner of
this Bond assents by the acceptance of this Bond.
The Indenture permits the issuance of additional bonds on
a parity with the Bonds.
2. Interest Payment Dates and Interest Periods. The
interest payment dates (as applicable, an Interest Payment
Date) for this Bond shall be (i) for the period from and
including the initial issuance of the Bond to and including
the Initial Remarketing Date (the Contingent Interest Period),
the first day of each month commencing June 1, 1989; (ii) the
initial remarketing date; and (iii) after the Initial
Remarketing Date, each June 1 and December 1, as provided in
the Indenture.
The "Interest Period" for the Bond shall be, as
applicable, (a) during the Contingent Interest Period, the
calendar month preceding an Interest Payment Date; provided
that if the Bond is not issued on the first day of a month,
then the first Interest Period shall be from and including the
date of issuance of the Bond to and including the last day of
the calendar month and provided further that the Interest
Period immediately preceding payment in full of the Bond
(whether by redemption, acceleration or otherwise) or the
Initial Remarketing Date shall be a period extending from and
including the day following the expiration of the last
Interest Period of which interest due on the Bond has been
paid to but not including the date of payment in full of the
Bond or the Initial Remarketing Date; and (b) on and after the
Initial Remarketing Date, the period from and including an
Interest Payment Date to but not including the next succeeding
Interest Payment Date.
3. Interest Payable. From and including the date of
initial issuance and delivery of the fully executed and
authenticated Bond to (but not including) the earlier of the
Initial Remarketing Date or the date on which the Bond is paid
in full (whether by redemption, acceleration or otherwise),
the Bond shall bear interest at a rate or rates determined as
provided below, but in no event to exceed the lesser of
fourteen percent (14%) per annum (the Contingent Interest
Rate) or the maximum amount allowed by the laws of The
Commonwealth of Massachusetts. Interest on the Bond shall be
calculated on the basis of a year of 360 days consisting of
twelve (12) thirty (30) day months and shall be payable on the
applicable Interest Payment Date described herein. Interest on
the Bond will be comprised of several components as set forth
below.
4. Current Interest Payable. During the Operating
Period, the Bond will bear Minimum Base Interest at the rate
of five and thirty-five hundredths percent (5.35%) per annum
(the Minimum Base Interest Rate), payable in arrears on the
first day of the calendar month following each related
Interest Period.
During each Interest Period during the Operating Period,
this Bond will bear additional interest in an amount not to
exceed the amount of interest equal to an annual
noncompounding rate of three and sixty-five hundredths percent
(3.65%) of the outstanding principal amount of the Bond (which
maximum amount is referred to as Maximum Additional Base
Interest) due and payable in arrears to the Servicer on behalf
of the Owner for such Interest Period on the Interest Payment
Date of the second calendar month following such Interest
Period to the extent Cash Flow is available for such Interest
Period. If the Cash Flow in any Interest Period is
insufficient to enable payment of the full amount of the
Maximum Additional Base Interest, then the maximum amount
possible from such available Cash Flow shall be paid and the
balance shall be carried forward without interest and shall
accrue and be due and payable in arrears (which amount so
payable is referred to herein as the Additional Base Interest)
on the Interest Payment Date of the second calendar month
immediately following such Interest Period.
The difference between the Maximum Additional Base
Interest and the Additional Base Interest (which difference is
referred to as the Deferred Base Interest) shall, to the
extent that the cumulative aggregate amount of Deferred Base
Interest and Deferred Program Management Fees (as defined in
the Construction Loan Agreement) does not exceed $1,200,000
(the Deferral Ceiling), be carried forward without interest
and shall accrue and be due and payable as described in
Section 6 below to the extent Sale and Refinancing Proceeds
are available for payment thereof. Following achievement of
the Deferral Ceiling, such amounts shall be carried forward
without interest and accrue and be due and payable on the
earliest possible Interest Payment Date thereafter from Cash
Flow in later Interest Periods to the extent such Cash Flow is
available subsequent to the payment of Additional Base
Interest and prior to the payment of any Contingent Interest
payable pursuant to the provisions of the succeeding
paragraph. To the extent sufficient Cash Flow is not available
in later Interest Periods, then such Deferred Base Interest
shall accrue and be due and payable as described in Section 6
below to the extent Sale and Refinancing Proceeds are
available for payment thereof.
During each Interest Period within the Operating Period,
this Bond shall bear additional interest at the Contingent
Interest Period Rate equal to an annual noncompounding rate of
five percent (5.00%) of the outstanding principal amount of
the Bond (which maximum amount is referred to herein as the
Maximum Contingent Interest), which Maximum Contingent
Interest shall accrue and be due and payable in arrears on the
Interest Payment Date of the second calendar month following
such Interest Period to the extent Net Cash Flow is available
for such Interest Period. If the Net Cash Flow in any such
Interest Period is insufficient to enable payment of the full
amount of Maximum Contingent Interest, then the maximum amount
possible from available Net Cash Flow shall be carried forward
without interest and shall accrue and be due and payable in
arrears (which amount so payable is referred to herein as the
Current Contingent Interest) on the Interest Payment Date
immediately following such Interest Period. The difference
between the Maximum Contingent Interest and the Current
Contingent Interest (which difference is referred to herein as
Deferred Contingent Interest) shall be carried forward without
interest and shall accrue and be due and payable as described
in Section 6 below to the extent Sale or Refinancing Proceeds
are available for payment thereof.
5. Deferred Interest. This Bond will bear deferred
interest, which shall be calculated and shall accrue and be
due and payable as follows (collectively, the Deferred
Interest):
(a) During the Operating Period, Deferred Base Interest
and Deferred Contingent Interest shall be calculated
as provided above and shall be carried forward
without interest and shall accrue and, to the extent
not paid as provided in Section 4, shall be due and
payable in the manner described in Section 6.
(b) In the event this Bond is redeemed, accelerated or
paid in full for any reason or in the event this
Bond is remarketed on the Initial Remarketing Date
pursuant to Article V of the Indenture, then
Deferred Base Interest and Deferred Contingent
Interest (in that stated order of priority of
accrual and payment) shall accrue and shall be due
and payable from Sale or Refinancing Proceeds to the
extent provided by Section 6 below, on the date of
such redemption, acceleration or other payment in
full of this Bond or on the Initial Remarketing
Date, as applicable. Upon the redemption of this
Bond in part pursuant to Section 7(b)(ii) hereof
upon the Trustee's application of a Condemnation
Award or Insurance Proceed not utilized for the
rebuilding or restoration of the Project pursuant to
the terms of the Mortgage, such partial redemption
shall be allocated between principal and interest
according to the following formula:
(i) Legend
PA = redemption amount
TP = total outstanding principal amount
of this Bond
TI = interest on the Loan Amount (as defined
in the Note) calculated at the
Contingent Interest Rate, without
compounding such interest, from the
date of issuance of the Bond through
the date of prepayment reduced by all
interest paid under this Bond prior to
the date of prepayment.
(ii) Principal Calculation. The principal portion
of the prepayment amount is calculated as
follows:
(PA) x TP
(TP + TI)
(iii) Interest Calculation. The interest portion
of the prepayment amount is calculated as
follows:
(PA) x TI
(TP + TI)
(iv) Interest Allocation. The interest portion of
the prepayment amount shall be applied to
(i) Deferred Base Interest, and (ii)
Deferred Contingent Interest, in that
order.
6. Payment of Deferred Interest. If on the earlier of
the Initial Remarketing Date or the date of the payment in
full of this Bond (whether by redemption, acceleration or
otherwise), interest in an amount equal to a cumulative, non-
compounded rate of fourteen percent (14%) per annum on the
Bond has not been paid from and including the date of initial
issuance of the Bond, to but not including Initial Remarketing
Date through the payment of Minimum Base Interest, Additional
Base Interest and Current Contingent Interest, then the
outstanding principal amount of this Bond, any past due
interest and Deferred Interest shall accrue and shall be due
and payable from Sale or Refinancing Proceeds in the following
order of priority of accrual and payment:
(a) 100% of the Sale or Refinancing Proceeds shall be
applied to payment of the outstanding principal
amount of this Bond;
(b) 100% of the Sale or Refinancing Proceeds remaining
after the payments required by subparagraph (a)
above shall be applied to payment of any accrued but
unpaid interest on this Bond;
(c) 100% of the Sale or Refinancing Proceeds remaining
after the payments required by subparagraphs (a) and
(b) above shall be applied to payment of any accrued
but unpaid Mortgage Servicing Fees due pursuant to
the Construction Loan Agreement and late fees due
under the Note;
(d) 100% of the Sale or Refinancing Proceeds remaining
after the payments required by subparagraphs (a)
through (c) above shall be applied to payment of
Deferred Interest until interest at a cumulative and
non-compounded per annum rate of nine percent (9.0%)
shall have been paid on this Bond;
(e) 100% of the Sale or Refinancing Proceeds remaining
after the payments required by subparagraphs (a)
through (d) above shall be applied to payment of any
accrued but unpaid Program Management Fees due
pursuant to the Construction Loan Agreement;
(f) To the extent the Sale or Refinancing Proceeds
exceed the aggregate amounts payable under
subparagraphs (a) through (e) above and under
subsections 4.2.3.3.(f)-(h) of the Additional Note,
an amount equal to twenty percent (20%) (the
Residual Percentage) of such excess shall be applied
to payment of Deferred Interest until such Deferred
Interest has been paid in full; and
(g) Sale or Refinancing Proceeds remaining after the
payments required by subparagraphs (a) through (f)
above shall be paid to the Developer and any
Deferred Interest which is not due and payable
pursuant to the above subparagraphs shall never
accrue and shall never be due and payable on this
Bond except as provided in the last paragraph
hereof.
The term "Sale or Refinancing Proceeds" herein shall mean
the Sale or Refinancing Proceeds calculated in accordance with
the provisions of the Note.
If this Bond has been prepaid in full prior to the
maturity date hereof, and within a five (5) year period
subsequent to such prepayment, the Developer (i) sells the
Project, (ii) refinances the Project, or (iii) converts the
Project to condominiums or a cooperative and sells such
converted units, the following provision shall apply: should
the total amount of such sale, refinancing or conversion yield
a sum greater than the prepayment amount before received by
the Owner, the Developer shall pay to the Owner from the
proceeds of such sale, refinancing or conversion, so much
thereof as will achieve the portion, if any, of the Contingent
Interest (as defined in the Note) remaining unpaid after such
previous prepayments.
7. Redemption Provisions. (a) During the Contingent
Interest Period, this Bond is subject to redemption in whole,
but not in part, on any date on or after September 22, 1994
from the proceeds of the optional prepayment of the Note
pursuant to the terms thereof at the redemption prices
expressed as percentages of the then outstanding aggregate
principal amount of the Bond set forth in the table below plus
accrued and unpaid interest (including any Deferred Interest
payable as described in Section 6 above) to the date of
redemption:
Redemption Dates Redemption Prices
September 22, 1994 to and 107%
including September 21, 1995
September 22, 1995 to and 106%
including September 21, 1996
September 22, 1996 to and 105%
including September 21, 1997
September 22, 1997 to and 104%
including September 21, 1998
September 22, 1998 to and 103%
including September 21, 1999
September 22, 1999 to and 102%
including September 21, 2000
September 22, 2000 to and 101%
including September 21, 2003
September 22, 2003 and 100%
thereafter
(b) During the Contingent Interest Period, this
Bond will be subject to mandatory redemption prior to maturity
at a redemption price equal to 100% of the then outstanding
aggregate principal amount of the Bond so called for
redemption, plus accrued and unpaid interest to the redemption
date, but without premium, as follows:
(i) in whole or in part on any Interest Payment
Date for which adequate notice of redemption can be
given in accordance with the Indenture on or after
May 22, 1989 to the extent that moneys (including
investment earnings) remain unexpended in the
Project Loan Fund on the earlier of the Conversion
Date or March 22, 1990 (excluding certain moneys
held for one or more disbursements permitted
pursuant to Section 6.05 of the Indenture for
Project Costs owing but not yet due and payable),
and such moneys in the Project Loan Fund shall be
applied to the payment of such redemption price; or
(ii) in whole or in part on the first Interest
Payment Date for which adequate notice of redemption
can be given in accordance with the Indenture to the
extent that Trustee applies as a prepayment of the
Note any Insurance Proceeds or Condemnation Award
received in connection with the Project and not used
to build or restore the Project pursuant to the
Mortgage; or
(iii) in whole on any Interest Payment Date on or
after January 1, 2006 at the option of the Owner
exercised by giving not less than six (6) months
prior written notice to the Issuer, the Trustee and
the Developer which notice of the Owner shall be
irrevocable and shall specify the date on which the
Bond is to be redeemed in whole.
(c) This Bond will also be subject to redemption
prior to maturity upon the occurrence of a "Determination of
Taxability" as described in Exhibit B to the Indenture.
(d) This Bond will be subject to redemption prior
to maturity after the Contingent Interest Period in the manner
and upon the terms described in Section 3.03 of the Indenture.
(e) Upon any acceleration of the Note on or prior
to September 22, 2003, which results in a redemption of this
Bond prior to the maturity hereof such redemption shall be at
a price equal to 107% if such redemption shall occur on or
prior to September 22, 1994, and thereafter at the applicable
redemption prices described under subparagraph (a) above, in
each case plus accrued and unpaid interest (including any
Deferred Interest payable as described in Section 6 above) to
the date of redemption.
8. Remarketing in Lieu of Redemption. In lieu of
redemption pursuant to Section 7(b)(iii) hereof, at the option
of the Developer, which option shall be made by written notice
to the Trustee and Owner not less than ninety (90) days prior
to the date set for redemption under Section 7(b)(iii) hereof,
the Bond otherwise subject to redemption pursuant to Section
7(b)(iii) hereof shall be purchased on such date (the "Initial
Remarketing Date") for a purchase price equal to 100% of the
principal amount thereof plus accrued and unpaid interest
(including any Deferred Interest payable as described in
Section 6 above) to the Initial Remarketing Date, provided
that if all of the conditions to remarketing the Bond on the
Initial Remarketing Date set forth in Section 5.03 of the
Indenture, as summarized under Section 9 below, are not met,
this Bond will be redeemed in whole on the date set by the
Owner for redemption pursuant to Section 7(b)(iii) hereof.
9. Remarketing of the Bond on Initial Remarketing Date.
No later than sixty (60) days prior to the Initial Remarketing
DATE, the Remarketing Agent, at the direction of the
Developer, and with notice to the Owner, the Issuer and the
Trustee, shall proceed to remarket the Bond in accordance with
the provisions described in Section 5.03 of the Indenture.
Upon the Initial Remarketing Date, a replacement Bond or Bonds
in lieu of the Bond will be issued to the new Bondholders to
replace the Bond and to reflect the provisions set forth in
the Indenture and any amendments made to the Indenture.
If, by 12:00 noon, New York City time, on the Initial
Remarketing Date, the conditions set forth in Section 5.03 of
the Indenture have not been satisfied the Trustee shall
promptly so notify the Developer and the Issuer and the bond
will be redeemed pursuant to Section 7(b)(iii) hereof.
If the Bond is not delivered for purchase on the Initial
Remarketing Date, the Bond will be deemed to have been
purchased if the purchase price therefor will have been
deposited in accordance with the Indenture ("Undelivered
Bonds"); and the parties to whom the Remarketing Agent will
have remarketed the Bond will be the Owners of Bonds issued in
exchange for such Undelivered Bonds for all purposes under the
Indenture, including without limitation the right to remarket
and transfer such Undelivered Bonds, whereupon interest
accruing from and after such Remarketing Date on such
Undelivered Bonds will not longer be payable to the former
Owners thereof but will be paid to the registered Owners of
such Bonds issued in exchange for such Undelivered Bonds
during the ensuing Remarketing Period.
BY THE PURCHASE AND ACCEPTANCE OF THIS BOND, THE OWNER
AGREES TO DELIVER THIS BOND TO THE TRUSTEE ON THE DATE
ESTABLISHED FOR REMARKETING OR REDEMPTION FOR (i) SALE TO SUCH
PURCHASER OR PURCHASERS AS MAY BE DESIGNATED BY THE
REMARKETING AGENT, OR (ii) FOR REDEMPTION, AS THE CASE MAY BE.
ANY BOND NOT DELIVERED FOR PURCHASE SHALL BE DEEMED TO HAVE
BEEN PURCHASED AND SHALL NOT BEAR INTEREST FROM AND AFTER THE
DATE ESTABLISHED FOR MANDATORY PURCHASE OR REDEMPTION AND THE
OWNER THEREOF SHALL NOT BE ENTITLED TO ANY RIGHTS EXCEPT THE
RIGHT TO RECEIVE THE AMOUNT DUE IN PAYMENT FOR THIS BOND.
10. Registration and Transfer. This Bond will be
transferable only by execution by the registered owner of the
Assignment attached hereto and delivery of the Bond to the new
registered owner thereof and by presenting to the Trustee,
this Bond and an Assignment executed by the registered owner
or its duly authorized representative.
Prior to the Initial Remarketing Date (except as
otherwise expressly provided in the Indenture), unless the
Owner requests an exchange Bond, it will not be necessary to
execute and authenticate an exchange Bond (1) upon its
transfer as provided in the immediately preceding paragraph
(and the endorsement for transfer and assignment will serve as
evidence of the ownership of the Bond) or (2) upon its
reduction of principal upon a partial redemption thereof (and
the notation in the Certificate Regarding Reduction of
Principal will serve as evidence of the principal amount of
the Bond) in accordance with the Indenture; provided, however,
that upon the Owner's request an exchange Bond shall be issued
by the Issuer and authenticated by the Trustee upon the
preparation of the exchange Bond by Bond Counsel at the
expense of the Developer.
Except as to transfer occurring on or after the
remarketing of this Bond on the Initial Remarketing Date, this
Bond may only be transferred, as a whole, in any Authorized
Denomination (i) to any one subsidiary of the Owner, an
affiliate with the same or substantially the same general
partner as the Owner, to any one entity arising out of any
merger or consolidation of the Owner, by operation of law, or
to a trustee in bankruptcy of the Owner and of such transferee
or (ii) in connection with a sale to one Accredited Investor
(as defined below), as evidenced by the certificate of such
transferee, if, in either instance, the Issuer, the Trustee
and the Developer received from the transferee of the Bond an
executed agreement to be bound by the transfer restriction set
forth in this paragraph in connection with subsequent transfer
of the Bond.
"Accredited Investor" means the Developer or any of the
following:
(a) Any bank as defined in Section 3(a)(2) of the
Securities Act of 1933, as amended (the Act),
whether acting in its individual or fiduciary
capacity; any insurance company as defined in
Section 2(13) of the Act; any investment company
registered under the Investment Company Act of 1940
or a business development company as defined in
Section 2(a)(48) of that Act; any Small Business
Investment Company licensed by the United States
Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958;
any employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security
Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such
Act, which is either a bank, insurance company or
registered investment adviser, or if the employee
benefit plan has total assets in excess of
$5,000,000;
(b) Any private business development company as defined
in Section 202(a)(22) of the Investment Advisers Act
of 1940;
(c) Any organization described in Section 501(c)(3) of
the Code with total assets in excess of $5,000,000;
(d) Any director, executive officer or general partner
of the issuer of the securities being offered or
sold;
(e) Any person who purchases at least $150,000 of the
securities being offered, where the purchaser's
total purchase price does not exceed twenty percent
(20%) of the purchaser's net worth at the time of
sale, or joint net worth with that person's spouse,
for one or any combination of the following: (i)
cash, (ii) securities for which market quotations
are readily available; (iii) an unconditional
obligation to pay cash or securities for which
market quotations are readily available, which
obligation is to be discharged within five years of
the sale of the securities to be purchased, or (iv)
the cancellation of any indebtedness owed by the
issuer to the purchaser;
(f) Any natural person whose individual net worth with
that person's spouse at the time of his purchase
exceeds $1,000,000;
(g) Any natural person who had an individual income in
excess of $200,000 in each of the two most recent
years and who reasonably expects an income in excess
of $200,000 in the current year; or
(h) Any entity in which all of the equity owners are
Accredited Investors under subparagraphs (a), (b),
(c), (d), (f) or (g) above.
Upon such transfer a new Bond of the same maturity, in
any Authorized Denomination and bearing the same interest rate
(except for Bonds purchased and not redeemed on any
Remarketing Date) will be issued to the transferee in exchange
therefor.
The Issuer and the Trustee may deem and treat the person
in whose name this Bond is registered as the absolute owner of
it (whether or not this Bond shall be overdue) for the purpose
of receiving payment of or on account of principal on it and
interest due on it and for all other purposes, and neither the
Issuer nor the Trustee shall be affected by any notice to the
contrary.
The Trustee shall not be required to issue or register
the transfer of any Bond (i) during any period beginning on
the fifteenth (15th) day of the calendar month immediately
preceding each Interest Payment Date, or, if such date is not
a Business Day, the Business Day next preceding such fifteenth
day (the "Record Date") and ending at the close of business on
the applicable Interest Payment Date, (ii) during any period
beginning five (5) Business Days prior to the notice of
redemption given by the Trustee of Bonds to be redeemed prior
to maturity and ending at the close of business on the date of
such redemption, or (iii) during any period beginning fifteen
(15) days prior to a Remarketing Date and ending at the close
of business on such Remarketing Date.
Prior to the Initial Remarketing Date, the Bond is
issuable only as a fully registered Bond in the amount of
$500,000 or the outstanding principal amount of the Bond or
any lesser amount as determined by Section 2.11(c) of the
Indenture (provided that such lesser amount is an integral
multiple of $5,000, with the exception, if necessary, of one
lesser amount less than $5,000). Subsequent to the Initial
Remarketing Date the Bond may be issued in denominations of
$5,000 or any integral multiple thereof, with the exception,
if necessary, of one denomination less than $5,000. The Bond
is exchangeable at the principal corporate trust office of the
Trustee, subject to the limitations and upon payment of the
charges provided herein and in the Indenture.
11. Amendments and Supplements. The Indenture contains
provisions permitting the Issuer, Developer and the Trustee
prior to the Initial Remarketing Date (with the approval of
the Owner), to adopt supplemental resolutions amending in any
particular the provisions of the Indenture; provided, however,
that no such amendment, without the consent of the owners of
the Bonds affected, shall permit (a) a change in the times,
amounts or currency of payment of the principal of or premium,
if any, or interest on any outstanding Bond, or a reduction in
the principal amount or redemption price, or the dates or
terms of redemption of any outstanding Bond or the rate of
interest thereon, (b) the creation of a claim or lien upon, or
a pledge of the revenues derived from the Developer under the
Indenture or other part of the moneys, rights or properties
pledged as security for the Bond, (c) a preference or priority
of any Bond over any other Bond, (d) any change adversely
affecting the tax-exempt status of the Bond, or (e) a
reduction in the aggregate principal amount of the Bond
required for consent under the Indenture.
12. Miscellaneous. The provisions included in this Bond
are summaries of certain provisions of the Indenture and are
qualified in their entirety by reference to the Indenture. The
Indenture is subject to supplement and amendment under the
circumstances, for the purposes and with the consent therein
provided. The Indenture is on file with the Trustee and
reference is made to it for a full statement of the rights and
duties and obligations of the Trustee and the Issuer. All
terms used herein which are not otherwise defined shall have
the meanings ascribed thereto in the Indenture.
Neither the officers, agents, employees or
representatives of the Issuer nor any person executing this
Bond shall be personally liable thereon or be subject to any
personal liability by reason of the issuance hereof, whether
by virtue of any constitution, status or rule of law, or by
the enforcement of any assessment or penalty, or otherwise,
all such liability being expressly released and waived as a
condition of and in consideration for the execution of the
Indenture and the issuance of this Bond.
This Bond shall not be valid and shall not be entitled to
the lien, pledge and benefits of the Indenture until the
authentication certificate appearing on the face of this Bond
shall be executed by a duly authorized signatory of the
Trustee.
All things necessary to make this Bond, when
authenticated by the Trustee, the valid, binding and legal
obligation of the Issuer, and to make the Indenture valid,
binding and legal for the security hereof, have been done and
performed and this Bond has been in all respects duly
authorized, done and accomplished.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be
executed in its name by its Chairman by manual signature and
the seal of the Issuer to be imprinted hereof.
Date: July 1, 1994 BURLINGTON HOUSING AUTHORITY
/s/ Robert S. Matarazzo
By:______________________________
Robert S. Matarazzo
(SEAL)
ATTEST:
/s/Lillian M. Buckley
___________________________
Lillian M. Buckley
Secretary
<PAGE>
CERTIFICATE OF AUTHENTICATION
This Bond is the Bond described in the within-mentioned
Indenture.
FLEET NATIONAL BANK, as
Trustee
/s/Susan M. Calise
By:____________________________
AUTHORIZED SIGNATORY
DATE:
<PAGE>
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfer unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION
NUMBER OF ASSIGNEE) (*This information, which is voluntary, is
being requested to ensure that the assignee will not be
subject to backup withholding under Section 3406 of the Code.)
________________________
________________________
_____________________________________________________________
(Please Print or Typewrite Name and Address of Assignee)
_____________________________________________________________
the within Bond, and all rights thereunder, and hereby does
irrevocably constitute and appoint
_____________________________________________________________
Attorney to transfer the within Bond on the books kept for the
registration thereof, with full power of substitution in the
premises.
Dated:
Signature Guaranteed _______________________
NOTICE: The signature to
this assignment must
___________________________ correspond with the
Bank, Trust Company or Firm name as it appears upon
the face of the within
bond in every
particular, without
By:________________________ alteration or
Authorized Signature enlargement or any
change whatever.
<PAGE>
CERTIFICATE REGARDING REDUCTION OF PRINCIPAL
THE PRINCIPAL AMOUNT OF THE BOND IS HEREBY REDUCED AS SET
FORTH IN THE FOLLOWING SCHEDULE EFFECTIVE AS OF THE DATE SHOWN
BELOW, ALL IN ACCORDANCE WITH THE PROVISIONS OF THE
WITHIN-MENTIONED INDENTURE.
Executed by
the Trustee
Principal Amount as the Registrar Confirmed
Effective of the Bond of the Issuer by the
Date of Reduction as of the for the Bond Registered Owner
of Principal Effective Date as of Such Date as of Such Date
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<PAGE>
THIS BOND DOES NOT CONSTITUTE A GENERAL OBLIGATION OF THE
BURLINGTON HOUSING AUTHORITY OR TOWN OF BURLINGTON OR THE
COMMONWEALTH OF MASSACHUSETTS OR ANY POLITICAL SUBDIVISION THEREOF
BUT IS PAYABLE SOLELY FROM THE REVENUES AND FUNDS PLEDGED FOR ITS
PAYMENT IN ACCORDANCE WITH THE TRUST INDENTURE REFERRED TO BELOW.
REGISTERED NUMBER R-2 REGISTERED
$28,826,500
BURLINGTON HOUSING AUTHORITY
RENTAL HOUSING REVENUE BOND
(BURLINGTON ARBORETUM APTS. 1987 PROJECT)
INTEREST DATED MATURITY
RATE DATE DATE
A. Described Below September 22, 1987 September 22, 2011
BURLINGTON HOUSING AUTHORITY (the Issuer), a public body corporate
and politic of The Commonwealth of Massachusetts (the Commonwealth), for
value received, hereby promises to pay, solely from the sources and in
the manner hereinafter provided, to the order of
DEAN WITTER/COLDWELL BANKER
TAX EXEMPT MORTGAGE FUND, L.P.,
or registered assigns (the Owner), on the twenty-second day of
September, 2011 (or earlier as herein provided) the principal amount of
$28,826,500 and to pay interest on such principal amount from the date
hereof to the maturity date or the date of earlier redemption at the
rates of interest per annum or in the amounts established as described
below.
All capitalized terms not otherwise defined herein shall have the
meaning given such terms in the Indenture.
1. General Provisions. The principal of and premium, if any, on
this Bond shall be payable in lawful money of the United States of
America, without exchange or collection charges, upon presentation and
surrender of this Bond on the maturity date (or earlier as herein
provided) at the principal office of Fleet National Bank, as trustee
(the Trustee) under a Trust Indenture, dated as of September 22, 1987,
as supplemented by a First Supplement to Trust Indenture, dated as of
May 24, 1989, and a Second Supplement to Trust Indenture, dated as of
July 1, 1994 (as supplemented, the Indenture), by and among the Issuer,
Burlington Arboretum Limited Partnership, a Massachusetts limited
partnership (formerly Burlington Arboretum Apts Associates Limited
Partnership)(the Developer), and the Trustee. Interest on this Bond is
payable at the times set forth below until maturity or earlier
redemption. Prior to the Initial Remarketing Date (as hereinafter
defined), interest on this Bond will be paid on behalf of the registered
owner of this Bond to Tempo-GP, Inc. (the New Servicer), successor to
Dean Witter Housing and Real Estate Finance Corporation (the Original
Servicer) as servicer pursuant to a Servicing Agreement, dated as of
September 22, 1987 (the Servicing Agreement), among the Original
Servicer, the Owner, the Developer and the Trustee, or any successor
servicer (the Original Servicer, the New Servicer or any other successor
servicer being the Servicer) designated by the registered owner of the
Bond (except as to interest paid with moneys disbursed from the Project
Loan Fund in accordance with Section 6.05 of the Indenture on Interest
Payment Dates occurring during the Construction Period, which shall be
paid by the Trustee to the Owner). The Servicer or the Trustee, as the
case may be, shall transmit such interest payments to the Owner by wire
transfer or other means acceptable to the Owner to such bank or account
as Owner may request in writing. After the Initial Remarketing Date,
interest on the Bonds shall be payable by the Trustee by check or draft
mailed to the respective Bondholders thereof at the addresses shown on
the registration books maintained by the Trustee as of the fifteenth day
of the calendar month preceding each Interest Payment Date (a Record
Date).
This Bond is the only bond of a duly authorized issue of bonds of
the Issuer, known as its "Rental Housing Revenue Bonds (Burlington
Arboretum Apts. 1987 Project)" (the Bond), issued as a single series and
executed and delivered by the Issuer pursuant to the Indenture. The Bond
is issued for the purpose of making a loan (the Project Loan) to the
Developer pursuant to the Indenture in order to finance the cost of the
acquisition, construction and equipping of a multifamily residential
rental project (the Project) to be located in the Town of Burlington,
Massachusetts.
The Bond is a limited obligation of the Issuer, secured by and
payable solely from a lien on and pledge of repayments by the Developer
of the Project Loan as provided in the Indenture and a certain
Promissory Note of the Developer, dated September 22, 1987, as amended
by a First Amendment to Promissory Note, dated May 24, 1989, and a
Second Amendment to Promissory Note, dated July 1, 1994, in the
principal amount of $28,826,500 (as amended, the Original Note) and a
certain Promissory Note of the Developer, dated May 24, 1989, as amended
by a First Amendment to Promissory Note, dated July 1, 1994, in the
principal amount of $500,000 (as amended, the Additional Note), which
Original Note and Additional Note (collectively, the Note) has been
assigned to the Trustee, together with certain other funds described in
the Indenture. The Bond is additionally secured by and entitled to the
benefits of (i) a First Mortgage and Security Agreement, dated as of
September 22, 1987, as amended by a First Amendment thereto, dated as of
May 24, 1989, and a Second Amendment thereto, dated as of July 1, 1994
(as amended, the Mortgage), between the Developer, as mortgagor and the
Issuer, as mortgagee, which Mortgage secures the Note, which Mortgage
has been assigned by the Issuer to the Trustee pursuant to an
Assignment, dated as of September 22, 1987, a Supplemental Assignment,
dated as of May 24, 1989, and a Second Supplemental Assignment, dated as
of July 1, 1994 (collectively, the Assignment), from the Issuer, as
assignor, to the Trustee, as assignee; (ii) by a First Assignment of
Rents and Leases, dated as of September 22, 1987, as amended by a First
Amendment thereto, dated as of May 24, 1989, and a Second Amendment
thereto, dated as of July 1, 1994 (as amended, the Lease Assignment),
between the Developer, as assignor and the Issuer, as assignee, which
Lease Assignment has been assigned by the Issuer to the Trustee pursuant
to the Assignment; (iii) by an Assignment of Contract Documents, dated
as of September 22, 1987, as confirmed by a Confirmation of Assignment
of Contract Documents, dated as of July 1, 1994 (as confirmed, the
Documents Assignment), between the Developer, as assignor and the
Issuer, as assignee, which Documents Assignment has been assigned by the
Issuer to the Trustee pursuant to the Assignment; (iv) by a Construction
Loan Agreement, dated as of September 22, 1987, as amended by a First
Amendment thereto, dated as of May 24, 1989, and a Second Amendment
thereto, dated as of July 1, 1994 (as amended, the Construction Loan
Agreement), by and among the Developer, the Trustee and the Servicer;
(v) by a Loan Guaranty Agreement, dated as of September 22, 1987 (the
Loan Guaranty Agreement) by Investors Management Group, Inc. (IMG),
Phillip H. Sloane and Jeffrey A. Kosow to the Trustee; and (vi) by a
Completion Guaranty Agreement, dated as of September 22, 1987 (the
Completion Guaranty) by IMG, Phillip H. Sloane and Jeffrey A. Kosow to
the Trustee. The Mortgage, Note, Assignment, Lease Assignment, Documents
Assignment, Construction Loan Agreement, Loan Guaranty Agreement and
Completion Guaranty are herein referred to as the Loan Documents.
Reference is hereby made to the Indenture and the Loan Documents, copies
of which are on file with the Trustee, for the provisions, among others,
with respect to the nature and extent of the rights, duties and
obligations of the Issuer, the Trustee, the Developer, the Owner and
subsequent Bondholders; the terms upon which the Bond is issued and
secured; the collection and disposition of revenues; a description of
the properties and interests pledged; the modification or amendment of
the Indenture or any of the Loan Documents; and other matters, to all of
which the owner of this Bond assents by the acceptance of this Bond.
The Indenture permits the issuance of additional bonds on a parity
with this Bond.
2. Interest Payment Dates and Interest Periods. The interest
payment dates (as applicable, an Interest Payment Date) for this Bond
shall be (i) for the period from and including the initial issuance of
the Bond to and including the Initial Remarketing Date (the Contingent
Interest Period), the first day of each month commencing November 1,
1987; (ii) the Initial Remarketing Date; and (iii) after the Initial
Remarketing Date, each June 1 and December 1, as provided in the
Indenture.
The "Interest Period" for the Bond shall be, as applicable, (a)
during the Contingent Interest Period, the calendar month preceding an
Interest Payment Date; provided that the Interest Period immediately
preceding payment in full of the Bond (whether by redemption,
acceleration or otherwise) or the Initial Remarketing Date shall be a
period extending from and including the day following the expiration of
the last Interest Period of which interest due on the Bond has been paid
to but not including the date of payment in full of the Bond or the
Initial Remarketing Date; and (b) on and after the Initial Remarketing
Date, the period from and including an Interest Payment Date to but not
including the next succeeding Interest Payment Date.
3. Interest Payable. From and including the date of initial
issuance and delivery of the fully executed and authenticated Bond to
(but not including) the earlier of the Initial Remarketing Date or the
date on which the Bond is paid in full (whether by redemption,
acceleration or otherwise), the Bond shall bear interest at a rate or
rates determined as provided below, but in no event to exceed the lesser
of fourteen percent (14%) per annum (the Contingent Interest Rate) or
the maximum amount allowed by the laws of The Commonwealth of
Massachusetts. Interest on the Bond shall be calculated on the basis of
a year of 360 days consisting of twelve (12) thirty (30) day months and
shall be payable on the applicable Interest Payment Date described
herein. Interest on the Bond will be comprised of several components as
set forth below.
4. Current Interest Payable. Commencing on the date of initial
issuance of the Bond and during the Initial Construction Period and the
First Extended Construction Period, the Bond shall bear Initial
Construction Period Base Interest at a rate equal to nine percent
(9.00%) per annum (the Initial Construction Period Base Interest Rate)
due and payable in arrears on each Interest Payment Date during the
Initial Construction Period and the First Extended Construction Period.
During the Second Extended Construction Period, this Bond shall
bear Extended Construction Period Base Interest at a rate equal to
eleven percent (11%) per annum (the Extended Construction Period Base
Interest Rate) due and payable in arrears on each Interest Payment Date
during the Extended Construction Period.
During the Operating Period, the Bond will bear Minimum Base
Interest at the rate of five and thirty-five hundredths percent (5.35%)
per annum (the Minimum Base Interest Rate), payable in arrears on the
first day of the calendar month following each related Interest Period.
During each Interest Period during the Operating Period, this Bond
will bear additional interest in an amount not to exceed the amount of
interest equal to an annualnoncompounding rate of three and sixty-five
hundredths percent (3.65%) of the outstanding principal amount of the
Bond (which maximum amount is referred to as Maximum Additional Base
Interest) due and payable in arrears to the Servicer on behalf of the
Owner for such Interest Period on the Interest Payment Date of the
second calendar month following such Interest Period to the extent Cash
Flow is available for such Interest Period. If the Cash Flow in any
Interest Period is insufficient to enable payment of the full amount of
the Maximum Additional Base Interest, then the maximum amount possible
from such available Cash Flow shall be paid and the balance shall be
carried forward without interest and shall accrue and be due and payable
in arrears (which amount so payable is referred to herein as the
Additional Base Interest) on the Interest Payment Date immediately
following such Interest Period.
The difference between the Maximum Additional Base Interest and
the Additional Base Interest (which difference is referred to as the
Deferred Base Interest) shall, to the extent that the cumulative
aggregate amount of Deferred Base Interest and Deferred Program
Management Fees (as defined in the Note) does not exceed $l,200,000 (the
Deferral Ceiling), be carried forward without interest and shall accrue
and be due and payable as described in Section 6 below to the extent
Sale and Refinancing Proceeds are available for payment thereof.
Following achievement of the Deferral Ceiling, such amounts shall be
carried forward without interest and accrue and be due and payable on
the earliest possible Interest Payment Date thereafter from Cash Flow in
later Interest Periods to the extent such Cash Flow is available
subsequent to the payment of Additional Base Interest and prior to the
payment of any Contingent Interest payable pursuant to the provisions of
the succeeding paragraph. To the extent sufficient Cash Flow is not
available in later Interest Periods, then such Deferred Base Interest
shall accrue and be due and payable as described in Section 6 below to
the extent Sale and Refinancing Proceeds are available for payment
thereof.
During each Interest Period within the Operating Period, this Bond
shall bear additional interest at the Contingent Interest Period Rate
equal to an annual noncompounding rate of five percent (5.00%) of the
outstanding principal amount of the Bond (which maximum amount is
referred to herein as the Maximum Contingent Interest), which Maximum
Contingent Interest shall accrue and be due and payable in
arrears on the Interest Payment Date of the second calendar month
following such Interest Period to the extent Net Cash Flow is available
for such Interest Period. If the Net Cash Flow in any such Interest
Period is insufficient to enable payment of the full amount of Maximum
Contingent Interest, then the maximum amount possible from available Net
Cash Flow shall be carried forward without interest and shall accrue and
be due and payable in arrears (which amount so payable is referred to
herein as the Current Contingent Interest) on the Interest Payment rate
immediately following such Interest Period. The difference between the
Maximum Contingent Interest and the Current Contingent Interest (which
difference is referred to herein as Deferred Contingent Interest) shall
be carried forward without interest and shall accrue and be due and
payable as described in Section 6 below to the extent Sale or
Refinancing Proceeds are available for payment thereof.
5. Deferred Interest. This Bond will bear deferred interest,
which shall be calculated and shall accrue and be due and payable as
follows (collectively, the Deferred Interest):
(a) During the Initial Construction Period and the First
Extended Construction Period, in addition to Initial
Construction Period Base Interest, the Bond shall bear
Deferred Interest at the Construction Period Deferred
Interest Rate equal to five percent (5.00%) per annum
(which maximum amount is referred to herein as the
Initial Construction Period Deferred Interest).
Initial Construction Period Deferred Interest shall be
carried forward without interest and shall accrue and
shall be due and payable to the extent of available
Sale or Refinancing Proceeds, and shall be payable in
the manner described in Section 6 below.
(b) During the Second Extended Construction Period, in
addition to Second Extended Construction Period
Interest, the Bond shall bear Deferred Interest at the
rate of 3.00% per annum (which maximum amount is
referred to herein as the Extended Construction Period
Deferred Interest). Extended Construction Period
Deferred Interest shall be carried forward without
interest and shall accrue and shall be due and payable
to the extent of available Sale or Refinancing
Proceeds, and shall be payable in the manner described
in Section 6 below.
(c) During the Operating Period, Deferred Base Interest
and Deferred Contingent Interest shall be calculated
as provided above and shall be carried forward without
interest and shall accrue and shall be due and payable
in the manner described in Section 6.
(d) In the event this Bond is redeemed, accelerated or
paid in full for any reason or in the event this Bond
is remarketed on the Initial Remarketing Date pursuant
to Article V of the Indenture, then Initial
Construction Period Deferred Interest and Extended
Construction Period Deferred Interest, Deferred Base
Interest and Deferred Contingent Interest (in that
stated order of priority of accrual and payment) shall
accrue and shall be due and payable from Sale or
Refinancing Proceeds to the extent provided by Section
6 below, on the date of such redemption, acceleration
or other payment in full of this Bond or on the
Initial Remarketing Date, as applicable. Upon the
redemption of this Bond in part pursuant to Section
7(b)(ii) hereof upon the Trustee's application of a
Condemnation Award or Insurance Proceed not utilized
for the rebuilding or restoration of the Project
pursuant to the terms of the Mortgage, such partial
redemption shall be allocated between principal and
interest according to the following formula:
(i) Legend
PA = redemption amount
TP = total outstanding principal amount of the
Bond
TI = interest on the Loan Amount (as defined in
the Note) calculated at the Contingent
Interest Rate, without compounding such
interest, from the date of issuance of the
Bond through the date of prepayment reduced
by all interest paid under this Bond prior
to the date of prepayment.
(ii) Principal Calculation. The principal portion of
the prepayment amount is calculated as follows:
(PA) x TP
(TP + TI)
(iii) Interest Calculation. The interest portion of the
prepayment amount is calculated as follows:
(PA) x TI
(TP + TI)
(iv) Interest Allocation. The interest portion of the
prepayment amount shall be applied to (i) the sum
of the Initial Construction Period Deferred
Interest and Extended Construction Period
Deferred Interest, (ii) Deferred Base Interest,
and (iii) Deferred Contingent Interest, in that
order.
6. Payment of Deferred Interest. If on the earlier of the
Initial Remarketing Date or the date of the payment in full of this Bond
(whether by redemption, acceleration or otherwise), interest in an
amount equal to a cumulative, noncompounded rate of fourteen percent
(14%) per annum on the Bond has not been paid from and including the
date of initial issuance of the Bond, to but not including the Initial
Remarketing Date through the payment of Initial Construction Period Base
Interest, Extended Construction Period Base Interest, Minimum Base
Interest, Additional Base Interest and Current Contingent Interest, then
the outstanding principal amount of this Bond, any past due interest and
Deferred Interest shall accrue and shall be due and payable from Sale or
Refinancing Proceeds in the following order of priority of accrual and
payment:
(a) 100% of the Sale or Refinancing Proceeds shall be
applied to payment of the outstanding principal amount
of this Bond;
(b) 100% of the Sale or Refinancing Proceeds remaining
after the payments required by subparagraph (a) above
shall be applied to payment of any accrued but unpaid
interest on this Bond;
(c) 100% of the Sale or Refinancing Proceeds remaining
after the payments required by subparagraphs (a) and
(b) above shall be applied to payment of any accrued
but unpaid Mortgage Servicing Fees due pursuant to the
Construction Loan Agreement;
(d) 100% of the Sale or Refinancing Proceeds remaining
after the payments required by subparagraphs (a)
through (c) above shall be applied to payment of
Deferred Interest until interest at a cumulative and
noncompounded per annum rate of nine percent (9.0%)
shall have been paid on this Bond;
(e) 100% of the Sale or Refinancing Proceeds remaining
after the payments required by subparagraphs (a)
through (d) above shall be applied to payment of any
accrued but unpaid Program Management Fees due
pursuant to the Construction Loan Agreement;
(f) To the extent the Sale or Refinancing Proceeds exceed
the aggregate amounts payable under subparagraphs (a)
through (e) above, an amount equal to twenty percent
(20%) (the Residual Percentage) of such excess shall
be applied to payment of Deferred Interest until such
Deferred Interest has been paid in full; and
(g) Sale or Refinancing Proceeds remaining after the
payments required by subparagraphs (a) through (f)
above shall be paid to the Developer and any Deferred
Interest which is not due and payable pursuant to the
above subparagraphs shall never accrue and shall never
be due and payable on this Bond except as provided in
the last paragraph hereof.
The term "Sale or Refinancing Proceeds" herein shall mean the Sale
or Refinancing Proceeds calculated in accordance with the provisions of
the Note.
If this Bond has been prepaid in full prior to the maturity date
hereof, and within a five (5) year period subsequent to such prepayment,
the Developer (i) sells the Project, (ii) refinances the Project, or
(iii) converts the Project to condominiums or a cooperative and sells
such converted units, the following provision shall apply: should the
total amount of such sale, refinancing or conversion yield a sum greater
than the prepayment amount before received by the Owner, the Developer
shall pay to the Owner from the proceeds of such sale, refinancing or
conversion, so much thereof as will achieve the portion, if any, of the
Contingent Interest (as defined in the Note) remaining unpaid after such
previous prepayments.
7. Redemption Provisions. (a) During the Contingent Interest
Period, this Bond is subject to redemption in whole, but not in part, on
any date on or after September 22, 1994 from the proceeds of the
optional prepayment of the Note pursuant to the terms thereof at the
redemption prices expressed as percentages of the then outstanding
aggregate principal amount of the Bond set forth in the table below plus
accrued and unpaid interest (including any Deferred Interest payable as
described in Section 6 above) to the date of redemption:
Redemption Dates Redemption Prices
September 22, 1994 to and 107%
including September 21, 1995
September 22, 1995 to and 106%
including September 21, 1996
September 22, 1996 to and 105%
including September 21, 1997
September 22, 1997 to and 104%
including September 21, 1998
September 22, 1998 to and 103%
including September 21, 1999
September 22, 1999 to and 102%
including September 21, 2000
September 22, 2000 to and 101%
including September 21, 2003
September 22, 2003 and 100%
thereafter
(b) During the Contingent Interest Period, this Bond will be
subject to mandatory redemption prior to maturity at a redemption price
equal to 100% of the then outstanding aggregate principal amount of the
Bond so called for redemption, plus accrued and unpaid interest to the
redemption date, but without premium, as follows:
(i) in whole or in part on any Interest Payment Date for which
adequate notice of redemption can be given in accordance
with the Indenture on or after May 22, 1989 to the extent
that moneys (including investment earnings) remain
unexpended in the Project Loan Fund on the earlier of the
Conversion Date or March 22, 1990 (excluding certain moneys
held for one or more disbursements permitted pursuant to
Section 6.05 of the Indenture for Project Costs owing but
not yet due and payable), and such moneys in the Project
Loan Fund shall be applied to the payment of such redemption
price; or
(ii) in whole or in part on the first Interest Payment Date for
which adequate notice of redemption can be given in
accordance with the Indenture to the extent that Trustee
applies as a prepayment of the Note any Insurance Proceeds
or Condemnation Award received in connection with the
Project and not used to build or restore the Project
pursuant to the Mortgage; or
(iii) in whole on any Interest Payment Date on or after January 1,
2006 at the option of the Owner exercised by giving not less
than six (6) months prior written notice to the Issuer, the
Trustee and the Developer which notice of the Owner shall be
irrevocable and shall specify the date on which the Bond is
to be redeemed in whole.
(c) This Bond will also be subject to redemption prior to
maturity upon the occurrence of a "Determination of Taxability" as
described in Exhibit B hereto.
(d) This Bond will be subject to redemption prior to maturity
after the Contingent Interest Period in the manner and upon the terms
described in Section 3.03 of the Indenture.
(e) Upon any acceleration of the Note on or prior to September
22, 2003, which results in a redemption of this Bond prior to the
maturity hereof such redemption shall be at a price equal to 107% if
such redemption shall occur on or prior to September 22, 1994, and
thereafter at the applicable redemption prices described under
subparagraph (a) above, in each case plus accrued and unpaid interest
(including any Deferred Interest payable as described in Section 6
above) to the date of redemption.
8. Remarketing in Lieu of Redemption. In lieu of redemption
pursuant to Section 7(b)(iii) hereof, at the option of the Developer,
which option shall be made by written notice to the Trustee and Owner
not less than ninety (90) days prior to the date set for redemption
under Section 7(b)(iii) hereof, the Bond otherwise subject to redemption
pursuant to Section 7(b)(iii) hereof shall be purchased on such date
(the "Initial Remarketing Date") for a purchase price equal to 100% of
the principal amount thereof plus accrued and unpaid interest including
any Deferred Interest payable as described in Section 6 above) to the
Initial Remarketing Date, provided that if all of the conditions to
remarketing the Bond on the Initial Remarketing Date set forth in
Section 5.03 of the Indenture, as summarized under Section 9 below, are
not met, this Bond will be redeemed in whole on the date set by the
Owner for redemption pursuant to Section 7(b)(iii) hereof.
9. Remarketing of the Bond on Initial Remarketing Date. No
later than sixty (60) days prior to the Initial Remarketing Date, the
Remarketing Agent, at the direction of the Developer, and with notice to
the Owner, the Issuer and the Trustee, shall proceed to remarket the
Bond in accordance with the provisions described in Section 5.03 of the
Indenture. Upon the Initial Remarketing Date, a replacement Bond or
Bonds in lieu of a replacement Bond will be issued to the new
Bondholders to replace the Bond and to reflect the provisions set forth
in the Indenture and any amendments made to the Indenture.
If, by 12:00 noon, New York City time, on the Initial Remarketing
Date, the conditions set forth in Section 5.03 of the Indenture have not
been satisfied the Trustee shall promptly so notify the Developer and
the Issuer and the Bond will be redeemed pursuant to Section 7(b)(iii)
hereof.
If the Bond is not delivered for purchase on the Initial
Remarketing Date, the Bond will be deemed to have been purchased if the
purchase price therefor will have been deposited in accordance with the
Indenture ("Undelivered Bonds"); and the parties to whom the Remarketing
Agent will have remarketed the Bond will be the Owners of Bonds issued
in exchange for such Undelivered Bonds for all purposes under the
Indenture, including without limitation the right to remarket and
transfer such Undelivered Bonds, whereupon interest accruing from and
after such Remarketing Date on such Undelivered Bonds will no longer be
payable to the former Owners thereof but will be paid to the registered
Owners of such Bonds issued in exchange for such Undelivered Bonds
during the ensuing Remarketing Period.
BY THE PURCHASE AND ACCEPTANCE OF THIS BOND, THE OWNER AGREES TO
DELIVER THIS BOND TO THE TRUSTEE ON THE DATE ESTABLISHED FOR REMARKETING
OR REDEMPTION FOR (i) SALE TO SUCH PURCHASER OR PURCHASERS AS MAY BE
DESIGNATED BY THE REMARKETING AGENT, OR (ii) FOR REDEMPTION, AS THE CASE
MAY BE. ANY BOND NOT DELIVERED FOR PURCHASE SHALL BE DEEMED TO HAVE BEEN
PURCHASED AND SHALL NOT BEAR INTEREST FROM AND AFTER THE DATE
ESTABLISHED FOR MANDATORY PURCHASE OR REDEMPTION AND THE OWNER THEREOF
SHALL NOT BE ENTITLED TO ANY RIGHTS EXCEPT THE RIGHT TO RECEIVE THE
AMOUNT DUE IN PAYMENT FOR THIS BOND.
10. Registration and Transfer. This Bond will be transferable
only by execution by the registered owner of the Assignment attached
hereto and delivery of the Bond to the new registered owner thereof and
by presenting to the Trustee, this Bond and an Assignment executed by
the registered owner or its duly authorized representative.
Prior to the Initial Remarketing Date (except as otherwise
expressly provided in the Indenture), unless the Owner requests an
exchange Bond, it will not be necessary to execute and authenticate an
exchange Bond (1) upon its transfer as provided in the immediately
preceding paragraph (and the endorsement for transfer and assignment
will serve as evidence of the ownership of the Bond) or (2) upon its
reduction of principal upon a partial redemption thereof (and the
notation in the Certificate Regarding Reduction of Principal will serve
as evidence of the principal amount of the Bond) in accordance with the
Indenture; provided, however, that upon the Owner's request an exchange
Bond shall be issued by the Issuer and authenticated by the Trustee upon
the preparation of the exchange Bond by Bond Counsel at the expense of
the Developer.
Except as to transfer occurring on or after the remarketing of
this Bond on the initial Remarketing Date, this Bond may only be
transferred, as a whole, in any Authorized Denomination (i) to any one
subsidiary of the Owner, an affiliate with the same or substantially the
same general partner as the Owner, to any one entity arising out of a
merger or consolidation of the Owner, by operation of law, or to a
trustee in bankruptcy of the Owner as evidenced by a certificate of the
Owner and of such transferee or (ii) in connection with a sale to one
Accredited Investor (as defined below), as evidenced by the certificate
of such transferee, if, in either instance, the Issuer, the Trustee and
the Developer received from the transferee of the Bond an executed
agreement to be bound by the transfer restriction set forth in this
paragraph in connection with subsequent transfer of the Bond.
"Accredited Investor" means the Developer or any of the following:
(a) Any bank as defined in Section 3(a)(2) of the Securities Act
of 1933, as amended (the Act), whether acting in its
individual or fiduciary capacity; any insurance company as
defined in Section 2(13) of the Act; any investment company
registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48)
of that Act; any Small Business Investment Company licensed
by the United States Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act
of 1958; any employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of
1974, if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, insurance company or registered investment
adviser, or if the employee benefit plan has total assets in
excess of $5,000,000;
(b) Any private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;
(c) Any organization described in Section 501(c)(3) of the Code
with total assets in excess of $5,000,000;
(d) Any director, executive officer or general partner of the
issuer of the securities being offered or sold;
(e) Any person who purchases at least $l50,000 of the securities
being offered, where the purchaser's total purchase price
does not exceed twenty percent (20%) of the purchaser's net
worth at the time of sale, or joint net worth with that
person's spouse, for one or any combination of the
following: (i) cash, (ii) securities for which market
quotations are readily available; (iii) an unconditional
obligation to pay cash or securities for which market
quotations are readily available, which obligation is to be
discharged within five years of the sale of the securities
to be purchased, or (iv) the cancellation of any
indebtedness owed by the issuer to the purchaser;
(f) Any natural person whose individual net worth with that
person's spouse at the time of his purchase exceeds
$1,000,000;
(g) Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years and who
reasonably experts an income in excess of $200,000 in the
current year; or
(h) Any entity in which all of the equity owners are Accredited
Investors under subparagraphs (a), (b), (c), (d), (f) or (g)
above.
Upon such transfer a new Bond of the same maturity, in any
Authorized Denomination and bearing the same interest rate (except for
Bonds purchased and not redeemed on any Remarketing Date) will be issued
to the transferee in exchange therefor.
The Issuer and the Trustee may deem and treat the person in whose
name this Bond is registered as the absolute owner of it (whether or not
this Bond shall be overdue) for the purpose of receiving payment of or
on account of principal on it and interest due on it and for all other
purposes, and neither the Issuer nor the Trustee shall be affected by
any notice to the contrary.
The Trustee shall not be required to issue or register the
transfer of any Bond (i) during any period beginning on the fifteenth
(15th) day of the calendar month immediately preceding each Interest
Payment Date, or, if such date is not a Business Day, the Business Day
next preceding such fifteenth day (the "Record Date") and ending at the
close of business on the applicable Interest Payment Date, (ii) during
any period beginning five (5) Business Days prior to the notice of
redemption given by the Trustee of Bonds to be redeemed prior to
maturity and ending at the close of business on the date of such
redemption, or (iii) during any period beginning fifteen (15) days prior
to a Remarketing Date and ending at the close of business on such
Remarketing Date.
Prior to the Initial Remarketing Date, the Bond is issuable only
as a fully registered Bond in the amount of $28,826,500 or the
outstanding principal amount of the Bond or any lesser amount as
determined by Section 2.11(c) of the Indenture (provided that such
lesser amount is an integral multiple of $5,000, with the exception, if
necessary, of one lesser amount less than $5,000). Subsequent to the
Initial Remarketing Date the Bond may be issued in denominations of
$5,000 or any integral multiple thereof, with the exception, if
necessary, of one denomination less than $5,000. The Bond is
exchangeable at the principal corporate trust office of the Trustee,
subject to the limitations and upon payment of the charges provided
herein and in the Indenture.
11. Amendments and Supplements. The Indenture contains
provisions permitting the Issuer, Developer and the Trustee prior to the
Initial Remarketing Date (with the approval of the Owner), to adopt
supplemental resolutions amending in any particular the provisions of
the Indenture; provided, however, that no such amendment, without the
consent of the owners of the Bonds affected, shall permit (a) a change
in the times, amounts or currency of payment of the principal of or
premium, if any, or interest on any outstanding Bond, or a reduction in
the principal amount or redemption price, or the dates or terms of
redemption of any outstanding Bond or the rate of interest thereon, (b)
the creation of a claim or lien upon, or a pledge of the revenues
derived from the Developer under the Indenture or other part of the
moneys, rights or properties pledged as security for the Bond, (c) a
preference or priority of any Bond over any other Bond, (d) any change
adversely affecting the tax-exempt status of the Bond, or (e) a
reduction in the aggregate principal amount of the Bond required for
consent under the Indenture.
12. Miscellaneous. The provisions included in this Bond are
summaries of certain provisions of the Indenture and are qualified in
their entirety by reference to the Indenture. The Indenture is subject
to supplement and amendment under the circumstances, for the purposes
and with the consent therein provided. The Indenture is on file with the
Trustee and reference is made to it for a full statement of the rights
and duties and obligations of the Trustee and the Issuer. All terms used
herein which are not otherwise defined shall have the meanings ascribed
thereto in the Indenture.
Neither the officers, agents, employees or representatives of the
Issuer nor any person executing this Bond shall be personally liable
thereon or be subject to any personal liability by reason of the
issuance hereof, whether by virtue of any constitution, status or rule
of law, or by the enforcement of any assessment or penalty, or
otherwise, all such liability being expressly released and waived as a
condition of and in consideration for the execution of the Indenture and
the issuance of this Bond.
This Bond shall not be valid and shall not be entitled to the
lien, pledge and benefits of the Indenture until the authentication
certificate appearing on the face of this Bond shall be executed by a
duly authorized signatory of the Trustee.
All things necessary to make this Bond, when authenticated by the
Trustee, the valid, binding and legal obligation of the Issuer, and to
make the Indenture valid, binding and legal for the security hereof,
have been done and performed and this Bond has been in all respects duly
authorized, done and accomplished.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed
in its name by its Chairman or Vice Chairman by manual signature and the
seal of the Issuer to be imprinted hereon and attested by the manual
signature of its Secretary.
Date: BURLINGTON HOUSING AUTHORITY
/s/Robert E. Matazz
By:___________________________
Chairman/Vice Chairman
(SEAL)
ATTEST:
/s/Lillian M. Buckley
________________________________
Secretary
<PAGE>
CERTIFICATE OF AUTHENTICATION
This Bond is the Bond described in the within-mentioned Indenture.
FLEET NATIONAL BANK, as Trustee
/s/Susan M. Calise
By:____________________________
AUTHORIZED SIGNATORY
DATE:
<PAGE>
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfer unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF
ASSIGNEE) (*THIS information, which is voluntary, is being requested to
ensure that the assignee will not be subject to backup withholding under
Section 3406 of the Code.)
________________________
________________________
_____________________________________________________________
(Please Print or Typewrite Name and Address of Assignee)
_____________________________________________________________
the within Bond, and all rights thereunder, and hereby does irrevocably
constitute and appoint
_____________________________________________________________
Attorney to transfer the within Bond on the books kept for the
registration thereof, with full power of substitution in the
premises.
Dated:
Signature Guaranteed ___________________________
NOTICE: The signature to
this assignment must
___________________________ correspond with the name as
Bank, Trust Company or Firm it appears upon the face of
the within bond in every
particular, without
By:________________________ alteration or enlargement or
Authorized Signature any change whatever.
<PAGE>
CERTIFICATE REGARDING REDUCTION OF PRINCIPAL
THE PRINCIPAL AMOUNT OF THE BOND IS HEREBY REDUCED AS SET FORTH IN
THE FOLLOWING SCHEDULE EFFECTIVE AS OF THE DATE SHOWN BELOW, ALL IN
ACCORDANCE WITH THE PROVISIONS OF THE WITHIN-MENTIONED INDENTURE.
Executed by
the Trustee
Principal Amount as the Registrar Confirmed
Effective of the Bond of the Issuer by the
Date of Reduction as of the for the Bond Registered Owner
of Principal` Effective Date as of Such Date as of Such Date
____________ ____________ ____________ ___________
____________ ____________ ____________ ___________
____________ ____________ ____________ ___________
____________ ____________ ____________ ___________
____________ ____________ ____________ ___________
____________ ____________ ____________ ___________
____________ ____________ ____________ ___________
____________ ____________ ____________ ___________
____________ ____________ ____________ ___________
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Registrant is a limited partnership which invests in federally tax-exempt
revenue bonds, which financed construction and/or ownership of multi-family
residential properties. In accordance with industry practice, its balance
sheet is unclassified. For full information, refer to the accompanying
audited financial statements.
</LEGEND>
<NAME> DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
<CIK> 0000794449
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 5,255,586
<SECURITIES> 0
<RECEIVABLES> 543,723
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 110,588,908<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 109,723,604<F2>
<TOTAL-LIABILITY-AND-EQUITY> 110,588,908<F3>
<SALES> 0
<TOTAL-REVENUES> 7,923,777<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 364,408
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 7,559,369
<INCOME-TAX> 0
<INCOME-CONTINUING> 7,559,369
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,559,369
<EPS-PRIMARY> .99<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include investment
in revenue bonds of $102,201,849, net deferred expenses of $1,261,006,
escrowed funds of $741,613 and other assets of $585,131.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and other liabilities of $865,304.
<F4>Total revenue includes interest income of $7,923,777.
<F5>Represents net income per Assigned Benefit Certificate.
</FN>
</TABLE>
